20. Other Liabilities – Current
Other current liabilities of $9.8 million as of December 31, 2018 related to amounts due to certain joint ventures that are not consolidated with the Company 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 that are not consolidated with the Company and $4.4 million owed to Buffalo International for distributions associated with the Buffalo joint venture.
21. Foreign Currency Translation
The functional currency of Iconix Luxembourg and Red Diamond Holdings, which are wholly owned subsidiaries of the Company, located in Luxembourg, 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 million currency 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 directly as an adjustment to stockholders’ equity. Our comprehensive income is primarily comprised of net income and foreign currency translation gain or loss. During FY 2018 and FY 2017, the Company recognized as a component of our comprehensive income (loss), a foreign currency translation loss of $5.0 million and a foreign currency translation gain of $19.6 million, respectively, due to changes in foreign exchange rates.
22. Subsequent Events
On March 14, 2019, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of its common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock had their holdings rounded up to the next whole share. Proportional adjustments were made to the Company’s outstanding warrants, stock options and other equity 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 each case, 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 have been 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 Notes into approximately 0.2 million shares of the Company’s common stock. Pursuant to the Indenture, the Company also made Conversion Make-Whole Payments of approximately 0.8 million shares of the Company’s common stock to those converting noteholders.
23. Other Matters
During 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 class action 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 member of 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 with his severance and other benefits.