Iconix Brand Group, Inc.
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K ☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM TO 001-10593(Commission File Number) ICONIX BRAND GROUP, INC.(Exact name of registrant as specified in its charter) Delaware 11-2481903(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)1450 Broadway, New York, New York 10018(Address of principal executive offices) (zip code)Registrant’s telephone number, including area code: (212) 730-0030Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredCommon Stock, $.001 Par Value The NASDAQ Stock Market LLC (NASDAQ Global Market)Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒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 12months (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 ☐ NoIndicate 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 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒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. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ 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 financialaccounting 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 Act). Yes ☐ No ☒The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant as of the close of business on June 30, 2018 was approximately $39.7 million.As of March 22, 2019, 8,837,659 shares of the registrant’s Common Stock, par value $.001 per share, were outstanding.DOCUMENTS INCORPORATED BY REFERENCE:Portions of the registrant’s definitive Proxy Statement relating to the registrant’s 2019 Annual Meeting of Stockholders, to be filed with the U.S. Securities and ExchangeCommission within 120 days following the end of the registrant’s fiscal year, are incorporated by reference in Part III of this annual report on Form 10-K as indicated herein.  ICONIX BRAND GROUP, INC. - FORM 10-KTABLE OF CONTENTS Page PART I Item 1. Business 1Item 1A. Risk Factors 16Item 1B. Unresolved Staff Comments 28Item 2. Properties 28Item 3. Legal Proceedings 28Item 4. Mine Safety Disclosures 30 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31Item 6. Selected Financial Data 31Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48Item 8. Financial Statements and Supplementary Data 48Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48Item 9A. Controls and Procedures 48Item 9B. Other Information 49 PART III Item 10. Directors, Executive Officers and Corporate Governance 50Item 11. Executive Compensation 50Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 50Item 13. Certain Relationships and Related Transactions, and Director Independence 50Item 14. Principal Accounting Fees and Services 50 PART IV Item 15. Exhibits, Financial Statement Schedules 51Item 16. Form 10-K Summary 51 Signatures 57 Consolidated Financial Statements 58  Unless the context requires otherwise, references in this Form 10-K to the “Company,” “Iconix,” “we,” “us,” “our,” or similar pronouns refer toIconix Brand Group, Inc. and its consolidated subsidiaries.  PART IItem 1. BusinessGeneralIconix Brand Group is a brand management company and owner of a diversified portfolio of approximately 30 global consumer brands across thewomen’s, men’s, home and international segments. The Company’s business strategy is to maximize the value of its brands primarily through strategiclicenses and joint venture partnerships around the world, as well as to grow the portfolio of brands through strategic acquisitions.As of December 31, 2018, the Company’s brand portfolio includes Candie’s ®, Bongo ®, Joe Boxer ® , Rampage ® , Mudd ® , London Fog ® ,Mossimo ® , Ocean Pacific/OP ® , Danskin/Danskin Now ® , Rocawear ® /Roc Nation ® , Cannon ® , Royal Velvet ® , Fieldcrest ® , Charisma ® ,Starter ® , Waverly ® , Ecko Unltd ® /Mark Ecko Cut & Sew ® , Zoo York ® , Umbro ®, Lee Cooper ® , and Artful Dodger ®; and interests in MaterialGirl ® , Ed Hardy ® , Truth or Dare ® , Modern Amusement ® , Buffalo ® , Hydraulic ®, and PONY ®.The Company seeks to monetize the Intellectual Property (herein referred to as “IP”) related to its brands throughout the world and in all relevantcategories primarily by licensing directly with leading retailers (herein referred to as “direct to retail” or “DTR”), through consortia of wholesale licensees,through joint ventures in specific territories and via other activity such as corporate sponsorships and content as well as the sale of IP for specific categoriesor territories. Products bearing the Company’s brands are sold across a variety of distribution channels. The licensees are generally responsible for designing,manufacturing and distributing the licensed products. The Company supports its brands with marketing, advertising and promotional campaigns designed toincrease brand awareness. Additionally, the Company provides its licensees with coordinated trend direction to enhance product appeal and help build andmaintain brand integrity. Globally, the Company has over 50 direct-to-retail licenses and more than 375 total licenses. Licensees are selected based upon the Company’s beliefthat such licensees will be able to produce and sell quality products in the categories and distribution channels of their specific expertise and that they arecapable of exceeding minimum sales targets and royalties that the Company generally requires for each brand. This licensing strategy is designed to permitthe Company to operate its licensing business, leverage its core competencies of marketing and brand management with minimal working capital. The vastmajority of the Company’s licensing agreements include minimum guaranteed royalty revenue which provides the Company with greater visibility intofuture cash flows. As of January 1, 2019, the Company had over $405 million of aggregate guaranteed royalty revenue over the terms of its existing contractsexcluding renewals.A key initiative in the Company’s global brand expansion plans has been the formation of international joint ventures. The strategy in forminginternational joint ventures is to partner with best-in-class, local partners to bring the Company’s brands to market more quickly and efficiently, generatinggreater short- and long-term value from its IP, than the Company believes is possible if it were to build-out wholly-owned operations ourselves across amultitude of regional or local offices. Since September 2008, the Company has established the following international joint ventures: Iconix China, IconixLatin America, Iconix Europe, Iconix India, Iconix Canada, Iconix Australia, Iconix Southeast Asia, Iconix Israel, Iconix Middle East, Umbro China, DanskinChina, Starter China, and Lee Cooper China. Note that the Company now maintains a 100% ownership interest in Iconix China, Iconix Latin America andIconix Canada. Refer to Note 5 in Notes to Consolidated Financial Statements for further detail.The Company’s primary goal of maximizing the value of its IP also includes, in certain instances, the sale to third parties of a brand’s trademark inspecific territories or categories. As such, the Company evaluates potential offers to acquire some or all of a brand’s IP by comparing whether the offer is morevaluable than the Company’s estimate of the current and potential revenue streams to be earned via the Company’s traditional licensing model. Further, aspart of the Company’s evaluation process it also considers whether or not the buyer’s future development of the brand may help to expand the brand’s overallrecognition and global revenue potential.1 The Company has acquired the following brands on the dates indicated: Date acquired BrandOctober 2004 Badgley Mischka(1)July 2005 Joe BoxerSeptember 2005 RampageApril 2006 MuddAugust 2006 London FogOctober 2006 MossimoNovember 2006 Ocean Pacific/ OPMarch 2007 Danskin/ Danskin NowMarch 2007 Rocawear/ Roc NationOctober 2007 Official-Pillowtex brands (Cannon, Royal Velvet, Fieldcrest and Charisma)December 2007 StarterOctober 2008 WaverlyOctober 2009, July 2011 Zoo York(2)October 2011 Sharper Image(3)November 2012 UmbroFebruary 2013 Lee Cooper(4)October 2009, May 2013 Ecko Unltd/ Marc Ecko Cut & Sew(5)March 2015 Strawberry Shortcake(6) 1In February 2016, the Company sold the rights to the Badgley Mischka intellectual property to Titan Industries, Inc. Refer to Note 5 in Notes toConsolidated Financial Statements for further details.2In July 2011, the Company, through its wholly-owned subsidiary ZY Holdings, purchased the Zoo York brand and related assets from its IPH Unltdjoint venture, increasing the Company’s effective ownership in the Zoo York brand from 51% to 100%.3The Company sold its rights to the Sharper Image intellectual property and related assets in December 2016. Refer to Note 5 in Notes to theConsolidated Financial Statements for further details.4In December 2016, the Company repurchased the remaining 50% ownership interest in the joint venture that held domestic assets relating to the LeeCooper brand, LC Partners US, LLC, from its joint venture partner, increasing the Company’s ownership interest in LC Partners US to 100%. Refer toNote 5 in Notes to Consolidated Financial Statements for further details.5In May 2013, the Company purchased the remaining 49% of the equity interest in IPH Unltd from its minority partner, increasing the Company’seffective ownership of the Ecko portfolio of brands from 51% to 100%.6In June 2017, the Company sold the businesses underlying the Entertainment segment, which included the Strawberry Shortcake brand. Refer to Note2 in Notes to Consolidated Financial Statements for further detailsIn addition to the acquisitions above, the Company has acquired ownership interests in the following brands through its investments in joint venturesas of December 31, 2018: Date Acquired/Invested Brand Investment / Joint Venture Iconix’s Interest November 2007 Artful Dodger Scion(1) 100%May 2009, April 2011 Ed Hardy Hardy Way(2) 85%March 2010 Material Girl and Truth or Dare MG Icon 50%June 2010 Peanuts Peanuts Holdings(3) 0%December 2012 Modern Amusement Icon Modern Amusement 51%February 2013 Buffalo Alberta ULC 51%October 2014 Nick Graham NGX(4) 0%December 2014 Hydraulic Hydraulic IP Holdings(5) 100%February 2015 PONY US Pony Holdings 75% (1)In July 2015, the Company acquired the remaining 50% interest in Scion, increasing its effective ownership of the Artful Dodger brand from 50% to100%. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.(2)In April 2011, the Company acquired an additional interest in Hardy Way LLC, increasing its effective ownership of the brand from 50% to85%. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.(3)In June 2017, the Company sold the businesses underlying the Entertainment segment, which included the Peanuts brand. Refer to Note 2 in Notes toConsolidated Financial Statements for further details.2 (4)In July 2017, the Company sold its 51% ownership interest in NGX, LLC. Refer to Note 5 in Notes to Consolidated Financial Statements for furtherdetails.(5)In April 2018, pursuant to a letter agreement entered into simultaneously with the Company’s acquisition of a 51% equity interest in Hydraulic, theCompany acquired the remaining 49% ownership interest from its joint venture partner for no cash consideration as a result of an affiliate of the jointventure partner not making its minimum guaranteed royalty payment obligations to the Company in accordance with the respective licenseagreement. This transaction resulted in the Company effectively increasing its ownership interest in Hydraulic to 100%. The Company will retain100% ownership interest in Hydraulic unless the affiliate of such joint venture partner satisfies its outstanding payment obligations by making allpayments of the minimum guaranteed royalties to the Company under the terminated license agreement.As of December 31, 2018, the Company was party to the following joint ventures to develop and market its brands in specific international markets,herein collectively referred to as the Company’s “International Joint Ventures”: Date Created Investment /Joint Venture Iconix’s Interest December 2009 Iconix Europe 51%May 2012 Iconix India 50%March 2013 Diamond Icon 51%September 2013 Iconix Australia(1) 55%October 2013 Iconix Southeast Asia(2) 50%December 2013 Iconix Israel 50%December 2014 Iconix Middle East(3) 55%July 2016 Umbro China Limited(4) 95%October 2016 Danskin China Limited(5) 100%March 2018 Starter China Limited(6) 100%June 2018 Lee Cooper China Limited(7) 100% (1)In July 2018, the Company purchased an additional 5% interest in Iconix Australia, LLC (“Iconix Australia”), increasing the Company’s ownership ofIconix Australia from 50% to 55%. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.(2)In June 2017, the Company deconsolidated Iconix SE Asia, Ltd. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.(3)In December 2016, the Company irrevocably exercised its call option to acquire an additional 5% of the equity interests in Iconix Middle East fromits partner, in order to increase the Company’s ownership from 50% to 55%. Such acquisition closed in February 2017. Refer to Note 5 in Notes toConsolidated Financial Statements for further details.(4)In July 2016, the Company sold a 5% interest in a newly formed entity, Umbro China Limited, to MH Umbro International Co. Limited. Refer to Note5 in Notes to Consolidated Financial Statements for further details.(5)In October 2016, the Company entered into an agreement with Li-Ning (China) Sports Goods Co., Ltd. (“LiNing”) to sell up to a 50% interest (and noless than 30% interest) in its wholly-owned indirect subsidiary, Danskin China Limited (“Danskin China”), a new Hong Kong registered companywhich holds the intellectual property and related assets in respect of the Danskin brand in mainland China and Macau. Refer to Note 5 in Notes toConsolidated Financial Statements for further details. (6)In March 2018, the Company entered into an agreement with Photosynthesis Holdings, Co. Ltd. (“PHL”) to sell up to no less than a 50% interest andup to a total of 60% interest in its wholly-owned indirect subsidiary, Starter China Limited, a newly registered Hong Kong subsidiary of Iconix China(“Starter China”), and which will hold the Starter trademarks and related assets in respect of the Greater China territory. PHL’s purchase of the initial50% equity interest in Starter China is expected to occur over a three-year period commencing on January 15, 2020 for cash consideration of $20.0million. The additional 10% equity interest (for a total equity interest of 60% interest) purchase right of PHL is expected to occur over a three-yearperiod commencing January 16, 2022 for cash consideration equal to the greater of $2.7 million or 2.5 times the royalty received under the respectivelicense agreement in the previous twelve months based on other terms and conditions specified in the share purchase agreement.3 (7)In June 2018, the Company entered into an agreement with POS Lee Cooper HK Co. Ltd. (“PLC”) to sell up to no less than a 50% interest and up to atotal of 60% interest in its wholly-owned indirect subsidiary, Lee Cooper China Limited, a newly registered Hong Kong subsidiary of Iconix China(“Lee Cooper China”), and which will hold the Lee Cooper trademarks and related assets in respect of the Greater China territory. PLC’s purchase ofthe initial 50% equity interest in Lee Cooper China is expected to occur over a four-year period commencing on October 15, 2020 for cashconsideration of approximately $8.2 million. The additional 10% equity interest (for a total equity interest of 60% interest) purchase right of PLC isexpected to occur over a two-year period commencing January 15, 2024 for cash consideration equal to the greater of $2.5 million or 2.5 times theroyalty received under the respective license agreement in the previous twelve months based on other terms and conditions specified in the sharepurchase agreement.Corporate InformationThe Company was incorporated under the laws of the state of Delaware in 1978. Its principal executive offices are located at 1450 Broadway, NewYork, New York 10018, and its telephone number is (212) 730-0030. The Company’s website address is www.iconixbrand.com. The information on theCompany’s website does not constitute part of this Form 10-K. The Company has included its website address in this document as an inactive textualreference only.The Company’s brandsThe Company owns a diversified portfolio of approximately 30 iconic brands across the Company’s four operating segments: women’s, men’s, home,and international (see Note 18 in Notes to Consolidated Financial Statements). Additionally, the Company previously owned and operated an Entertainmentsegment which is included in the Company’s consolidated statement of operations as a discontinued operation for the year ended December 31, 2017 (“FY2017”). The sale of the businesses underlying the Entertainment segment was completed on June 30, 2017 (see Note 2 of Notes to Consolidated FinancialStatements). The Company’s objective is to grow its existing portfolio organically, both domestically and internationally, and acquire new brands, both ofwhich leverage its brand management expertise, platform and infrastructure, and where third parties offer similar leverage of their relationshipsand infrastructures, enter into joint ventures or other partnerships. To achieve this objective, the Company intends to: •extend its existing brands by adding additional product categories, expanding the brands’ distribution and retail presence and optimizing itslicensees’ sales through marketing that increases consumer awareness and loyalty; •continue its international expansion through additional licenses, partnerships, joint ventures and other arrangements with leading retailers andwholesalers worldwide; •continue acquiring consumer brands or the rights to such brands with high consumer awareness, broad appeal, applicability to a range ofproduct categories and an ability to diversify the Company’s portfolio; and •use advertising and marketing to keep brands relevant and create long term value. In managing its brands, the Company seeks to capitalize on its heritage and authenticity, while simultaneously working to keep its brands relevant totoday’s consumer.Women’sBrands Wholly-Owned by Iconix:Candie’s. Candie’s is known as a “fun & flirty” young contemporary lifestyle brand, featuring products in apparel, accessories and footwearcategories. As Iconix’s longest held trademark, Candie’s brand was established in 1977 which started with a high-heeled wooden-sole slide shoe that allowedwomen to put a punctuation mark on their look. Since then, the Candie’s brand has popped with cultural connection reflecting the attitude and aspiration ofthe times. In July 2005, Kohl’s Department Stores, Inc., became the primary direct-to-retail licensee and launched an all-store roll out of the brand in theUnited States with a multi-category line of Candie’s products, including sportswear, denim, footwear, handbags and intimate apparel. Additionally, the brandhas signed wholesale license agreements with channels outside of Kohl’s within optical, home, and girl’s underwear and sleepwear categories of business.Candie’s award-winning advertising is known for its flirty but playful concepts. Over the years the brand has created omni-channel marketing campaignsleveraging its talent of “It” girls including Britney Spears, Fergie, Destiny’s Child, Lea Michele, Vanessa Hudgens, Hilary Duff, Bella Thorne, Kelly Clarkson& Jenny McCarthy.Mudd. Mudd is a highly recognizable junior lifestyle brand representing a generation of independent girls who stand up, stand out, and make theirdreams a reality. It was established in 1995 and acquired by Iconix in April 2006. Mudd has since become a junior’s denim destination synonymous withfeminine-yet-casual fashion and a free-spirited lifestyle. In November 2008, the Mudd brand entered into a multi-year, exclusive, direct-to-retail licensingagreement with Kohl’s Department Stores, Inc., across the United States for apparel, footwear, fashion accessories and jewelry. 4 Danskin/Danskin Now. Danskin is a 135 year-old iconic brand of women’s activewear, athleisure, legwear, dancewear, intimates, sleepwear, andfitness equipment, which the Company acquired in March 2007. Danskin has maintained a legacy of health, strength and female empowerment in its corevalues. The Danskin brand continues to be sold through better department, mid-tier, specialty and sporting goods stores, as well as through Danskin.com bywholesale licensees in the United States. In 2014, the brand re-launched its e-commerce site, blog, and expanded its social media efforts sustaining itsheritage with dance. As previously disclosed, the Company was notified that Wal-mart will not renew the existing Danskin Now license agreement for thebrand subsequent to its expiration in January 2019. The Danskin brand has 5 licensees including a new addition of Footwear for 2019. Even after thetermination of the Wal-mart retail license agreement, we believe the brand has a solid distribution of retailers. These retailers include Amazon, Costco,Walmart.com as well as a strong presence within TJX corporation. The Danskin brand has recently secured collaborations such as Footlocker/6:02 with theJenna Dewan Collection. Mossimo. Mossimo is known as a contemporary, active and youthful lifestyle brand. The brand was established in 1986 and acquired by theCompany in October 2006. Since 2000, Target Corporation, herein referred to as Target, had held the exclusive license in the United States, covering apparelproducts for men, women and children, including casual sportswear, denim, swimwear, bodywear, watches, handbags and other fashion accessories and hadbecome one of the largest apparel brands in the United States. The license agreement with Target expired on October 31, 2018. We are in the process ofdeveloping a “go forward” strategy to position the brand in midrange retailers, off price retailers and on-line retailers in an effort to transfer the name of thebrand developed over the years with the consumer. Our 2019 focus is to secure strong licensee partners to design, develop and distribute a variety of productcategories to a wider base of retailers that we believe will generate revenue to the Company beginning in 2020.Joe Boxer. Joe Boxer is a highly recognized lifestyle brand known for its irreverent and humorous image and provocative promotional events.Acquired by Iconix in July 2005, the brand was established in 1985 with the idea of taking basic clothing and re-imagining it to reflect humor, fashion andpopular trends. Since August 2001, Kmart/Sears has held the exclusive license for the brand in the United States covering apparel, fashion accessories andhome products for men, women, teens and children. Given the Kmart/Sears bankruptcy filing in October 2018, the Company is currently in the process ofrenegotiating the existing license agreement with Kmart/Sears on a non-exclusive basis.London Fog. London Fog is a classic brand known worldwide for its outerwear, luggage and travel products, cold weather accessories, umbrellas andfootwear. The brand was established over 80 years ago and was acquired by the Company in August 2006. The brand is sold in a variety of categories throughwholesale licenses in the United States, primarily through the department store channel including Macy’s and Nordstrom’s Department Store. Further, theCompany has a direct-to-retail license agreement for London Fog with Hudson’s Bay Corporation in Canada.Rampage. Rampage was established in 1982 and is known as a young contemporary fashion brand that empowers women to be their truest, boldestselves. Rampage was acquired by Iconix in September 2005 with products sold through better department stores such as Macy’s and Belk Stores acrosscategories of footwear, handbags, intimates, accessories and outerwear. Previous campaigns have featured Petra Nemcova, Gisele Bündchen, Bar Refaeli, IrinaShayk, and Olivia Culpo. Ocean Pacific/OP. Ocean Pacific and OP are global action-sports lifestyle apparel brands which trace their heritage to Ocean Pacific’s roots as a 1960’ssurfboard label. The Company acquired the Ocean Pacific/OP brands in November 2006 and in 2007, the OP business in the United States was converted to adirect-to-retail license with Wal-Mart Stores, Inc. (herein referred to as Wal-Mart). The OP DTR license agreement at Walmart was not renewed upon itsexpiration in June 2017. In 2017, Ocean Pacific was repositioned to re-connect with the brand heritage and its authentic core customer, the action-sportsenthusiast, across the specialty channel. Plans for launching product with new licensees are in process for 2019. We are is aggressively researching the bestpartners for this license in all categories and genders including swim, apparel, accessories, home and beach related products. Distribution is currentlyfocused on Walmart.com, mid-range department stores and off-price retailers.Bongo. The Bongo brand is a California lifestyle brand established in 1982 and is best described as the everyday girl with a splash ofcool. Recognized for its famous denim fit, Bongo also features a broad range of Junior’s casual apparel and accessories, including sportswear, eyewear andfootwear. As a result of the Kmart/Sears bankruptcy filing, the Company is currently in negotiations to potentially license the brand to new or existinglicensees.Badgley Mischka. The Badgley Mischka brand is known for luxury couture eveningwear. The brand was established in 1988 and was acquired by theCompany in October 2004. The Company sold the Badgley Mischka brand in February 2016.Brands Held by Iconix with Joint Venture Partners:MG Icon—Material Girl. Material Girl is designed to fit into the “it” woman’s demanding, multi-dimensional world. Material Girl offers themillennial customer fast fashion at affordable prices and is the go-to for style setters. MG Icon, a joint venture in which5 the Company has a 50% interest, was created by Iconix with Madonna and Guy Oseary in March 2010 to buy, create, develop and license the Material Girlbrand across a spectrum of consumer product categories. Concurrent with the formation of this joint venture, MG Icon entered a direct-to-retail exclusivelicense with Macy’s Retail Holdings, Inc. (“Macy’s”) covering a wide array of consumer categories across the Material Girl brand. As previously disclosed,the Company was notified that Macy’s will not renew the existing license agreement for the brand subsequent to its expiration in January 2020. Currently,the brand has wholesale license agreements in hosiery and socks and will transition the apparel, intimates and sleepwear products to newpartners. Celebrating its ninth year, the brand has had many notable faces for its campaigns, including Rita Ora, Zendaya, Kelly Osbourne, Sofia Richie,Taylor Momsen, Pia Mia, and Serayah. Men’sBrands Wholly-Owned by Iconix:Rocawear/Roc Nation. Rocawear is a youth culture brand, established by Shawn “Jay-Z” Carter and his partners in 1999. The Company acquired theRocawear brand in March 2007. Rocawear is currently licensed in the United States in a variety of categories, including men’s, women’s and kids’ apparel,outerwear, footwear, jewelry and handbags. Rocawear products are sold primarily through department stores nationwide. In July 2013, the Company acquiredthe global rights to the “Roc Nation” name, a higher-end halo brand of Rocawear, associated with the Roc Nation entertainment and talent agency.Starter. Founded in 1971, Starter is one of the original brands in licensed team sports merchandise and is a highly-recognized brand of athletic appareland footwear. The Company acquired Starter in December 2007. At the time of the acquisition, the brand was distributed in the United States primarily atWal-Mart through a number of wholesale licensees. In July 2008, the brand was converted to a direct-to-retail license with Wal-Mart and is currently sold inall stores in the United States and Canada. The Starter brand has been worn by some of the greatest athletes in MLB, NBA, NFL and NHL and the 2015ambassadors for the brand included Kevin Love and Eric Decker. Most recently, the Company has partnered with all the major professional sports leaguesand over one hundred NCAA universities throughout the U.S. through a licensee to re-launch the iconic Starter satin jacket, sold through various specialtystores, sporting goods stores and online. In 2012, the Starter Black brand was launched. Starter Black is a premium lifestyle brand extension that focuses on afashion-forward collection of logo branded apparel and accessories and has quickly become a staple among celebrities, athletes and influencers. The StarterBlack brand is sold in high-end specialty and sporting goods stores (e.g. Fanatics, Barnes and Noble College Book Stores). In the Fall of 2017, the Starterbrand was launched as an exclusive distribution with Amazon as their only national brand in their private brand division. Over 300 styles across men’s,women’s, and children’s activewear and accessories launched on the site throughout 2018. Starting in 2019, Starter is the on-field provider for the Allianceof American Football league which gives a significant amount of national recognition of the brand.Zoo York. Zoo York is an East Coast-based action lifestyle brand, named for the graffiti-art infused counterculture of 1970’s New York City. Zoo Yorkhas licenses with wholesalers covering a variety of products, including men’s, women’s and kids’ apparel, footwear, socks and accessories. The Manhattan-based brand proudly serves up a wide range of casual utilitarian looks for men and women that fuse authentic military-influenced overtones with iconic ZooYork City imagery. The Company acquired a 51% interest in the Zoo York brand as part of the Ecko Untld. acquisition in 2009, and the Company increasedits ownership to 100% in 2011. Zoo York is currently distributed in department stores including JCPenney and Stage Stores. Celebrity spokespeople for thebrand include professional skateboarders Chaz Ortiz.Ecko Unltd, Marc Ecko Cut & Sew. In October 2009, the Company, through a then newly formed joint venture company IPH Unltd, acquired a 51%controlling stake in the Ecko portfolio of brands. In May 2013, the Company purchased the remaining 49% interest from its minority partner, increasing itsownership in IPH Unltd from 51% to 100%. Founded in 1993, Ecko and its various brands are marketed and sold to consumers in the youth culture lifestylecategories, including active-athletic, streetwear, collegiate/preppy and denim fashion for men, women and children. Ecko Unltd. products are sold primarilythrough department and specialty stores including Dillard’s and JCPenney. Ecko Unltd. brand ambassadors include professional skateboarder MannySantiago and professional boxer Danny Garcia. Marc Ecko Cut & Sew is a halo brand, licensed in men’s apparel, outerwear, underwear, fragrance andaccessories. It is distributed in boutiques, specialty stores and Dillard’s Department Store. Artful Dodger. In November 2007, Scion, through its wholly-owned subsidiary, Artful Holdings LLC, purchased the Artful Dodger brand, a high endurban apparel brand. In July 2015, the Company acquired the remaining 50% interest in the Scion joint venture which increased the Company’s ownershipinterest in Scion, and as a result, Artful Dodger, to 100%.Umbro. Founded in 1924, Umbro is a global football (soccer) brand. The brand combines British heritage with a modern football lifestyle to createiconic sports apparel and footwear with high global awareness and strong global distribution. The Company acquired the Umbro brand in November 2012.The Company and its licensees sponsor more than a hundred national and professional6 teams worldwide. Umbro products are sold globally through a strong network of licensees and partners in the United States, Canada, Australia, Africa, Asia,Europe, the Middle East, India and Latin America.Lee Cooper. Founded in 1908, Lee Cooper is an iconic British denim brand that has expanded into multiple lifestyle categories including men’s,women’s and kids’ casual wear, footwear and accessories. The Company acquired the Lee Cooper brand in February 2013. Lee Cooper has global reachthrough more than 40 licensees with product sold in Africa, Asia, Europe, the Middle East, India and Latin America.Hydraulic IP Holdings, LLC - Hydraulic. In December 2014, the Company formed a joint venture with Top On International Group Limited in whichthe Company effectively purchased a 51% interest in the Hydraulic trademarks and related assets. In April 2018, the Company acquired the remaining 49%ownership interest from its joint venture partner. This transaction resulted in the Company effectively increasing its ownership interest in Hydraulic to 100%.Hydraulic was founded in New York in 1998 and is known for setting the blue jean standard in the denim market for junior’s, women’s and plus sizes.Hydraulic differentiates itself from other denim brands by positioning itself with the theme that all denim was not created equally. Hydraulic is currentlydistributed in department stores and is licensed for women’s apparel in the United States.Brands Held by Iconix with Joint Venture Partners:Hardy Way-Ed Hardy. In May 2009, the Company acquired a 50% interest in Hardy Way, the owner of the Ed Hardy brand and trademarks. In April2011, the Company made an additional investment in Hardy Way which effectively increased its ownership interest to 85%. Don Ed Hardy and his artworkdate back to 1967 when he transformed the tattoo business into an artistic medium. He began licensing his name and artwork for apparel in 2003 and todaythe Ed Hardy brand is recognized by its tattoo inspired lifestyle products. The brand is licensed to wholesalers in the United States for men’s, women’s, andkids’ apparel, fragrance, footwear and accessories. Distribution in the United States includes a wide base of retail stores, from Target to Walgreens. Celebritiesthat have worn the brand include Shakira, Lil Wayne, Madonna, Dwight Howard, Jessica Alba and Eva Longoria.Icon Modern Amusement—Modern Amusement. In December 2012, the Company entered into an agreement with Dirty Bird Productions, Inc., inwhich the Company purchased a 51% interest in the Modern Amusement trademarks and related assets. Modern Amusement is a premium, west coast-lifestylebrand with a focus on casual sportswear apparel and related accessories for young men and young women. Modern Amusement has a direct-to-retail license inthe U.S. with PacSun which distributes men’s apparel and footwear.Buffalo Brand Joint Venture—Buffalo by David Bitton. In February 2013, the Company formed a joint venture with Buffalo International ULC inwhich the Company effectively purchased a 51% interest in the Buffalo trademarks and related assets. Founded in 1985, Buffalo is a lifestyle brandconsisting of denim, sportswear, active wear, and accessories. Buffalo is sold primarily through better department stores including Macy’s, Dillard’s andLord & Taylor.NGX, LLC—Nick Graham. In October 2014, the Company formed a joint venture with NGO, LLC (“Nick Graham”) in which the Company purchaseda 51% interest in the Nick Graham trademarks and related assets. Founded in 2013, Nick Graham is a men’s lifestyle brand. The Company sold its ownershipinterest in NGX, LLC in July 2017.US Pony Holdings, LLC – Pony / Product of New York. In February 2015, the Company through its newly-formed subsidiary, US Pony Holdings,LLC, acquired the North American rights to the Pony / Product of New York brand. These rights include the rights in the United States obtained from Pony,Inc. and Pony International, LLC, and the rights in Mexico and Canada obtained from Super Jumbo Holdings Limited. US Pony Holdings, LLC is owned75% by the Company and 25% by its partner, Anthony L&S Athletics, LLC. Since acquiring the brand, the Company has entered into footwear, apparel andhosiery licensing contracts. The brand is distributed in mid-tier department stores, specialty stores and sporting goods stores.Formed in 1972 in New York City, PONY became one of the top athletic footwear brands worldwide in the 1990’s appearing on professional athletesin the NBA, NFL, MLB, Pro Soccer, Pro Tennis, and Pro Boxing. In Q4 2015, the Company launched its current multi-faceted marketing campaignhighlighting the acronym for Pony, Product of New York. The digital and social media campaign aimed at millennials, paid homage to the brand’s New YorkCity roots.HomeBrands Wholly-Owned by Iconix:Cannon. Established in 1887, Cannon is a brand with a powerful heritage and products that are known for their high quality, easy care and appeal to abroad range of consumers. One of the most recognized home brands, Cannon delivers a consistent quality at an affordable price. It is known as the firsttextile brand to sew logos onto products. The Company acquired Cannon as part of the 2007 Pillowtex acquisition. At the time of the acquisition, the brandwas distributed in various regional department stores. In7 February 2008, the Company signed its current direct-to-retail license with Kmart/Sears for Cannon to be sold exclusively in the United States in multiplecategories including fashion bedding, sheets, towels and bath rugs, basic bedding and kitchen textiles. Given the Kmart/Sears bankruptcy filing in October2018, the Company is currently in the process of renegotiating the existing license agreement with Kmart/Sears on a non-exclusive basis. In March 2019, theCompany signed two new licensing agreements for Cannon with Pem America and Blue Ridge Home fashions in various product categories. The PemAmerica license agreement will cover the US, Canadian and Mexican markets and Blue Ridge Home Fashions will cover the US and Canadian markets.Royal Velvet. For over 60 years, Royal Velvet has been celebrating home fashions, offering sophisticated designs that foster creativity and welcomecustomers home. Royal Velvet is a premium brand that provides a sophisticated aesthetic to homes and delivers exceptional quality that people know, trustand love. Royal Velvet is an authority on color, bringing rich, elevated choices in home textiles and décor. The Royal Velvet towel has been an industrystandard since 1954. Royal Velvet products include towels, sheets, bath rugs, fashion bedding, basic bedding and window treatments. The Companyacquired Royal Velvet as part of the 2007 Pillowtex acquisition. In April 2011, the Company entered into a direct-to-retail license with JC PenneyCorporation, Inc., (owner of JC Penney stores), for the Royal Velvet brand to be sold exclusively in JC Penney Stores in the United States, which commencedin February 2012. As previously disclosed, the Company was notified that JC Penney will not renew the existing license agreement for the brand subsequentto its expiration in January 2019. In March 2019, the Company entered into a license agreement with Himatsingka America, a part of the Himatsingka Groupfor various product categories within the US, Canada and Mexico markets. The Company is also currently in negotiations for licensing of the brand toadditional new or existing licensees.Fieldcrest. Fieldcrest has been the choice for quality bedding and bath since the late 19th Century. A brand rich in heritage, Fieldcrest is foundationalluxury for the modern guest. The Company acquired Fieldcrest as part of the 2007 Pillowtex acquisition. Since 2005, the Fieldcrest brand has been licensedexclusively to Target in the United States. Categories include fashion bedding, bath towels, rugs, basic bedding and sheets.Charisma. Charisma home textiles were introduced in the 1970’s and are synonymous with understated elegance. The Company acquired Charismaas part of the 2007 Pillowtex acquisition. In February 2009, the Company signed a direct-to-retail license with Costco Wholesale Corporation, (hereinreferred to as Costco), for certain Charisma products to be sold in Costco stores in the United States and other countries. The brand is also licensed in theUnited States and Canada for distribution through better department stores such as Bloomingdales, Bed Bath & Beyond, Nieman Marcus, Macy’s, Horchowand QVC.Waverly. Waverly is a home fashion and lifestyle brand that has been a leader in prints and patterns since its launch in 1923. It is one of the mostrecognized names in home décor and furnishings. Waverly’s distinctive color palette and accessible home decor allows consumers to mix and match fabricsoffering a custom-designed look at an affordable price. The Company acquired Waverly in October 2008. Waverly has two direct-to-retail agreements in theUnited States; with Wal-Mart for the Waverly Inspirations Collection covering fabrics and craft and the Waverly Home Collection at Christmas TreeShops. Waverly also has wholesale licensees in the United States for products including fabric, window treatments, décor, and bedding that are sold throughretailers such as Jo-Ann’s, Lowe’s and Belk and other specialty and off-price retailers.Sharper Image. Founded in 1977, Sharper Image is a lifestyle brand with unique product assortments across a range of categories including consumerelectronics, home goods, luggage, eclectic gifts and kitchen accessories. The Company acquired the Sharper Image brand in October 2011. The Companysold the Sharper Image brand and related assets in December 2016.EntertainmentOn May 9, 2017, the Company signed definitive agreements to sell its Entertainment segment. The sale was completed on June 30, 2017. Refer toNote 2 of Notes to Consolidated Financial Statements for further details.Brand Wholly-Owned by Iconix:Strawberry Shortcake. In March 2015, the Company completed its acquisition of the Strawberry Shortcake brand and related assets from AmericanGreetings Corporation and its wholly-owned subsidiary, Those Characters From Cleveland, Inc. In June 2017, the Company sold the brand to DHX Media,Ltd. Refer to Note 2 of Notes to Consolidated Financial Statements for further details.Brand Held by Iconix with Joint Venture Partners:Peanuts Worldwide – Peanuts, Charlie Brown, Snoopy. In June 2010, the Company, through its wholly-owned subsidiary Icon Entertainment LLC,acquired an 80% controlling stake in Peanuts Holdings, which, through its wholly-owned subsidiary, Peanuts Worldwide, owned and managed the Peanutsbrand and characters. The Company’s 20% partner in Peanuts8 Holdings was the family of Charles Schulz, the creator of the Peanuts brand and characters. In June 2017, the Company sold its 80% ownership interest in thebrand to DHX Media, Ltd. Refer to Note 2 of Notes to Consolidated Financial Statements for further details.InternationalWholly-Owned Subsidiaries and Joint Ventures:Within the international segment, the Company operates both wholly-owned subsidiaries and joint ventures in various territories. A variety of theCompany’s brands are present within these territories and generate license revenue and profitability. Wholly-Owned Subsidiaries Iconix China. In September 2008, the Company and Novel Fashions Holdings Limited, (referred to as Novel), formed a joint venture, Iconix China, todevelop, exploit and market the Company’s brands in the People’s Republic of China, Hong Kong, Macau and Taiwan, (herein referred to as GreaterChina). In the initial phase of the joint venture, Iconix China sought to maximize brand monetization through investment, whereby Iconix China received aminority equity stake in local operating companies in exchange for the rights to one or more of the Company’s brands in Greater China and brandmanagement support. Pursuant to the terms of this transaction, the Company contributed to Iconix China substantially all rights to its brands in Greater Chinaand contributed $2.0 million, and Novel contributed $17 million to Iconix China. Iconix China successfully placed several brands into joint ventures including Candie’s and Marc Ecko Cut & Sew with Shanghai La Chapelle FashionCo. Ltd (HK 6116); London Fog with China Outfitters (HK1146); Material Girl with Ningbo Peacebird; Ed Hardy with Landmark International; and EckoUnltd. with Xi Ha Clothing. These brands are collectively sold through more than 1,000 branded retail locations. In April 2016, the Company sold its interestin TangLi International, Ltd. (Ed Hardy China). In March 2015, the Company purchased all equity interests in Iconix China owned by its partner, increasing the Company’s ownership of IconixChina from 50% to 100%. Subsequently, the Company has secured traditional licensing agreements for many of its brands including Umbro, Joe Boxer,Rocawear, Rampage, Danskin and Starter.Iconix Latin America. In December 2008, the Company formed a joint venture partnership, (“Iconix Latin America”), with New Brands, an affiliate ofthe Falic Group, to develop, exploit, market and license the Company’s brands in the Latin American territory comprising of Mexico, Central America, SouthAmerica and the Caribbean. In February 2014, the Company purchased from New Brands its 50% interest in Iconix Latin America for $42.0 million,increasing the Company’s ownership to 100%. Today, Iconix Latin America has over fifty licenses, including key direct-to-retail relationships with Falabella,Renner, Wal-Mart and Suburbia. Licensed brands in this territory include Candie’s, Joe Boxer, London Fog, Mossimo, Ocean Pacific, Danskin/Danskin Now,Starter, Zoo York, Ecko Unltd., Ed Hardy, Cannon, and Fieldcrest, among others.Iconix Canada. In June 2013, the Company contributed substantially all rights to its wholly-owned and controlled brands in Canada into twoentities: Ico Brands L.P. (“Ico Brands”) and Iconix Canada L.P. (“Ico Canada” and together with Ico Brands, collectively “Iconix Canada”). Shortly thereafter,through their acquisitions of limited partnership and general partnership interests, Buffalo International ULC and its affiliates purchased a 50% interest inIconix Canada. In July 2017, the Company purchased from Buffalo its 50% interest in Iconix Canada for $19.0 million plus 50% of the net asset value ofIconix Canada (estimated to be approximately $2.0 million), increasing the Company’s ownership to 100%. Iconix Canada has many direct-to-retail licensesincluding Danskin Now at Wal-Mart, and London Fog at The Bay as well as a wide range of licenses for key brands such as Ecko Unltd., Danskin, Rampage,Zoo York, Umbro, Fieldcrest, Royal Velvet, and Waverly.International Joint VenturesThe formation and administration of international joint ventures have been a central and ongoing component of our business since 2008. TheCompany established and maintains the following international joint ventures: Iconix Europe, Iconix India, Iconix Australia, Iconix Southeast Asia, IconixIsrael, Iconix Middle East, Umbro China and Danskin China. The Company’s primary purpose in forming international joint ventures has been to bring itsbrands to market more quickly and efficiently, generating greater short- and long-term value from its IP. This approach enabled its brands to more rapidlyincrease licensing revenue, market share and profitability than what the Company believes it could have achieved on its own.9 To get what we believe are best-in-class local partners to invest in and represent the Company’s brands in their respective territories, the Companyoffers its partner the ability to buy equity interests in the IP. These equity interests provide the Company’s partners with the necessary incentive to devotemanagement time and resources to the brands. By leveraging the partners’ local market expertise, retail relationships, wholesale networks, business contactsand staff, the Company has significantly grown licensing royalties in key global markets, and maintained stricter enforcement against counterfeit products.As these businesses in each territory reach sufficient scale to support the Company’s full business structure of brand management, marketing, licensing,acquisitions and finance, the Company may consider acquiring control or full ownership of the joint ventures, where possible, as was the case in LatinAmerica in 2014, in China in 2015 and Canada in 2017.Iconix Europe. In December 2009, the Company contributed substantially all rights to its wholly-owned brands in all member states and candidatestates of the European Union, and certain other European countries, to Iconix Europe, a then newly formed wholly-owned subsidiary of the Company. Shortlythereafter, an investment group led by Albion Equity Partners LLC, purchased a 50% interest in Iconix Europe for $4 million through Brand InvestmentsVehicle Group 3 Limited (“BIV”). Also, as part of this transaction, Iconix Europe entered into a multi-year brand management and services agreement withThe Licensing Company to assist in developing, exploiting, marketing and licensing the contributed brands in the European territory.In January 2014, the Company consented to the purchase of BIV’s 50% ownership interest in Iconix Europe by Global Brands Group Asia Limited,formerly known as LF Asia Limited (“GBG”), in exchange for $1.5 million from GBG. In addition, the Company acquired an additional 1% equity interest inIconix Europe from GBG thereby increasing the Company’s ownership in Iconix Europe to a controlling 51% interest. GBG is also our joint venture partnerin Iconix SE Asia.Iconix Europe has multiple direct-to-retail partnerships including OP with Sports Direct, Danskin with Go Sport and Danskin, Starter, Joe Boxer, ZooYork and London Fog with S-Group/Prisma as well as a wide range of licenses in multiple territories for key brands such as Ocean Pacific, Ecko Unltd.,Rocawear, Cannon, and Waverly.Iconix India. In May 2012, the Company contributed substantially all rights to its wholly-owned and controlled brands in India to Imaginative BrandDevelopers Private Limited, now known as Iconix Lifestyle India Private Limited (“Iconix India”), a then newly formed subsidiary of the Company. Shortlythereafter, Reliance Brands Limited (“Reliance”), purchased a 50% interest in Iconix India for $6.0 million. Reliance is an affiliate of Reliance IndustriesLimited, one of India’s largest private sector enterprises.Iconix India has signed many long-term licensing partnerships with some of the largest retailing groups in India including Future Group, and Arvindand Aditya Birla Nuvo and has licensed brands such as Ecko Unltd., London Fog, Umbro, Ed Hardy and Cannon.Iconix Australia. In September 2013, the Company contributed substantially all rights to its wholly-owned and controlled brands in Australia andNew Zealand (the “Australia Territory”) to Iconix Australia through an exclusive, royalty-free perpetual master license agreement with Iconix Australia.Shortly thereafter, Pac Brands USA, Inc. (“Pac Brands USA”) purchased a 50% interest in Iconix Australia for $7.2 million from the Company to assist theCompany in developing, exploiting, marketing and licensing the Company’s brands in the Australia Territory. In July 2018, the Company purchased anadditional 5% ownership interest in Iconix Australia, effectively increasing the Company’s ownership interest in Iconix Australia to 55%.Iconix Australia licenses many brands in the territory including Cannon, Ecko Unltd., Mossimo, Starter, Umbro, Zoo York, Fieldcrest, and Waverly.Iconix Israel. In November 2013, the Company contributed substantially all rights to its wholly-owned and controlled brands in the State of Israeland the geographical regions of the West Bank and the Gaza Strip (together, the “Israel Territory”) to Iconix Israel LLC (“Iconix Israel”), a then newly formedsubsidiary of the Company through an exclusive, royalty-free perpetual master license agreement with Iconix Israel. Shortly thereafter, M.G.S. Sports TradingLimited (“MGS”) purchased a 50% interest in Iconix Israel for approximately $3.4 million to assist the Company in developing, exploiting, marketing andlicensing the Company’s brands in the Israel Territory.MGS and its affiliated companies, have licenses for Umbro, Joe Boxer, OP and Starter, which they distribute through their vast wholesale network andthrough its Mega Sport stores. Iconix Israel also includes a license with Brill Fashion for Lee Cooper.Iconix Southeast Asia. In October 2013, the Company contributed substantially all rights to its wholly-owned and controlled brands in Indonesia,Thailand, Malaysia, Philippines, Singapore, Vietnam, Cambodia, Laos, Brunei, Myanmar and East Timor (together, the “Southeast Asia Territory”) to LionNetwork Limited (“Iconix SE Asia”), a then newly formed subsidiary of the Company through an exclusive, royalty-free perpetual master license agreementwith Iconix SE Asia. Shortly thereafter, GBG purchased a 50% interest in Iconix SE Asia for $10 million to assist the Company in developing, exploiting,marketing and licensing the Company’s brands in the Southeast Asia Territory.10 In June 2014, the Company amended Iconix SE Asia by contributing substantially all rights to its wholly-owned and controlled brands in the territoryof South Korea, and the Company’s Marc Ecko Cut & Sew, Ecko Unltd., Zoo York, Ed Hardy and Sharper Image brands in the European Union and Turkey,in each case, to Iconix SE Asia. In return, GBG agreed to pay the Company $15.9 million.During September 2014, the Iconix SE Asia territory was further amended to include China, Macau, Hong Kong and Taiwan for the Umbro and LeeCooper marks. In respect of its 50% interest in the joint venture, GBG agreed to pay the Company $21.5 million. In December 2015, the Company purchasedGBG’s effective 50% interest in the Umbro and Lee Cooper marks in Greater China for $24.7 million. Iconix SE Asia has licensed many key brands in theSoutheast Asia Territory including Joe Boxer, Rampage, London Fog, Cannon, Ecko Unltd., Ed Hardy, Lee Cooper, Mossimo, Rocawear, Starter, Zoo York,Umbro, Charisma and others.Iconix Middle East and North Africa. In December 2014, the Company contributed substantially all rights to its wholly-owned and controlledbrands in the United Arab Emirates, Qatar, Kuwait, Bahrain, Saudi Arabia, Oman, Jordan, Egypt, Pakistan, Uganda, Yemen, Iraq, Azerbaijan, Kyrgyzstan,Uzbekistan, Lebanon, Tunisia, Libya, Algeria, Morocco, Cameroon, Gabon, Mauritania, Ivory Coast, Nigeria and Senegal (the “MENA Territory”) to IconixMENA LTD (“Iconix MENA”), a then newly formed subsidiary of the Company through an exclusive, royalty-free perpetual master license agreement withIconix MENA. Shortly thereafter, GBG, purchased a 50% interest in Iconix MENA for $18.8 million to assist the Company in developing, exploiting,marketing and licensing the Company’s brands in the MENA Territory. In December 2016, the Company irrevocably exercised its right to acquire anadditional 5% equity interest in Iconix MENA and increase the Company’s ownership interest to 55%. Such acquisition closed in February 2017.Iconix Middle East has licensed many brands in the MENA Territory including Cannon, Ecko Unltd., Fieldcrest, Starter, Umbro, Zoo York, andWaverly and a substantial direct-to-retail license with Landmark Group for Lee Cooper.Umbro China. In July 2016, the Company executed an agreement with MH Umbro International Co. Limited (“MHMC”) to sell up to an aggregate50% interest in a newly registered company in Hong Kong, which holds the Umbro intellectual property in respect of the Greater China territory, of which, atthat time, the Company received $2.5 million in cash from MHMC for a 5% interest in Umbro China.Danskin China. In October 2016, the Company entered into an agreement with Li-Ning Company Limited to sell up to a 50% interest (and no lessthan a 30% interest) in Danskin China, which holds the Danskin trademarks and related assets in respect of mainland China and Macau. LiNing’s purchase ofthe equity interest in Danskin China is expected to occur over a three-year period commencing on March 31, 2019.Diamond Icon LLC. In March 2013, the Company, via Iconix Luxembourg Holdings SARL, entered into a joint venture agreement with AlbionAgencies Ltd, an English limited company, in which the Company purchased a 51% interest in Diamond Icon Ltd, also an English limited company.Diamond Icon was established to design, develop and facilitate the supply of apparel, footwear and sports equipment for the Umbro brand; a service thewholesale licensees depend upon, which was previously provided by the former owner, Nike. The apparel, footwear and accessories developed by DiamondIcon for Umbro are distributed by wholesale licensees of the Umbro brand around the world.Starter China. In March 2018, the Company entered into an agreement with Photosynthesis Holdings, Co. Ltd. to sell up to no less than a 50%interest and up to a total of 60% interest in Starter China, which holds the Starter trademarks and related assets in respect of the Greater China territory. PHL’spurchase of the equity interest in Starter China is expected to occur over a three-year period commencing on January 15, 2020.Lee Cooper China. In June 2018, the Company entered into an agreement with POS Lee Cooper HK Co. Ltd. To sell up to no less than a 50% interestand up to a total of 60% interest in Lee Cooper China, which holds the Lee Cooper trademarks and related assets in respect of the Greater Chinaterritory. PLC’s purchase of the equity interest in Lee Cooper China is expected to occur over a two-year period commencing on January 15, 2024.11 Investments:Marcy Media Holdings, LLCIn July 2013, the Company purchased a minority interest in Marcy Media Holdings, LLC (“Marcy Media”), resulting in the Company’s indirectownership of a 5% interest in Roc Nation, LLC. Founded in 2008, Roc Nation is a full-service entertainment company. Roc Nation Sports, a division of RocNation, launched in Spring 2013 and focuses on elevating premier professional athletes’ career on and off the field by executing marketing and endorsementdeals, community outreach, charitable tie-ins, media relations and brand strategy. Roc Nation entertainment and talent agency represents Kevin Durant,Robinson Cano and many other influential athletes and artists. For additional information related to our investment in Marcy Media, see “Item 1A. RiskFactors – Risks Related to our Business” below and Note 5 in the Notes to Consolidated Financial Statements.Complex Media Inc.In September 2013, the Company purchased convertible preferred shares, representing on an as-converted basis as of December 31, 2014, anapproximate 14.4% minority interest in Complex Media Inc. (“Complex Media”), a multi-media lifestyle company which, among other things, ownsComplex magazine and its online counterpart, Complex.com. In July 2016, the Company received $35.3 million in connection with the sale of its interest inComplex Media. Refer to Note 5 in the Notes to Consolidated Financial Statements for further details.Galore Media Inc.In April 2016, the Company entered into agreements with Galore Media, Inc. (“Galore”), a marketing company formed in the year ended December 31,2015 (“FY 2015”) and still in a development stage. Under the agreements, the Company purchased 50,050 shares of Series A Preferred Stock of Galore for$0.5 million and entered into arrangements pursuant to which the Company agreed to purchase up to an aggregate $0.5 million of marketing services fromGalore for the year ended December 31, 2016. In connection with the marketing services arrangement, the Company received warrants that, as the Companypurchased specified levels of marketing services, became exercisable for additional shares of Galore’s Series A Preferred Stock at a nominal exerciseprice. Upon closing of the investment on April 21, 2016, the Company exercised the initial warrant which resulted in the Company receiving an additional46,067 shares of Series A Preferred Stock of Galore. Given these arrangements, the Company had an investment of approximately 11% of the equity ofGalore. In September 2017, the Company entered into a stock repurchase agreement with Galore to sell the Company’s outstanding shares of Series APreferred Stock of Galore. Refer to Note 5 in Notes to Consolidated Financial Statements for further details.Licensing StrategyThe Company’s principal business strategy is to maximize the value of its brands by entering into strategic license agreements with best-in-classlicensees that are responsible for designing, manufacturing and distributing the licensed products. Through our licensing business model, we havesubstantially eliminated inventory risk and reduced the operating exposure associated with traditional fully vertically integrated businesses, therebyresulting in attractive cash flows and operating margins. The Company has over 375 licenses and has benefited from the model’s scalability, which enables the Company to leverage its existing infrastructureto support new business and brands. A key objective of the Company is to capitalize on its brand management expertise and relationships to build andmaintain a diversified portfolio of consumer brands that generate increasing revenues. Through our international partnerships, we have successfully built avast network of licensees around the world that are growing our brands outside of the United States. The Company is also committed to continuouslyreinvesting in its global platform in order to provide licensees with preeminent brand management knowledge and services to allow all partners to benefitfrom being a part of the Iconix network.The Company licenses its brands across a broad range of product categories, including fashion apparel, footwear, accessories, sportswear, homefurnishings and décor, and beauty and fragrance. The Company seeks licensees with the ability to produce and sell quality products in their licensedcategories and to meet and exceed minimum sales and royalty payment thresholds.The Company maintains direct-to-retail and traditional wholesale licenses. Typically, in a direct-to-retail license, the Company grants exclusive rightsto one of its brands to a single national retailer for a broad range of product categories. For example, the Fieldcrest brand is primarily licensed exclusively toTarget in the United States across a variety of product categories. Direct-to-retail licenses provide retailers with proprietary rights to national brandsat favorable economics. In a traditional wholesale license, the Company grants the right to a specific brand to a single or small group of related productcategories to a wholesale supplier, who is permitted to sell licensed products to multiple stores within an approved distribution channel. For example, theCompany licenses the Umbro brand in the United States to numerous wholesale suppliers for products ranging from athletic wear to footwear to apparel, forsale and distribution primarily to department and specialty stores.12 The Company’s licenses typically require the licensee to pay the Company royalties based upon net sales with guaranteed minimum royalties in theevent that net sales do not reach certain specified targets. The Company’s licenses also typically require the licensees to pay to the Company certainminimum amounts for the advertising and marketing of the respective licensed brands. As of January 1, 2019, the Company and its joint ventures had acontractual right to receive over $405 million of aggregate minimum licensing revenue through the balance of all of their current licenses, excluding anyrenewals.The Company believes that coordination of brand presentation across product categories is critical to maintaining the strength and integrity of itsbrands. Accordingly, the Company typically maintains the right in its licenses to preview and approve all products, packaging and other presentations of thelicensed mark. Moreover, in many of its licenses, prior to each season, representatives of the Company supply licensees with trend guidance as to the “lookand feel” of the current trends for the season, including colors, fabrics, silhouettes and an overall style sensibility, and then work with licensees to coordinatethe licensed products across the categories to maintain the cohesiveness of the brand’s overall presentation in the market place. Thereafter, the Companyobtains and approves (or objects and requires modification to) product and packaging provided by each licensee on an on-going basis. In addition, theCompany communicates with its licensees throughout the year to obtain and review reporting of sales and calculation and payment of royalties.MarketingThe Company believes marketing is a critical element in maximizing brand value to its consumers, licensees and to the Company. The Company’s in-house marketing department conceives and produces omni-channel marketing initiatives for the Company’s brands. These initiatives aim to increase brandawareness, positive perception and drive-engagement and conversion. The Company believes that its national campaigns result in increased sales andconsumer recognition of its brands.The Company has organized its marketing structure to allow for ongoing updates to its marketing campaigns based upon market trends. Marketingconsists of four areas: Social and digital marketing, public relations, creative content generation and brand management. The Company uses its in-housetalent to create compelling 360° marketing campaigns that include social/digital marketing, print, outdoor, celebrity, influencers, bloggers and otherinnovative strategies. It also will utilize outside agencies when needed to supplement. In addition to building omni-channel campaigns, the Company workswith major retail partners to provide assets for online, digital/ social and in-store marketing.The Company maintains separate websites for each of its brands, in addition to www.iconixbrand.com to further market the brands. In addition, theCompany has established an intranet for approved vendors and service providers who can access additional materials and download them through a securenetwork.Many of the Company’s license agreements require the payment of an advertising royalty by the licensee, and in certain cases, the Company’slicensees are required to supplement the marketing of the Company’s brands by performing additional advertising through trade, cooperative or othersources.Trend directionThe Company’s in-house brand management supports the brands by providing licensees with unified trend direction, guidance and coordination ofthe brand image across all product categories. The fashion team is focused on identifying and interpreting the most current trends, both domestically andinternationally, by helping forecast the future design and product demands of the respective brands’ customers. Typically, the Company develops a trendguide, including color, print, pattern, fabrication and key silhouettes while being sensitive to the overall “DNA” of each brand. In addition, the Homedivision generates original designs and patterns, which both the licensees and DTR partners utilize to allow each brand their own brand identity andindividual lifestyle.This is accomplished by delivering these guides each season. The fashion team also provides insight into new emerging categories and business shiftsthat affect the merchandising of the brand. Often times, these new ideas can be formulated and sold as capsule collections or sub-brands into current or newretailers, based on the guidance given by the fashion and brand management team. In addition, the Company has product approval rights in most licenses andfurther controls the look and mix of products its licensees produce through that process. In cases where we do not hold contractual approval rights, as is thecase with many direct-to-retail licensees, the brand management and fashion teams still work closely with the designers and merchants of the particularretailer to give guidance and opinions on the product aesthetic.The team often provides bought samples from comparison shopping that inspire key items within each collection. With respect to Alberta ULC (ownerof the Buffalo brand), the Company has entered into arrangements with its partner to oversee and control the creative aspects of the brand, including designand brand marketing. With respect to our Umbro brand, we have created a design entity, Diamond Icon, that designs apparel and footwear products to servicethe needs of our global licensee network.13 Key direct-to-retail licensesFor the year ended December 31, 2018, the Company’s largest direct-to-retail licensees were with Wal-Mart for Danskin Now and Waverly Inspirationsbrands, Target for the Mossimo and Fieldcrest brands, Kohl’s for the Candie’s and Mudd brands and Kmart/Sears for the Joe Boxer, Bongo and Cannonbrands. The relationships with these major retailers collectively represented approximately 26% of total revenue for the period.Wal-Mart licensesRevenue generated by the Company’s four licenses with Wal-Mart accounted for, in the aggregate, 4% and 16% of the Company’s revenue for theyears ended December 31, 2018 (“FY 2018”) and FY 2017, respectively. The following is a description of these licenses:Danskin Now. In July 2008, the Company entered into a license agreement with Wal-Mart pursuant to which Wal-Mart was granted the exclusive rightto use the Danskin Now trademark in the United States and Canada in connection with the design, manufacture, promotion and sale of women’s and girl’s softlines, including active wear, dancewear, footwear, intimate apparel, apparel accessories and fitness equipment through Wal-Mart stores and Wal-Mart.com.The term of the license continues through January 31, 2019. Following the expiration of the license on January 31, 2019, while Danskin Now is no longerlicensed directly to Wal-Mart, the Company has entered into license agreements with other licensees which will sell the product into Wal-Mart. Ocean Pacific/OP. In August 2007, the Company entered into an exclusive direct-to-retail license agreement with Wal-Mart granting Wal-Mart theright to design, manufacture, sell and distribute through Wal-Mart stores and Wal-Mart.com a broad range of apparel and accessories under the OceanPacific/OP marks in the United States and Canada. The OP license expired on June 30, 2017.Starter. In December 2007, the Company entered into a license agreement with Wal-Mart granting Wal-Mart the exclusive right to design,manufacture, sell and distribute a broad range of apparel and accessories under the Starter trademark in the United States and Canada. The Starter licenseexpired December 31, 2017. Waverly Inspirations. In July 2014, the Company entered into a license agreement with Wal-Mart granting Wal-Mart the exclusive right to design,manufacture, sell and distribute a broad range of fabrics and crafts under the Waverly Inspirations trademark in the United States. The current term of thelicense expires on January 31, 2020.Target licensesRevenue generated by the Company’s licenses with Target accounted for, in the aggregate, 6% and 9% of the Company’s revenue for FY 2018 and FY2017, respectively. The following is a description of these licenses.Mossimo. As part of the Company’s acquisition of the Mossimo trademarks in October 2006, the Company acquired the license with Target, which wasoriginally signed in 2000 and was subsequently amended and restated in March 2006. Pursuant to this license, as further amended, Target had the exclusiveright to design, manufacture, and sell through Target stores and Target.com in the United States, its territories and possessions, a wide range of Mossimo-branded products, including men’s, women’s and kid’s apparel, footwear and fashion accessories. The license expired on October 31, 2018.Fieldcrest. As part of the Company’s acquisition of Official-Pillowtex in October 2007, the Company acquired the license with Target for theFieldcrest brand, which commenced in March 2004. Pursuant to this license, Target has the exclusive right to design, manufacture, and sell through Targetstores and Target.com in the United States and Canada a wide range of home products, including bedding, towels, rugs, furniture and dinnerware. The currentterm of the license continues through January 31, 2020. The license has been renewed two prior times. The license provides for guaranteed annual minimumroyalties that Target is obligated to pay the Company for each contract year.Umbro. In August 2017, the Company entered into a distribution agreement with Target granting Target the exclusive right to sell and distributeUmbro-branded apparel and soccer equipment in the United States. The current term of the agreement continues through January 31, 2022 and Target has theoption to renew for up to 1 additional term of 3 years. The agreement provides for minimum sales requirement for each contract year.Kohl’s licensesRevenue generated by the Company’s two licenses with Kohl’s accounted for, in the aggregate, 10% and 9% of the Company’s revenue for FY 2018and FY 2017, respectively. The following is a description of these licenses.14 Candie’s. In December 2004, the Company entered into a license agreement with Kohl’s for an initial term of five years which continued throughJanuary 29, 2011. Pursuant to this license, Kohl’s has the exclusive right to design, manufacture, sell and distribute a broad range of products under theCandie’s trademark, including women’s, and juniors’ apparel, and accessories (except prescription eyewear). The license provides for guaranteed minimumroyalties and advertising payments that Kohl’s is obligated to pay the Company for each contract year. The current term of the license continues throughJanuary 31, 2021. The Company has been notified that it is unlikely that Kohl’s will renew the license agreement subsequent to the current term. Mudd. In November 2008, the Company entered into a license agreement with Kohl’s granting Kohl’s the exclusive right to design, manufacture, selland distribute a broad range of Mudd-branded apparel and accessories in the United States and its territories. The current term of the license continuesthrough December 31, 2020 and Kohl’s has the option to renew for up to two additional consecutive terms of five years. The Company is currently innegotiations for renewal of the license agreement. The license provides for guaranteed minimum royalties and advertising payments that Kohl’s is obligatedto pay the Company for each contract year.Kmart/Sears licensesRevenue generated by the Company’s three licenses with Kmart/Sears, accounted for, in the aggregate, 7% and 8% of the Company’s revenue for FY2018 and FY 2017, respectively. Kmart/Sears filed for Chapter 11 bankruptcy in October 2018 and subsequently rejected the existing license agreements forJoe Boxer, Cannon and Bongo. We are currently working with Kmart/Sears as to whether they will utilize these brands in future periods. CompetitionThe Company’s proprietary brands are all subject to extensive competition from various domestic and foreign brands. These competitors compete withthe Company’s licensees in terms of design, quality, price, product, advertising and service. We believe that our strong brand management platform andproven international partnerships as well as our experienced management team differentiate our Company from our competitors.Each brand has many competitors specific to certain distribution channels that span a broad variety of product categories, including the fashionapparel, home furnishings and decor, sports and entertainment industries. For example, Candies’ competes with respect to young women’s and juniors fast-fashion in the United States at the mid-tier channel with national brands like Express and XOXO, Starter competes with brands like Russell Athletic and C9 inthe athletic apparel category, and Avia and And1 competes in the footwear category at the mass-tier channel. Umbro competes with global brands like Nikeand Adidas in active-wear and with global and local brands in technical soccer categories. Additionally, a significant portion of our brands also competewith big box retailers “private-label” and/or “exclusive” brands.The Company also faces competition in securing retail and wholesale licenses. Companies owning established brands may decide to enter intolicensing arrangements with retailers or wholesalers similar to the ones the Company currently has in place, therefore creating direct competition. Similarly,the retailers that currently license our brands may decide to develop their own private labels and/or purchase brands rather than enter into license agreementswith the Company.Lastly, in America, the Company competes for acquisitions with traditional apparel, consumer and entertainment brand companies, financial buyersand other brand management companies. Throughout the rest of the world, the Company also competes for the acquisition of global brands with strategic andfinancial buyers.Intellectual PropertyWe believe that the Company’s worldwide IP portfolio, which includes trademarks, service marks, copyrights and other proprietary information, is ourmost valuable asset. As of December 31, 2018, we owned nearly 6,300 trademark and service mark registrations and applications – over 400 of which aredomestic and over 5,800 of which are foreign. Trademarks and associated marks are registered or pending registration with the U.S. Patent and TrademarkOffice and in other countries throughout the world in block letter and/or logo formats, as well as in combination with a variety of ancillary marks for use withrespect to a variety of product categories, including footwear, apparel, fragrance, handbags, watches and various other goods and services, including in somecases, home accessories and electronics. In addition, the Company owns numerous copyrights in its iconic Waverly and Joe Boxer patterns and designs. TheCompany also owns over 1,500 domain names worldwide and registers key domain names containing its trademarks.EmployeesAs of December 31, 2018, the Company had a total of 122 full-time employees. Our full-time employees consisted of our CEO, senior managers,middle management, marketing and administrative personnel. Of the Company’s 122 full-time employees, 5515 employees reside in the U.S., 61 reside in Europe, five in China, and one in the Middle East. None of the Company’s employees are represented by a laborunion. The Company considers its relationship with its employees to be satisfactory.Available InformationThe Company maintains a website at www.iconixbrand.com, which provides a wide variety of information on each of its brands. The Company alsomakes available free of charge on its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and anyamendments to those reports filed with or furnished to the Securities and Exchange Commission, herein referred to as the SEC, under applicable law as soonas reasonably practicable after it files such material. The Company’s website also contains information about its history, investor relations, governance andlinks to access copies of its publicly filed documents. Further, the Company has established an intranet with approved vendors and service providers who canaccess additional materials and download them through a secure network. In addition, there are websites for many of the Company’s brands, operated by theCompany or its licensees, for example, at www.candies.com, www.joeboxer.com and www.danskin.com. The information regarding the Company’s websiteaddress and/or those sites established for its brands is provided for convenience, and the Company is not including the information contained on theCompany’s and brands’ websites as part of, or incorporating it by reference into, this Annual Report on Form 10-K.Item 1A. Risk FactorsWe operate in a changing environment that involves numerous known and unknown risks and uncertainties that could impact our operations. Thefollowing highlights some of the factors that have affected, and in the future could affect, our operations:RISKS RELATED TO OUR CAPITAL STRUCTURE AND DEBTThe Company may not generate sufficient cash in the next twelve months necessary to fund continued operations.Our ability to make cash payments on and to refinance our indebtedness and to fund future operations will depend on our ability to generatesignificant operating cash flow in the future. This ability is, to a significant extent, subject to general economic, financial, competitive and other factors thatare beyond our control. We cannot assure you that our business will generate cash flow from operations in amount sufficient to enable us to fund our liquidityneeds, including fees payable in connection with waivers obtained from our creditors and lenders, costs related to the impairment analysis discussed belowand costs related to ongoing litigation (see “Legal Proceedings” and the risk factor entitled “—We have been named in securities litigations, which could beexpensive and could divert our management’s attention. There may be additional class action and/or derivative claims”). As a result, we may need torefinance all or a portion of our indebtedness, on or before its maturity, obtain additional equity or debt financing, sell existing assets or enter into strategicalliances with other parties. We cannot assure you that we will be able to do so on commercially reasonable terms or at all, or on terms that would beadvantageous to our stockholders. Any inability to generate sufficient cash flow, refinance our indebtedness or incur additional indebtedness oncommercially reasonable terms could adversely affect our financial condition and could cause us to be unable to service our existing debt. If we are unable toobtain a waiver, we would be in default under our existing indebtedness, the holders of such indebtedness could exercise their rights as described above, andwe could be forced into bankruptcy or liquidation. Even if we are able to obtain such waivers, limited liquidity may cause us to delay or abandon some or allof our plans to invest in new brands and may have a material and adverse effect our ability to generate and/or increase revenue going forward or cause us tobe unable to maintain existing licenses on favorable terms and conditions. Additionally, we have historically received cash payments of management feesand residual fees under the agreements governing our Senior Secured Notes (as defined below), however, there is no guarantee we will receive any or all ofthese amounts in future years. Any decrease in cash received under these arrangements in future periods could adversely affect our liquidity.Our existing and future debt obligations could impair our liquidity and financial condition, and in the event we are unable to meet our debtobligations we could lose title to certain trademarks.As of December 31, 2018, the Company’s consolidated balance sheet reflects debt of approximately $675.2 million (which is net of $4.7 million ofdebt issuance costs), including (i) securitization debt of $460.8 million (net of original issue discount of $4.7 million) under our Series 2012-1 4.229% SeniorSecured Notes, Class A-2, Series 2013-1 4.352% Senior Secured Notes, Class A-2 (collectively, the “Senior Secured Notes”), and the Variable Funding Notes(as defined below), (ii) senior secured debt of $171.1 million (net of original issue discount of $18.3 million) under our Senior Secured Term Loan (as definedbelow), and (iii) subordinated secured debt of $109.7 million (which is recorded in our consolidated balance sheet as of December 31, 2018 at a fair value of$48.1 million) under our 5.75% convertible senior subordinated secured second lien notes due 2023 (the “5.75% Convertible Notes”). We may also assumeor incur additional debt, including secured debt, in the future in connection with, or to fund, future acquisitions or refinance our existing debt obligations.Our outstanding debt obligations: •could impair our liquidity;16 •could make it more difficult for the Company to satisfy its other obligations; •require us to dedicate a substantial portion of our cash flow to payments on our debt obligations, which reduces the availability of our cashflow to fund working capital, capital expenditures and other corporate requirements; •could impede us from obtaining additional financing in the future for working capital, capital expenditures, acquisitions and general corporatepurposes; •impose restrictions on us with respect to the use of our available cash; •make us more vulnerable in the event of a downturn in our business prospects and could limit our flexibility to plan for, or react to, changes inour licensing markets; and •could place us at a competitive disadvantage when compared to our competitors who have less debt and/or less leverage.In the event that we fail to make any required payment under any current or future agreements governing our indebtedness or fail to comply with thefinancial and operating covenants contained in those agreements, we would be in default regarding that indebtedness. A debt default could significantlydiminish the market value and marketability of our common stock, result in the acceleration of the payment obligations under all or a portion of ourconsolidated indebtedness and impact the Company’s ability to continue as a going concern.The terms of our debt agreements have restrictive covenants and our failure to comply with any of these could put us in default, which would have anadverse effect on our business and prospects, and could cause us to lose title to our key IP assets.Unless and until we repay all outstanding borrowings under our securitization debt, we will remain subject to the restrictive terms of these borrowings.The securitization debt, under which certain of our wholly-owned subsidiaries (as defined below, the “Co-Issuers”) issued and guaranteed the Senior SecuredNotes and a revolving financing facility consisting of variable funding notes, herein referred to as Variable Funding Notes, contain a number of covenants,with the most significant financial covenant being a debt service coverage calculation. These covenants limit the ability of certain of our subsidiaries to,among other things: •sell assets; •engage in mergers, acquisitions and other business combinations; •declare or pay distributions on their equity interests; •incur, assume or permit to exist additional indebtedness or guarantees; and •incur liens.These restrictions could reduce our liquidity and thereby affect our ability to pay dividends or repurchase shares of our common stock. Thesecuritization debt requires us to maintain a specified financial ratio relating to available cash to service the borrowings at the end of each fiscal quarter. Ourability to meet this financial ratio can be affected by events beyond our control, and we may not satisfy such a test. A breach of this covenant could result in arapid amortization event or default under the securitization debt.In the event that a rapid amortization event occurs or continues under the indenture (including, without limitation, upon an event of default under theindenture or the failure to repay the securitization debt at the end of the five year interest-only period), the funds available to us would be or are reduced oreliminated, which would in turn reduce our ability to operate or grow our business.Furthermore, a reserve account has been established for the benefit of the secured parties under the indenture for the purpose of trapping cash upon theoccurrence of our failure to maintain a specified financial ratio at the end of each fiscal quarter. Once it commences, such cash trapping period would extenduntil the quarterly payment date on which that financial ratio becomes equal to or exceeds the minimum ratio. In the event that a cash trapping periodcommences, the funds available for the Co-Issuers to pay amounts to us will be reduced or eliminated, which would in turn reduce our ability to support ourbusiness and service repayment obligations under our other financing arrangements (including under the Senior Secured Term Loan and 5.75% ConvertibleNotes).In an event of default, all unpaid amounts under the Senior Secured Notes and Variable Funding Notes could become immediately due and payable atthe direction or consent of holders of a majority of the outstanding Senior Secured Notes. Such acceleration of our debt could have a material adverse effecton our liquidity if we are unable to negotiate mutually acceptable terms with our lenders or if alternate funding is not available to us.Furthermore, if amounts owed under the securitization debt were to become accelerated because of a failure to meet the specified financial ratio or tomake required payments, the holders of our Senior Secured Notes would have the right to foreclose on17 the Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear, Cannon, Fieldcrest, RoyalVelvet, Charisma, Starter and Waverly trademarks in the United States and Canada (with the exception of the London Fog brand for outerwear in the UnitedStates); on our joint venture interests in Hardy Way, MG Icon and ZY Holdings; on the equity interests in certain of our subsidiaries; and on other relatedassets securing the notes.The Senior Secured Term Loan and the indenture in respect of our 5.75% Convertible Notes (the “5.75% Notes Indenture”) also contain a number ofcovenants that restrict our ability and the ability of certain of our subsidiaries, their respective subsidiaries and certain joint ventures to, among other things: •grant liens on certain assets; •consummate specified types of acquisitions or acquisitions requiring cash consideration in excess of specified amounts; •make fundamental changes (including mergers and consolidations); •make restricted payments and investments; and •incur or prepay certain indebtedness.In addition, our wholly-owned subsidiary IBG Borrower LLC (“IBG Borrower”), as borrower under the Senior Secured Term Loan, must maintain aspecified minimum asset coverage ratio and leverage ratio. Upon the occurrence of an event of default under the Senior Secured Term Loan or a default under the 5.75% Notes Indenture, in addition to theinterest rate increasing by an additional 3% per year under the Credit Agreement, all unpaid amounts under the Senior Secured Term Loan and the 5.75%Convertible Notes could become immediately due and payable. An acceleration of our debt could have a material adverse effect on our liquidity if we wereto be unable to negotiate mutually acceptable terms with our lenders or holders of the 5.75% Convertible Notes or other debt obligations as they come due.In addition, a default under one debt instrument relating to our existing indebtedness could in turn permit lenders or holders under other debt instruments todeclare borrowings outstanding under those instruments to be due and payable pursuant to cross-default and cross-acceleration clauses.In the event of a default under our indebtedness under our Senior Secured Term Loan, which is not waived by our lenders thereunder, such lenders may beable to declare all of the indebtedness under such facilities, together with accrued interest, to be due and payable.In the event of a default under our indebtedness under our Senior Secured Term Loan, which is not waived by our lenders thereunder, such lendersgenerally would be able to declare all of the indebtedness under such facilities, together with accrued interest, to be due and payable. In addition, borrowingsunder our Senior Secured Term Loan are secured by a first-priority lien on substantially all of the assets of the Guarantors defined therein. In the event of adefault under that facility, such lenders generally would be entitled to seize the collateral, including assets which are necessary to operate our business.Pursuant to the terms of the 5.75% Note Indenture, the 5.75% Convertible Notes are secured by a second-priority lien on all of the assets of the sameGuarantors listed in the Senior Secured Term Loan. Subject to the terms of an Intercreditor Agreement governing the relationship between the lenders underthe Senior Secured Term Loan and the holders of the 5.75% Convertible Notes, in the event of a default under our Senior Secured Term Loan, the lendersunder the Senior Secured Term Loan generally would be entitled to seize the collateral, including assets which are necessary to operate our business. Inaddition, default under one debt instrument relating to our existing indebtedness could in turn permit lenders or holders under other debt instruments todeclare borrowings outstanding under those instruments to be due and payable pursuant to cross-default and cross-acceleration clauses. Moreover, upon theoccurrence of an event of default relating to our indebtedness, any commitments to extend further credit to us could be terminated.Accordingly, the occurrence of a default under any debt instrument, unless cured or waived, may have a material adverse effect on our results ofoperations.RISKS RELATED TO OUR COMMON STOCKThe market price of our common stock, which has significantly declined in the past year, has been, and may continue to be, volatile, which could reducethe market price of our common stock.The market price of our common stock has significantly declined in the past year. Furthermore, the publicly traded shares of our common stock haveexperienced, and may continue to experience, significant price and volume fluctuations. This market volatility could further reduce the market price of ourcommon stock, regardless of our operating performance. In addition, the trading price of18 our common stock could change significantly over short periods of time in response to actual or anticipated variations in our quarterly operating results,announcements by us, our licensees or our respective competitors, factors affecting our licensees’ markets generally and/or changes in national or regionaleconomic conditions, making it more difficult for shares of our common stock to be sold at a favorable price or at all. The market price of our common stockcould also be reduced by general market price declines or market volatility in the future or future declines or volatility in the prices of stocks for companiesin the trademark licensing business or companies in the industries in which our licensees compete. In addition, any future conversions of the 5.75%Convertible Notes would dilute the holdings of our then existing stockholders, including any remaining holders of our 5.75% Convertible Notes that receiveshares of our common stock upon conversion of their notes, and could reduce the market price of our common stock.Future issuances of our common stock may cause the prevailing market price of our shares to decrease.We have issued a substantial number of shares of common stock that are eligible for resale under Rule 144 of the Securities Act of 1933, as amended,or Securities Act, and that may become freely tradable. We may, in the future, issue additional shares of our common stock. Pursuant to the terms of our5.75% Convertible Notes, we may elect to pay interest on such notes in shares of our common stock, rather than in cash. Upon conversion of our 5.75%Convertible Notes, we may elect to satisfy our conversion obligations solely in shares of our common stock, which would result in an increase in theoutstanding number of shares of our common stock that, subject to certain limitations, would be freely tradable. We have also already issued a substantialnumber of restricted shares of common stock as inducement grants in connection with the Company’s hiring of a new CEO in October 2018 and a new CFO inFebruary 2019. If the holders of 5.75% Convertible Notes choose to exercise their conversion rights and sell the underlying shares of common stock in thepublic market, or if holders of currently restricted shares of our common stock choose to sell such shares in the public market under Rule 144 or otherwise, theprevailing market price for our common stock may decline. The sale of shares issued upon the exercise of our derivative securities or other issuances of ourcommon stock could also further dilute the holdings of our then existing stockholders, including holders of convertible notes that receive shares of ourcommon stock upon conversion of their notes. In addition, future issuances of shares of our common stock could impair our ability to raise capital by offeringequity securities.If our common stock is delisted from the Nasdaq Global Select Market it may limit our ability to raise additional funds, reduce trading liquidity in ourcommon stock and otherwise create additional volatility and/or downward pressure on the price of our common stock.As previously disclosed, on November 27, 2018, the Company received a written notice from Nasdaq that the Company’s common stock would bedelisted from the Nasdaq Global Select Market. In accordance with Nasdaq’s procedures, the Company appealed the Nasdaq’s determination by requesting ahearing (the “Hearing”) before a Nasdaq Hearings Panel (the “Panel”) to seek continued listing, which stayed the delisting of the Company’s common stock.The Hearing occurred on January 10, 2019. On January 15, 2019, the Panel granted the Company’s request for continued listing of the Company’s commonstock on The Nasdaq Global Select Market pursuant to an extension through May 27, 2019, subject to the condition that the Company regain compliancewith its Nasdaq listing rules by such date and provide the Panel with certain interim progress reports. If the Company does not regain compliance with theNasdaq listing rules by May 27, 2019 or, based on the Company’s interim progress reports, the Panel reconsiders the extension before then, Nasdaq will delistthe Company’s common stock from the Nasdaq Global Select Market.On March 14, 2019, the Company completed a reverse stock split at a ratio of one-for-ten of its outstanding common stock (the “Reverse StockSplit”). However, even after the completion of the Reverse Stock Split, there is no guarantee that the Company will regain compliance with the Nasdaqlisting rules by May 27, 2019, or stay in compliance with such rules thereafter even if it does regain compliance as of such date. As a result, there is noguarantee that the Company’s common stock will not be delisted on or after May 27, 2019. If the Company’s common stock is delisted from the NasdaqGlobal Select Market it may limit its ability to raise additional funds, reduce trading liquidity in the Company’s common stock and otherwise createadditional volatility and/or downward pressure on the price of the Company’s common stock.Future issuances of equity or convertible notes to raise additional needed capital may result in significant dilution to our stockholders.In order to raise additional needed capital, the Company may issue shares of its common stock or shares of preferred stock or debt convertible intoshares of its common stock or preferred stock. There can be no assurance that such issuances will be at current market rates or on terms favorable to theCompany and its existing stockholders. Any raising of capital involving the issuance of equity is expected to result in a significant dilution to existingstockholders. The terms of any debt securities issued could also impose significant restrictions on our operations. Broad market and industry factors mayseriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds.Similarly, if our common stock is delisted from the NASDAQ Global Market, it may limit our ability to raise additional funds.19 We have previously identified material weaknesses in our internal control over financial reporting, and during the course of preparing our financialstatements for the year ended December 31, 2018, we identified a material weakness in our internal control over financial reporting. If our remediation ofthis material weakness is not effective, we may be unable to report our financial condition or results of operations accurately or on a timely basis andinvestors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may be adverselyaffected.As previously disclosed, we and our auditors have identified material weaknesses in our internal control over financial reporting for prior periods.Following the identification of the material weaknesses for prior periods, management implemented a remediation plan for such materialweaknesses. Although such material weaknesses have been remediated (with the exception of the financial reporting for the modification of debt), there canbe no assurance that the internal controls we implement will be effective or that in the future we will not suffer from additional ineffective disclosure controlsand procedures or internal controls over financial reporting, which would further impair our ability to provide reliable and timely financial reports.We are continuing to implement additional review procedures and adopt additional control procedures to remediate the material weakness related tothe financial reporting for the modification of debt which was previously identified. Moreover, because of the inherent limitations of any control system,material misstatements due to error or fraud may not be prevented or detected on a timely basis, or at all. If we are unable to remediate effectively thesematerial weaknesses, we may be unable to report our financial condition or financial results accurately or report them within the timeframes required by theSEC, and our business may be further harmed. Historical restated financial statements and failures in internal controls may also cause investors to loseconfidence in our financial reporting process and the accuracy and completeness of our financial reports, which could have a negative effect on the price ofour common stock, subject us to regulatory investigations and penalties, and adversely impact our business and financial condition.We do not anticipate paying cash dividends on our common stock in the short term.An investor should not rely on an investment in our common stock to provide dividend income in the short term, as we have not paid any cashdividends on our common stock and do not plan to pay any in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand ourexisting licensing operations, further develop our trademarks and finance the acquisition of additional trademarks. Accordingly, investors must rely on salesof their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment.RISKS RELATING TO OUR BUSINESSThe failure of our licensees to adequately produce, market, import and sell products bearing our brand names in their license categories, continue theiroperations, renew their license agreements or pay their obligations under their license agreements could result in a decline in our results of operations.Our revenue is almost entirely dependent on royalty payments made to us under our license agreements. Although the license agreements for ourbrands usually require the advance payment to us of a portion of the license fees and, in most cases, provide for guaranteed minimum royalty payments to us,the failure of our licensees to satisfy their obligations under these agreements, or their inability to operate successfully or at all, could result in their breachand/or the early termination of such agreements, their non-renewal of such agreements or our decision to amend such agreements to reduce the guaranteedminimums or sales royalties due thereunder, thereby eliminating some or all of that stream of revenue. There can be no assurances that we will not lose thelicensees under our license agreements due to their failure to exercise the option to renew or extend the term of those agreements or the cessation of theirbusiness operations (as a result of their financial difficulties or otherwise) without equivalent options for replacement. Any of such failures could reduce theanticipated revenue stream to be generated by the license agreements. In addition, the failure of our licensees to meet their production, manufacturing anddistribution requirements, or to be able to continue to import goods (including, without limitation, as a result of changes to laws or trade regulations, tradeembargoes, labor strikes or unrest, especially, for example, given the recent uncertainty around tariffs in respect of trade between the US and China), couldcause a decline in their sales and potentially decrease the amount of royalty payments (over and above the guaranteed minimums) due to us. Further, thefailure of our licensees and/or their third party manufacturers, which we do not control, to adhere to local laws, industry standards and practices generallyaccepted in the United States in areas of worker safety, worker rights of association, social compliance, and general health and welfare, could result inaccidents and practices that cause disruptions or delays in production and/or substantial harm to the reputation of our brands, any of which could have amaterial adverse effect on our business, financial position, results of operations and cash flows. A weak economy or softness in certain sectors includingapparel, consumer products, retail and entertainment could exacerbate this risk. This, in turn, could decrease our potential revenues and cash flows.20 A substantial portion of our licensing revenue is concentrated with a limited number of licensees, such that the loss of any of such licensees or theirrenewal on terms less favorable than today, could slow our growth plans, decrease our revenue and impair our cash flows.Our licenses with Walmart, Target, Kohls, Kmart/Sears and Global Brands Group represent, each in the aggregate, our five largest licensees during thetwelve-month period ended December 31, 2018, representing approximately 4%, 6%, 10%, 7% and 10%, respectively, of our total revenue for such period.Because we are dependent on these licensees for a significant portion of our licensing revenue, if any of them were to have financial difficultiesaffecting their ability to make payments, cease operations, or if any of these licensees decides not to renew or extend any existing agreement with us, or tosignificantly reduce its sales of licensed products under any of the agreement(s), our revenue and cash flows could be reduced substantially.As previously disclosed, the Company was notified of the following non-renewals of license agreements: (i) the OP, Starter and Danskin Now DTRlicense agreements with Walmart, (ii) the Mossimo DTR license agreement with Target, (iii) the Royal Velvet license agreement with J.C. Penney’s and (iv)the Material Girl DTR license agreement with Macy’s. Also, Kmart/Sears filed for Chapter 11 bankruptcy in October 2018 and subsequently rejected theexisting license agreements for Joe Boxer, Cannon and Bongo. While the Company is actively working to place these brands with other licensees, and is innegotiations with Kmart/Sears related to its existing license agreements, the failure to enter into replacement license agreements for these brands on economicterms similar to such DTR arrangements may adversely affect our future revenues and cash flows.In addition, we may face increasing competition in the future for direct-to-retail licenses as other companies owning established brands may decide toenter into licensing arrangements with retailers similar to those we currently have in place. Furthermore, our current or potential direct-to-retail licensees maydecide to more prominently promote and market competing brands, or develop or purchase other or establish their own brands, rather than continue theirlicensing arrangements with us. In addition, increased competition could result in lower sales of products offered by our direct-to-retail licensees under ourbrands. If our competition for retail licenses increases, it may take us longer to procure additional retail licenses.We were engaged in a comment letter process with the SEC Staff and undertook an internal review of our financial statements, which resulted in ourBoard, Audit Committee and current management restating certain of our historical financials. In addition, we have received a formal order ofinvestigation from both the SEC and the U.S. Department of Justice (“DOJ”). Restatements of financial statements and results of the SEC’s or DOJ’sinvestigation has had and could continue to have a negative effect on our business and stock price.As previously disclosed, the Company received a formal order of investigation from the SEC staff in December 2015 and was contacted by the U.S.Attorney’s office for the Southern District of New York (the “SDNY”) in December 2018 regarding that matter. The Company continues to cooperate fullywith the SEC and SDNY regarding this matter. However, there can be no guarantee as to the amount of internal and external resources we may need to devoteto responding to any further requests we may receive from the SEC and/or SDNY. In this regard, the legal and accounting fees and expenses we may incur, orthe timeline for resolution or the ultimate outcome of the investigation. In addition, if the SEC and/or SDNY were to charge the Company with violations, wecould potentially be subject to fines, penalties or other adverse consequences, and our business and financial condition could be adversely impacted.We are currently involved in litigation relating to our investment in Marcy Media which may result in a partial or total loss of our investment in MarcyMedia.As a result of our inability to obtain financial, tax or other business information from Marcy Media, or its controlling shareholders and affiliates,including Marcy Media, LLC, Roc Nation and Shawn Carter (aka Jay-Z), we are in the process of litigating to obtain access to such financial information andseeking alternatives to monetize this investment (including special financing to fund current and/or additional litigation relating to our investment in MarcyMedia, the sale of the litigation claim to a third party or an outright sale of our investment in Marcy Media to a third party).As of December 31, 2018, we evaluated the investment in Marcy Media for impairment and noted that there are no additional facts and circumstancesto suggest that our investment is impaired. As a result of our inability to obtain any financial, tax or other business information relating to Marcy Media,however, in the future, we may be required to write down a portion of or all of these assets and such write-down could have an adverse impact on our results ofoperations in a future period.We have a material amount of goodwill and other intangible assets, including our trademarks, recorded on our balance sheet. As a result of changes inmarket conditions and declines in the estimated fair value of these assets, we may, in the future, be required to21 further write down a portion of this goodwill and other intangible assets and such write-down would, as applicable, either decrease our net income orincrease our net loss.As of December 31, 2018, goodwill represented approximately $26.1 million, or approximately 4% of the Company’s total consolidated assets, andtrademarks and other intangible assets represented approximately $337.7 million, or approximately 53% of our total consolidated assets. Under current U.S.GAAP accounting standards, goodwill and indefinite life intangible assets, including most of our trademarks, are no longer amortized, but instead are subjectto impairment evaluation based on related estimated fair values, with such testing to be done at least annually.In FY 2018, as a result of a decline in net sales as well as a decline in future guaranteed minimum royalties from license agreements for certain brands,the Company recorded a total non-cash asset impairment charge, related to the write-off of certain of our trademarks and goodwill, in the amount ofapproximately $174.2 million.As previously disclosed, in November 2017, as of a result of, among other things, the recent decisions by certain licensees not to renew existingMossimo and Danskin Now license agreements and expected diminished revenues in FY 2018 across several of the Company’s other brands, the Companyaccelerated the timing of its annual impairment testing of goodwill and intangible assets to be completed in connection with the preparation of its financialstatements for the quarter ended September 30, 2017. As a result of such testing, the Company recorded a total non-cash asset impairment charge, related tothe write-off of certain of our trademarks and goodwill, in the amount of approximately $625.5 million. Additionally, in the fourth quarter of FY 2017, as aresult of the recent notification of JC Penney not renewing the existing Royal Velvet license agreement, the Company recorded an additional non-cash assetimpairment charge, related to the write-off of the Royal Velvet trademark, in the amount of approximately $4.1 million. As a result, total trademark andgoodwill impairment recorded for FY 2017 is in the amount of approximately $629.6 million.There can be no assurance that any future downturn in the business of any of the Company’s segments, or a continued decrease in our marketcapitalization, will not result in a further write-down of goodwill or trademarks, which would either decrease the Company’s net income or increase theCompany’s net loss, which may or may not have a material impact to the Company’s consolidated statement of operations.As a result of the intense competition within our licensees’ markets and the strength of some of their competitors, we and our licensees may not be able tocontinue to compete successfully.Many of our trademark licenses are for products in the apparel, fashion accessories, footwear, beauty and fragrance, home products and décorindustries in which our licensees face intense competition, including from our other brands and licensees, as well as from third party brands and licensees. Ingeneral, competitive factors include quality, price, style, name recognition and service. In addition, various fads and the limited availability of shelf spacecould affect competition for our licensees’ products. Many of our licensees’ competitors have greater financial, importation, distribution, marketing and otherresources than our licensees and have achieved significant name recognition for their brand names. Our licensees may be unable to compete successfully inthe markets for their products, and we may not be able to continue to compete successfully with respect to our licensing arrangements.Our business is dependent on continued market acceptance of our brands and the products of our licensees bearing these brands.Although most of our licensees guarantee minimum net sales and minimum royalties to us, a failure of our brands or of products bearing our brands toachieve or maintain market acceptance could cause a reduction of our licensing revenue and could further cause existing licensees not to renew theiragreements. Such failure could also cause the devaluation of our trademarks, which are our primary IP assets, making it more difficult for us to renew ourcurrent licenses upon their expiration or enter into new or additional licenses for our trademarks. In addition, if such devaluation of our trademarks were tooccur, a material impairment in the carrying value of one or more of our trademarks could also occur and be charged as an expense to our operating results.The industries in which we compete, including the apparel industry, are subject to rapidly evolving trends and competition. In addition, consumertastes change rapidly. The licensees under our licensing agreements may not be able to anticipate, gauge or respond to such changes in a timely manner.Failure of our licensees to anticipate, identify and capitalize on evolving trends could result in declining sales of our brands and devaluation of ourtrademarks. Continued and substantial marketing efforts, which may, from time to time, also include our expenditure of significant additional funds to keeppace with changing consumer demands, are required to maintain market acceptance of the licensees’ products and to create market acceptance of newproducts and categories of products bearing our trademarks; however, these expenditures may not result in either increased market acceptance of, or licensesfor, our trademarks or increased market acceptance, or sales, of our licensees’ products. Furthermore, while we believe that we currently maintain sufficientcontrol over the products our licensees’ produce under our brand names through the provision of trend direction and our right to preview and approve amajority of such products, including their presentation and packaging, we do not actually22 design or manufacture products bearing our marks, and therefore, have more limited control over such products’ quality and design than a traditional productmanufacturer might have.Our success is largely dependent on the continued service of our key personnel.As previously disclosed, we have experienced significant turnover in our senior management team. While we are not aware of any further pendingchanges in key management positions, we cannot provide assurance that we will effectively manage our current management transition or other futuremanagement changes we may experience. An inability to effectively manage these changes may impact our ability to retain our senior executives and otherkey employees, which could harm our operations. Additional turnover at the senior management level may create instability within the Company and ouremployees may terminate their employment, which could further impede our ability to maintain day to day operations. Such instability could also impedeour ability to fully implement our business plan and growth strategy, which would harm our business and prospects.Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.Our future effective tax rates could be adversely affected by changes in the valuation of our deferred tax assets and liabilities, or by changes in taxlaws or policies, or interpretations thereof. In addition, our current global tax structure could be negatively impacted by various factors, including changes inthe tax rates in jurisdictions in which we earn income or changes in, or in the interpretation of, tax rules and regulations in jurisdictions in which we operate.An increase in our effective tax rate could have a material adverse effect on our business, results of operations and financial position.We also are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities bothdomestically (including state and local entities) and abroad. We regularly assess the likelihood of recovering the amount of deferred tax assets recorded onthe balance sheet and the likelihood of adverse outcomes resulting from examinations by various taxing authorities in order to determine the adequacy of ourprovision for income taxes. We cannot guarantee that the outcomes of these evaluations and continuous examinations will not harm our reported operatingresults and financial conditions.We are subject to additional risks associated with our international licensees and joint ventures.We market and license our brands outside the United States and many of our licensees are located, and joint ventures operate, outside the UnitedStates. As a key component of our business strategy, we intend to expand our international sales, including, without limitation, through joint ventures. Weand our joint ventures face numerous risks in doing business outside the United States, including: (i) unusual or burdensome foreign laws or regulatoryrequirements or unexpected changes to those laws or requirements; (ii) tariffs, trade protection measures, import or export licensing requirements, tradeembargoes, sanctions and other trade barriers (including, for example, given the recent uncertainty around tariffs in respect of trade between the US andChina); (iii) competition from foreign companies; (iv) longer accounts receivable collection cycles and difficulties in collecting accounts receivable; (v) lesseffective and less predictable protection and enforcement of our IP; (vi) changes in the political or economic condition of a specific country or region(including, without limitation, as a result of political unrest), particularly in emerging markets; (vii) fluctuations in the value of foreign currency versus theU.S. dollar and the cost of currency exchange; (viii) potentially adverse tax consequences; and (ix) cultural differences in the conduct of business. Any one ormore of such factors could cause our future international sales, or distributions from our international joint ventures, to decline or could cause us to fail toexecute on our business strategy involving international expansion. In addition, our business practices in international markets are subject to therequirements of the U.S. Foreign Corrupt Practices Act and all other applicable anti-bribery laws, any violation of which could subject us to significant fines,criminal sanctions and other penalties.A portion of our revenue and net income are generated outside of the United States, by certain of our licensees and our joint ventures, in countries that mayhave volatile currencies, capital control regimes, legal prohibitions on enforcing payment terms in license agreements or other risks.A portion of our revenue is attributable to activities in territories and countries outside of the United States by certain of our joint ventures and ourlicensees. The fact that some of our revenue and certain business operations of our joint ventures and certain licensees are conducted outside of the UnitedStates exposes them to several additional risks, including, but not limited to social, political, regulatory and economic conditions or to laws and policiesgoverning foreign trade and investment in the territories and countries where our joint ventures or certain licensees currently have operations or will in thefuture operate. Certain foreign jurisdictions also create difficulties collecting bad debts or other outstanding receivables owed to the Company or its jointventures. Any of these factors could have a negative impact on the business and operations of our joint ventures and certain of our licensees operations,which could also adversely impact our results of operations. Increase of revenue generated in foreign markets may also increase our exposure to risks relatedto foreign currencies, such as fluctuations in currency exchange rates and exposure to capital23 controls that trap cash in these foreign currencies and/or jurisdictions. Currency exchange rate fluctuations may also adversely impact our joint ventures andlicensees. In the past, we and our joint ventures have attempted to have contracts that relate to activities outside of the United States denominated in U.S.currency, however, we do not know to the extent that we will be able to continue this as we increase our contracts with foreign licensees. In certain instanceswe have entered into foreign currency hedges to mitigate our risk related to fluctuations in our contracts denominated in foreign currencies; however, wecannot predict the effect that future exchange rate fluctuations will have on our operating results. We also cannot guarantee that we can distribute cash out ofthese foreign jurisdictions or otherwise enforce all of our legal and economic rights therein. In the past, particularly in countries with strong capital controlsin place by a central bank or other centralized governmental monetary authority (e.g. the People’s Republic of China), we have had difficulty from time totime distributing cash on a timely basis out of such countries. Similarly, in the past in certain foreign countries, we have faced difficulties in legallyenforcing the payment terms in our license agreements or otherwise collecting past due payables due from certain licensees. A material rise in any of theaforementioned challenges, especially with respect to any unpaid material sums, could have a material adverse effect on our business, results of operationsand financial position.Our licensees are subject to risks and uncertainties of foreign manufacturing and importation of goods, and the price, availability and quality of rawmaterials, along with labor unrest at shipping/receiving ports, could interrupt their operations or increase their operating costs, thereby affecting theirability to deliver goods to the market, reduce or delay their sales and decrease our potential royalty revenue.Substantially all of the products sold by our licensees are manufactured overseas and there are substantial risks associated with foreign manufacturingand importation, including changes in laws and policies relating to quotas and current and proposed international trade agreements, the payment of tariffsand duties, fluctuations in foreign currency exchange rates, shipping delays, labor unrest that could hinder or delay shipments, effects on the ability to importgoods or the cost associated with such importation and international political, regulatory and economic developments. Further, our licensees may experiencefluctuations in the price, availability and quality of fabrics and raw materials used by them in their manufactured or purchased finished goods. Any of theserisks could increase our licensees’ operating costs. Our licensees also import finished products and assume all risk of loss and damage with respect to thesegoods once they are shipped by their suppliers. If these goods are destroyed or damaged during shipment, the revenue of our licensees, and thus our royaltyrevenue over and above the guaranteed minimums, could be reduced as a result of our licensees’ inability to deliver or their delay in delivering theirproducts.We participate in international joint ventures which we do not typically legally control.We participate in a number of international joint ventures, some of which we do not control. As we continue to expand our business internationallyand execute our strategy for growth, we may enter into additional International Joint Ventures in the future. Joint ventures pose an inherent risk. Regardlessof whether we hold a majority interest in or directly control the management of our International Joint Ventures, our partners may have business goals andinterests that are not aligned with ours, exercise their rights in a manner of which we do not approve, be unable to fulfill their obligations under the jointventure agreements, or exploit our trademarks in a manner that harms the overall quality and image of our brands. In addition, any or of our joint venturepartners may simply be unable to identify licensees for our brands. In these cases, the termination of an arrangement one of our joint venture partners or theirfailure to build the business could result in the delay of our expansion in a particular market or markets, and will not allow us to achieve the worldwidegrowth that we seek on our current timeline. We may not be able to identify another suitable partner for a particular joint venture or foreign territory in suchmarket or markets, which could result in further delay, and could materially and adversely affect our business and operating results.A sale of our trademarks or other IP related to our brands in a jurisdiction could have a negative effect on the brands in other jurisdictions or worldwide.From time to time, we may sell IP related to our brands to a third party in a domestic or foreign territory, where we do not intend to continue exploitingthe brand. In these instances, we may enter into co-existence agreements with any such third party, the terms of which require that the sold IP be exploited ina manner befitting the brand image and prestige. Though we try to limit our potential exposure related to potential misuse of the IP, we cannot ensure thatthird parties will comply with their contractual requirements or that they will use the IP in an appropriate manner. Any misuse by a third party of IP related toour brands could lead to a negative perception of our brands by current and potential licensees, international joint venture partners or consumers, and couldadversely affect our ability to develop the brands and meet our strategic goals. This, in turn, could decrease our potential revenue.Our failure to protect our proprietary rights could compromise our competitive position and result in cancellation, loss of rights or diminution in value ofour brands.We monitor on an ongoing basis unauthorized filings of our trademarks and imitations thereof, and rely primarily upon a combination of U.S.,Canadian and other international federal, state and local laws, as well as contractual restrictions to protect and24 enforce our IP rights. We believe that such measures afford only limited protection and, accordingly, there can be no assurance that the actions taken by us toestablish, protect and enforce our trademarks and other proprietary rights will prevent infringement of our IP rights by others, or prevent the loss of licensingrevenue or other damages caused therefrom.For instance, despite our efforts to protect and enforce our IP rights, unauthorized parties may misappropriate or attempt to copy aspects of our IP,which could harm the reputation of our brands, decrease their value and/or cause a decline in our licensees’ sales and thus our revenue. Further, we and ourlicensees may not be able to detect infringement of our IP rights quickly or at all, and at times we or our licensees may not be successful combatingcounterfeit, infringing or knockoff products, thereby damaging our competitive position. In addition, we depend upon the laws of the countries where ourlicensees’ products are sold to protect our IP. IP rights may be unavailable or limited in some countries because standards of register ability varyinternationally. Consequently, in certain foreign jurisdictions, we have elected or may elect not to apply for trademark registrations. If we fail to timely file atrademark application in any such country, we may be precluded from obtaining a trademark registration in such country at a later date. Failure to adequatelypursue and enforce our trademark rights could damage our brands, enable others to compete with our brands and impair our ability to compete effectively.In addition, our license agreements provide our licensees with rights to our trademarks and contain provisions requiring our licensees to comply withcertain standards to be monitored by us. Our failure to adequately monitor our licensees’ compliance with the license agreements or take appropriatecorrective action when necessary may subject our IP assets to cancellation, loss of rights or diminution in value.Further, the rights to our brands in our International Joint Venture territories are controlled primarily through our joint ventures in these regions. Whilewe believe that our partnerships in these areas will enable us to better protect our trademarks in the countries covered by the ventures, we do not control all ofour joint venture companies and thus most decisions relating to the use and enforcement of the marks in these countries will be subject to the approval of ourlocal partners.We also own the exclusive right to use various domain names containing or relating to our brands. There can be no assurances that we will be able toprevent third parties from acquiring and maintaining domain names that infringe or otherwise decrease the value of our trademarks. Failure to protect ourdomain names could adversely affect our brands which could cause a decline in our licensees’ sales and the related revenue and in turn decrease the amountof royalty payments (over and above the guaranteed minimums) due to us.Third-party claims regarding our intellectual property assets could result in our licensees being unable to continue using our trademarks, which couldadversely impact our revenue or result in a judgment or monetary damages being levied against us or our licensees.We may be subject to legal proceedings and claims, including claims of alleged infringement or violation of the patents, trademarks and otherintellectual property rights of third parties. In the future, we may be required to assert infringement claims against third parties or third parties may assertinfringement claims against us and/or our licensees. To the extent that any of our intellectual property assets is deemed to violate the proprietary rights ofothers in any litigation or proceeding or as a result of any claim, then we and our licensees may be prevented from using it, which could cause a breach ortermination of certain license agreements. If our licensees are prevented from using our trademarks, this could adversely impact the revenue of our licenseeswith respect to those IP assets, and thus the royalty payments over and above the guaranteed minimums could be reduced as a result of the licensees’ inabilityto continue using our trademarks. Litigation could also result in a judgment or monetary damages being levied against us and our licensees. Further, if we,our International Joint Ventures or our licensees are alleged to have infringed the IP rights of another party, any resulting litigation could be costly and coulddamage the Company’s reputation. There can be no assurance that we, our International Joint Ventures or our licensees would prevail in any litigationrelating to our IP.25 We may not be able to establish or maintain our trademark rights and registrations, which could impair our ability to perform our obligations under ourlicense agreements, which could cause a decline in our licensees’ sales and potentially decrease the amount of royalty payments (over and above theguaranteed minimums) due to us.While we intend to take reasonable steps to protect our trademark rights, it may not be possible to obtain or maintain legal protection and registrationsfor all of our trademarks for all forms of goods and services based on certain facts, such as the timing of our or our predecessors’ entrance into the market orthe fact that a third party previously adopted a similar mark for use in connection with a similar set of goods or services. As a result, it may be difficult or notpossible for our trademarks to be registered or even protected so as to prohibit third party use in a particular manner. Moreover, third parties may challenge orseek to oppose or cancel existing trademark applications or registrations, and we cannot guarantee we will succeed against such challenges. Any failure tosecure and maintain rights and registrations could impair our ability to perform our obligations under the license agreements, enter new product or servicecategories or could affect our ability to enter into new license agreements or renew existing license agreements, both of which could cause a decline in ourlicensees’ sales and potentially decrease the amount of royalty payments (over and above the guaranteed minimums) due to us.We are subject to local laws and regulations in the U.S. and abroad.We are subject to U.S. federal, state and local laws and regulations affecting our business. Our International Joint Ventures are subject to similarregulations in the countries where they operate. While we actively identify and monitor our obligations and the applicability of all laws to ensure that we arecompliant and our contractual arrangements with our International Joint Venture partners require them to do the same, our efforts to maintain compliancewith local laws and regulations may require us to incur significant expenses, and our failure to comply with such laws may expose us to potential liability. Inaddition, our ability to operate or compete effectively, as well as our financial results, could be adversely affected by the introduction of new laws, policies orregulations; changes in the interpretation or application of existing laws, policies and regulations; or our failure to obtain required regulatory approvals.We may be a party to litigation in the normal course of business, which could affect our financial position and liquidity.From time to time, we may be made a party to litigation in the normal course of business. For example, as the owner of a trademark, we may be namedas a defendant in a lawsuit relating to a product designed and manufactured by a licensee of that trademark. In most cases, our licensees under the existinglicense agreements are obligated to defend and indemnify us, as licensor, and our affiliates with respect to such litigation. In addition, while third partiescould assert infringement claims involving our trademarks, we believe our trademarks are not subject to significant litigation risk because they are widelyknown and well-established trademarks, which have been consistently used by us and the previous owners. We also maintain insurance for certain risks, but itis not possible to obtain insurance to protect against all possible liabilities. Although historically the litigation involving us has not been material to ourfinancial position or our liquidity, any litigation has an element of uncertainty and if any such litigation were to be adversely determined and/or a licenseewere to fail to properly indemnify us and/or we did not have appropriate insurance coverage, such litigation could affect our financial position and liquidity.We have been named in securities litigations, which could be expensive and could divert our management’s attention. There may be additional classaction and/or derivative claims.We have been named as defendants in three securities actions and two common law actions filed in the Southern District of New York (one of which isbefore the United States Bankruptcy Court), and five shareholder derivative claims have been filed on behalf of the Company, three which were filed in NewYork State Supreme Court and two of which were filed in the Southern District of New York, each as described in Note 12 to our Audited ConsolidatedFinancial Statements contained in this Annual Report. While we plan to vigorously defend the securities and common law actions and seek to dismiss thederivative claims, we may be unable to defend or settle these claims on favorable terms, and there can be no assurance that additional claims will not be madeby other stockholders. The pending and any future securities claims or derivate suits could be costly and could harm our reputation and business. An adversedetermination could materially and negatively affect the Company. Our insurance coverage may not be adequate or available for us to avoid or limit ourexposure in the pending actions or in future claims and adequate insurance coverage may not be available in sufficient amounts or at a reasonable cost in thefuture. Additionally, securities and derivative claims may divert our management’s attention from other business concerns, which could seriously harm ourbusiness. Finally, the market price of our common stock may be volatile, and in the past companies that have experienced volatility in the market price oftheir stock have been subject to securities and/or derivative litigation.26 While we audit our licensees from time to time in the ordinary course, we otherwise rely on the accuracy of our licensees’ retail sales reports for reportingand collecting our revenues, and if these reports are untimely or incorrect, our revenue could be delayed or inaccurately reported.Most of our revenue is generated from retailers that license our brands for manufacture and sale of products bearing our brands in their stores. Underour existing agreements, these licensees pay us licensing fees based in part on the retail value of products sold. We rely on our licensees to accurately reportthe retail sales in collecting our license fees, preparing our financial reports, projections, budgets, and directing our sales and marketing efforts. All of ourlicense agreements permit us to audit our licensees. If any of our licensee reports understate the retail sales of products they sell, we may not collect andrecognize revenue to which we are entitled, or may endure significant expense to obtain compliance.A decline in general economic conditions or an increase in inflation resulting in a decrease in consumer-spending levels and an inability to access capitalmay adversely affect our business.Our performance is subject to worldwide economic conditions, including increasing inflation, and its corresponding impact on the levels of consumerspending which may affect our licensees’ sales. It is difficult to predict future levels of consumer spending or inflation and any such predictions areinherently uncertain. The worldwide apparel industry is heavily influenced by general economic cycles. Purchases of goods offered under our brands tend todecline in periods of recession or uncertainty regarding future economic prospects, as disposable income typically declines. As a result, our operating resultsmay be materially affected by trends in the United States or global economy.A significant disruption in our computer systems, including from a malicious attack, and our inability to adequately maintain and update those systems,could adversely affect our operations.We rely extensively on our computer systems to manage our operations and to communicate with our licensees, International Joint Venture partnersand other third parties, and to collect, summarize and analyze results. We depend on continued and unimpeded access to the internet to use our computersystems. Our systems are subject to damage or interruption from power outages, telecommunications failures, computer hackings, cyber-attacks, computerviruses or other malicious activities, security breaches and catastrophic events. If our systems are damaged, threatened, attacked or fail to function properly,we may incur substantial repair or replacement costs, experience data loss and impediments to our ability to manage our internal control system, a loss inconfidence by our partners, negative publicity and lost revenue, all of which could adversely affect our results of operations.Provisions in our charter and Delaware law could make it more difficult for a third party to acquire us, discourage a takeover and adversely affect ourstockholders.Certain provisions of our certificate of incorporation could have the effect of making more difficult, delaying or deterring unsolicited attempts byothers to obtain control of our company, even when these attempts may be in the best interests of our stockholders. Our certificate of incorporationauthorizes our board of directors, without stockholder approval, to issue up to 5,000,000 shares of preferred stock, in one or more series, which could havevoting and conversion rights that adversely affect or dilute the voting power of the holders of our common stock, none of which is outstanding.We are also subject to the provisions of Section 203 of the Delaware General Corporation Law, which could prevent us from engaging in a businesscombination with a 15% or greater stockholder for a period of three years from the date it acquired that status unless appropriate board or stockholderapprovals are obtained.Use of social media may adversely impact our reputation and business.We rely on social media, as one of our marketing strategies, to have a positive impact on both the value and reputation of our brands. Our brands couldbe adversely affected if we fail to achieve these objectives or if our public image or reputation, or that of any of our licensees or business partners, were to betarnished by negative publicity. Use of social media platforms and weblogs by third parties provides access to a broad audience of consumers and otherinterested parties. The opportunity for dissemination of information on these platforms, including negative or inaccurate information about Iconix or itsbrands, is virtually limitless and the effect is immediate. For example, any bad, controversial or otherwise offending behavior by any of our paidspokespeople or other persons associated with our brands (whether paid or unpaid, and whether there is any current affiliation with such persons), couldnegatively impact our brands or the perception of such branded products in the marketplace, even if the offending behavior has no connection to such brand,product or the Company. The occurrence of any of these events could harm our reputation, business and financial results. The harm may be immediatewithout affording us an opportunity for redress or correction. It could also result in decreases in sales by our licensees, which in turn could negatively impactour revenues and cash flows. 27 Recent and ongoing developments relating to the United Kingdom’s leaving the European Union could adversely affect us or our licenses.The decision made in the United Kingdom referendum in June 2016 to leave the European Union (commonly known as “Brexit”) has led to volatilityin global financial markets, and in particular in the markets of the United Kingdom and across Europe, and may also lead to weakening in political,regulatory, consumer, corporate and financial confidence in the United Kingdom and Europe. The United Kingdom and European Union announced inMarch 2018 an agreement in principle to transitional provisions under which European Union law would remain in force in the United Kingdom until theend of December 2020, but this remains subject to the successful conclusion of an agreement between the United Kingdom and the European Union. In theabsence of such an agreement there would be no transitional provisions and the United Kingdom would exit the European Union at the end of the two yearperiod on April 12, 2019, and the relationship between the United Kingdom and the European Union would be based on the World Trade Organization rules.The process for the United Kingdom to exit the European Union, and the longer term economic, legal, political, regulatory and social framework to be put inplace between the United Kingdom and the European Union remain unclear and may lead to ongoing political and economic uncertainty and periods ofexacerbated volatility in both the United Kingdom and in wider European markets for some time. The mid-to-long term uncertainty may have a negativeeffect on the performance of Iconix Europe, our London-based joint venture, as well as Iconix MENA LTD and Diamond Icon, LLC, our joint ventures whichwere established under the laws of the United Kingdom. In addition, we have license agreements in place with licensees across many of our brands in theUnited Kingdom, maintain a wholly-owned subsidiary established under the laws of the United Kingdom; and have employees, offices and showroom spacein the United Kingdom related to our Umbro and Lee Cooper brands. The impact of Brexit on the foregoing aspects of our business are unknown at thistime. Brexit could have the effect of disrupting the free movement of goods, services and people between the United Kingdom and the European Union andnegatively impact our business and that of our licensees. The full effects of Brexit are uncertain and will depend on any agreements the United Kingdom maymake to retain access to European Union markets. Brexit also could lead to uncertainty with respect to the United Kingdom legal and regulatory frameworkand the enforcement of our legal and intellectual property rights. Additionally, the decision made in the United Kingdom referendum may lead to a call forsimilar referenda in other European jurisdictions which may cause increased economic volatility and uncertainty in the European and global markets. Thisvolatility and uncertainty may have an adverse effect on the economy generally and on the ability of us and our portfolio companies to execute ourrespective strategies and to receive attractive returns. Given these possibilities and others we may not anticipate, as well as the lack of comparable precedent,the full extent to which our business, licensees, results of operations and financial condition could be adversely affected by Brexit is uncertain.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesOn November 9, 2007, we entered into a lease agreement covering approximately 30,550 square feet of office and showroom space at 1450 Broadwayin New York, New York. The term of the lease runs through June 30, 2024 and provides for total aggregate annual base rental payments for such space ofapproximately $26.4 million (ranging from approximately $1.1 million for the first year following the rent commencement date to approximately $2.2million, on an annualized basis, in the last year of the lease). We will also be required to pay our proportionate share of any increased taxes attributed to thepremises. Such property is utilized by each of the Company’s reporting segments other than the international segment.Item 3. Legal ProceedingsIn May 2016, Supply Company, LLC, referred to as Supply, a former licensee of the Ed Hardy trademark, commenced action against the Company andits affiliate, Hardy Way, LLC, referred to as Hardy Way (the Company and Hardy Way are collectively referred to as the Iconix Defendants) seeking damagesof $50 million, including punitive damages, attorneys’ fees and costs. Supply alleges that Hardy Way breached the parties’ license agreement by failing toreimburse Supply for markdown reimbursement requests that Supply received from a certain retailer. Supply also alleges that the Company is liable for fraudbecause it made purported misstatements about the Company’s financials and the viability of the Ed Hardy trademark in order to induce Supply to enter intothe license agreement and to induce Supply to enter into a separate agreement with a certain retailer. The Iconix Defendants are vigorously defending againstthe claims, and have filed a motion to dismiss the complaint, which is awaiting court decision. At this time, the Company is unable to estimate the ultimateoutcome of this matter.On May 1, 2017, 3TAC, LLC, referred to as 3TAC, a former licensee of the Company, and West Loop South, LLC, referred to as West Loop (3TAC andWest Loop collectively referred to as Plaintiffs), filed a second amended complaint against the Company, its affiliate, IP Holdings Unltd., LLC, referred to asIPHU, and the Company’s former CEO, Neil Cole (the Company, IPHU, and Cole are collectively referred to as the Iconix Parties), in the action captioned3TAC, LLC and West Loop South, LLC v. Iconix Brand28 Group, Inc., IP Holdings Unltd, LLC and Neil Cole, Case No. 16-cv-08795-GBD-RWL in the United States District Court for the Southern District of NewYork. Plaintiffs asserted claims for breach of contract, tortious interference with contract and business relations, unjust enrichment, trade libel, unfaircompetition and prima facie tort relating to the Iconix Parties’ alleged breach of a Global License Agreement, as amended, between 3TAC and IPHUconcerning intellectual property rights in and to the Marc Ecko brands, the Iconix Parties’ alleged interference with 3TAC’s performance thereunder, and theIconix Parties’ alleged interference with a related sublicense between 3TAC and West Loop. On October 27, 2017, Judge Katherine B. Forrest granted theIconix Parties’ motion to dismiss Plaintiffs’ unjust enrichment, trade libel, unfair competition and prima facie tort claims. Plaintiffs filed a Third AmendedComplaint on June 11, 2018, in which no new claims were asserted, and the only additional allegations are related to the allegedly “inconsistent” exclusivelicense of New Rise Brand Holdings, LLC. Plaintiffs seek damages of at least $22 million for their remaining claims as well as punitive damages, attorneys’fees and costs. The Iconix Parties are vigorously defending against the remaining claims. At this time, the Company is unable to estimate the ultimateoutcome of this matter.On November 1, 2017, Seth Gerszberg, referred to as Gerszberg, and EGRHC, LLC, referred to as EGRHC (Gerszberg and EGRHC collectively referredto as Plaintiffs) (with EGRHC suing in its capacity as a successor-in-interest to Suchman, LLC, referred to as Suchman, a company wholly-owned byGerszberg that entered into a joint venture with the Company pursuant to which they formed IP Holdings Unltd, LLC, referred to as IPHU), filed an actioncaptioned Gerszberg and EGRHC v. Iconix Brand Group, Inc., IP Holdings Unltd, LLC and Neil Cole, Case No. 17-cv-08421-GBD-RWL in the United StatesDistrict Court for the Southern District of New York. Plaintiffs asserted claims against the Company, IPHU, and Neil Cole (collectively referred to as the IPHUParties) for breach of IPHU’s Operating Agreement and related breaches of fiduciary duties, breach of an agreement pursuant to which the Company boughtout Suchman’s interest in IPHU and fraudulent inducement and unjust enrichment regarding that buyout agreement; and also asserted claims for fraudulentinducement regarding the fourth amendment of the Global License Agreement between 3TAC, LLC and IPHU concerning the intellectual property rights inand to the Marc Ecko brands. On May 7, 2018, Judge Katherine B. Forrest dismissed the breach of fiduciary duty, breach of the IPHU Operating Agreement,and unjust enrichment claims; and limited the fraudulent inducement claim to the Fourth Amendment of the Global License Agreement and limited thebreach of the Buyout Agreement claim to the warranty as to no governmental investigation. Plaintiffs seek more than $100 million in damages, includingcompensatory and punitive damages, disgorgement and restitution. The IPHU Parties are vigorously defending against the remaining claims asserted byPlaintiffs. At this time, the Company is unable to estimate the ultimate outcome of this matter.Two shareholder derivative complaints captioned James v. Cuneo et al, Docket No. 1:16-cv-02212 and Ruthazer v. Cuneo et al, Docket No. 1:16-cv-04208 have been consolidated in the United States District Court for the Southern District of New York, and three shareholder derivative complaintscaptioned De Filippis v. Cuneo et al. Index No. 650711/2016, Gold v. Cole et al, Index No. 53724/2016 and Rosenfeld v. Cuneo et al., Index No.510427/2016 have been consolidated in the Supreme Court of the State of New York, New York County. The complaints name the Company as a nominaldefendant and assert claims for breach of fiduciary duty, insider trading and unjust enrichment against certain of the Company's current and former directorsand officers arising out of the Company's restatement of financial reports and certain employee departures. At this time, the Company is unable to estimatethe ultimate outcome of these matters. The Company continues to cooperate in the previously disclosed SEC investigation and SDNY investigation.Three securities class actions have been consolidated in the United States District Court for the Southern District of New York, under the caption In reIconix Brand Group, Inc., et al., Docket No. 1:15-cv-4860, against the Company and certain former officers and one current officer (the “Class Action”). Theplaintiffs in the Class Action purport to represent a class of purchasers of the Company’s securities from February 22, 2012 to November 5, 2015, inclusive,and claim that the Company and individual defendants violated sections 10(b) and 20(a) of the Exchange Act, by making allegedly false and misleadingstatements regarding certain aspects of the Company’s business operations and prospects. On October 25, 2017, the Court granted the motion to dismiss theconsolidated amended complaint filed by the Company and the individual defendants with leave to amend. On November 14, 2017, the plaintiffs filed asecond consolidated amended complaint. On February 2, 2018, the defendants moved to dismiss the second consolidated amended complaint. The Companyand the individual defendants intend to vigorously defend against the claims. At this time, the Company is unable to estimate the ultimate outcome of thesematters.29 In April 2016, New Rise Brands Holdings, LLC, referred to as New Rise, a former licensee of the Ecko Unlimited trademark, and Sichuan New RiseImport & Export Co. Ltd., referred to as Sichuan, the guarantor under New Rise's license agreement, commenced an action captioned New Rise BrandsHoldings, LLC and Sichuan New Rise Import & Export Co. Ltd v. IP Holdings Unltd, LLC, et al., Index No. 652278/2016 in the New York State SupremeCourt, New York County against the Company’s subsidiary, IP Holdings Unltd, LLC, referred to as IP Holdings, seeking damages of at least $15 million, pluspunitive damages of $50 million, counsel fees and costs. Among other claims, New Rise and Sichuan allege improper termination of New Rise’s licenseagreement, fraud and misappropriation. On September 21, 2018, New Rise and Sichuan served an expert report claiming damages ranging from $15.6 millionto $44.2 million. The trial was set to begin in February 2019. Immediately prior to the trial date, the Court ordered a pretrial settlement conference to beattended by the parties and their counsel. Following such conference and with the Court’s approval, on March 15, 2019, parties entered into a definitivesettlement agreement resolving all claims asserted against Iconix in the action.From time to time, the Company is also made a party to litigation incurred in the normal course of business. In addition, in connection with litigationcommenced against licensees for non-payment of royalties, certain licensees have asserted unsubstantiated counterclaims against the Company. While anylitigation has an element of uncertainty, the Company believes that the final outcome of any of these routine matters will not, individually or in theaggregate, have a material effect on the Company’s financial position or future liquidity. See Note 12 of Notes to Consolidated Financial Statements.Item 4. Mine Safety DisclosuresNot applicable.30 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesThe Company’s common stock, $0.001 par value per share, its only class of common equity, is quoted on NASDAQ, under the symbol “ICON”. As of March 21, 2019, there were 1,163 holders of record of the Company’s common stock.The Company has never declared or paid any cash dividends on its common stock and the Company does not anticipate paying any such cashdividends in the foreseeable future. Payment of cash dividends, if any, will be at the discretion of the Company’s Board of Directors and will depend upon theCompany’s financial condition, operating results, capital requirements, contractual restrictions, restrictions imposed by applicable law and other factors itsBoard of Directors deems relevant. The Company’s ability to pay dividends on its common stock and repurchase of its common stock is restricted by certainof its current indebtedness and may be restricted or prohibited under future indebtedness. ISSUER PURCHASES OF EQUITY SECURITIES (1) 2018 TotalNumber ofSharesPurchased (*) WeightedAveragePricePaidper Share TotalNumber ofSharesPurchasedas Part ofPubliclyAnnouncedPlan MaximumApproximateDollarValue ofSharesthat MayYet bePurchasedUnder thePlan October 1—October 31 29 $2.20 — $— November 1—November 30 — — — — December 1—December 31 1 1.20 — — Total 30 $2.20 — $— *Amounts purchased represent shares surrendered to the Company to pay withholding taxes due upon the vesting of restricted stock. These amountsexclude shares subject to the clawback of performance-based shares of certain former executives.(1)Share and price per share data presented are adjusted for the Reverse Stock Split.The information regarding equity compensation plans is incorporated by reference to Item 12 of this Form 10-K, which incorporates by reference theinformation set forth in the Company’s Definitive Proxy Statement in connection with the annual meeting of stockholders to be held in 2019.Item 6. Selected Financial DataNot applicable. 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsSafe Harbor Statement under the Private Securities Litigation Reform Act of 1995. This Annual Report on Form 10-K, including this Item 7, includes“forward-looking statements” based on the Company’s current expectations, assumptions, estimates and projections about its business and its industry. Thesestatements include those relating to future events, performance and/or achievements, and include those relating to, among other things, the Company’s futurerevenues, expenses and profitability, the future development and expected growth of the Company’s business, its projected capital expenditures, futureoutcomes of litigation and/or regulatory proceedings, competition, expectations regarding the retail sales environment, continued market acceptance of theCompany’s current brands and its ability to market and license brands it acquires, the Company’s indebtedness, the ability of the Company’s currentlicensees to continue executing their business plans with respect to their product lines and the ability to pay contractually obligated royalties, and theCompany’s ability to continue sourcing licensees that can design, distribute, manufacture and sell their own product lines.These statements are only predictions and are not guarantees of future performance. They are subject to known and unknown risks, uncertainties andother factors, some of which are beyond the Company’s control and difficult to predict and could cause its actual results to differ materially from thoseexpressed or forecasted in, or implied by, the forward-looking statements. In evaluating these forward-looking statements, the risks and uncertaintiesdescribed in “Item 1A. Risk Factors” above and elsewhere in this report and in the Company’s other SEC filings should be carefully considered.Words such as “may,” “should,” “will,” “could,” “estimate,” “predict,” “potential,” “continue,” “anticipate,” “believe,” “plan,” “expect,” “future” and“intend” or the negative of these terms or other comparable expressions are intended to identify forward-looking statements. Readers are cautioned not toplace undue reliance on these forward looking statements, which speak only as of the date the statement was made.On March 14, 2019, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of its common stock. Unless the context otherwiserequires, all share and per share amounts in this Item 7 have been adjusted to reflect the Reverse Stock Split.OverviewWe are a brand management company and owner of a diversified portfolio of approximately 30 global consumer brands across the Company’soperating segments: women’s, men’s, home, and international. Additionally, the Company previously owned and operated an Entertainment segment whichis included in the Company’s consolidated statement of operations as a discontinued operation for FY 2017. The sale of the businesses underlying theEntertainment segment was completed on June 30, 2017 (see Note 2 of Notes to Consolidated Financial Statements). The Company’s business strategy is tomaximize the value of its brands primarily through strategic licenses and joint venture partnerships around the world, as well as to grow the portfolio ofbrands through strategic acquisitions.As of December 31, 2018, the Company’s brand portfolio includes Candie’s ® , Bongo ® , Joe Boxer ® , Rampage ® , Mudd ®, London Fog ® ,Mossimo ® , Ocean Pacific/OP ® , Danskin/Danskin Now ® , Rocawear ® /Roc Nation ® , Cannon ® , Royal Velvet ® , Fieldcrest ® , Charisma ® ,Starter ® , Waverly ® , Ecko Unltd ® /Mark Ecko Cut & Sew ® , Zoo York ® , Umbro ®, Lee Cooper ® , and Artful Dodger ® ; and interests in MaterialGirl ®, Ed Hardy ® , Truth or Dare ® , Modern Amusement ® , Buffalo ® , Hydraulic ®, and PONY ® .The Company principally looks to monetize the Intellectual Property (herein referred to as “IP”) related to its brands throughout the world and in allrelevant categories by licensing directly with leading retailers (herein referred to as “direct to retail” or “DTR”), through a consortia of wholesale licensees,through joint ventures in specific territories and via other activity such as corporate sponsorships and content as well as the sale of IP for specific categoriesor territories. Products bearing the Company’s brands are sold across a variety of distribution channels. The licensees are generally responsible for designing,manufacturing and distributing the licensed products. The Company supports its brands with marketing, advertising and promotional campaigns designed toincrease brand awareness. Additionally, the Company provides its licensees with coordinated trend direction to enhance product appeal and help build andmaintain brand integrity.Globally, the Company has over 50 direct-to-retail licenses and more than 375 total licenses. Licensees are selected based upon the Company’s beliefthat such licensees will be able to produce and sell quality products in the categories of their specific expertise and that they are capable of exceedingminimum sales targets and royalties that the Company generally requires for each brand. This licensing strategy is designed to permit the Company tooperate its licensing business, leverage its core competencies of marketing and brand management with minimal working capital. The majority of theCompany’s licensing agreements include minimum guaranteed32 royalty revenue which provides the Company with greater visibility into future cash flows. As of January 1, 2019, the Company had over $405 million ofaggregate guaranteed royalty revenue over the terms of its existing contracts excluding renewals.The Company’s OP DTR license agreement at Walmart was not renewed upon expiration in June 2017. The Company’s Starter DTR license agreementat Walmart was not renewed upon expiration in December 2017. In October 2017, the Company also announced that Starter is now available on Amazonexclusively to Amazon Prime members. Additionally, the Company’s Danskin Now license agreement with Walmart was not renewed upon its expiration inJanuary 2019. The Company’s Mossimo DTR license agreement at Target was not renewed upon expiration in October 2018. The Company’s Material Girllicense agreement with Macy’s will not be renewed upon its expiration in January 2020. The Company’s Royal Velvet license agreement with JC Penney wasnot renewed upon its expiration in January 2019. The Company is actively seeking to place OP, Danskin, Mossimo, Material Girl and Royal Velvet with newor existing licensees. At this time, the Company is uncertain how the terms and conditions of any potential replacement licensing arrangements could affectits future revenues and cash flows.As discussed in further detail in Note 16 in the Notes to the Consolidated Financial Statements, on December 22, 2017 the United States enacted theTax Cuts and Jobs Act. The new law, which is also commonly referred to as “U.S. tax reform”, significantly changes U.S. corporate income tax laws by, amongother changes, imposing a one-time mandatory tax on previously deferred earnings of foreign subsidiaries, reducing the U.S. corporate income tax rate from35% to 21% starting on January 1, 2018, creating a territorial tax system which generally eliminates U.S. federal income taxes on dividends from foreignsubsidiaries, eliminating or limiting the deduction of certain expenses including interest expense, and requiring a minimum tax on earnings generated byforeign subsidiaries. The Company identifies its operating segments according to how business activities are managed and evaluated. The Company has four distinctreportable operating segments: women’s, men’s, home, and international. The four reportable operating segments represent the Company’s activities forwhich separate financial information is available and which is utilized on a regular basis by the Chief Executive Officer in deciding how to allocate resourcesand in assessing performance. Since the Company does not track, manage and analyze its assets by segments, no disclosure of segmented assets isreported. Additionally, the Company previously owned and operated an Entertainment segment which is included in the Company’s consolidated statementof operations as a discontinued operation for FY 2017.The Company’s segments consist of the following: •Women’s segment – consists of the Company’s women’s brands in the United States. •Men’s segment – consists of the Company’s men’s brands in the United States. •Home segment – consists of the Company’s home brands in the United States. •International segment – consists of the Company’s men’s, women’s and home brands in international markets.Items not allocated to any segment are allocated to the Corporate level. Corporate, for segment reporting purposes, includes compensation, benefitsand occupancy costs for corporate employees as well as other corporate-related expenses such as: audit, legal, and information technology used in managingour business.The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker. The Company’s measures of segmentprofitability are licensing revenue and operating income. Refer to Note 18 in Notes to Consolidated Financial Statements for further details. The accountingpolicies of the Company’s reportable operating segments are the same as those described in Note 1 – Summary of Significant Accounting Policies in Notes tothe Consolidated Financial Statements.33 The Company has disclosed these reportable segments for the periods shown below. (in 000’s) FY 2018 FY 2017 Licensing revenue by segment: Women’s $57,401 $96,833 Men’s 39,073 39,780 Home 24,568 28,807 International 66,647 60,413 $187,689 $225,833 Operating income (loss): Women’s $(128,050) $(215,570)Men’s 11,754 (144,779)Home 17,221 (76,680)International 27,447 (64,826)Corporate (47,409) (62,796) $(119,037) $(564,651) Highlights of FY 2018 •Total revenue of $187.7 million, a 17% decline from prior year. Continued growth internationally as segment revenue up 10% from the prioryear. •Improved financial stability during 2018 by closing on Delayed Draw Term Loan and issuing new 5.75% Convertible Notes. • Signed 83 license deals over the last six months for aggregate guaranteed minimum royalties of approximately $45 million through the life ofthe agreements for the next several years. •Rationalized cost structure of business with cost reductions of approximately $30 million on an annualized basis. FY 2018 Compared to FY 2017 Licensing Revenue. Total licensing revenue for FY 2018 was $187.7 million, a 17% decrease as compared to $225.8 million for FY 2017. Thewomen’s segment decreased 41% from $96.8 million in FY 2017 to $57.4 million in FY 2018 mainly due to a decrease in our Mossimo, Danskin and OPbrands. The men’s segment decreased 2% from $39.8 million in FY 2017 to $39.1 million in FY 2018 mainly due to a decrease in the Starter brand somewhatoffset by an increase in the Umbro brand. The home segment decreased 15% from $28.8 million in FY 2017 to $24.6 million in FY 2018 mainly due to adecrease in the Cannon brand. The international segment increased 10% from $60.4 million in FY 2017 to $66.6 million in FY 2018 mainly due to increasesacross Europe, China and India.Selling, General and Administrative Expenses. Total selling, general and administrative expenses (“SG&A”) was $121.4 million for FY 2018 ascompared to $114.6 million for the FY 2017, an increase of $6.8 million or 6%. SG&A in FY 2018 included an $8.2 million accounts receivable reserve forthe impact of the Sears bankruptcy. SG&A from the women’s segment increased 46% from $11.3 million in FY 2017 to $16.5 million in FY 2018 mainly dueto a $5.2 million increase in accounts receivables reserves and write-offs mainly due to the reserve related to Sears. Excluding the reserve in Sears, SG&A inthe women’s segment decreased by 4%. SG&A from the men’s segment decreased 18% from $20.2 million in FY 2017 to $16.5 million in FY 2018 primarilydue to a $3.2 million decrease in advertising expense. SG&A from the home segment increased 31% from $3.5 million in FY 2017 to $4.6 million in FY 2018mainly due to a $1.9 million increase in accounts receivables reserves and write-offs mainly due to the reserve related to the Sears bankruptcy. Excluding thereserve in Sears, SG&A in the home segment decreased by 42%. SG&A from the international segment increased 29% from $30.5 million in FY 2017 to $39.4million in FY 2018 mainly due to a $4.6 million increase in accounts receivable reserves and write-offs and a $2.8 million increase in cost of goods sold dueto replica jersey sales by our Diamond Icon joint venture. Corporate SG&A decreased 10% from $49.1 million in FY 2017 to $44.4 million mainly driven bya decrease of $10.8 million in compensation costs somewhat offset by a $5.2 million increase in professional fees.Loss on Termination of Licenses. Loss on the termination of licenses was a $10.6 million for FY 2018 as compared to $28.4 in FY 2017. The charge inFY 2018 was mostly related to licensee terminations associated with the Rocawear and Ecko brands as compared to FY 2017 which primarily related to theUmbro brand.34 Depreciation and Amortization. Depreciation and amortization was $2.3 million for FY 2018, compared to $2.5 million in FY 2017, a decrease of $0.1million or 5%. The decrease was mostly a result of lower amortization costs related to the Buffalo brand.Equity Earnings (Loss) on Joint Ventures. Equity Earnings (Loss) on Joint Ventures was $3.0 million in income in FY 2018, as compared to $3.3million in losses in FY 2017. The improvement primarily came from the absence of asset impairment charges that occurred in FY 2017 within the Australiajoint venture and SE Asia joint venture.Gain on Deconsolidation of Joint Venture. There was no gain on deconsolidation of joint venture during FY 2018 as compared to $3.8 million for FY2017 due to the deconsolidation of Southeast Asia joint venture. Gain on Sale of Trademarks. Gain on Sale of Trademarks was $1.3 million for FY 2018 as compared to a $0.9 million gain for FY 2017. The gainsrelated to the completion of the sale of the Sharper Image and Badgley Mischka trademarks in certain of the Company’s international joint ventures.Trademark, Goodwill & Investment Impairment. Trademark, Goodwill & Investment Impairment loss for FY 2018 was approximately $176.7 millionas compared to $646.5 million in FY 2017. The Trademark Impairment in FY 2018 was approximately $136.4 million as compared to $525.7 million in FY2017. The charge in FY 2018 primarily related to write-downs in the women’s segment while the charge in FY 2017 primarily related to write-downs in thewomen’s segment and men’s segments. The Goodwill Impairment in FY 2018 was $37.8 million related to a write down in our women’s segment while thecharge in FY 2017 was $103.9 million primarily related to a write-down in our women’s segment and home segment primarily due to declines in net sales incertain brands within the segments and an inability to secure additional license agreements with guaranteed minimum royalties in future periods for thesebrands. Investment Impairment was $2.5 million in FY 2018 related to a write-down in iBrands investment as compared to $16.8 million in FY 2017 relatedto a write-down in MG Icon investment.Operating (Loss) Income. Total operating loss for FY 2018 was $119.0 million as compared to a loss of $564.7 million in FY 2017. Excluding thetrademark, goodwill & investment impairment, loss on termination of licenses, gain on sale of trademarks and gain on deconsolidation of joint ventures,operating income in FY 2018 was $67.0 million, or 36% of revenue, as compared to income of $113.1 million, or 50% of revenue, in FY 2017. Operating lossfrom the women’s segment was $128.1 million in FY 2018 as compared to $215.6 million in FY 2017. Excluding trademark & goodwill impairment and theloss on the termination of licenses, women’s operating income in FY 2018 was $42.5 million as compared to operating income of $87.9 million in FY 2017.Operating income from the men’s segment was $11.8 million in FY 2018 as compared to a loss of $144.8 million in FY 2017. Excluding trademark &goodwill impairment and the loss on the termination of licenses, men’s operating income in FY 2018 was $22.4 million as compared to income of $19.0million in FY 2017. Operating income from the home segment was $17.2 million in FY 2018 as compared to a loss of $76.7 million in FY 2017. Excludingtrademark & goodwill impairment, home operating income was $19.9 million in FY 2018 as compared to income of $25.3 million in FY 2017. Operatingincome from the international segment was $27.4 million in FY 2018 as compared to a loss of $64.8 million in FY 2017. Excluding trademark & goodwillimpairment, international operating income was $28.2 million in FY 2018 as compared to income of $31.4 million in FY 2017. Corporate operating loss was$47.4 million in FY 2018 as compared to a loss of $62.8 million in FY 2017. Excluding investment impairment, gains on sale of trademarks and gain ondeconsolidation of joint venture, corporate operating loss was $46.2 million in FY 2018 as compared to a loss of $50.6 million in FY 2017.Other Expenses (income)- Net. Other expenses (income)- net was income of $35.9 million for FY 2018 as compared to an expense of $88.8 million forthe FY 2017, a decrease of $124.7 million. The decrease was primarily related to the following: (i) a gain of $82.1 million in FY 2018 related to the mark-to-market adjustment to the carrying value of the Company’s 5.75% Convertible Notes based on the Company’s accounting treatment which requires the fairvalue of the liability at the end of each period, (ii) a gain on the extinguishment of debt of $4.5 million in FY 2018 as compared to a loss of $20.9 million inFY 2017 (iii) a $8.7 million decrease in interest expense in FY 2018 as compared to FY 2017.Provision for Income Taxes. The effective tax rate from continuing operations in FY 2018 was -7.9% resulting in a $6.5 million tax expense ascompared to FY 2017 which had a tax rate of 14.7% resulting in a $96.0 million tax benefit. The decrease in the effective tax rate for the FY 2018 ascompared to the FY 2017 is primarily a result of foreign tax expense calculated in local jurisdictions where there is no net operating losses available to offsetthe current tax liability, partially offset by a tax benefit resulting from the tax impact of impairment expenses recorded on indefinite lived intangible assets.Net (Loss) Income from Continuing Operations. Our net loss from continuing operations was approximately $89.7 million for FY 2018, compared tonet loss from continuing operations of approximately $557.5 million for FY 2017, as a result of the factors discussed above.35 Discontinued Operations. In the first quarter of FY 2017, our Board of Directors approved a plan to sell the businesses underlying the Entertainmentsegment. As a result, we have classified the results of our Entertainment segment as discontinued operations in our consolidated statement of operations forFY 2017. We completed the sale of those businesses on June 30, 2017. See Note 2 of Notes to Consolidated Financial Statements.Liquidity and Capital ResourcesLiquidityHistorically, our principal capital requirements have been to fund acquisitions, working capital needs, share repurchases and, to a lesser extent, capitalexpenditures. Since FY 2016, our principal capital requirements have been to refinance or extinguish existing indebtedness and working capital needs. Wehave historically relied on internally generated funds to finance our operations and our primary source of capital needs for acquisition has been the issuanceof debt and equity securities. Since FY 2016, we have relied on asset sales and issuance of indebtedness to refinance existing indebtedness. At December 31,2018 and December 31, 2017, our cash totaled $66.6 million and $65.9 million, respectively, not including short-term restricted cash of $16.0 million and$48.8 million, respectively. Our short term restricted cash primarily consists of collection and investment accounts related to our Securitization Notes (asdefined below). In addition, as of December 31, 2018, approximately $12.2 million, or 15%, of our total cash (including restricted cash) was held in foreignsubsidiaries. During the second fiscal quarter of 2018, the Company elected to treat its Luxembourg top tier subsidiary (“Luxco”) as a disregarded entity forUS tax purposes. All the operations under LuxCo were previously treated as disregarded for US tax purposes. As of the election date, all the foreignoperations under LuxCo will be treated as a branch for US tax purposes and subject to US taxation. As such, the Company will no longer have any earnings inforeign subsidiaries that are not currently subject to taxation for US purposes. Before the election, the Company indefinitely reinvested all earnings of itsforeign subsidiaries. The Company’s Securitization Notes include a test that measures the amount of principal and interest required to be paid on the Co-Issuers’ debt to theapproximate cash flow available to pay such principal and interest; the test is referred to as the debt service coverage ratio (“DSCR”). As a result in thedecline in royalty collections received by the Co-Issuers during the twelve months ended June 30, 2018, the DSCR fell below 1.45x as of June 30, 2018.Beginning July 1, 2018, the Co-Issuers are required to allocate 25% of residual royalty collections (i.e. collections less debt service, management, servicing,administrative and other fees) to a restricted reserve account administered by the securitization program’s trustee, which will result in cash remaining insidethe securitization program. The DSCR fell below 1.35x as of September 30, 2018 and as a result, beginning October 1, 2018, the Co-Issuers are required toallocate 50% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) to a restricted reserveaccount administered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and not being distributedto the Company. The cash required to be maintained inside the securitization program may be released to the Company if the DSCR is at least 1.45x for twoconsecutive quarters. The DSCR fell below 1.25x as of December 31, 2018 and as a result, beginning January 1, 2019, the Co-Issuers are required to allocate100% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) to a restricted reserve accountadministered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and not being distributed to theCompany. The cash required to be maintained inside the securitization program may be released to the Company if the DSCR is at least 1.45x for twoconsecutive quarters. Management believes the allocation of residual royalty collections to a restricted reserve account will not negatively impact theCompany’s ability to meet its cash flow needs. We may, from time to time, seek to retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt securities, inopen market transactions, privately negotiated transactions, or otherwise. Such repurchase or exchanges, if any, will depend on prevailing market conditions,our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transactions may individually or in the aggregate, bematerial.Changes in Working CapitalAt December 31, 2018 and December 31, 2017, the working capital ratio (current assets to current liabilities) was 1.34 to 1 and 2.07 to 1, respectively.Operating ActivitiesNet cash provided by operating activities increased approximately $54.0 million, from $2.1 million in FY 2017 to $56.1 million in FY 2018 primarilydue to a decrease in net loss from continuing operations from $557.5 million in FY 2017 to $89.7 million in FY 2018. The change in the non-cashadjustments is primarily as a result of (i) a decrease in the impairment of trademarks and goodwill, (ii) a change in the gain (loss) on extinguishment of debtfrom a loss of $20.9 million in FY 2017 to a gain of $4.5 million in FY 2018, (iii) an increase in the mark to market gain on the 5.75% Convertible Notes, (iv)a decrease in our deferred income tax benefit, and (v) a decrease in our stock compensation. These non-cash adjustments are offset by cash used in workingcapital items of $29.4 million in FY 2017 as compared to cash provided by working capital items of $26.6 million in FY 2018.36 Investing ActivitiesNet cash provided by investing activities decreased approximately $336.2 million, from cash provided by investing activities of $330.5 million in FY2017 to cash used in investing activities of $5.7 million in FY 2018. This decrease is primarily due to our sale of the Entertainment segment, net of our cashsold of $336.7 million which occurred in FY 2017 of which there was no comparable amount in FY 2018. Financing ActivitiesNet cash used in financing activities decreased approximately $465.6 million, from cash used in financing activities of $547.4 million in FY 2017 tocash used in financing activities of $81.8 million in FY 2018. The decrease in cash used in financing activities period over period is primarily due to thepayment of long term debt of $824.9 million in FY 2017 (mainly due to the principal prepayments on our previously outstanding senior secured term loanand Senior Secured Notes) and $58.8 million for the repurchase of a portion of our previously outstanding 1.50% convertible notes as compared to paymentof long term debt of $157.3 million in FY 2018 which is primarily attributable to the repayment of the outstanding principal balance of $111.2 million of our1.50% Convertible Notes in March 2018 and regular principal payments on both of our Senior Secured Notes and Senior Secured Term Loan. This was offsetby proceeds from long-term debt of $307.0 million related to our Variable Funding Note and Senior Secured Term Loan in FY 2017 as compared to proceedsfrom long-term debt of $95.7 million which is primarily related to additional borrowings under our Senior Secured Term Loan and the issuance of our 5.75%Convertible Notes in FY 2018.Obligations and commitmentsSenior Secured Notes and Variable Funding NoteOn November 29, 2012, Icon Brand Holdings, Icon DE Intermediate Holdings LLC, Icon DE Holdings LLC and Icon NY Holdings LLC, each alimited-purpose, bankruptcy remote, wholly-owned direct or indirect subsidiary of the Company, (collectively, the “Co-Issuers”) issued $600.0 millionaggregate principal amount of Series 2012-1 4.229% Senior Secured Notes, Class A-2 (the “2012 Senior Secured Notes”) in an offering exempt fromregistration under the Securities Act.Simultaneously with the issuance of the 2012 Senior Secured Notes, the Co-Issuers also entered into a revolving financing facility of Series 2012-1Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”), which allowed for the funding of up to $100 million of Variable Funding Notesand certain other credit instruments, including letters of credit. The Variable Funding Notes allowed for drawings on a revolving basis. Drawings and certainadditional terms related to the Variable Funding Notes are governed by the Class A-1 Note Purchase Agreement dated November 29, 2012 (the “VariableFunding Note Purchase Agreement”), among the Co-Issuers, Iconix, as manager, certain conduit investors, financial institutions and funding agents, andBarclays Bank PLC, as provider of letters of credit, as swingline lender and as administrative agent. The Variable Funding Notes are governed, in part, by theVariable Funding Note Purchase Agreement and by certain generally applicable terms contained in the Securitization Notes Indenture. Interest on theVariable Funding Notes is payable at per annum rates equal to the CP Rate, Base Rate or Eurodollar Rate, each as defined in the Variable Funding NotePurchase Agreement. In February 2015, the Company fully drew down the $100.0 million of available funding under the Variable Funding Notes, whichremains outstanding as of December 31, 2018.On June 21, 2013, the Co-Issuers issued $275.0 million aggregate principal amount of Series 2013-1 4.352% Senior Secured Notes, Class A-2 (the“2013 Senior Secured Notes” and together, with the 2012 Senior Secured Notes, the “Senior Secured Notes”) in an offering exempt from registration underthe Securities Act.The 2012 Senior Secured Notes, 2013 Senior Secured Notes and the Variable Funding Notes are referred to collectively as the “Securitization Notes.”The Securitization Notes were issued under a base indenture (the “Securitization Notes Base Indenture”) and related supplemental indentures (the“Securitization Notes Supplemental Indentures” and, collectively with the Securitization Notes Base Indenture, the “Securitization Notes Indenture”) amongthe Co-Issuers and Citibank, N.A., as trustee and securities intermediary. The Securitization Notes Indenture allows the Co-Issuers to issue additional series ofnotes in the future subject to certain conditions.On August 18, 2017, the Company entered into an amendment to the Securitization Notes Supplemental Indenture to, among other things, (i) extendthe anticipated repayment date for the Variable Funding Notes from January 2018 to January 2020, (ii) decrease the L/C Commitment and the SwinglineCommitment (as such terms are defined in the amendment) available under the Variable Funding Notes to $0 as of the closing date, (iii) replace BarclaysBank PLC with Guggenheim Securities Credit Partners, LLC, as provider of letters of credit, as swingline lender and as administrative agent under thepurchase agreement and (iv) provide that, upon the disposition of intellectual property assets by the Co-Issuers as permitted by the Securitization Notes BaseIndenture, (x) the holders of the Variable Funding Notes will receive a mandatory prepayment, pro rata based on the amount of Variable Funding37 Notes held by such holder, and (y) the maximum commitment will be permanently reduced by the amount of the mandatory prepayment.While the Securitization Notes are outstanding, payments of interest are required to be made on the 2012 Senior Secured Notes and the 2013 SeniorSecured Notes, in each case, on a quarterly basis. Initially, principal payments in the amount of $10.5 million and $4.8 million were required to be made onthe 2012 Senior Secured Notes and 2013 Senior Secured Notes, respectively, on a quarterly basis. The amount of quarterly principal payments has sincechanged in subsequent periods due to the prepayments made under the Securitization Notes Indenture. See below for further discussion.The legal final maturity date of the Securitization Notes is in January of 2043. If the Co-Issuers have not repaid or refinanced the Securitization Notesprior to January 2020 (the “anticipated repayment date”), additional interest will accrue on amounts outstanding under the Securitization Notes at a rateequal to (A) in respect of Variable Funding Notes 5% per annum, (B) in respect of the 2012 Senior Secured Notes and the 2013 Senior Secured Notes, thegreater of (1) 5% per annum and (2) a per annum interest rate equal to the excess, if any, by which the sum of (x) the yield to maturity (adjusted to a quarterlybond-equivalent basis), on the anticipated repayment date of the United States treasury security having a term closest to 10 years plus (y) 5% per annum plus(z) with respect to the 2012 Senior Secured Notes, 3.4% per annum, or with respect to the 2013 Senior Secured Notes, 3.14% per annum, exceeds the originalinterest rate. Pursuant to the Securitization Notes Indenture, such additional interest is not due to be paid by the Company until January 2043 (the legalmaturity date) and does not compound annually. The Securitization Notes rank pari passu with each other.Pursuant to the Securitization Notes Indenture, the Securitization Notes are the joint and several obligations of the Co-Issuers only. The SecuritizationNotes are secured under the Securitization Notes Indenture by a security interest in certain of the assets of the Co-Issuers (the “Securitized Assets”), whichincludes, among other things, (i) intellectual property assets, including the U.S. and Canadian registered and applied for trademarks for the following brandsand other related IP assets: Candie’s, Bongo, Joe Boxer (excluding Canadian trademarks, none of which are owned by Iconix), Rampage, Mudd, London Fog(other than the trademark for outerwear products sold in the United States), Mossimo, Ocean Pacific and OP, Danskin and Danskin Now, Rocawear, Starter,Waverly, Fieldcrest, Royal Velvet, Cannon, and Charisma; (ii) the rights (including the rights to receive payments) and obligations under all licenseagreements for use of those trademarks in such territories; (iii) the following equity interests in the following joint ventures: an 85% interest in Hardy WayLLC which owns the Ed Hardy brand, a 50% interest in MG Icon LLC which owns the Material Girl and Truth or Dare brands, and a 100% interest in ZYHoldings LLC which owns the Zoo York brand; and (iv) certain cash accounts established under the Securitization Notes Indenture. The Securitized Assetsdo not include revenue generating assets of (x) the Iconix subsidiaries that own the Ecko Unltd trademarks, the Mark Ecko trademarks, the Artful Dodgertrademarks, the Umbro trademarks, and the Lee Cooper trademarks, (y) the Iconix subsidiaries that own Iconix’s other brands outside of the United States andCanada or (z) the joint ventures in which Iconix and certain of its subsidiaries have investments and which own the Modern Amusement trademarks and theBuffalo trademarks, the Pony trademarks, and the Hydraulic trademarks.If the Company contributes an Additional IP Holder to Icon Brand Holdings LLC or Icon DE Intermediate Holdings LLC, that Additional IP Holderwill enter into a guarantee and collateral agreement in a form provided for in the Securitization Notes Indenture pursuant to which such Additional IP Holderwill guarantee the obligations of the Co-Issuers in respect of any Securitization Notes issued under the Securitization Notes Indenture and the other relateddocuments and pledge substantially all of its assets to secure those guarantee obligations pursuant to a guarantee and collateral agreement.Neither the Company nor any subsidiary of the Company, other than the Securitization Entities, will guarantee or in any way be liable for theobligations of the Co-Issuers under the Securitization Notes Indenture or the Securitization Notes.The Securitization Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Co-Issuersmaintain specified reserve accounts to be used to make required payments in respect of the Securitization Notes, (ii) provisions relating to optional andmandatory prepayments, including mandatory prepayments in the event of a change of control (as defined in the Securitization Notes SupplementalIndentures) and the related payment of specified amounts, including specified make-whole payments in the case of the Senior Secured Notes under certaincircumstances, (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the SecuritizationNotes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. As of December 31,2018, the Company is in compliance with all covenants under the Securitization Notes.The Company’s Securitization Notes include a financial test that measures the amount of principal and interest required to be paid on the Co-Issuers’debt to the approximate cash flow available to pay such principal and interest; the test is referred to as the debt service coverage ratio (“DSCR”). As a resultof the decline in royalty collections received by the Co-Issuers during the twelve months ended June 30, 2018, the DSCR fell below 1.45x as of June 30,2018. Beginning July 1, 2018, the Co-Issuers were required to allocate 25% of residual royalty collections (i.e. collections less debt service, management,servicing, administrative and other fees) to a restricted reserve account administered by the securitization program’s trustee, which will result in cashremaining inside the securitization program. The DSCR fell below 1.35x as of September 30, 2018 and as a result, beginning October 1, 2018, the Co-38 Issuers are required to allocate 50% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) toa restricted reserve account administered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and notbeing distributed to the Company. The DSCR fell below 1.25x as of December 31, 2018 and as a result, beginning January 1, 2019, the Co-Issuers arerequired to allocate 100% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) to arestricted reserve account administered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and notbeing distributed to the Company. The cash required to be maintained inside the securitization program may be released to the Company if the DSCR is atleast 1.45x for two consecutive quarters. Management believes the allocation of residual royalty collections to a restricted reserve account will notnegatively impact the Company’s ability to meet its cash flow needs.The Securitization Notes are also subject to customary rapid amortization events provided for in the Securitization Notes Indenture, including eventstied to (i) the failure to maintain a stated DSCR, (ii) certain manager termination events, (iii) the occurrence of an event of default and (iv) the failure to repayor refinance the Securitization Notes on the anticipated repayment date. If a rapid amortization event were to occur, including as a result of not paying orredeeming the Securitization Notes in full prior to the anticipated repayment date, the management fee payable to the Company would remain payablepursuant to the priority of payments set forth under the Securitization Indenture, but no residual amounts would be payable to the Company thereafter. In June 2014, the Company sold the “sharperimage.com” domain name and the exclusive right to use the Sharper Image trademark in connection withthe operation of a branded website and catalog distribution in specified jurisdictions, in which the Senior Secured Notes had a security interest pursuant tothe Indenture. As a result of this permitted disposition, the Company paid an additional $1.6 million in principal in July 2014.In January 2017, in connection with the sale of the Sharper Image intellectual property and related assets, the Company made a mandatory principalprepayment on its Senior Secured Notes of $36.7 million. The Company wrote off a pro-rata portion of the Senior Secured Notes’ deferred financing costs of$0.5 million. As a result of this transaction, the Company recognized a loss on extinguishment of debt of $0.5 million which has been recorded on theCompany’s consolidated statement of operations. Additionally, the quarterly principal payments on the 2012 Senior Secured Notes and 2013 Senior SecuredNotes were reduced to $9.9 million and $4.5 million, respectively.In July 2017, in connection with the sale of the businesses underlying the Entertainment segment, the Company made a mandatory principalprepayment on its Senior Secured Notes of $152.2 million. The Company wrote off a pro-rata portion of the Senior Secured Notes’ deferred financing costs of$2.0 million as well as paid a prepayment penalty of $0.3 million. As a result of this transaction, the Company recognized a loss on extinguishment of debtof $2.3 million which has been allocated to discontinued operations on the Company’s consolidated statement of operations in FY 2017. Additionally, thequarterly principal payments on the 2012 Senior Secured Notes and 2013 Senior Secured Notes were reduced to $7.3 million and $3.4 million, respectively.As of December 31, 2018 and December 31, 2017, the total outstanding principal balance of the Securitization Notes was $465.5 million and $508.2million, respectively, of which $42.7 million is included in the current portion of long-term debt on the consolidated balance sheet. As of December 31, 2018and December 31, 2017, $15.2 million and $29.9 million, respectively, is included in restricted cash on the consolidated balance sheet and represents short-term restricted cash consisting of collections on behalf of the Securitized Assets, restricted to the payment of principal, interest and other fees on a quarterlybasis under the Senior Secured Notes.Senior Secured Term LoanOn August 2, 2017, the Company entered into a credit agreement (as amended or otherwise modified, unless context provides otherwise the “SeniorSecured Term Loan”), among IBG Borrower, the Company’s wholly-owned direct subsidiary, as borrower, the Company and certain wholly-ownedsubsidiaries of IBG Borrower, as guarantors (the “Guarantors”), Cortland Capital Market Services LLC, as administrative agent and collateral agent(“Cortland”) and the lenders party thereto from time to time, including Deutsche Bank AG, New York Branch. Pursuant to the Senior Secured Term Loan, thelenders provided to IBG Borrower a senior secured term loan (the “Senior Secured Term Loan”), scheduled to mature on August 2, 2022 in an aggregateprincipal amount of $300 million and bearing interest at LIBOR plus an applicable margin of 7% per annum (the “Interest Rate”).On August 2, 2017, the net cash proceeds of the Senior Secured Term Loan were deposited into an escrow account and subject to release to IBGBorrower from time to time, subject to the satisfaction of customary conditions precedent upon each withdrawal, to finance repurchases of, or at the maturitydate thereof to repay in full, the 1.50% Convertible Notes (as defined below). The Company had the ability to make these repurchases in the open market orprivately negotiated transactions, depending on prevailing market conditions and other factors.Borrowings under the Senior Secured Term Loan were to amortize quarterly at 0.5% of principal, commencing on September 30, 2017. IBG Borrowerwas obligated to make mandatory prepayments annually from excess cash flow and periodically from net39 proceeds of certain asset dispositions and from net proceeds of certain indebtedness, if incurred (in each case, subject to certain exceptions and limitationsprovided for in the Senior Secured Term Loan).IBG Borrower’s obligations under the Senior Secured Term Loan are guaranteed jointly and severally by the Company and the other Guarantorspursuant to a separate facility guaranty. IBG Borrower’s and the Guarantors’ obligations under the Senior Secured Term Loan are secured by first priorityliens on and security interests in substantially all assets of IBG Borrower, the Company and the other Guarantors and a pledge of substantially all equityinterests of the Company’s subsidiaries (subject to certain limits including with respect to foreign subsidiaries) owned by the Company, IBG Borrower or anyother Guarantor. However, the security interests will not cover certain intellectual property and licenses owned, directly or indirectly by the Company’ssubsidiary Iconix Luxembourg Holdings SÀRL or those subject to the Company’s securitization facility. In addition, the pledges exclude certain equityinterests of Marcy Media Holdings, LLC and the subsidiaries of Iconix China Holdings Limited.In connection with the Senior Secured Term Loan, IBG Borrower, the Company and the other Guarantors made customary representations andwarranties and have agreed to adhere to certain customary affirmative covenants. Additionally, the Senior Secured Term Loan mandates that IBG Borrower,the Company and the other Guarantors enter into account control agreements on certain deposit accounts, maintain and allow appraisals of their intellectualproperty, perform under the terms of certain licenses and other agreements scheduled in the Senior Secured Term Loan and report significant changes to orterminations of licenses generating guaranteed minimum royalties of more than $0.5 million. Prior to the First Amendment (as discussed below), IBGBorrower was required to satisfy a minimum asset coverage ratio of 1.25:1.00 and maintain a leverage ratio of no greater than 4.50:1.00.Amendments to Senior Secured Term LoanFirst AmendmentOn October 27, 2017, the Company entered into the First Amendment to the Senior Secured Term Loan (the “First Amendment”) pursuant to which,among other things, the remaining escrow balance of approximately $231 million (after taking into account approximately $59.2 million that was used tobuy back 1.50% Convertible Notes in open market purchases in the third quarter of 2017) was returned to the lenders.The First Amendment also provided for, among other things, (a) a reduction in the existing $300 million term loan to the then-current term loanbalance of approximately $57.8 million, (b) a new senior secured delayed draw term loan facility in the aggregate amount of up to $165.7 million, consistingof (i) a $25 million First Delayed Draw Term Loan (the “First Delayed Draw Term Loan”), and (ii) a $140.7 million Second Delayed Draw Term Loan (the“Second Delayed Draw Term Loan” and, together, with the First Delayed Draw Term Loan, the “Delayed Draw Term Loan Facility”) for the purpose ofrepaying the 1.50% Convertible Notes; (c) an increase of the Total Leverage Ratio permitted under the Senior Secured Term Loan from 4.50:1.00 to5.75:1.00; (d) a reduction in the debt service coverage ratio multiplier in the Company’s asset coverage ratio under the Senior Secured Term Loan; (e) anincrease in the existing amortization rate from 2 percent per annum to 10 percent per annum commencing July 2019; and (f) amendments to the mandatoryprepayment provisions to (i) permit the Company not to prepay borrowings under the Senior Secured Term Loan from the first $100 million of net proceedsresulting from Permitted Capital Raising Transactions (as defined in the Senior Secured Term Loan) effected prior to March 15, 2018, and (ii) eliminate therequirement that the Company pay a Prepayment Premium (as defined in the Senior Secured Term Loan) on any payments or prepayments made prior toDecember 31, 2018. Indebtedness issued under the Delayed Draw Term Loan Facility was issued with original issue discount.As a result of the First Amendment, on October 27, 2017, the Company repaid $231.0 million on the Senior Secured Term Loan which represented$240.7 million of outstanding principal balance. On that date, the Company wrote-off a pro-rata portion of the original issue discount and deferred financingcosts of $9.3 million and $5.4 million, respectively, which were both recorded to interest expense on the Company’s consolidated statement of operations forFY 2017. As a result of this transaction, the Company’s outstanding principal balance of the Senior Secured Term Loan was reduced to $57.8 million at thattime and the Company recorded a gain on modification of debt of $8.8 million (which is net of $0.8 million of additional deferred financing costs associatedwith the First Amendment) which has been recorded in interest expense on the Company’s consolidated statement of operations for FY 2017.On November 2, 2017, the Company drew down the full amount of $25.0 million on the First Delayed Draw Term Loan of which the Companyreceived $24.0 million, in cash as this amount was net of the $1.0 million of original issue discount.Second AmendmentGiven that the Company was unable to timely file its quarterly financial statements for the quarter ended September 30, 2017 with the SEC byNovember 14, 2017 and became in default under the terms of the Senior Secured Term Loan, as amended, on November 24, 2017, the Company entered intothe Second Amendment to the Senior Secured Term Loan. Pursuant to the Second Amendment, among other things, the lenders under the Senior SecuredTerm Loan agreed, subject to the Company’s compliance with40 the requirements set forth in the Second Amendment, to waive until December 22, 2017, certain potential defaults and events of default arising under theSenior Secured Term Loan.In connection with the Second Amendment, Deutsche Bank was granted additional pricing flex in the form of price protection upon syndication of theSenior Secured Term Loan (“Flex”) and ticking fees on the unfunded portion of the loan. The Second Amendment allows, among other things, for cashpayments on account of the Flex and ticking fees to be paid from the proceeds of the First Delayed Draw Term Loan, which was previously fully funded inaccordance with the terms of the Senior Secured Term Loan. After giving effect to the additional Flex provided in the Second Amendment, the Companyestimated that it could be responsible for payments on account of the Flex in an aggregate total amount of up to $12.0 million. As of December 31, 2018, theCompany has paid a total of approximately $5.0 million in Flex. The Company has recorded this amount against the outstanding principal balance of theSenior Secured Term Loan on the Company’s consolidated balance sheet and is being amortized over the remaining term of the Senior Secured Term Loan.As a result of the Second Amendment, the Company incurred $0.2 million of additional deferred financing costs. The Company accounted for thisamendment as a debt modification and has recorded the additional deferred financing costs against the gain on modification of debt on the Company’sconsolidated statement of operations for FY 2017.Third AmendmentOn February 12, 2018, the Company, through IBG Borrower, entered into the Third Amendment to the Senior Secured Term Loan. The ThirdAmendment provides for, among other things, amendments to certain restrictive covenants and other terms set forth in the Senior Secured Term Loan, asamended, to permit (i) IBG Borrower to enter into the 5.75% Notes Indenture (as defined below) and a related intercreditor agreement that was executed and(ii) the Note Exchange (as defined below). In connection with the Third Amendment, Deutsche Bank was granted additional pricing flex in the form of priceprotection upon syndication of the loan (“Third Amendment Flex”). After giving effect to the additional Third Amendment Flex, the Company estimates thatit could be responsible for payments on account of the Third Amendment Flex in an aggregate total amount of up to $6.1 million.Fourth AmendmentThe Company, through IBG Borrower, entered into the Fourth Amendment to the Senior Secured Term Loan as of March 12, 2018. The FourthAmendment provided, among other things, that the funding date for the Second Delayed Draw Term Loan would be March 14, 2018 instead of March 15,2018. The conditions to the availability of the Second Delayed Draw Term Loan were satisfied as of March 14, 2018 due, in part, to the transactionscontemplated by the Note Exchange, and the Company was able to draw on the Second Delayed Draw Term Loan. On March 14, 2018, the Company drewdown $110 million under the Second Delayed Draw Term Loan and used those proceeds, along with cash on hand, to make a payment to the trustee under theindenture governing the 1.50% Convertible Notes to repay the remaining 1.50% Convertible Notes at maturity on March 15, 2018.The Senior Secured Term Loan, as amended, contains customary negative covenants and events of default. The Senior Secured Term Loan limits theability of IBG Borrower, the Company and the other Guarantors, with respect to themselves, their subsidiaries and certain joint ventures, from, among otherthings, incurring and prepaying certain indebtedness, granting liens on certain assets, consummating certain types of acquisitions, making fundamentalchanges (including mergers and consolidations), engaging in substantially different lines of business than those in which they are currently engaged, makingrestricted payments and amending or terminating certain licenses scheduled in the Senior Secured Term Loan. Such restrictions, failure to comply with whichmay result in an event of default under the terms of the Senior Secured Term Loan, are subject to certain customary and specifically negotiated exceptions, asset forth in the Senior Secured Term Loan.If an event of default occurs, in addition to the Interest Rate increasing by an additional 3% per annum Cortland shall, at the request of lendersholding more than 50% of the then-outstanding principal of the Senior Secured Term Loan, declare payable all unpaid principal and accrued interest andtake action to enforce payment in favor of the lenders. An event of default includes, among other events: a change of control by which a person or groupbecomes the beneficial owner of 35% of the voting stock of the Company or IBG Borrower; the failure to extend of the Series 2012-1 Class A-1 Senior NotesRenewal Date (as defined in the Senior Secured Term Loan); the failure of any of Icon Brand Holdings LLC, Icon NY Holdings LLC, Icon DE IntermediateHoldings LLC, Icon DE Holdings LLC and their respective subsidiaries (the “Securitization Entities”) to perform certain covenants; and the entry intoamendments to the securitization facility that would be materially adverse to the lenders or Cortland without consent. Subject to the terms of the SeniorSecured Term Loan, both voluntary and certain mandatory prepayments will trigger a premium of 5% of the aggregate principal amount during the first yearof the loan and a premium of 3% of the aggregate principal amount during the second year of the loan, with no premiums payable in subsequent periods.41 As of December 31, 2018 and December 31, 2017, the outstanding principal balance of the Senior Secured Term Loan was $171.1 million (which isnet of $18.3 million of original issue discount) and $74.8 million (which is net of $8.0 million of original issue discount), respectively, of which $11.6million and $1.7 million is recorded in current portion of long term debt on the Company’s consolidated balance sheet, respectively.5.75% Convertible NotesOn February 22, 2018, the Company consummated an exchange (the “Note Exchange”) of approximately $125 million previously outstanding 1.50%Convertible Senior Subordinated Notes due 2018 (the “1.50% Convertible Notes”), pursuant to which it issued approximately $125 million of new 5.75%Convertible Notes due 2023 (the “5.75% Convertible Notes”). The 5.75% Convertible Notes were issued pursuant to an indenture, dated February 22, 2018,by and among the Company, each of the guarantors thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (the“Indenture”).The 5.75% Convertible Notes mature on August 15, 2023. Interest on the 5.75% Convertible Notes may be paid in cash, shares of the Company’scommon stock, or a combination of both, at the Company’s election. If the Company elects to pay all or a portion of an interest payment in shares of commonstock, the number of shares of common stock payable will be equal to the applicable interest payment divided by the average of the 10 individual volume-weighted average prices for the 10-trading day period ending on and including the trading day immediately preceding the relevant interest payment date.The 5.75% Convertible Notes are (i) secured by a second lien on the same assets that secure the obligations of IBG Borrower under the Senior SecuredTerm Loan and (ii) guaranteed by IBG Borrower and same guarantors as those under the Senior Secured Term Loan, other than the Company.Subject to certain conditions and limitations, the Company may cause all or part of the 5.75% Convertible Notes to be automatically converted intocommon stock of the Company. The 5.75% Convertible Notes are convertible into shares of the Company’s common stock based on a conversion rate of52.1919 shares of the Company’s common stock, per $1,000 principal amount of the 5.75% Convertible Notes (which is equal to an initial conversion priceof approximately $19.16 per share), subject to adjustment from time to time pursuant to the 5.75% Convertible Note Indenture.Holders converting their 5.75% Convertible Notes (including in connection with a mandatory conversion) shall also be entitled to receive a paymentfrom the Company equal to the Conversion Make-Whole Payment (as defined in the Indenture) if such conversion occurs after a regular record date and on orbefore the next succeeding interest payment date, through and including the maturity date (determined as if such conversion did not occur).If the Company elects to pay all or a portion of a Conversion Make-Whole Payment in shares of common stock, the number of shares of common stockpayable will be equal to the applicable Conversion Make-Whole Payment divided by the average of the 10 individual volume-weighted average prices forthe 10-trading day period immediately preceding the applicable conversion date.Subject to certain limitations pursuant to the Senior Secured Term Loan, from and after the February 22, 2019, the Company may redeem for cash allor part of the 5.75% Convertible Notes at any time by providing at least 30 days’ prior written notice to holders of the 5.75% Convertible Notes.If the Company undergoes a fundamental change (which would occur if the Company experiences a change of control or is delisted from NASDAQ)prior to maturity, each holder will have the right, at its option, to require the Company to repurchase for cash all or a portion of such holder’s 5.75%Convertible Notes at a fundamental change purchase price equal to 100% of the principal amount of the 5.75% Convertible Notes to be repurchased, togetherwith interest accrued and unpaid to, but excluding, the fundamental change purchase date.The Company is subject to certain restrictive covenants pursuant to the 5.75% Convertible Note Indenture, including limitations on (i) liens, (ii)indebtedness, (iii) asset sales, (iv) restricted payments and investments, (v) prepayments of indebtedness and (vi) transactions with affiliates.During 2018, certain noteholders converted an aggregate outstanding principal balance of $15.3 million of their 5.75% Convertible Notes intoapproximately 0.8 million shares of the Company’s common stock. Pursuant to the Indenture, the Company also made an aggregate Conversion Make-WholePayment of approximately 0.6 million shares of the Company’s common stock to those converting noteholders. As a result of the difference in the fair marketvalue versus the carrying value of the 5.75% Convertible Notes that were converted during FY 2018, an aggregate of $1.2 million was recorded as OtherIncome in the Company’s consolidated statement of operations for FY 2018.42 As of December 31, 2018, while the debt balance recorded at fair value on the Company’s consolidated balance sheet was $48.1 million, the actualoutstanding principal balance of the 5.75% Convertible Notes was $109.7 million.Refer to Note 9 in the Notes to the Consolidated Financial Statements for further details. Other FactorsWe continue to seek to expand and diversify the types of licensed products being produced under our various brands, as well as diversify thedistribution channels within which licensed products are sold, in an effort to reduce dependence on any particular retailer, consumer or market sector. Thesuccess of our Company, however, remains largely dependent on our ability to build and maintain brand awareness and contract with and retain key licenseesand on our licensees’ ability to accurately predict upcoming trends within their respective customer bases and fulfill the product requirements of theirparticular distribution channels within the global marketplace. Unanticipated changes in consumer fashion preferences, slowdowns in the global economy,changes in the prices of supplies, consolidation of retail establishments, and other factors noted in “Risk Factors,” could adversely affect our licensees’ability to meet and/or exceed their contractual commitments to us and thereby adversely affect our future operating results.We market and license our brands outside the United States and many of our licensees are located, and joint ventures operate, outside the UnitedStates. As a key component of our business strategy, we intend to expand our international sales, including, without limitation, through joint ventures.Tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions and other trade barriers; less effective and lesspredictable protection and enforcement of intellectual property; changes in the political or economic condition of a specific country or region; fluctuationsin the value of foreign currency versus the U.S. dollar and the cost of currency exchange; and potentially adverse tax consequences, and other factors noted in“Risk Factors,” could adversely affect our licensees’ and International Joint Ventures future operating results.Effects of InflationWe do not believe that the relatively moderate rates of inflation experienced over the past few years in the United States, where we primarily compete,have had a significant effect on revenues or profitability. If there was an adverse change in the rate of inflation by less than 10%, the expected effect on netincome would be immaterial.New Accounting StandardsRefer to Note 1 in the Notes to the Consolidated Financial Statements for new accounting standards.Critical Accounting Policies and EstimatesThe preparation of our consolidated financial statements in conformity with GAAP requires management to exercise its judgment. We exerciseconsiderable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts ofour assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the financial statements.On an on-going basis, we evaluate our estimates and judgments. We base our estimates and judgments on historical experience and on various otherassumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values ofassets and liabilities that are not readily apparent from other sources. While we believe that the factors we evaluate provide us with a meaningful basis forestablishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimatesrequires the exercise of judgment, actual results could differ from such estimates.Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements. We believe, however, the followingcritical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financialstatements.Revenue RecognitionWe have entered into various trade name license agreements that provide revenues based on minimum royalties and advertising/marketing fees andadditional revenues based on a percentage of defined sales. Minimum royalty and advertising/marketing revenue is recognized on a straight-line basis overthe entire contract term and royalties exceeding the defined minimum amounts are recognized only in the subsequent periods to when the minimumguarantee for the contract year has been achieved and when the later of the following events occur: (i) the subsequent sale occurs, or (ii) the performanceobligation to which some or all of the sales-based royalty has been allocated has been satisfied (or partially satisfied).43 Gains on sale of trademarksWe sell a brand’s territories and/or categories through joint venture transactions which is a central and ongoing part of our business. Since our goal isto maximize the value of the IP, we evaluate sale opportunities by comparing whether the offer is more valuable than the current and potential revenue streamin the Company’s traditional licensing model. Further, as part of the Company’s evaluation process, it will also look at whether or not the buyer’s futuredevelopment of the brand could help expand the brands global recognition and revenue. The Company considers, among others, the following guidance indetermining the appropriate accounting and gains recognized from the initial sale of our brands/trademarks to our joint ventures: ASC 323, Investments—Equity Method and Joint Venture, ASC 605 and ASC 606, Revenue Recognition, ASC 810, Consolidations , and ASC 845, NonmonetaryTransactions - Exchanges Involving Monetary Consideration.Additionally, the Company determines the cost of the trademarks sold by determining the relative fair market value of the proceeds received in thetransaction to the relative fair value of the trademarks on the Company’s consolidated balance sheet at the time of the transaction.Allowance for doubtful accountsWe evaluate our allowance for doubtful accounts and estimate collectability of accounts receivable based on our analysis of historical bad debtexperience in conjunction with our assessment of the financial condition of individual licensees with which we do business. In times of domestic or globaleconomic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stableperiods.Impairment of Long-Lived Assets and IntangiblesLong-lived assets, representing predominantly trademarks related to the Company’s brands, are reviewed for impairment whenever events or changesin circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite lived intangible assets are tested for impairment on anannual basis (October 1 for the Company) and between annual tests if an event occurs or circumstances change that indicate that the carrying amount of theindefinite lived intangible asset may not be recoverable. When conducting its annual indefinite lived intangible asset impairment assessment, the Companyinitially performs a qualitative evaluation of whether it is more likely than not that the asset is impaired. If it is determined by a qualitative evaluation that itis more likely than not that the asset is impaired, the Company then tests the asset for recoverability. Recoverability of assets to be held and used is measuredby a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are consideredto be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.Assumptions used in our fair value estimates are as follow: (i) discount rates; (ii) royalty rates; (iii) projected average revenue growth rates; (iv)contractually guaranteed minimum revenues; and (v) projected long-term growth rates. The testing also factors in economic conditions and expectations ofmanagement and may change in the future based on period-specific facts and circumstances. During FY 2018 and FY 2017, the Company recognized a non-cash impairment charge of $136.4 million and $525.7 million, respectively, for indefinite-lived intangibles across all segments. See Note 4 for furtherinformation. For the year ended December 31, 2018:During the second quarter of FY 2018, the Company recognized an impairment charge of $73.3 million for the indefinite-lived intangible forMossimo in Women’s as well as an impairment charge of $37.8 million for goodwill in Women’s. During the third quarter of FY 2018, the Companyrecognized an impairment charge of $4.4 million for the indefinite-lived intangible for Joe Boxer in Women’s. During the fourth quarter of FY 2018, theCompany recognized an impairment charge of $58.7 million comprised of $55.1 million in Women’s, $0.1 million in Men’s, $2.7 million in Home, and $0.8million in International. The following is a breakdown of the trademark impairment charges: Operating Segment Brand / Trademark Territory Amount Women’s Mossimo US $105,985 Women’s Mudd US 15,581 Women’s Joe Boxer US 11,214 Home Cannon US 2,719 Other various various 918 Total $136,417 44 Overall, the impairment charges were primarily as a result of management’s revisions to the Company’s forecasts to reflect lower revenue andoperating margin expectations for the Company. The decrease in financial projections is primarily due to continued declines and strategic repositioning ofproprietary brands in the retail industry, accompanied by the closing of traditional brick and mortar stores and continued online disruption and competitionin the target market. Several of our key DTR partners (e.g. Kohl’s, Kmart/Sears) have been affected by this decline which has resulted in the non-renewal oflicense agreements or increased pressures to reduce the economics (e.g. royalty rates, guaranteed minimum royalties) of new and existing license agreements.On an individual brand level, the impairment charges noted above arose out of lower forecasted revenue. The primary factors for the lower forecasts foreach of the brands noted above are set forth below: •Mossimo – As discussed below, the Mossimo license agreement at Target was not renewed and while market and demographic research indicatesignificant brand awareness and viability outside of exclusive Target distribution, the Company has yet to find a replacement core licensee.The Company continues to pursue multiple partners with broad distributions and varying degrees of economics. •Mudd – Given the decline in the retail industry, Kohl’s was unable to achieve revenue expectations above guaranteed minimums. Kohl’s hasindicated the willingness to renew beyond the current term but at a level below the current guaranteed minimums. •Joe Boxer – Kmart/Sears’ bankruptcy filing in the fourth quarter of FY 2018 allowed Kmart/Sears to reject the existing Joe Boxer licenseagreement, and the Company’s ongoing renegotiations of the license agreement with Kmart/Sears resulted in a reduction to forecasted revenuesfor the Company. •Cannon – Kmart/Sears’ bankruptcy filing in the fourth quarter of FY 2018 allowed Kmart/Sears to reject the existing Cannon licenseagreement, and the Company’s renegotiations of the license agreement with Kmart/Sears resulted in a reduction to forecasted revenues for theCompany.For the year ended December 31, 2017:During the third quarter of FY 2017, the Company recognized an impairment charge of $521.7 million for indefinite-lived intangibles comprised of$227.6 million in Women’s, $135.9 million in Men’s, $69.5 million in Home, and $88.8 million in International as well as an impairment charge of $103.9million for goodwill comprised of $73.9 million in Women’s, $1.5 million in Men’s, and $28.4 million in Home. During the fourth quarter of FY 2017, theCompany recognized an impairment charge of $4.1 million for the indefinite-lived intangible for Royal Velvet. The following is a breakdown of thetrademark impairment charges: Operating Segment Brand / Trademark Territory Amount Women’s Mossimo US $21,800 Women’s Joe Boxer US 45,584 Women’s Danksin US 52,572 Women’s Mudd US 37,015 Women’s Rampage US 24,712 Women’s Ocean Pacific US 29,523 Men's Buffalo US 43,429 Men's Zoo York US 17,258 Men's Rocawear US 34,559 Men's Ed Hardy US 18,666 Home Cannon US 17,995 Home Royal Velvet US 33,657 Home Fieldcrest US 12,930 International Umbro China 31,137 International Umbro Europe 26,739 Other various various 78,150 Total $525,726 Overall, the impairment charges were primarily as a result of management’s significant revisions to the Company’s forecasts to reflect lower revenueand operating margin expectations for the Company. The decrease in financial projections is primarily due to continued declines and strategic repositioningof proprietary brands in the retail industry, accompanied by the closing of traditional brick and mortar stores and continued online disruption andcompetition in the target market. Several of our key DTR partners (e.g. Walmart, Target, Macy’s, Kmart/Sears) have been affected by this decline which hasresulted in the non-renewal of license agreements or increased pressures to reduce the economics (e.g. royalty rates, guaranteed minimum royalties) of newand existing license agreements.45 On an individual brand level, the impairment charges noted above arose out of lower forecasted revenue. The primary factors for the lower forecasts foreach of the brands noted above are set forth below: •Mossimo – In the fourth quarter of FY 2016, Target notified the Company that it did not intend to renew its license for the Mossimo brandbeyond 2018. While market and demographic research indicate significant brand awareness and viability outside of exclusive Targetdistribution, the Company has yet to find a replacement core licensee. The Company continues to pursue multiple partners with broaddistributions and varying degrees of economics. •Joe Boxer – Store closings of the Company’s core licensee, Kmart/Sears, resulted in a decline in sales of the brand and thus the Companyexperiencing lower than expected revenues and operating margins. •Danskin – In FY 2017, Walmart notified the Company that it did not intend to renew its license for the Danskin Now brand beyond January2019 resulting in a reduction to forecasted revenues for the Company. •Mudd – Given the Mudd brand is exclusively sold at Kohl’s, the Company had anticipated forecasted growth of the brand through the creationof new product categories. However, given the decline in the retail industry, Kohl’s was unable to achieve revenue expectations aboveguaranteed minimums. •Rampage – The impairment was due to the renegotiation of the economics of its existing core license agreement for footwear partially due toreduced distribution of the licensed product resulting in a decrease in forecasted revenues for the Company. •Ocean Pacific – The Company has begun a strategic repositioning of the brand which it expects will result in reduced economics in the nearterm. •Buffalo – Store closings at Macy’s and other traditional retailers where the product is sold as well as a decline in the retail industry resulted in areduction to forecasted revenues for the Company. •Zoo York – Given the decline in the demand for streetwear and urban clothing, the Company’s licensees have been unable to increase sales ofZoo York products. •Rocawear – Given the decline in the demand for streetwear and urban clothing, the Company’s licensees have been unable to increase sales ofRocawear products. •Ed Hardy – Given the decline in the demand for streetwear and urban clothing, the Company’s licensees have been unable to increase sales ofEd Hardy. •Cannon – Store closings of the Company’s core licensee, Kmart/Sears, resulted in a decline in sales of the brand and thus the Companyexperiencing lower than expected revenues and operating margins. •Royal Velvet – Store closings of the Company’s core licensee, JCPenney, as well as the recent decision of JCPenney not to renew the existingRoyal Velvet license agreement following its expiration in January 2019, resulted in a decline in sales of the brand and thus the Companyexperiencing lower than expected revenues and operating margins. •Fieldcrest – Given the Fieldcrest brand is exclusively sold at Target, the Company had anticipated forecasted growth of the brand through thecreation of new product categories. However, given the decline in the retail industry, Target was unable to achieve anticipated salesexpectations. •Umbro in China – The Umbro brand was a new initiative for the Company given its formation of the Umbro China joint venture in FY 2016.Since the acquisition of the brand in 2012, the monetization levels in China have not met our initial expectations. •Umbro in Europe – Since the acquisition of the brand in 2012, the monetization levels in Europe have not met our initial expectations. The Company will continue to monitor impairment indicators and financial results in future periods. If current or expected cash flows change or if themarket value of the Company’s stock decreases, there may be additional impairment charges. Impairment charges could be based on factors such as theCompany’s forecasted cash flows, assumptions used, or other variables.GoodwillGoodwill is tested for impairment at the reporting unit level (the Company has four operating segments: women’s, men’s, home, and international) onan annual basis (in the Company’s fourth fiscal quarter) and between annual tests if an event occurs or circumstances change that would more likely than notreduce the fair value of a reporting unit below its carrying value. The Company considers its market capitalization and the carrying value of its assets andliabilities, including goodwill, when performing its goodwill impairment test. When conducting its annual goodwill impairment assessment, the Companyinitially performs a qualitative evaluation of whether it is more likely than not that goodwill is impaired. If it is determined by a qualitative evaluation that itis more likely than not that goodwill is impaired, the Company then applies a two-step impairment test. The two-step impairment test first compares the fairvalue of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying46 value, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the reporting unit exceeds its fair value,the Company determines the implied fair value of the reporting unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its impliedfair value, then an impairment loss equal to the difference is recorded in the consolidated statement of operations. During the second quarter of FY 2018, theCompany recognized a non-cash impairment charge of $37.8 million in the women’s segment. During the third quarter of FY 2017, the Company recognizeda non-cash impairment charge of $103.9 million in the women’s, men’s and home segment. No additional goodwill impairment was recognized during thefourth quarter of FY 2017. See Note 1 – Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for further detail. Variable Interest EntitiesIn accordance with the variable interest entities (“VIE”) sub-section of ASC 810, Consolidation, we perform a formal assessment at each reportingperiod regarding whether the Company is considered the primary beneficiary of a VIE based on the power to direct activities that most significantly impactthe economic performance of the entity and the obligation to absorb losses or rights to receive benefits that could be significant to the VIE.Business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired, and liabilities assumed based on their estimatedfair values. Such a valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. The results ofoperations for each acquisition are included in our financial statements from the date of acquisition.We account for business acquisitions as purchase business combinations in accordance with ASC 805, Business Combinations (“ASC 805”). Thefundamental requirement of ASC 805 is that the acquisition method of accounting be used for all business combinations.Management estimates fair value based on assumptions believed to be reasonable. These estimates are based on historical experience and informationobtained from the management of the acquired companies. Critical estimates in valuing certain intangible assets include, but are not limited to: futureexpected cash flows; acquired developed technologies and patents; the acquired company’s brand awareness and market position, as well as assumptionsabout the period of time the acquired brand will continue to be used in our product portfolio; and discount rates.Stock-Based CompensationWe account for stock-based compensation under ASC 718, Compensation—Stock Compensation, which requires companies to measure and recognizecompensation expense for all stock-based payments at fair value.Income TaxesIncome taxes are calculated in accordance with ASC Topic 740-10, Income Taxes (“ASC 740-10”), which requires the use of the asset and liabilitymethod. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets andliabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect in the years in which thosetemporary differences are expected to reverse. Inherent in the measurement of deferred balances are certain judgments and interpretations of enacted tax lawand published guidance with respect to applicability to the Company’s operations. The effective tax rate utilized by the Company reflects management’sjudgment of the expected tax liabilities within the various taxing jurisdictions.In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred taxassets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, net operating losscarryback potential, and tax planning strategies in making these assessments.The Company adopted guidance under ASC 740 as it relates to uncertain tax positions. The implementation of this guidance did not have asignificant impact on our financial position or results of operations. We are continuing our practice of recognizing interest and penalties related to incometax matters in income tax expense.47 Item 7A. Quantitative and Qualitative Disclosures about Market RiskNot applicable. Item 8. Financial Statements and Supplementary DataThe financial statements and supplementary data required to be submitted in response to this Item 8 are set forth after Part IV, Item 15 of this report (forSelected Quarterly Financial Data, see Note 19 of Notes to Consolidated Financial Statements). Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNot applicable. Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresOur management, with the participation of our principal executive officer and principal financial and accounting officer, evaluated the effectivenessof the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K (December 31, 2018). Basedupon that evaluation, our principal executive officer and principal financial and accounting officer have concluded due to a material weakness in internalcontrol over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2018.The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and otherprocedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under theExchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls andprocedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports thatit files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principalfinancial officers, as appropriate to allow timely decisions regarding required disclosure.Changes in Internal Control Over Financial ReportingRefer to Management’s Annual Report on Internal Control over Financial Reporting for changes in internal controls over financial reporting for theyear ended December 31, 2018.Limitation on Effectiveness of ControlsManagement does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errorand fraud. Any control system, no matter how well conceived, designed and operated, is based upon certain assumptions and can provide only reasonable,not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error orfraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.Management’s Annual Report on Internal Control over Financial ReportingManagement of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules13a-15(f) and 15(d)-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed by, or under the supervisionof, our principal executive officer and principal financial and accounting officer, and effected by our board of directors, management and other personnel, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith US GAAP. Internal control over financial reporting includes those policies and procedures that: •Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of theCompany; •Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with USGAAP, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directorsof the Company; and •Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assetsthat could have a material effect on the financial statements.48 Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degreeof compliance with the policies or procedures may change over time. Our management, under the supervision of our principal executive officer and principal financial and accounting officer, conducted an evaluation ofthe effectiveness of our internal controls over financial reporting based on the framework in Internal Control – Integrated Framework (2013), issued by theCommittee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that material weaknesses whichexisted at December 31, 2017, related to our statement of cash flows, our intangible asset impairment testing, and calculation of our long-term incentiveprogram (“LTIP”) compensation expense, were remediated at December 31, 2018. This was primarily the result of enhanced review procedures, and changesin the process for preparing the financial statement or calculation. However, the previously identified material weakness related to the financial reporting forthe modification of our debt has not been remediated. Also, in 2018, management identified a material weakness in internal control over financial reporting,specifically dealing with the management review controls surrounding the calculation of the adjustment to retained earnings, and the financial reporting forreimbursement to licensees for advertising resulting from the implementation of the new revenue recognition standard, ASC 606. We have implemented newcontrols in 2018 which will be tested in 2019.As a result of the material weakness, management concluded that our internal controls over financial reporting was not effective as of December 31,2018. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonablepossibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Remediation ActionsThroughout 2018, management conducted a remediation plan to address the material weakness noted above. The plan included (i) a robust analysison our current control environment in order to revamp our existing control processes and procedures, and identify and address any potential gaps, (ii)educating control owners concerning the principles and requirements of each control, and (iii) management conducting a more rigorous review process forthe reporting on the statement of cash flows, conducting the intangible asset impairment testing, and the calculation of our LTIP compensationexpense. Through effective implementation of the Company’s remediation plan, the Company has strengthened its internal control environment and hasaddressed the above noted material weaknesses that were identified at December 31, 2017. In addition, during 2018, the Company made changes to its internal controls related to the accounting and financial reporting for the modification ofdebt, and financial reporting for the new revenue recognition standard, ASC 606, including more robust review procedures and seeking accountingconsultation from third party advisors proactively, as well as changes in personnel.The principal executive officer and principal financial officer also conducted an evaluation of internal control over financial reporting, herein referredto as internal control, to determine whether any changes in internal control occurred during the three months ended December 31, 2018 that may havematerially affected or which are reasonably likely to materially affect internal control. Based on that evaluation, there have been no other changes in theCompany’s internal control during the three months ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, theCompany’s internal control, except for the matter relating to our financial reporting for debt and the new revenue recognition standard, ASC 606, discussedabove.The foregoing has been approved by our current management team, including our Chief Executive Officer and Chief Financial Officer, who have beeninvolved with the reassessment and analysis of our internal control over financial reporting.The Audit Committee, which consists of independent, non-executive directors, will continue to meet regularly with management, the Director ofInternal Audit, and the independent accountants to review accounting, reporting, auditing and internal control matters. The Audit Committee has direct andprivate access to the Director of Internal Audit and the external auditors, and will meet with each, separately, in executive sessions. The Company reviewedthe results of management’s assessment of its internal control over financial reporting with the Audit Committee of the Board of Directors and they agreedwith the conclusions. Item 9B. Other InformationNone.49 PART III Item 10. Directors, Executive Officers and Corporate GovernanceThe information required by this item concerning our directors, executive officers and certain corporate governance matters is incorporated byreference from our definitive proxy statement relating to our Annual Meeting of Stockholders to be held in 2019 (“2019 Definitive Proxy Statement”) to befiled with the SEC.Code of Business ConductWe have adopted a written code of business conduct that applies to our officers, directors and employees. Copies of our code of business conduct areavailable, without charge, upon written request directed to our corporate secretary at Iconix Brand Group, Inc., 1450 Broadway, New York, NY 10018. Item 11. Executive CompensationThe information required under this item is hereby incorporated by reference to the 2019 Definitive Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required under this item is hereby incorporated by reference to the 2019 Definitive Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required under this item is hereby incorporated by reference to the 2019 Definitive Proxy Statement. Item 14. Principal Accounting Fees and ServicesThe information required under this item is hereby incorporated by reference to the 2019 Definitive Proxy Statement. 50 PART IVItem 15. Exhibits and Financial Statement Schedules(a) Documents included as part of this Annual Report1. The following consolidated financial statements are included in this Annual Report: •Report of Independent Registered Public Accounting Firm •Consolidated Balance Sheets—December 31, 2018 and December 31, 2017 •Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 •Consolidated Statements of Comprehensive Loss for the years ended December 31, 2018 and 2017 •Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2018 and 2017 •Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 •Notes to Consolidated Financial StatementsAll other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not requiredunder the related instructions or are inapplicable and therefore have been omitted.3. See the Index to Exhibits for a list of exhibits filed as part of this Annual Report.(b) See Item (a) 3 above.(c) See Item (a) 2 above.Item 16. Form 10-K SummaryNot applicable.51 Index to Exhibits ExhibitNumbers Description 2.1 Contribution and Sale Agreement dated October 26, 2009 by and among the Company, IP Holder LLC, now known as IP Holdings Unltd LLC,Seth Gerszberg, Suchman LLC, Yakira, L.L.C., Ecko.Complex, LLC, Zoo York LLC and Zoo York THC LLC (1) + 2.2 Membership Interest Purchase Agreement dated as of March 9, 2010 by and between the Company and Purim LLC (2) + 2.3 Asset Purchase Agreement dated April 26, 2011 by and among Hardy Way LLC, Nervous Tattoo, Inc. and Audigier Brand Management Group,LLC (4) + 2.4 Asset Purchase Agreement dated December 23, 2016 by and among Iconix Brand Group, Inc., 360 Holdings II-A LLC, Icon NY Holdings LLC,Iconix Latin America LLC and Sharper Image Holdings LLC(51) 2.5 Membership Interest Purchase Agreement by and among Iconix Brand Group, Inc., Icon NY Holdings LLC, IBG Borrower LLC, DHX Media Ltd.and DHX SSP Holdings LLC, dated May 9, 2017. (52) 2.6 Membership Interest Purchase Agreement by and among Iconix Brand Group, Inc., IBG Borrower LLC, DHX Media Ltd. and DHX SSP HoldingsLLC, dated May 9, 2017.(52) 3.1 Amended and Restated Certificate of Incorporation, as amended(9) ++ 3.2 Restated and Amended By-Laws(10) 4.1 Base Indenture dated November 29, 2012(12) 4.2 Supplemental Indenture Series 2012-1 Supplement dated November 29, 2012(12) 4.3 First Amendment to the Series 2012-1 Supplemental Indenture dated August 18, 2017(54) 4.4 Supplemental Indenture Series 2013-1 Supplement dated as of June 21, 2013(8) 4.5 Indenture 1.50% Convertible Senior Subordinated Notes Due 2018 dated as of March 18, 2013(40) 4.6 Global Note(40) 4.7 Indenture, dated as of February 22, 2018, by and among the Company, the Guarantors listed therein and The Bank of New York Mellon TrustCompany, N.A., as trustee(59) 10.1 401(K) Savings Plan of the Company(18) 10.2 Form of Restricted Stock Agreement for officers under the Company’s 2006 Equity Incentive Plan(20)* 10.3 Form of Restricted Stock Agreement for Directors under the Company’s 2006 Equity Incentive Plan(20)* 10.4 Lease dated as of November 12, 2007 with respect to the Company’s Executive Offices(24) 10.5 Iconix Brand Group, Inc. Executive Incentive Bonus Plan(25)* 10.6 Class A-1 Note Purchase Agreement dated November 29, 2012 by and among Registrant, Co-Issuers, Certain Conduit Investors, CertainFinancial Institutions, Certain Funding Agents, Barclays Bank PLC, as L/C Provider, Barclays Bank PLC as Swingline Lender and BarclaysBank PLC, as Administrative Agent (12) 10.7 First Amendment to the Class A-1 Note Purchase Agreement dated August 18, 2017, by and among the Company, the Co-Issuers, CertainConduit Investors, Certain Financial Institutions, Certain Funding Agents, and Guggenheim Securities Credit Partners, LLC, as L/C Provider, asSwingline Lender and as Administrative Agent.(54) 10.8 Management Agreement dated November 29, 2012 by and among the Co-Issuers, Registrant and Citibank, N.A., as trustee (12) 10.9 Form of RSU Agreement pursuant to the Amended and Restated 2009 Plan (Executive)(36)* 10.10 Form of RSU Agreement pursuant to the Amended and Restated 2009 Plan (Non-Executive)(36)* 10.11 Form of RSU Agreement pursuant to the Amended and Restated 2009 Plan (Non-employee Director)(36)* 10.12 Amended and Restated 2009 Equity Incentive Plan(37)* 52 ExhibitNumbers Description 10.13 Clawback policy form of Acknowledgement(36)* 10.14 Employment Agreement dated as of August 19, 2013 between the Company and Jason Schaefer(38)* 10.15 Confirmation of OTC Convertible Note Hedge dated March 13, 2013 between Iconix Brand Group, Inc. and Barclays Capital Inc., acting asagent for Barclays Bank PLC (40) 10.16 Confirmation of Additional OTC Convertible Note Hedge dated March 13, 2013 between Iconix Brand Group, Inc. and Barclays Capital Inc.,acting as agent for Barclays Bank PLC (40) 10.17 Confirmation of OTC Warrant Transaction dated March 13, 2013 between Iconix Brand Group, Inc. and Barclays Capital Inc., acting as agent forBarclays Bank PLC (40) 10.18 Confirmation of Additional OTC Warrant Transaction dated March 13, 2013 between Iconix Brand Group, Inc. and Barclays Capital Inc., actingas agent for Barclays Bank PLC (40) 10.19 Employment Agreement dated as of June 10, 2015 between the Company and David Jones(42)* 10.20 Employment Agreement dated as of February 18, 2016 between the Company and John Haugh(43)* 10.21 Credit Agreement dated as of March 7, 2016 between IBG Borrower LLC, as the borrower (“IBG Borrower”), the Company and certain of IBGBorrower’s wholly-owned subsidiaries, as guarantors, Cortland Capital Market Services LLC, as administrative agent and collateral agent andthe lenders party thereto from time to time, including CF ICX LLC and Fortress Credit Co LLC(44) 10.22 Facility Guaranty dated as of March 7, 2016 between the Company and certain wholly-owned subsidiaries of IBG Borrower LLC, as guarantorsand Cortland Capital Market Services LLC, as administrative agent and collateral agent(44) 10.23 Security Agreement dated as of March 7, 2016 between the Company, IBG Borrower LLC and certain of its wholly-owned subsidiaries, asGrantors, and Cortland Capital Market Services LLC, as Collateral Agent(44) 10.24 2015 Executive Incentive Plan(45)* 10.25 Employment Agreement dated as of April 28, 2016 between the Company and Peter Cuneo(47)* 10.26 Agreement dated as of September 26, 2016 by and among Iconix Brand Group, Inc., Huber Capital Management, LLC and Joseph R. Huber(49) 10.27 Amended and Restated 2016 Omnibus Incentive Plan(50)* 10.28 Executive Severance Plan(51)* 10.29 Credit Agreement, dated as of August 2, 2017, among IBG Borrower LLC, as the borrower, Iconix Brand Group, Inc. and certain of IBGBorrower’s wholly-owned subsidiaries, as guarantors, Cortland Capital Market Services LLC, as administrative agent and collateral agent andthe lenders party thereto from time to time, including Deutsche Bank AG, New York Branch. (53) 10.30 Facility Guaranty, dated as of August 2, 2017, among Iconix Brand Group, Inc. and certain wholly-owned subsidiaries of IBG Borrower LLC, asguarantors and Cortland Capital Market Services LLC, as administrative agent and collateral agent. (53) 10.31 Security Agreement, dated as of August 2, 2017, among Iconix Brand Group, Inc., IBG Borrower LLC and certain of its wholly-ownedsubsidiaries, as Grantors, and Cortland Capital Market Services LLC, as Collateral Agent. (53) 10.32 Limited Waiver and Amendment No. 1 to Credit Agreement, entered into as of October 27, 2017, among IBG Borrower LLC, a Delaware limitedliability company, the Guarantors thereunder; each lender from time to time party thereto; and Cortland Capital Market Services LLC, aDelaware limited liability company as Administrative Agent and Collateral Agent.(55) 10.33 Second Amendment, Consent and Limited Waiver to Credit Agreement, entered into as of November 24, 2017, among IBG Borrower LLC, aDelaware limited liability company, the Guarantors thereunder; each lender from time to time party thereto; and Cortland Capital MarketServices LLC, a Delaware limited liability company, as Administrative Agent and Collateral Agent.(56) 53 ExhibitNumbers Description 10.34 Executive Employment Agreement by and between F. Peter Cuneo and the Company entered into as of December 18, 2017.(57) 10.35 Third Amendment, Consent and Limited Waiver to Credit Agreement and Other Loan Documents entered into as of February 12, 2018, amongIBG Borrower LLC, a Delaware limited liability company, the Guarantors thereunder; each lender from time to time party thereto; and CortlandCapital Market Services LLC, a Delaware limited liability company, as Administrative Agent and Collateral Agent.(58) 10.36 Indenture, dated as of February 22, 2018, by and among the Company, the Guarantors listed therein and The Bank of New York Mellon TrustCompany, N.A., as trustee.(59) 10.37 Fourth Amendment and Consent to Credit Agreement, entered into as of March 12, 2018, among IBG Borrower LLC, a Delaware limited liabilitycompany, the Guarantors thereunder; each lender from time to time party thereto; and Cortland Capital Market Services LLC, a Delaware limitedliability company, as Administrative Agent and Collateral Agent. (60) 10.38 Employment Agreement dated as of June 15, 2018 between the Company and Peter Cuneo.(61) 10.39 Cooperation Agreement dated as of July 25, 2018, by and between Iconix Brand Group, Inc. and Sports Direct International plc.(62) 10.40 Amendment No. 1, dated as of September 14, 2018 to Employment Agreement of F. Peter Cuneo(63) 10.41 Employment Agreement entered into October 15, 2018 by and between Iconix Brand Group, Inc. and Robert C. Galvin.(64) 10.42 Employment Agreement entered into October 15, 2018 by and between Iconix Brand Group, Inc. and F. Peter Cuneo.(64) 10.43 Intercreditor Agreement dated as of February 22, 2018, by and among the Company and certain of its affiliates, The Bank of New York MellonTrust Company, N.A., and Cortland Capital Market Services LLC.(65) 21 Subsidiaries of the Company++ 23 Consent of BDO USA, LLP++ 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant toSection 302 of the Sarbanes-Oxley Act Of 2002++ 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant toSection 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 of2002++ 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002++ 101.INS XBRL Instance Document++ 101.SCH XBRL Schema Document++ 101.CAL XBRL Calculation Linkbase Document ++ 101.DEF XBRL Definition Linkbase Document++ 101.LAB XBRL Label Linkbase Document++ 101.PRE XBRL Presentation Linkbase Document++ (1)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated October 30, 2009 and incorporated herein by reference.(2)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated March 9, 2010 and incorporated by reference herein.(3)[Intentionally omitted.](4)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated April 26, 2011 and incorporated by reference herein.(5)[Intentionally omitted.](6)[Intentionally omitted.]54 (7)[Intentionally omitted.](8)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated June 21, 2013 and incorporated by reference herein.(9)Filed herewith.(10)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated August 6, 2012 and incorporated by reference herein.(11)[Intentionally omitted.](12)[Intentionally omitted.](13)[Intentionally omitted.](14)[Intentionally omitted.](15)[Intentionally omitted.](16)[Intentionally omitted.](17)[Intentionally omitted.](18)Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended January 31, 2003 and incorporated by reference herein.(19)[Intentionally omitted.](20)Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and incorporated by reference herein.(21)[Intentionally omitted.](22)[Intentionally omitted.](23)[Intentionally omitted.](24)Filed as an exhibit to the Company’s Annual Report on Form 10-K for the period ended December 31, 2007 and incorporated by reference herein.(25)Filed as Annex B to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 7, 2008 and incorporated by referenceherein.(26)[Intentionally omitted.](27)[Intentionally omitted.](28)[Intentionally omitted.](29)[Intentionally omitted.](30)[Intentionally omitted.](31)[Intentionally omitted.](32)[Intentionally omitted.](33)[Intentionally omitted.](34)[Intentionally omitted.](35)[Intentionally omitted.](36)Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated by reference herein.(37)Filed as an exhibit to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2012 and incorporated by reference herein.(38)Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and incorporated by reference herein.(39)[Intentionally omitted.](40)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated March 12, 2013 and incorporated by reference herein.(41)[Intentionally omitted.](42)Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and incorporated by reference herein.(43)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated February 18, 2016 and incorporated by reference herein.(44)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated March 7, 2016 and incorporated by reference herein.(45)Filed as Annex A to the Company’s Definitive Proxy Statement dated October 23, 2015 as filed on Schedule 14A and incorporated by referenceherein.(46)[Intentionally omitted.](47)Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and incorporated by reference herein.(48)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated June 10, 2016 and incorporated by reference herein.55 (49)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated September 28, 2016 and incorporated by reference herein.(50)Filed as Annex A to the Company’s Definitive Proxy Statement dated September 29, 2017 as filed on Schedule 14A and incorporated by referenceherein.(51)Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated by reference herein.(52)Filed as an exhibit to the Company’s Current Report on Form 8-K/A for the event dated May 9, 2017 and incorporated by reference herein.(53)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated August 2, 2017 and incorporated by reference herein.(54)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated August 18, 2017 and incorporated by reference herein.(55)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated October 27, 2017 and incorporated by reference herein.(56)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated November 24, 2017 and incorporated by reference herein.(57)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated December 13, 2017 and incorporated by reference herein.(58)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated February 12, 2018 and incorporated by reference herein.(59)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated February 22, 2018 and incorporated by reference herein.(60)Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and incorporated by reference herein.(61)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated June 18, 2018 and incorporated by reference herein.(62)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated July 27, 2018 and incorporated by reference herein.(63)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated September 17, 2018 and incorporated by reference herein.(64)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated October 18, 2018 and incorporated by reference herein.(65)Filed as an exhibit to the Company’s Current Report on Form 8-K for the event dated December 3, 2018 and incorporated by reference herein.*Denotes management compensation plan or arrangement+Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Iconix Brand Group, Inc. hereby undertakes to furnishsupplementally to the Securities and Exchange Commission copies of any of the omitted schedules and exhibits upon request by the Securities andExchange Commission.++Filed herewith.56 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. ICONIX BRAND GROUP, INC. Date: March 28, 2019 By: /s/ Robert C. Galvin Robert C. Galvin President and Chief Executive Officer (Principal Executive Officer)Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrantand in the capacities and on the dates indicated: Name Title Date /s/ Robert C. Galvin Director, President and Chief Executive Officer(Principal Executive Officer) March 28, 2019Robert C. Galvin /s/ John T. McClain Executive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer) March 28, 2019John T. McClain /s/ F. Peter Cuneo Chairman of the Board of Directors March 28, 2019F. Peter Cuneo /s/ Drew Cohen Lead Director March 28, 2019Drew Cohen /s/ Mark Friedman Director March 28, 2019Mark Friedman /s/ James A. Marcum Director March 28, 2019James A. Marcum /s/ Sue Gove Director March 28, 2019Sue Gove /s/ Justin Barnes Director March 28, 2019Justin Barnes 57 Annual Report on Form 10-KItem 8, 15(a)(1) and (2), (c) and (d)List of Financial Statements and Financial Statement ScheduleYear ended December 31, 2018Iconix Brand Group, Inc. and SubsidiariesForm 10-KIndex to Consolidated Financial Statements and Financial Statement ScheduleThe following consolidated financial statements of Iconix Brand Group Inc. and subsidiaries are included in Item 15: Report of Independent Registered Public Accounting Firm 59 Consolidated Balance Sheets - December 31, 2018 and 2017 60 Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 61 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2018 and 2017 62 Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2018 and 2017 63 Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 64 Notes to Consolidated Financial Statements 67 The following consolidated financial statement schedule of Iconix Brand Group, Inc. and subsidiaries is included in Item 15(d): All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not requiredunder the related instructions or are inapplicable and therefore have been omitted.58 Report of Independent Registered Public Accounting Firm Board of Directors and StockholdersIconix Brand Group, Inc.New York, New YorkOpinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Iconix Brand Group, Inc. (the “Company”) and subsidiaries as of December 31,2018 and 2017, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for each of the twoyears in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). In ouropinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries atDecember 31, 2018 and 2017, and the results of their operations and their cash flows for each of the two years in the period ended December 31,2018, in conformity with accounting principles generally accepted in the United States of America.Change in Accounting PrinciplesOn January 1, 2018, the Company adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606). Theeffects of this adoption are described in Note 3 to the consolidated financial statements.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federalsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits weare required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due toerror or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believethat our audits provide a reasonable basis for our opinion. /s/ BDO USA, LLP We have served as the Company's auditor since 1998. New York, New YorkMarch 28, 2019 59 Iconix Brand Group, Inc. and SubsidiariesConsolidated Balance Sheets(in thousands, except par value) December 31,2018 December 31,2017 Assets Current Assets: Cash and cash equivalents $66,609 $65,927 Restricted cash 16,026 48,766 Accounts receivable, net 37,671 66,625 Contract asset 4,802 — Other assets – current 28,057 51,850 Total Current Assets 153,165 233,168 Property and equipment: Furniture, fixtures and equipment 22,525 21,661 Less: Accumulated depreciation (17,644) (15,567) 4,881 6,094 Other Assets: Other assets 5,979 6,268 Contract asset 14,560 — Deferred income tax asset — 4,492 Trademarks and other intangibles, net 337,700 465,722 Investments and joint ventures 89,691 90,887 Goodwill 26,099 63,882 474,029 631,251 Total Assets $632,075 $870,513 Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Deficit Current liabilities: Accounts payable and accrued expenses $44,856 $49,191 Deferred revenue 5,405 5,525 Current portion of long-term debt 54,263 44,349 Other liabilities – current 9,788 13,581 Total current liabilities 114,312 112,646 Deferred income tax liability 4,566 11,466 Other tax liabilities — 531 Long-term debt, less current maturities (includes $48,076 and $0, respectively, at fair value) 620,966 756,493 Other liabilities 3,829 10,066 Total Liabilities $743,673 $891,202 Redeemable Non-Controlling Interests 34,137 30,287 Commitments and contingencies Stockholders’ Deficit: Common stock, $.001 par value shares authorized 260,000; shares issued 11,162 and 9,016, respectively 11 9 Additional paid-in capital 1,037,372 1,044,599 Accumulated losses (312,796) (223,718)Accumulated other comprehensive loss (53,068) (51,280)Less: Treasury stock – 3,323 and 3,282 shares at cost, respectively (844,253) (844,030)Total Iconix Brand Group, Inc. Stockholders’ Deficit (172,734) (74,420)Non-controlling interests, net of installment payments due from non-controlling interest holders 26,999 23,444 Total Stockholders’ Deficit $(145,735) $(50,976)Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Deficit $632,075 $870,513 See accompanying notes to consolidated financial statements 60 Iconix Brand Group, Inc. and SubsidiariesConsolidated Statements of Operations(in thousands, except earnings per share data) YearEnded YearEnded December 31,2018 December 31,2017 Licensing revenue $187,689 $225,833 Selling, general and administrative expenses 121,429 114,606 Loss on termination of licenses 10,550 28,360 Depreciation and amortization 2,329 2,455 Equity (earnings) loss on joint ventures (3,043) 3,259 Gain on deconsolidation of joint venture — (3,772)Gains on sale of trademarks, net (1,268) (875)Goodwill impairment 37,812 103,877 Trademark impairment 136,417 525,726 Investment impairment 2,500 16,848 Operating loss (119,037) (564,651)Other expenses (income): Interest expense 59,214 67,901 Interest income (495) (480)Other income, net (91,305) (2,650)(Gain) loss on extinguishment of debt (4,473) 20,939 Foreign currency translation loss 1,153 3,071 Other expenses (income) – net (35,906) 88,781 Loss from continuing operations before income taxes (83,131) (653,432)Provision (benefit) for income taxes 6,538 (95,977)Net loss from continuing operations (89,669) (557,455)Less: Net gain (loss) attributable to non-controlling interest from continuing operations 10,852 (22,177)Net loss from continuing operations attributable to Iconix Brand Group, Inc. (100,521) (535,278) Loss from discontinued operations before income taxes — (26,232)Gain on sale of Entertainment segment — 104,099 Provision for income taxes — 28,899 Net income from discontinued operations — 48,968 Less: Net income attributable to non-controlling interest from discontinued operations — 2,943 Net income from discontinued operations attributable to Iconix Brand Group, Inc. — 46,025 Net loss attributable to Iconix Brand Group, Inc. $(100,521) $(489,253) (Loss) earnings per share - basic: Continuing operations $(15.73) $(94.71)Discontinued operations $— $8.06 (Loss) earnings per share - basic: $(15.73) $(86.65) (Loss) earnings per share - diluted: Continuing operations $(15.73) $(94.71)Discontinued operations $— $8.06 (Loss) earnings per share - diluted $(15.73) $(86.65) Weighted average number of common shares outstanding: Basic 6,734 5,711 Diluted 6,734 5,711 See accompanying notes to consolidated financial statements. 61 Iconix Brand Group, Inc. and SubsidiariesConsolidated Statements of Comprehensive Loss(in thousands) Year EndedDecember 31 2018 2017 Net loss from continuing operations $(89,669) $(557,455)Other comprehensive income (loss): Foreign currency translation (loss) gain (4,965) 19,632 Change in fair value of available for sale securities — (484)Total other comprehensive (loss) income (4,965) 19,148 Comprehensive loss (94,634) (538,307)Less: comprehensive income (loss) from continuing operations attributable to non-controlling interest 10,852 (22,177)Comprehensive loss from continuing operations attributable to Iconix Brand Group, Inc. $(105,486) $(516,130) See accompanying notes to consolidated financial statements. 62 Iconix Brand Group, Inc. and SubsidiariesConsolidated Statements of Stockholders’ Deficit(in thousands) Common Stock AdditionalPaid-In Retained AccumulatedOtherComprehensive Treasury Non-Controlling Shares Amount Capital Earnings Loss Stock Interest Total Balance at January 1, 2017 8,972 9 1,033,810 257,704 (70,428) (842,952) 116,502 $494,645 Shares issued on vesting of restricted stock 44 0 — — — — — 0 Compensation expense in connection with restricted stock and stock options — — 9,168 — — — — 9,168 Shares repurchased on vesting of restricted stock — — — — — (1,078) — (1,078)Additional paid in capital associated with purchase of additional interest in Iconix Canada joint venture — — 1,478 — — — — 1,478 Write off of accretion expense due to deconsolidation of joint venture — — — 4,527 — — — 4,527 Deferred intercompany charge — — — (191) — — — (191)Payments from non-controlling interest holders, net of imputed interest — — — — — — 2,925 2,925 Elimination of non-controlling interest related to sale of the Entertainment segment — — — — — — (36,907) (36,907)Elimination of non-controlling interest related to purchase of additional interest in Iconix Canada joint venture — — — — — — (19,530) (19,530)Elimination of non-controlling interest related to the sale of NGX — — — — — — (2,529) (2,529)Tax benefit related to amortization of convertible notes' discount — — 124 — — — — 124 Change in redemption value of redeemable non-controlling interest holders — — — 3,495 — — — 3,495 Change in fair value of available for sale securities — — — — (484) — — (484)Net loss — — — (489,253) — — (19,234) (508,487)Foreign currency translation — — 19 — 19,632 — — 19,651 Distributions to joint venture partners — — — — — — (17,783) (17,783)Balance at December 31, 2017 9,016 $9 $1,044,599 $(223,718) $(51,280) $(844,030) $23,444 $(50,976)Shares issued on vesting of restricted stock 110 — — — — — — — Shares issued on conversion of 5.75% Convertible Notes 1,411 1 13,153 — — — — 13,154 Shares issued on payment of interest of 5.75% Convertible Notes 625 1 3,067 — — — — 3,068 Write-off of equity component of 1.50% Convertible notes — — (23,250) — — — — (23,250)Cumulative effect of accounting change for adoption of ASC 606 — — — 16,540 — — 1,176 17,716 Cumulative effect of accounting change for adoption of ASU 2016-01 — — — (3,177) 3,177 — — — Elimination of non-controlling interest related to the acquisition of additional interest in Hydraulic joint venture — — 2,097 — — — (2,097) — Compensation benefit in connection with restricted stock and stock options — — (2,405) — — — — (2,405)Shares repurchased on vesting of restricted stock — — — — — (223) — (223)Payments from non-controlling interest holders, net of imputed interest — — — — — — 194 194 Tax benefit related to amortization of convertible notes' discount — — 159 — — — — 159 Change in redemption value of redeemable non-controlling interest holders — — — 2,004 — — — 2,004 Net (loss) income — — — (100,521) — — 10,852 (89,669)Foreign currency translation — — (48) — (4,965) — — (5,013)Distributions to joint venture partners — — — (3,924) — — (6,570) (10,494)Balance at December 31, 2018 11,162 $11 $1,037,372 $(312,796) $(53,068) $(844,253) $26,999 $(145,735) See accompanying notes to consolidated financial statements. 63 Iconix Brand Group, Inc. and SubsidiariesConsolidated Statements of Cash Flows (in thousands) Year Ended Year Ended December 31,2018 December 31,2017 Cash flows from operating activities: Net loss from continuing operations $(89,669) $(557,455)Income from discontinued operations — 48,968 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of property and equipment 2,071 1,714 Amortization of trademarks and other intangibles 258 741 Amortization of deferred financing costs 3,133 9,771 Amortization of debt discount 9,833 7,349 Amortization of deferred rent (238) (198)Third party fees associated with the issuance of 5.75% Convertible Notes 4,958 — Interest expense on 5.75% Convertible Notes paid in shares 3,067 — Stock-based compensation (benefit) expense (2,405) 8,744 Non-cash gain on re-measurement of equity investment (8,410) — Provision for doubtful accounts 15,557 5,794 Write-off of contract asset accounts 1,777 — Write-off of receivable due from Iconix India joint venture partner 1,000 — Losses (Earnings) on equity investments in joint ventures (3,043) 3,259 Distributions from equity investments 3,021 3,575 Gain on deconsolidation of joint venture — (3,772)Goodwill impairment 37,812 103,877 Trademark impairment 136,417 525,726 Impairment of equity method investment 2,500 16,848 Settlement of note receivable related to formation of Buffalo joint venture 1,141 — Mark to market adjustment on convertible note (80,979) — Gain on debt to equity conversions (1,165) — Gain on sale of trademarks (1,268) (875)Loss on sale of NGX — 79 Gain on sale of Complex Media (958) (2,728)(Gain) loss on extinguishment of debt (4,473) 20,939 Loss on other equity investment 402 — Deferred income tax benefit (2,004) (104,169)Loss (Gain) on foreign currency translation 1,153 3,071 Changes in operating assets and liabilities, net of business acquisitions: Accounts receivable 13,103 (6,481)Other assets – current 19,144 (38,997)Other assets (5,498) 2,469 Deferred revenue (282) (3,272)Accounts payable and accrued expenses 204 23,212 Other tax liabilities (531) (4,713)Other liabilities 454 (1,654)Net cash provided by continuing operating activities 56,082 12,854 Net cash used in discontinued operating activities — (10,780)Net cash provided by operating activities 56,082 2,074 Cash flows provided by (used in) investing activities: Purchases of property and equipment (829) (870)Acquisition of additional interest in Iconix MENA — (1,800)Acquisition of remaining interest in Iconix Canada (7,053) (11,177)Acquisition of trademarks from Iconix Southeast Asia (2,120) — Acquisition of Badgley Mischka and Sharper Image trademarks in certain international joint ventures (1,289) — Acquisition of additional interest in Iconix Australia, net of cash acquired (649) — Proceeds received from note due from American Greetings — 1,250 64 Proceeds from sale of interest in Badgley Mischka in certain international joint ventures 2,500 — Proceeds from note receivable from formation of Buffalo joint venture 1,409 — Proceeds from sale of Sharper Image 1,755 — Proceeds from sale of interest in Badgley Mischka Canada — 375 Proceeds from sale of interest in Sharper Image Canada — 500 Proceeds from sale of Galore Media — 500 Proceeds from sale of NGX — 2,561 Proceeds from sale of interest in Complex Media 958 2,728 Proceeds from sale of discontinued operation, net of cash sold — 336,675 Proceeds from sale of trademarks and related notes receivable — 1,922 Decrease in cash and cash equivalents from deconsolidation of joint venture — (1,853)Additions to trademarks (339) (212)Net cash provided by (used in) continuing investing activities (5,657) 330,599 Net cash used in discontinued investing activities — (84)Net cash provided by (used in) investing activities (5,657) 330,515 Cash flows (used in) provided by financing activities: Proceeds from Variable Funding Notes — 73,437 Proceeds from long-term debt, net of discount and fees 95,700 307,030 Proceeds from sale of trademarks and related notes receivables to consolidated joint ventures 195 6,942 Payment of long-term debt (157,292) (824,867)Repurchase of convertible notes — (58,810)Payment of make-whole premium on repayment of long-term debt — (13,933)Prepaid financing costs (5,423) (7,145)Distributions to non-controlling interests (14,902) (5,191)Excess tax benefit from share-based payment arrangements — — Tax benefit related to amortization of convertible notes' discount 159 78 Cost of shares repurchased on vesting of restricted stock and exercise of stock options (223) (1,078)Net cash used in continuing financing activities (81,786) (523,537)Net cash used in discontinued financing activities — (23,873)Net cash used in financing activities (81,786) (547,410)Effect of exchange rate changes on cash (697) 2,834 Net decrease in cash, cash equivalents, and restricted cash (32,058) (211,987)Cash, cash equivalents and restricted cash from continuing operations, beginning of period 114,693 314,383 Cash and cash equivalents from discontinued operations, beginning of period — 12,297 Cash, cash equivalents, and restricted cash, beginning of period 114,693 326,680 Cash, cash equivalents, and restricted cash, end of period 82,635 114,693 Less: Cash and cash equivalents from discontinued operations, end of period — — Cash, cash equivalents, and restricted cash of continuing operations, end of period $82,635 $114,69365 Year Ended Year Ended Supplemental disclosure of cash flow information: December 31,2018 December 31,2017 Cash paid during the period: Income taxes (net of refunds received) $(5,702) $36,752 Interest 40,534 60,472 See accompanying notes to consolidated financial statements. 66 Iconix Brand Group, Inc. and SubsidiariesNotes to Consolidated Financial StatementsInformation as of and for the Years Ended December 31, 2018 and 2017(dollars are in thousands (unless otherwise noted), except per share data)The CompanyGeneralIconix Brand Group is a brand management company and owner of a diversified portfolio of approximately 30 global consumer brands across theCompany’s operating segments: women’s, men’s, home and international. Additionally, the Company previously owned and operated an Entertainmentsegment which is included in the Company’s consolidated statement of operations as a discontinued operation for FY 2017. The sale of the businessesunderlying the Entertainment segment was completed on June 30, 2017 (see Note 2 of Notes to Consolidated Financial Statements). The Company’sbusiness strategy is to maximize the value of its brands primarily through strategic licenses and joint venture partnerships around the world, as well as togrow the portfolio of brands through strategic acquisitions. At December 31, 2018, the Company’s brand portfolio includes Candie’s ®, Bongo ®, Joe Boxer ® , Rampage ® , Mudd ® , London Fog ® ,Mossimo ® , Ocean Pacific/OP ® , Danskin /Danskin Now ® , Rocawear ® /Roc Nation ® , Cannon ® , Royal Velvet ® , Fieldcrest ® , Charisma ® ,Starter ® , Waverly ® , Ecko Unltd ® /Mark Ecko Cut & Sew ® , Zoo York ® , Umbro ®, Lee Cooper ®, and Artful Dodger ®; and interests in MaterialGirl ® , Ed Hardy ® , Truth or Dare ® , Modern Amusement ® , Buffalo ® , Hydraulic ® , and PONY ®.The Company looks to monetize the IP related to its brands throughout the world and in all relevant categories primarily by licensing directly withleading retailers, through consortia of wholesale licensees, through joint ventures in specific territories and through other activity such as corporatesponsorships and content as well as the sale of IP for specific categories or territories. Products bearing the Company’s brands are sold across a variety ofdistribution channels from the mass tier (e.g. Wal-Mart) to better department stores (e.g. Macy’s). The licensees are generally responsible for designing,manufacturing and distributing the licensed products. The Company supports its brands with advertising and promotional campaigns designed to increasebrand awareness. Additionally, the Company provides its licensees with coordinated trend direction to enhance product appeal and help build and maintainbrand integrity.Licensees are selected based upon the Company’s belief that such licensees will be able to produce and sell quality products in the categories of theirspecific expertise and that they are capable of exceeding minimum sales targets and royalties that the Company generally requires for each brand. Thislicensing strategy is designed to permit the Company to operate its licensing business, leverage its core competencies of marketing and brand managementwith minimal working capital. The majority of the Company’s licensing agreements include minimum guaranteed royalty revenue which provides theCompany with greater visibility into future cash flows.A key initiative in the Company’s global brand expansion plans has been the formation of international joint ventures. The strategy in forminginternational joint ventures is to partner with best-in-class, local partners to bring the Company’s brands to market more quickly and efficiently, generatinggreater short- and long-term value from its IP, than the Company believes is possible if it were to build-out wholly-owned operations ourselves across amultitude of regional or local offices. Since September 2008, the Company has established the following international joint ventures: Iconix China, IconixLatin America, Iconix Europe, Iconix India, Iconix Canada, Iconix Australia, Iconix Southeast Asia, Iconix Israel, Iconix Middle East, Umbro China, DanskinChina, Starter China and Lee Cooper China. Note that the Company now maintains a 100% ownership interest in Iconix China, Iconix Latin America andIconix Canada. Refer to Note 5 for further details.The Company’s primary goal of maximizing the value of its IP also includes, in certain instances, the sale to third parties of a brand’s trademark inspecific territories or categories. As such, the Company evaluates potential offers to acquire some or all of a brand’s IP by comparing whether the offer is morevaluable than the Company’s estimate of the current and potential revenue streams to be earned via the Company’s traditional licensing model. Further, aspart of the Company’s evaluation process it also considers whether or not the buyer’s future development of the brand may help to expand the brand’s overallrecognition and global revenue potential. 67 1. Summary of Significant Accounting PoliciesPrinciples of ConsolidationThe consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and, in accordance with U.S. GAAP andaccounting for variable interest entities (where the Company is the primary beneficiary) and majority owned subsidiaries, the Company consolidates fourteenjoint ventures (Hardy Way, Icon Modern Amusement, Alberta ULC, Iconix Europe, Hydraulic IP Holdings, US PONY Holdings, Diamond Icon, Iconix Israel,Iconix Middle East, Umbro China, Danskin China, Starter China, Lee Cooper China and Iconix Australia; see Note 5 for explanation). All significantintercompany transactions and balances have been eliminated in consolidation.In accordance with Accounting Standards Codification (“ASC”) 810—Consolidation (“ASC 810”), the Company evaluates the following criteria todetermine the accounting for its joint ventures: 1) consideration of whether the joint venture is a variable interest entity which includes reviewing thecorporate structure of the joint venture, the voting rights, and the contributions of the Company and the joint venture partner to the joint venture, 2) if thejoint venture is a VIE, whether or not the Company is the primary beneficiary, a determination based upon a variety of factors, including: i) the presence ofinstallment payments which constitutes a de facto agency relationship between the Company and the joint venture partner, and ii) an evaluation of whetherthe Company or the joint venture partner is more closely associated with the joint venture. If the Company determines that the entity is a variable interestentity and the Company is the primary beneficiary, then the joint venture is consolidated. For those entities that are not considered variable interest entities,or are considered variable interest entities but the Company is not the primary beneficiary, the Company uses the equity method as set forth in ASC 323—Investments (“ASC 323”), to account for those investments and joint ventures which are not required to be consolidated under US GAAP. Refer to Note 5 forfurther details. LiquidityThese consolidated financial statements are prepared on a going concern basis that contemplates the realization of cash flows from assets anddischarge of liabilities, in each case, in the ordinary course of business consistent with the Company’s prior periods. The Company considered, among otherthings, the Sears Holdings Corporation’s bankruptcy filing on October 15, 2018, and determined that the bankruptcy filing is not expected to have a materialadverse impact on its ability to continue as a going concern. Based on the Company’s financial plans and projections for 2019, which assumes therealization of significant cost savings, among other things, from the successful implementation of the Company’s current strategic initiatives, the Companydoes not expect the occurrence of any payment defaults on its outstanding debt facilities in the next twelve months, and otherwise expects to generatesufficient cash to meet its operating cash flow needs and maintain compliance with the financial covenants set forth in its various debt facilities during suchperiod. In particular, management believes the allocation of residual royalty collections to a restricted reserve account (as is discussed in Note 9) is notexpected to have a material adverse impact on the Company’s ability to meet such cash flow needs. See Liquidity Risk Factor in Item 1A.Reverse Stock SplitOn March 14, 2019, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of its common stock. Unless the context otherwiserequires, all share and per share amounts in this annual report on Form 10-K have been adjusted to reflect the Reverse Stock Split. Refer to Note 22 for furtherdetails.Business Combinations, Joint Ventures and InvestmentsThe purchase method of accounting requires that the total purchase price of an acquisition be allocated to the assets acquired and liabilities assumedbased on their fair values on the date of the business acquisition. The results of operations from the acquired businesses are included in the accompanyingconsolidated statements of income from the acquisition date. Any excess of the purchase price over the estimated fair values of the net assets acquired isrecorded as goodwill. Since January 1, 2017, the Company established the following joint ventures to develop and market the Company’s brands in specific markets: Date Created Investment /Joint Venture Iconix’sInvestmentMarch 2018 Starter China 100%(1)June 2018 Lee Cooper China 100%(2) (1)In March 2018, the Company formed the Starter China Limited as a wholly-owned subsidiary to hold the Starter trademarks and related assets inrespect of the Greater China territory. The Company entered into an agreement with Photosynthesis Holdings, Co. Ltd. (“PHL”) who will purchase noless than a 50% interest and up to a total of 60% interest in Starter China Limited. The purchase of the equity interest is expected to occur over athree-year period commencing on January 16, 2022. Refer to Note 5 for further details. As of December 31, 2018, the Company’s ownership interestin Starter China Limited was 100%.68 (2)In June 2018, the Company formed the Lee Cooper China Limited as a wholly-owned subsidiary to hold the Lee Cooper trademarks and related assetsin respect of the Greater China territory. The Company entered into an agreement with POS Lee Cooper HK Co. Ltd. (“PLC”) who will purchase noless than a 50% interest and up to a total of 60% interest in Lee Cooper China Limited. The purchase of the equity interest is expected to occur over atwo-year period commencing on January 15, 2024. Refer to Note 5 for further details. As of December 31, 2018, the Company’s ownership interest inLee Cooper China Limited was 100%. For further information on the Company’s accounting for joint ventures and investments, see Note 5.Use of EstimatesThe preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. The Company reviews all significant estimates affecting the financial statements on arecurring basis and records the effect of any adjustments when necessary.Cash and Cash EquivalentsCash and cash equivalents consist of actual cash as well as cash equivalents, defined as short-term, highly liquid financial instruments withinsignificant interest rate risk that are readily convertible to cash and have maturities of three months or less from the date of purchase. In addition, as ofDecember 31, 2018, approximately $12.2 million, or 15%, of our total cash (including restricted cash) was held in foreign subsidiaries. During the secondfiscal quarter of 2018, the Company elected to treat its Luxembourg top tier subsidiary (“Luxco”) as a disregarded entity for US tax purposes. All theoperations under Luxco were previously treated as disregarded for US tax purposes. As of the election date, all the foreign operations under Luxco will betreated as a branch for US tax purposes and subject to US taxation. As such, the Company will no longer have any earnings in foreign subsidiaries that arenot currently subject to taxation for US purposes. Before the election, the Company indefinitely reinvested all earnings of its foreign subsidiaries.Restricted CashRestricted cash consists of actual cash deposits held in accounts primarily for debt service, as well as cash equivalents, defined as short-term, highlyliquid financial instruments with insignificant interest rate risk that are readily convertible to cash and have maturities of three months or less from the date ofpurchase, the restrictions on all of which lapse every three months or less.Concentration of Credit RiskFinancial instruments which potentially subject the Company to concentration of credit risk consist principally of short-term cash investments andaccounts receivable. The Company places its cash in investment-grade, short-term instruments with high quality financial institutions. The Companyperforms ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. The allowance for non-collection of accounts receivable is based upon the expected collectability of all accounts receivable.Two customers each accounted for 10% of the Company’s total revenue for FY 2018 as compared to one customer accounted for 16% of theCompany’s total revenue for FY 2017.Accounts ReceivableAccounts receivable are reported at amounts the Company expects to be collected, net of provision for doubtful accounts, based on the Company’songoing discussions with its licensees, and its evaluation of each licensee’s payment history and account aging. As of December 31, 2018 and 2017, theCompany’s provision for doubtful accounts was $20.1 million and $7.9 million, respectively.No customers accounted for more than 10% of the Company’s accounts receivable (which includes both short-term and long-term accountsreceivables included in prepaid and other current assets and other assets on the Company’s consolidated balance sheets) as of December 31, 2018 ascompared to two customers who accounted for approximately 12% and 14% of the Company’s accounts receivable, (which includes both short-term andlong-term accounts receivables included in prepaid and other current assets and other assets on the Company’s consolidated balance sheets) as of December31, 2017.69 DerivativesThe Company’s objective for holding any derivative financial instruments is to manage interest rate risks, and in the case of our 1.50% ConvertibleNotes, dilution risk. The Company does not use financial instruments for trading or other speculative purposes. From time to time the Company usesderivative financial instruments to hedge the variability of anticipated cash flows of a forecasted transaction (a “cash flow hedge”). The Company had nosuch derivative instruments in FY 2018 or FY 2017.Restricted StockCompensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock isgranted. For restricted stock where restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized over the periodbetween the issue date and the date that restrictions lapse. Time-based restricted stock is included in total common shares outstanding upon the lapse of anyrestrictions. Time-based restricted stock is included in total diluted shares outstanding which is calculated utilizing the treasury stock method.For restricted stock where restrictions are based on performance measures (“performance-based restricted stock”), restrictions lapse when thoseperformance measures have been deemed earned. Performance-based restricted stock is included in total common shares outstanding upon the lapse of anyrestrictions. Performance-based restricted stock is included in total diluted shares outstanding when the performance measures have been deemed earned butnot issued. For restricted stock which is measured based on market conditions, the Company values the stock utilizing a Monte Carlo simulation factoring keyassumptions such as the stock price at the beginning and end of the period, risk free interest rate, expected dividend yield when simulating total shareholderreturn, expected dividend yield when simulating the Company’s stock price, stock price volatility and correlation coefficients. Restricted stock based onmarket conditions is included in total common shares outstanding upon the achievement of the performance metrics. Restricted stock based on marketconditions is included in total diluted shares outstanding when the performance metrics have been deemed earned but not issued.Treasury StockTreasury stock is recorded at acquisition cost. Gains and losses on disposition are recorded as increases or decreases to additional paid-in capital withlosses in excess of previously recorded gains charged directly to retained earnings.Deferred Financing CostsThe Company incurred costs (primarily professional fees and placement agent fees) in connection with borrowings under senior secured notes, 1.50%Convertible Notes, the Senior Secured Term Loan and the 2016 Senior Secured Term Loan. These costs have been deferred and are being amortized using theeffective interest method over the life of the related debt.Property, Equipment, Depreciation and AmortizationProperty and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are determined by thestraight line method over the estimated useful lives of the respective assets ranging from three to seven years. Leasehold improvements are amortized by thestraight-line method over the initial term of the related lease or estimated useful life, whichever is less.Operating LeasesTotal rent payments under operating leases that include scheduled payment increases and rent holidays are amortized on a straight-line basis over theterm of the lease. Landlord allowances are amortized by the straight-line method over the term of the lease as a reduction of rent expense.Long-Lived AssetsIf circumstances mandate, the Company evaluates the recoverability of its long-lived assets, other than goodwill and other indefinite life intangibles(discussed below), by comparing estimated future undiscounted cash flows with the assets’ carrying value to determine whether a write-down to market value,based on discounted cash flow, is necessary.70 Assumptions used in our fair value estimates are as follow: (i) discount rates; (ii) royalty rates; (iii) projected average revenue growth rates; and(iv) projected long-term growth rates. The testing also factors in economic conditions and expectations of management and may change in the future basedon period-specific facts and circumstances. During FY 2018 and FY 2017, there were no impairments of long-lived assets other than the non-cash impairmentcharges for goodwill and trademarks. See Note 4 for further details. Goodwill and TrademarksGoodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations accounted for under the purchasemethod of accounting. On an annual basis and as needed, the Company tests goodwill and indefinite life trademarks for impairment through the use ofdiscounted cash flow models. Other intangibles with determinable lives, including certain trademarks, license agreements and non-compete agreements, areevaluated for the possibility of impairment when certain indicators are present, and are otherwise amortized on a straight-line basis over the estimated usefullives of the assets (currently ranging from 1 to 15 years). Assumptions used in our fair value estimates are as follow: (i) discount rates; (ii) royalty rates;(iii) projected average revenue growth rates; and (iv) projected long-term growth rates. The testing also factors in economic conditions and expectations ofmanagement and may change in the future based on period-specific facts and circumstances. In the second quarter of 2018, and third quarter of 2017, theCompany recognized non-cash impairment charge for goodwill of $37.8 million, and $103.9 million, respectively. In the FY 2018 and FY 2017, theCompany recognized non-cash impairment charge for trademarks of $136.4 million and $525.7 million, respectively. Refer to Note 4 for further details.Non-controlling Interests / Redeemable Non-controlling InterestsCertain of the Company’s consolidated joint ventures have put options which, if exercised by the Company’s joint venture partner, would require theCompany to purchase all or a portion of the joint venture partner’s equity interest in the joint venture. The Company has determined that these put optionsare not derivatives under the guidelines prescribed in Accounting Standards Codification (“ASC”) 815. As such, and in accordance with ASC 480-10-S99, asthe potential exercise of the put options is outside the control of the Company, the Company has recorded the portion of the non-controlling interest’s equitythat may be put to the Company in mezzanine equity in the Company’s consolidated balance sheets as “redeemable non-controlling interest”. The initialvalue of the redeemable non-controlling interest represents the fair value of the put option at inception. This amount recorded at inception is accreted, over aperiod determined by when the put option becomes exercisable, to what the Company would be obligated to pay to the non-controlling interest holder if theput option was exercised. This accretion is recorded as a credit to redeemable non-controlling interest and a debit to retained earnings resulting in an impactto the consolidated balance sheet only. For each reporting period, the Company revisits the estimates used to determine the redemption value of the putoption when it becomes exercisable and may adjust the remaining put option value and associated accretion accordingly through redeemable non-controlling interest and retained earnings, as necessary. The terms of each of the outstanding put options are included in the individual discussions of eachjoint venture, as applicable. For the Company’s consolidated joint ventures that do not have put options, the non-controlling interest is recorded withinequity on the Company’s consolidated balance sheet.The Company may enter into joint venture agreements with joint venture partners in which the Company allows the joint venture partner to pay aportion of the purchase price in cash at the time of the formation of the joint venture with the remaining cash consideration paid over a specified period oftime following the closing of such transaction. The Company records the amounts due from such joint venture partners as (a) a reduction of Non-controllingInterests, net of installment payments, or (b) if installment payments result from the issuance of shares classified as mezzanine equity, as a reduction inRedeemable Non-controlling Interests, net of installment payments (i.e. mezzanine equity), as applicable, in the Company’s consolidated balance sheet inaccordance with ASC 505-10-45, “Classification of a Receivable from a Shareholder.” The Company accretes the present value discount on these installmentpayments through interest income on its consolidated statements of operations. Revenue RecognitionThe Company enters into various license agreements that provide revenues based on minimum royalties and advertising/ marketing fees andadditional revenues based on a percentage of defined sales. Minimum royalty and advertising/ marketing revenue is recognized on a straight-line basis overthe full contract term. Minimum royalties that escalate on an annual basis over the contract term are recognized on a straight-line basis over the full contractterm. Royalties exceeding the defined minimum amounts in a specific contract year (sales-based royalties), as defined in each license agreement, arerecognized only in the subsequent periods to when the minimum guarantee for the contract year has been achieved and when the later of the following eventsoccur: (i) the subsequent sale occurs, or (ii) the performance obligation to which some or all of the sales-based royalty has been allocated has been satisfied(or partially satisfied).71 Gains on sale of trademarksFrom time to time, we sell a brand’s territories and/or categories through joint venture transactions which is a central and ongoing part of our business.The Company considers, among others, the following guidance in determining the appropriate accounting for gains recognized from the initial sale of ourbrands/trademarks to our joint ventures: ASC 323, Investments-Equity Method and Joint Venture, ASC 605 and ASC 606, Revenue Recognition, ASC810, Consolidations, ASC 845, Nonmonetary Transactions—Exchanges Involving Monetary Consideration and Staff Accounting Bulletin No. 104. Additionally, the Company determines the cost of the trademarks sold by applying the relative fair market value of the proceeds received in thetransaction to the book value of the trademarks on the Company’s consolidated balance sheet at the time of the transaction. Foreign CurrencyThe Company’s consolidated joint ventures’ functional currency is U.S. dollars. The functional currencies of the Company’s internationalsubsidiaries are the local currencies of the countries in which the subsidiaries are located. Foreign currency denominated assets and liabilities are translatedinto U.S. dollars using the exchange rates in effect at the consolidated balance sheet date. Results of operations and cash flows are translated using theaverage exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component ofshareholders’ equity in accumulated other comprehensive income (loss). Taxes on IncomeThe Company uses the asset and liability approach of accounting for income taxes and provides deferred income taxes for temporary differences thatwill result in taxable or deductible amounts in future years based on the reporting of certain costs in different periods for financial statement and income taxpurposes. Valuation allowances are recorded when uncertainty regarding their realizability exists. Earnings (Loss) Per ShareBasic earnings (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weightedaverage number of common shares outstanding for the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the effect ofcommon shares issuable upon exercise of stock options and warrants, vesting of restricted stock, and potential conversion of our convertible debt. Thedifference between reported basic and diluted weighted-average common shares results from the assumption that all dilutive stock options, warrants,convertible debt and restricted stock outstanding were exercised into common stock.We may be required to calculate basic earnings (loss) per share using the two-class method as a result of the Company’s redeemable non-controllinginterests. To the extent that the redemption value increases and exceeds the then-current fair value of a redeemable non-controlling interest, net (loss) incomeattributable to Iconix Brand Group, Inc. (used to calculate earnings (loss) per share) could be negatively impacted by that increase, subject to certainlimitations. The partial or full recovery of any reductions to net (loss) attributable to Iconix Brand Group, Inc. (used to calculate earnings (loss) per share) islimited to any cumulative prior-period reductions. For FY 2018 and FY 2017, earnings (loss) per share was impacted by approximately $0.80 per share (or$5.4 million) and $1.00 per share (or $5.6 million), respectively, for adjustments related to the Company’s redeemable non-controlling interests. Refer toNote 11 for further details. Advertising Campaign CostsAll costs associated with production for the Company’s national advertising campaigns are expensed during the periods when the activities takeplace. All other advertising costs such as print and online media are expensed when the advertisement first occurs. Advertising expenses for FY 2018 and FY2017 amounted to $25.7 million, and $30.5 million, respectively.The Company also incurs co-operative advertising costs that represent reimbursements to certain licensees for shared marketing expenses related tothe sale of its products. In accordance with ASC 606, these reimbursements are recorded as a reduction to licensing revenue.72 Comprehensive Income (Loss)Comprehensive income (loss) includes certain gains and losses that, under U.S. GAAP, are excluded from net income (loss) as such amounts arerecorded directly as an adjustment to stockholders’ equity. The Company’s comprehensive income (loss) is primarily comprised of net income (loss), foreigncurrency translation and changes in fair value of available for sale securities (prior to the Company’s adoption of ASU 2016-01 in FY 2018).New Accounting StandardsIn May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which is the new comprehensive revenuerecognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard’s core principle is that a company willrecognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which such company expects tobe entitled in exchange for those goods or services. The Company adopted the new standard in the first quarter of FY 2018. Refer to Note 3 for further details.In January 2016, FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”, includes amendmentson recognition, measurement, presentation, and disclosure of financial instruments. It requires an entity to (1) measure equity investments at fair valuethrough net income, with certain exceptions; (2) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fairvalue option; (3) present financial assets and financial liabilities by measurement category and form of financial asset; (4) calculate the fair value of financialinstruments for disclosure purposes based on an exit price; and (5) assess a valuation allowance on deferred tax assets related to unrealized losses onavailable-for-sale debt securities in connection with other deferred tax assets. The ASU provides an election to subsequently measure certain nonmarketableequity investments at cost less any impairment and adjusted for certain observable price changes. The ASU also requires a qualitative impairment assessmentof such equity investments and amends certain fair value disclosure requirements. The ASU is effective for public business entities for fiscal years, andinterim periods within those fiscal years, beginning after December 15, 2017. Certain provisions of the ASU are eligible for early adoption. The Companyadopted the new standard in the first quarter of FY 2018 which resulted in the Company reclassifying the cumulative loss in fair value of our available-for-sale securities of $3.2 million from accumulated other comprehensive loss to accumulated losses as of January 1, 2018 in the Company’s consolidatedbalance sheet. Changes in the fair value of the available-for-sale securities will be recorded within the Company’s consolidated statement of operations infuture periods. Additionally, the Company’s previously cost method investments are now being categorized as other equity investments and continue to berecorded on the Company’s consolidated balance sheet at fair value and assessed for potential impairment on a quarterly basis. Refer to Note 5 and Note 7 forfurther details.In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to recorda ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating,with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning afterDecember 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital andoperating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practicalexpedients available. The Company’s leases are considered operating leases and are not capitalized under ASC 840. Under ASC 842, the majority of theseleases will qualify for capitalization and will result in the recognition of lease assets and lease liabilities once the new standard is adopted. We will adoptASC 842 using the effective date method in accordance with ASU 2018-11 for all leases existing at January 1, 2019. All of our leases are operatingleases. Upon adoption, leases that were classified as operating leases under ASC 840 will be classified as operating leases under ASC 842 and we will recordright-of-use assets and the related lease liability. The lease liability will be based on the present value of the remaining minimum lease payments discountedusing our secured incremental borrowing rate at the effective date of January 1, 2019 using the remaining lease term as of January 1, 2019. As permittedunder ASC 842, upon adoption we will elect a package of practical expedients that allows us not to reassess (1) whether a contract is or contains a lease, (2)the lease classification and (3) whether previously capitalized costs continue to qualify as initial indirect costs. We are currently in the process of finalizingthe impact of adopting the standard, including the calculation of the present value of future minimum lease payments at the effective date, as well aspreparing the disclosures to be included in the financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments”, which clarifies how certain cashreceipts and cash payments are presented in the statement of cash flows. The amendment addresses eight specific cash flow issues with the objective ofreducing the existing diversity in practice. The Company adopted the new standard in the first quarter of FY 2018 which did not have a material impact toour financial statements.In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory”, which wasissued as part of the FASB’s simplification initiative and, intends to improve the accounting for the income tax consequences of intra-entity transfers of assetsother than inventory. Under this ASU, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventorywhen the transfer occurs. The Company adopted the new standard in the first quarter of FY 2018 which did not have a material impact to our financialstatements.73 In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Restricted Cash.” The primary purpose of this ASU is to reduce thediversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU will require that astatement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash orrestricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cashequivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted thenew standard in the first quarter of FY 2018. In January 2017, the FASB issued ASU No. 2017-01,”Business Combinations (Topic 805) - Clarifying the Definition of a Business”, to clarify thedefinition of a business, which is fundamental in the determination of whether transactions should be accounted for as acquisition (or disposals) of assets orbusinesses. The guidance is generally expected to result in fewer transactions qualifying as business combinations. The Company adopted the new standardin the first quarter of FY 2018 which did not have a material impact to our financial statements.In February 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”,which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and eliminated the requirements for anyreporting unit with a zero or negative carrying amount to perform a qualitative assessment. The ASU is effective for public business entities for annual or anyinterim goodwill impairment tests in fiscal years beginning after December 15, 2019. This ASU should be applied prospectively. Early adoption is permittedfor interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We will adopt this accounting guidance in future periods.In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718)”, which provides clarity and reduces both (1)diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the termsor conditions of a share-based payment award. The ASU is effective for all entities for annual periods, and interim periods within those annual periods,beginning after December 15, 2017. The Company adopted the new standard in the first quarter of FY 2018 which did not have a material impact to ourfinancial statements.Presentation of Prior Year DataCertain reclassifications, which were immaterial, have been made to conform prior year data to the current presentation. 2. Discontinued OperationsThe Company completed the sale of its Entertainment segment on June 30, 2017 for $349.1 million in cash. As a result of the sale, the Company hasclassified the results of its Entertainment segment as discontinued operations in its consolidated statement of operations for FY 2017, including a pre-taxgain of $104.1 million (net of transaction costs of $7.8 million) on the sale.74 The following table presents financial results of the Entertainment segment for FY 2017 which were shown as income from discontinued operations,net of income taxes, in our consolidated statement of operations: Year EndedDecember 31, 2017 Licensing revenue $53,129 Selling, general and administrative expenses 34,542 Depreciation and amortization 303 Trademark impairment — Operating income 18,284 Other expenses (income): Interest expense 12,973 Interest income (180)Loss on extinguishment of debt 31,554 Foreign currency translation loss (gain) 169 Other expenses – net 44,516 (Loss) Income from operations of discontinued operations before income taxes (26,232)Gain (loss) on sale of Entertainment segment 104,099 Provision for income taxes 28,899 Net income from discontinued operations 48,968 Less: Net income attributable to non-controlling interest from discontinued operations 2,943 Income from discontinued operations, net of income taxes $46,025 The cash proceeds from the sale of the Company’s Entertainment segment were utilized by the Company to make mandatory principal prepayments onboth its Senior Secured Notes and 2016 Senior Secured Term Loan (each as defined below) (as well as a corresponding prepayment premium). As a result, andin accordance with ASC 205-20-45-6, for FY 2017, the Company has allocated additional interest expense of $12.9 million (which includes $1.7 million ofamortization of the original issue discount on the 2016 Senior Secured Term Loan) from continuing operations to discontinued operations. In FY 2017,given the mandatory principal prepayment of $152.2 million on the Senior Secured Notes paid in July 2017 as a result of the sale of the Company’sEntertainment segment, the Company allocated the associated prepayment penalty of $0.3 million as well as the write-off of the pro-rata portion of deferredfinancing costs of $2.0 million related to the Senior Secured Notes from continuing operations to discontinued operations on the Company’s consolidatedstatement of operations. In FY 2017, the Company has allocated the prepayment premium of $15.2 million related to the 2016 Senior Secured Term Loan aswell as the write-off of the pro-rata portion of deferred financing costs and original issue discount of $9.4 million and $4.7 million, respectively, fromcontinuing operations to discontinued operations on the Company’s consolidated statement of operations. Refer to Note 9 for further details. The following table presents cash flow of the Entertainment segment during FY 2017: Year EndedDecember 31, 2017 Net cash (used in) provided by discontinued operating activities $(10,780)Net cash used in discontinued investing activities $(84)Net cash used in discontinued financing activities $(23,873) 75 3. Revenue Recognition Adoption of ASC Topic 606, “Revenue from Contracts with Customers”On January 1, 2018, we adopted ASC Topic 606 – Revenue from Contracts with Customers (“Topic 606”), using the modified retrospective methodapplied to those license agreements which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 arepresented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting underTopic 605. Under Topic 605, the Company recognized minimum royalty revenue on a straight-line basis over the term of each contract year, as defined, ineach license agreement and royalties exceeding the defined minimum amounts were recognized as income during the period corresponding to the licensee’ssales. Under Topic 606, the Company is recognizing the minimum royalty revenue on a straight-line basis over the entire contract term and royaltiesexceeding the defined minimum amounts are recognized only in the subsequent periods to when the minimum guarantee for the contract year has beenachieved and when the later of the following events occur: (i) the subsequent sale occurs, or (ii) the performance obligation to which some or all of the sales-based royalty has been allocated has been satisfied (or partially satisfied), as is discussed below. We recorded a net increase to opening retained earnings and the corresponding amount to non-controlling interest of $16.5 million and $1.2 million,respectively, net of tax, as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to our revenuesassociated with license agreements which have escalating guaranteed minimum royalties in the contract years of the license agreement term. The impact torevenues was an increase of approximately $3.9 million for FY 2018 as a result of applying Topic 606. Revenue RecognitionLicensing RevenueThe Company licenses its brands across a broad range of product categories, including fashion apparel, footwear, accessories, sportswear, homefurnishings and décor, and beauty and fragrance. The Company seeks licensees with the ability to produce and sell quality products in their licensedcategories and to meet and exceed minimum sales and royalty payment thresholds.The Company maintains direct-to-retail and traditional wholesale licenses. Typically, in a direct-to-retail license, the Company grants exclusiverights to one of its brands to a national retailer for a broad range of product categories. Direct-to-retail licenses provide retailers with proprietary rights tonational brands at favorable economics. In a traditional wholesale license, the Company grants the right to a specific brand to a single or small group ofrelated product categories to a wholesale supplier, who is permitted to sell licensed products to multiple retailers within an approved distribution channel.The Company’s license agreements typically require the licensee to pay the Company royalties based upon net sales with guaranteed minimumroyalties in the event that net sales do not reach certain specified targets. The Company’s licenses also typically require the licensees to pay to the Companycertain minimum amounts for the advertising and marketing of the respective licensed brands. Licensing revenue is comprised of revenue related to the Company’s entry into various trade name license agreements that provide revenues based onminimum royalties and advertising/marketing fees and additional revenues based on a percentage of defined sales. Minimum royalty amounts are recognizedas revenue on a straight-line basis over the full contract term. Minimum royalties that escalate on an annual basis over the contract term are recognized on astraight-line basis over the full contract term. Royalties exceeding the defined minimum amounts in a specific contract year (sales-based royalties), asdefined in each license agreement, are recognized only in the subsequent periods to when the minimum guarantee for the contract year has been achieved andwhen the later of the following events occur: (i) the subsequent sale occurs, or (ii) the performance obligation to which some or all of the sales-based royaltyhas been allocated has been satisfied (or partially satisfied). Within the Company’s International segment, the Umbro business purchases replica soccer jerseys for resale to certain licensees. The Companygenerally does this as an accommodation to its licensees to consolidate ordering from the manufacturers. The revenue associated with such activity isincluded in licensing revenue and was approximately $2.9 million for FY 2018 and the associated cost of goods sold is included in selling general andadministrative expenses and was approximately $2.8 million for FY 2018. There was approximately $1.1 million of such sales and corresponding cost ofgoods sold in FY 2017. Revenue for these sales are recognized upon the transfer of control of the promised product to the customer or licensee in an amountthat reflects the consideration that we expect to receive in exchange for these products.76 The following table presents our revenues disaggregated by license type: Year Ended December 31, 2018 2017 Licensing revenue by license type: Direct-to-retail license $71,609 $120,555 Wholesale licenses 112,769 105,041 Other licenses(1) 3,311 237 $187,689 $225,833(1)Included in Other licenses for FY 2018 is $2.9 million of revenue associated with the Umbro business purchases discussed above as compared to $1.1million for FY 2017.The following table represents our revenues disaggregated by geography: Year Ended December 31, 2018 2017 Total licensing revenue by geographic region: United States $120,397 $163,809 Other (1) 67,292 62,024 $187,689 $225,833(1)No single country represented 10% of the Company’s revenues in the periods presented.Remaining Performance ObligationWe enter into long-term license agreements with our licensees across all operating segments. Revenues are recognized on a straight line basisconsistent with the nature, timing and extent of our services, which primarily relate to the ongoing brand management and maintenance of the intellectualproperty. As of January 1, 2019, the Company and its joint ventures had a contractual right to receive over $408 million of aggregate minimum licensingrevenue through the balance of all of their current licenses, excluding any renewals.As of December 31, 2018, future minimum license revenue to be recognized is as follows: $102.2 million, $75.3 million, $55.8 million, $47.0 million,$42.3 million and $86.3 million for FY 2019, FY 2020, FY 2021, FY 2022, FY 2023 and thereafter, respectively.Contract BalancesTiming of revenue recognition may differ from the timing of invoicing to licensees. We record a receivable when amounts are contractually due orwhen revenue is recognized prior to invoicing. Deferred revenue is recorded when amounts are contractually due prior to satisfying the performanceobligations of the contracts. For multi-year license agreements, as the performance obligation is providing the licensee with the right of access to theCompany’s intellectual property for the contractual term, the Company uses a time-lapse measure of progress and straight lines the guaranteed minimumroyalties over the contract term.Contract AssetWe record contract assets when revenue is recognized in advance of cash payment being due from our licensees. Contract assets due within one yearof the most recent balance sheet date are recorded within Other assets – current and long term contract assets are recorded within Other assets on theCompany’s consolidated balance sheet. As of December 31, 2018, our contract assets – current and long term contract assets were $4.8 million and $14.6million, respectively. For the year ended December 31, 2018, the Company incurred an impairment loss of its contract assets of $1.8 million as a result ofcertain contract modifications.77 Deferred RevenueWe record deferred revenue when cash payment is received or due in advance of our performance, including amounts which are refundable. Advancedroyalty payments are recognized ratably over the period indicated by the terms of the license and are reflected in the Company’s consolidated balance sheetin deferred revenue at the time the payment is received. The decrease in deferred revenues for FY 2018 is primarily driven by $3.9 million of revenuesrecognized that were included in the deferred revenue balance at the beginning of the period offset by cash payments received or due in advance of satisfyingour performance obligations. 4. Goodwill and Trademarks and Other Intangibles, netGoodwillGoodwill by reportable operating segment and in total, and changes in the carrying amounts, as of the dates indicated are as follows: Women's Men's Home International Consolidated Net goodwill at January 1, 2017 $111,751 $1,524 $28,414 $29,561 $171,250 Deconsolidation of joint venture — — — (3,491) (3,491)Impairment (73,939) (1,524) (28,414) — (103,877)Net goodwill at December 31, 2017 $37,812 $— $— $26,070 $63,882 Impairment (37,812) — — — (37,812)Acquisition of 5% interest in Iconix Australia — — — 29 29 Net goodwill at December 31, 2018 $— $— $— $26,099 $26,099 In July 2018, the Company purchased an additional 5% ownership interest in Iconix Australia from its joint venture partner. As a result of thistransaction, the Company recorded goodwill of less than $0.1 million. Refer to Note 5 for further details.The Company identifies its operating segments according to how business activities are managed and evaluated. The Company has four distinctreportable operating segments: men’s, women’s, home, and international. Additionally, the Company previously owned and operated an Entertainmentsegment which is included in the Company’s consolidated statement of operations as a discontinued operation for FY 2017. The sale of the businessesunderlying the Entertainment segment was completed on June 30, 2017 (see Note 2 of Notes to Consolidated Financial Statements). These operatingsegments represent individual reporting units for purposes of evaluating goodwill for impairment. The fair value of the reporting unit is determined usingdiscounted cash flow analysis and estimates of sales proceeds with consideration of market participant data. As a corroborative source of information, theCompany evaluates the estimated aggregate fair values of its reporting units to within a reasonable range of its market capitalization, which includes anassumed control premium (an adjustment reflecting an estimated fair value on a control basis) to verify the reasonableness of the fair value of its reportingunits. The control premium is estimated based upon control premiums observed in comparable market transactions. As none of the Company’s reporting unitsare publicly-traded, individual reporting unit fair value determinations do not directly correlate to the Company’s stock price. The Company monitorschanges in the share price to ensure that the market capitalization continues to exceed or is not significantly below the carrying value of our total net assets.In the event that our market capitalization is below the book value of the Company’s aggregate fair value of its reporting units, we consider the length andseverity of the decline and the reason for the decline when evaluating whether potential goodwill impairment exists. Additionally, if a reporting unit does notappear to be achieving the projected growth plan used in determining its fair value, we will reevaluate the reporting unit for potential goodwill impairmentbased on revised projections, as deemed appropriate. The annual evaluation of goodwill is typically performed as of October 1, the beginning of theCompany’s fourth fiscal quarter. Utilizing the Income Approach, the Company performed a two-step goodwill impairment test and an intangible assetimpairment test using a discounted cash flow analysis to evaluate whether the carrying value of each of its segments exceeded its fair value.During the fourth quarter of FY 2018, the Company evaluated its goodwill for potential impairment incremental to the amount recorded as ofSeptember 30, 2018. Based upon the results of step 1 of the goodwill impairment test in accordance with ASC 350, the Company noted that the fair value ofthe international segment exceeded the carrying value after first reflecting the impairment of trademarks. As a result, no additional goodwill impairment wasrecorded during the fourth quarter of FY 2018.During the second quarter of 2018, based upon the results of step 1 of the goodwill impairment test in accordance with ASC 350 for the women’ssegment, the Company noted that the carrying value of the women’s segment exceeded its fair value after first reflecting the impairment of the Mossimotrademark as discussed below. In accordance with step 2 of the goodwill impairment test, the Company recorded a non-cash impairment charge of $37.8million in the second quarter of 2018, which is due to the projected decline in royalties associated with the license agreements for the Mossimo brand.78 As of September 30, 2017, based upon the results of step 1 of the goodwill impairment test in accordance with ASC 350, the Company noted that thecarrying value of the women’s men’s, home and international segments exceeded their fair values after first reflecting the impairment of trademarks. Inaccordance with step 2 of the goodwill impairment test, the Company recorded a non-cash impairment charge of $103.9 million in FY 2017 which iscomprised of $73.9 million, $1.5 million and $28.4 million in the women’s, men’s and home segment, respectively, primarily due to the decline in net salesassociated with the recent developments in which various DTR license agreements would not be renewed subsequent to their expiration dates.During the fourth quarter of FY 2017, the Company evaluated its goodwill for potential impairment incremental to the amount recorded as ofSeptember 30, 2017. Based on the Company’s goodwill impairment analysis in accordance with ASC 350, no additional impairment was recognized as ofDecember 31, 2017.Trademarks and Other Intangibles, netTrademarks and other intangibles, net consist of the following: December 31, 2018 December 31, 2017 EstimatedLives inYears GrossCarryingAmount AccumulatedAmortization GrossCarryingAmount AccumulatedAmortization Indefinite-lived trademarks and copyrights Indefinite $337,631 $— $465,391 $— Definite-lived trademarks 10-15 8,958 8,958 8,958 8,917 Non-compete agreements 2-15 — — 940 940 Licensing contracts 1-9 978 909 3,412 3,122 $347,567 $9,867 $478,701 $12,979 Trademarks and other intangibles, net $337,700 $465,722 The trademarks of Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific, Danskin, Rocawear, Cannon, Royal Velvet,Fieldcrest, Charisma, Starter, Waverly, Ecko, Zoo York, Ed Hardy, Umbro, Modern Amusement, Buffalo, Lee Cooper, Hydraulic, and Pony have beendetermined to have an indefinite useful life and accordingly, consistent with ASC Topic 350, no amortization has been recorded in the Company’sconsolidated statements of operations. Instead, each of these intangible assets are tested for impairment annually and as needed on an individual brand andterritorial basis as separate single units of accounting, with any related impairment charge recorded to the statement of operations at the time of determiningsuch impairment. The annual evaluation of the Company’s indefinite-lived trademarks is typically performed as of October 1, the beginning of theCompany’s fourth fiscal quarter, or as deemed necessary due to the identification of a triggering event. As it relates to the Company’s impairment testing of goodwill and intangible assets, assumptions and inputs used in our fair value estimates includethe following: (i) discount rates; (ii) royalty rates; (iii) projected average revenue growth rates; and (iv) projected long-term growth rates. Additionally, forthose instances where core licenses have not been or will not be renewed and replacement licenses have not yet been identified, the Company’s estimate offair value may incorporate a probability weighted average of projected cash flows based on several scenarios (e.g. DTR license, wholesale license, or direct-to-consumer model). Key inputs to these scenarios, which were selected based on the perspective of a market participant and include estimated future retailand wholesale sales and related royalties, are assessed a probability of occurrence to compensate for the uncertainty of success and timing of completion. TheCompany will continue to reassess these probabilities and inputs, as well as economic conditions and expectations of management, and may recordadditional impairment charges as these estimates are updated, all of which are subject to change in the future based on period-specific facts andcircumstances. The Company recorded impairment charges for indefinite-lived intangible assets consisting of trademarks in the fourth quarter of FY 2018. Inconnection with the preparation of the Company’s financial statements for the fourth quarter of FY 2018, the Company concluded that the primary driver ofthe impairment charges was a decline in the net sales as well as a decline in future guaranteed minimum royalties from license agreements for certainbrands. As a result, in the fourth quarter of FY 2018, the Company recorded a total non-cash asset impairment charge of $58.7 million which is comprised of$55.1 million in the women’s segment, $0.1 million in the men’s segment, $2.7 million in the home segment, and $0.8 million in the international segment toreduce various trademarks in those segments to fair value. 79 Given Kmart/Sears bankruptcy filing on October 15, 2018, the Company conducted an indefinite-lived intangible asset impairment test in accordancewith ASC 350 for the Joe Boxer, Cannon and Bongo trademarks whose future revenues and earnings were either exclusively or heavily dependent on theexisting license agreements with Sears. As part of its indefinite-lived intangible asset impairment test for the Joe Boxer, Cannon and Bongo trademarks, theCompany recorded a non-cash impairment charge of $4.4 million in the third quarter of FY 2018 to reduce the Joe Boxer trademark to fair value. At thattime, the fair value of the Bongo and Cannon trademarks remained above their current book value and thus no impairment charge was recorded. TheCompany is currently in negotiations with new and/or existing licensees for the licensing of these brands. During the fourth quarter of 2018, the Companyrecognized an additional non-cash impairment charges of $6.8 million related to the Joe Boxer trademark (in the women’s segment) and $2.7 million relatedto the Cannon trademark (in the home segment), which are included in the total $58.7 million non-cash impairment charge discussed above. As of June 30, 2018, the Company revised its forecasted future earnings for the Mossimo brand given the Company was unsuccessful in finding areplacement core licensee. As a result, the Company conducted an indefinite-lived intangible asset impairment test in accordance with ASC350. Consequently, the Company recorded a non-cash impairment charge of $73.3 million in the second quarter of FY 2018 in the women segment to reducethe Mossimo trademark to fair value. During the fourth quarter of 2018, the Company recognized an additional non-cash impairment charge of $32.7 million(in the women’s segment), which is included in the total $58.7 million non-cash impairment charge discussed above. As of December 31, 2017, given the recent decision of JCPenney not to renew the existing Royal Velvet license agreement following its expiration inJanuary 2019, the Company revised its forecasted future earnings for the Royal Velvet brand and accordingly, conducted an indefinite-lived intangible assetimpairment test in accordance with ASC 350. Consequently, the Company recorded a non-cash asset impairment charge of $4.1 million in the fourth quarterof December 31, 2017 in the home segment to reduce the Royal Velvet trademark to fair value. As of September 30, 2017, as a result of a combination of factors, including the recent decisions by Target not to renew the existing Mossimo licenseagreement following its expiration in October 2018 and by Walmart, Inc. not to renew the existing Danskin Now license agreement following its expirationin January 2019 and the Company’s revised forecasted future earnings, the Company conducted an interim indefinite-lived intangible asset impairment testin accordance with ASC 350. As discussed above, as a result of the recent decline in the Company’s stock price and related market capitalization, theCompany determined that there existed a further indication of potential impairment across all of the Company’s intangible assets. Consequently, theCompany accelerated the timing of annual impairment testing of goodwill and intangible assets that is customarily performed in connection with thepreparation of its year-end financial statements and completed such testing in connection with the preparation of its financial statements for the quarter endedSeptember 30, 2017. Accordingly, for FY 2017, the Company recorded a total non-cash asset impairment charge of $521.8 million which is comprised of$135.9 million in the men’s segment, $227.6 million in the women’s segment $69.5 million in the home segment, and $88.8 million in the internationalsegment to reduce various trademarks in those segments to fair value.The Company measured its indefinite-lived intangible assets for impairment in accordance with ASC-820-10-55-3F which states, “The incomeapproach converts future amounts (for example cash flows) in income and expenses in a single current (that is, discounted) amount. When the incomeapproach is used, fair value measurement reflects current market expectations about those future amounts. The Income Approach is based on the presentvalue of future earnings expected to be generated by a business or asset. Income projections for a future period are discounted at a rate commensurate withthe degree of risk associated with future proceeds. A residual or terminal value is also added to the present value of the income to quantify the value of thebusiness beyond the projection period.”Changes in estimates and assumptions used to determine whether impairment exists or changes in actual results compared to expected results couldresult in additional impairment charges in future periods. In accordance with ASC 360, there were no impairment charges to the Company’s definite-lived trademarks during FY 2018 or FY 2017. During FY 2018, the Company completed the sale of the Badgley Mischka and Sharper Image intellectual property and related assets from the IconixSoutheast Asia, Iconix MENA, Iconix Europe and Iconix Australia joint ventures. Refer to Note 6 for further details. During the third quarter of FY 2018, the Company purchased an additional 5% ownership interest in Iconix Australia which resulted in the Companyconsolidating the entity on its consolidated balance sheet and the statement of operations for the Current Quarter. As a result of this transaction, theCompany recorded $12.3 million of trademarks on its consolidated balance sheet. Refer to Note 5 for further details.80 In July 2017, the Company sold its ownership interest in NGX, LLC. As a result of this transaction, the Company’s indefinite-lived trademarksdecreased by $5.0 million. Refer to Note 5 for further details.In June 2017, the Company deconsolidated Iconix SE Asia, Ltd. which resulted in a decrease in indefinite-lived trademarks of $22.7 million. Refer toNote 5 for further details.In June 2017, the Company sold the businesses underlying its Entertainment segment, representing the intellectual property of both the Peanuts andStrawberry Shortcake brands. As a result of this transaction, the Company’s indefinite-lived trademarks decreased by $204.3 million (which represents$153.6 million and $50.7 million for the Peanuts and Strawberry Shortcake brand, respectively). Refer to Note 2 for further details.Amortization expense for intangible assets for FY 2018 and FY 2017 was $0.3 million and $0.7 million, respectively. The Company projectsamortization expenses to be less than $0.1 million in both FY 2019 and FY 2020 and none in FY 2021 through FY 2023. 5. Consolidated Entities, Joint Ventures and InvestmentsConsolidated EntitiesThe following entities and joint ventures are consolidated with the Company:Iconix ChinaIn September 2008, the Company and Novel Fashions Brands Limited (“Novel”) formed a joint venture (“Iconix China”) to develop and market theCompany’s brands in the People’s Republic of China, Hong Kong, Macau and Taiwan (the “China Territory”). Pursuant to the terms of this transaction, theCompany contributed to Iconix China substantially all rights to its brands in the China Territory and committed to contribute $5.0 million, and Novelcommitted to contribute $20 million, to Iconix China. Upon closing of the transaction, the Company contributed $2.0 million and Novel contributed $8.0million. In September 2009, the parties amended the terms of the transaction to eliminate the obligation of the Company to make any additionalcontributions and to reduce Novel’s remaining contribution commitment to $9.0 million, $4.0 million of which was contributed in July 2010, $3.0 million ofwhich was contributed in May 2011, and $2.0 million of which was contributed in June 2012. In March 2015, the Company purchased from Novel its 50% interest in Iconix China for $57.4 million (the “2015 Buy-out”), of which $40.4 millionwas paid in cash, $15.7 million was paid in the Company’s common stock, and $1.3 million was an amount due the Company from Iconix China that wasoffset against the Company’s accounts receivable, thereby taking 100% of the equity interest in Iconix China. Other assets consist primarily of securities of a company publicly traded on the Hong Kong Stock Exchange. These assets are being accounted for asavailable-for-sale securities. As such, any increase or decrease in fair value is recorded with other income in the Company’s consolidated statement ofoperations.The Iconix China trademarks have been determined by management to have an indefinite useful life and accordingly no amortization is beingrecorded in the Company’s consolidated statement of operations. The goodwill and trademarks are subject to a test for impairment on an annual basis. The$9.6 million of goodwill resulting from the 2015 Buy-out is deductible for income tax purposes.As part of this transaction, the Company also acquired, through its ownership of 100% of Iconix China, equity interests in the following privatecompanies with an aggregate fair value of approximately $38.9 million: Candies Shanghai Fashion Co. Ltd. (which can be put by Iconix China to ShanghaiLa Chappelle Fashion Co., Ltd. for cash based on a pre-determined formula); Mark Ecko China Ltd.; Ningbo Material Girl Fashion Co., Ltd.; TangliInternational Holdings Ltd. (subsequently sold in April 2016 – see Note 5 for further detail); and Ecko Industry (Shanghai) Co., Ltd. See section entitled“Investments in Iconix China” for further detail on such investments.Strawberry ShortcakeIn March 2015, the Company completed its acquisition from American Greetings Corporation and its wholly-owned subsidiary, Those CharactersFrom Cleveland, Inc. (collectively, “AG”), of all of AG’s intellectual property rights and licenses and certain other assets relating to the Strawberry Shortcakebrand pursuant to an asset purchase agreement entered into in February 2015.81 In accordance with the terms of the asset purchase agreement, the Company paid AG $105.0 million in cash at closing of which $95.0 million wastreated as consideration for the acquisition and the remaining $10.0 million was the issuance of a note due from AG. The note receivable represented amounts due from AG in respect of non-compete payments pursuant to a license agreement entered into with AGsimultaneously with the closing of the transaction. The note was in the principal amount of $10.0 million and was paid in equal quarterly installments over atwo year period. The note receivable was fully paid off in FY 2017. The $35.4 million of goodwill resulting from the 2015 acquisition was deductible forincome tax purposes. In FY 2017, the Company sold the businesses underlying its Entertainment segment which was inclusive of the Strawberry Shortcake brand. Refer toNote 2 for further details. PONYIn February 2015, the Company, through its then newly-formed subsidiary, US Pony Holdings, LLC, (“Pony Holdings”) acquired the North Americanrights to the PONY brand. These rights include the rights in the US obtained from Pony, Inc. and Pony International, LLC, and the rights in Mexico andCanada obtained from Super Jumbo Holdings Limited. The purchase price paid by the Company was $37.0 million. The $14.7 million of goodwill resultingfrom the 2015 acquisition is deductible for income tax purposes. Pony Holdings is owned 75% by the Company and 25% by its partner Anthony L&SAthletics, LLC (“ALS”). ALS contributed to Pony Holdings its perpetual license agreement in respect of the U.S. and Canadian territories for a 25% interest inPony Holdings. Accounting Standards Codification (“ASC”) 810 - “Consolidations” (“ASC 810”) affirms that consolidation is appropriate when one entity has acontrolling financial interest in another entity. The Company owns a 75% membership interest in Pony Holdings compared to the minority owner’s 25%membership interest. Further, the Company believes that the voting and veto rights of the minority shareholder are merely protective in nature and do notprovide them with substantive participating rights in Pony Holdings. As such, Pony Holdings is subject to consolidation with the Company, which isreflected in the consolidated financial statements.Iconix Middle East Joint VentureIn December 2014, the Company formed Iconix MENA (“Iconix Middle East”) a wholly owned subsidiary of the Company and contributed to itsubstantially all rights to its wholly-owned and controlled brands in the United Arab Emirates, Qatar, Kuwait, Bahrain, Saudi Arabia, Oman, Jordan, Egypt,Pakistan, Uganda, Yemen, Iraq, Azerbaijan, Kyrgyzstan, Uzbekistan, Lebanon, Tunisia, Libya, Algeria, Morocco, Cameroon, Gabon, Mauritania, Ivory Coast,Nigeria and Senegal (the “Middle East Territory”). Shortly thereafter, Global Brands Group Asia Limited (“GBG”), purchased a 50% interest in Iconix MiddleEast for approximately $18.8 million. GBG paid $6.3 million in cash upon the closing of the transaction and committed to pay an additional $12.5 millionover the 24-month period following closing. This obligation was fully paid in FY 2017. As of December 31, 2018, the redeemable non-controlling interest ofIconix MENA was $14.8 million which was recorded on the Company’s consolidated balance sheet as mezzanine equity.Pursuant to the joint venture agreement entered into in connection with the formation of Iconix Middle East, each of GBG and the Company holdsspecified put and call rights, respectively, relating to GBG’s ownership interest in the joint venture.Company Two-Year Call Option: At any time during the six month period commencing December 19, 2016, the Company had the right to call up to5% of the total equity in Iconix Middle East from GBG for an amount in cash equal to $1.8 million.Five-Year and Eight-Year Put/Call Options: At any time during the six month period commencing December 19, 2019, and again at any time duringthe six month period commencing December 19, 2022, GBG may deliver a put notice to the Company, and the Company may deliver a call notice to GBG, ineach case, for the Company’s purchase of all equity in the joint venture held by GBG. In the event of the exercise of such put or call rights, the purchase pricefor GBG’s equity in Iconix Middle East is an amount equal to (x) the Agreed Value (in the event of GBG put) or (y) 120% of Agreed Value (in the event of anIconix call). The purchase price is payable in cash.Agreed Value—Five-Year Put/Call: (i) Percentage of Iconix Middle East owned by GBG, multiplied by (ii) 5.5, multiplied by (iii) aggregate royaltygenerated by Iconix Middle East for the year ending December 31, 2019; provided, however, that such Agreed Value cannot be less than $12.0 million82 Agreed Value—Eight-Year Put/Call: (i) Percentage of Iconix Middle East owned by GBG, multiplied by (b) 5.5, multiplied by (iii) aggregate royaltygenerated by Iconix Middle East for the year ending December 31, 2022; provided, however, that the Agreed Value cannot be less than $12.0 million.The Company serves as Iconix Middle East’s administrative manager, responsible for arranging for or providing back-offices services, including legalmaintenance of trademarks (e.g. renewal of trademark registrations) for the brands in respect of Iconix Middle East Territory. Further Iconix Middle East hasaccess to general brand marketing materials prepared and owned by the Company to refit for use by the joint venture in marketing brands in the Middle EastTerritory. GBG serves as Iconix Middle East’s local manager, responsible for providing market experience in respect of the applicable territory, managing thejoint venture on a day-to-day basis (other than back-office services), identifying potential licensees and assisting the Company in enforcement of licenseagreements in respect of the applicable territory. The Company receives a monthly fee in connection with the performance of its services as administrativemanager in an amount equal to 5% of Iconix Middle East’s gross revenue collected in the prior month (other than in respect of the Umbro and Lee Cooperbrands). GBG receives a monthly fee in connection with the performance of its services as local manager in an amount equal to 15% of Iconix Middle East’sgross revenue collected in the prior month (other than in respect of the Umbro and Lee Cooper brands). In addition, following the closing of GBG’s purchaseof 50% of Iconix Middle East, GBG received from the Company $3.1 million for expenses related to its diligence and market analysis in the Iconix MiddleEast Territory, which reduced the cash received by the Company in relation to this transaction as of December 31, 2014.In December 2016, the Company irrevocably exercised its call right to acquire an additional 5% equity interest in Iconix Middle East from GBG fortotal cash consideration of $1.8 million. After taking into effect this transaction and as of December 31, 2016, the Company’s ownership interest in IconixMiddle East effectively increased to 55%. Such acquisition closed in February 2017. In addition to the increase in ownership interest, the joint ventureagreement gives the Company the sole discretion and power to direct the activities of the Iconix Middle East joint venture that most significantly impact thejoint venture’s economic performance. As a result of this transaction, the Company continues to consolidate this joint venture in its consolidated financialstatements in accordance with ASC 810. The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and GBG,that Iconix Middle East is a variable interest entity (VIE) and, as the Company has been determined to be the primary beneficiary, is subject to consolidation.The Company has consolidated this joint venture within its consolidated financial statements since inception. The liabilities of the VIE are not material andnone of the VIE assets are encumbered by any obligation of the VIE or other entity.LC Partners U.S.In March 2014, the Company formed LC Partners US, LLC (“LCP”), a wholly-owned subsidiary of the Company, and contributed to it substantially allits rights to the Lee Cooper brand in the US through an agreement with LCP. Shortly thereafter, Rise Partners, LLC (“Rise Partners”), purchased a 50% interestin LCP for $4.0 million, of which $0.8 million in cash was received during FY 2014, with the remaining $3.2 million to be paid in four equal annualinstallments on the first through the fourth anniversaries of the closing date. This obligation was fully satisfied as part of the Company’s purchase of theremaining 50% interest in LCP from Rise Partners as discussed below.In December 2016, the Company entered into an agreement with Rise Partners whereby the Company purchased the remaining 50% interest of LCP fora total consideration of $3.3 million. After taking in to effect this transaction, the Company maintains 100% ownership interest in LCP. Iconix Israel Joint VentureIn November 2013, the Company formed Iconix Israel. LLC (“Iconix Israel”), a wholly-owned subsidiary of the Company, and contributedsubstantially all rights to its wholly-owned and controlled brands in the State of Israel and the geographical regions of the West Bank and the Gaza Strip(together, the “Israel Territory”) through an agreement with Iconix Israel. Shortly thereafter, M.G.S. Sports Trading Limited (“MGS”) purchased a 50% interestin Iconix Israel for approximately $3.3 million. MGS paid $1.0 million in cash upon the closing of the transaction and committed to pay an additional $2.3million over the 36-month period following closing. This obligation was fully paid in FY 2017. Pursuant to the operating agreement entered into in connection with the formation of Iconix Israel, the Company holds a call right, exercisable at anytime during the six month period following November 14, 2015, on 5% of the total outstanding shares in Iconix Israel held by MGS. The purchase pricepayable in connection with the Company’s exercise of its call option is an amount equal to (i) .05, multiplied by (ii) 6.5, multiplied by (iii) gross cash orproperty received by Iconix Israel from all sources.83 In December 2016, the Company amended the Iconix Israel joint venture agreement to obtain the sole discretion and power to direct the activities ofthe Iconix Israel joint venture that most significantly impact its economic performance which requires the Company to continue to consolidate this jointventure in its consolidated financial statements in accordance with ASC 810. The Company serves as Iconix Israel’s administrative manager, responsible for arranging for or providing back-offices services, including legalmaintenance of trademarks (e.g. renewal of trademark registrations) for the brands in respect of the Israel Territory. Further, Iconix Israel has access to generalbrand marketing materials, prepared and owned by the Company to refit for use by the joint venture in the Israel Territory. MGS serves as Iconix Israel’s localmanager, responsible for providing market experience in respect of the applicable territory, managing the joint venture on a day-to-day basis (other thanback-office services), identifying potential licensees and assisting the Company in enforcement of license agreements in respect of the applicable territory.Each of the Company and MGS is reimbursed for all out-of-pocket costs incurred in performing its respective services.The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and MGS,that Iconix Israel is a VIE and, as the Company has been determined to be the primary beneficiary, is subject to consolidation. The Company hasconsolidated this joint venture within its consolidated financial statements since inception. The liabilities of the VIE are not material and none of the VIEassets are encumbered by any obligation of the VIE or other entity. Iconix Canada Joint VentureIn June 2013, the Company formed Iconix Canada L.P. (“Ico Canada”) and Ico Brands L.P. (“Ico Brands” and, together with Ico Canada, collectively,“Iconix Canada”), as wholly-owned indirect subsidiaries of the Company, and contributed substantially all rights to its wholly-owned and controlled brandsin Canada (the “Canada Territory”) through agreements with the Iconix Canada partnerships. Shortly thereafter through their acquisitions of limitedpartnership and general partnership interests, Buffalo International ULC and BIU Sub Inc. purchased 50% interests in the Iconix Canada partnerships for$17.8 million in the aggregate, of which approximately $8.9 million in the aggregate, was paid in cash upon closing of these transactions in June 2013, andthe remaining $8.9 million of which were notes payable to the Company to be paid, as amended, over the five year period following the date of closing, withfinal payment in June 2018.Pursuant to agreements entered into in connection with the formation of Ico Canada and Ico Brands, the Company held specified call options relatingto Buffalo International’s and BIU Sub’s ownership interests in the joint ventures.Ico Canada Call Option: At any time between the second and third anniversary of June 28, 2013 the Company had the right to call a number of unitsheld by Buffalo International equal to 5% of all units issued and outstanding for an amount in cash equal to the greater of (i) $1.5 million and (ii) 5% of theamount obtained by applying a multiple of 5.5 to the highest of (a) the minimum royalties in respect of the Ico Canada marks for the previous 12 months,(b) the actual royalties in respect of the Ico Canada marks for the previous 12 months, (c) the projected minimum royalties in respect of the Ico Canada marksfor the subsequent fiscal period and (d) the average projected minimum royalties in respect of the Ico Canada marks for the subsequent three fiscal periods.Ico Brands Call Option: At any time between the second and third anniversary of June 28, 2013, the Company had the right to call a number of unitsheld by BIU Sub equal to 5% of all units issued and outstanding for an amount in cash equal to the greater of (i) $0.6 million and (ii) 5% of the amountobtained by applying a multiple of 5.5 to the highest of (a) the minimum royalties in respect of the Ico Brands marks for the previous 12 months, (b) theactual royalties in respect of the Ico Brands marks for the previous 12 months, (c) the projected minimum royalties in respect of the Ico Brands marks for thesubsequent fiscal period and (d) the average projected minimum royalties in respect of the Ico Brands marks the subsequent three fiscal periods.If the total payments to Ico Canada in respect of the Umbro marks for the four-year period following June 28, 2013 were less than $2.7 million, theCompany had an obligation to pay Buffalo International an amount equal to the shortfall.As a result of the Company’s prior contribution of the intellectual property and related assets relating to certain of its brands in respect of the Canadianterritory (the “Encumbered Canadian Assets”) to the Company’s securitization, Ico Canada was granted the right to receive an amount equal to the royaltystreams from the Encumbered Canadian Assets. Ico Brands has an option to purchase the Encumbered Canadian Assets for one dollar within one yearfollowing the earlier of (i) January 15, 2020 and (ii) the later of (a) the release of such assets from the Company’s securitization and (b) Ico Brands receipt ofnotice of such release. If the Company does not deliver such assets to Ico Brands following the exercise of such option, the Company has an obligation to payliquidated damages to Ico Brands in an amount equal to approximately $4.9 million.84 In July 2017, the Company purchased the 50% ownership interest in Iconix Canada owned by its joint venture partner for $19.0 million plus 50% ofthe net asset value of Iconix Canada (which was approximately $2.2 million), in cash, of which $9.0 million was paid at closing and the remaining $10.0million will be paid over a two-year period through the Company’s distributions from its 51% interest in the Buffalo brand joint venture. The Company alsopaid 50% of the estimated net asset value of Iconix Canada at closing, subject to a post-closing reconciliation based on 50% of the actual net asset value ofIconix Canada. Additionally, as a part of this transaction, the remaining outstanding purchase price installment payment of $2.9 million due from theCompany’s joint venture partner, in respect of such partner’s interest in the joint venture at inception was paid to the Company. As a result of thistransaction, the Company maintains 100% ownership interest in Iconix Canada.Iconix EuropeIn December 2009, the Company contributed substantially all rights to its brands in the European Territory (defined as all member states andcandidate states of the European Union and certain other European countries) to Iconix Europe LLC, a then newly formed wholly-owned subsidiary of theCompany (“Iconix Europe”). Also in December 2009 and shortly after the formation of Iconix Europe, an investment group led by The Licensing Companyand Albion Equity Partners LLC purchased a 50% interest in Iconix Europe through Brand Investments Vehicles Group 3 Limited (“BIV”), to assist theCompany in developing, exploiting, marketing and licensing the Company’s brands in the European Territory. In consideration for its 50% interest in IconixEurope, BIV agreed to pay $4.0 million, of which $3.0 million was paid upon closing of this transaction in December 2009 and the remaining $1.0 million ofwhich was paid in January 2011.At inception and prior to the January 2014 transaction described below, the Company determined, in accordance with ASC 810, based on thecorporate structure, voting rights and contributions of the Company and BIV, that Iconix Europe is not a VIE and was not subject to consolidation. TheCompany had recorded its investment under the equity method of accounting.In January 2014, the Company consented to the purchase of BIV’s 50% ownership interest in Iconix Europe by GBG. In exchange for this consent, theCompany recorded a $1.5 million receivable due from GBG. As a result of this transaction, the Company recorded revenue of $1.5 million, which is includedin licensing revenue in the Company’s consolidated statement of operations for FY 2014. In addition, the Company acquired an additional 1% equityinterest in Iconix Europe from GBG, and amended the operating agreement (herein referred to as the “IE Operating Agreement”) thereby increasing itsownership in Iconix Europe to a controlling 51% interest and reducing its preferred profit distribution from Iconix Europe to $3.0 million after which allprofits and losses are recognized 51/49 in accordance with each principal’s membership interest percentage. In October 2017, the Company received theremaining $0.9 million of the total $1.5 million receivable due from GBG. ASC Topic 810 affirms that consolidation is appropriate when one entity has a controlling financial interest in another entity. As a result of thistransaction, the Company owns a 51% membership interest in Iconix Europe compared to the minority owner’s 49% membership interest. Further, theCompany believes that the voting and veto rights of the minority shareholder are merely protective in nature and do not provide the minority shareholderwith substantive participating rights in Iconix Europe. As such, Iconix Europe is subject to consolidation with the Company, which is reflected in theconsolidated financial statements as of December 31, 2016.Pursuant to the IE Operating Agreement, for a period following the fifth anniversary of the January 2014 transaction and again following the eighthanniversary of the January 2014 transaction, the Company has a call option to purchase, and GBG has a put option to initiate the Company’s purchase ofGBG’s 49% equity interests in Iconix Europe for a calculated amount as described below.Five-Year and Eight-Year Put/Call Options: At any time during the six month period commencing January 13, 2019, and again at any time during thesix month period commencing January 13, 2022, GBG may deliver a put notice to the Company, and the Company may deliver a call notice to GBG, in eachcase, for the Company’s purchase of all equity in the joint venture held by GBG. In the event of the exercise of such put or call rights, the purchase price forGBG’s equity in Iconix Europe is an amount equal to (x) the Agreed Value (in the event of GBG’s put) or (y) 120% of Agreed Value (in the event of an Iconixcall). The purchase price is payable in cash.Agreed Value-Five-Year Put/Call: (i) (x) percentage of Iconix Europe owned by GBG, multiplied by (y) 5.5, multiplied by (z) the greater of aggregateroyalty generated by Iconix Europe for the year ended December 31, 2013 and the year ended December 31, 2018; plus (ii) percentage of Iconix Europeowned by GBG multiplied by the aggregate amount of cash in Iconix Europe which is available for distribution to the members.Agreed Value-Eight-Year Put/Call: (i) (x) percentage of Iconix Europe owned by GBG, multiplied by (y) 5.5, multiplied by (z) the greater of aggregateroyalty generated by Iconix Europe for the year ended December 31, 2013 and the year ended December 31, 2021; plus (ii) percentage of Iconix Europeowned by GBG multiplied by the aggregate amount of cash in Iconix Europe which is available for distribution to the members.85 As a result of the January 2014 transaction, the Company records this redeemable non-controlling interest as mezzanine equity on the Company’sconsolidated balance sheet. The Company is accreting the difference between the redemption value of the put option and the non-controlling interest atinception over the five-year term of the first put option to retained earnings on the Company’s balance sheet. As of December 31, 2018, the redeemable non-controlling interest for Iconix Europe was $13.5 million which was recorded on the Company’s consolidated balance sheet as mezzanine equity. Hydraulic IP Holdings, LLCIn December 2014, the Company formed a joint venture with Top On International Group Limited (“Top On”). The name of the joint venture isHydraulic IP Holdings, LLC (“Hydraulic IPH”), a Delaware limited liability company. The Company paid $6.0 million, which was funded entirely from cashon hand, in exchange for a 51% controlling ownership of Hydraulic IPH. Top On owns the remaining 49% interest in Hydraulic IPH. Hydraulic IPH owns theIP rights, licenses and other assets relating principally to the Hydraulic brand. Concurrently, Hydraulic IPH and iBrands International, LLC (“iBrands”)entered into a license agreement pursuant to which Hydraulic IPH licensed the Hydraulic brand to iBrands as licensee in certain categories and geographies.Additionally, the Company and Top On entered into a limited liability company agreement with respect to their ownership of Hydraulic IPH. As ofDecember 31, 2018, the Company maintains a 15% ownership interest in iBrands. In FY 2018, based on impairment indicators, the Company recorded a fullimpairment of its investment in iBrands of $2.5 million included in investment impairment on the Company’s consolidated statement of operations. In April 2018, pursuant to a condition in a letter agreement entered into simultaneously with the Company’s acquisition of a 51% equity interest inHydraulic IPH in December 2014, the Company acquired the remaining 49% ownership interest from its joint venture partner for no cash consideration as aresult of an affiliate of the joint venture partner not making its minimum guaranteed royalty payment obligations to the Company in accordance with therespective license agreement. This transaction resulted in the Company effectively increasing its ownership interest in Hydraulic to 100%. The Companywill retain 100% ownership interest in Hydraulic unless the affiliate of such joint venture partner satisfies its outstanding payment obligations by making allpayments of the minimum guaranteed royalties to the Company under the terminated license agreement. NGX, LLCIn October 2014, the Company formed a joint venture with NGO, LLC (“NGO”). The name of the joint venture is NGX, LLC (“NGX”), a Delawarelimited liability company. The Company paid $6.0 million, which was funded entirely from cash on hand; in exchange for a 51% controlling ownership ofNGX. NGO owns the remaining 49% interest in NGX. NGX owns the IP rights, licenses and other assets relating principally to the Nick Graham brand.Concurrently, NGX and NGL, LLC (“NGL”) entered into a license agreement pursuant to which NGX licensed the Nick Graham brand to NGL as licensee incertain categories and geographies. Additionally, the Company and NGO entered into a limited liability company operating agreement with respect to theirownership of NGX.The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and NGO,NGX is a VIE and, as the Company has been determined to be the primary beneficiary, is subject to consolidation. The Company has consolidated this jointventure within its consolidated financial statements since inception. The liabilities of the VIE are not material and none of the VIE assets are encumbered byany obligation of the VIE or other entity.In July 2017, the Company sold its 51% ownership interest in NGX, LLC for $2.4 million in cash. As a result of this transaction, the Companyrecognized a loss of less than $0.1 million which has been recorded within Other Income on the Company’s consolidated statement of operations in FY 2017. Buffalo Brand Joint VentureIn February 2013, Iconix CA Holdings, LLC (“ICA Holdings”), a Delaware limited liability company and a wholly-owned subsidiary of the Company,formed a joint venture with Buffalo International ULC (“BII”). The name of the joint venture is 1724982 Alberta ULC (“Alberta ULC”), an Alberta, Canadaunlimited liability company. The Company, through ICA Holdings, paid $76.5 million, which was funded entirely from cash on hand, in exchange for a 51%controlling ownership of Alberta ULC which consists of a combination of equity and a promissory note. BII owns the remaining 49% interest in Alberta ULC.Alberta ULC owns the IP rights, licenses and other assets relating principally to the Buffalo David Bitton brand (the “Buffalo brand”). Concurrently, AlbertaULC and BII entered into a license agreement pursuant to which Alberta ULC licensed the Buffalo brand to BII as licensee in certain categories andgeographies (which the license agreement has expired).86 The Buffalo brand trademarks have been determined by management to have an indefinite useful life and accordingly, consistent with ASC Topic350, no amortization is being recorded in the Company’s consolidated statement of operations. The goodwill and trademarks are subject to a test forimpairment on an annual basis. Of the total consideration paid, $36.9 million (which is net of a discount) has been classified as a note receivable, as the fairvalue of the transaction and the related guaranteed minimum royalties which the Company will receive through FY 2016 under the BII license agreement,could not be established at the acquisition date. As of December 31, 2017, $2.5 million remained due to the Company from BII for the above transaction andwas recorded in other assets – current on the consolidated balance sheet. As of December 31, 2018, the note receivable due to the Company from BII for theabove transactions was fully satisfied and no additional amounts were due. The $7.1 million of goodwill resulting from this acquisition is deductible forincome tax purposes.The Company has consolidated this joint venture within its consolidated financial statements since inception.Icon Modern AmusementIn December 2012, the Company entered into an interest purchase and management agreement with Dirty Bird Productions, Inc., a Californiacorporation, in which the Company effectively purchased a 51% controlling interest in the Modern Amusement trademarks and related assets for $5.0million, which was funded entirely from cash on hand. To acquire its 51% controlling interest in the trademark, the Company formed a new joint venturecompany, Icon Modern Amusement LLC (“Icon MA”), a Delaware limited liability company.Peanuts HoldingsOn June 3, 2010 (the “Peanuts Closing Date”), the Company consummated an interest purchase agreement with United Feature Syndicate, Inc. (“UFS”)and The E.W. Scripps Company, pursuant to which it purchased all of the issued and outstanding interests (“Peanuts Interests”) of Peanuts Worldwide, a thennewly formed Delaware limited liability company, to which, prior to the closing of this acquisition, copyrights and trademarks associated with the Peanutscharacters and certain other assets were contributed by UFS. On June 3, 2010, the Company assigned its right to buy all of the Peanuts Interests to PeanutsHoldings, a newly formed Delaware limited liability company and joint venture owned 80% by Icon Entertainment LLC (“IE”), a wholly-owned subsidiary ofthe Company, and 20% by Beagle Scouts LLC, a Delaware limited liability company (“Beagle”) owned by certain Schulz family trusts.Also on June 3, 2010, IE and Beagle entered into an operating agreement with respect to Peanuts Holdings (the “Peanuts Operating Agreement”).Pursuant to the Peanuts Operating Agreement, the Company, through IE, and Beagle made capital contributions of $141.0 million and $34.0 million,respectively, in connection with the acquisition of Peanuts Worldwide. The Peanuts Interests were then purchased for $172.1 million in cash, as adjusted foracquired working capital.In FY 2017, the Company sold the businesses underlying its Entertainment segment which was inclusive of the Peanuts brand. Refer to Note 2 forfurther details. Hardy WayIn May 2009, the Company acquired a 50% interest in Hardy Way, the owner of the Ed Hardy brands and trademarks, for $17.0 million, comprised of$9.0 million in cash and 58,868 shares of the Company’s common stock valued at $8.0 million as of the closing. In addition, the sellers of the 50% interestreceived an additional $1.0 million in shares of the Company’s common stock pursuant to an earn-out based on royalties received by Hardy Way for 2009.On April 26, 2011, Hardy Way acquired substantially all of the licensing rights to the Ed Hardy brands and trademarks from its licensee, NervousTattoo, Inc. (“NT”) pursuant to an asset purchase agreement by and among Hardy Way, NT and Audigier Brand Management Group, LLC (“ABMG”).Immediately prior to the closing of the transactions contemplated by the asset purchase agreement, the Company contributed $62.0 million to Hardy Way,thereby increasing the Company’s ownership interests in Hardy Way from 50% to 85% of the outstanding membership interests.ScionScion is a brand management and licensing company formed by the Company with Shawn “Jay-Z” Carter in March 2007 to buy, create and developbrands across a spectrum of consumer product categories. On November 7, 2007, Scion, through its wholly-owned subsidiary Artful Holdings LLC, purchasedArtful Dodger, an urban apparel brand for a purchase price of $15.0 million.87 In March 2009, the Company, through its investment in Scion, effectively acquired a 16.6% interest in one of its licensees, Roc Apparel Group LLC(“RAG”), whose principal owner is Shawn “Jay-Z” Carter, for nominal consideration. The Company had determined that this entity is a VIE as defined byASC 810. However, the Company was not the primary beneficiary of this entity. The investment in this entity was accounted for under the cost method ofaccounting. Subsequent to March 2009, this investment in RAG was assigned from Scion to the Company. From March 2009 through January 2014, theCompany and its partner contributed approximately $11.8 million to Scion, which was deposited as cash collateral under the terms of RAG’s financingagreements. In June 2010, $3.3 million was released from collateral and distributed to the Scion members equally. In July 2014, the lender under suchfinancing arrangement made a cash collateral call, reducing the Company’s restricted cash by $8.5 million. In FY 2014, the Company recorded a $2.7 millioncharge to reduce this receivable to $5.8 million. RAG caused such amount to be repaid pursuant to a binding term sheet dated April 2015, which resulted in afinal agreement on July 6, 2015, between the Company and the managing member of RAG. In connection therewith, on July 6, 2015, the Company sold its16.6% interest in RAG to an affiliate of Shawn “Jay-Z” Carter for nominal consideration and purchased the remaining 50% interest in Scion for $6.0 million,which effectively increased its interest in Artful Holdings LLC to 100%. In accordance with ASC 810, the Company increased additional paid-in capital by$0.8 million to reflect its 100% ownership in Scion.Umbro ChinaIn July 2016, the Company executed an agreement with MH Umbro International Co. Limited (MHMC) to sell up to an aggregate 50% interest in anewly registered company in Hong Kong which holds the Umbro intellectual property in respect of the Greater China territory for total cash consideration of$25.0 million. The acquisition of such equity is expected to occur over a four-year period. As stipulated in the agreement, on each anniversary subsequent tothe close of the transaction, MHMC will pay a portion of the total cash consideration to the Company in return for a percentage of the total potential 50%equity interest. In July 2016, the Company received $2.5 million in cash from MHMC for a 5% interest in Umbro China. In accordance with ASC 810, theCompany has recorded noncontrolling interest of $1.8 million for the sale of 5% interest in Umbro China to MHMC and the corresponding gain associatedwith the sale of this interest is recorded in additional paid in capital on the Company’s consolidated balance sheet. Pursuant to the Shareholder Agreement entered into in connection with the formation of Umbro China, each of MHMC and the Company holdsspecified call rights to purchase its partners’ ownership interest in the joint venture as described below.If at any time after June 2036, both Iconix and MHMC hold shares in Umbro China, either shareholder (Initiating Shareholder) may provide writtennotice (Call Option Notice) to the other shareholder of its election to purchase all shares held by such shareholder at the date of the Call Option Notice and ata price per share as stated in the Call Option Notice.Within ten (10) business days after receipt of a Call Option Notice, the other shareholder may provide written notice (Purchase Option Notice) to theInitiating Shareholder of its election to purchase all shares held by the Initiating Shareholder at the price per share set forth in the Call Option Notice, atwhich point the Call Option Notice shall become null and ineffective as if it was not issued or served.Danskin ChinaIn October 2016, the Company entered into an agreement with Li-Ning (China) Sports Goods Co., Ltd. (“LiNing”) to sell up to a 50% interest (and noless than a 30% interest) in its wholly-owned indirect subsidiary, Danskin China Limited (“Danskin China”), a new Hong Kong registered company, whichholds the Danskin trademarks and related assets in respect of mainland China and Macau. LiNing’s purchase of the equity interest in Danskin China isexpected to occur over a three-year period commencing on March 31, 2019 (the “First Closing”) for cash consideration of $5.4 million. The aggregate cashconsideration paid by Li Ning for its ownership of Danskin China may, based on the percentage interest in Danskin China that Li Ning elects to purchase oneach anniversary of the First Closing, increase to up to $8.6 million. Starter ChinaIn March 2018, the Company entered into an agreement with Photosynthesis Holdings, Co. Ltd. (“PHL”) to sell up to no less than a 50% interest andup to a total of 60% interest in its wholly-owned indirect subsidiary, Starter China Limited, a newly registered Hong Kong subsidiary of Iconix China(“Starter China”), and which will hold the Starter trademarks and related assets in respect of the Greater China territory. PHL’s purchase of the initial 50%equity interest in Starter China is expected to occur over a three-year period commencing on January 15, 2020 for cash consideration of $20.0 million. Theadditional 10% equity interest (for a total equity interest of 60% interest) purchase right of PHL is expected to occur over a three-year period commencingJanuary 16, 2022 for cash consideration equal to the greater of $2.7 million or 2.5 times the royalty received under the respective license agreement in theprevious twelve months based on other terms and conditions specified in the share purchase agreement. 88 Lee Cooper ChinaIn June 2018, the Company entered into an agreement with POS Lee Cooper HK Co. Ltd. (“PLC”) to sell up to no less than a 50% interest and up to atotal of 60% interest in its wholly-owned indirect subsidiary, Lee Cooper China Limited, a newly registered Hong Kong subsidiary of Iconix China (“LeeCooper China”), and which will hold the Lee Cooper trademarks and related assets in respect of the Greater China territory. PLC’s purchase of the initial 50%equity interest in Lee Cooper China is expected to occur over a four-year period commencing on October 15, 2020 for cash consideration of approximately$8.2 million. The additional 10% equity interest (for a total equity interest of 60% interest) purchase right of PLC is expected to occur over a two-year periodcommencing January 15, 2024 for cash consideration equal to the greater of $2.5 million or 2.5 times the royalty received under the respective licenseagreement in the previous twelve months based on other terms and conditions specified in the share purchase agreement.Iconix Australia Joint VentureIn September 2013, the Company formed Iconix Australia, LLC (“Iconix Australia”), a Delaware limited liability company and a wholly-ownedsubsidiary of the Company, and contributed substantially all rights to its wholly-owned and controlled brands in Australia and New Zealand (the “Australiaterritory”) through an agreement with Iconix Australia. Shortly thereafter Pac Brands USA, Inc. (“Pac Brands”) purchased a 50% interest in Iconix Australiafor $7.2 million in cash, all of which was received upon closing of this transaction in September 2013. As a result of this transaction, the Company recorded again of $4.1 million in FY 2013 for the difference between the cash consideration received by the Company and the book value of the brands contributed tothe joint venture. In July 2018, the Company purchased an additional 5% ownership interest in Iconix Australia from Brand Collective (USA), Inc. (“BrandCo”) for $0.7million in cash. As a result of this transaction, the Company’s ownership interest in Iconix Australia effectively increased to 55% and reduced BrandCo’sownership interest in Iconix Australia to 45%. This purchase resulted in a change in rights, duties and obligations of the Company and BrandCo in theircapacity as joint venture partners in respects of the Iconix Australia joint venture. Additionally, as a result of this transaction and in accordance with ASC810, based on the corporate structure, voting rights and contributions of the Company and BrandCo, Iconix Australia has been determined to be a VIE, andthus is subject to consolidation and included in the Company’s consolidated financial statements on and after July 2018. The estimated fair value of the assets acquired, less liabilities assumed, were allocated in July 2018 as follows: Fair value of 50% interest in Iconix Australia $6,507 Book value of Company equity investment prior to purchase of additional 5% interest (1,904)Gain on re-measurement of initial equity investment 8,410 $13,013 Trademarks 12,349 Cash 44 Accounts receivable 360 Intercompany receivables, net 368 Accounts payable and accrued expenses (85)Deferred revenue (52)Goodwill 29 $13,013 The Iconix Australia trademarks have been determined by management to have an indefinite useful life and accordingly, no amortization is beingrecorded in the Company’s consolidated statement of operations. The goodwill and trademarks are subject to a test for impairment on an annualbasis. Additionally, as a result of the acquisition, the Company recognized a $5.9 million non-controlling interest associated with BrandCo’s 45% ownershipinterest in the Iconix Australia joint venture on the date of consolidation. Given the put option associated with the joint venture, the Company has recordedthe non-controlling interest of $5.9 million in Redeemable Non-controlling interest on the Company’s consolidated balance sheet as mezzanine equity. For the second half of FY 2018, post-acquisition, the Company recognized approximately $0.8 million, in revenue from such assets. In addition, theCompany’s selling, general and administrative expenses increased by $0.2 million for the second half of FY 2018, and net income attributable to non-controlling interest increased by $0.3 million for the second half of FY 2018 as a result of consolidating Iconix Australia on the Company’s consolidatedstatement of operations.Additionally, pursuant to the Amended Agreement, the specified put and call rights held by BrandCo and the Company, respectively, relating toBrandCo’s owernship interest in the joint venture, were amended and restated as follows:89 Two-Year Put/Call Option: At any time from December 20, 2020, BrandCo may deliver a put notice to the Company and the Company may deliver acall notice to BrandCo, in each case, for the Company’s purchase of all units in the joint venture held by BrandCo. Upon the exercise of such put/call, thepurchase price for BrandCo’s units in the joint venture will be an amount equal to (i) the percentage interest represented by BrandCo’s units, multiplied by(ii) 5, multiplied by (iii) RR, where RR is equal to: A + (A x (100% + CAGR))2 A = trailing 12 months royalty revenue; andCAGR = 36 month compound annual rateEquity Method Investments In the fourth quarter of December 31, 2018, the Company reviewed the fair values of the underlying assets and liabilities of its equity methodinvestments as compared to their book values. The fair value of the Company’s equity method investments were higher than the book values and thus noimpairment was recorded in FY 2018. In the fourth quarter of December 31, 2017, the Company reviewed the fair values of the underlying assets and liabilities of its equity methodinvestments as compared to their book values. As a result, the Company recognized an investment impairment associated with its investment in MGIcon. See below in section “MG Icon” for further details. The fair value of the Company’s equity method investments were higher than their book value andthus no other impairment was recorded. The following joint ventures are recorded using the equity method of accounting:Iconix Southeast Asia Joint VentureIn October 2013, the Company formed Iconix SE Asia Limited (“Iconix SE Asia”), a wholly owned subsidiary of the Company, and contributedsubstantially all rights to its wholly-owned and controlled brands in Indonesia, Thailand, Malaysia, Philippines, Singapore, Vietnam, Cambodia, Laos,Brunei, Myanmar, and East Timor (the “South East Asia Territory”). Shortly thereafter, GBG (f/k/a Li + Fung Asia Limited) purchased a 50% interest in IconixSE Asia for approximately $12.0 million. GBG paid $7.5 million in cash upon the closing of the transaction and committed to pay an additional $4.5 millionover the 24-month period following closing.In June 2014, the Company contributed substantially all rights to its wholly-owned and controlled brands in the Republic of Korea, and its Ecko, ZooYork, Ed Hardy and Sharper Image Brands in the European Union, and Turkey, in each case, to Iconix SE Asia. In return, GBG agreed to pay the Company$15.9 million, of which $4.0 million was paid in cash at closing. The Company guaranteed minimum distributions of $2.5 million in the aggregate throughFY 2015 to GBG from the exploitation in the European Union and Turkey of the brands contributed to Iconix SE Asia as part of this transaction. As a result ofthis transaction, the Company incurred $5.4 million of marketing costs which were accounted for as a reduction to the cash received. In September 2014, theCompany’s subsidiaries contributed substantially all rights to their Lee Cooper and Umbro brands in the People’s Republic of China, Hong Kong, Macau andTaiwan (together, the “Greater China Territory”), to Iconix SE Asia. In return, GBG agreed to pay the Company $21.5 million, of which $4.3 million was paidat closing. The Company guaranteed minimum distributions of $5.1 million in the aggregate through FY 2017 to GBG from the exploitation in the GreaterChina Territory of the brands contributed to Iconix SE Asia as part of this transaction. In December 2015, the Company purchased GBG’s effective 50%interest in such brands as described below.Pursuant to the operating agreement entered into in connection with the formation of Iconix SE Asia, as amended, each of GBG and the Companyholds specified put and call rights, respectively, relating to GBG’s ownership interest in the joint venture.Company Two-Year Call Option: At any time during the six month period which commenced October 1, 2015, the Company had the right to call upto 5% of the total equity in Iconix SE Asia from GBG for an amount in cash equal to (x) .10, multiplied by (y) 1.15, multiplied by (z) $38.4 million.Five-Year and Eight-Year Put/Call Options on South East Asia Territory Rights, Europe/Turkey Rights and Korea Rights: At any time during the sixmonth period commencing October 1, 2018, and again at any time during the six month period commencing October 1, 2021, GBG may deliver a put noticeto the Company, and the Company may deliver a call notice to GBG, in each case, for the Company’s purchase of the Europe/Turkey Rights, South East AsiaTerritory Rights and/or Korea Rights. In the event of the exercise of such put or call rights, the purchase price for such rights is an amount equal to (x) theAgreed Value (in event of a GBG put) or (y) 120% of Agreed Value (in event of a Company call). The purchase price is payable in cash.90 Agreed Value—Five-Year Put/Call: (i) Percentage of Iconix SE Asia owned by GBG, multiplied by (ii) 5.5, multiplied by (iii) the greater of theaggregate royalty generated by Iconix SE Asia in respect of the Europe/Turkey Rights, South East Asia Territory Rights and/or Korea Rights (as applicable)for the year ending December 31, 2015 and the year ending December 31, 2018; provided, that the Agreed Value attributable to the Europe/Turkey Rightsshall not be less than $7.6 million, plus (iv) in the case of a Full Exercise (i.e., and exercise of all of the Europe/Turkey Rights, South East Asia TerritoryRights and Korea Rights), the amount of cash in Iconix SE Asia at such time.Agreed Value—Eight-Year Put/Call: (i) Percentage of Iconix SE Asia owned by GBG, multiplied by (ii) 5.5, multiplied by (iii) the greater of theaggregate royalty generated by Iconix SE Asia in respect of the Europe/Turkey Rights, South East Asia Territory Rights and/or Korea Rights (as applicable)for the year ending December 31, 2018 and the year ending December 31, 2021; provided, that the Agreed Value attributable to the Europe/Turkey Rightsshall not be less than $7.6 million, plus (iv) in the case of a Full Exercise (i.e., and exercise of all of the Europe/Turkey Rights, South East Asia TerritoryRights and Korea Rights), the amount of cash in Iconix SE Asia at such time.The Company serves as Iconix SE Asia’s administrative manager, responsible for arranging for or providing back-office services including legalmaintenance of trademarks (e.g. renewal of trademark registrations) for the brands in respect of the territories included in Iconix SE Asia. Further, Iconix SEAsia has access to general brand marketing materials, prepared and owned by the Company, to refit for use by the joint venture in territories included inIconix SE Asia. GBG serves as Iconix SE Asia’s local manager, responsible for providing market experience in respect of the applicable territory, managingthe joint venture on a day-to-day basis (other than back-office services), identifying potential licensees and assisting the Company in enforcement of licenseagreements in respect of the applicable territory. The Company receives a monthly fee in connection with the performance of its services as administrativemanager in an amount equal to 5% of Iconix SE Asia’s gross revenue collected in prior month. GBG receives a monthly fee in connection with theperformance of its services as local manager in an amount equal to 15% of Iconix SE Asia’s gross revenue collected in prior month. In October 2013, and inrespect of services that commenced in August 2013 and expired on December 31, 2013, the Company executed a Consultancy Agreement with LFCentennial Limited, an affiliate of Li and Fung Asia Limited, for the provision of brand strategy services in Asia to assist the Company in developing itsbrands. Pursuant to the Consultancy Agreement, the Company paid LF Centennial Limited four installments of $0.5 million for the provision of suchservices. The aggregate $2.0 million of consulting costs paid to GBG were a reduction to the cash received in relation to this transaction for the year endedDecember 31, 2013.The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and GBG,that Iconix SE Asia was a VIE and, as the Company was determined to be the primary beneficiary, was subject to consolidation. The Company hadconsolidated this joint venture within its consolidated financial statements since inception and up to June 30, 2017. The liabilities of the VIE were notmaterial and none of the VIE assets were encumbered by any obligation of the VIE or other entity. See discussion below for the deconsolidation of the jointventure on June 30, 2017.In December 2015, the Company purchased GBG’s effective 50% interest in the Umbro and Lee Cooper trademarks in Greater China for $24.7million. The Company, through its wholly-owned subsidiaries, will pay consideration of $24.7 million to GBG which represents GBG’s 50% ownershipinterest in these trademarks. Immediately prior to the consummation of this transaction, the Company, and its wholly owned subsidiaries, had a receivablefrom GBG of $9.4 million, which represented the balance still owed by GBG from the original September 2014 transaction. It was agreed upon by bothparties that this balance would be set off against the consideration to be paid by the Company. At closing, the Company paid $3.5 million in cash to GBGand recorded amounts owed to GBG of approximately $5.2 million and $5.4 million paid to GBG, net of discounts, in accounts payable and other accruedexpenses and other long term liabilities, respectively, on the consolidated balance sheet. As of December 31, 2018, a total of $4.0 million, net of discount forpresent value, remaining due to GBG for the above transaction is recorded in accounts payable and other accrued expenses on the consolidated balancesheet. The excess of the purchase price over the non-controlling interest balance was $2.2 million which was recorded to additional paid-in-capital.Prior to June 30, 2017, the Company consolidated this joint venture in accordance with ASC 810. In June 2017, the Company received the finalpurchase price installment payment due from its joint venture partner, in respect of such partner’s interest in the joint venture, which resulted in the Companyno longer having a de facto agency relationship with the Iconix SE Asia, Ltd. joint venture partner. In accordance with ASC 810, the receipt of the finalpurchase price installment payment was considered a reconsideration event and although the joint venture remains a VIE, the Company is no longer theprimary beneficiary. As a result, the Company deconsolidated this entity from its consolidated balance sheet as of June 30, 2017 and recognized a pre-taxgain on deconsolidation of $3.8 million in its FY 2017 consolidated statement of operations. The Company recorded an equity-method investment at fairvalue in Iconix SE Asia, Ltd. of $17.4 million in the consolidated balance sheet and all assets and liabilities of the joint venture are no longer reflected in theCompany’s consolidated balance sheet as of June 30, 2017. Fair value of the equity-method investment was determined utilizing the income method withLevel 3 inputs in accordance with ASC 820. For the six months ended June 30, 2017, the joint venture’s financial results were reflected within the individualfinancial statement line items of the consolidated statement of operations. Subsequent to June 30, 2017, Iconix SE Asia, Ltd. is accounted for as an equity-method investment with earnings from the investment being recorded in equity earnings from joint ventures in the Company’s consolidated statement ofoperations.91 Iconix India Joint VentureIn June 2012, the Company formed Imaginative Brand Developers Private Limited (“Iconix India”), a wholly-owned subsidiary of the Company, andcontributed substantially all rights to its wholly-owned and controlled brands in India through an agreement with Iconix India. Shortly thereafter RelianceBrands Limited (“Reliance”), an affiliate of the Reliance Group, purchased a 50% interest in Iconix India for $6.0 million of which approximately $2.0million was paid in cash upon the closing of this transaction and the remaining $4.0 million of which is a note, to be paid over a 48- month period followingclosing. As a result of this transaction, the Company recognized a gain of approximately $2.3 million in FY 2013 for the difference between the consideration(cash and notes receivable) received by the Company and the book value of the brands contributed to the joint venture. Additionally, pursuant to the terms ofthe transaction, the Company and Reliance each agreed to contribute 100 million Indian rupees (approximately $2.0 million) to Iconix India only upon thefuture mutual agreement of the parties, of which 25 million Indian rupees (approximately $0.5 million) was contributed at closing.As of December 31, 2018, the $1.0 million note receivable which is the remaining amount due to the Company from Reliance was reserved on theCompany’s consolidated balance sheet with the offset recorded to bad debt expense on the Company’s consolidated statement of operations.The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company andReliance, that Iconix India is not a VIE and not subject to consolidation. The Company has recorded its investment under the equity method of accountingsince inception.MG IconIn March 2010, the Company acquired a 50% interest in MG Icon, the owner of the Material Girl and Truth or Dare brands and trademarks and otherrights associated with the artist, performer and celebrity known as “Madonna”, from Purim LLC (“Purim”) for $20.0 million, $4.0 million of which was paid atclosing. In connection with the launch of Truth or Dare brand and based on certain qualitative criteria, Purim is entitled to an additional $3.0 million. Thetotal cash consideration was fully paid in FY 2016. At inception, the Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of theCompany and Purim, MG Icon is a VIE and not subject to consolidation, as the Company is not the primary beneficiary of MG Icon. The Company hasrecorded its investment under the equity method of accounting.Pursuant to the terms of the MG Icon operating agreement and subject to certain conditions, the Company is entitled to recognize a preferred profitdistribution from MG Icon of at least $23.0 million, after which all profits and losses are recognized 50/50 in accordance with each principal’s membershipinterest percentage. Since the third quarter of FY 2017 (at which time the Company had achieved the $23.0 million in distributions from its interest in MGIcon), the Company has been recognizing 50/50 of all profits and losses in accordance with each principal’s membership interest percentage.As a result of the investment impairment test performed in the fourth quarter of FY 2017 as discussed above, the Company recorded an investmentimpairment of its investment in MG Icon of $16.8 million due to the Company being notified that Macy’s would not renew its existing MG Icon licenseagreement following its expiration date in January 2020, which consequently resulted in the Company revising its financial forecasts for the brand. Noinvestment impairment was recognized in FY 2018 as the fair value of the equity method investment was higher than the Company’s book value.Galore Media, Inc.In April 2016, the Company entered into agreements with Galore Media, Inc. (“Galore”), a marketing company formed in FY 2015 and still in adevelopment stage. Under the agreements, the Company purchased 50,050 shares of Series A Preferred Stock of Galore for $0.5 million and entered intoarrangements pursuant to which the Company agreed to purchase up to an aggregate $0.5 million of marketing services from Galore in FY 2016. Inconnection with the marketing services arrangement, the Company received warrants that, as the Company purchased specified levels of marketing services,became exercisable for additional shares of Galore’s Series A Preferred Stock at a nominal exercise price. Upon closing of the investment on April 21, 2016,the Company exercised the initial warrant which resulted in the Company receiving an additional 46,067 shares of Series A Preferred Stock of Galore. Giventhese arrangements, the Company had an investment of approximately 11% of the equity of Galore.In September 2017, the Company entered into a stock repurchase agreement with Galore whereby the Company agreed to sell, and Galore agreed torepurchase, the Company’s 50,050 outstanding shares of Series A Preferred Stock of Galore for $0.5 million. Pursuant to the stock repurchase agreement, theCompany received $0.3 million upon execution of the agreement and the remaining $0.2 million was received in December 2017. Additionally, pursuant tothe stock repurchase agreement, the Company agreed to forfeit and surrender the 46,067 shares of Series A Preferred Stock of Galore that were received inApril 2016 upon the Company’s exercise of the initial warrant. All remaining warrants to purchase additional shares of Series A Preferred Stock of Galorewere also forfeited as part of the stock repurchase agreement. This transaction resulted in the Company’s ownership interest in Galore being reduced to zero.92 Investments in Iconix ChinaThrough our ownership of Iconix China (see above), we have equity interests in the following private companies which are accounted for as equitymethod investments: Brands Placed Entity Ownershipby IconixChina CarryingValue of InvestmentAs of December 31, 2018 Candie’s Candies Shanghai Fashion Co., Ltd. 20% $10,529 Marc Ecko Shanghai MuXiang Apparel & AccesoryCo. Limited 15% 2,270 Material Girl Ningbo Material Girl Fashion Co., Ltd. 20% 2,129 Ecko Unltd Ai Xi Enterprise (Shanghai) Co. Limited 20% 10,400 $25,328 Other Equity InvestmentsHistorically, given that the Company did not have significant influence over the entities noted below, its investment was recorded under the costmethod of accounting. During the first quarter of FY 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10):Recognition and Measurement of Financial Assets and Financial Liabilities. As a result of the adoption of the standard, given that these investments do nothave readily determinable fair values and the Company does not have significant influence over the entity, the Company assesses these investments forpotential impairment on a quarterly basis. As of December 31, 2018, there were no indicators of impairment for these investments. See below for furtherdiscussion.Marcy Media Holdings, LLCIn July 2013, the Company purchased a minority interest in Marcy Media Holdings, LLC (“Marcy Media”), resulting in the Company’s indirectownership of a 5% interest in Roc Nation, LLC for $32 million. At inception, the Company determined, in accordance with ASC 810, based on the corporatestructure, voting rights and contributions of the Company that Marcy Media is not a VIE and not subject to consolidation.Since October 2018, we have been actively engaged in arbitration to obtain access to financial, tax and other business-related information from and inrelation to Marcy Media, as well as its controlling shareholders and affiliates, including Marcy Media, LLC, Roc Nation and Shawn Carter (aka Jay-Z). Inaddition, we are considering alternatives to litigation that would allow us to monetize this investment (including special financing to fund current and/oradditional litigation relating to our investment in Marcy Media, the sale of the litigation claim to a third party or an outright sale of our investment in MarcyMedia to a third party). Upon adoption of ASU 2016-01, we determined that the investment in Marcy Media does not have a readily determinable fair valueand elected to use the measurement alternative which records the investment at cost, less impairments. As of December 31, 2018, we performed a qualitativeassessment of impairment of the investment in Marcy Media in accordance with ASC 321. Based upon review of publicly available information, includingspecific business opportunities and successes of Roc Nation, and other sources, we made the qualitative assessment that our investment in Marcy Media isnot impaired.Complex Media Inc.In September 2013, the Company purchased convertible preferred shares, on an as-converted basis as of December 31, 2014, equaling an approximate14.4% minority interest in Complex Media Inc. (“Complex Media”), a multi-media lifestyle company which, among other things, owns Complex magazineand its online counterpart, Complex.com, for $25 million. At inception, the Company determined, in accordance with ASC 810, based on the corporatestructure, voting rights and contributions of the Company that Complex Media is not a VIE and not subject to consolidation. As the Company does not havesignificant influence over Complex Media, its investment has been recorded under the cost method of accounting. In September 2015, HearstCommunications, Inc. acquired a minority stake in Complex Media effectively reducing the Company’s ownership interest to 11.8%. In July 2016, the Company received $35.3 million in connection with the sale of its interest in Complex Media. An additional $3.7 million is beingheld in escrow to satisfy specified indemnification claims, with a portion of such escrow expected to be released twelve months following the closing of thetransaction and the remainder expected to be released eighteen months following the closing of the transaction, subject to any such claims, at which time, theCompany will record the gain within its consolidated statement of operations. For FY 2016, the Company recognized a gain of $10.2 million as a result ofthis transaction which has been recorded in Other Income on the Company’s consolidated statement of operations. 93 In July 2017, the Company received $2.7 million in cash of the total $3.7 million being held in escrow. As a result, the Company has recognized again of $2.7 million recorded within Other Income on the Company’s FY 2017 consolidated statement of operations. In January 2018, the Company received the remaining $1.0 million in cash being held in escrow. As a result, the Company has recognized a gain of$1.0 million recorded within Other Income on the Company’s consolidated statement of operations in FY 2018. 6. Gains on Sale of Trademarks, netThe following table details transactions comprising gains on sales of trademarks, net in the consolidated statement of operations: December 31, December 31, 2018 2017 Interest in Badgley Mischka Canada trademark(1) $— $375 Interest in Sharper Image Canada trademark(2) — 500 Interest in Sharper Image trademark in Iconix Southeast Asia(2) 236 — Interest in Sharper Image trademark in Iconix Europe(2) 352 — Interest in Sharper Image trademark in Iconix MENA(2) 250 — Interest in Sharper Image trademark in Iconix Australia(2) 125 — Interest in Badgley Mischka trademark in Iconix Southeast Asia(1) 478 — Interest in Badgley Mischka trademark in Iconix Europe(1) (244) — Interest in Badgley Mischka trademark in Iconix MENA(1) 71 — Total net gains on sales of trademarks $1,268 $875 (1)In February 2016, the Company sold its rights to the Badgley Mischka intellectual property and related assets to Titan Industries, Inc. in partnershipwith the founders, Mark Badgley and James Mischka, and the apparel license MJCLK LLC for $13.8 million in cash. The Company recognized a gainof $11.6 million as a result of this transaction. The $11.6 million gain represented the sale of the Badgley Mischka intellectual property and relatedassets within the United States, Greater China, Israel and Latin America territories. The Badgley Mischka intellectual property and related assetswithin other foreign territories is owned by certain of the Company’s joint venture entities and required the Company to negotiate and finalize the saleof the intellectual property with its respective joint venture partners. In September 2017, the Company sold its interest in certain Badgley Mischkatrademarks for shoes and handbags in Canada for $0.4 million in cash. The Company recognized a gain of $0.4 million as a result of thistransaction. Additionally, in FY 2018, the Company recognized an additional combined gain of approximately $0.3 million upon final execution ofthe agreement for the sale of the Badgley Mischka intellectual property and related assets which were previously owned by the Iconix Southeast Asia,Iconix Europe and Iconix MENA joint ventures resulting in an aggregate gain on the sale of the brand of $12.3 million.(2)In December 2016, the Company sold the rights to the Sharper Image intellectual property and related assets to 360 Holdings, Inc. for $100.0 millionin cash (of which $1.8 million is being held in escrow for the sale of the Sharper Image intellectual property in the Company’s international jointventures). The Company recognized a gain of $28.1 million as a result of this transaction. The Sharper Image intellectual property and related assetswithin other foreign territories is owned by certain of the Company’s joint venture entities and required the Company to negotiate and finalize the saleof the intellectual property with its respective joint venture partners. In September 2017, the Company sold its interest in the Sharper Image trademarkin Canada for $0.5 million in cash. The Company recognized a gain of $0.5 million as a result of this transaction. In FY 2018, the Companyrecognized an additional combined gain of approximately $1.0 million upon final execution of the agreement for the sale of the Sharper Imageintellectual property and related assets which were previously owned by the Iconix Southeast Asia, Iconix Europe, Iconix MENA, and Iconix Australiajoint ventures resulting in an aggregate gain on the sale of the brand of $29.6 million. 94 7. Fair Value MeasurementsASC Topic 820 “Fair Value Measurements”, which the Company adopted on January 1, 2008, establishes a framework for measuring fair value andrequires expanded disclosures about fair value measurement. While ASC 820 does not require any new fair value measurements in its application to otheraccounting pronouncements, it does emphasize that a fair value measurement should be determined based on the assumptions that market participants woulduse in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 established the followingfair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of thereporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the bestinformation available in the circumstances (unobservable inputs):Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active marketsLevel 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputsLevel 3: Unobservable inputs for which there is little or no market data and which requires the owner of the assets or liabilities to develop its ownassumptions about how market participants would price these assets or liabilitiesThe valuation techniques that may be used to measure fair value are as follows:(A) Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets orliabilities(B) Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations aboutthose future amounts, including present value techniques, option-pricing models and excess earnings method(C) Cost approach—Based on the amount that would currently be required to replace the service capacity of an asset (replacement cost)To determine the fair value of certain financial instruments, the Company relies on Level 2 inputs generated by market transactions of similarinstruments where available, and Level 3 inputs using an income approach when Level 1 and Level 2 inputs are not available. The Company’s assessment ofthe significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilitiesand their placement within the fair value hierarchy.Hedge InstrumentsFrom time to time, the Company will purchase hedge instruments to mitigate statement of operations risk and cash flow risk of revenue andreceivables. As of December 31, 2018, the Company had no hedge instruments.Financial InstrumentsAs of December 31, 2018 and December 31, 2017, the fair values of cash, receivables and accounts payable approximated their carrying values due tothe short-term nature of these instruments. The fair value of notes receivable and note payable from and to our joint venture partners approximate theircarrying values. The fair value of our other equity investments is not readily determinable and it is not practical to obtain the information needed todetermine the value. However, there has been no indication of an impairment of these other equity investments as of December 31, 2018 and December 31,2017. The estimated fair values of other financial instruments subject to fair value disclosures, determined based on Level One inputs including brokerquotes or quoted market prices or rates for the same or similar instruments and the related carrying amounts are as follows: December 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion(1) $675,229 $582,370 $800,842 $747,818 (1)Carrying amounts include aggregate unamortized debt discount and debt issuance costs. Additionally, the fair value of the other equity investments acquired as part of the FY 2015 purchase of our joint venture partners’ interest in IconixChina (refer to Note 5 for further details) was $1.0 million and $1.4 million as of December 31, 2018 and December 31, 2017, respectively, with the decreasein fair value of $0.4 million recorded in the Company’s consolidated statement of operations since the first quarter of FY 2018 due to the adoption of ASU2016-01. 95 Financial instruments expose the Company to counterparty credit risk for nonperformance and to market risk for changes in interest. The Companymanages exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor theamount of credit exposure. The Company’s financial instrument counterparties are investment or commercial banks with significant experience with suchinstruments as well as certain of our joint venture partners – see Note 5.Non-Financial Assets and LiabilitiesThe Company accounts for non-recurring adjustments to the fair values of its non-financial assets and liabilities under ASC 820 using a marketparticipant approach. The Company uses a discounted cash flow model with Level 3 inputs to measure the fair value of its non-financial assets and liabilities.The Company also adopted the provisions of ASC 820 as it relates to purchase accounting for its acquisitions. The Company has goodwill, which is tested forimpairment at least annually, as required by ASC 350- “Intangibles- Goodwill and Other”, (“ASC 350”). Further, in accordance with ASC 350, the Company’sindefinite-lived trademarks are tested for impairment at least annually, on an individual basis as separate single units of accounting. Similarly, consistentwith ASC 360- “Property, Plant and Equipment” (“ASC 360”), as it relates to accounting for the impairment or disposal of long-lived assets, the Companyassesses whether or not there is impairment of the Company’s definite-lived trademarks. The Company recorded impairment charges on certain indefinite-lived and definite-lived assets during the fourth quarter, third quarter and second quarter of FY 2018 as well as the third quarter and fourth quarter of FY2017. Refer to Note 4 for further information. 8. Fair Value OptionDuring the first quarter of FY 2018, the Company elected to account for its 5.75% Convertible Notes under the fair value option. The fair valuecarrying amount and the contractual principal outstanding balance of the 5.75% Convertible Notes accounted for under the fair value option as of December31, 2018 is $48.1 million and $109.7 million, respectively. The change of $81.0 million in the fair value of the 5.75% Convertible Notes accounted forunder the fair value option are included in the Company’s consolidated statement of operations for FY 2018 within Other Income. The primary reason for electing the fair value option is for simplification and cost-benefit considerations of accounting for the 5.75% ConvertibleNotes (the hybrid financial instrument) at fair value in its entirety versus bifurcation of the embedded derivatives. The 5.75% Convertible Notes containbifurcatable embedded derivatives and do not require settlement by physical delivery of non-financial assets. The significant inputs to the valuation of the5.75% Convertible Notes at fair value are Level 1 inputs as they are based on the quoted prices of the notes in the active market. 9. Debt ArrangementsThe Company’s net carrying amount of debt is comprised of the following: December 31,2018 December 31,2017 Senior Secured Notes $365,481 $408,174 1.50% Convertible Notes(1) — 233,898 Variable Funding Note, net of original issue discount 95,273 91,363 Senior Secured Term Loan, net of original issue discount 171,137 74,813 5.75% Convertible Notes(1) 48,076 — Unamortized debt issuance costs (4,738) (7,406)Total debt 675,229 800,842 Less current maturities 54,263 44,349 Total long-term debt $620,966 $756,493 (1)On February 22, 2018, the Company exchanged $125 million of aggregate principal amount of 1.50% Convertible Notes for $125 million ofaggregate principal amount of 5.75% Convertible Notes. See below for further details.96 Senior Secured Notes and Variable Funding NoteOn November 29, 2012, Icon Brand Holdings, Icon DE Intermediate Holdings LLC, Icon DE Holdings LLC and Icon NY Holdings LLC, each alimited-purpose, bankruptcy remote, wholly-owned direct or indirect subsidiary of the Company, (collectively, the “Co-Issuers”) issued $600.0 millionaggregate principal amount of Series 2012-1 4.229% Senior Secured Notes, Class A-2 (the “2012 Senior Secured Notes”) in an offering exempt fromregistration under the Securities Act.Simultaneously with the issuance of the 2012 Senior Secured Notes, the Co-Issuers also entered into a revolving financing facility of Series 2012-1Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”), which allowed for the funding of up to $100 million of Variable Funding Notesand certain other credit instruments, including letters of credit. The Variable Funding Notes allow for drawings on a revolving basis. Drawings and certainadditional terms related to the Variable Funding Notes are governed by the Class A-1 Note Purchase Agreement dated November 29, 2012 (the “VariableFunding Note Purchase Agreement”), among the Co-Issuers, Iconix, as manager, certain conduit investors, financial institutions and funding agents, andBarclays Bank PLC, as provider of letters of credit, as swingline lender and as administrative agent. The Variable Funding Notes are governed, in part, by theVariable Funding Note Purchase Agreement and by certain generally applicable terms contained in the Securitization Notes Indenture. Interest on theVariable Funding Notes is payable at per annum rates equal to the CP Rate, Base Rate or Eurodollar Rate, each as defined in the Variable Funding NotePurchase Agreement. In February 2015, the Company fully drew down the $100.0 million of available funding under the Variable Funding Notes, whichremains outstanding as of December 31, 2018.On June 21, 2013, the Co-Issuers issued $275.0 million aggregate principal amount of Series 2013-1 4.352% Senior Secured Notes, Class A-2 (the“2013 Senior Secured Notes” and, together with the 2012 Senior Secured Notes, the “Senior Secured Notes”) in an offering exempt from registration underthe Securities Act.The Senior Secured Notes and the Variable Funding Notes are referred to collectively as the “Securitization Notes.”The Securitization Notes were issued under a base indenture (the “Securitization Notes Base Indenture”) and related supplemental indentures (the“Securitization Notes Supplemental Indentures” and, collectively with the Securitization Notes Base Indenture, the “Securitization Notes Indenture”) amongthe Co-Issuers and Citibank, N.A., as trustee and securities intermediary. The Securitization Notes Indenture allows the Co-Issuers to issue additional series ofnotes in the future subject to certain conditions.On August 18, 2017, the Company entered into an amendment to the Securitization Notes Supplemental Indenture to, among other things, (i) extendthe anticipated repayment date for the Variable Funding Notes from January 2018 to January 2020, (ii) decrease the L/C Commitment and the SwinglineCommitment (as such terms are defined in the amendment) available under the Variable Funding Notes to $0 as of the closing date, (iii) replace BarclaysBank PLC with Guggenheim Securities Credit Partners, LLC, as provider of letters of credit, as swingline lender and as administrative agent under thepurchase agreement and (iv) provide that, upon the disposition of intellectual property assets by the Co-Issuers as permitted by the Securitization Notes BaseIndenture, (x) the holders of the Variable Funding Notes will receive a mandatory prepayment, pro rata based on the amount of Variable Funding Notes heldby such holder, and (y) the maximum commitment will be permanently reduced by the amount of the mandatory prepayment.While the Securitization Notes are outstanding, payments of interest are required to be made on the 2012 Senior Secured Notes and the 2013 SeniorSecured Notes, in each case, on a quarterly basis. Initially, principal payments in the amount of $10.5 million and $4.8 million were required to be made onthe 2012 Senior Secured Notes and 2013 Senior Secured Notes, respectively, on a quarterly basis. The amount of quarterly principal payments has sincechanged in subsequent periods due to the prepayments made under the Securitization Notes Indenture. See below for further discussion.The legal final maturity date of the Securitization Notes is in January of 2043. If the Co-Issuers have not repaid or refinanced the Securitization Notesprior to January 2020 (the “anticipated repayment date”), additional interest will accrue on amounts outstanding under the Securitization Notes at a rateequal to (A) in respect of the Variable Funding Notes, 5% per annum, (B) in respect of the 2012 Senior Secured Notes and the 2013 Senior Secured Notes, thegreater of (1) 5% per annum and (2) a per annum interest rate equal to the excess, if any, by which the sum of (x) the yield to maturity (adjusted to a quarterlybond-equivalent basis), on the anticipated repayment date of the United States treasury security having a term closest to 10 years plus (y) 5% per annum plus(z) with respect to the 2012 Senior Secured Notes, 3.4% per annum, or with respect to the 2013 Senior Secured Notes, 3.14% per annum, exceeds the originalinterest rate. Pursuant to the Securitization Notes Indenture, such additional interest is not due to be paid by the Company until January 2043 (the legalmaturity date) and does not compound annually. The Securitization Notes rank pari passu with each other.Pursuant to the Securitization Notes Indenture, the Securitization Notes are the joint and several obligations of the Co-Issuers only. The SecuritizationNotes are secured under the Securitization Notes Indenture by a security interest in certain of the assets of the Co-Issuers (the “Securitized Assets”), whichincludes, among other things, (i) intellectual property assets, including the U.S. and Canadian registered and applied for trademarks for the following brandsand other related IP assets: Candie’s, Bongo, Joe Boxer (excluding Canadian trademarks, none of which are owned by Iconix), Rampage, Mudd, London Fog(other than the trademark for97 outerwear products sold in the United States), Mossimo, Ocean Pacific and OP, Danskin and Danskin Now, Rocawear, Starter, Waverly, Fieldcrest, RoyalVelvet, Cannon, and Charisma; (ii) the rights (including the rights to receive payments) and obligations under all license agreements for use of thosetrademarks in such territories; (iii) the following equity interests in the following joint ventures: an 85% interest in Hardy Way LLC which owns the EdHardy brand, a 50% interest in MG Icon LLC which owns the Material Girl and Truth or Dare brands, and a 100% interest in ZY Holdings LLC which ownsthe Zoo York brand; and (iv) certain cash accounts established under the Securitization Notes Indenture. The Securitized Assets do not include revenuegenerating assets of (x) the Iconix subsidiaries that own the Ecko Unltd trademarks, the Mark Ecko trademarks, the Artful Dodger trademarks, the Umbrotrademarks, and the Lee Cooper trademarks, (y) the Iconix subsidiaries that own Iconix’s other brands outside of the United States and Canada or (z) the jointventures in which Iconix and certain of its subsidiaries have investments and which own the Modern Amusement trademarks and the Buffalo trademarks, thePony trademarks, and the Hydraulic trademarks.If the Company contributes an Additional IP Holder to Icon Brand Holdings LLC or Icon DE Intermediate Holdings LLC, that Additional IP Holderwill enter into a guarantee and collateral agreement in a form provided for in the Securitization Notes Indenture pursuant to which such Additional IP Holderwill guarantee the obligations of the Co-Issuers in respect of any Securitization Notes issued under the Securitization Notes Indenture and the other relateddocuments and pledge substantially all of its assets to secure those guarantee obligations pursuant to a guarantee and collateral agreement.Neither the Company nor any subsidiary of the Company, other than the Securitization Entities, will guarantee or in any way be liable for theobligations of the Co-Issuers under the Securitization Notes Indenture or the Securitization Notes.The Securitization Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Co-Issuersmaintain specified reserve accounts to be used to make required payments in respect of the Securitization Notes, (ii) provisions relating to optional andmandatory prepayments, including mandatory prepayments in the event of a change of control (as defined in the Securitization Notes SupplementalIndentures) and the related payment of specified amounts, including specified make-whole payments in the case of the Senior Secured Notes under certaincircumstances, (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the SecuritizationNotes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. As of December 31,2018, the Company is in compliance with all covenants under the Securitization Notes.The Company’s Securitization Notes include a financial test that measures the amount of principal and interest required to be paid on the Co-Issuers’debt to the approximate cash flow available to pay such principal and interest; the test is referred to as the debt service coverage ratio (“DSCR”). As a resultof the decline in royalty collections received by the Co-Issuers during the twelve months ended June 30, 2018, the DSCR fell below 1.45x as of June 30,2018. Beginning July 1, 2018, the Co-Issuers were required to allocate 25% of residual royalty collections (i.e. collections less debt service, management,servicing, administrative and other fees) to a restricted reserve account administered by the securitization program’s trustee, which will result in cashremaining inside the securitization program. The DSCR fell below 1.35x as of September 30, 2018 and as a result, beginning October 1, 2018, the Co-Issuersare required to allocate 50% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) to arestricted reserve account administered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and notbeing distributed to the Company. The DSCR fell below 1.25x as of December 31, 2018 and as a result, beginning January 1, 2019, the Co-Issuers arerequired to allocate 100% of residual royalty collections (i.e. collections less debt service, management, servicing, administrative and other fees) to arestricted reserve account administered by the securitization program’s trustee, which will result in cash remaining inside the securitization program and notbeing distributed to the Company. The cash required to be maintained inside the securitization program may be released to the Company if the DSCR is atleast 1.45x for two consecutive quarters.The Securitization Notes are also subject to customary rapid amortization events provided for in the Securitization Notes Indenture, including eventstied to (i) the failure to maintain a stated DSCR, (ii) certain manager termination events, (iii) the occurrence of an event of default and (iv) the failure to repayor refinance the Securitization Notes on the anticipated repayment date. If a rapid amortization event were to occur, including as a result of not paying orredeeming the Securitization Notes in full prior to the anticipated repayment date, the management fee payable to the Company would remain payablepursuant to the priority of payments set forth under the Securitization Indenture, but no residual amounts would be payable to the Company thereafter.In June 2014, the Company sold the “sharperimage.com” domain name and the exclusive right to use the Sharper Image trademark in connection withthe operation of a branded website and catalog distribution in specified jurisdictions, in which the Senior Secured Notes had a security interest pursuant tothe Indenture. As a result of this permitted disposition, the Company paid an additional $1.6 million in principal in July 2014.In January 2017, in connection with the sale of the Sharper Image intellectual property and related assets, the Company made a mandatory principalprepayment on its Senior Secured Notes of $36.7 million. The Company wrote off a pro-rata portion of the Senior Secured Notes’ deferred financing costs of$0.5 million. As a result of this transaction, the Company recognized a loss on98 extinguishment of debt of $0.5 million which has been recorded on the Company’s consolidated statement of operations. Additionally, the quarterlyprincipal payments on the 2012 Senior Secured notes and 2013 Senior Secured Notes were reduced to $9.9 million and $4.5 million, respectively.In July 2017, in connection with the sale of the businesses underlying the Entertainment segment, the Company made a mandatory principalprepayment on its Senior Secured Notes of $152.2 million. The Company wrote off a pro-rata portion of the Senior Secured Notes’ deferred financing costs of$2.0 million as well as paid a prepayment penalty of $0.3 million. As a result of this transaction, the Company recognized a loss on extinguishment of debtof $2.3 million which has been allocated to discontinued operations on the Company’s consolidated statement of operations in FY 2017. Additionally, thequarterly principal payments on the 2012 Senior Secured Notes and 2013 Senior Secured Notes were reduced to $7.3 million and $3.4 million, respectively.As of December 31, 2018 and December 31, 2017, the total outstanding principal balance of the Securitization Notes was $465.5 million and $508.2million, respectively, of which $42.7 million is included in the current portion of long-term debt on the consolidated balance sheet. As of December 31, 2018and December 31, 2017, $15.2 million and $29.9 million, respectively, is included in restricted cash on the consolidated balance sheet and represents short-term restricted cash consisting of collections on behalf of the Securitized Assets, restricted to the payment of principal, interest and other fees on a quarterlybasis under the Senior Secured Notes.For FY 2018 and FY 2017, cash interest expense relating to the Senior Secured Notes was approximately $16.4 million and $22.2 million,respectively.Senior Secured Term LoanOn August 2, 2017, the Company entered into a credit agreement (as amended or otherwise modified, unless context provides otherwise the “SeniorSecured Term Loan”), among IBG Borrower, the Company’s wholly-owned direct subsidiary, as borrower, the Company and certain wholly-ownedsubsidiaries of IBG Borrower, as guarantors (the “Guarantors”), Cortland Capital Market Services LLC, as administrative agent and collateral agent(“Cortland”) and the lenders party thereto from time to time, including Deutsche Bank AG, New York Branch. Pursuant to the Senior Secured Term Loan, thelenders provided to IBG Borrower a senior secured term loan (the “Senior Secured Term Loan”), scheduled to mature on August 2, 2022 in an aggregateprincipal amount of $300 million and bearing interest at LIBOR plus an applicable margin of 7% per annum (the “Interest Rate”).On August 2, 2017, the net cash proceeds of the Senior Secured Term Loan were deposited into an escrow account and subject to release to IBGBorrower from time to time, subject to the satisfaction of customary conditions precedent upon each withdrawal, to finance repurchases of, or at the maturitydate thereof to repay in full, the 1.50% Convertible Notes (as defined below). The Company had the ability to make these repurchases in the open market orprivately negotiated transactions, depending on prevailing market conditions and other factors.Borrowings under the Senior Secured Term Loan were to amortize quarterly at 0.5% of principal, commencing on September 30, 2017. IBG Borrowerwas obligated to make mandatory prepayments annually from excess cash flow and periodically from net proceeds of certain asset dispositions and from netproceeds of certain indebtedness, if incurred (in each case, subject to certain exceptions and limitations provided for in the Senior Secured Term Loan).IBG Borrower’s obligations under the Senior Secured Term Loan are guaranteed jointly and severally by the Company and the other Guarantorspursuant to a separate facility guaranty. IBG Borrower’s and the Guarantors’ obligations under the Senior Secured Term Loan are secured by first priorityliens on and security interests in substantially all assets of IBG Borrower, the Company and the other Guarantors and a pledge of substantially all equityinterests of the Company’s subsidiaries (subject to certain limits including with respect to foreign subsidiaries) owned by the Company, IBG Borrower or anyother Guarantor. However, the security interests will not cover certain intellectual property and licenses owned, directly or indirectly by the Company’ssubsidiary Iconix Luxembourg Holdings SÀRL or those subject to the Company’s securitization facility. In addition, the pledges exclude certain equityinterests of Marcy Media Holdings, LLC and the subsidiaries of Iconix China Holdings Limited.In connection with the Senior Secured Term Loan, IBG Borrower, the Company and the other Guarantors made customary representations andwarranties and have agreed to adhere to certain customary affirmative covenants. Additionally, the Senior Secured Term Loan mandates that IBG Borrower,the Company and the other Guarantors enter into account control agreements on certain deposit accounts, maintain and allow appraisals of their intellectualproperty, perform under the terms of certain licenses and other agreements scheduled in the Senior Secured Term Loan and report significant changes to orterminations of licenses generating guaranteed minimum royalties of more than $0.5 million. Prior to the First Amendment (as discussed below), IBGBorrower was required to satisfy a minimum asset coverage ratio of 1.25:1.00 and maintain a leverage ratio of no greater than 4.50:1.00.99 Amendments to Senior Secured Term LoanFirst AmendmentOn October 27, 2017, the Company entered into the First Amendment to the Senior Secured Term Loan (the “First Amendment”) pursuant to which,among other things, the remaining escrow balance of approximately $231 million (after taking into account approximately $59.2 million that was used tobuy back 1.50% Convertible Notes in open market purchases in the third quarter of 2017) was returned to the lenders.The First Amendment also provided for, among other things, (a) a reduction in the existing $300 million term loan to the then-current term loanbalance of approximately $57.8 million, (b) a new senior secured delayed draw term loan facility in the aggregate amount of up to $165.7 million, consistingof (i) a $25 million First Delayed Draw Term Loan (the “First Delayed Draw Term Loan”), and (ii) a $140.7 million Second Delayed Draw Term Loan (the“Second Delayed Draw Term Loan” and, together, with the First Delayed Draw Term Loan, the “Delayed Draw Term Loan Facility”) for the purpose ofrepaying the 1.50% Convertible Notes; (c) an increase of the Total Leverage Ratio permitted under the Senior Secured Term Loan from 4.50:1.00 to5.75:1.00; (d) a reduction in the debt service coverage ratio multiplier in the Company’s asset coverage ratio under the Senior Secured Term Loan; (e) anincrease in the existing amortization rate from 2 percent per annum to 10 percent per annum commencing July 2019; and (f) amendments to the mandatoryprepayment provisions to (i) permit the Company not to prepay borrowings under the Senior Secured Term Loan from the first $100 million of net proceedsresulting from Permitted Capital Raising Transactions (as defined in the Senior Secured Term Loan) effected prior to March 15, 2018, and (ii) eliminate therequirement that the Company pay a Prepayment Premium (as defined in the Senior Secured Term Loan) on any payments or prepayments made prior toDecember 31, 2018. Indebtedness issued under the Delayed Draw Term Loan Facility was issued with original issue discount.As a result of the First Amendment, on October 27, 2017, the Company repaid $231.0 million on the Senior Secured Term Loan which represented$240.7 million of outstanding principal balance. As this transaction was accounted for as a debt modification in accordance ASC 470-50-40, and based onthe Company’s accounting policy for debt modifications, the Company wrote-off a pro-rata portion of the original issue discount and deferred financing costsof $9.3 million and $5.4 million, respectively, which were both recorded to interest expense on the Company’s consolidated statement of operations for FY2017. As a result of this transaction, the Company’s outstanding principal balance of the Senior Secured Term Loan was reduced to $57.8 million at that timeand the Company recorded a gain on modification of debt of $8.8 million (which is net of $0.8 million of additional deferred financing costs associated withthe First Amendment) which has been recorded in interest expense on the Company’s consolidated statement of operations for FY 2017. On November 2, 2017, the Company drew down the full amount of $25.0 million on the First Delayed Draw Term Loan of which the Companyreceived $24.0 million in cash, net of the $1.0 million of original issue discount. As a result of the Second Amendment, the Company incurred $0.2 million of additional deferred financing costs. In accordance with ASC 470-50-40,the Company accounted for this amendment as a debt modification and has recorded the additional deferred financing costs against the gain on modificationof debt on the Company’s consolidated statement of operations for FY 2017.Second AmendmentGiven that the Company was unable to timely file its quarterly financial statements for the quarter ended September 30, 2017 with the SEC byNovember 14, 2017 and became in default under the terms of the Senior Secured Term Loan, as amended, on November 24, 2017, the Company entered intothe Second Amendment to the Senior Secured Term Loan. Pursuant to the Second Amendment, among other things, the lenders under the Senior SecuredTerm Loan agreed, subject to the Company’s compliance with the requirements set forth in the Second Amendment, to waive until December 22, 2017,certain potential defaults and events of default arising under the Senior Secured Term Loan.In connection with the Second Amendment, Deutsche Bank was granted additional pricing flex in the form of price protection upon syndication of theSenior Secured Term Loan (“Flex”) and ticking fees on the unfunded portion of the loan. The Second Amendment allows, among other things, for cashpayments on account of the Flex and ticking fees to be paid from the proceeds of the First Delayed Draw Term Loan, which was previously fully funded inaccordance with the terms of the Senior Secured Term Loan. After giving effect to the additional Flex provided in the Second Amendment, the Companyestimated that it could be responsible for payments on account of Flex in an aggregate total amount of up to $12.0 million. As of December 31, 2018, theCompany has paid a total of approximately $5.0 million in Flex. The Company has recorded this amount against the outstanding principal balance of SeniorSecured Term Loan on the Company’s consolidated balance sheet and is being amortized over the remaining term of Senior Secured Term Loan.100 As a result of the Second Amendment, the Company incurred $0.2 million of additional deferred financing costs. In accordance with ASC 470-50-40,the Company accounted for this amendment as a debt modification and has recorded the additional deferred financing costs against the gain on modificationof debt on the Company’s consolidated statement of operations for FY 2017.On December 7, 2017, the Company paid approximately $5.0 million of Flex of which the Company has recorded this amount against the outstandingprincipal balance of Senior Secured Term Loan on the Company’s consolidated balance sheet and is being amortized over the remaining term of loan.Third Amendment On February 12, 2018, the Company, through IBG Borrower, entered into the Third Amendment to the Senior Secured Term Loan. The ThirdAmendment provides for, among other things, amendments to certain restrictive covenants and other terms set forth in the Senior Secured Term Loan, asamended, to permit (i) IBG Borrower to enter into the 5.75% Notes Indenture (as defined below) and a related intercreditor agreement that was executed and(ii) the Note Exchange (as defined below). In connection with the Third Amendment, Deutsche Bank was granted additional pricing flex in the form of priceprotection upon syndication of the loan (“Third Amendment Flex”). After giving effect to the additional Third Amendment Flex, the Company estimates thatit could be responsible for payments on account of the Third Amendment Flex in an aggregate total amount of up to $6.1 million.Fourth AmendmentThe Company, through IBG Borrower, entered into the Fourth Amendment to the Senior Secured Term Loan as of March 12, 2018. The FourthAmendment provided, among other things, that the funding date for the Second Delayed Draw Term Loan would be March 14, 2018 instead of March 15,2018. The conditions to the availability of the Second Delayed Draw Term Loan were satisfied as of March 14, 2018 due, in part, to the transactionscontemplated by the Note Exchange, and the Company was able to draw on the Second Delayed Draw Term Loan. On March 14, 2018, the Company drewdown $110 million under the Second Delayed Draw Term Loan and used those proceeds, along with cash on hand, to make a payment to the trustee under theindenture governing the 1.50% Convertible Notes to repay the remaining 1.50% Convertible Notes at maturity on March 15, 2018.The Senior Secured Term Loan, as amended, contains customary negative covenants and events of default. The Senior Secured Term Loan limits theability of IBG Borrower, the Company and the other Guarantors, with respect to themselves, their subsidiaries and certain joint ventures, from, among otherthings, incurring and prepaying certain indebtedness, granting liens on certain assets, consummating certain types of acquisitions, making fundamentalchanges (including mergers and consolidations), engaging in substantially different lines of business than those in which they are currently engaged, makingrestricted payments and amending or terminating certain licenses scheduled in the Senior Secured Term Loan. Such restrictions, failure to comply with whichmay result in an event of default under the terms of the Senior Secured Term Loan, are subject to certain customary and specifically negotiated exceptions, asset forth in the Senior Secured Term Loan.If an event of default occurs, in addition to the Interest Rate increasing by an additional 3% per annum Cortland shall, at the request of lendersholding more than 50% of the then-outstanding principal of the Senior Secured Term Loan, declare payable all unpaid principal and accrued interest andtake action to enforce payment in favor of the lenders. An event of default includes, among other events: a change of control by which a person or groupbecomes the beneficial owner of 35% of the voting stock of the Company or IBG Borrower; the failure to extend of the Series 2012-1 Class A-1 Senior NotesRenewal Date (as defined in the Senior Secured Term Loan); the failure of any of Icon Brand Holdings LLC, Icon NY Holdings LLC, Icon DE IntermediateHoldings LLC, Icon DE Holdings LLC and their respective subsidiaries (the “Securitization Entities”) to perform certain covenants; and the entry intoamendments to the securitization facility that would be materially adverse to the lenders or Cortland without consent. Subject to the terms of the SeniorSecured Term Loan, both voluntary and certain mandatory prepayments will trigger a premium of 5% of the aggregate principal amount during the first yearof the loan and a premium of 3% of the aggregate principal amount during the second year of the loan, with no premiums payable in subsequent periods.As of December 31, 2018 and December 31, 2017, the outstanding principal balance of the Senior Secured Term Loan was $171.1 million (which isnet of $18.3 million of original issue discount) and $74.8 million (which is net of $8.0 million of original issue discount), respectively, of which $11.6million and $1.7 million is recorded in current portion of long term debt on the Company’s consolidated balance sheet, respectively.The Company recorded cash interest expense of approximately $17.2 million (including a commitment fee of approximately $1.2 million) relating tothe Senior Secured Term Loan in FY 2018 as compared to $8.1 million for FY 2017. 101 The Company recorded an expense for the amortization of original issue discount and deferred financing fees of approximately $4.4 million relatingto the Senior Secured Term Loan, included in interest expense on the consolidated statement of operations, during FY 2018 as compared to $1.0 millionduring FY 2017.5.75% Convertible NotesOn February 22, 2018, the Company consummated an exchange (the “Note Exchange”) of approximately $125 million previously outstanding 1.50%Convertible Senior Subordinated Notes due 2018 (the “1.50% Convertible Notes”), pursuant to which it issued approximately $125 million of new 5.75%Convertible Notes due 2023 (the 5.75% Convertible Notes”). The 5.75% Convertible Notes were issued pursuant to an indenture, dated February 22, 2018,by and among the Company, each of the guarantors thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (the“Indenture”).The 5.75% Convertible Notes mature on August 15, 2023. Interest on the 5.75% Convertible Notes may be paid in cash, shares of the Company’scommon stock, or a combination of both, at the Company’s election. If the Company elects to pay all or a portion of an interest payment in shares of commonstock, the number of shares of common stock payable will be equal to the applicable interest payment divided by the average of the 10 individual volume-weighted average prices for the 10-trading day period ending on and including the trading day immediately preceding the relevant interest payment date.The 5.75% Convertible Notes are (i) secured by a second lien on the same assets that secure the obligations of IBG Borrower under the Senior SecuredTerm Loan and (ii) guaranteed by IBG Borrower and same guarantors as those under the Senior Secured Term Loan, other than the Company.Subject to certain conditions and limitations, the Company may cause all or part of the 5.75% Convertible Notes to be automatically converted intocommon stock of the Company. The 5.75% Convertible Notes are convertible into shares of the Company’s common stock based on a conversion rate of52.1919 shares of the Company’s common stock, per $1,000 principal amount of the 5.75% Convertible Notes (which is equal to an initial conversion priceof approximately $19.16 per share), subject to adjustment from time to time pursuant to the 5.75% Convertible Note Indenture.Holders converting their 5.75% Convertible Notes (including in connection with a mandatory conversion) shall also be entitled to receive a paymentfrom the Company equal to the Conversion Make-Whole Payment (as defined in the Indenture) if such conversion occurs after a regular record date and on orbefore the next succeeding interest payment date, through and including the maturity date (determined as if such conversion did not occur).If the Company elects to pay all or a portion of a Conversion Make-Whole Payment in shares of common stock, the number of shares of common stockpayable will be equal to the applicable Conversion Make-Whole Payment divided by the average of the 10 individual volume-weighted average prices forthe 10-trading day period immediately preceding the applicable conversion date.Subject to certain limitations pursuant to the Senior Secured Term Loan, from and after the February 22, 2019, the Company may redeem for cash allor part of the 5.75% Convertible Notes at any time by providing at least 30 days’ prior written notice to holders of the 5.75% Convertible Notes.If the Company undergoes a fundamental change (which would occur if the Company experiences a change of control or is delisted from NASDAQ)prior to maturity, each holder will have the right, at its option, to require the Company to repurchase for cash all or a portion of such holder’s 5.75%Convertible Notes at a fundamental change purchase price equal to 100% of the principal amount of the 5.75% Convertible Notes to be repurchased, togetherwith interest accrued and unpaid to, but excluding, the fundamental change purchase date.The Company is subject to certain restrictive covenants pursuant to the 5.75% Convertible Note Indenture, including limitations on (i) liens, (ii)indebtedness, (iii) asset sales, (iv) restricted payments and investments, (v) prepayments of indebtedness and (vi) transactions with affiliates.During 2018, certain noteholders converted an aggregate outstanding principal balance of $15.3 million of their 5.75% Convertible Notes intoapproximately 0.8 million shares of the Company’s common stock. Pursuant to the Indenture, the Company also made Conversion Make-Whole Payments ofapproximately 0.6 million shares of the Company’s common stock to those converting noteholders. As a result of the difference in the fair market valueversus the carrying value of the 5.75% Convertible Notes that were converted during FY 2018, an aggregate $1.2 million was recorded as Other Income in theCompany’s consolidated statement of operations for FY 2018.102 The Company has elected to account for the 5.75% Convertible Notes based on the Fair Value Option accounting as outlined in ASC 825. Refer toNote 8 for further details. As of December 31, 2018, while the debt balance recorded at fair value on the Company’s consolidated balance sheet is $48.1million, the actual outstanding principal balance of the 5.75% Convertible Notes is $109.7 million.The Company recorded interest expense of approximately $5.5 million relating to the 5.75% Convertible Notes during the FY 2018 as compared tonone for FY 2017. The Company paid its first interest payment which was due on August 15, 2018 through the issuance of approximately 0.6 million sharesof the Company’s common stock. 1.50% Convertible NotesOn March 18, 2013, the Company completed the issuance of $400.0 million principal amount of the Company’s 1.50% Convertible Notes issuedpursuant to that certain Indenture, dated as of March 15, 2013, by and between the Company and The Bank of New York Mellon Trust Company, N.A., astrustee (the “1.50% Notes Indenture”), in a private offering to certain institutional investors with net proceeds of approximately $390.6 million. During FY 2016, the Company repurchased $104.9 million par value of the 1.50% Convertible Notes with a combination of $36.7 million in cash(including interest and trading fees) and the issuance of approximately 0.7 million shares of the Company’s common stock. The Company accounted for thistransaction in accordance with ASC 470-20 resulting in the recognition of a $9.6 million gain which is included in gain on extinguishment of debt, net in theCompany’s consolidated statement of income for FY 2016, and a reacquisition of approximately $1.2 million of the embedded conversion option recordedwithin additional paid in capital on the Company’s consolidated balance sheet. During FY 2017, the Company repurchased $58.9 million par value of the 1.50% Convertible Notes for $59.3 million in cash (including interest andtrading fees). The Company accounted for this transaction in accordance with ASC 470-20 resulting in the recognition of a $1.5 million loss which wasincluded in loss on extinguishment of debt in the Company’s consolidated statement of operations during FY 2017. On February 22, 2018, the Company completed the Note Exchange. On March 15, 2018, the Company repaid the remaining outstanding principalbalance of $111.2 million of the 1.50% Convertible Notes with the proceeds of the Second Delayed Draw Term Loan of $110 million plus cash on hand, andno further 1.50% Convertible Notes remained outstanding. The exchange of the 1.50% Convertible Notes for the 5.75% Convertible Notes was accountedfor as a debt extinguishment in accordance with ASC 470 and resulted in the Company recording a gain on extinguishment of debt of $4.5 million, which isrecorded in the Company’s consolidated statement of operations for the FY 2018. In accordance with ASC 470, as the terms of the 5.75% Convertible Notes and the Second Delayed Draw Term Loan were readably determinable andthe 5.75% Convertible Notes and the Second Delayed Draw Term Loan were scheduled to mature on August 15, 2023 and August 2, 2022, respectively, theCompany classified the 1.50% Convertible outstanding debt balance (which was net of deferred financing costs and original issue discount) of $233.9million as long-term debt on its December 31, 2017 consolidated balance sheet.For FY 2018 and FY 2017, the Company recorded additional non-cash interest expense of approximately $1.7 million and $12.8 million, respectively,representing the difference between the stated interest rate on the 1.50% Convertible Notes and the rate for a similar instrument that does not have aconversion feature.For FY 2018 and FY 2017, the Company recorded cash interest expense relating to the 1.50% Convertible Notes of approximately $0.6 million, $4.1million, respectively. 2016 Senior Secured Term LoanOn March 7, 2016, the Company entered into a credit agreement (the “Credit Agreement”), among IBG Borrower LLC, the Company’s wholly-owneddirect subsidiary, as borrower (“IBG Borrower”), the Company and certain wholly-owned subsidiaries of IBG Borrower, as guarantors (the “Guarantors”),Cortland Capital Market Services LLC, as administrative agent and collateral agent (“Cortland”) and the lenders party thereto from time to time (the“Lenders”), including CF ICX LLC and Fortress Credit Co LLC (“Fortress”). Pursuant to the Credit Agreement, the Lenders provided to IBG Borrower a 2016Senior Secured Term Loan (the “2016 Senior Secured Term Loan”), scheduled to mature on March 7, 2021, in an aggregate principal amount of $300 millionand bearing interest at LIBOR (with a floor of 1.50%) plus an applicable margin of 10% per annum.103 The net cash proceeds of the 2016 Senior Secured Term Loan, which were approximately $264.2 million (after deducting financing, investmentbanking and legal fees), were, pursuant to the terms of the Credit Agreement, deposited by the Lenders into an escrow account on April 4, 2016. In December 2016, as a result of the sale of the Sharper Image intellectual property and related assets and in accordance with the Credit Agreement, theCompany was required to make a mandatory principal prepayment of $28.7 million and a corresponding prepayment premium of $4.3 million. In January 2017, the Company made a voluntary prepayment and an additional mandatory prepayment of $23.0 million and $23.5 million,respectively, as well as a corresponding prepayment premium of $3.4 million and $3.4 million, respectively. For each of the voluntary prepayment of $23.0million and the mandatory prepayment of $23.5 million, the Company wrote off a pro-rata portion of the 2016 Senior Secured Term Loan’s original issuediscount and deferred financing costs of $1.7 million and $0.8 million, respectively, which resulted in an aggregate loss on extinguishment of debt of $5.0million recorded in the Company’s consolidated statement of operations in FY 2017.On June 30, 2017, in connection with the sale of the Entertainment segment, the Company made a mandatory prepayment of $140.0 million with acorresponding prepayment premium of $15.2 million of the 2016 Senior Secured Term Loan, of which the prepayment premium was allocated todiscontinued operations in the Company’s consolidated statement of operations. As part of this mandatory prepayment, the Company wrote-off a pro-rataportion of the original issue discount and deferred financing costs of $9.4 million and $4.7 million, respectively, which was also allocated to discontinuedoperations in the Company’s consolidated statement of operations in FY 2017. Additionally, on June 30, 2017, the Company made a voluntary prepaymentof $66.0 million with a corresponding prepayment premium of $7.2 million of which the prepayment premium was recorded in loss on extinguishment ofdebt within continuing operations on the Company’s consolidated statement of operations in FY 2017. Accordingly, the Company wrote off the remainingportion of the original issue discount and deferred financing costs of $4.4 million and $2.3 million, respectively, which was recorded in loss onextinguishment of debt in the Company’s consolidated statement of operations in FY 2017. As a result of these prepayments, the Company’s outstandingprincipal balance of the 2016 Senior Secured Term Loan was zero as of June 30, 2017 and the facility has since been terminated.Given the principal balance of the loan was reduced to zero as of June 30, 2017, the Company recorded cash interest of approximately $12.4 millionrelating to the 2016 Senior Secured Term Loan in FY 2017 as compared no cash interest recorded in FY 2018. Debt MaturitiesAs of December 31, 2018, the Company’s debt maturities on a calendar year basis are as follows: Total 2019 2020 2021 2022 2023 Thereafter Senior Secured Notes $365,481 $42,693 $42,693 $42,693 $42,693 $42,693 $152,016 Variable Funding Notes(1) $95,273 — — — — — 95,273 Senior Secured Term Loan(2) $171,137 11,570 19,284 19,284 120,999 — — 5.75% Convertible Notes(3) $48,076 — — — — 48,076 — Total $679,967 $54,263 $61,977 $61,977 $163,692 $90,769 $247,289 (1)Reflects the net debt carrying amount, effected by the outstanding balance of the original issue discount, in the consolidated balance sheet as ofDecember 31, 2018. The actual principal outstanding balance of the Variable Funding Notes is $100.0 million as of December 31, 2018.(2)Reflects the net debt carrying amount, effected by the outstanding balance of the original issue discount, in the consolidated balance sheet as ofDecember 31, 2018. The actual principal outstanding balance of the Senior Secured Term Loan is $189.4 million as of December 31, 2018.(3)Reflects the debt carrying amount which is accounted for under the Fair Value Option in the consolidated balance sheet as of December 31, 2018. Theactual principal outstanding balance of the 5.75% Convertible Notes is $109.7 million as of December 31, 2018. 104 10. Stockholders’ Equity2016 Omnibus Incentive PlanOn November 4, 2016, the Company’s stockholders approved the Company’s 2016 Omnibus Incentive Plan (“2016 Plan”). The 2016 Plan replacedand superseded the Company’s Amended and Restated 2009 Equity Incentive Plan. Under the 2016 Plan, all employees, directors, officers, consultants andadvisors of the Company, including those of the Company’s subsidiaries, are eligible to be granted common stock, options or other stock-based awards. Atinception, there were approximately 0.2 million shares of the Company’s common stock available for issuance under the 2016 Plan. The 2016 Plan wasamended at the 2017 Annual Meeting of Stockholders to increase the number of shares available under the plan by 0.19 million shares. Shares Reserved for IssuanceOn May 7, 2018, the Company filed a Form S-8 to register the 0.19 million shares available for issuance under the 2016 Plan that were approved at the2017 Annual Meeting of Stockholders. At December 31, 2018, 0.53 million common shares were reserved for issuance under the 2016 Plan.Amendment of Certification of IncorporationAt the Special Meeting of Stockholders of the Company held on April 26, 2018, the Company’s stockholders approved an amendment to theCompany’s Certificate of Incorporation to increase the number of authorized shares of its common stock, $.001 par value per share, from 150 million to 260million.Reverse Stock SplitOn March 14, 2019, the Company effected a Reverse Stock Split of its common stock. No fractional shares were issued in connection with the ReverseStock Split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock had their holdings rounded up to the nextwhole share. Unless the context otherwise requires, all share and per share amounts in this annual report on Form 10-K have been adjusted to reflect theReverse Stock Split. Refer to Note 22 for further details.Stock Options and WarrantsStock options outstanding and exercisable as of December 31, 2018 were issued under previous equity incentive plans of the Company. There was nocompensation expense related to stock option grants or warrant grants during FY 2018 or FY 2017 as all prior awards have been fully expensed.Summaries of the Company’s stock options, warrants and performance related options activity, and related information for FY 2018 and FY 2017 areas follows: Stock Options Options Options Weighted AverageExercise Price Outstanding at January 1, 2017 2,000 $153.50 Granted — — Canceled — — Exercised — — Expired/Forfeited — — Outstanding at December 31, 2017 2,000 $153.50 Granted — — Canceled — — Exercised — — Expired/Forfeited (500) 99.20 Outstanding at December 31, 2018 1,500 $171.60 Exercisable at December 31, 2018 1,500 $171.60 The weighted average contractual term (in years) of options outstanding and exercisable as of December 31, 2018 and 2017 were 0.73 and 1.50,respectively.105 The aggregate intrinsic value is calculated as the difference between the market price of the Company’s common stock as of December 31, 2018 andthe exercise price of the underlying options. At December 31, 2018 and 2017, the aggregate intrinsic value of options outstanding and exercisable was $0and $0, respectively. There were no unamortized options as of December 31, 2018.Warrants Warrants Warrants Weighted AverageExercise Price Outstanding at January 1, 2017 2,000 $66.40 Granted — — Canceled — — Exercised — — Expired/Forfeited — — Outstanding at December 31, 2017 2,000 $66.40 Granted — — Canceled — — Exercised — — Expired/Forfeited (2,000) 66.40 Outstanding at December 31, 2018 — $— Exercisable at December 31, 2018 — $— All warrants issued in connection with acquisitions were recorded at fair market value using the Black Scholes model and are recorded as part ofpurchase accounting. Certain warrants are exercised using the cashless method.The weighted average contractual term (in years) of warrants outstanding and exercisable as of December 31, 2018 and 2017 were 0 and 0.76,respectively.Restricted stockCompensation cost for restricted stock is measured as the excess, if any, of the quoted market price of the Company’s stock at the date the commonstock is issued over the amount the employee must pay to acquire the stock (which is generally zero). The compensation cost, net of projected forfeitures, isrecognized over the period between the issue date and the date any restrictions lapse, with compensation cost for grants with a graded vesting schedulerecognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multipleawards. The restrictions do not affect voting and dividend rights.The following tables summarize information about unvested restricted stock transactions: FY 2018 FY 2017 Shares WeightedAverageGrantDate FairValue Shares WeightedAverageGrantDate FairValue Non-vested, January 1, 130,808 $252.90 128,050 $263.20 Granted 319,378 2.20 48,774 80.40 Vested (109,872) 21.40 (31,892) 106.40 Forfeited/Canceled (24,919) 76.00 (14,123) 81.40 Non-vested, December 31, 315,396 $108.60 130,808 $252.90 The Company has awarded time-based restricted shares of common stock to certain employees. The awards have restriction periods tied toemployment and vest over a maximum period of 5 years. The cost of the time-based restricted stock awards, which is the fair market value on the date of grantnet of estimated forfeitures, is expensed ratably over the vesting period. During FY 2018 and FY 2017, the Company awarded approximately 0.3 million and0.1 million restricted shares, respectively, with a fair market value of approximately $0.7 million and $3.9 million, respectively.106 The Company has awarded performance-based restricted shares of common stock to certain employees. The awards have restriction periods tied tocertain performance measures. The cost of the performance-based restricted stock awards, which is the fair market value on the date of grant net of estimatedforfeitures, is expensed when the likelihood of those shares being earned is deemed probable.Compensation expense related to restricted stock grants for FY 2018 and FY 2017 was approximately $1.8 million and $3.5 million, respectively. Anadditional amount of $0.6 million of compensation expense related to restricted stock grants (inclusive of the restricted stock grants awarded as part of thelong-term incentive plan discussed below) is expected to be expensed evenly over a period of approximately twelve months. During FY 2018 and FY 2017,the Company repurchased shares valued at $0.2 million and $1.2 million, respectively, of its common stock in connection with net share settlement ofrestricted stock grants and option exercises. Retention StockOn January 7, 2016, the Company awarded to certain employees a retention stock grant of approximately 0.1 million shares with a then current valueof approximately $7.5 million. The awards cliff vested in three years on a scaled pay out based on the Company’s total shareholder return measured against apeer group. The measurement period began on the grant date and the beginning measurement amount was calculated based on the 20 day average closingstock price leading up to the grant date. The measurement period ended on December 31, 2018 and the ending measurement amount was based on the 20 dayaverage closing stock price leading up to December 31, 2018. In accordance with ASC 718, the Company valued these shares utilizing a Monte Carlo simulation as the awards are based on market conditions. The grant date fair value of the awards issued on January 7, 2016 was $4.25 and was based on the following range of assumptions for the Companyand the peer group (the grant date fair value and the stock price valuation assumptions in the table below have not been effected for the Reverse Stock Split): January 7. 2016 Valuation Assumptions: Beginning average stock price (20 trading days prior to January 7, 2016) $4.85 - $63.41 Valuation date stock price (closing values on January 7, 2016) $4.53 - $59.08 Risk free interest rate 1.21%Expected dividend yield used when simulating the total shareholder return 0.00%Expected dividend yield used when simulating the Company's stock price 0.00%Stock price volatility (based on historical stock price over the last 2.98 years) 21.09% - 72.17% Correlation coefficients 0.04 - 0.47 As of December 31, 2018, pursuant to the terms of the awards and based upon the Company’s performance over the vesting period, no shares wereissued upon expiration of the grant.107 Mr. Haugh, the Company’s former Chief Executive Officer, was issued an Employment Inducement Award pursuant to his employmentagreement. The terms of the Employment Inducement Award are similar to the retention stock awards provided to all other employees as describedabove. The grant date fair value of Mr. Haugh’s award issued on February 23, 2016 was $5.75 and was based on the following range of assumptions for theCompany and the peer group (the grant date fair value and stock price valuation assumptions in the table below have not been effected for the Reverse StockSplit): February 23. 2016 Valuation Assumptions: Beginning average stock price (20 trading days prior to February 23, 2016) $4.86 - $66.71 Valuation date stock price (closing values on February 23, 2016) $5.52 - $69.92 Risk free interest rate 0.90%Expected dividend yield used when simulating the total shareholder return 0.00%Expected dividend yield used when simulating the Company's stock price 0.00%Stock price volatility (based on historical stock price over the last 3.00 years) 24.23% - 74.33% Correlation coefficients 0.06 - 0.50 As of June 15, 2018, Mr. Haugh was no longer an employee of the Company or member of the Company’s board of directors. As of June 15, 2018,pursuant to the terms of the awards and based upon the Company’s performance over the vesting period, no shares were issued upon expiration of his award. On October 15, 2018, the Company hired Robert C. Galvin as its Chief Executive Officer and President and was appointed to the Company’s board ofdirectors. Mr. Galvin was issued an Employment Inducement Award pursuant to his employment agreement. The terms of the Employment InducementAward are similar to the retention stock awards provided to other employees as described above. The grant date fair value of Mr. Galvin’s award issued onOctober 15, 2018 was $0.18 and was based on the following range of assumptions for the Company and the peer group (the grant date fair value and stockprice valuation assumptions in the table below have not been effected for the Reverse Stock Split): October 15, 2018 Valuation Assumptions: Beginning average stock price (20 trading days prior to October 15, 2018) $0.27 - $86.49 Valuation date stock price (closing values on October 15, 2018) $0.22 - $80.27 Risk free interest rate 2.92%Expected dividend yield used when simulating the total shareholder return 0.00%Expected dividend yield used when simulating the Company's stock price 0.00%Stock price volatility (based on historical stock price over the last 3.00 years) 20.88% - 108.81% Correlation coefficients -0.02 -0.48 Compensation related to the retention stock awards was a benefit of approximately $0.3 million and an expense of approximately $1.0 million for FY2018 and FY 2017, respectively. An additional amount of $0.4 million of compensation expense related to retention stock awards is expected to beexpensed evenly over the next thirty-three months. Long-Term Incentive CompensationOn March 31, 2016, the Company approved a new plan for long-term incentive compensation (the “2016 LTIP”) for key employees and grantedequity awards under the 2016 LTIP in the aggregate amount of approximately 0.7 million shares at a weighted average share price of $73.10 with a thencurrent value of approximately $5.2 million. For each grantee other than Mr. Haugh, the Company’s Chief Executive Officer, 33% of the award was in theform of restricted stock units (“RSUs”) and 67% of the award was in the form of target level performance stock units (“PSUs”). Mr. Haugh’s award under the2016 LTIP consisted of 25% RSUs and108 75% PSUs. The RSUs for each grantee vest in three equal installments annually over a three-year period. Other than for Mr. Haugh, the PSUs cliff vest overthree years based on the achievement of operating income performance targets established by the Compensation Committee. One-third of Mr. Haugh’s PSUsshall be converted to time-based awards on December 31, 2016, December 31, 2017 and December 31, 2018, based on the achievement of operating incomeperformance targets established by the Compensation Committee, and such time-based awards shall vest and be settled on December 31, 2018. As of Mr.Haugh’s termination date, approximately 0.2 million shares of this award vested and were issued on December 31, 2018. As a result, the Companyaccelerated approximately $0.3 million of stock compensation expense for these awards. Additionally, given Mr. Haugh’s termination date, his remainingawards that would have converted to time-based awards on December 31, 2018 were forfeited and the Company reversed approximately $0.6 million of stockcompensation expense related to these forfeited shares. For both FY 2018 and FY 2017, less than 0.1 million shares were forfeited in respect of the 2016LTIP. The weighted average remaining contractual terms of the PSUs is less than one year.On March 7, 2017, the Company approved a new plan for long-term incentive compensation (the “2017 LTIP”) for certain employees and grantedequity awards under the 2017 LTIP in the aggregate amount of approximately 0.9 million shares at a weighted average share price of $75.20 with a thencurrent value of $6.6 million. For each grantee, 33% of the award was in the form of RSUs and 67% of the award was in the form of target level PSUs. Thematerial terms of the PSUs and RSUs are substantially similar to those set forth in the 2016 LTIP. Specifically, the RSUs vest one third annually on each ofMarch 30, 2018, March 30, 2019 and March 30, 2020. The PSUs vest based on performance metrics approved by the Compensation Committee, which, forthe performance period commencing January 1, 2017 and ending on December 31, 2019, are based on the Company’s achievement of an aggregated adjustedoperating income performance target as set forth in the applicable award agreements, and continued employment through December 31, 2019. In FY 2018,less than 0.1 million shares were forfeited in respect of the 2017 LTIP. The weighted average remaining contractual term of the PSUs is approximately fifteenmonths.On March 15, 2018, the Company approved a new plan for long-term incentive compensation (the “2018 LTIP”) for certain employees whichconsisted of (i) equity awards in the aggregate amount of 224,183 shares at a weighted average share price of $13.80 with a then current value of $3.1 millionand (ii) cash awards in the aggregate amount of approximately $3.1 million. For each grantee, 50% of the award was in the form of PSUs and 50% of suchaward was in the form of cash (the “Cash Grant”). The Cash Grants comprising the 2018 LTIP vest in 48 equal semi-monthly installments on the 15th and lastdays of each month, beginning March 31, 2018 and ending March 15, 2020, subject in each case to continued employment through the applicable vestingdate. Each installment is paid within 15 days of the applicable vesting date. Upon the end of an employee’s employment with the Company, any remainingunpaid portion of the Cash Grant is forfeited. The PSUs vest based on performance metrics approved by the Compensation Committee over three separateperformance periods, commencing on January 1 of each of 2018, 2019 and 2020 and ending on December 31 of each of 2018, 2019 and 2020, which, foreach such performance period, are based on the Company’s achievement of an aggregated adjusted operating income performance target to be set by theCompensation Committee prior to March 30 of each applicable performance period, and continued employment through the settlement date. For FY 2018,there were 0.2 million shares forfeited in respect of the 2018 LTIP. The weighted average remaining contractual term of the PSUs is approximately two years.Compensation recognized related to the PSUs granted as part of the long-term incentive plans was a benefit of $3.9 million and an expense of $4.2million in FY 2018 and FY 2017, respectively. The compensation benefit recognized during FY 2018 is as a result of the Company revising its futureforecasted earnings associated with the Sears bankruptcy filing which in accordance with ASC 718, required the Company to reverse compensation expenserecognized in prior periods as the PSUs were no longer projected to earn-out on the vesting date for the 2017 LTIP as well as the reversal of compensationexpense during the year due to the departure of certain named executive officers. An additional amount of $0.6 million of compensation expense related tothe PSUs granted as part of the various LTIPs is expected to be expensed evenly over the remaining contractual terms disclosed above.11. Earnings (Loss) Per ShareBasic earnings (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weightedaverage number of common shares outstanding for the period. Diluted earnings (loss) per share reflect, in periods in which they have a dilutive effect, theeffect of restricted stock-based awards, common shares issuable upon exercise of stock options and warrants and shares underlying convertible notespotentially issuable upon conversion. The difference between basic and diluted weighted-average common shares results from the assumption that alldilutive stock options outstanding were exercised and all convertible notes have been converted into common stock.As of December 31, 2018, of the total potentially dilutive shares related to restricted stock-based awards, stock options and warrants, all of the shares(or approximately 0.2 million) were anti-dilutive, compared to approximately 0.1 million that were anti-dilutive as of December 31, 2017. Additionally, as ofDecember 31, 2018, of total potentially dilutive shares related to potential conversion of the Company’s 5.75% Convertible Notes, all of the shares (orapproximately 8.1 million) were anti-dilutive, compared to none as of December 31, 2017 as the 5.75% Convertible Notes were entered into in February2018.109 As of December 31, 2018, of the performance related restricted stock-based awards issued in connection with the Company’s named executive officers,none of the shares were anti-dilutive compared to all of the shares (or approximately 0.1 million) that were anti-dilutive as of December 31, 2017.For FY 2017, warrants issued in connection with the Company’s 1.50% Convertible Notes financing were anti-dilutive and therefore were notincluded in this calculation. Warrants issued in connection with the Company’s 1.50% Convertible Notes were no longer outstanding as of December 31,2018 given the repayment of the 1.50% Convertible Notes in March 2018.A reconciliation of weighted average shares used in calculating basic and diluted earnings per share follows: FY 2018 FY 2017 Basic 6,734 5,711 Effect of assumed vesting of restricted stock — — Effect of convertible notes subject to conversion — — Diluted 6,734 5,711 As a result of the Company being in a net loss position during FY 2018 and FY 2017, dilution from the exercise of vesting of restricted stock has beenexcluded in the diluted earnings per share calculation.110 In accordance with ASC 480, the Company considers its redeemable non-controlling interest in its computation of both basic and diluted earnings pershare. In addition, in accordance with ASC 260, the Company considers its 5.75% Convertible Notes in its computation of diluted earnings per share. For FY2018 and FY 2017, adjustments to the Company’s redeemable non-controlling interest and effects of the potential conversion of the 5.75% ConvertibleNotes had impacts on the Company’s earnings per share calculations as follows: Year Ended Year Ended December 31, 2018 December 31, 2017 For earnings (loss) per share - basic: Net income (loss) from continuing operations attributable to Iconix Brand Group, Inc. $(100,521) $(535,278)Accretion of redeemable non-controlling interest (5,432) (5,589)Net income (loss) attributable to Iconix Brand Group, Inc. after accretion of redeemable non- controlling interest for basic earnings (loss) per share (105,953) (540,867) Net income (loss) from discontinued operations attributable to Iconix Brand Group, Inc. — 46,025 Net income (loss) attributable to Iconix Brand Group, Inc. for basic earnings (loss) per share $(105,953) $(494,842) For earnings (loss) per share - diluted: Net income (loss) from continuing operations attributable to Iconix Brand Group, Inc. $(100,521) $(535,278)Effect of potential conversion of 5.75% Convertible Notes(1) — — Accretion of redeemable non-controlling interest (5,432) (5,589)Net loss attributable to Iconix Brand Group, Inc. after the effect of potential conversion of 5.75% Convertible Notes and accretion of redeemable non- controlling interest for diluted earnings (loss) per share $(105,953) $(540,867) Net income (loss) from discontinued operations attributable to Iconix Brand Group, Inc. — 46,025 Net loss attributable to Iconix Brand Group, Inc. for diluted earnings (loss) per share $(105,953) $(494,842) Earnings (loss) per share - basic: Continuing operations $(15.73) $(94.71)Discontinued operations $— $8.06 Earnings (loss) per share - basic $(15.73) $(86.65) Earnings (loss) per share - diluted: Continuing operations $(15.73) $(94.71)Discontinued operations $— $8.06 Earnings (loss) per share - diluted $(15.73) $(86.65)Weighted average number of common shares outstanding: Basic 6,734 5,711 Diluted 6,734 5,711 (1)There was no effect of potential conversion of the Company’s 5.75% Notes on the Company’s diluted earnings per share calculation for FY 2018 asthe effect was anti-dilutive.111 12. Contingencies In May 2016, Supply Company, LLC, referred to as Supply, a former licensee of the Ed Hardy trademark, commenced the above-referenced actionagainst the Company and its affiliate, Hardy Way, LLC, referred to as Hardy Way (the Company and Hardy Way are collectively referred to as the IconixDefendants) seeking damages of $50 million, including punitive damages, attorneys’ fees and costs. Supply alleges that Hardy Way breached the parties’license agreement by failing to reimburse Supply for markdown reimbursement requests that Supply received from a certain retailer. Supply also alleges thatthe Company is liable for fraud because it made purported misstatements about the Company’s financials and the viability of the Ed Hardy trademark in orderto induce Supply to enter into the license agreement and to induce Supply to enter into a separate agreement with a certain retailer. The Iconix Defendantsare vigorously defending against the claims, and have filed a motion to dismiss the Complaint, which is awaiting Court decision. At this time, the Companyis unable to estimate the ultimate outcome of this matter. On May 1, 2017, 3TAC, LLC, referred to as 3TAC, a former licensee of the Company, and West Loop South, LLC, referred to as West Loop (3TAC andWest Loop collectively referred to as Plaintiffs), filed a second amended complaint against the Company, its affiliate, IP Holdings Unltd., LLC, referred to asIPHU, and the Company’s former CEO, Neil Cole (the Company, IPHU, and Cole are collectively referred to as the Iconix Parties), in the action captioned3TAC, LLC and West Loop South, LLC v. Iconix Brand Group, Inc., IP Holdings Unltd, LLC and Neil Cole, Case No. 16-cv-08795-GBD-RWL in the UnitedStates District Court for the Southern District of New York. Plaintiffs asserted claims for breach of contract, tortious interference with contract and businessrelations, unjust enrichment, trade libel, unfair competition and prima facie tort relating to the Iconix Parties’ alleged breach of a Global License Agreement,as amended, between 3TAC and IPHU concerning intellectual property rights in and to the Marc Ecko brands, the Iconix Parties’ alleged interference with3TAC’s performance thereunder, and the Iconix Parties’ alleged interference with a related sublicense between 3TAC and West Loop. On October 27, 2017,Judge Katherine B. Forrest granted the Iconix Parties’ motion to dismiss Plaintiffs’ unjust enrichment, trade libel, unfair competition and prima facie tortclaims. Plaintiffs filed a Third Amended Complaint on June 11, 2018, in which no new claims were asserted, and the only additional allegations are relatedto the allegedly “inconsistent” exclusive license of New Rise Brand Holdings, LLC. Plaintiffs seek damages of at least $22 million for their remaining claimsas well as punitive damages, attorneys’ fees and costs. The Iconix Parties are vigorously defending against the remaining claims. At this time, the Companyis unable to estimate the ultimate outcome of this matter. On November 1, 2017, Seth Gerszberg, referred to as Gerszberg, and EGRHC, LLC, referred to as EGRHC (Gerszberg and EGRHC collectively referredto as Plaintiffs) (with EGRHC suing in its capacity as a successor-in-interest to Suchman, LLC, referred to as Suchman, a company wholly-owned byGerszberg that entered into a joint venture with the Company pursuant to which they formed IP Holdings Unltd, LLC, referred to as IPHU), filed an actioncaptioned Gerszberg and EGRHC v. Iconix Brand Group, Inc., IP Holdings Unltd, LLC and Neil Cole, Case No. 17-cv-08421-GBD-RWL in the United StatesDistrict Court for the Southern District of New York. Plaintiffs asserted claims against the Company, IPHU, and Neil Cole (collectively referred to as theIconix Parties) for breach of IPHU’s Operating Agreement and related breaches of fiduciary duties, breach of an agreement pursuant to which the Companybought out Suchman’s interest in IPHU and fraudulent inducement and unjust enrichment regarding that buyout agreement; and also asserted claims forfraudulent inducement regarding the fourth amendment of the Global License Agreement between 3TAC, LLC and IPHU concerning the intellectual propertyrights in and to the Marc Ecko brands. On May 7, 2018, Judge Katherine B. Forrest dismissed the breach of fiduciary duty, breach of the IPHU OperatingAgreement, and unjust enrichment claims; and limited the fraudulent inducement claim to the Fourth Amendment of the Global License Agreement andlimited the breach of the Buyout Agreement claim to the warranty as to no governmental investigation. Plaintiffs seek more than $100 million in damages,including compensatory and punitive damages, disgorgement and restitution. The Iconix Parties are vigorously defending against the remaining claimsasserted by Plaintiffs. At this time, the Company is unable to estimate the ultimate outcome of this matter. Two shareholder derivative complaints captioned James v. Cuneo et al, Docket No. 1:16-cv-02212 and Ruthazer v. Cuneo et al, Docket No. 1:16-cv-04208 have been consolidated in the United States District Court for the Southern District of New York, and three shareholder derivative complaintscaptioned De Filippis v. Cuneo et al. Index No. 650711/2016, Gold v. Cole et al, Index No. 53724/2016 and Rosenfeld v. Cuneo et al., Index No.510427/2016 have been consolidated in the Supreme Court of the State of New York, New York County. The complaints name the Company as a nominaldefendant and assert claims for breach of fiduciary duty, insider trading and unjust enrichment against certain of the Company's current and former directorsand officers arising out of the Company's restatement of financial reports and certain employee departures. At this time, the Company is unable to estimatethe ultimate outcome of these matters. The Company continues to cooperate in the previously disclosed SEC investigation. 112 Three securities class actions have been consolidated in the United States District Court for the Southern District of New York, under the caption In reIconix Brand Group, Inc., et al., Docket No. 1:15-cv-4860, against the Company and certain former officers and one current officer (the “Class Action”). Theplaintiffs in the Class Action purport to represent a class of purchasers of the Company’s securities from February 22, 2012 to November 5, 2015, inclusive,and claim that the Company and individual defendants violated sections 10(b) and 20(a) of the Exchange Act, by making allegedly false and misleadingstatements regarding certain aspects of the Company’s business operations and prospects. On October 25, 2017, the Court granted the motion to dismiss theconsolidated amended complaint filed by the Company and the individual defendants with leave to amend. On November 14, 2017, the plaintiffs filed asecond consolidated amended complaint. On February 2, 2018, the defendants moved to dismiss the second consolidated amended complaint. The Companyand the individual defendants intend to vigorously defend against the claims. At this time, the Company is unable to estimate the ultimate outcome of thesematters. In April 2016, New Rise Brands Holdings, LLC, referred to as New Rise, a former licensee of the Ecko Unlimited trademark, and Sichuan New RiseImport & Export Co. Ltd., referred to as Sichuan, the guarantor under New Rise's license agreement, commenced an action captioned New Rise BrandsHoldings, LLC and Sichuan New Rise Import & Export Co. Ltd v. IP Holdings Unltd, LLC, et al., Index No. 652278/2016 in the New York State SupremeCourt, New York County against the Company’s subsidiary, IP Holdings Unltd, LLC, referred to as IP Holdings, seeking damages of at least $15 million, pluspunitive damages of $50 million, counsel fees and costs. Among other claims, New Rise and Sichuan allege improper termination of New Rise’s licenseagreement, fraud and misappropriation. On September 21, 2018, New Rise and Sichuan served an expert report claiming damages ranging from $15.6 millionto $44.2 million. The trial was set to begin in February 2019. Immediately prior to the trial date, the Court ordered a pretrial settlement conference to beattended by the parties and their counsel. Following such conference and with the Court’s approval, on March 15, 2019, parties entered into a definitivesettlement agreement resolving all claims asserted against Iconix in the action. From time to time, the Company is also made a party to litigation incurred in the normal course of business. In addition, in connection with litigationcommenced against licensees for non-payment of royalties, certain licensees have asserted unsubstantiated counterclaims against the Company. While anylitigation has an element of uncertainty, the Company believes that the final outcome of any of these routine matters will not, individually or in theaggregate, have a material effect on the Company’s financial position or future liquidity. 13. Related Party Transactions During FY 2017, the Company incurred less than $0.1 million in advertising expenses with Galore Media, Inc. to promote certain of the Company’sbrands and for the rights to certain warrants of Galore Media, Inc. as compared to none for FY 2018. The Company owned a minority interest in GaloreMedia, Inc. The Company sold its interest in Galore Media during FY 2017 as discussed in Note 5. Management believes that all transactions were made onterms and conditions no less favorable than those available in the marketplace from unrelated parties.The Company has entered into certain license agreements in which the core licensee is also one of our joint venture partners. In the case of SportsDirect International plc (“Sports Direct”), the Company maintains license agreements with Sports Direct, but in addition, during FY 2018, the Companyentered into a cooperation agreement with Sports Direct that allowed Sports Direct to appoint113 two members to the Company’s Board of Directors. As of December 31, 2018 and December 31, 2017, the Company recognized the following royaltyrevenue amounts: FY 2018 FY 2017 Joint Venture Partner Global Brands Group Asia Limited(1)(2) $19,544 $18,011 MHMC 2,927 1,800 Albion Equity Partners LLC / GL Damek 2,644 2,264 Rise Partners, LLC / Top On International Group Limited 977 1,054 Sports Direct International plc 915 — Anthony L&S 623 165 M.G.S. Sports Trading Limited 610 576 Pac Brands USA, Inc. 246 278 Buffalo International ULC — 690 Roc Nation — — $28,486 $24,838 (1)Royalty revenue of less than $0.1 million for FY 2017, which is included in the amounts presented in the table above, relates to royalty revenueassociated with Peanuts Worldwide and Strawberry Shortcake, which has been reclassified to income from discontinued operations on the Company’sconsolidated statement of operations for all periods presented. Additionally, GBG also served as agent to Peanuts Worldwide for the Greater China Territory for Peanuts brands. As of June 30, 2017, due to thecompletion of the sale of the Entertainment segment, GBG is no longer a related party in its capacity as agent of Peanuts Worldwide. For FY 2017,Global Brands Group Asia Limited earned fees of approximately $0.7 million in its capacity as agent to Peanuts Worldwide which have been recordedwithin discontinued operations in the Company’s consolidated statement of operations.(2)Prior to February 2017, Buffalo International ULC maintained the Buffalo license agreement. However, starting in February 2017, BuffaloInternational ULC effectively assigned the Buffalo license agreement to GBG. The license revenue from the Buffalo license agreement representsapproximately $18.4 million and $16.1 million of the total license revenue for GBG shown in the table above for FY 2018 and FY 2017,respectively. 14. Operating LeasesFuture net minimum lease payments under non-cancelable operating lease agreements as of December 31, 2018 are approximately as follows: Year ending December 31, 2019 $2,650 2020 2,726 2021 2,583 2022 2,191 2023 2,109 Thereafter 1,078 Totals $13,337 The leases require the Company to pay additional taxes on the properties, certain operating costs and contingent rents based on sales in excess ofstated amounts.Rent expense was approximately $4.0 million and $3.4 million for FY 2018 and FY 2017, respectively. Contingent rent amounts have beenimmaterial for all periods. 15. Benefit and Incentive Compensation Plans and OtherThe Company sponsors a 401(k) Savings Plan (the “Savings Plan”) which covers all eligible full-time employees. Participants may elect to makepretax contributions subject to applicable limits. At its discretion, the Company may contribute additional amounts to the Savings Plan. During FY 2018 andFY 2017, the Company made contributions to the Savings Plan of approximately $0.1million and $0.2 million, respectively.114 Stock-based awards are provided to certain employees under the terms of the Company’s 2016 Plan. These plans are administered by theCompensation Committee of the Board of Directors. With respect to performance-based restricted common stock units, the number of shares that ultimatelyvest and are received by the recipient is based upon various performance criteria. Though there is no guarantee that performance targets will be achieved, theCompany estimates the fair value of performance-based restricted stock based on the closing stock price on the grant date. Over the performance period, thenumber of shares of common stock that will ultimately vest and be issued is adjusted upward or downward based upon the Company’s estimation ofachieving such performance targets. The ultimate number of shares delivered to recipients and the related compensation cost recognized as an expense willbe based on the actual performance metrics as defined under the 2016 Plan. Restricted common stock units are unit awards that entitle the recipient to sharesof common stock upon vesting annually over as much as 5 years for time-based awards or over five years for performance-based awards. The fair value ofrestricted common stock units is determined on the date of grant, based on the Company’s closing stock price. 16. Income TaxesThe Company accounts for income taxes in accordance with ASC Topic 740. Under ASC Topic 740, deferred tax assets and liabilities are determinedbased on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will bein effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amountexpected to be realized. In determining the need for a valuation allowance, management reviews both positive and negative evidence pursuant to therequirements of ASC Topic 740, including current and historical results of operations, future income projections and the overall prospects of the Company’sbusiness.In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred tax assets willbe realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income in the periods in which those temporarydifferences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planningstrategies in making this assessment. Based on these items and the cumulative pretax losses (primarily resulting from asset impairment expenses),management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of afull valuation allowance for all taxing jurisdictions as of December 31, 2018. In addition, the Company has deferred tax liabilities related to indefinite livedintangibles on the balance sheet in an amount of approximately $4.6 million which cannot be considered to be a source of taxable income to offset deferredtax assets. At December 31, 2018, the Company has approximately $75.5 million in federal net operating loss carryforwards (NOLs) which will expire in FY 2037if unused. The Company also has foreign tax credit carryforwards of approximately $5.3 million which will expire in 2023 and 2024. The Company also hasapproximately $32.0 million apportioned state and local NOLs that will begin to expire in 2034 and 2035 if not used. Our use of our NOL carryforwards are limited under Section 382 of the Internal Revenue Code, as we have had a change in ownership of more than50% of our capital stock over a three-year period as measured under Section 382 of the Internal Revenue Code. These complex changes of ownership rulesgenerally focus on ownership changes involving shareholders owning directly or indirectly 5% or more of our stock, including certain public “groups” ofshareholders as set forth under Section 382 of the Internal Revenue Code, including those arising from new stock issuances and other equity transactions. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act. The new law, which is also commonly referred to as “U.S. tax reform”,significantly changes U.S. corporate income tax laws. The primary impact on the Company’s 2017 financial results was associated with the effect of reducingthe U.S. corporate income tax rate from 35% to 21% starting in 2018. As a result, the Company has estimated a net benefit of $67 million during the fourthquarter of 2017. Other provisions of the law became effective on January 1, 2018, including, but are not limited to, creating a territorial tax system,eliminating or limiting the deduction of certain expenses including interest expense, and requiring a tax of earnings generated by foreign subsidiaries that arein excess of a specified return.During the fourth quarter of 2017, the Company recorded (i) a net income tax provision of $34 million resulting from the remeasurement of theCompany’s net deferred income tax assets and liabilities and uncertain tax liabilities based on the new reduced U.S. corporate income tax rate, and (ii) anincome tax benefit of $101 million from the remeasurement of the Company’s valuation allowance for the impact of the law on certain tax attributes. In othercases, the Company was not able to make a reasonable estimate and continued to account for those items based on its historical accounting under GAAP andthe provisions of the tax laws that were in effect prior to enactment. One such case was the Company’s intent regarding whether to continue to assertindefinite reinvestment on a part or all the foreign undistributed earnings, as discussed further below.115 As of December 31, 2018, the Company has finalized its analysis of the new tax law and its calculations, and accounted for the impact in its incometax balances. In finalizing the analysis, the Company concluded that no further adjustments were needed to be recorded, and the analysis of the impact of thenew tax law is now complete.The Company’s consolidated effective tax rate from continuing operations was -7.9% and 14.7% for the year ended December 31, 2018 and December31, 2017, respectively. The decrease in the effective tax rate for the FY 2018 as compared to the FY 2017 is primarily a result of foreign tax expensecalculated in local jurisdictions where there is no net operating losses available to offset the current tax liability, partially offset by a tax benefit resultingfrom the tax impact of impairment expenses recorded on indefinite lived intangible assets. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome oftax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management'sexpectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs.Pre-tax book loss for FY 2018 and FY 2017 were as follows: FY 2018 FY 2017 Domestic $(119,031) $(575,547)Foreign 35,900 (77,885)Total pre-tax loss $(83,131) $(653,432) The income tax provision (benefit) for federal, and state and local income taxes in the consolidated statement of operations consists of the following: Year EndedDecember 31,2018 Year EndedDecember 31,2017 Current: Federal $(609) $(1,152)State and local (61) 986 Foreign 9,212 8,358 Total current $8,542 $8,192 Deferred: Federal (4,950) (93,376)State and local (1,967) (93)Foreign 4,913 (10,700)Total deferred (2,004) (104,169)Total benefit $6,538 $(95,977) As of December 31, 2018, the Company is not indefinitely reinvested in any foreign earnings.116 The significant components of net deferred tax assets and liabilities of the Company consist of the following: December 31, 2018 2017 State net operating loss carryforwards $2,498 $1,225 U.S. Federal net operating loss carryforwards 15,864 4,278 Receivable reserves 4,827 675 Interest expense limitation 5,975 — Hedging transaction — 551 Intangibles 107,035 68,922 Investment in joint ventures — 6,733 Equity compensation 1,764 2,600 Foreign Tax Credit 5,252 5,317 Other 8,907 7,183 Total deferred tax assets 152,122 97,484 Valuation allowance (115,483) (80,800)Net deferred tax assets $36,639 $16,684 Depreciation (369) (614)Difference in cost basis of acquired intangibles — (22,652)Convertible notes (10,519) (392)Investment in joint ventures (30,317) — Total deferred tax liabilities (41,205) (23,658)Total net deferred tax liabilities $(4,566) $(6,974)Balance Sheet detail on total net deferred tax assets (liabilities): Non-current portion of net deferred tax assets $— $4,492 Non-current portion of net deferred tax liabilities $(4,566) $(11,466) The following is a rate reconciliation between the amount of income tax provision (benefit) at the Federal rate of 21% and 35% and provision (benefit)from taxes on loss before income taxes for FY 2018 and FY 2017, respectively: Year ended December, 31 2018 2017 Income tax benefit computed at the federal rate of 21% and 35%, respectively $(17,457) $(228,701)Increase (reduction) in income taxes resulting from: State and local income taxes (benefit), net of federal income tax (1,998) (8,511)Non-controlling interest (2,720) 8,869 Unrecognized tax benefits (31) 1,690 Valuation allowance 22,752 80,800 Change in position of prior year foreign tax credits — 8,410 Non-deductible executive compensation 868 929 Foreign Earnings (rate differential) 13,405 6,287 US Tax Reform / rate reduction (5,562) 34,205 Other, net (2,719) 45 Total $6,538 $(95,977) 117 With the exception of the Buffalo brand joint venture, Diamond Icon Joint Venture and Iconix Middle East joint venture, the Company is notresponsible for the income taxes related to the non-controlling interest’s share of the joint venture’s earnings. Therefore, the tax liability associated with thenon-controlling interest share of the joint venture’s earnings is not reported in the Company’s income tax expense, despite the joint venture’s entire incomebeing consolidated in the Company’s reported income before income tax expense. As such, the joint venture’s earnings have the effect of lowering oureffective tax rate. This effect is more pronounced in periods in which joint venture earnings are higher relative to our other earnings. Since the Buffalo brandjoint venture is a taxable entity in Canada, and the Diamond Icon joint venture and Iconix Middle East joint venture are taxable entities in the UnitedKingdom, the Company is required to report its tax liability, including taxes attributable to the non-controlling interest, in its statement of operations. Allother consolidated joint ventures are partnerships and treated as pass-through entities not subject to taxation in their local tax jurisdiction, and therefore theCompany includes only the tax attributable to its proportionate share of income from the joint venture in income tax expense.The Company files income tax returns in the U.S. federal and various state and local jurisdictions. For federal income tax purposes, during the fourthquarter of 2016, the Internal Revenue Service initiated an audit of the 2014 federal tax return which is ongoing. The State of California is currently auditingtax years 2013 through 2014. During 2018, the Company concluded its New York State audit covering 2011 through 2014. There was no tax charge relatedto this examination during the year as the $0.5 million due was recorded in prior years. During 2017, the Company concluded its New York City auditcovering 2007 through 2014. This resulted in a tax charge of approximately $2.0 million recorded during the year. The Company also files returns innumerous foreign jurisdictions that have varied years remaining open for examination, but generally the statute of limitations is three to four years from whenthe return is filed. At December 31, 2018 and December 31, 2017, the total unrecognized tax benefit was approximately $0 million and $0.4 million, respectively. Areconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: 2018 2017 Uncertain tax positions at January 1 $354 $7,470 Additions for current year tax positions — — Additions for prior year tax positions — — Reductions for prior year tax positions (15) (397)Settlements (339) (6,719)Uncertain tax positions at December 31 $— $354 Approximately $0 million of unrecognized tax benefits at December 31, 2018 would affect the Company's effective tax rate if recognized. TheCompany believes it is reasonably possible that there will be no reduction of unrecognized tax benefits in the next 12 months as a result of settlements withtaxing authorities and or statute of limitations expirations. The Company is continuing its practice of recognizing interest and penalties to income tax matters in income tax expense. Total interest related touncertain tax positions for FY 2018 and FY 2017 were $ 0 million and $0.9 million, respectively. There were no penalties accrued in any of these periods. 118 17. Accumulated Other Comprehensive Income The following table sets forth the activity in accumulated other comprehensive income for the years ended December 31, 2018 and December 31,2017: Foreign currencytranslationadjustments Unrealizedlosses ofavailable forsale securities Total Balance at December 31, 2017 $(48,103) $(3,177) $(51,280)Changes before reclassifications (4,965) — (4,965)Cumulative adjustment for adoption of ASU 2016-01 — 3,177 3,177 Current period other comprehensive income (4,965) 3,177 (1,788)Balance at December 31, 2018 $(53,068) $— $(53,068) Foreign currencytranslationadjustments Unrealizedlosses ofavailable forsale securities Total Balance at December 31, 2016 $(67,735) $(2,693) $(70,428)Changes before reclassifications 19,632 (484) 19,148 Current period other comprehensive income 19,632 (484) 19,148 Balance at December 31, 2017 $(48,103) $(3,177) $(51,280) 18. Segment and Geographic DataThe Company identifies its operating segments for which separate financial information is available and for which segment results are evaluatedregularly by the Chief Executive Officer, the Company’s chief operating decision maker, in deciding how to allocate resources and in assessing performance.The Company discloses the following operating segments: women’s, men’s, home, and international. Since the Company does not track, manage and analyzeits assets by segments, no disclosure of segmented assets is reported. Additionally, the Company previously owned and operated an Entertainment segment which is included in the Company’s consolidated statement ofoperations as a discontinued operation for FY 2017. See Note 2 for further details.The reportable operating segments described below represent the Company’s activities for which separate financial information is available and whichis utilized on a regular basis by the Company’s Chief Operating Decision Maker to evaluate performance and allocate resources. In identifying theCompany’s operating segments, the Company considers its management structure and the economic characteristics, customers, sales growth potential andlong-term profitability of its operating segments. As such, the Company configured its operations into the following four operating segments: •Women’s segment – consists of the Company’s women’s brands in the United States. •Men’s segment – consists of the Company’s men’s brands in the United States. •Home segment – consists of the Company’s home brands in the United States. •International segment – consists of the Company’s men’s, women’s and home brands in international markets. Items not allocated to any segment are allocated to the Corporate level. Corporate, for segment reporting purposes, includes compensation, benefitsand occupancy costs for corporate employees as well as other corporate-related expenses such as: audit, legal, and information technology used in managingour business. The Company’s Chief Executive Officer has been identified as the CODM. The Company’s measure of segment profitability is licensing revenue andoperating income. The accounting policies of the Company’s operating segments are the same as those described in Note 1 – Summary of SignificantAccounting Policies.The geographic regions consist of the United States and Other (which principally represent Latin America and Europe). Revenues attributable to eachregion are based on the location in which licensees are located and where they principally do business. Refer to Note 3 for further details.119 Reportable data for the Company’s operating segments were as follows: FY 2018 FY 2017 Licensing revenue: Women’s $57,401 $96,833 Men’s 39,073 39,780 Home 24,568 28,807 International 66,647 60,413 $187,689 $225,833 Operating income (loss): Women’s $(128,050) $(215,570)Men’s 11,754 (144,779)Home 17,221 (76,680)International 27,447 (64,826)Corporate (47,409) (62,796) $(119,037) $(564,651) 19. Other Assets- Current and Long-Term Other Assets – Current December 31,2018 December 31,2017 Other assets- current consisted of the following: US federal tax receivables $16,757 $29,662 Due from related parties 3,903 3,843 Prepaid expenses 2,451 4,621 Prepaid taxes 1,755 2,347 Prepaid advertising 1,100 2,453 Prepaid insurance 1,446 1,428 Other current assets 645 709 Notes receivables on sale of trademarks(1) — 3,097 Note receivable in connection with acquisition of interest in Buffalo brand (see Note 5) — 2,515 Due from DHX Media, Ltd. (2) — 1,175 $28,057 $51,850 (1)Certain amounts due from our joint venture partners are presented net of redeemable non-controlling interest and non-controlling interest in theconsolidated balance sheet. Refer to Note 5 for further details.(2)This amount represents the amount that was due from DHX as a result of amounts reimbursable to the Company of $1.2 million associated with thetransitional service agreement between DHX and the Company and other infrastructure and IT expenses which were incurred by the Companysubsequent to the completion of the sale of the Entertainment segment on June 30, 2017. Refer to Note 2 for further details. Other Assets – Long Term December 31, December 31, 2018 2017 Other noncurrent assets consisted of the following: Prepaid interest 5,496 5,601 Deposits 482 616 Other noncurrent assets 1 51 $5,979 $6,268 120 20. Other Liabilities – CurrentOther current liabilities of $9.8 million as of December 31, 2018 related to amounts due to certain joint ventures that are not consolidated with theCompany as compared to other current liabilities of $13.6 million as of December 31, 2017, which related to $9.2 million due to certain joint ventures thatare not consolidated with the Company and $4.4 million owed to Buffalo International for distributions associated with the Buffalo joint venture. 21. Foreign Currency TranslationThe functional currency of Iconix Luxembourg and Red Diamond Holdings, which are wholly owned subsidiaries of the Company, located inLuxembourg, is the Euro. However, the companies have certain dollar denominated assets, in particular cash and notes receivable, that are maintained in U.S.Dollars, which are required to be revalued each quarter. Due to fluctuations in currency in FY 2018 and FY 2017, the Company recorded a $1.2 millioncurrency translation loss and a $3.1 million currency translation loss, respectively, that is included in the consolidated statements of operations.Comprehensive income includes certain gains and losses that, under U.S. GAAP, are excluded from net income as such amounts are recorded directlyas an adjustment to stockholders’ equity. Our comprehensive income is primarily comprised of net income and foreign currency translation gain orloss. During FY 2018 and FY 2017, the Company recognized as a component of our comprehensive income (loss), a foreign currency translation loss of $5.0million and a foreign currency translation gain of $19.6 million, respectively, due to changes in foreign exchange rates. 22. Subsequent EventsOn March 14, 2019, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of its common stock. No fractional shares wereissued in connection with the Reverse Stock Split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock hadtheir holdings rounded up to the next whole share. Proportional adjustments were made to the Company’s outstanding warrants, stock options and otherequity securities and to the Company’s incentive plans, and the conversion ratio of the 5.75% Convertible Notes, to reflect the Reverse Stock Split, in eachcase, in accordance with the terms thereof. Unless the context otherwise requires, all share and per share amounts in this annual report on Form 10-K havebeen adjusted to reflect the Reverse Stock Split.In the first quarter of 2019, certain noteholders converted an aggregate outstanding principal balance of $4.0 million of their 5.75% Convertible Notesinto approximately 0.2 million shares of the Company’s common stock. Pursuant to the Indenture, the Company also made Conversion Make-WholePayments of approximately 0.8 million shares of the Company’s common stock to those converting noteholders. 23. Other MattersDuring FY 2018 and FY 2017, the Company included in its selling, general and administrative expenses approximately $9.0 million and $9.6 million,respectively, of charges for professional fees associated with the continuing correspondence with the Staff of the SEC, the SEC investigation and the classaction and derivative litigations. As of June 15, 2018, Mr. Haugh, the Company’s former Chief Executive Officer and President, was no longer an employee of the Company or memberof the Company’s board of directors. Included in the charges related to professional fees discussed above is $2.1 million recorded in FY 2018 associated withhis severance and other benefits. 121 Exhibit 3.1CERTIFICATE OF INCORPORATIONOFMILLFELD TRADING CO. INC.A CLOSE CORPORATIONFIRST. The name of the corporation is Millfeld Trading Co. Inc.SECOND. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle.The name of its registered agent at such address is The Corporation Trust Company.THIRD. The nature of the business or purposes to be conducted or promoted is to act as agent or broker, on commission or otherwise for individuals,partnerships, corporations, foreign or domestic and to aid and assist, promote, and conserve the interests of, and afford facilities for the convenient transactionof business by its principals in all parts of the world with respect to the importing into the United States of America men’s, women’s and children’s shoes; toborrow or raise moneys for the aforementioned purposes of the corporation and, from time to time, without limit as to amount, to draw, make, accept, endorse,execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidencesof indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of thewhole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bondsor other obligations of the corporation for its corporate services as are necessary in the furtherance of the aforementioned purposes of the corporation; and, ingeneral, to possess and exercise all of the powers and privileges granted by the General Corporation Law of Delaware or by an other law of Delaware or bythis Certificate of Incorporation together with any lowers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct,promotion or attainment of the aforementioned purposes of the corporation.FOURTH. The total number of shares which the corporation is authorized to issue is one hundred (100) shares of common stock having a par value ofone hundred ($100) dollars per share. Ninety (90) shares shall be classified as Class A voting common stock with a par value of one hundred ($100) dollarsper share and ten (10) shares shall be classified as Class B non-voting common stock with a par value of one hundred ($100) dollars per share.The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof are as follows:The holders of Class A and Class B shares (regardless of the class of the share) shall participate equally to the same amount per share in all dividendsand any distribution of assets upon the liquidation, dissolution or winding up of the corporation or otherwise.The holders of Class A shares shall exclusively possess all the voting power of the corporation for the election of directors and for all other purposes,and the holders of Class B shares shall have no voting power and no holder thereof shall be entitled to receive notice of any meeting of shareholders.Notwithstanding any other of the articles of this Certificate of Incorporation or the General Corporation Law of the State of Delaware, no amendmentto the Certificate of Incorporation of this corporation or other shareholder action affecting a sub-division or consolidation of an outstanding class of commonshares may be made unless at the same time a similar subdivision or consolidation of the outstanding shares of the other class is also made, and the directorsshall not declare or pay any dividends payable in Class B shares to holders of Class B shares nor in Class A shares to the holders of Class A shares unless atthe same time a similar dividend be declared and paid to the holders of shares of all other classes. Share dividends shall not be declared in shares of the classto holders of another class.All of the issued and outstanding stock of all classes shall be held of record by not more than twenty (20) persons, as defined in Section 342 of theGeneral Corporation Law; the corporation shall make no offering of any of  its stock of any class which would constitute a “public offering” within the meaning of the United States Securities Act of 1933, as it may be amended fromtime to time; and the consent of the directors of the corporation shall be required to approve the issuance or transfer of any shares as being in compliance withthe foregoing restrictions.No natural person who is a holder of shares of Class A voting common stock shall sell, assign or otherwise dispose of any such share or shares of stockof this corporation to any person, firm, corporation or association, nor shall the executor, administrator, trustee, assignee or other legal representative of suchdeceased stockholder sell, assign, transfer or otherwise dispose of any such share or shares of the stock of this corporation to any person, firm, corporation orassociation, nor to any next of kin or legatee or legatees of a deceased stockholder, without first offering the said share or shares of stock for sale to any othernatural persons who are holders of Class A voting common stock of the corporation at a price representing the true book value thereof at the time of said offerand said stockholders shall have the right to purchase the same by payment of such purchase price at any time within thirty (30) days after receipt of writtennotice of said offer. In the event that said stockholders accept the offer to sell such share or shares within thirty (30) days after the receipt of written notice ofsaid offer, the share or shares shall next be offered for sale to any other holders of Class A voting common stock of the corporation, at a price representing thetrue book value thereof at the time of said offer and such other stockholders shall have the right to purchase the same by payment of such purchase price atany time within thirty (30) days after the receipt of written notice of said offer. In the event that said stockholders do not accept the offer to sell such share orshares within thirty (30) days after receipt of written notice of said offer, the share or shares shall next be offered for sale to the corporation at a pricerepresenting true book value thereof at the time of said offer and the corporation shall have the right to purchase the same by payment of such purchase priceat any time within thirty (30) days after the receipt of written notice of said offer.No holder of shares of Class A voting common stock which is a firm, corporation or association shall sell, assign or otherwise dispose of any suchshare or shares of stock of this corporation to any person, firm, corporation or association, nor shall the executor, administrator, trustee, assignee or other legalrepresentative of such deceased stockholder sell, assign, transfer or otherwise dispose of any such share or shares of the stock of this corporation to anyperson, firm, corporation or association, nor to any next of kin or legatee or legatees of a deceased stockholder, without first offering the said share or sharesof stock for sale to all other holders of Class A voting common stock at a price representing the true book value thereof at the time of said offer and saidshareholders shall have the right to purchase the same by the payment of such purchase price at any time within thirty (30) days after receipt of written noticeof said offer. In the event that said shareholders do not accept the offer to sell such share or shares within thirty (30) days after receipt of the written notice ofsaid offer, the share or shares shall next be offered for sale to the corporation at a price representing the true book value thereof at the time of said offer and thecorporation shall have the right to purchase the same by payment of such purchase price at any time within thirty (30) days after the receipt of written noticeof said offer.No holder of shares of Class B non-voting common stock shall sell, assign or otherwise dispose of any such share or shares of stock of thiscorporation of either class to any person, firm, corporation or association, nor shall the executor, administrator, trustee, assignee or other legal representativeof such deceased stockholder sell, assign, transfer or otherwise dispose of any share or shares of the stock of this corporation to any person, firm, corporationor association, nor to any next of kin or legatee or legatees of a deceased stockholder, without first offering the said share or shares of stock for sale to thecorporation at a price representing the true book value thereof at the time of said offer and the corporation shall have the right to purchase the same by thepayment of such purchase price at any time within thirty (30) days after receipt of written notice of said offer. In the event that the corporation does notaccept the offer to sell such share or shares within thirty (30) days after receipt of the written notice of said offer, the share or shares shall next be offered forsale to the other stockholder or stockholders of said corporation at a price representing the true book value thereof at the time of said offer and such otherstockholder or stockholders shall have the right to purchase the same by payment of such purchase price at any time within thirty (30) days after the receipt ofwritten notice of said offer.Compliance with the foregoing terms and conditions in regard to the sale, assignment, transfer or other disposition of the shares of stock of thiscorporation shall be a condition precedent to the transfer of such shares of stock on the books of this corporation.The holders of Class A shares and Class B shares shall, upon the issue or sale of Class A shares or Class B shares of stock, respectively, (whether nowor hereafter authorized) or any securities convertible into such stock,- 2 - have the right, during such period of time and on such conditions as the Board of Directors shall prescribe, to subscribe to and purchase such shares, orsecurities in proportion to their respective holdings of Class A shares or Class B shares, respectively, at such price or prices as the Board of Directors may fromtime to time fix and as may be permitted by law.FIFTH. The name and mailing address of each incorporator is as follows: M. A. Ferrucci 100 West Tenth StreetWilmington, Delaware 19801R. F. Andrews 100 West Tenth StreetWilmington, Delaware 19801W. J. Reif 100 West Tenth StreetWilmington, Delaware 19801 SIXTH. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until asuccessor is elected and qualified, is as follows: Name Mailing Address Gerald F. Mills 108 Oak Hill DriveSharon, Massachusetts 02067 Marlene Mills 108 Oak Hill DriveSharon, Massachusetts 02067 Fred Kushmer 241 Main StreetHackensack, New Jersey 07602 SEVENTH. The business and affairs of the corporation shall be managed by the Board of Directors subject to any written agreements restricting thediscretion of the directors pursuant to Subchapter XIV, Section 341 et seq. of the General Corporation Law of the State of Delaware entered into among amajority of the shareholders. EIGHTH. Meeting of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the corporationmay be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to timeby the Board of Directors or in the By-Laws of the corporation. Elections of directors need not be by written ballot unless the By-Laws of the corporationshall so provide. NINTH. The corporation reserves the right to amend, alter, change or repeal any provisions contained in this Certificate of in corporation, in thematter now or hereafter prescribed by statutes, and all rights conferred upon stockholders herein are granted subject to this reservation. We, the undersigned, being each of the incorporators herein before named, for the purpose of forming a corporation pursuant to the GeneralCorporation Law of the State of Delaware, do make this Certificate, hereby declaring a certifying that this is our act and deed and the facts herein stated aretrue and accordingly has hereunto set our hands his 26th day of December , 1978. /s/ M. A. Ferrucci M. A. Ferrucci /s/ R. F. Andrews R. F. Andrews /s/ W. J. Reif W. J. Reif - 3 - CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF MILLFELD TRADING CO. INC. Under section 242 of the Delaware General Corporation LawMILLFELD TRADING CO. INC., a corporation organized and existing under and by virtue of the General Corporation Law of the state of Delaware(the “corporation”) DOES HEREBY CERTIFY: 1.The name of the Corporation is Millfeld Trading Co. Inc. 2.The Corporation’s Certificate of Incorporation was filed by the Department of State on December 26, 1978. 3.The purpose of this Amendment is among other things, (i) to increase the authorized capital stock of the Corporation to 10,000,000 shares ofcommon stock and 5,000,000 shares of preferred stock; (ii) to reduce the par value of the common stock to $.001 per share; (iii) to eliminatethe liability of directors to the Corporation and its stockholders to the fullest extent permitted by the General Corporation Law of Delaware;and (iv) to indemnify any and all persons whom the Corporation shall have power to indemnify to the fullest extent permitted by the GeneralCorporation Law of Delaware. 4.On August l, 1989, the Board of Directors of the corporation adopted the following resolutions by written consent, proposing and declaringadvisable the following amendments to the Certificate of Incorporation of the Corporation:RESOLVED, that Article Third of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor:THIRD: The nature of the business, and the objects and purposes proposed to be transacted, promoted and carried on, are to do any and allthings therein mentioned, as fully and to the same extent as natural persons might or could do, and in any part of the world, viz:To do any lawful act or thing for which corporations may be organized under the General Corporation law of the State of Delaware.RESOLVED, that Article Fourth of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor:FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is Fifteen Million (15,000,000) consistingof:(a) Ten Million (10,000,000) shares of common stock, $.001 par value (“common Stock”); and(b) Five Million (5,000,000) shares of Preferred Stock, $.01 par value (“Preferred Stock”) having the following voting powers, restrictions,preferences and qualifications: A.Preferred StockShares of Preferred Stock may be issued from time to time in one or more series, as may from time to time be determined by the Board ofDirectors, each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular,except that there may be different dates from which dividends, if any, thereon shall be cumulative, if made cumulative. The voting powersand the preferences and relative, participating, optional and other special rights or each such series, and the qualifications, limitations orrestrictions thereof, if any, may differ from those of any and all other series at any time outstanding; and the Board of Directors of theCorporation is hereby expressly granted  authority to fix by resolution or resolutions adopted prior to the issuance of any shares of a particular series of Preferred Stock, the votingpowers and the designations, preferences and relative, optional and other special rights, and the qualifications, limitations and restrictions ofsuch series, including but without limiting the generality of the foregoing, the following:(a) The distinctive designation of, and the number of shares of Preferred Stock which shall constitute each series, which number maybe increased (except where otherwise provided by the Board of Directors) or decreased (but not below the number of shares thereof thenoutstanding) from time to time by like action of the Board of Directors;(b) The rate and times at which, and the terms and conditions on which, dividends, if any, on Preferred stock of such series shall bepaid, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes or series of stockand whether such dividends shall be cumulative or non-cumulative.(c) the right, if any, of the holders of Preferred Stock of such series to convert the same into, or exchange the same for, shares of anyother class or classes or of any series of the same or any other class or classes of stock of the Corporation and the terms and conditions of suchconversion or exchange.(d) Whether or not Preferred Stock of such series shall be subject to redemption, and the redemption price or prices and the time ortimes at which, and the terms and conditions on which, Preferred Stock of such series may be redeemed.(e) The rights, if any, of the holders of Preferred Stock of such series upon the voluntary or involuntary liquidation, merger,consolidation, distribution or sale of assets, dissolution or windingup of the corporation,(f) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock of such series; and(g) The voting powers, if any, of the holders of such series of Preferred Stock which may, without limiting the generality of theforegoing, include the right, voting as a series by itself or together with other series of Preferred Stock or all series of Preferred Stock as aclass, to elect one or more directors of the Corporation if there shall have been a default in the payment of dividends on any one or moreseries of Preferred Stock or under such other circumstances as the Board of Directors may determine. B.Common stockl. After the requirements with respect to preferential dividends on the Preferred stock (fixed in accordance with the provisions of paragraph Aof this Article Fourth), if any, shall have been met and after the Corporation shall have complied with all the requirement, if any, with respectto the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of paragraph A ofthis Article Fourth), and subject further to any other conditions which may be fixed in accordance with the provisions of Paragraph A of thisArticle Fourth, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from timeto time by the Board of Directors.2. After distribution in full of the preferential amount, if any (fixed in accordance with the provisions of Paragraph A of this Article Fourth),to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets,dissolution or winding-up, of the Corporation, the holders of the Common Stock shall be entitled to receive all the remaining assets of theCorporation, tangible and intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number ofshares of Common Stock held by them respectively.3. Except as may otherwise be required by law or by the provisions of such resolution or resolutions as may be adopted by the Board ofDirectors pursuant to paragraph A of this Article Fourth, each holder of Common Stock shall have one vote in respect of each share ofCommon Stock held by him on all matters voted upon by stockholders.- 2 - C.Other Provisions1.The relative powers, preferences and rights of each series of Preferred Stock in relation to the powers, preferences and rights ofeach other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution of resolutionsadopted pursuant to authority granted in paragraph A of this Article Fourth and the consent, by class or series vote or otherwise, of theholders of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board ofDirectors of any other series of Preferred Stock whether or not the powers, preferences and rights of such other series shall be fixed by theBoard of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided,however, that the Board of Directors may provide in the resolution or resolutions adopted pursuant to paragraph A of this Article Fourth as toany series of Preferred Stock that the consent of the holders of a majority (or such greater proportion as shall be therein fixed) of theoutstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock.2.Subject to the provisions of subparagraph 1 of this paragraph C, shares of any series of Preferred Stock may be issued from time totime as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Boardof Directors.3.Shares of Common Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on suchterms and for such consideration as shall be fixed by the Board of Directors.4.The authorized amount of shares of Common Stock may, without a vote, be increased or decreased from time to time by theaffirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon.RESOLVED, that Article Fifth of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor:“FIFTH: The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. Thenumber of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the By Laws. Thephrase “whole Board” and the phrase “total number of directors” shall be deemed to have the same meaning, to wit, the total number ofdirectors which the Corporation would have if there were no vacancies• No election of directors need be by written ballot.After the original or other By-laws of the corporation have been adopted, amended, or repealed, as the case may be, in accordance with theprovisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment forany of its stock, the power to adopt, amend, or repeal the By-Laws of the Corporation may be exercised by the Board of Directors of theCorporation, provided, however, that any provision for the classification of directors of the corporation for staggered terms pursuant to theprovisions of subsection (d) of Section 141 of the General corporation Law of the state of Delaware shall be set forth in an initial By-Law orin a By-Law adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in thisCertificate of Incorporation.Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof tonotice of, and the right to vote at, any meeting of stockholders. Whenever the Corporation shall be authorized to issue more than one class ofstock, no outstanding share of any class of stock which is denied voting power under the provisions of the Certificate of Incorporation shallentitle the holder thereof to the right to vote at any meeting of stockholders except as the provisions of paragraph (2) of subsection (b) ofSection 242 the General Corporation Law of the State of Delaware shall otherwise require; provided, that no share of any such class which isotherwise denied voting power shall entitle the holder thereof to vote upon the increase or decrease in the number of authorized shares ofsaid class,- 3 - The directors shall have power to make and to alter or amend the ByLaws; to fix the amount to be reserved as working capital, and toauthorize and cause to be executed, mortgages and liens without limit as to the amount, upon the property and franchises of the Corporation.With the consent in writing, and pursuant to a vote of the holders of a majority of the capital stock issued and outstanding, the Directors shallhave authority to dispose, in any manner, of the whole property of the Corporation.The By-Laws shall determine whether and to what extent the accounts and books of this Corporation, or any of them, shall be open to theinspection of the stockholders; and no stockholder shall have any right of inspecting any account, or book, or document of the Corporation,except as conferred by Law or the By-Laws, or by resolution of the stockholders.The stockholders and directors shall have power to hold their meetings and keep the books, documents and papers of the Corporation outsidethe State of Delaware, at such places as may be from time to time designated by the By-Laws or by resolution of the stockholders or directors,except as otherwise required by the laws of Delaware.It is the intention that the objects, purposes and powers specified in Article Fifth hereof shall, except where otherwise specified in ArticleFifth, be in nowise limited or restricted by reference to or inference from the terms of any other article, clause or paragraph in this Certificateof Incorporation, but that the objects, purposes and powers specified in Article Fifth and in each of the article, clauses or paragraphs of thischarter shall be regarded as independent objects, purposes and powers.”RESOLVED, that Article Sixth of the certificate of Incorporation be deleted in its entirety and the following substitute therefor:“SIXTH: The Corporation is to have perpetual existence.”RESOLVED, that Article Seventh of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor,“SEVENTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/orbetween the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, onthe application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver orreceivers appointed for the Corporation under Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution orof any receiver or receivers appointed for the Corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditorsor class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in suchmanner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of thestockholders or Class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to anyreorganization of the Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the saidreorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class ofcreditors, and/or on all the stockholders or class of stockholders of the Corporation, as the case may be, and also on the Corporation.”RESOLVED, that Article Eighth of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor:“EIGHTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) ofsubsection (b) of Section 102 of the General Corporation law of the State of Delaware, as the same may be amended and supplemented.RESOLVED, that Article Ninth of the Certificate of Incorporation be deleted in its entirety and the following substituted therefor:- 4 - “NINTH: The Corporation shall, to the fullest extent permitted by section 145 of the General Corporation Law of the State of Delaware, as thesame may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from andagainst any and all of the expenses, liabilities, or other matter referred to in or covered by said section, and the indemnification provided forherein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any By-law, agreement, vote ofstockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity whileholding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to thebenefit of the hairs, executors, and administrators of such a person.”RESOLVED, that a new Article Tenth be added to the Certificate of Incorporation as forth below:“TENTH: No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for Breach of fiduciaryduty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts oromissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for the payment of unlawfuldividends or unlawful stock repurchases or redemptions under Section 174 of the Delaware General Corporation Law; or (iv) for anytransaction from which the director derived an improper personal benefit.”RESOLVED, that a new Article Eleventh be added to the Certificate of Incorporation as set forth below:“ELEVENTH: From time to time any of the provisions of the Certificate of the Incorporation may be amended, altered or repealed, and otherprovisions authorized by the law of the State of Delaware at the time in force may be added or inserted in the manner and at the timeprescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by the Certificate of Incorporation aregranted subject to the provisions of this Article ELEVENTH.5.On August 1, 1989, these Amendments to the Certificate of Incorporation were approved by written consent of the solestockholder of the Corporation.6.The aforesaid Amendments to the Corporation’s Certificate of Incorporation were duly adopted in accordance with the applicableprovisions of Sections 242 of the General Corporation Law of the State of Delaware.IN WITNESS WHEREOF, MILLFELD TRADING CO. INC. has caused the certificate to be signed by Barry Feldstein, its President, and attested byGlen Feldstein, its secretary this / day of September, 1989. MILLFELD TRADING CO. INC. By:/s/ Barry Feldstein Name: Barry Feldstein Title:President Attest: By:/s/ Glen Feldstein Name: Glen Feldstein Title:Secretary - 5 - STATE OF New York) .ss. : COUNTY OF Nassau) On this 1st day of September, 1989, before me personally came BARRY FELDSTEIN, to me known, who being by me dull sworn, did depose and saythat he resides at 32 Elm Street Woodbury, New York 11797, that he is the President of MILLFELD TRADING Co. INC., the corporation described in andwhich executedthe foregoing instrument; and that he signed his name thereto by order of the Board of Directors of the said corporation. Rachel Petrou Notary Public STATE OF New York) .ss. : COUNTY OF Nassau) On this 1st day of September, 1989, before me personally came GLEN FELDSTEIN, to me known, who being by me duly sworn, did depose and saythat he resides at; that he is the Secretary of MILLFELD TRADING CO. INC., the corporation described in and which executed the foregoing instrument; and that hesigned his name thereto by order of the Board of Directors of the said corporation. Rachel Petrou Notary Public - 6 - STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 02:30 PM 02/27/1992 920525233 – 864972 CERTIFICATE OF OWNERSHIPOFBRIGHT STAR, INC.(a Delaware corporation)ANDMILLFELD TRADING CO., INC.(a Delaware corporation)UNDER SECTION 253 OF THE GENERAL CORPORATION LAWOF THE STATE OF DELAWAREThe undersigned corporations organized and existing under and by virtue of the General Corporation Law of the State of Delaware,DO HEREBY CERTIFY:FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows: NAME STATE OF INCORPORATION Bright Star, Inc. Delaware Millfeld Trading co., Inc. Delaware SECOND: That 100% of the outstanding stock of Bright Star, Inc. is owned by Millfeld Trading Co., Inc.THIRD: That the name of the surviving corporation of the merger shall be changed to Candies, Inc.FOURTH: That the Board of Directors of Millfeld Trading Co., Inc. adopted the following resolution by unanimous joint written consent on the 20thday or February, 1992:RESOLVED, that the Company’s wholly-owned subsidiary, Bright Star, Inc., be merged with and into the Company, and that upon the filing of theappropriate certificate of Merger with the Secretary of State of the State of Delaware, the Company’s name shall be changed to Candies, Inc.IN WITNESS WHEREOF, the undersigned have executed this Certificate this 20th day of February, 1992. ATTEST: MILLFELD TRADING CO., INC. By: /s/ Felix F. Ruchel By: /s/ Michael Callahan Title: Asst. Sect’y Title: Vice President ATTEST: BRIGHT STAR, INC. By: /s/ Felix F. Ruchel By:/s/ Michael Callahan Title: Asst. Sect’y Title: Vice President  STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 12:30 PM 02/27/1992 92058246 – 864972 CERTIFICATE OF OWNERSHIPOFMILLFELD SUB, INC.(a Delaware corporation)ANDCANDIES, INC.(a Delaware corporation)UNDER SECTION 253 OF THE GENERAL CORPORATION LAWOF THE STATE OF DELAWARE The undersigned corporations organized and existing under and by virtue of the General Corporation Law of the state of Delaware,DO HEREBY CERTIFY:FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows: NAME STATE OF INCORPORATION Millfeld Sub, Inc. Delaware Candies, Inc. Delaware SECOND: That 100% of the outstanding stock of Millfeld Sub, Inc. is owned by Candies, Inc.THIRD: That the name of the surviving corporation of the merger shall be changed to Millfeld Trading Co., Inc.FOURTH: That the Board of Directors of candies, Inc. adopted the following resolution by unanimous joint written consent on the 25th day ofFebruary, 1992:RESOLVED, that the Company’s wholly-owned subsidiary, Millfeld Sub, Inc., be merged with and into the Company, and that upon the filing of theappropriate certificate of Merger with the Secretary of state of the State of Delaware, the Company’s name shall be changed to Millfeld Trading Co., Inc.  IN WITNESS WHEREOF, the undersigned have executed this Certificate this 25th day of February, 1992. ATTEST: CANDIES, INC. By: /s/ Felix F. Ruchel By:/s/ Michael Callahan Title: Asst. Sect’y Title: Vice President ATTEST: MILLFELD SUB, INC. By:/s/ Felix F. Ruchel By:/s/ Michael Callahan Title: Asst. Sect’y Title: Vice President 2 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 02/24/1993 930555198 – 864972 CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFMILLFELD TRADING CO., INC.The undersigned, being, respectively, President and Secretary of Millfeld Trading Co., Inc., a Delaware corporation (the “Corporation”),do herebycertify as follows:FIRST: That the Board of Directors o the Corporation adopted a resolution proposing and declaring advisable that the Corporation change its nameto Candie’s, Inc. by adoption of the following amendment to the Certificate of Incorporation of said corporation:“FIRST, the name of the corporation shall be Candie’s, Inc.”SECOND: That the Board of Directors of the Corporation adopted a resolution proposing and declaring advisable a reverse split of the Corporation’sCommon Stock, $.0l par value per share, on a one-for-4.5 basis by adoption of the following amendment to the Certificate of Incorporation of saidcorporation:“FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is FIFTEEN MILLION (15,000,000) shares, ofwhich 10,000,000 shall be shares of common stock of the par value of $.001 each, and 5,000,000 shares be preferred stock, $.01 par value per share.A. The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof or the Preferred Stock, and of theCommon Stock are as follows: A.Preferred Stock.The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article 4, to provide tor the issuance of thePreferred Stock in series and by filing a Certificate pursuant to the Delaware General Corporation Law to establish the number of shares to be included in eachsuch series. The Preferred Stock may be issued either as a class without series, or as so determined from time to time by the Board of Directors, either in wholeor in part in one or more series, each series to be appropriately designated by a distinguishing number, letter or title prior to the issue of any shares thereof.Whenever the term “Preferred Stock” is used in this Article 4, it shall be deemed to mean and include Preferred Stock issued as a class without series, or one ormore series thereof, or both, unless the context shall otherwise require. There is hereby expressly granted to the Board of Directors of the Corporationauthority, subject to the limitations provided by law, to fix the voting power, the designations, and the relative preferences, powers, participating, optional orother special rights, and the qualifications, limitations or restrictions thereof, of the shares of each series of said Preferred Stock and the variations in therelative powers, rights, preferences and limitations as between series, and to increase the number of shares constituting each series, and to decrease suchnumber of shares (but not to less than the number of outstanding shares of the series), in the resolution or resolutions adopted by the Board of Directorsproviding for the issue of said Preferred Stock.  The authority of the Board of Directors of the Corporation with respect to each series shall include, but shall not be limited to, the authority todetermine the following:l.The designation of the series;2.The number of shares initially constituting such series;3.The increase, and the decrease to a number not less than the number of the outstanding shares of such series, of the number of shares constituting suchseries theretofore fixed;4.The rate or rates and the times and conditions under which dividends on the shares of such series shall be paid, and, (i) if such dividends are payablein preference to, or in relation to, the dividends payable on any other class or classes of stock, the terms and conditions of such payment, and (ii) itsuch dividends shall be cumulative, the date or dates from and after which they shall accumulate;5.Whether or not the shares of such series shall be redeemable, and, if such shares shall be redeemable, the terms and conditions of such redemption,including, but not limited to, the date or dates upon or after which such shares shall be redeemable and the amount per share which shall be payableupon such redemption, which amount may vary under conditions and at different redemption dates;6.The amount payable on the shares of such series in the event of the dissolution of, or upon any distribution of the assets of, the Corporation;7.Whether or not the shares of such series may be convertible into, or exchangeable for, shares of any other class or series and the price or prices and therates of exchange and the terms of any adjustments to be made in connection with such conversion or exchange;8.Whether or not the shares of such series shall have voting rights in addition to the voting rights provided by law, and, if such shares shall have suchvoting rights, the terms and conditions thereof, including but not limited to, the right of the holders of such shares to vote as a separate class eitheralone or with the holders of shares of one or more other series of Preferred stock and the right to have more or less than one vote per share;9.Whether or not a purchase fund shall be provided for the shares of such series, and, if such a purchase fund shall be provided, the terms andconditions thereof;10.Whether or not a sinking fund shall be provided for the redemption of the shares of such series and if such a sinking fund shall be provided, the termsand conditions thereof; and11.Any other powers, preferences and relative, participating, optional, or other special rights, and qualifications, limitations or restrictions thereof, asshall not be inconsistent with the provisions of this Article 4 or the limitations provided by law.B.Common Stock.1.Subject to the rights of the Preferred Stockholders, the holders of the Common Stock shall be entitled to receive such dividends a may be declaredthereon by the Board of Directors of the Corporation in its discretion, from time to time, out of any funds or assets of the corporation lawfullyavailable for the payment of such dividends.2.In the event of any liquidation, dissolution or winding up of the Corporation, or any reduction of its capital, resulting in a distribution of its assets toits stockholders, whether voluntary or involuntary, then, after there shall have been paid or set apart for the holders of the Preferred Stock the fullpreferential amounts to which they are entitled, the holders of the Common stock shall be entitled to receive as a class, pro rata, the remaining assetsof the Corporation available for distribution to its stockholders.2 3.For any and all purposes of this Certificate of Incorporation, neither the merger or consolidation of the Corporation into or with any othercorporation, nor the merger or consolidation of any other corporation into or with the Corporation, nor a sale, transfer or lease of all or substantiallyall of the assets of the Corporation, or any other transaction or series of transactions having the effect of a reorganization shall be deemed to be aliquidation, dissolution or winding-up of the Corporation.4.Except as otherwise expressly provided by law or in a resolution of the Board of Directors providing voting rights to the holders of the PreferredStock, the holders of the Common Stock shall possess exclusive voting power for the election of directors and for all other purposes and each holderthereof shall be entitled to one vote for each share thereof.”THIRD: The foregoing amendments have been duly adopted by the stockholders of the corporation in accordance with Section 242 of the GeneralCorporation Law of the state of Delaware.IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by Michael Callahan, its President and attested by Dominick Gallo,its Secretary, this 23th day of February, 1993. /s/ Michael Callahan Michael Callahan, President ATTEST: /s/ Dominick Gallo Dominick Gallo, Secretary 3 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 02:00 PM 09/13/1994 944171949 – 864972 CANDIE’S, INC.CERTIFICATE OF DESIGNATIONOF SERIES A CUMULATIVE CONVERTIBLEPREFERRED STOCK SETTING FORTH THE POWERS,PREFERENCES, RIGHTS, QUALIFICATIONS,LIMITATIONS AND RESTRICTIONS OFSUCH SERIES OF PREFERRED STOCKPursuant to Section 151 of the General corporation Law of the State of Delaware, Candie’s, Inc. (the “Corporation”), a corporation organized andexisting under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:That pursuant to the authority given to the Board of Directors of the Corporation by paragraph A of Article Fourth of the Certificate ofIncorporation of the Corporation (the “Certificate of Incorporation”), and in accordance with the provisions of Section 151 of the General Corporation Law ofthe State of Delaware, the Board of Directors of the Corporation on September 13, 1994, adopted the following resolution creating a series of Preferred Stockdesignated as Series A Cumulative Convertible Preferred Stock:RESOLVED that, pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the General Corporation Law ofthe State of Delaware and the provisions of the Certificate of Incorporation, a series of the class of authorized Preferred Stock, par value $.01 per share, of theCorporation is hereby created and that the designation and number of shares thereof and the voting powers, preferences and relative, participating, optionaland other special rights of the shares of such series, and the qualifications, limitations and restrictions thereof, are as follows:Section 1. Designation and Number. (a) The shares of such series shall be designated “Series A Cumulative Convertible Preferred Stock” (the“Series A Preferred Stock”). The number of shares initially constituting the Series A Preferred Stock shall be 14,400, which number may be decreased (but notincreased) by the Board of Directors without a vote of stockholders, provided, however, that such number may not be decreased below the number of thenoutstanding shares of Series A Preferred Stock.(b) The Series A Preferred Stock shall, with respect to dividend rights and rights on liquidation, dissolution or winding up, rank prior tothe Common Stock, par value $.001 per share, of the Corporation (the “Common Stock”) and any other issue of Preferred Stock.Section 2. Dividends and Distributions. (a) The holders of shares of Series A Preferred Stock, in preference to the holders of shares of CommonStock and of any shares of other capital stock of the Corporation ranking junior to the Series A Preferred Stock as to payment of dividends, shall be entitled toreceive, when, as and if declared by the Board of Directors, out of the assets of the Corporation legally available therefor, cumulative cash dividends at a rateof $8.00 per annum per share, subject to appropriate adjustment in the event of any stock split, reverse stock split or other recapitalization. Dividends shallaccrue and be payable semiannually, in arrears, on the last business day of April and October in each year (each such date being referred to herein as a“Dividend Payment Date”), commencing April 1, 1995.(b) Dividends payable pursuant to paragraph (a) of this Section 2 shall begin to accrue and be cumulative from the Issue Date, whetheror not earned or declared. The amount of dividends so payable shall be determined on the basis of twelve 30-day months and a 360-day year. Accrued butunpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends atthe time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among  all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stockentitled to receive payment of a dividend declared hereon, which record date shall be no more than sixty days prior to the date fixed for the payment thereof.(c) The holders of shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions except asprovided herein.Section 3. Voting Rights. In addition to any voting rights provided by law, the holders of shares of Series A Preferred Stock shall have thefollowing voting rights:(a) Until the date commencing six months from the initial issuance of shares of Series A Preferred stock, the holders of shares of Series APreferred Stock shall be entitled to vote on or to consent to corporate action with the holders of the Common Stock, having the number of votes equal to thenumber of shares of Common Stock issuable upon conversion of the Series A Preferred Stock on the date set forth in Section 3(c) hereof, with respect to anymatter submitted to stockholders for a vote at such meeting or adjournment thereof or written consent in lieuthereof (or as otherwise required by applicable law).(b) The affirmative vote of the holders of at least 66 2/3% of the outstanding shares of Series A Preferred Stock, voting together as aclass, in person or by proxy, at a special or annual meeting of stockholders called for the purpose, shall be necessary to (i) authorize, increase the authorizednumber of shares of, or issue (including on conversion or exchange of any convertible or exchangeable securities or by reclassification), any shares of anyclass or classes of the Corporation’s capital stock ranking pari passu with or prior to (either as to dividends or upon voluntary or involuntary liquidation,dissolution or winding up) the Series A Preferred Stock, (ii) increase the authorized number of shares of, or issue (including on conversion or exchange of anyconvertible or exchangeable securities or by reclassification) any shares of, Series A Preferred Stock; or (iii) authorize, adopt or approve an amendment to theCertificate of Incorporation of the Corporation which would increase or decrease the par value of the shares of Series A Preferred Stock, or alter or change thepowers, preferences or special rights of the shares of Series A Preferred Stock so as to affect such shares of Series A Preferred Stock adversely.(c) For the taking of any action as provided in this Section 3 by the holders of shares of Series A Preferred Stock each such holder shallhave one vote for each share of Series A Preferred Stock or such number of votes as the number of shares of Common Stock into which such shares of Series APreferred Stock are convertible, as the case may be, in each case standing in his name on the transfer books of the Corporation as of any record date fixed forsuch purpose or, if no such date be fixed, at the close of business on the Business Day (as defined in Section 9) next preceding the day on which notice isgiven, or if notice is waived, at the close of business on the Business Day next preceding the day on which the meeting is held.Section 4. Certain Restrictions. (a) Whenever semiannual dividends payable on shares of Series A Preferred Stock as provided in Section 2 are notpaid in full, thereafter and until all unpaid dividends payable on the outstanding shares of Series A Preferred Stock, whether or not declared, shall have beenpaid in full, the Corporation shall not: (A) declare or pay dividends, or make any other distributions, on any shares of Junior Stock (as defined in Section 9),other than dividends or distributions payable in Junior, Stock; or (B) declare or pay dividends, or make any other distributions, on any shares of Parity Stock,except (1) dividends or distributions payable in Junior Stock and (2) dividends or distributions paid ratably on the Series A Preferred Stock and all ParityStock on which dividends are payable or in arrears, in proportion to the total amounts to which the holders of all shares of the Series A Preferred Stock andsuch Parity Stock are then entitled.(b) Whenever semiannual dividends payable on shares of Series A Preferred Stock as provided in Section 2 are not paid in full,thereafter and until all unpaid dividends payable, whether or not declared, on the outstanding shares of Series A Preferred Stock shall have been paid in full,the Corporation shall not: redeem, purchase or otherwise acquire for consideration any shares of Junior Stock or Parity Stock; provided, however, that (1) theCorporation may at any time redeem, purchase or otherwise acquire shares of Junior Stock or Parity Stock in exchange for any shares of Junior Stock, (2) theCorporation may accept shares of any Parity Stock or Junior Stock for conversion and (3) the Corporation may at any time redeem, purchase or otherwiseacquire shares of any Parity Stock pursuant to any mandatory redemption, put, sinking fund or other similar obligation, pro rata with the Series A PreferredStock in proportion to the total amount then required to be applied by it to redeem, repurchase or otherwise acquire shares of Series A Preferred stock andshares of such Parity Stock.- 2 - (c) The Corporation shall not permit any Subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares ofcapital stock of the Corporation unless the Corporation could, pursuant to Section 4(b), purchase such shares at such time and in such manner.Section 5. Reacquired Shares. Any shares of Series A Preferred Stock converted, redeemed, purchased or otherwise acquired by the Corporation inany manner what soever shall be retired and canceled promptly after the acquisition thereof. All such shares of Series A Preferred Stock shall upon theircancellation, and upon the filing of an appropriate certificate with the Secretary of State of the State of Delaware, become authorized but unissued shares ofPreferred Stock, $.01 par value, of the Corporation and may be reissued as part of another series of Preferred Stock, par value $.01 per share, of theCorporation, subject to the conditions or restrictions on issuance set forth herein.Section 6. Liquidation, Dissolution or Winding Up. (a) If the Corporation shall commence a voluntary case under the Federal bankruptcy laws orany other applicable Federal or state bankruptcy, insolvency or similar law, or consent to the entry of an order for relief in an involuntary case under such lawor to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial partof its property or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or if adecree or order for relief in respect of the Corporation shall be entered by a court having jurisdiction in the premises in an involuntary case under the Federalbankruptcy laws or any other applicable federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, custodian,trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or ordering the winding up or liquidation of itsaffairs, and any such decree or order shall be unstayed and in effect for a period of 150 consecutive days and on account of any such event the Corporationshall liquidate, dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve or wind up, no distribution shall be made (i) to the holders ofshares of Junior Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received the Liquidation Preference with respect toeach share (as adjusted for any stock dividends, combinations or splits with respect to such shares) plus all declared or accumulated but unpaid dividends onsuch shares or (ii) to the holders of shares of Parity Stock unless the holders of shares of Series A Preferred Stock shall have received distributions maderatably to the holders of the Series A Preferred Stock and the Parity Stock in proportion to the total amounts to which the holders of all such shares of Series APreferred Stock and Parity Stock would be entitled upon such liquidation, dissolution or winding up.(b) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person or Persons nor thesale of all or substantially all the assets of the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes ofthis Section 6.Section 7. Conversion. (a) Upon the effectiveness of an amendment to the Certificate of Incorporation of the Corporation raising the number ofauthorized shares of Common Stock of the Corporation to a number not less than 30,000,000, each share of Series A Preferred Stock shall automatically beconverted into such number of fully paid and nonassessable shares of Common Stock as is determined by applying the Conversion Ratio. The ConversionRatio shall initially be 86.9565 shares of Common Stock for each share of Series A Preferred Stock, subject to adjustment from time to time pursuant toSection 7(e).(b) Upon the occurrence of an automatic conversion pursuant to Section 7(a) hereof, and as soon as practicable thereafter, each holder ofSeries A Preferred Stock shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or any transfer agent for Series APreferred Stock and the Corporation shall issue and deliver at such office to the holders of Series A Preferred Stock, or to the nominee or nominees of suchholders, a certificate or certificates for the number of shares of Common Stock to which such holders shall be entitled as aforesaid. Regardless of the time atwhich such certificates are issued, the conversion shall be deemed to have been made immediately upon the occurrence of the event described in Section 7(a)and •the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date.(c) The Conversion Ratio shall be subject to adjustment from time to time in certain instances as hereinafter provided. Upon conversion,the holder of shares of Series A Preferred Stock shall be entitled to receive, in cash, any accrued and unpaid dividends on the shares of Series A PreferredStock surrendered for conversion to the date of such conversion.- 3 - (d) In connection with the conversion of any shares of Series A Preferred Stock, no fractions of shares of Common Stock shall be issued,but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multipliedby the current Market Price per share of Common Stock on the Trading Day on which such shares of Series A Preferred Stock are deemed to have beenconverted. If more than one share of Series A Preferred Stock shall be surrendered for conversion by the same holder at the same time, the number of fullshares of Common Stock issuable on conversion thereof shall be computed on the basis of the total number of shares of series A Preferred Stock sosurrendered.(e) The Conversion Ratio will be subject to adjustment from time to time as follows:(i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend, or make adistribution, on the outstanding shares of Common Stock in shares of Common Stock or declare, order, pay or make a dividend or other distribution of stockor other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spinoff, (B)subdivide the outstanding shares of Common Stock, (C) combine the outstanding shares of Common stock into a smaller number of shares or (D) issue byreclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, provision shall be made so that theholders of the Series A Preferred Stock shall thereafter be entitled to receive, upon conversion of the Series A Preferred Stock, the number of shares of stock orother securities or property of the Corporation or otherwise, to which the holders of Series A Preferred Stock would have received if they had converted theirshares of Series A Preferred Stock immediately prior to the happening of such event or the record date therefor, whichever is earlier. In any such case,appropriate adjustment shall be made in the application of the provisions of this Section 7(e) with respect to the rights of the holders of the Series A PreferredStock after such event to the end that the provisions of this Section 7(e) (including adjustment of the Conversion Ratio then in effect and the number ofshares purchasable upon conversion of the Series A Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable. Anadjustment made pursuant to this clause shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business onthe record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of suchsubdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. No adjustment shall bemade pursuant to this clause (i) in connection with any transaction to which Section 7(f) applies.(ii) For purposes of this Section 7(e), the number of shares of Common Stock at any time outstanding shall not include anyshare of Common stock then owned or held by or for the account of the Corporation.(iii) The term “dividend,” as used in this Section 7(e) shall mean a dividend or other distribution upon stock of theCorporation.(iv) Anything in this Section 7(e) to the contrary notwithstanding, the Corporation shall not be required to give effect to anyadjustment in the Conversion Ratio unless and until the net effect of one or more adjustments (each of which shall be carried forward), determined as aboveprovided, shall have resulted in a change of the Conversion Ratio by at least one-tenth of one share of Common Stock, and when the cumulative net effect ofmore than one adjustment so determined shall be to change the Conversion Ratio by at least one-tenth of one share of Common Stock, such change inConversion Ratio shall thereupon be given effect.(v) The certificate of any firm of independent public accountants of recognized standing selected by the Board of Directors ofthe Corporation (which may be the independent public accountants regularly employed by the Corporation) shall be presumptively correct for anycomputation made under this Section 7(e).(vi) If the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive adividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividendor distribution, then thereafter no adjustment in the number of shares of Common Stock issuable upon exercise of the right of conversion granted by thisSection 7 or in the Conversion Ratio then in effect shall be required by reason of the taking of such record.- 4 - (f) In case of any consolidation or merger of the Corporation with or into another corporation, or in case of any sale or conveyance toanother corporation, of all or substantially all of the assets or property of the Corporation (each of the foregoing being referred to as a “Transaction”), at theoption of the holder of any shares of Series A Preferred Stock, each share of Series A Preferred Stock then outstanding shall thereafter be convertible into, inlieu of the Common Stock issuable upon such conversion prior to consummation of such transaction, the kind and amount of shares of stock and othersecurities and property receivable {including cash) upon the consummation of such Transaction by a holder of that number of shares of Common Stock intowhich one share of Series A Preferred Stock was convertible immediately prior to such Transaction (including, on a pro rata basis, the cash, securities orproperty received by holders of Common Stock in any tender or exchange offer that is a step in such Transaction). In case securities or property other thanCommon Stock shall be issuable or deliverable upon conversion as aforesaid then all references in this Section 7 shall be deemed to apply, so far asappropriate and nearly as may be, to such other securities or property.Section 8. Reports as to Adjustments. Upon any adjustment of the Conversion Ratio then in effect and any increase or decrease in the number ofshares of Common Stock issuable upon the operation of the conversion set forth in section 7, then, and in each such case, the Corporation shall promptlydeliver to each holder of Series A Preferred Stock and to the Transfer Agent of the Common Stock, a certificate signed by the President or a Vice President andby the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation setting forth in reasonable detail the event requiringthe adjustment and the method by which such adjustment was calculated and specifying the conversion ratio then in effect following such adjustment andthe increased or decreased number of shares issuable upon the conversion granted by Section 7.Section 9. Definitions. For the purposes of this Certificate of Designation of Series A Cumulative Convertible Preferred Stock, the following termsshall have the meanings indicated:“Bussiness Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are authorizedor obligated by law or executive order to close.“Current Market Price” shall mean the fair market value per share of Common Stock as determined in good faith by the Board of Directors of theCorporation, which may be based on an opinion of an independent investment banking firm with an established national reputation as a valuer of securities.“Issue Date” shall mean the first date on which shares of Series A Preferred Stock are issued.“Junior Stock” shall mean any capital stock of the Corporation ranking junior (either as to dividends or upon liquidation, dissolution or windingup) to the Series A Preferred Stock.“Liquidation Preference” with respect to a share of Series A Preferred Stock shall mean $100 per share.“Parity Stock” shall mean any capital stock of the Corporation ranking on a parity (either as to dividends or upon liquidation, dissolution orwinding up) with the series A Preferred Stock.“Person” shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.“Subsidiary” of any Person means any corporation or other entity of which a majority of the voting power of the voting equity securities or equityinterest is owned, directly or indirectly, by such Person.“Trading Day” means a Business Day or, if the Common Stock is listed or admitted to trading on any national securities exchange, a day on whichsuch exchange is open for the transaction of business.- 5 - IN WITNESS WHEREOF, CANDIE’S, INC. has caused this Certificate to be duly executed under its corporate name on this 14th day of September1994. CANDIE’S, INC. By:/s/ Neil Cole Name:Neil Cole Title:President - 6 - STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 11/29/1994 944230090 – 864972 CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFCANDIE’S, INC. Adopted in accordance with the provisions ofSection 242 of the General Corporation Law of the State of Delaware THE UNDERSIGNED, President of Candies’e, Inc., a corporation existing under the laws of the State of Delaware (the “Corporation”), does herebycertify as follows:FIRST: That the Certificate of Incorporation of the Corporation has been amended as follows by striking out the first sentence of Article FOURTH asit now exists and inserting in lieu and instead thereof a new first sentence of Article FOURTH, reading as follows:“The total number of shares of stock which the Corporation shall have authority to issue is thirty-five million (35,000,000) shares, of whichthirty million (30,000,000) shall be common stock, of the par value of $.001 per share, and five million (5,000,000) shall be preferred stock, of the parvalue of $.01 per share.”SECOND: That such amendment has been duly adopted in accordance with the provisions of the General Corporation Law of the State of Delawareby the affirmative vote of the holders of a majority of the stock entitled to vote at a meeting of stockholders.IN WITNESS WHEREOF, the undersigned has executed this Certificate this 29th day of November, 1994. By:/s/ Neil Cole Name: Neil Cole Title:President  STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 08/18/1998 981323030 – 0864972 CERTIFICATE OF MERGEROFNEW RETAIL CONCEPTS, INC.(a Delaware corporation)INTOCANDIE’S, INC.(a Delaware corporation)New Retail Concepts, Inc., a corporation formed under the laws of the State of Delaware, desiring to merge with and into Candie’s, Inc. pursuant tothe provisions of Section 251 (c) of the Delaware General Corporation law, DOES HEREBY CERTIFY as follows:FIRST: That the names and states of incorporation of each Constituent Corporations are: NAME STATE OF INCORPORATION Candie’s, Inc. Delaware New Retail Concepts, Inc. DelawareSECOND: That the Agreement and Plan of Merger has been approved, adopted, certified, executed and acknowledged by each of the ConstituentCorporations in accordance with Section 251(c) of the Delaware General Corporation Law.THIRD: That the name of the surviving corporation is candie’s, Inc.FOURTH: The Certificate of Incorporation of Candie’s sha1l be the Certificate of Incorporation of the surviving corporation.FIFTH: That an executed Agreement and Plan of Merger is on file at the principal place of business of Candie’s, Inc. 2975 Westchester Avenue,Purchase, New York 10577 and that a copy of the Agreement and Plan of Merger will be furnished by the surviving Corporation, on request and without cost,to any stockholder of any Constituent Corporation.IN WITNESS WHEREOF, Candie’s, Inc. has caused this Certificate of Merger to be executed by its president thereunto duly authorized this 17 day ofAugust, 1998. ATTEST: CANDIE’S, INC.(a Delaware corporation)/s/ Gary Klein Secretary By:/s/ Neil ColeGary Klein Neil Cole, President  STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 02/03/2000 001055450 – 0864972 CERTIFICATE OF ELIMINATIONOFCANDIE’S, INC.CANDIE’S, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBYCERTIFY:That the following resolutions were adopted by the Board of Directors of CANDIE’S, INC. on January 25, 2000:“RESOLVED, that this Corporation will not in the future issue any shares of its Series A Cumulative Convertible Preferred Stock, par value$.01 per share, no shares of which are currently outstanding, pursuant to the Certificate of Designation for the Series A Convertible Preferred Stockthat was filed on September 13, 1994 with the office of the Secretary of State of the State of Delaware; and furtherRESOLVED, that the Chief Executive Officer of this Corporation be, and hereby is, authorized and directed to file a certificate setting forththese resolutions pursuant to Section 151(g) of the General Corporation Law of the State of Delaware so that, pursuant to such Section 151(g), theCertificate of Designation shall be eliminated from this Corporation’s Certificate of Incorporation and the shares previously designated by theCertificate of Designation shall revert to the status of authorized and unissued shares of Preferred Stock of this Corporation for which powers,designations, preferences and relative, participating, optional or other rights, if any, or the qualifications, limitations or restrictions thereof, if any,shall not have been set forth in the Certificate of Incorporation of this Corporation or any amendment thereto; and furtherRESOLVED, that the Chief Executive Officer of this Corporation be, and hereby is, authorized, for and on behalf of this Corporation, toexecute and deliver any and all agreements, instruments and documents, and to do any and all other acts and things as they or any of them may deemnecessary or appropriate to carry out fully the intent and purpose of the foregoing resolutions.”Dated: February 2, 2000. CANDIE’S, INC. By:/s/ Deborah Sorell Stehr Deborah Sorell Stehr, Senior Vice President  STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:01 AM 02/03/2000 001055461 – 0864972CANDIE’S, INC. CERTIFICATE OF DESIGNATIONOF THE VOTING POWERS, DESIGNATIONS,PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OROTHER SPECIAL RIGHTS, AND OF THE QUALIFICATIONS,LIMITATIONS OR RESTRICTIONS, OF SERIES AJUNIOR PARTICIPATING PREFERRED STOCK($.01 Par Value Per Share)Pursuant to Section 151 of theGeneral Corporation Law of the State of Delaware The undersigned hereby certifies that the following resolution was duly adopted by the Board of Directors of Candie’s, Inc. (the “Corporation”), acorporation organized and existing by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), on January 25, 2000:RESOLVED, that pursuant to authority conferred upon the Board of Directors of the Corporation by its Certificate of Incorporation, a Series A JuniorParticipating Preferred Stock of the Corporation is hereby created, and the designation and amount thereof and the voting powers, preferences and relative,participating, optional or other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof, are as follows:Section 1. Designation and Number of Shares. The shares of such series shall be designated as “Series A Junior Participating Cumulative PreferredStock” (“Series A Preferred Stock”). The number of shares initially constituting the Series A Stock shall be 18,000; provided, however, that, if more than atotal of 18,000 shares of Series A Preferred Stock shall be at any time issuable upon the exercise of Rights (the “Rights”) issued pursuant to the RightsAgreement, dated as of January 26, 2000, between the Corporation and Continental Stock Transfer and Trust Company, as Rights Agent, as amended fromtime to time (the “Rights Agreement”), the Board of Directors, pursuant to Section 151(g) of the DGCL, shall direct by resolution or resolutions that acertificate be properly executed, acknowledged, filed and recorded, in accordance with the provisions of Section 103 thereof, providing for the total numberof shares of Series A Preferred Stock authorized to be issued to be increased (to the extent that the Certificate of Incorporation then permits) to the largestnumber of whole shares (rounded up to the nearest whole number) then issuable upon exercise of such Rights.Section 2. Dividends and Distributions.(a) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superiorto the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock andof any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose,quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share ofSeries A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 or (ii) subject to the provision for adjustmenthereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of allnon-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of CommonStock (by reclassification or otherwise),  declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend PaymentDate, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay anydividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares ofCommon Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares ofCommon Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event underclause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares ofCommon Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstandingimmediately prior to such event.(b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (a) of thisSection 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock);provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly DividendPayment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless bepayable on such subsequent Quarterly Dividend Payment Date.(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly DividendPayment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly DividendPayment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a QuarterlyDividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterlydividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from suchQuarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in anamount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basisamong all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A PreferredStock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed forthe payment thereof.Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:(a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereofto 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay anydividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares ofCommon Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares ofCommon Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior tosuch event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstandingimmediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.(b) Except as otherwise provided in this Certificate of Incorporation, in any Preferred Stock Designation or in any certificate ofdesignations creating any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any othercapital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of theCorporation.(c) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rightsand their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking anycorporate action.2 Section 4. Certain Restrictions.(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stockoutstanding shall have been paid in full, the Corporation shall not:(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividendsor upon liquidation, dissolution or winding up) to the Series A Preferred Stock;(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as todividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stockand all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are thenentitled;(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividendsor upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwiseacquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution,liquidation or winding up) to the Series A Preferred Stock; or(iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares ofstock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined bythe Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates andother relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among therespective series or classes.(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any sharesof stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and insuch manner.Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any mannerwhatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of SeriesA Preferred Stock and may be reissued as part of a new series of Series A Preferred Stock subject to the conditions and restrictions on issuance set forth hereinor in any Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall bemade (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stockunless, prior thereto, the holders of shares of Series A Preferred Stock shall have received an amount equal to accrued and unpaid dividends and distributionsthereon, whether or not declared, to the date of such payment, plus an amount equal to the greater of $1.00 per share or an aggregate amount per share equalto 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on aparity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on theSeries A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation,dissolution or winding up; provided, however, that in the event the Corporation shall at any time declare or pay any dividend on the Common Stock payablein shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification orotherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case theaggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying suchamount by a fraction the numerator3 of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares ofCommon Stock that were outstanding immediately prior to such event.Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction inwhich the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case eachshare of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustmenthereinafter set forth, equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, intowhich or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on theCommon Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (byreclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then ineach such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjustedby multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event andthe denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.Section 8. No Redemption. The shares of Series A Preferred Stock shall not be redeemable.Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets upon liquidation,dissolution or winding up of the Corporation, whether voluntary or involuntary, junior to all other series of the Corporation’s Preferred Stock.Section 10. Amendment. The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter orchange the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of atleast two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. Dated: February 2, 2000 CANDIE’S, INC. By:/s/ Deborah Sorell Stehr Deborah Sorell Stehr, Senior Vice President 4 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/24/2002 020407781 – 0864972CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFCANDIE’S, INC. Adopted in accordance with the provisions ofSection 242 of the General Corporation Law of the State of Delaware THE UNDERSIGNED, President of Candie’s, Inc., a corporation existing under the laws of the State of Delaware (the “Corporation”),does hereby certify as follows:FIRST: That the Certificate of Incorporation of the Corporation has been amended as follows by striking out the first sentence ofArticle FOURTH as it now exists and inserting in lieu and instead thereof a new first sentence of Article FOURTH, reading as follows:“The total number of shares of stock which the Corporation shall have authority to issue is eighty million (80,000,000) shares, ofwhich seventyfive million (75,000,000) shares shall be common stock, of the par value of $.001 per share, and five million (5,000,000) shares shall bepreferred stock, of the par value of $.01 per share.”SECOND: That such amendment has been duly adopted in accordance with the provisions of the General Corporation Law of theState of Delaware by the affirmative vote of the holders of a majority of the stock entitled to vote at a meeting of stockholders.IN WITNESS WHEREOF, the undersigned has executed this Certificate this 24th day of June, 2002. /s/ Neil Cole Name: Neil Cole Title:President  State of .DelawareSecretary of StateDivision of CorporationsDelivered 01:58 PM 02/09/2005FILED 12:57 PM 02/09/2005SRV 050106573 – 0864972 FILECERTIFICATE FOR RENEWALAND REVIVAL OF CHARTER OFCANDIE’S, INC.1. The name of the corporation is Candie’s, Inc., whose original Certificate of Incorporation was filed in the office of the Secretary of State onDecember 26, 1978.2. Its registered office in the State of Delaware shall be located at 1209 Orange Street, City of Wilmington, County of New Castle, 19801, and thename of its registered agent at said address shall be The Corporation Trust Company.3. This restoration, renewal and revival of the charter of the corporation is to be for a perpetual term. The date when the restoration, renewal andrevival of the charter of the corporation is to be effective is the 29th day of February, 2004, which date is prior to the date of the expiration of the charter ofsaid corporation and its becoming void by operation of law.4. The corporation was duly organized under the laws of the State of Delaware5. The corporation was authorized to engage in the business activities set forth in its Certificate of Incorporation until March 1, 2004, at which timeits charter became inoperative and void by operation of law for failure to file annual reports and for non-payment of taxes payable to the State of Delaware,and this Certificate of Renewal and Revival is filed by authority of the duly elected directors of the corporation in accordance with the laws of the State ofDelaware.IN WITNESS WHEREOF, I have signed this Certificate this 13th day of January, 2005. CANDIE’S, INC. By:/s/ Deborah Sorell Stehr Name:Deborah Sorell Stehr, Title:Sr. V. Pres  State of DelawareSecretary of StateDivision of CorporationsDelivered 12:26 PM 06/29/2005FILED 12: 05 PM 06/29/2005SRV 050541901 - 0864972 FILECERTIFICATE OF OWNERSHIP AND MERGEROFICONIX BRAND GROUP, INC.INTOCANDIE’S, INC. Adopted in accordance with the provisions ofSection 253 of the Delaware General Corporation Law CANDIE’S, INC., a Delaware corporation, desiring to merge with ICONIX BRAND GROUP, INC., a Delaware corporation, pursuant to the provisionsof Section 253 of the Delaware General Corporation Law, hereby certifies as follows:1. Candie’s, Inc. is a corporation formed under the laws of the State of Delaware (the “Corporation”).2. The Corporation is the owner of all of the outstanding shares of each class of stock of Iconix Brand Group, Inc., a corporation formed under thelaws of the State of Delaware.3. On June 28, 2005, the Board of Directors of the Corporation adopted the following resolutions to merge Iconix Brand Group, Inc. into theCorporation:“WHEREAS, the Corporation owns 100% of the issued and outstanding common stock of the Iconix Brand Group, Inc. (“Subsidiary”);andWHEREAS, it is in the best interests of the Corporation to merge the Subsidiary with and into the Corporation in order that all theestate, property, rights, privileges and franchises of the Subsidiary shall vest in and be possessed by the Corporation;NOW, THEREFORE, be it:RESOLVED, that the Board of Directors of the Corporation hereby approves and adopts the following plan to merge the Subsidiary into theCorporation:1. The name of the corporation proposing to merge is Iconix Brand Group, Inc. (the “Subsidiary”) and the name of the surviving corporation is Candie’s, Inc.(the “Corporation”)2. The Subsidiary shall merge into the Corporation and upon the effective date of such merger the Subsidiary shall cease to exist and shall no longer exerciseits powers, privileges and franchises subject to the laws of the State of Delaware. The Corporation shall succeed to the property and assets of and exercise allthe powers, privileges and franchises of the Subsidiary and shall assume and be liable for all of the debts and liabilities, if any, of the Subsidiary.  3. The shares of the Subsidiary shall not be converted as a result of the merger, but shall be cancelled, and the authorized capital stock of the Corporationshall be and remain the same as before the merger.4. The Certificate of Incorporation of the Corporation shall be amended to change the name of the Corporation to Iconix Brand Group, Inc. upon the effectivedate of the merger.and furtherRESOLVED, that the President of the Corporation, or such other officer of the Corporation designated by the President, is hereby authorized toexecute, in the name of the Corporation, a Certificate of Merger, and to file such Certificate in the Office of the Secretary of State of the State of Delaware, andto do all the other acts and things that may be necessary to carry out and effectuate the purpose of these resolutions.”4. The effective time and date of the merger shall be 9 A.M., July 1, 2005.  IN WITNESS WHEREOF, CANDIE’S, INC. has caused this Certificate to be executed by its duly authorized officer thereunto duly authorized this28th day of June, 2005. CANDIE’S, INC.(a Delaware corporation) By:/s/ Neil Cole Name:Neil Cole Title:President  State of DelawareSecretary of StateDivision of CorporationsDelivered 05:45 PM 08/16/2007FILED 05:18 PM 08/16/2007SRV 070930663 - 0864972 FILE CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFICONIX BRAND GROUP, INC. Adopted in accordance with the provisions of Section 242of the General Corporation Law of the State of Delaware THE UNDERSIGNED, being a duly authorized officer of Iconix Brand Group, Inc., a corporation existing under the laws of the State of Delaware(the “Corporation”), does hereby certify as follows:FIRST: That the Certificate of Incorporation of the Corporation has been amended as follows by striking out the first sentence of ArticleFOURTH as it now exists and inserting in lieu and instead thereof a new first sentence of Article FOURTH, reading as follows:“The total number of shares of stock which the Corporation shall have authority to issue is one hundred fifty-five million (155,000,000)shares, of which one hundred fifty million (150,000,000) shares shall be common stock, of the par value of $.001 per share, and five million(5,000,000) shares shall be preferred stock, of the par value of $.01 per share.”SECOND: That such amendment has been duly adopted in accordance with the provisions of the General Corporation Law of the State ofDelaware by the affirmative vote of the holders of a majority of the stock entitled to vote at a meeting of stockholders.IN WITNESS WHEREOF, the undersigned has executed this Certificate this 16th day of August, 2007. /s/ Deborah Sorell Stehr Name: Deborah Sorell Stehr Title:Senior Vice President  State of .DelawareSecretary of StateDivision of CorporationsDelivered 12:01 PM 05/12/2010FILED 09:05 AM 05/12/2010SRV 100494750 - 0864972 FILE CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICEAND OF REGISTERED AGENTOFICONIX BRAND GROUP, INC.It is hereby certified that:1. The name of the corporation (hereinafter called the “corporation”) is:ICONIX BRAND GROUP, INC.2. The registered office of the corporation within the State of Delaware is hereby changed to 2711 Centerville Road, Suite 400, Cityof Wilmington 19808, County of New Castle.3. The registered agent of the corporation within the State of Delaware is hereby changed to Corporation Service Company, thebusiness office of which is identical with the registered office of the corporation as hereby changed.4. The corporation has authorized the changes hereinbefore set forth by resolution of its Board of Directors.Signed on May 10, 2010 /s/ Andrew Tarshis Name: Andrew Tarshis Title: Executive Vice President  State of DelawareSecretary of StateDivision of CorporationsDelivered 08:09 AM 01/29/2016FILED 08:15 AM 01/29/2016SR 20160468306 - File Number 864972 CERTIFICATE OF DESIGNATION, PREFERENCES ANDRIGHTS OF SERIES B JUNIOR PARTICJPATING PREFERRED STOCKofICONIX BRAND GROUP, INC.Pursuant to Section 151 of the General Corporation Law of the State of DelawareWe, F. Peter Cuneo, Chairman of the Board of Directors, and Jason Schaefer, Secretary, of ICONIX BRAND GROUP, INC., a corporation organizedand existing under the General Corporation Law of the State of Delaware (the “Corporation’’), in accordance with the provisions of Section 103 thereof, DOHEREBY CERTIFY:That pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors’’) by the Certificate of Incorporation of theCorporation and all amendments thereto (as may be amended from time to time, the “Certificate of Incorporation”), the Board of Directors on January 27,2016, duly adopted the following resolution creating a series of shares of Preferred Stock, par value $0.01 per share, of the Company designated as Series BJunior Participating Preferred Stock (the “Preferred Stock”):RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions ofthe Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and thevoting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations orrestrictions thereof are as follows:Section 1. Designation and Amount. The shares of such series shall be designated as “Series B Junior Participating Preferred Stock” and thenumber of shares constituting such series shall be l00,000. Such number of shares may be increased or decreased by resolution of the Board of Directors;provided, that no decrease shall reduce the number of shares of Series B Junior Participating Preferred Stock to a number less than the number of shares thenoutstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the exercise of any options,rights or warrants issuable upon conversion of any outstanding securities issued by the Corporation convertible into the Series B Junior ParticipatingPreferred Stock.Section 2. Dividends and Distributions.(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to1:he shares ofSeries B Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series B Junior Participating Preferred Stock, in preference tothe holders of common stock, par value $0.001 per share, of the Corporation (the “Common Stock”), and of any other junior stock, shall be entitled toreceive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first dayof March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on thefirst Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Participating Preferred Stock, in an amount pershare (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, one thousand (1,000)times the aggregate per share amount of all cash dividends, and one thousand (1,000) times the aggregate per share amount (payable in kind) of all non-cashdividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (byreclassification or otherwise), declared on the Common Stock since the1 immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any shareor fraction of a share of Series B Junior Participating Preferred Stock.•In the event the Corporation shall at any time after January 27, 2016 (the “RightsDeclaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B JuniorParticipating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying suchamount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator ofwhich is the number of shares of Common Stock that were outstanding immediately prior to such event.(B) The Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in paragraph (A) ofthis Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock);provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly DividendPayment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series B Junior Participating Preferred Stockshall nevertheless be payable on such subsequent Quarterly Dividend Payment Date (the actual payment, however, may be deferred if prohibited under anydebt instruments).(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the QuarterlyDividend Payment Date next preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless the date of issue of such sharesis prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue ofsuch shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares ofSeries B Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of whichevents such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bearinterest. Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the timeaccrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directorsmay fix a record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend ordistribution declared thereon, which record date shall be no more than thirty (30) days prior to the date fixed for the payment thereof.Section 3. Voting Rights. The holders of shares of Series B Junior Participating Preferred Stock shall have the following voting rights:(A) Subject to the provision for adjustment hereinafter set forth, each share of Series B Junior Participating Preferred Stock shall entitle the holderthereof to one thousand (1,000) votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any timeafter the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding CommonStock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holdersof shares of Series B Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by afraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is thenumber of shares of Common Stock that were outstanding immediately prior to such event.(B) Except as otherwise provided herein, in the Certificate of Incorporation or by law, the holders of shares of Series B Junior ParticipatingPreferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together asone class on all matters submitted to a vote of stockholders of the Corporation.(C) Except as set forth herein, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent shallnot be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.2 Section 4. Certain Restrictions.(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Participating Preferred Stock as provided inSection 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B JuniorParticipating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stockranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock;(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or uponliquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, except dividends paid ratably on the Series B JuniorParticipating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders ofall such shares are then entitled;(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation,dissolution or winding up) with the Series B Junior Participating Preferred Stock provided that the Corporation may at any time redeem, purchase orotherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upondissolution, liquidation or winding up) to the Series B Junior Participating Preferred Stock; or(iv) purchase or otherwise acquire for consideration any shares of Series B Junior Participating Preferred Stock, or any shares of stock ranking on aparity with the Series B Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined bythe Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates andother relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among therespective series or classes.(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock ofthe Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in suchmanner.Section 5. Reacquired Shares. Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation inany manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorizedbut unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board ofDirectors, subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation or as otherwise required by law.Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of theCorporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or windingup) to the Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Participating Preferred Stock shall havereceived an amount equal to one thousand dollars ($1,000.00) per share of Series B Junior Participating Preferred Stock, plus an amount equal to accrued andunpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “‘Series B Liquidation Preference”). Following thepayment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B JuniorParticipating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “CommonAdjustment’’) equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) one thousand (1,000)(as appropriately adjusted as setforth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such numberin clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment inrespect of all outstanding shares of Series B Junior Participating Preferred Stock and Common Stock, respectively, holders of Series B Junior ParticipatingPreferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining3 assets to be distributed in the ratio of the Adjustment Number to one (l) with respect to such Preferred Stock and Common Stock, on a per share basis,respectively.(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and theliquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series B Junior Participating Preferred Stock, then suchremaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event,however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributedratably to the holders of Common Stock.(C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in sharesof Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then ineach such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction thenumerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of sharesof Common Stock that were outstanding immediately prior to such event.Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction inwhich the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case theshares of Series B Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to theprovision for adjustment hereinafter set forth) equal to one thousand (1,000) times the aggregate amount of stock, securities, cash and/or any other property(payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall atany time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstandingCommon Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the precedingsentence with respect to the exchange or change of shares of Series B Junior Participating Preferred Stock shall be adjusted by multiplying such amount by afraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is thenumber of shares of Common Stock that were outstanding immediately prior to such event.Section 8. No Redemption. The shares of Series B Junior Participating Preferred Stock shall not be redeemable.Section 9. Ranking. Except as set forth in the following sentence or in the terms of any series of Preferred Stock hereinafter designated, the SeriesB Junior Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and thedistribution of assets, unless the terms of any such series shall provide otherwise. The Series A Junior Participating Preferred Stock, to the extent any suchshares are outstanding, shall rank junior to the Series B Junior Participating Preferred Stock.Section 10. Amendment. At any time when any shares of Series B Junior Participating Preferred Stock are outstanding, neither the Certificate ofIncorporation nor this Certificate of Designation, Preferences and Rights shall be amended in any manner which would materially alter or change the powers,preferences or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of amajority or more of the outstanding shares of Series B Junior Participating Preferred Stock, voting separately as a class.Section 11. Fractional Shares. Series B Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, inproportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rightsof holders of Series B Junior Participating Preferred Stock.[Signature Page Follows] 4 IN WITNESS WHEREOF, we have executed and subscribed this Certificate of Designation, Preferences and Rights and do affirm the foregoing astrue under the penalties of perjury this 29th day of January, 2016. /s/ F. Peter Cuneo Chairman of the Board of Directors Peter Cuneo Attest: /s/ Jason Schaefer Secretary Jason Schaefer [Signature Page to the Certificate of Designation, Preferences and Rights]  State of DelawareSecretary of StateDivision of CorporationsDelivered 01:19 PM 05/02/2018FILED 01:19 PM 05/02/2018SR 20183268497 - File Number 864972 CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFICONIX BRAND GROUP, INC. Adopted in accordance with the provisions of Section 242of the General Corporation Law of the State of Delaware THE UNDERSIGNED, being a duly authorized officer of Iconix Brand Group, Inc., a corporation existing under the laws of the State of Delaware (the“Corporation”), does hereby certify as follows:FIRST: That the Certificate of Incorporation of the Corporation has been amended by striking out of the first sentence of Article FOURTH as it nowexists and inserting in lieu and instead thereof a new first sentence of Article FOURTH, reading as follows:“The total number of shares of stock which the Corporation shall have authority to issue is two hundred sixty-five million(265,000,000) shares, of which two hundred sixty million (260,000,000) shares shall be common stock, of the par value of $.001 pershare, and five million (5,000,000) shares shall be preferred stock, of the par value of $.01 per share.”SECOND: That such amendment has been duly adopted in accordance with the provisions of the General Corporation Law of the State of Delawareby the affirmative vote of the holders of a majority of the stock entitled to vote at a meeting of stockholders. [Signature Page Follows]  IN WITNESS WHEREOF, the undersigned has executed this Certificate this 2nd day of May, 2018. /s/ Jason Schaefer Name: Jason Schaefer Title:Executive Vice• President, General Counsel andCorporate Secretary  State of DelawareSecretary of StateDivision of CorporationsDelivered 11:48 AM 03/13/2019FILED 11:48 AM 03/13/2019SR 20191939569 - File Number 864972 CERTIFICATE OF AMENDMENTOFCERTIFICATE OF INCORPORATIONOFICONIX BRAND GROUP, INC.------------------------------------------------------------------------Adopted in accordance with the provisions of Section 242of the General Corporation Law of the State of Delaware------------------------------------------------------------------------THE UNDERSIGNED, being a duly authorized officer of Iconix Brand Group, Inc., a corporation existing under the laws of the State of Delaware (the“Corporation”), does hereby certify as follows:FIRST: That the Certificate of Incorporation of the Corporation has been amended by inserting a new second paragraph into Article FOURTH as itnow exists, reading as follows:“Reverse Stock Split. In accordance with Section 242 of the General Corporation Law of the State of Delaware, upon the effectiveness(the “Effective Time”) of the certificate of amendment filed by the Corporation with the State of Delaware on or prior to March 14,2019 (the “Certificate of Amendment”), each ten (10) shares of the Corporation’s common stock, par value of $0.001 per share, issuedand outstanding immediately prior to the Effective Time (the “Old Common Stock”) shall automatically without further action on thepart of the Corporation or any holder of Old Common Stock, be reclassified, combined and changed into one (1) fully paid andnonassessable share of common stock, par value of $0.001 per share (the “New Common Stock”), subject to the treatment offractional share interests as described below (the “reverse stock split”). From and after the Effective Time, certificates representing theOld Common Stock shall represent the number of shares of New Common Stock into which such Old Common Stock shall have beencombined pursuant to the reverse stock split. Holders who otherwise would be entitled to receive fractional share interests of NewCommon Stock upon the effectiveness of the reverse stock split shall be entitled to receive a whole share of New Common Stock inlieu of any fractional share created as a result of such reverse stock split.”SECOND: That this Certificate of Amendment shall be effective as of 12:01 a.m. EST on March 14, 2019.THIRD: That this Certificate of Amendment has been duly adopted in accordance with the provisions of the General Corporation Law of the State ofDelaware by the affirmative vote of the holders of a majority of the stock entitled to vote at a meeting of stockholders. [Signature Page Follows]  IN WITNESS WHEREOF, the undersigned has executed this Certificate this 13th day of March, 2019. /s/ Kyle Harmon Name: Kyle C. Harmon Title:Vice President Exhibit 21SUBSIDIARIES OF ICONIX BRAND GROUP, INC. IBG Borrower LLCa Delaware limited liability company Bright Star Footwear LLCa New Jersey limited liability company Badgley Mischka Licensing LLCa Delaware limited liability company IP Holdings and Management Corporationa Delaware corporation IP Holdings LLCa Delaware limited liability company IP Management LLCa Delaware limited liability company Michael Caruso & Co., Inc.a California corporation Unzipped Apparel LLCa Delaware limited liability company Mossimo Holdings LLCa Delaware limited liability company Mossimo, Inc.a Delaware corporation OP Holdings LLCa Delaware limited liability company OP Holdings and Management Corporationa Delaware corporation Studio IP Holdings LLCa Delaware limited liability company Studio Holdings and Management Corporationa Delaware corporation Official Pillowtex LLCa Delaware limited liability company Pillowtex Holdings and Management LLCa Delaware limited liability company Scion LLCa Delaware limited liability company Artful Holdings LLCa Delaware limited liability company IP Holdings Unltd LLCa Delaware limited liability company MG Icon LLCa Delaware limited liability company Icon Entertainment LLCa Delaware limited liability company Hardy Way LLCa Delaware limited liability company ZY Holdings LLCa Delaware limited liability company ZY Holdings and Management Corporationa Delaware corporation Sharper Image Holdings LLCa Delaware limited liability company Sharper Image Holdings and Management Corporationa Delaware corporation Scion BBC LLCa Delaware limited liability company Iconix DE Brand Holdings Corp.a Delaware corporation Icon DE Intermediate Holdings LLCa Delaware limited liability company Icon DE Holdings LLCa Delaware limited liability company Icon NY Holdings LLCa Delaware limited liability company Umbro IP Holdings LLCa Delaware limited liability company Iconix Luxembourg Holdings S.á.r.l,a Luxembourg Société à responsabilité limitée Iconix Brand UK Limiteda United Kingdom private limited company Iconix Spain Holdings, S.L.a Spanish Sociedad Unipersonal Icon Modern Amusement LLCa Delaware limited liability company 1724982 Alberta ULCa Canadian unlimited liability company Iconix Latin America LLCa Delaware limited liability company Iconix Europe LLCa Delaware limited liability company Hydraulic IP Holdings LLCa Delaware limited liability company US Pony Holdings, LLCa Delaware limited liability company Diamond Icon Ltd.a United Kingdom limited company Icon Brand Holdings LLCa Delaware limited liability company Iconix CA Holdings LLCa Delaware limited liability company Icon Canada JV Holdings Corp.a Delaware corporation Iconix Canada JV Holdings ULCa Canada unlimited liability company Iconix Luxembourg LC Holdings S.á.r.l.a Luxembourg Société à responsabilité limitée Lee Cooper Brands (Management Services) Ltd.a United Kingdom limited company Red Diamond Holdings S.á.r.la Luxembourg Société à responsabilité limitée Umbro Sourcing LLCa Delaware limited liability company Iconix China Holdings Limiteda Cayman Islands company Iconix China Investments Ltd.a British Virgin Islands company Iconix China Limiteda Hong Kong limited company Umbro China Limiteda Hong Kong limited company Danskin China Limiteda Hong Kong limited company LC Partners US LLCa Delaware limited liability company Iconix Ecom, LLCa Delaware limited liability company Starter China Limiteda Hong Kong limited company Lee Cooper China Limiteda Hong Kong limited company Iconix MENA Ltd.a United Kingdom limited company Iconix Group DMCCa Dubai limited company Exhibit 23Consent of Independent Registered Public Accounting Firm Iconix Brand Group, Inc.New York, New York We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-224724, 333-215050, 333-184313, and 333-161419) of our report dated March 28, 2019, relating to the consolidated financial statements of Iconix Brand Group, Inc. which appear in this Form 10-K. /s/ BDO USA, LLPNew York, New YorkMarch 28, 2019 Exhibit 31.1ICONIX BRAND GROUP, INC.CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OFTHE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Robert C. Galvin, certify that:1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2018 of Iconix Brand Group, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting.5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 28, 2019 /s/ Robert C. GalvinRobert C. GalvinPresident and Chief Executive Officer(Principal Executive Officer) Exhibit 31.2ICONIX BRAND GROUP, INC.CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OFTHE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, John T. McClain, certify that:1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2018 of Iconix Brand Group, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting.5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: March 28, 2019 /s/ John T. McClainJohn T. McClainExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer) Exhibit 32.1ICONIX BRAND GROUP, INC.CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906 OFTHE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Iconix Brand Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2018 (the “Report”), I,Robert C. Galvin, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002, that to the best of my knowledge:(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Robert C. GalvinRobert C. GalvinPresident and Chief Executive Officer March 28, 2019 Exhibit 32.2ICONIX BRAND GROUP, INC.CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906 OFTHE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Iconix Brand Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2018 (the “Report”), I,John T. McClain, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ John T. McClainJohn T. McClainExecutive Vice President and Chief Financial Officer March 28, 2019 

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