What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-04-09 compared with 2024-04-15 · 694 added, 277 removed, 25 unchanged (97% of the section changed)

Recent Developments

We entered into a license deal for Bailey 44 in January 2023 that is paid quarterly based on the results.

We have received two license payouts since November 2023 for approximately $124,000 in total.

The licensee has asked to add additional categories to their current offering, which we agreed to.

We entered into a retail store sublease for approximately 3.5 years at the Simon Premium Outlet in Allen, TX, a suburb of Dallas.

We plan to open the store in April 2024.

We expect the store to generate meaningful cash flow as we already have excess product that we can sell, which means we will not have to use cash to create inventory for sale.

We expect the store to generate over $1.5 million in annual revenue and over $500,000 in free cash flow.

Company Overview

We are a curated collection of lifestyle brands, including Bailey, DSTLD, Stateside, Sundry and Avo, that offers

a variety of apparel products through direct-to-consumer and wholesale distribution.

Our complementary brand portfolio provides us with

the unique opportunity to cross merchandise our brands.

We aim for our customers to wear our brands head to toe and to capture what we

call “closet share” by gaining insight into their preferences to create targeted and personalized content specific to their

Operating our brands under one portfolio provides us with the ability to better utilize our technological, human capital and operational

capabilities across all brands.

As a result, we have been able to realize operational efficiencies and continue to identify additional

cost-saving opportunities to scale our brands and overall portfolio.

April of 2024, we entered into a retail store sublease for approximately 3.5 years at the Simon Premium Outlet in Allen, TX, a suburb

We opened the store in April 2024.

The Company closed the store in October 2024 to focus on its e-commerce strategy with VaynerCommerce,

a digital marketing agency.

October 2, 2024, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market

LLC (“Nasdaq”) notifying the Company that the Staff has determined to delist the Company’s common stock from Nasdaq

at the opening of business on October 11, 2024, based on the Company’s failure to maintain a minimum bid price of $1 per share

per Listing Rule 5550(a)(2), unless the Company requests an appeal of such determination by October 9, 2024.

The Company submitted the

appeal request to Nasdaq on October 9, 2024.

Nasdaq granted a hearing of the appeal to be held on December 3, 2024.

On November 20, 2024,

the Company received notice from the Staff of Nasdaq that the Company no longer satisfied the $35,000,000 market value of listed securities

requirement, or the alternative $2,500,000 stockholders’ equity requirement, as set forth in Listing Rule 5550(b), and that such

failure would serve as an additional basis for the delisting of the Company’s securities from Nasdaq.

In the Company’s Amendment

1 to its Quarterly Report on Form 10-Q/A for the period ended September 30, 2024 (the “Q3 Report”), filed with the SEC

on November 15, 2024, the Company reported stockholders’ equity of $19,046 and, therefore, no longer complied with the Rule.

December 16, 2024, the Staff of Nasdaq notified the Company that the Nasdaq Hearings Panel (the “Panel”) determined to delist

the Company’s common stock and trading of the Company’s securities was suspended on Nasdaq at the open of trading on December

Immediately after the delisting of the Company’s common stock, the Company’s common stock began being quoted on

the OTC Pink Market under its existing symbol, “DBGI”.

The Panel reached its decision because the Company was in violation

of Listing Rules 5550(a)(2), 5550(b)(1), and 5635, the Bid Price, Shareholders’ Equity, and Shareholder Approval Rules, respectively.

Company and various purchasers (the “Investors”) executed a securities purchase agreement (the “SPA”) on or around

April 7, 2023, whereby the Investors purchased from the Company promissory notes in the aggregate principal amount of approximately $2,500,000

(the “Original Notes”), and the remaining balances of such Original Notes as of October 1, 2023, were exchanged by the Investors

for replacement promissory notes issued on October 1, 2023, in the aggregate principal amount of approximately $1,789,668.37 (the “2023

On May 24, 2024, the Company entered into settlement agreements with the Investors (each a “Settlement Agreement”),

pursuant to which the Company agreed to pay aggregate cash payments equal to $1,789,668.37 to extinguish all obligations and claims under

the SPA, Original Notes, and 2023 Notes, as follows:

(i) $500,000.00 on or before May 28, 2024 and (ii) $1,289,668.37 on or before September

30, 2024 (the “Final Payment”).

On or around October 3, 2024, the Company entered into amendments to each Settlement Agreement

with the Investors, whereby the Final Payment due date was extended to October 31, 2024.

On November 1, 2024, the Company entered into

a second amendment to each Settlement Agreement with the Investors, whereby the Final Payment due date was extended to November 4, 2024.

On November 4, 2024, the Company paid the Final Payment to extinguish all obligations and claims under the SPA, Original Notes, and 2023

July 1, 2024 and October 22, 2024, the Company issued and sold 105,125 shares of Common Stock (the “Recent ATM Share Sales”)

Wainwright & Co., LLC (the “Agent”) as sales agent or principal, pursuant to the terms of the Company’s

previously announced At-The-Market Offering Agreement, dated December 27, 2023, between us and the Agent (the “Sales Agreement”).

The Company received net proceeds of $2,063,386 from the Recent ATM Share Sales.

Between October 23, 2024 and December 17, 2024, the

Company issued and sold 65,236 shares of Common Stock to the Agent as sales agent or principal, pursuant to the terms of the Sales Agreement,

and received net proceeds of $278,160.

October 3, 2024 and October 15, 2024, the Company issued 26,226 shares of the Company’s common stock (the “Shares”)

to a certain note holder upon conversion of a portion of their promissory note originally issued by the Company on or around October

1, 2023 (the “Note”).

On October 16, 2024, the Company became aware that the issuance of the Shares was in error and not

permitted under the terms of the Note due to the requirement thereunder that stockholder approval be obtained prior to the issuance of

more than 19.9% of the Company’s pre-transaction shares outstanding upon conversion(s) of the Note, as referenced and specifically

required under Nasdaq Listing Rule 5635(d).

The Company then notified the note holder that the Shares must be returned to the Company’s

transfer agent for cancellation.

On November 5, 2024, the holder facilitated the cancellation of 26,226 shares of the Company’s

common stock in accordance with the Company’s remediation plan.

The Company communicated with The Nasdaq Stock Market LLC regarding

the aforementioned erroneous issuance of the Shares and subsequent remediation actions.

The Listing Qualifications Staff (the “Staff”)

of The Nasdaq Stock Market LLC considered the Company’s non-compliance with Nasdaq Listing Rule 5635(d) as an additional basis

for the delisting of the Company’s securities from Nasdaq.

October 28, 2024, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain accredited

investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a best efforts offering

(the “Offering”):

(i) 124,673 shares of common stock (the “Common Stock”), at a purchase price of $5.00 per share

of Common Stock, and (ii) 482,187 pre-funded warrants (“Pre-Funded Warrants”) to purchase Common Stock, at a purchase price

of $4.995 per Pre-Funded Warrant, immediately exercisable at an exercise price of $0.005 per share.

The Purchase Agreement contained

customary representations and warranties and agreements of the Company and the Purchasers and customary indemnification rights and obligations

of the parties.

The Offering closed on October 30, 2024.

Company offered Pre-Funded Warrants to those Purchasers whose purchase of Common Stock in the Offering would have resulted in the Purchaser,

together with its affiliates and certain related parties, beneficially owning more than 4.99% (or at the election of the Purchaser, 9.99%)

of our Common Stock immediately following the consummation of the Offering in lieu of the Common Stock that would otherwise result in

ownership in excess of 4.99% (or at the election of the purchaser, 9.99%) of the outstanding Common Stock of the Company.

The Pre-Funded

Warrants may be exercised commencing on the issuance date and do not expire.

The Pre-Funded Warrants are exercisable for cash;

however that they may be exercised on a cashless exercise basis if, at the time of exercise, there is no effective registration statement

registering, or no current prospectus available for, the issuance or resale of the Common Stock issuable upon exercise of the Pre-Funded

Common Stock, the Pre-Funded Warrants, and the Common Stock issuable upon exercise of the Pre-Funded Warrants were offered pursuant to

a registration statement on Form S-1 as filed with the SEC on October 24, 2024, as amended, and was declared effective on October 28,

2024 (the “Registration Statement”).

Capital Partners LLC, acting through Dominari Securities LLC (the “Placement Agent”), acted as the exclusive placement agent

for the Offering pursuant to a Placement Agency Agreement dated October 28, 2024 (the “Placement Agency Agreement”) by and

between the Company and the Placement Agent.

Offering resulted in gross proceeds to the Company of approximately $3,000,000, before deducting placement agent fees and commissions

and other offering expenses, and excluding proceeds to the Company, if any, that may result from the future exercise of the Pre-Funded

Warrants issued in the Offering.

As compensation to the Placement Agent, as the exclusive placement agent in connection with the Offering,

the Company paid to the Placement Agent a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering, a non-accountable

expense allowance of 1.0% of the aggregate gross proceeds raised in the Offering, reimbursement of up to $50,000 for expenses of legal

counsel and other actual out-of-pocket expenses, and up to $15,950 for clearing agent closing costs.

The Company received net proceeds

of approximately $2,555,261 from the Offering (the “Public Offering Proceeds”).

December 9, 2024, the Company filed a certificate of amendment to its Certificate of Incorporation with the Secretary of State of

the State of Delaware to effectuate the 2024 Reverse Stock Split at a

ratio of 1-for-50 (the “Amendment”).

The Amendment became effective at 5:00 PM ET on December 12, 2024.

or around January 17, 2025, the Company closed a private placement pursuant to a securities purchase agreement with a certain accredited

investor, pursuant to which the Company agreed to issue and sell, in a private placement, a promissory note in the principal amount of

$121,900 (the “January 2025 Note”).

The January 2025 Note is convertible into common stock upon default at a conversion price

equal to 61% of the lowest closing bid price during the ten trading days prior to the conversion date.

The January 2025 Note provides

that the total number of shares of common stock that may be issued upon conversion thereof shall not exceed 19.99% of the shares of Common

Stock outstanding as of the issuance date of the January 2025 Note.

or around January 20, 2025, the Company entered into a vendor agreement (the “Vendor Agreement”) with MavDB Consulting LLC

(the “Vendor”).

The engagement of the Vendor is for a five (5) year period and the vendor services to be provided include,

but are not limited to, product content production, social media marketing, engagement of influencers and student athletes for product

awareness, and event and staffing costs (the “Services”).

In consideration for the Services, the Company will pay the Vendor

a vendor fee equal to $3,000,000 (the “Cash Fee”) within thirty calendar days after the date of the Vendor Agreement (the

“Payment Period”), provided, however, that Vendor may elect to receive the Vendor Shares (as defined below) and/or Vendor

Pre-Funded Warrants (as defined below) as described below in lieu of the Cash Fee by providing written notice to the Company of such

election during the Payment Period (the “Written Notice”).

The “Vendor Shares” shall mean a number of Common

Stock equal to the Cash Fee divided by $1.45, provided, however, if the issuance of any of the Vendor Shares would cause the Vendor to

exceed 4.99% of the of the outstanding Common Stock, as determined in accordance with Section 16 of the Exchange Act and the regulations

promulgated thereunder, then the Company shall instead issue to Vendor pre-funded warrants (the “Vendor Pre-Funded Warrants”)

for the purchase of the amount of Vendor Shares in excess of the beneficial ownership limitation, provided, further, that if the Vendor

specifies in the Written Notice that the Vendor elects to receive Vendor Pre-Funded Warrants in lieu of the entire amount of the Vendor

Shares, then the Company shall instead issue to Vendor the Vendor Pre-Funded Warrants to purchase the entire amount of the Vendor Shares.

The Vendor delivered the Written Notice to the Company during the Payment Period and the Company issued the Vendor Pre-Funded Warrants

for the purchase of 2,068,965 shares of Common Stock to Vendor on January 21, 2025.

Vendor Pre-Funded Warrants have an initial exercise price per share of Common Stock equal to $0.01.

The Vendor Pre-Funded Warrants are

immediately exercisable and will expire five (5) years after the issuance date of the Vendor Pre-Funded Warrants.

The exercise price

and number of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of share dividends, share

splits, reorganizations or similar events.

The Vendor Pre-Funded Warrants will be exercisable, at the option of the Vendor, in whole

or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of Common Stock

purchased upon such exercise (except in the case of a cashless exercise).

The Vendor (together with its affiliates) may not exercise

any portion of the Vendor Pre-Funded Warrants to the extent that the Vendor would own more than 4.99% of the outstanding shares of Common

Stock immediately after exercise, except that upon at least 61 days’ prior notice from the Vendor to us, the Vendor may increase

the amount of beneficial ownership of outstanding shares after exercising the Vendor’s Pre-Funded Warrants up to 9.99% of the number

of our shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined

in accordance with the terms of the Vendor Pre-Funded Warrants.

In lieu of making the cash payment otherwise contemplated to be made

to us upon such exercise in payment of the aggregate exercise price, the Vendor may elect instead to receive upon such exercise (either

in whole or in part) the number of shares of Common Stock determined according to a formula set forth in the Vendor Pre-Funded Warrants.

January 22, 2025, the Company issued a promissory note in the principal amount of $260,000.00 (the “Second Note”) to an accredited

investor (“Investor”), pursuant to which the Investor made a loan to the Company.

The Second Note carries an original issue

discount of $60,000.00, and accordingly the purchase price of the Second Note is $200,000.00.

The Second Note matures on April 22, 2025,

and contains customary events of default.

Upon the occurrence of any event of default under the Second Note, the Second Note will become

immediately due and payable in an amount equal to the outstanding principal and accrued interest under the Second Note plus default interest

at the rate of sixteen percent (16%) per annum.

Reverse Stock Split

On August 22, 2023, following the approval of shareholders at a special meeting held on August 21, 2023, we completed a one-for-twenty-five (1-for-25) reverse stock split (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, every twenty-five (25) shares of the Company’s pre-Reverse Stock Split common stock was combined and automatically became one (1) share of common stock.

The Company’s post-Reverse Stock Split common stock began trading on August 22, 2023 with a new CUSIP number of 25401N408.

The Reverse Stock Split did not (i) change the authorized number of shares, (ii) change the par value of the common stock, or (iii) modify any voting rights of the common stock.

Also, at the effective time of the Reverse Stock Split, the number of shares of common stock issuable upon exercise of warrants (including public warrants under the trading symbol “DBGIW”), preferred stock, and other convertible securities, as well as any commitments to issue securities, that provide for adjustments in the event of a reverse stock split will be appropriately adjusted pursuant to their applicable terms for the Reverse Stock Split.

If applicable, the conversion price for each outstanding share of preferred stock and the exercise price for each outstanding warrant will be increased, pursuant to their terms, in inverse proportion to the 1-for-25 split ratio such that upon conversion or exercise, the aggregate conversion price for conversion of preferred stock and the aggregate exercise price payable by the warrant holder to the Company for shares of common stock subject to such warrant will remain approximately the same as the aggregate conversion or exercise price, as applicable, prior to the Reverse Stock Split.

H&J Settlement Agreement and Disposition of H&J

We have been involved in a dispute with the former owners of H&J regarding our obligation to “true up” their ownership interest in our company further to that membership interest purchase agreement dated May 10, 2021 whereby we acquired all of the outstanding membership interests of H&J (as amended, the “H&J Purchase Agreement”).

Further to the H&J Purchase Agreement, we agreed that if, at May 18, 2022, the one year anniversary of the closing date of our initial public offering, the product of the number of shares of our common stock issued at the closing of such acquisition multiplied by the average closing price per share of our shares of common stock as quoted on the NasdaqCM for the thirty (30) day trading period immediately preceding such date plus the gross proceeds, if any, of shares of our stock issued to such sellers and sold by them during the one year period from the closing date of the offering does not exceed the sum of $9.1 million, less the value of any shares of common stock cancelled further to any indemnification claims or post-closing adjustments under the H&J Purchase Agreement, then we shall issue to the subject sellers an additional aggregate number of shares of common stock equal to any such valuation shortfall at a per share price equal to the then closing price per share of our common stock as quoted on the NasdaqCM.

We did not honor our obligation to issue such shares and the former owner of H&J have claimed that they were damaged as a result.

On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby contemporaneously with the parties’ execution of the Settlement Agreement (i) the Company made aggregate cash payments of $229,000 to D.

Jones Tailored Collection, Ltd.

Jones”), (ii) the Company issued 78,103 shares of common stock to D.

Jones at a per share purchase price of $17.925 which represented the lower of (i) the closing price per share of the Company’s common stock as reported on Nasdaq on June 20, 2023, and (ii) the average closing price per share of common stock as reported on the NasdaqCM for the five trading days preceding June 21, 2023, and (iii) the Company assigned and transferred one hundred percent (100%) of the Company’s membership interest in H&J to D.

This transaction is known as the “H&J Settlement”.

The Settlement Agreement contained a resale registration rights provision, pursuant to which the Company agreed to prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1 covering the resale of all the shares issued pursuant to the Settlement Agreement and all the shares owned by D.

Jones and its principals by no later than the earlier of the following dates:

(i) within 90 calendar days following the effective date of an offering that the Company was contemplating at that time but did not consummate and (ii) October 31, 2023.

The Company agreed to use its commercial best efforts to have the resale registration statement declared effective as soon as possible and D.

Jones and its principals have agreed to sell no more than $500,000 worth of shares in any calendar month after the registration statement is declared effective.

As of the date hereof, a registration statement on Form S-1 has not been declared effective.

Norwest Waiver

On June 21, 2023, the Company, on the one hand, and Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP (together, the “Norwest Investors”), on the other hand, executed a Waiver and Amendment (the “Norwest Amendment”) whereby the Norwest Investors agreed to waive and terminate certain true up rights of the Norwest Investors under the Agreement and Plan of Merger, dated February 12, 2020, among the Company, Bailey, Norwest Venture Partners XI, LP, and Norwest Venture Partners XII, LP and Denim.LA Acquisition Corp.

This transaction is known as the “Norwest Waiver”.

Sundry Conversion

On June 21, 2023, the Company and the former owners of Sundry (collectively, the “Sundry Investors”) executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 shares of Series C Convertible Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”) to the Sundry Investors at a purchase price of $1,000 per share.

The Series C Preferred Stock is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by an initial conversion price of $17.925 which represents the lower of (i) the closing price per share of the common stock as reported on the NasdaqCM on June 20, 2023, and (ii) the average closing price per share of common stock as reported on the NasdaqCM for the five trading days preceding June 21, 2023.

The shares of Series C Preferred Stock were issued in consideration for the cancellation of $5,759,178 which represented amounts owing further to certain promissory notes issued by the Company to the Sundry Investors dated December 30, 2022.

This transaction is known as the “Sundry Conversion”.

Pursuant to the Sundry SPA, the Company provided resale registration rights to the Sundry Investors.

The Sundry SPA provides that the Company shall no later than the earlier of the following dates:

(i) the date which is 90 calendar days following the effective date of the offering and (ii) October 31, 2023 use its commercially best efforts to prepare and file with the SEC a registration statement covering the resale of 100% of the common stock issuable upon conversion of the Series C Preferred Stock for an offering to be made on a continuous basis pursuant to Rule 415.

The Company agreed to keep such resale registration statement effective until the earlier to occur of (x) the date on which all registrable securities have been sold pursuant to such registration statement and (y) the date as of which all of the Sundry Investors may sell all of the registrable securities without restriction pursuant to Rule 144 (including, without limitation, volume restrictions).

Each of the Sundry Investors agreed that in no event will such investor, on an individual basis, convert in any calendar month, more than the greater of (i) $300,000 of the Series C Preferred Stock (measured by the shares of common stock issuable upon conversion of the Series C Preferred Stock multiplied by the conversion price) or (ii) shares of Series C Preferred Stock comprising more than 3% of the aggregate trading volume of the Company’s common stock as reported by the NasdaqCM.

Digital Brands Group is a curated collection of lifestyle brands that offers a variety of apparel products through direct-to-consumer and wholesale distribution.

December 2024, following the approval of shareholders, we completed the 2024 Reverse Stock Split in the ratio of 1-for-50.

result of the 2024 Reverse Stock Split, every fifty (50) shares of the Company’s pre-reverse stock split common stock was

combined and automatically became one (1) share of common stock.

The 2024 Reverse Stock Split did not (i) change the authorized

number of shares, (ii) change the par value of the common stock, or (iii) modify any voting rights of the common stock.

at the effective time of the 2024 Reverse Stock Split, the number of shares of common stock issuable upon exercise of warrants

(including public warrants under the trading symbol “DBGIW”), preferred stock, and other convertible securities, as well

as any commitments to issue securities, that provide for adjustments in the event of a reverse stock split will be appropriately

adjusted pursuant to their applicable terms for the 2024 Reverse Stock Split.

If applicable, the conversion price for each

outstanding share of preferred stock and the exercise price for each outstanding warrant will be increased, pursuant to their terms,

in inverse proportion to the 1-for-50 split ratio such that upon conversion or exercise, the aggregate conversion price for

conversion of preferred stock and the aggregate exercise price payable by the warrant holder to the Company for shares of common

stock subject to such warrant will remain approximately the same as the aggregate conversion or exercise price, as applicable, prior

to the 2024 Reverse Stock Split.

of Offering of Common Stock and Pre-Funded Warrants

February 13, 2025, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain accredited

investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a best efforts offering

(the “Offering”) 11,365,340 units (the “Units”), including (i) 125,535 units consisting of one share of common

stock, par value $0.0001 per share (the “Common Stock”) and two warrants to purchase one share of Common Stock each (the

“Share Unit Warrants”), at a purchase price per unit equal to $0.66, and (ii) 11,239,805 units consisting of a pre-funded

warrant to purchase one share of Common Stock (“Pre-Funded Warrants”), immediately exercisable at an exercise price of $0.0001

per share, and two warrants to purchase one share of Common Stock each (the “PFW Unit Warrants, and collectively with the Share

Unit Warrants, the “Warrants”), at a purchase price per unit equal to $0.6599.

The Warrants may be exercised for an aggregate

of 22,730,680 shares of Common Stock at an exercise price equal to $0.66 per share, subject to adjustment for stock splits and similar

The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchasers and

customary indemnification rights and obligations of the parties.

The Offering closed on February 18, 2025.

Company offered Pre-Funded Warrants to those Purchasers whose purchase of Common Stock in the Offering would have resulted in the Purchaser,

together with its affiliates and certain related parties, beneficially owning more than 4.99% (or at the election of the Purchaser, 9.99%)

of our Common Stock immediately following the consummation of the Offering in lieu of the Common Stock that would otherwise result in

ownership in excess of 4.99% (or at the election of the purchaser, 9.99%) of the outstanding Common Stock of the Company.

The Pre-Funded

Warrants may be exercised commencing on the issuance date and do not expire.

The Pre-Funded Warrants are exercisable for cash;

however that they may be exercised on a cashless exercise basis if, at the time of exercise, there is no effective registration statement

registering, or no current prospectus available for, the issuance or resale of the Common Stock issuable upon exercise of the Pre-Funded

The exercise of the Pre-Funded Warrants will be subject to a beneficial ownership limitation, which will prohibit the exercise

thereof, if upon such exercise the holder of the Pre-Funded Warrants, its affiliates and any other persons or entities acting as a group

together with the holder or any of the holder’s affiliates would hold 4.99% (or, upon election of a Purchaser prior to the issuance

of any shares, 9.99%) of the number of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable

upon exercise of the Pre-Funded Warrant held by the applicable holder, provided that the holder may increase or decrease the beneficial

ownership limitation (up to a maximum of 9.99%) upon 60 days advance notice to the Company, which 60 day period cannot be waived

Warrants may be exercised commencing on the issuance date and expire one year from issuance.

The Warrants are exercisable for cash at

an exercise price of $0.66 per share;

provided, however that they may be exercised on a cashless exercise basis if, at the time of exercise,

there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the Common

Stock issuable upon exercise of the Warrants.

The exercise of the Warrants will be subject to a beneficial ownership limitation, which

will prohibit the exercise thereof, if upon such exercise the holder of the Warrants, its affiliates and any other persons or entities

acting as a group together with the holder or any of the holder’s affiliates would hold 4.99% (or, upon election of a Purchaser

prior to the issuance of any shares, 9.99%) of the number of Common Stock outstanding immediately after giving effect to the issuance

of Common Stock issuable upon exercise of the Warrants held by the applicable holder, provided that the holder may increase or decrease

the beneficial ownership limitation (up to a maximum of 9.99%) upon 60 days advance notice to the Company, which 60 day period cannot

the closing of the Offering, the Company issued warrants to RBW Capital Partners LLC, acting through Dawson James Securities, Inc.

“Placement Agent”), for the purchase of 568,267 shares of Common Stock at an exercise price of $0.759 per share (the “Placement

Agent Warrants”), which is equal to 115% of the price per Unit.

The Placement Agent Warrants are exercisable at any time commencing

six (6) months from the date of commencement of sales in the Offering and expiring five (5) years from the commencement of sales in the

During the aforementioned six (6) month period, the Placement Agent Warrant may not be sold, transferred, assigned, pledged,

or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective

economic disposition of the Placement Agent Warrant pursuant to FINRA Rule 5110(e)(1)(A).

Common Stock, Pre-Funded Warrants, Common Stock issuable upon exercise of the Pre-Funded Warrants, Warrants, Common Stock issuable upon

exercise of the Warrants, Placement Agent Warrants, and Common Stock issuable upon exercise of the Placement Agent Warrants were offered

pursuant to a registration statement on Form S-1 (File No.

333-284508), as filed with the Securities and Exchange Commission (the “Commission”)

on January 27, 2025, as amended, and was declared effective on February 11, 2025 (the “Registration Statement”).

Placement Agent acted as the exclusive placement agent for the Offering pursuant to a Placement Agency Agreement dated February 13, 2025

(the “Placement Agency Agreement”) by and between the Company and the Placement Agent.

The Placement Agency Agreement contains

customary conditions to closing, representations and warranties of the Company, and termination rights of the parties, as well as certain

indemnification obligations of the Company and ongoing covenants for the Company.

Offering resulted in gross proceeds to the Company of approximately $7,500,000, before deducting placement agent fees and commissions

and other offering expenses, and excluding proceeds to the Company, if any, that may result from the future exercise of the Pre-Funded

Warrants or Warrants issued in the Offering.

As compensation to the Placement Agent, as the exclusive placement agent in connection with

the Offering, the Company paid to the Placement Agent a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering (which

amount shall not include any additional proceeds the Company may receive from the exercise of the Warrants, or the Pre-Funded Warrants,

issued in this Offering) and reimbursement of up to $150,000 for expenses of legal counsel and other actual out-of-pocket expenses.

Securities Exchange Application

February 20, 2025, the Company issued a press release announcing that it has submitted an application to list its common stock on a national

securities exchange.

The successful listing of the Company’s common shares is subject to the approval of the listing application

by the national securities exchange and the satisfaction of all applicable listing criteria and requirements.

No assurance can be given

that the listing application will be approved or that such listing will be completed.

Brands Group is a curated collection of lifestyle brands that offers a variety of apparel products through direct-to-consumer and wholesale

distribution.

Our complementary brand portfolio provides us with the unique opportunity to cross-merchandise our brands.

We aim for our customers to wear our brands head to toe and to capture what we call “closet share” by gaining insight into their preferences to create targeted and personalized content specific to their cohort.

Operating our brands under one portfolio provides us with the ability to better utilize our technological, human capital and operational capabilities across all brands.

As a result, we have been able to realize operational efficiencies and continue to identify additional cost saving opportunities to scale our brands and overall portfolio.

Our portfolio currently consists of four brands that leverage our three channels:

our websites, wholesale and our own stores.

● Bailey 44 combines beautiful, luxe fabrics and on-trend designs to create sophisticated ready-to-wear capsules for women on-the-go.

We aim for our

customers to wear our brands head to toe and to capture what we call “closet share” by gaining insight into their preferences

to create targeted and personalized content specific to their cohort.

Operating our brands under one portfolio provides us with the ability

to better utilize our technological, human capital and operational capabilities across all brands.

As a result, we have been able to

realize operational efficiencies and continue to identify additional cost saving opportunities to scale our brands and overall portfolio.

portfolio currently consists of five brands that leverage our three channels:

our websites, wholesale and royalty (license revenue).

44 combines beautiful, luxe fabrics and on-trend designs to create sophisticated ready-to-wear capsules for women on-the-go.

Designing for real life, this brand focuses on feeling and comfort rather than how it looks on a runway.

Bailey 44 is primarily a wholesale brand, which we are transitioning to a digital, direct-to-consumer brand.

● DSTLD offers stylish high-quality garments without the luxury retail markup valuing customer experience over labels.

DSTLD is primarily a digital direct-to-consumer brand, to which we recently added select wholesale retailers to generate brand awareness.

● Stateside is an elevated, America first brand with all knitting, dyeing, cutting and sewing sourced and manufactured locally in Los Angeles.

Bailey 44 is primarily a

wholesale brand, which we are transitioning to a digital, direct-to-consumer brand.

offers stylish high-quality garments without the luxury retail markup valuing customer experience over labels.

DSTLD is primarily

a digital direct-to-consumer brand.

is an elevated, America first brand with all knitting, dyeing, cutting and sewing sourced and manufactured locally in Los Angeles.

The collection is influenced by the evolution of the classic t-shirt, offering a simple yet elegant look.

Stateside is primarily a wholesale brand that we will be transitioning to a digital, direct-to-consumer brand.

● Sundry offers distinct collections of women’s clothing, including dresses, shirts, sweaters, skirts, shorts, athleisure bottoms and other accessory products.

Sundry’s products are coastal casual and consist of soft, relaxed and colorful designs that feature a distinct French chic, resembling the spirits of the French Mediterranean and the energy of Venice Beach in Southern California.

Stateside is primarily

a wholesale brand that we will be transitioning to a digital, direct-to-consumer brand.

offers distinct collections of women’s clothing, including dresses, shirts, sweaters, skirts, shorts, athleisure bottoms

and other accessory products.

Sundry’s products are coastal casual and consist of soft, relaxed and colorful designs that feature

a distinct French chic, resembling the spirits of the French Mediterranean and the energy of Venice Beach in Southern California.

Sundry is primarily a wholesale brand that we will be transitioning to a digital, direct-to-consumer brand.

We believe that successful apparel brands sell in all revenue channels.

However, each channel offers different margin structures and requires different customer acquisition and retention strategies.

We were founded as a digital-first retailer that has strategically expanded into select wholesale and direct retail channels.

We strive to strategically create omnichannel strategies for each of our brands that blend physical and online channels to engage consumers in the channel of their choosing.

Our products are sold direct-to-consumers principally through our websites and our own showrooms, but also through our wholesale channel, primarily in specialty stores and select department stores.

With the continued expansion of our wholesale distribution, we believe developing an omnichannel solution further strengthens our ability to efficiently acquire and retain customers while also driving high customer lifetime value.

We believe that by leveraging a physical footprint to acquire customers and increase brand awareness, we can use digital marketing to focus on retention and a very tight, disciplined high value new customer acquisition strategy, especially targeting potential customers lower in the sales funnel.

Building a direct relationship with the customer as the customer transacts directly with us allows us to better understand our customer’s preferences and shopping habits.

Our substantial experience as a company originally founded as a digitally native-first retailer gives us the ability to strategically review and analyze the customer’s data, including contact information, browsing and shopping cart data, purchase history and style preferences.

This in turn has the effect of lowering our inventory risk and cash needs since we can order and replenish product based on the data from our online sales history, replenish specific inventory by size, color and SKU based on real times sales data, and control our mark-down and promotional strategies versus being told what mark downs and promotions we have to offer by the department stores and boutique retailers.

We believe that the highly fragmented nature of the apparel industry, combined with the opportunity to leverage our position as a public company with access to financial resources, presents a significant opportunity for consolidation of apparel brands.

We use a disciplined approach to identify and evaluate acquisition candidates.

We believe there are three ideal acquisition targets:

(1) strong legacy brands that have been mismanaged, (2) strong brands that do not have capital to grow, and (3) wholesale brands that are struggling to transition to e-commerce.

We look for brands that have an emotional hook in its customers, a high repeat customer rate, the potential to scale and strong financials.

We source and identify acquisition targets based on our industry knowledge and through our network of investment banks, finders, private equity and venture capital firms, among others.

We intend to continue to actively pursue acquisitions to increase and tighten customer cohorts and increase our ability to create more customized content and personalized looks and styles for each customer cohort.

We believe that customers want and trust brands that can deliver customized content and personalized looks and styles.

We expect this should result in higher customer loyalty, higher lifetime value, higher average order value and lower customer acquisition cost.

Organizational Structure

We operate the brands on a decentralized basis with an emphasis on brand level execution supported by corporate coordination.

The brand’s executive teams will continue to operate and leverage relationships with customers and suppliers, including designing and producing product and developing marketing plans including social media, email and digital communications.

We consolidate marketing and tech contracts as we have done with Bailey’s contracts, which has provided significant cost savings.

We review the fabric mills and factories used by each brand to see if we can consolidate or cross utilize these mills and factories, which will drive increased volumes, lower production costs and higher gross margins.

We are also consolidating production into a few factories in Europe from China and the U.S., which lowers our average production cost per unit.

We leverage the Digital Brands Group marketing and data analytics team to create cross-marketing campaigns based on the customer data respective to each brand’s customer base.

As an example, the Digital Brand Group’s marketing and data team reviews

the customer data across all our portfolio brands and will work with each brand to identify the new customers from our other portfolio brands that they can target and what styles and looks should be created for each of those customer cohorts.

The brand level employees then execute the looks and styles and create the customized customer communication based on the information and data from the Digital Brand Group marketing and data teams.

Certain administrative functions are centralized on a regional and, in certain circumstances, a national basis following, including but not limited to accounting support functions, corporate strategy and acquisitions, human resources, information technology, insurance, marketing, data analytics and customer cross-merchandising, advertising buys, contract negotiations, safety, systems support and transactional processing.

Principal Products and Services

Bailey — Brand Summary

In February 2020, we acquired Bailey.

Bailey delivers distinct high-quality, well-fitting, on-trend contemporary apparel using an entry contemporary price point.

Bailey combines beautiful, luxe fabrics and on-trend designs to offer clean, sophisticated ready-to-wear separates that easily transition from day to night and for date night.

Bailey offers fashionable staples with timeless design features, making them wearable for any occasion — the majority of products are tops, sweaters and dresses.

Bailey’s full seasonal collections of dresses, tops, jumpsuits, bottoms, sets, jackets and rompers retail at price points between $90 and $350.

is a women’s essential brand that will offer t-shirts, sweats, dresses, sweaters and athleisure.

Avo eliminates the wholesale

mark-up, so its products have a sharper price point.

Avo also offers larger discounts when the customer bundles multiple products

to their cart, which allows Avo to leverage its shipping and fulfillment costs.

Avo leverages the Company’s current design

and supply chain infrastructure, so we use similar or the same fabrics and contractors for Avo that we do for our other brands.

believe that successful apparel brands sell in all revenue channels.

However, each channel offers different margin structures and requires

different customer acquisition and retention strategies.

We were founded as a digital-first retailer that has strategically expanded

into select wholesale and direct retail channels.

We strive to strategically create omnichannel strategies for each of our brands that

blend physical and online channels to engage consumers in the channel of their choosing.

Our products are sold direct-to-consumers principally

through our websites and our own showrooms, but also through our wholesale channel, primarily in specialty stores and select department

With the continued expansion of our wholesale distribution, we believe developing an omnichannel solution further strengthens

our ability to efficiently acquire and retain customers while also driving high customer lifetime value.

believe that by leveraging a physical footprint to acquire customers and increase brand awareness, we can use digital marketing to focus

on retention and a very tight, disciplined high value new customer acquisition strategy, especially targeting potential customers lower

in the sales funnel.

Building a direct relationship with the customer as the customer transacts directly with us allows us to better

understand our customer’s preferences and shopping habits.

Our substantial experience as a company originally founded as a digitally

native-first retailer gives us the ability to strategically review and analyze the customer’s data, including contact information,

browsing and shopping cart data, purchase history and style preferences.

This in turn has the effect of lowering our inventory risk and

cash needs since we can order and replenish product based on the data from our online sales history, replenish specific inventory by

size, color and SKU based on real times sales data, and control our mark-down and promotional strategies versus being told what mark

downs and promotions we have to offer by the department stores and boutique retailers.

define “closet share” as the percentage (“share”) of a customer’s clothing units that (“of closet”)

she or he owns in her or his closet and the amount of those units that go to the brands that are selling these units.

For example, if

a customer buys 20 units of clothing a year and the brands that we own represent 10 of those units purchased, then our closet share is

50% of that customer’s closet, or 10 of our branded units divided by 20 units they purchased in entirety.

Closet share is a similar

concept to the widely used term wallet share, it is just specific to the customer’s closet.

The higher our closet share, the higher

our revenue as higher closet share suggests the customer is purchasing more of our brands than our competitors.

have strategically expanded into an omnichannel brand offering these styles and content not only on-line but at selected wholesale and

retail storefronts.

We believe this approach allows us opportunities to successfully drive Lifetime Value (“LTV”) while increasing

new customer growth.

We define Lifetime Value or LTV as an estimate of the average revenue that a customer will generate throughout their

lifespan as our customer.

This value/revenue of a customer helps us determine many economic decisions, such as marketing budgets per

marketing channel, retention versus acquisition decisions, unit level economics, profitability and revenue forecasting.

April of 2024, we entered into a retail store sublease for approximately 3.5 years at the Simon Premium Outlet in Allen, TX, a suburb

We opened the store in April 2024.

The Company closed the store in October 2024 to focus on its e-commerce strategy with VaynerCommerce,

a digital marketing agency.

intend to continue to actively pursue acquisitions to increase and tighten customer cohorts and increase our ability to create more customized

content and personalized looks and styles for each customer cohort.

We believe that customers want and trust brands that can deliver

customized content and personalized looks and styles.

We expect this should result in higher customer loyalty, higher lifetime value,

higher average order value and lower customer acquisition cost.

Organizational

operate the brands on a decentralized basis with an emphasis on brand level execution supported by corporate coordination.

executive teams will continue to operate and leverage relationships with customers and suppliers, including designing and producing product

and developing marketing plans including social media, email and digital communications.

consolidate marketing and tech contracts as we have done with Bailey’s contracts, which has provided significant cost savings.

We review the fabric mills and factories used by each brand to see if we can consolidate or cross utilize these mills and factories,

which will drive increased volumes, lower production costs and higher gross margins.

We are also consolidating production into a few

factories in Europe from China and the U.S., which lowers our average production cost per unit.

leverage the Digital Brands Group marketing and data analytics team to create cross-marketing campaigns based on the customer data respective

to each brand’s customer base.

As an example, the Digital Brand Group’s marketing and data team reviews the customer data

across all our portfolio brands and will work with each brand to identify the new customers from our other portfolio brands that they

can target and what styles and looks should be created for each of those customer cohorts.

The brand level employees then execute the

looks and styles and create the customized customer communication based on the information and data from the Digital Brand Group marketing

and data teams.

administrative functions are centralized on a regional and, in certain circumstances, a national basis following, including but not limited

to accounting support functions, corporate strategy and acquisitions, human resources, information technology, insurance, marketing,

data analytics and customer cross-merchandising, advertising buys, contract negotiations, safety, systems support and transactional processing.

Products and Services

— Brand Summary

February 2020, we acquired Bailey.

Bailey delivers distinct high-quality, well-fitting, on-trend contemporary apparel using an entry

contemporary price point.

Bailey combines beautiful, luxe fabrics and on-trend designs to offer clean, sophisticated ready-to-wear separates

that easily transition from day to night and for date night.

Bailey offers fashionable staples with timeless design features, making

them wearable for any occasion — the majority of products are tops, sweaters and dresses.

full seasonal collections of dresses, tops, jumpsuits, bottoms, sets, jackets and rompers retail at price points between $90 and $350.

We believe that we can create more compelling price points as we leverage our direct-to-consumer expertise.

As we increase the direct-to-consumer revenue mix, we believe we will have opportunities to increase our margins, which will mostly be passed along to the customer with lower price points.

Stateside — Brand Summary

We acquired Stateside in August 2021.

As we increase the direct-to-consumer

revenue mix, we believe we will have opportunities to increase our margins, which will mostly be passed along to the customer with lower

price points.

our acquisition of Bailey 44, LLC, we view the following as tangible near term growth opportunities:

emphasis on email and SMS communications allowing for personalized direct customer engagement, retention and repurchases.

market share in existing and new wholesale, including specialty boutiques due to the well-known and respected designer we hired in

digital spend, social media presence, and brand and influencer collaborations.

opportunity to roll out proven retail concept in well defined, strategic locations.

International

expansion and licensing opportunities in select categories.

— Brand Summary

acquired Stateside in August 2021.

Stateside is a collection of elevated American basics influenced by the evolution of the classic T-shirt.

All garments are designed and produced in Los Angeles from the finest fabrics.

All knitting, dyeing, cutting and sewing is sourced and manufactured locally in Los Angeles.

Stateside is known for delivering high quality, luxury T-shirts, tops and bottoms.

Stateside is primarily a wholesale brand with very limited online revenue.

All knitting, dyeing, cutting and sewing is sourced and

manufactured locally in Los Angeles.

is known for delivering high quality, luxury T-shirts, tops and bottoms.

Stateside is primarily a wholesale brand with very limited online

Their T-shirt prices range from $68 to $94, their other tops range from $98 to $130, and their bottoms from $80 to $144.

Sundry — Brand Summary

We acquired Sundry in December 2022.

Sundry offers distinct collections of women’s clothing, including dresses, shirts, sweaters, skirts, shorts, athleisure bottoms and other accessory products.

our acquisition of Stateside, we view the following as tangible near-term growth opportunities:

online revenues significantly as we have spent very little resources on developing its online sales opportunity from the website

optimization to photography to email marketing to online advertising to digital customer acquisition and retention.

gross margins by ordering larger quantities as we pay meaningful upcharges for minimum order quantities.

seasonal new product categories such as women’s knits and wovens in the top category and women’s wovens in the bottom

We believe knits and wovens tops are one of the larger product categories in womenswear, with higher price points and dollar

Sundry — Brand

acquired Sundry in December 2022.

Sundry offers distinct collections of women’s clothing, including dresses, shirts, sweaters,

skirts, shorts, athleisure bottoms and other accessory products.

Sundry’s products are coastal casual and consist of soft, relaxed

and colorful designs that feature a distinct French chic, resembling the spirits of the French Mediterranean and the energy of Venice

Beach in Southern California.

The products are designed and mostly produced in Los Angeles from the finest fabrics.

The majority of the knitting, dyeing, cutting and sewing is sourced and manufactured locally in Los Angeles, with some sweaters made overseas.

Sundry is known for delivering high quality novelty and resort style T-shirts, tops and bottoms.

Sundry is mostly a wholesale brand with meaningful online revenue.

Their T-shirt prices range from $68 to $98, their other tops range from $98 to $198, and their bottoms range from $80 to $228.

With our acquisition of Sundry, we view the following as tangible near-term growth opportunities:

● Increase online revenues significantly as we cross-market their customer base with the customer bases from our other brands, especially on the Bailey Shop.

● Increase gross margin dollars by updating the product line and driving increased volume through the wholesale and online channels.

● Launch a new product category for 2024 in women’s athleisure.

We believe athleisure is one of the largest product categories in womenswear, with high repeat spend and closet share.

DSTLD — Brand Summary

DSTLD focuses on minimalist design, superior quality, and only the essential wardrobe pieces.

The majority of the

knitting, dyeing, cutting and sewing is sourced and manufactured locally in Los Angeles, with some sweaters made overseas.

is known for delivering high quality novelty and resort style T-shirts, tops and bottoms.

Sundry is mostly a wholesale brand with meaningful

online revenue.

Their T-shirt prices range from $68 to $98, their other tops range from $98 to $198, and their bottoms range from $80

our acquisition of Sundry, we view the following as tangible near-term growth opportunities:

online revenues significantly as we cross-market their customer base with the customer bases from our other brands.

gross margin dollars by updating the product line and driving increased volume through the wholesale and online channels.

a new product category for 2025 in women’s athleisure.

We believe athleisure is one of the largest product categories in womenswear,

with high repeat spend and closet share.

— Brand Summary

focuses on minimalist design, superior quality, and only the essential wardrobe pieces.

We deliver casual luxury rooted in denim;

garments that are made with exhaustive attention to detail from the finest materials for a closet of timeless, functional staples.

Our brand name “DSTLD” is derived from the word ‘distilled,’ meaning to extract only the essentials.

As such, DSTLD boasts a line of key wardrobe pieces in a fundamental color palette of black, white, grey, and denim.

Our denim prices generally range from $75 to $95;

similar quality brands produced at the same factories wholesale for approximately $95 to $125 and retail for $185 to $350.

Our t-shirts and tops range from $30 to $90, while similar quality brands produced at the same factories wholesale for approximately $25 to $75 and retail for $60 to $250.

Our casual pants range from $85 to $109, with similar quality brands produced at the same factories wholesaling for approximately $85 to $115 and retailing for $175 to $250.

ACE Studios — Brand Summary

ACE Studios will design and offer luxury men’s suiting with superior performance, superb fits, and excellent quality at an exceptional value.

that are made with exhaustive attention to detail from the finest materials for a closet of timeless, functional staples.

Our brand name

“DSTLD” is derived from the word ‘distilled,’ meaning to extract only the essentials.

As such, DSTLD boasts a

line of key wardrobe pieces in a fundamental color palette of black, white, grey, and denim.

denim prices generally range from $75 to $95;

similar quality brands produced at the same factories wholesale for approximately $95 to

$125 and retail for $185 to $350.

Our t-shirts and tops range from $30 to $90, while similar quality brands produced at the same factories

wholesale for approximately $25 to $75 and retail for $60 to $250.

Our casual pants range from $85 to $109, with similar quality brands

produced at the same factories wholesaling for approximately $85 to $115 and retailing for $175 to $250.

— Brand Summary

is a women’s essential brand that will offer t-shirts, sweats, dresses, sweaters and athleisure.

Avo eliminates the wholesale mark-up,

so its products have a sharper price point.

Avo also offers larger discounts when the customer bundles multiple products to their cart,

which allows Avo to leverage its shipping and fulfillment costs.

Avo leverages the Company’s current design and supply chain infrastructure,

so we use similar or the same fabrics and contractors for Avo that we do for our other brands.

launched in late August 2024 and prices for t-shirts range from $20 to $50 based on the size of the customer’s bundle.

Other product

prices will range from $17.50 for tanks to $198 for sweaters with no retail price above $99 if the customer bundles three units or more.

If the customer bundles two units then they receive a 40% discount and if they bundle three units or more the customer receives a 60%

Studios — Brand Summary

Studios will design and offer luxury men’s suiting with superior performance, superb fits, and excellent quality at an exceptional

We will offer men’s classic tailored apparel with premium and luxury fabrics and manufacturing.

We work with the same high-quality mills and factories in the world as the leading luxury brands.

We believe most customers have different shapes and sizes, so we plan to offer multiple fits for our products.

We sidestep the middleman and sell our products ourselves, allowing us to offer top-tier quality without the standard retail markup.

Our suits are expected to range from $295 to $495;

similar quality brands produced at the same factories wholesale for approximately $300 to $600 and retail for $600 to $1,200.

Our dress shirts will range from $55 to $65, while similar quality brands produced at the same factories wholesale for approximately $50 to $75 and retail for $95 to $150.

Our casual pants will range $85 to $109, with similar quality brands produced at the same factories wholesaling for approximately $85 to $115 and retailing for $175 to $250.

We anticipate rolling out the ACE Studios brand in the second quarter of 2024 as a digitally native first brand.

Sales and Distribution

Bailey products are distributed through wholesale and direct-to-consumer channels.

The wholesale channel includes premium department stores, select independent boutiques and third-party online stores.

Since all the product is custom made, there is no old stock to sell off.

Stateside and Sundry products are distributed through wholesale and direct-to-consumer channels, including premium department stores and national chains, select independent boutiques and third-party online stores.

DSTLD products have historically been sold solely direct-to-consumer, via our website.

We started offering DSTLD products through a wholesale channel in October 2020.

We intend to leverage the Bailey sales force to sell DSTLD products into their select independent boutiques and select department stores.

We believe that we can increase the brand awareness, new customer acquisition and revenue by leveraging the Bailey independent boutiques.

We will start selling old season stock through selected off-price retailers, with additional sales expected to be generated through specifically-cut product for select off-price retailers.

As of December 31, 2023, products are distributed through 75+ doors at major department stores, over 350 points of sale at boutique stores and several major e-commerce multi-brand platform wholesale customers.

We do not have material terms or arrangements with our third-party distributors.

As is customary in the wholesale side of the retail apparel industry, we work with the wholesale buyers for every product collection and season to develop a purchase order based on quantities, pricing, profit margin and any future mark-down agreements.

Historically, these factors are driven by the wholesale buyer’s belief of how well they think the product will sell at their stores.

We work with the same high-quality

mills and factories in the world as the leading luxury brands.

We believe most customers have different shapes and sizes, so we plan

to offer multiple fits for our products.

We sidestep the middleman and sell our products ourselves, allowing us to offer top-tier quality

without the standard retail markup.

suits had range from $295 to $495;

similar quality brands produced at the same factories wholesale for approximately $300 to $600 and

retail for $600 to $1,200.

Our dress shirts will range $55 to $65, similar quality brands produced at the same factories wholesale for

approximately $50 to $75 and retail for $95 to $150.

Our casual pants will range $85 to $109, similar quality brands produced at the

same factories wholesale for approximately $85 to $115 and retail for $175 to $250.

discontinued the operations of the ACE Studios brand in the second quarter of 2024 as a digitally native first brand.

and Distribution

and Avo products are sold primarily direct-to-consumer, via our website.

We utilize a build your own bundle strategy to increase the

cart size and create cost savings per unit sold.

By selling direct-to-consumer, we are able to eliminate the wholesale mark-up and offer

sharper pricing to the customer.

products are distributed through wholesale and direct-to-consumer channels.

The wholesale channel includes premium department stores,

select independent boutiques and third-party online stores.

and Sundry products are distributed through wholesale and direct-to-consumer channels includes premium department stores and national

chains, select independent boutiques and third-party online stores.

do not have material terms or arrangements with our third-party distributors.

As is customary in the wholesale side of the retail apparel

industry, we work with the wholesale buyers for every product collection and season to develop a purchase order based on quantities,

pricing, profit margin and any future mark- down agreements.

Historically, these factors are driven by the wholesale buyer’s belief

of how well they think the product will sell at their stores.

For example, if the collection is considered very strong by the wholesale

buyer, we usually achieve higher quantities, higher margins and lower future markdown guarantees.

Conversely, when the wholesale buyer considers the collection to be weak, we experience lower quantities, lower margins and higher mark-down guarantees.

Our direct-to-consumer channels include our own website.

Old season stock is sold through selected off-price retailers, with additional sales generated through specifically cut product for select off-price retailers.

All of our DSTLD, Bailey, Stateside, Sundry and ACE Studios sellable products are, or will be with respect to ACE Studios, stored at our corporate warehouse and distribution center in Vernon, CA, which also houses our corporate office.

In addition to storing product, we also receive and process new product deliveries, process and ship outbound orders, and process and ship customer returns in this same facility.

We offer free shipping and returns to all our customers in the United States.

Conversely, when the wholesale buyer

considers the collection to be weak, we experience lower quantities, lower margins and higher mark-down guarantees.

direct-to-consumer channels include our own website.

Old season stock is sold through selected off- price retailers, with additional

sales generated through specifically cut product for select off-price retailers.

of our DSTLD, Avo, Bailey and Stateside and Sundry sellable product is stored at our corporate warehouse and distribution center in Los

Angeles, CA, which also houses our corporate office.

In addition to storing product, we also receive and process new product deliveries,

process and ship outbound orders, and process and ship customer returns in this same facility.

offer free shipping and returns above to all our customers in the United States once they achieve a cart size amount of $50 for all brands

but Avo and $99 for Avo.

We also offer customers the option to upgrade to 2-Day or Overnight Shipping for an additional cost.

Design and Development

Our products are designed at the headquarters of each brand Each brand’s design efforts are supported by well-established product development and production teams.

The continued collaboration between design and merchandising ensures it responds to consumer preferences and market trends with new innovative product offerings while maintaining its core fashion foundation.

In-house design and production teams in Los Angeles perform development of the sample line allowing for speed to market, flexibility and quality of fit.

We are engaged in analyzing trends, markets, and social media feedback along with utilizing historical data and industry tools to identify essential styles and proper replenishment timing and quantities.

We rely on a limited number of suppliers to provide our finished products, so we can aggregate pricing power.

As we continue to increase our volumes, we will source additional factories to spread out our risks.

While we have developed long-standing relationships with a number of our suppliers and manufacturing sources and take great care to ensure that they share our commitment to quality and ethics, we do not have any long-term term contracts with these parties for the production and supply of our fabrics and products.

We require that all of our manufacturers adhere to a vendor code of ethics regarding social and environmental sustainability practices.

Our product quality and sustainability team partners with leading inspection and verification firms to closely monitor each supplier’s compliance with applicable laws and our vendor code of ethics.

Currently, our Bailey, DSTLD, Stateside and Sundry products are shipped from our suppliers to our distribution center in Los Angeles, CA, which currently handles all our warehousing, fulfillment, outbound shipping and returns processing.

In 2023, we will review maintaining our own distribution centers versus using a third-party solution.

Product Suppliers:

and Development

products are designed at the headquarters of each brand, which are in Los Angeles, CA.

Each brand’s design efforts are supported

by well-established product development and production teams.

The continued collaboration between design and merchandising ensures we

respond to consumer preferences and market trends with new innovative product offerings while maintaining our core fashion foundation.

In-house design and production teams in Los Angeles perform development of the sample line, allowing for speed to market, flexibility

and quality of fit.

analyze trends, markets, and social media feedback along and utilize historical data and industry tools to identify essential styles

and proper replenishment timing and quantities.

rely on a limited number of suppliers to provide our finished products, so we can aggregate pricing power.

As we continue to increase

our volumes, we will source additional factories to spread out our risks.

we have developed long-standing relationships with a number of our suppliers and manufacturing sources and take great care to ensure

that they share our commitment to quality and ethics, we do not have any long-term term contracts with these parties for the production

and supply of our fabrics and products.

We require that all of our manufacturers adhere to a vendor code of ethics regarding social and

environmental sustainability practices.

Our product quality and sustainability team partners with leading inspection and verification

firms to closely monitor each supplier’s compliance with applicable laws and our vendor code of ethics.

our Bailey, DSTLD, Avo and Stateside and Sundry products are shipped from our suppliers to our distribution center in Los Angeles, CA

which currently handles all our warehousing, fulfillment, outbound shipping and returns processing.

Our Sundry products will be shipped

from our suppliers to our distribution center in Los Angeles, CA which will handle all our warehousing, fulfillment, outbound shipping

and returns processing.

During 2025, we will review maintaining our own distribution centers versus using a third-party solution.

Sourcing and Manufacturing

We work with apparel manufacturers in North America, Asia and Europe.

We work with full package suppliers, which supply fabric, trims, along with cut/sew/wash services, only invoicing us for the final full cost of each garment.

In Los Angeles, we also work with several local trim, fabric and garment dye houses to create garments for Stateside.

This allows us the ability to maximize cash flows and optimize operations.

We do not have long-term written contracts with manufacturers, though we have long-standing relationships with a diverse base of vendors.

We do not own or operate any manufacturing facilities and rely solely on third-party contract manufacturers operating primarily in Europe, the United States, and the Asia Pacific region for the production of our products, depending on the brand.

All of our contract manufacturers are evaluated for quality systems, social compliance and financial strength by our internal teams prior to being selected and on an ongoing basis.

work with a variety of apparel manufacturers in North America, Asia and Europe.

We only work with full package suppliers, which supply

fabric, trims, along with cut/sew/wash services, only invoicing us for the final full cost of each garment.

This allows us the ability

to maximize cash flows and optimize operations.

We do not have long-term written contracts with manufacturers, though we have long-standing

relationships with a diverse base of vendors.

do not own or operate any manufacturing facilities and rely solely on third-party contract manufacturers operating primarily in Europe,

United States, and the Asia Pacific region for the production of our products depending on the brand.

All of our contract manufacturers

are evaluated for quality systems, social compliance and financial strength by our internal teams prior to being selected and on an ongoing

Where appropriate, we strive to qualify multiple manufacturers for particular product types and fabrications.

All of our garments are produced according to each brand’s specifications and we require that all manufacturers adhere to strict regulatory compliance and standards of conduct.

The vendors’ factories are monitored by each brand’s production team to ensure quality control, and they are monitored by independent third-party inspectors we employ for compliance with local manufacturing standards

and regulations on an annual basis.

We also monitor our vendors’ manufacturing facilities regularly, providing technical assistance and performing in-line and final audits to ensure the highest possible quality.

We source our products from a variety of domestic and international manufacturers.

When deciding which factory to source a specific product from, we take into account the following factors:

● Cost of garment

● Retail price for end consumer

● Production time

● Minimum order quantity

● Shipping/delivery time

● Payment terms

By taking all of these into consideration, we can focus on making sure we have access to in-demand and high quality products available for sale to our customers at competitive price points and sustainable margins for our business.

We believe marketing is a critical element in creating brand awareness and an emotional connection, as well as driving new customer acquisition and retention.

Each brand has its own in-house marketing department, which creates and produces marketing initiatives specific to each marketing channel and based on the specific purpose, such as acquisition, retention or brand building.

We also have an in-house marketing team at the DBG portfolio level, which reviews these brand initiatives, develops and helps initiate cross merchandising strategies, manages the data analytics and negotiates contracts using all our brands to lower the cost.

Our goal at the brand and the portfolio level is to increase brand awareness and reach, customer engagement, increase new customer conversion and repurchase rates and average order size.

We utilize a multi-pronged marketing strategy to connect with our customers and drive traffic to our online platform, comprised of the following:

Customer Acquisition Marketing

Paid Social Media Marketing:

This is our primary customer acquisition channel, and it is composed almost entirely of paid Facebook and Instagram marketing.

of our garments are produced according to each brand’s specifications, and we require that all manufacturers adhere to strict regulatory

compliance and standards of conduct.

The vendors’ factories are monitored by each brand’s production team to ensure quality

control, and they are monitored by independent third-party inspectors we employ for compliance with local manufacturing standards and

regulations on an annual basis.

We also monitor our vendors’ manufacturing facilities regularly, providing technical assistance

and performing in-line and final audits to ensure the highest possible quality.

source our products from a variety of domestic and international manufacturers.

When deciding which factory to source a specific product

from, we take into account the following factors:

price for end consumer

order quantity

Shipping/delivery

taking all of these into consideration, we can focus on making sure we have access to in-demand and high quality products available for

sale to our customers at competitive price points and sustainable margins for our business.

believe marketing is a critical element in creating brand awareness and an emotional connection, as well as driving new customer acquisition

and retention.

Each brand has its own in-house marketing department, which creates and produces marketing initiatives specific to each

marketing channel and based on the specific purpose, such as acquisition, retention or brand building.

We also have an in-house marketing

team at the DBG portfolio level, which reviews these brand initiatives, develops and helps initiate cross merchandising strategies, manages

the data analytics and negotiates contracts using all our brands to lower the cost.

goal at the brand and the portfolio level is to increase brand awareness and reach, customer engagement, increase new customer conversion

and repurchase rates and average order size.

We utilize a multi-pronged marketing strategy to connect with our customers and drive traffic

to our online platform, comprised of the following:

Acquisition Marketing

Social Media Marketing:

This is our primary customer acquisition channel, and it is composed almost entirely of paid Facebook and

Instagram marketing.

We believe our core customers rely on the opinions of their peers, often expressed through social media.

Social media platforms are viral marketing platforms that allow our brands to communicate directly with our customers while also allowing customers to interact with us and provide feedback on our products and service.

We make regular posts highlighting new products, brand stories, and other topics and images we deem “on brand”.

By being a verified brand, our followers can shop products directly from our posts.

media platforms are viral marketing platforms that allow our brands to communicate directly with our customers while also allowing customers

to interact with us and provide feedback on our products and service.

We make regular posts highlighting new products, brand stories,

and other topics and images we deem “on brand”.

By being a verified brand, our followers can shop products directly from

We are also able to link to products in the stories feature.

Affiliate Marketing:

With select online publications and influencers, we’ve sought to establish [cost/commission] per action (“CPA”) or revenue sharing agreements.

We believe these agreements are effective in incentivizing influencers or media to push our product and allowing us to only pay partners based on performance.

Email Marketing:

With select online publications and influencers, we’ve sought to establish CPA or revenue sharing agreements.

believe these agreements are effective in incentivizing influencers or media to push our product and allowing us to only pay partners

based on performance.

We utilize email marketing to build awareness and drive repeat purchases.

We believe this can be the most personalized customer communication channel for our brands, and therefore should continue to be one of our highest performing channels.

We use an email service provider that enables us to send out a variety of promotional, transactional, and retargeting emails, with the main goal of driving increased site traffic and purchases.

We maintain a database through which we track and utilize key metrics such as customer acquisition cost, lifetime value per customer, cost per impression and cost per click.

We engage the services of certain retargeting engines that allow us to dynamically target our visitors on third-party websites via banner/content ads.

Content Marketing:

We use content marketing platforms that allow us to serve up native ads in the form of articles promoting our brand story and specific products.

Search Engine Optimization:

This is the process of maximizing the number of visitors to our website by increasing our rankings in the search results on internet search engines.

This is done by optimizing our onsite content, by making sure our pages, titles, tags, links, and blog content is structured to increase our search results on certain keywords, and our offsite content, which is the number of external websites linking to our website, usually through press articles and other advertising channels.

Print Advertising :

We also intend to utilize print advertisements in magazines or billboards in major metropolitan areas to drive increased site traffic and brand awareness.

Video / Blog Content:

We plan to offer videos and blog posts as a way to engage and educate the customer on our brands, how to wear different looks and styles, and create confidence and trust between our brands and customers.

Videos and blog posts will include interviews with our designers, a behind-the- scenes look at how products are made, features of other artists or creatives, and photo shoots.

Retail Stores:

We have successfully tested retail “pop ups” in the past.

These “pop ups” have resulted in higher average order value, significantly lower customer returns (even when the retail customer orders online at a later date), and higher repurchase rate and annual spend.

We view these retail locations as a marketing strategy, similar to allocating funds towards digital/online marketing.

We expect our pop ups to generate a small to break even profit, which is more than offset by any potential marketing costs to acquire those customers in another marketing channel.

As we grow the entire DBG portfolio, we will test “pop up” locations for specific brands, and also develop a multi-line pop up that incorporates our other brands into the “pop-up”.

We will determine whether a “pop up” or wholesale specialty boutique is the better option for each market and brand.

Instagram and Influencer Marketing

Instagram and influencer marketing is one of our largest initiatives.

On a weekly basis, we reach out to and receive requests from tastemakers in fashion, lifestyle, and photography.

We have developed a certain set of criteria for working with influencers (for example, engagement level, aesthetic, audience demographic) that have enabled us to garner impactful impressions.

Our focus is not on the size of an account, but on creating organic relationships with influencers who are excited to tell our story.

While most of our collaborations are compensated solely through product gifts, we also offer an affiliate commission of up to 20% through the influencer platform reward Style, which is the parent company of LiketoKnow.it, the first influencer platform to make Instagram shopable (users receive an email directly to their inbox with complete outfit details when they “Like” a photo with LiketoKnow.it technology).

Public Relations

To generate ongoing organic and word-of-mouth awareness, we intend to work with print and online media outlets to announce new products and develop timely news stories.

We are in contact with leading fashion, business, and tech writers in order to capitalize on celebrity fashion features, e-commerce trend pieces, or general brand awareness articles.

We believe this can be the most personalized

customer communication channel for our brands, and therefore should continue to be one of our highest performing channels.

email service provider that enables us to send out a variety of promotional, transactional, and retargeting emails, with the main goal

of driving increased site traffic and purchases.

We maintain a database through which we track and utilize key metrics such as customer

acquisition cost, lifetime value per customer, cost per impression and cost per click.

We engage the services of certain retargeting engines that allow us to dynamically target our visitors on third-party websites via

banner/content ads.

We use content marketing platforms that allow us to serve up native ads in the form of articles promoting our brand story

and specific products.

Engine Optimization:

This is the process of maximizing the number of visitors to our website by increasing our rankings in the search

results on internet search engines.

This is done by optimizing our onsite content, by making sure our pages, titles, tags, links, and

blog content is structured to increase our search results on certain keywords, and our offsite content, which is the number of external

websites linking to our website, usually through press articles and other advertising channels.

We also intend to utilize print advertisements in magazines or billboards in major metropolitan areas to drive increased

site traffic and brand awareness.

/ Blog Content:

We plan to offer videos and blog posts as a way to engage and educate the customer on our brands, how to wear different

looks and styles, and create confidence and trust between our brands and customers.

Videos and blog posts will include interviews with

our designers, a behind-the- scenes look at how products are made, features of other artists or creatives, and photo shoots.

and Influencer Marketing

and influencer marketing is one of our largest initiatives.

On a weekly basis, we reach out to and receive requests from tastemakers

in fashion, lifestyle, and photography.

We have developed a certain set of criteria for working with influencers (for example, engagement

level, aesthetic, audience demographic) that have enabled us to garner impactful impressions.

Our focus is not on the size of an account,

but on creating organic relationships with influencers who are excited to tell our story.

While most of our collaborations are compensated

solely through product gifts, we also offer an affiliate commission of up to 20% through the influencer platform reward Style, which

is the parent company of LiketoKnow.it, the first influencer platform to make Instagram shopable (users receive an email directly to

their inbox with complete outfit details when they “Like” a photo with LiketoKnow.it technology).

generate ongoing organic and word-of-mouth awareness, we intend to work with print and online media outlets to announce new products

and develop timely news stories.

We are in contact with leading fashion, business, and tech writers in order to capitalize on celebrity

fashion features, e-commerce trend pieces, or general brand awareness articles.

We may utilize outside agencies from time to time.

We visit the major fashion, tech, and news outlets in New York City on a quarterly basis to keep them up to date on our latest launches and any relevant company developments.

visit the major fashion, tech, and news outlets in New York City on a quarterly basis to keep them up to date on our latest launches

and any relevant company developments.

We also plan to host local Los Angeles press at our office space.

Celebrity gifting

We approach celebrity gifting in a strategic, discerning manner.

We have longstanding, personal relationships with the industry’s top stylists;

approach celebrity gifting in a strategic, discerning manner.

We have longstanding, personal relationships with the industry’s

top stylists;

we do not send clothing blindly or unsolicited.

We have successfully placed clothing (and as a result, fashion press) on a number of well-known A-list celebrities.

Loyalty Program

We plan to develop and launch a company-wide loyalty program, which would include all our brands.

Our customer loyalty program will be designed to engage and reward our customers in a direct and targeted manner, and to cross merchandise our portfolio brands to

our customers.

Customers will earn reward points that can be used to purchase products.

We will also use loyalty point multipliers to create customer purchases, especially, which is a strategy beauty retailer have effectively used.

Our business depends on our ability to create consumer demand for our brands and products.

We believe we are well-positioned to compete in the apparel, leather products and accessories segments by developing high quality, well designed products at competitive prices that are often below our competitors’ pricing.

We focus on designing products that we hope exceed consumer expectations, which should result in retention and repurchases.

We will invest in cross merchandising brands to customers through customized customer communications and personalized styles and looks utilizing products across all our portfolio brands, which we believe creates a competitive advantage for our brands versus single brands.

As noted above, each of our brands has different competitors depending on product, quality and price point.

Government Regulation

Our business is subject to a number of domestic and foreign laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our business.

These laws and regulations include federal and state consumer protection laws and regulations, which address, among other things, the privacy and security of consumer information, sending of commercial email, and unfair and deceptive trade practices.

Under applicable federal and state laws and regulations addressing privacy and data security, we must provide notice to consumers of our policies with respect to the collection and use of personal information, and our sharing of personal information with third parties, and notice of any changes to our data handling practices.

In some instances, we may be obligated to give customers the right to prevent sharing of their personal information with third parties.

Under applicable federal and state laws, we also are required to adhere to a number of requirements when sending commercial email to consumers, including identifying advertising and promotional emails as such, ensuring that subject lines are not deceptive, giving consumers an opportunity to opt-out of further communications and clearly disclosing our name and physical address in each commercial email.

Regulation of privacy and data security matters is an evolving area, with new laws and regulations enacted frequently.

For example, California recently enacted legislation that, among other things, will require new disclosures to California consumers, and afford such consumers new abilities to opt out of certain sales of personal information.

In addition, under applicable federal and state unfair competition laws, including the California Consumer Legal Remedies Act, and U.S.

Federal Trade Commission, or FTC, regulations, we must, and our network of influencers may be required to, accurately identify product offerings, not make misleading claims on our websites or in advertising, and use qualifying disclosures where and when appropriate.

The growth and demand for eCommerce could result in more stringent domestic and foreign consumer protection laws that impose additional compliance burdens on companies that transact substantial business on the Internet.

Our international business is subject to additional laws and regulations, including restrictions on imports from, exports to, and services provided to persons located in certain countries and territories, as well as foreign laws and regulations addressing topics such as advertising and marketing practices, customs duties and taxes, privacy, data protection, information security and consumer rights, any of which might apply by virtue of our operations in foreign countries and territories or our contacts with consumers in such foreign countries and territories.

Many foreign jurisdictions have laws, regulations, or other requirements relating to privacy, data protection, and consumer protection, and countries and territories are adopting new legislation or other obligations with increasing frequency.

In many jurisdictions, there is great uncertainty whether or how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet and eCommerce.

New legislation or regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business or the application of existing laws and regulations to the Internet and eCommerce could result in significant additional obligations on our business or may necessitate changes to our business practices.

We have successfully placed clothing (and as a result, fashion press) on

a number of well-known A-list celebrities.

plan to develop and launch a company-wide loyalty program, which would include all our brands.

Our customer loyalty program will be designed

to engage and reward our customers in a direct and targeted manner, and to cross merchandise our portfolio brands to our customers.

will earn reward points that can be used to purchase products.

We will also use loyalty point multipliers to create customer purchases,

especially, which is a strategy beauty retailer have effectively used.

business depends on our ability to create consumer demand for our brands and products.

We focus on designing products that we hope exceed

consumer expectations, which should result in retention and repurchases.

We plan to invest in cross merchandising brands to customers

through customized customer communications and personalized styles and looks utilizing products across all our portfolio brands, which

we believe creates a competitive advantage for our brands versus single brands.

The markets in which we compete are highly competitive.

Competition may result in pricing pressures, reduced profit margins or lost market share, or a failure to grow or maintain our market

share, any of which could substantially harm our business and results of operations.

We compete directly against wholesalers and direct

retailers of apparel, including large, diversified apparel companies with substantial market share and strong worldwide brand recognition.

Many of our competitors, including Vince, James Perse, Rag & Bone, Madewell, AG, FRAME, All Saints, Zegna and Ralph Lauren, have

significant competitive advantages, including longer operating histories, larger and broader customer bases, more established relationships

with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution,

and other resources than we do.

a result, these competitors may be better equipped than we are to influence consumer preferences or otherwise increase their market share

adapting to changes in customer requirements or consumer preferences;

excess inventory that has been written down or written off;

resources to the marketing and sale of their products, including significant advertising campaigns, media placement, partnerships

and product endorsement;

in lengthy and costly intellectual property and other disputes.

Our quarterly operating results vary due to the seasonality of our individual brands, and are historically stronger

in the second half of the calendar year.

business is subject to a number of domestic and foreign laws and regulations that affect companies conducting business on the Internet,

many of which are still evolving and could be interpreted in ways that could harm our business.

These laws and regulations include federal

and state consumer protection laws and regulations, which address, among other things, the privacy and security of consumer information,

sending of commercial email, and unfair and deceptive trade practices.

applicable federal and state laws and regulations addressing privacy and data security, we must provide notice to consumers of our policies

with respect to the collection and use of personal information, and our sharing of personal information with third parties, and notice

of any changes to our data handling practices.

In some instances, we may be obligated to give customers the right to prevent sharing

of their personal information with third parties.

Under applicable federal and state laws, we also are required to adhere to a number

of requirements when sending commercial email to consumers, including identifying advertising and promotional emails as such, ensuring

that subject lines are not deceptive, giving consumers an opportunity to opt-out of further communications and clearly disclosing our

name and physical address in each commercial email.

Regulation of privacy and data security matters is an evolving area, with new laws

and regulations enacted frequently.

For example, California recently enacted legislation that, among other things, will require new disclosures

to California consumers, and afford such consumers new abilities to opt out of certain sales of personal information.

In addition, under

applicable federal and state unfair competition laws, including the California Consumer Legal Remedies Act, and U.S.

Federal Trade Commission,

or FTC, regulations, we must, and our network of influencers may be required to, accurately identify product offerings, not make misleading

claims on our websites or in advertising, and use qualifying disclosures where and when appropriate.

The growth and demand for eCommerce

could result in more stringent domestic and foreign consumer protection laws that impose additional compliance burdens on companies that

transact substantial business on the Internet.

international business is subject to additional laws and regulations, including restrictions on imports from, exports to, and services

provided to persons located in certain countries and territories, as well as foreign laws and regulations addressing topics such as advertising

and marketing practices, customs duties and taxes, privacy, data protection, information security and consumer rights, any of which might

apply by virtue of our operations in foreign countries and territories or our contacts with consumers in such foreign countries and territories.

Many foreign jurisdictions have laws, regulations, or other requirements relating to privacy, data protection, and consumer protection,

and countries and territories are adopting new legislation or other obligations with increasing frequency.

many jurisdictions, there is great uncertainty whether or how existing laws governing issues such as property ownership, sales and other

taxes, libel and personal privacy apply to the Internet and eCommerce.

New legislation or regulation, the application of laws and regulations

from jurisdictions whose laws do not currently apply to our business or the application of existing laws and regulations to the Internet

and eCommerce could result in significant additional obligations on our business or may necessitate changes to our business practices.

These obligations or required changes could have an adverse effect on our cash flows and results of operations.

Further, any actual or alleged failure to comply with any of these laws or regulations by us, our vendors or our network of influencers could hurt our reputation, brand and business, force us to incur significant expenses in defending against proceedings or investigations, distract our management, increase our costs of doing business, result in a loss of customers and suppliers and may result in the imposition of monetary penalties.

As of December 31, 2023, we had 56 employees, all of whom were full-time employees.

None of our employees is currently covered by a collective bargaining agreement.

Further, any actual or

alleged failure to comply with any of these laws or regulations by us, our vendors or our network of influencers could hurt our reputation,

brand and business, force us to incur significant expenses in defending against proceedings or investigations, distract our management,

increase our costs of doing business, result in a loss of customers and suppliers and may result in the imposition of monetary penalties.

of December 31, 2024, we had 41 employees, all of whom were full-time employees.

None of our employees is currently covered by a collective

bargaining agreement.

We have had no labor-related work stoppages and we believe our relationship with our employees is strong.

We believe that a diverse workforce is important to our success.

We will continue to focus on the hiring, retention and advancement of women and underrepresented populations, and to cultivate an inclusive and diverse corporate culture.

In the future, we intend to continue to evaluate our use of human capital measures or objectives in managing our business such as the factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in our workforce.

The success of our business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health, safety and wellness of our employees.

We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being;

that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors;

and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

We also provide robust compensation and benefits programs to help meet the needs of our employees.

Available Information

Our Internet address is https://www.digitalbrandsgroup.co.

Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Exchange Act are available on the SEC’s website http://www.sec.gov .

All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

believe that a diverse workforce is important to our success.

We will continue to focus on the hiring, retention and advancement of women

and underrepresented populations, and to cultivate an inclusive and diverse corporate culture.

In the future, we intend to continue to

evaluate our use of human capital measures or objectives in managing our business such as the factors we employ or seek to employ in

the development, attraction and retention of personnel and maintenance of diversity in our workforce.

success of our business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health, safety

and wellness of our employees.

We provide our employees and their families with access to a variety of innovative, flexible and convenient

health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events

that may require time away from work or that impact their financial well-being;

that support their physical and mental health by providing

tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors;

and that offer

choice where possible so they can customize their benefits to meet their needs and the needs of their families.

also provide robust compensation and benefits programs to help meet the needs of our employees.

Internet address is https://www.digitalbrandsgroup.co.

Our website and the information contained on, or that can be accessed through,

the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K.

Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements

and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Exchange Act are available on the

SEC’s website http://www.sec.gov .

All statements made in any of our securities filings, including all forward-looking statements

or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation

to update any of those statements or documents unless we are required to do so by law.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business