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Item 9A. Controls and Procedures

2025-04-09 compared with 2024-04-15 · 1959 added, 1357 removed, 393 unchanged (89% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, who serve as our principal executive officer and principal financial and accounting officer, respectively, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

In making this evaluation, our management considered the material weakness in our internal control over financial reporting described below.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of such date.

We have initiated various remediation efforts, including the hiring of additional financial personnel/consultants with the appropriate public company and technical accounting expertise and other actions that are more fully described below.

As such remediation efforts are still ongoing, we have concluded that the material weaknesses have not been fully remediated.

Our remediation efforts to date have included the following:

● We have made an assessment of the basis of accounting, revenue recognition policies and accounting period cutoff procedures.

In some cases, we made the necessary adjustments to convert the basis of accounting from cash basis to accrual basis.

In all cases we have done the required analytical work to ensure the proper cutoff of the financial position and results of operations for the presented accounting periods.

● We have made an assessment of the current accounting personnel, financial reporting and information system environments and capabilities.

Based on our preliminary findings, we have found these resources and systems lacking and have concluded that these resources and systems will need to be supplemented and/or upgraded.

We are in the process of identifying a single, unified accounting and reporting system that can be used by the Company and Bailey, with the goal of ensuring consistency and timeliness in reporting, real time access to data while also ensuring ongoing data integrity, backup and cyber security procedures and processes.

● We engaged external consultants with public company and technical accounting experience to facilitate accurate and timely accounting closes and to accurately prepare and review the financial statements and related footnote disclosures.

We plan to retain these financial consultants until such time that the internal resources of the Company have been upgraded and the required financial controls have been fully implemented.

● We have made an assessment on significant judgments and estimates, including impairment of long-lived assets and inventory valuation.

We plan to take the steps as noted above to have the proper resources to conduct proper analyses on areas requiring judgments and estimates.

The actions that have been taken are subject to continued review, implementation and testing by management, as well as audit committee oversight.

While we have implemented a variety of steps to remediate these weaknesses, we cannot assure you that we will be able to fully remediate them, which could impair our ability to accurately and timely meet our public company reporting requirements.

Notwithstanding the assessment that our internal controls over financial reporting are not effective and that material weaknesses exist, we believe that we have employed supplementary procedures to ensure that the financial statements contained in this filing fairly present our financial position, results of operations and cash flows for the reporting periods covered herein in all material respects.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Management believes that the material weakness set forth above did not have an effect on our financial results.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the year ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names, ages and titles of our directors, director nominees, executive officers and key personnel:

Executive Officers and Directors

The following table sets forth certain information with respect to our executive officers and directors as of December 31, 2023.

Executive Officers and Directors

John Hilburn Davis IV

President and Chief Executive Officer

Chief Financial Officer

Trevor Pettennude

Jameeka Aaron

Huong “Lucy” Doan

Board Composition

Our board of directors may establish the authorized number of directors from time to time by resolution.

No current or pending member of our board of directors or Compensation Committee serves as a member of the board of directors or the compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Executive Officers

John Hilburn Davis IV, “Hil ”, has served as our President and Chief Executive Officer since March 2019 and a Director since November 2020.

AND PROCEDURES

of Disclosure Controls and Procedures

maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act

of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports we file

and submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s

rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information

required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management,

including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures,

no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily

applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

management, with the participation of our Chief Executive Officer and Chief Financial Officer, who serve as our principal executive officer

and principal financial and accounting officer, respectively, has evaluated the effectiveness of our disclosure controls and procedures

as of December 31, 2024.

In making this evaluation, our management considered the material weakness in our internal control over financial

reporting described below.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our

disclosure controls and procedures were not effective as of such date.

have initiated various remediation efforts, including the hiring of additional financial personnel/consultants with the appropriate public

company and technical accounting expertise and other actions that are more fully described below.

As such remediation efforts are still

ongoing, we have concluded that the material weaknesses have not been fully remediated.

Our remediation efforts to date have included

the following:

have made an assessment of the basis of accounting, revenue recognition policies and accounting period cutoff procedures.

cases, we made the necessary adjustments to convert the basis of accounting from cash basis to accrual basis.

In all cases we have

done the required analytical work to ensure the proper cutoff of the financial position and results of operations for the presented

accounting periods.

have made an assessment of the current accounting personnel, financial reporting and information system environments and capabilities.

Based on our preliminary findings, we have found these resources and systems lacking and have concluded that these resources and

systems will need to be supplemented and/or upgraded.

We are in the process of identifying a single, unified accounting and reporting

system that can be used by the Company and Bailey, with the goal of ensuring consistency and timeliness in reporting, real time access

to data while also ensuring ongoing data integrity, backup and cyber security procedures and processes.

engaged external consultants with public company and technical accounting experience to facilitate accurate and timely accounting

closes and to accurately prepare and review the financial statements and related footnote disclosures.

We plan to retain these financial

consultants until such time that the internal resources of the Company have been upgraded and the required financial controls have

been fully implemented.

have made an assessment on significant judgments and estimates, including impairment of long-lived assets and inventory valuation.

We plan to take the steps as noted above to have the proper resources to conduct proper analyses on areas requiring judgments and

actions that have been taken are subject to continued review, implementation and testing by management, as well as audit committee oversight.

While we have implemented a variety of steps to remediate these weaknesses, we cannot assure you that we will be able to fully remediate

them, which could impair our ability to accurately and timely meet our public company reporting requirements.

Notwithstanding

the assessment that our internal controls over financial reporting are not effective and that material weaknesses exist, we believe that

we have employed supplementary procedures to ensure that the financial statements contained in this filing fairly present our financial

position, results of operations and cash flows for the reporting periods covered herein in all material respects.

on Effectiveness of Controls and Procedures

management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer),

does not expect that our disclosure controls and procedures will prevent all errors and all fraud.

A control system, no matter how well

conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered

relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance

that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include, but

are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or

by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the

likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential

future conditions.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies

or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or

fraud may occur and not be detected.

believes that the material weakness set forth above did not have an effect on our financial results.

in Internal Control over Financial Reporting

change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred

during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control

over financial reporting.

REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table sets forth the names, ages and titles of our directors, director nominees, executive officers and key personnel:

Officers and Directors

following table sets forth certain information with respect to our executive officers and directors as of December 31, 2024.

Hilburn Davis IV

Chief Executive Officer and Chairman of the Board

Financial Officer

board of directors may establish the authorized number of directors from time to time by resolution.

Our Board currently consists of five members.

current or pending member of our board of directors or Compensation Committee serves as a member of the board of directors or the compensation

committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Hilburn Davis IV, “Hil ”, has served as our President and Chief Executive Officer since March 2019 and a Director since

November 2020.

He joined DSLTD to overhaul its supply chain in March 2018.

Prior to that, Mr.

Davis founded two companies, BeautyKind and J.Hilburn.

Davis founded two companies, BeautyKind

and J.Hilburn.

He founded and was CEO of BeautyKind from October 2013 to January 2018.

He also founded and was CEO of J.Hilburn from January 2007 to September 2013, growing it from $0 to $55 million in revenues in six years.

He also founded and was CEO of J.Hilburn from

January 2007 to September 2013, growing it from $0 to $55 million in revenues in six years.

From 1998 to 2006 Mr.

Davis worked as an equity research analyst covering consumer luxury publicly traded companies at Thomas Weisel Partners, SunTrust Robinson Humphrey and Citadel Investment Group.

Davis worked as an

equity research analyst covering consumer luxury publicly traded companies at Thomas Weisel Partners, SunTrust Robinson Humphrey and

Citadel Investment Group.

He graduated from Rhodes College in 1995 with a BA in Sociology and Anthropology.

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Davis filed for personal bankruptcy through the filing of a Chapter 7 bankruptcy petition in Texas federal court.

Reid Yeoman has served as our Chief Financial Officer since October 2019.

Yeoman is a finance professional with a core Financial Planning & Analysis background at major multi-national Fortune 500 companies — including Nike & Qualcomm.

He has a proven track record of driving growth and expanding profitability with retail.

Yeoman has served as our Chief Financial Officer since October 2019.

Yeoman is a finance professional with a core Financial Planning

& Analysis background at major multi-national Fortune 500 companies — including Nike & Qualcomm.

He has a proven track

record of driving growth and expanding profitability with retail.

From November 2017 to September 2019, Mr.

Yeoman served as CFO/ COO at Hurley — a standalone global brand within the Nike portfolio — where he managed the full profit and loss/Balance Sheet, reporting directly to Nike and oversaw the brand’s logistics and operations.

He is a native Californian and graduated with an MBA from UCLA’s Anderson School of Management in 2013 and a BA from UC Santa Barbara in 2004.

Nonemployee Board Members

Yeoman served as CFO/ COO

at Hurley — a standalone global brand within the Nike portfolio — where he managed the full profit and loss/Balance Sheet,

reporting directly to Nike and oversaw the brand’s logistics and operations.

He is a native Californian and graduated with an MBA

from UCLA’s Anderson School of Management in 2013 and a BA from UC Santa Barbara in 2004.

Board Members

Lynn has been a director of our company since inception and served as our Co-Chief Executive Officer from September 2013 to October

Prior to joining us, until September 2011 he was Co-Founder of WINC, a direct-to-consumer e-commerce company which was then the fastest growing winery in the world, backed by Bessemer Venture Partners.

Prior to joining us, until September 2011 he was Co-Founder of WINC, a direct-to-consumer e-commerce company which was then the

fastest growing winery in the world, backed by Bessemer Venture Partners.

Prior to WINC, Mr.

Lynn co-founded a digital payments company that was sold in 2011.

Lynn co-founded a digital payments company

that was sold in 2011.

He holds a digital marketing certificate from Harvard Business School’s Executive Education Program.

Trevor Pettennude is a seasoned financial services executive.

Pettennude became the CEO of 360 Mortgage Group, where he oversees a team of 70 people generating over $1 billion of annual loan volume.

He is also the founder and principal of Banctek Solutions, a global merchant service company which was launched in 2009 and which processes over $300 million of volume annually.

Jameeka Green Aaron became a director of our company in May 2021.

Pettennude is a seasoned financial services executive.

Pettennude became the CEO of 360 Mortgage Group, where he oversees

a team of 70 people generating over $1 billion of annual loan volume.

He is also the founder and principal of Banctek Solutions, a global

merchant service company which was launched in 2009 and which processes over $300 million of volume annually.

Green Aaron became a director of our company in May 2021.

Aaron is the Chief Information Security Officer at Auth0.

Aaron is responsible for the holistic security and compliance of Auth0’s platform, products, and corporate environment.

Auth0 provides a platform to authenticate, authorize, and secure access for applications, devices, and users.

is responsible for the holistic security and compliance of Auth0’s platform, products, and corporate environment.

Auth0 provides

a platform to authenticate, authorize, and secure access for applications, devices, and users.

Prior to her current role Ms.

Aaron was the Chief Information Officer Westcoast Operations at United Legwear and Apparel.

Her 20+ years of experience include serving as the Director of North American Technology and Director of Secure Code and Identity and Access Management at Nike, and as Chief of Staff to the CIO of Lockheed Martin Space Systems Company.

the Chief Information Officer Westcoast Operations at United Legwear and Apparel.

Her 20+ years of experience include serving as the

Director of North American Technology and Director of Secure Code and Identity and Access Management at Nike, and as Chief of Staff to

the CIO of Lockheed Martin Space Systems Company.

Aaron is also a 9-year veteran of the United States Navy.

Aaron’s dedication to service has extended beyond her military career.

She is committed to advancing women and people of color in Science, Technology, Engineering, and Mathematics (STEM) fields she is an alumni of the U.S.

State Department’s TechWomen program and the National Urban League of Young Professionals.

Aaron’s dedication

to service has extended beyond her military career.

She is committed to advancing women and people of color in Science, Technology, Engineering,

and Mathematics (STEM) fields she is an alumni of the U.S.

State Department’s TechWomen program and the National Urban League of

Young Professionals.

Aaron currently sits on the board of the California Women Veterans Leadership Council, is an advisor for U.C.

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Born in Stockton, California, Ms.

Aaron holds a bachelor’s degree in Information Technology from the University of Massachusetts, Lowell.

Aaron’s extensive corporate and leadership experience qualifies her to serve on our board of directors.

Huong “Lucy” Doan is a seasoned finance and strategy executive who brings expertise working with some of the world’s best-known brands.

a bachelor’s degree in Information Technology from the University of Massachusetts, Lowell.

Aaron’s extensive corporate

and leadership experience qualifies her to serve on our board of directors.

“Lucy” Doan is a seasoned finance and strategy executive who brings expertise working with some of the world’s

best-known brands.

Since 2018, Ms.

Doan serves as advisor to CEOs and founders of high-growth DTC, ecommerce and retail brands, in apparel and consumer products.

In this capacity, she provides strategic guidance to successfully scale businesses while driving profitability, with focus on operational excellence and capital resource planning.

In 2019, she became a board member of Grunt Style, a patriotic apparel brand.

Doan spent 20 years in senior executive roles at Guitar Center, Herbalife International, Drapers & Damons, and Fox Television, where she built high performance teams to drive execution of business plans and growth strategies.

Committees of the Board of Directors

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which operates pursuant to a charter adopted by our board of directors.

The board of directors may also establish other committees from time to time to assist our company and the board of directors.

The composition and functioning of all of our committees will comply with all applicable requirements of the Sarbanes-Oxley Act, NasdaqCM and SEC rules and regulations, if applicable.

Each committee’s charter is available on our website at www.digitalbrandsgroup.co.

The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website.

Audit committee

Trevor Pettennude, Jameeka Green Aaron and Hong Doan serve on the audit committee, which is chaired by Trevor Pettennude.

Our board of directors has determined that each are “independent” for audit committee purposes as that term is defined by the rules of the SEC and NasdaqCM, and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee.

Our Board of directors has designated Trevor Pettennude as an “audit committee financial expert,” as defined under the applicable rules of the SEC.

Doan serves as advisor to CEOs and founders of high-growth DTC, ecommerce and retail brands, in apparel

and consumer products.

In this capacity, she provides strategic guidance to successfully scale businesses while driving profitability,

with focus on operational excellence and capital resource planning.

In 2019, she became a board member of Grunt Style, a patriotic apparel

Doan spent 20 years in senior executive roles at Guitar Center, Herbalife International, Drapers & Damons, and

Fox Television, where she built high performance teams to drive execution of business plans and growth strategies.

of the Board of Directors

board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee,

each of which operates pursuant to a charter adopted by our board of directors.

The board of directors may also establish other committees

from time to time to assist our company and the board of directors.

The composition and functioning of all of our committees will comply

with all applicable requirements of the Sarbanes-Oxley Act, and SEC rules and regulations.

Each committee’s

charter is available on our website at www.digitalbrandsgroup.co.

The reference to our website address does not constitute incorporation

by reference of the information contained at or available through our website.

Board and c ommittee m eetings

During the year ended December 31, 2024, the Board held 4 meetings and acted by unanimous written consent 4 times.

The audit committee held 4 meetings.

The compensation committee held 4 meetings and acted by unanimous written consent 4 times.

The nominating

and corporate governance committee held 4 meetings.

During 2024, each director attended more than 75% of the combined meetings of the

Board and each committee on which he or she served.

Pettennude, Jameeka Green Aaron and Huong Doan serve on the audit committee, which is chaired by Huong Doan.

Our board of directors

has determined that each are “independent” for audit committee purposes as that term is defined by the rules of the SEC and

Nasdaq, and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee.

Our Board of directors

has designated Huong Doan as an “audit committee financial expert,” as defined under the applicable rules of the SEC.

The audit committee’s responsibilities include:

● appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

● pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

● reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;

● reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;

● coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;

● establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;

● recommending, based upon the audit committee’s review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;

● monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;

● preparing the audit committee report required by SEC rules to be included in our annual proxy statement;

● reviewing all related person transactions for potential conflict of interest situations and approving all such transactions;

● reviewing quarterly earnings releases.

Compensation committee

Trevor Pettennude, Jameeka Green Aaron and Hong Doan serve on the compensation committee, which is chaired by Jameeka Green Aaron.

Our board of directors has determined that each member of the compensation committee is “independent” as defined in the applicable NasdaqCM rules.

approving the compensation of, and assessing the independence of our independent registered public accounting firm;

pre-approving

auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public

accounting firm;

the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing

our financial statements;

and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements

and related disclosures as well as critical accounting policies and practices used by us;

the oversight and reviewing the adequacy of our internal control over financial reporting;

policies and procedures for the receipt and retention of accounting-related complaints and concerns;

recommending,

based upon the audit committee’s review and discussions with management and our independent registered public accounting firm,

whether our audited financial statements shall be included in our Annual Report on Form 10-K;

the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial

statements and accounting matters;

the audit committee report required by SEC rules to be included in our annual proxy statement;

all related person transactions for potential conflict of interest situations and approving all such transactions;

quarterly earnings releases.

Pettennude, Jameeka Green Aaron and Huong Doan serve on the compensation committee, which is chaired by Jameeka Green Aaron.

of directors has determined that each member of the compensation committee is “independent” as defined in the Nasdaq rules.

The compensation committee’s responsibilities include:

● annually reviewing and recommending to the board of directors the corporate goals and objectives relevant to the compensation of our Chief Executive Officer;

● evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and based on such evaluation:

(i) recommending to the board of directors the cash compensation of our Chief Executive Officer, and (ii) reviewing and approving grants and awards to our Chief Executive Officer under equity-based plans;

● reviewing and recommending to the board of directors the cash compensation of our other executive officers;

● reviewing and establishing our overall management compensation, philosophy and policy;

● overseeing and administering our compensation and similar plans;

● reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable NasdaqCM rules;

● retaining and approving the compensation of any compensation advisors;

● reviewing and approving our policies and procedures for the grant of equity-based awards;

● reviewing and recommending to the board of directors the compensation of our directors;

● preparing the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement.

None of the members of our compensation committee has at any time during the prior three years been one of our officers or employees.

None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

Nominating and corporate governance committee

Trevor Pettennude, Jameeka Green Aaron and Hong Doan serve on the nominating and corporate governance committee, which is chaired by Hong Doan.

Our board of directors has determined that each member of the nominating and corporate governance committee is “independent” as defined in the applicable NasdaqCM rules.

reviewing and recommending to the board of directors the corporate goals and objectives relevant to the compensation of our Chief

Executive Officer;

the performance of our Chief Executive Officer in light of such corporate goals and objectives and based on such evaluation:

recommending to the board of directors the cash compensation of our Chief Executive Officer, and (ii) reviewing and approving grants

and awards to our Chief Executive Officer under equity-based plans;

and recommending to the board of directors the cash compensation of our other executive officers;

and establishing our overall management compensation, philosophy and policy;

and administering our compensation and similar plans;

and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation

matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified

in the applicable rules;

and approving the compensation of any compensation advisors;

and approving our policies and procedures for the grant of equity-based awards;

and recommending to the board of directors the compensation of our directors;

the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement.

of the members of our compensation committee has at any time during the prior three years been one of our officers or employees.

of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation

committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

and corporate governance committee

Pettennude, Jameeka Green Aaron and Huong Doan serve on the nominating and corporate governance committee, which is chaired by Huong Doan.

Our board of directors has determined that each member of the nominating and corporate governance committee is “independent”

as defined in the Nasdaq rules.

The nominating and corporate governance committee’s responsibilities include:

● developing and recommending to the board of directors’ criteria for board and committee membership;

● establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;

● reviewing the composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us.

Involvement in Certain Legal Proceedings

There are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

On December 16, 2021, Mr.

and recommending to the board of directors’ criteria for board and committee membership;

procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;

the composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise

to advise us.

in Certain Legal Proceedings

are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal

conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking

industries, or a finding of securities or commodities law violations.

December 16, 2021, Mr.

Davis filed for personal bankruptcy through the filing of a Chapter 7 bankruptcy petition in Texas federal court.

Except for Mr.

Davis, none of our directors and officers has been affiliated with any company that has filed for bankruptcy within the last ten years.

We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or director, is a party adverse to us or any of our or has a material interest adverse to us or any of our subsidiaries.

Code of Conduct

The Company’s Code of Conduct applies to all of its employees, officers and directors, including those officers responsible for financial reporting.

The Code of Conduct is available on its website at www.digitalbrandsgroup.co.

Information contained on or accessible through such website is not a part of this Annual Report, and the inclusion of the website address in this Annual Report is an inactive textual reference only.

The Company intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who beneficially own more than 10% of the Company’s common stock to file with the SEC reports showing initial ownership of and changes in ownership of the Company’s common stock and other registered equity securities.

Based solely upon our review of the copies of such forms or written representations from certain reporting persons received by us with respect to fiscal year 2023, the Company believes that its directors and executive officers and persons who own more than 10% of a registered class of its equity securities have complied with all applicable Section 16(a) filing requirements for fiscal year 2023.

EXECUTIVE COMPENSATION

Compensation of Named Executive Officers

The summary compensation table below shows certain compensation information for services rendered in all capacities for the fiscal years ended December 31, 2023 and 2022.

Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in any of the applicable years.

The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.

Davis, none of our directors and officers has been affiliated with any company that has filed for bankruptcy within the

last ten years.

We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or

director, is a party adverse to us or any of our or has a material interest adverse to us or any of our subsidiaries.

of Ethics and Business Conduct

Company’s Code of Ethics and Business Conduct applies to all of its employees, officers and directors, including those

officers responsible for financial reporting.

The Code of Ethics and Business Conduct is available on its website at

www.digitalbrandsgroup.co.

Information contained on or accessible through such website is not a part of this Annual Report, and the

inclusion of the website address in this Annual Report is an inactive textual reference only.

The Company intends to disclose any

amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by

the applicable rules and exchange requirements.

Compensation Recovery Policy

In 2023, the Board of Directors

approved a new compensation recovery policy (the “Clawback Policy”) in compliance with SEC and then-applicable rules and regulations.

The Clawback Policy provides that in the event we are required to prepare an “Accounting Restatement” (as defined in the Clawback

Policy), we shall, subject to certain limited exceptions as described in the Clawback Policy, recover certain incentive-based compensation

from executive officers who are or have been designated as an “officer” by the Board of Directors in accordance with Exchange

Act Rule 16a-1(f).

Compensation that shall be recovered under the Clawback Policy generally includes “Incentive-Based Compensation”

(as defined in the Clawback Policy) received during the three-year period prior to the “Accounting Restatement Determination Date”

(as defined in the Clawback Policy) that exceeds the amount that otherwise would have been received by the “officer” had such

compensation been determined based on the restated amounts in the financial restatement.

Under the Clawback Policy, “Incentive-Based

Compensation” includes any compensation that is granted, earned, or vested based, in whole or in part, upon the attainment of a

Financial Reporting Measure (as defined in the Clawback Policy).

Insider Trading Arrangements

We have adopted an

insider trading policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers and employees.

A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K for the fiscal year ended December 31,

In addition, with regard to us trading in our own securities, it is our policy to comply with the federal securities laws and the

applicable exchange listing requirements in all respects.

Anti-Hedging Policy

Under the terms of our insider trading policy, we prohibit each officer, director and employee, and each of their

family members and controlled entities, from engaging in certain forms of hedging or monetization transactions.

Such transactions include

those, such as zero-cost collars and forward sale contracts, that would allow them to lock in much of the value of their stock holdings,

often in exchange for all or part of the potential for upside appreciation in the stock, and to continue to own the covered securities

but without the full risks and rewards of ownership.

Section 16(a) Reports

16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who beneficially own more than 10%

of the Company’s common stock to file with the SEC reports showing initial ownership of and changes in ownership of the Company’s

common stock and other registered equity securities.

Based solely upon our review of the copies of such forms or written representations

from certain reporting persons received by us with respect to fiscal year 2024, the Company believes that its directors and executive

officers and persons who own more than 10% of a registered class of its equity securities have complied with all applicable Section 16(a)

filing requirements for fiscal year 2024.

Board Oversight of Risk Management

The Board of Directors considers

oversight of the Company’s risk management efforts, including enterprise risk management, to be a responsibility of the entire Board

(as reported by and through the appropriate committee in the case of risks under the purview of a particular committee).

Management regularly

updates the full Board on major Company initiatives, strategies, and related risks.

At least annually, management reviews with the Board

risks to the enterprise and efforts to address them.

In addition, presentations are made in the ordinary course at scheduled Board meetings

regarding operations, finance, market trends, and the various other risks that face the Company.

On an ongoing basis, the various committees

of the Board address risk in the areas germane to their scope.

The nominating and corporate governance committee evaluates Board effectiveness, succession planning, and general corporate best practices;

The compensation committee oversees the Company’s policies to attract, retain, and motivate talented employees and ties compensation to actual performance, including risks associated with executive compensation;

The audit committee provides risk oversight of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements and corporate policies and controls, including controls over financial reporting, computerized information systems and cyber security, the independent auditor’s selection, retention, qualifications, objectivity and independence, and the performance of the Company’s internal audit function.

The chairperson of the relevant

Board committee reports on the committee’s discussions to the entire Board during the committee reports portion of the applicable

Board meeting.

Leadership Structure and Role in Risk Oversight

Board of Directors has a Chairman, Mr.

The Chairman has authority, among other things, to preside over Board meetings and set the

agenda for Board meetings.

Accordingly, the Chairman has substantial ability to shape the work of our Board of Directors.

We believe that

separation of the roles of Chairman and Chief Executive Officer is not necessary at this time to ensure appropriate oversight by the Board

of Directors of our business and affairs.

However, no single leadership model is right for all companies and at all times.

Directors recognizes that depending on the circumstances, other leadership models, such as the appointment of a lead independent director,

might be appropriate.

Accordingly, the Board of Directors may periodically review its leadership structure.

In addition, the Board of

Directors will hold executive sessions in which only independent directors are present.

Our Board of Directors is

generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities.

Our audit committee

oversees management of financial risks;

our Board of Directors regularly reviews information regarding our cash position, liquidity and

operations, as well as the risks associated with each.

The Board of Directors regularly reviews plans, results and potential risks related

to our product development and commercialization efforts.

Our compensation committee oversees risk management as it relates to our compensation

plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may

create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on us.

Executive Sessions of Independent Directors

The independent directors of the

Board and each standing committee meet regularly in executive sessions without management present.

Stockholders wishing to communicate

with the independent directors may contact them by writing to Independent Directors, c/o Corporate Secretary, Digital Brands Group, Inc.,

1400 Lavaca Street, Austin, TX 78701.

Any such communication will be promptly distributed by our Corporate Secretary to the individual

independent director or directors named in the communication in the same manner as described below in “Communications with the Board.”

Communications with the Board

Stockholders and other interested

parties can send communications to one or more members of the Board by writing to the Board or specific directors or group of directors

at the following address:

c/o Corporate Secretary, Digital Brands Group, Inc., 1400 Lavaca Street, Austin, TX 78701.

Any communication

will be promptly distributed by our Corporate Secretary to the individual director or directors named in the communication or to all directors

if addressed to the entire Board.

of Named Executive Officers

summary compensation table below shows certain compensation information for services rendered in all capacities for the fiscal years

ended December 31, 2024 and 2023.

Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in

any of the applicable years.

The following information includes the dollar value of base salaries, bonus awards, the number of stock

options granted and certain other compensation, if any, whether paid or deferred.

Name and Principal Position

John “Hil” Davis

$ 249,000 (1)

President and Chief Executive Officer

$ 250,000 (2)

Chief Financial Officer

$ 250,000 (2)

This amount represents the amount of salary Mr.

Davis was entitled to receive under his agreement with the Company.

$34,483.85 of such

amount has been paid to Mr.

This amount represents the amount of salary Mr.

Yeoman was entitled to receive under his agreement with the Company.

Such amount has not yet been paid to Mr.

Executive Officer Outstanding Equity Awards at Fiscal Year-End

The following table provides certain information concerning any common share purchase options, stock awards or equity incentive plan awards held by each of our named executive officers that were outstanding as of December 31, 2023.

The number of shares of common stock referred to in this “Executive Compensation” section gives effect to the one-for-100 reverse stock split that we effectuated on November 3, 2022, unless the context clearly indicates otherwise.

On August 21, 2023, the Board of Directors approved a one - for - 25 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

Such amount has

not yet been paid to Mr.

Outstanding Equity Awards at 2024 Fiscal Year-End

following table provides certain information concerning any common share purchase options, stock awards or equity incentive plan awards

held by each of our named executive officers that were outstanding as of December 31, 2024.

Option Awards

Option Exercise

Unexercisable

John “Hil” Davis

Employment Agreements

In December 2020, we entered into an offer letter with Mr.

December 2020, we entered into an offer letter with Mr.

Davis, our Chief Executive Officer and a member of our board.

The offer letter provides for an annual base salary of $350,000 effective October 1, 2020, and for Mr.

The offer letter

provides for an annual base salary of $350,000 effective October 1, 2020, and for Mr.

Davis to be appointed to our board effective November

Effective January 1, 2021, Mr.

Davis is also eligible to receive an annual bonus with a target of 175%, and with a range from 0% to a maximum of 225%, of his base salary based upon achievement of Company and individual goals.

He is also eligible to participate in employee benefit plans that we offer to our other senior executives.

In the event of a termination of his employment after June 30, 2021, Mr.

Davis is also eligible to receive an annual bonus with a target of 175%, and with a range from

0% to a maximum of 225%, of his base salary based upon achievement of Company and individual goals.

He is also eligible to participate

in employee benefit plans that we offer to our other senior executives.

In the event of a termination of his employment after June 30,

Davis is eligible for severance benefits as may be approved by the Board.

Davis is subject to our recoupment, insider trading and other company policies, a perpetual non-disclosure of confidential information covenant, a non-

disparagement covenant and a non-solicitation of employees covenant.

Davis’ offer letter also provided for an option grant exercisable for up to 2,144,000 shares of our common stock to him at a per share exercise price equal to the IPO price, of which 75% of the options vested on the effective date of the IPO and 25% of the options vest in accordance with the vesting schedule provided in the Company’s 2020 Stock Plan.

Davis is an at- will employee and does not have a fixed employment term.

In December 2020, we entered into an offer letter with Mr.

Davis is subject to our recoupment, insider trading

and other company policies, a perpetual non-disclosure of confidential information covenant, a non-disparagement covenant and a non-solicitation

of employees covenant.

Davis’ offer letter also provided for an option grant exercisable for up to 17 shares of our common

stock to him at a per share exercise price equal to the IPO price, of which 75% of the options vested on the effective date of the IPO

and 25% of the options vest in accordance with the vesting schedule provided in the Company’s 2020 Stock Plan.

at- will employee and does not have a fixed employment term.

December 2020, we entered into an offer letter with Mr.

Yeoman, our Chief Financial Officer.

The offer letter provides for an annual base salary of $250,000 effective upon the closing of the IPO.

The offer letter provides for an annual

base salary of $250,000 effective upon the closing of the IPO.

Effective January 1, 2021, Mr.

Yeoman is also eligible to receive an annual bonus with a target of 50%, and with a range from 0% to a maximum of 75%, of his base salary based upon achievement of Company and individual goals.

Yeoman is also eligible to receive an annual

bonus with a target of 50%, and with a range from 0% to a maximum of 75%, of his base salary based upon achievement of Company and individual

He is also eligible to participate in employee benefit plans that we offer to our other senior executives.

In the event of a termination of his employment after June 30, 2021, Mr.

Yeoman is eligible for severance benefits as may be approved by the Board.

Yeoman is subject to our recoupment, insider trading and other company policies, a perpetual non-disclosure of confidential information covenant, a non- disparagement covenant and a non-solicitation of employees covenant.

Yeoman’s offer letter also provided for an option grant 128,000 shares of our common stock to him at a per share exercise price equal to the IPO price, of which 75% of the options vested on the effective date of the IPO and 25% of the options vest in accordance with the vesting schedule provided in the Company’s 2020 Stock Plan.

the event of a termination of his employment after June 30, 2021, Mr.

Yeoman is eligible for severance benefits as may be approved by

Yeoman is subject to our recoupment, insider trading and other company policies, a perpetual non-disclosure of confidential

information covenant, a non- disparagement covenant and a non-solicitation of employees covenant.

Yeoman’s offer letter also

provided for an option grant 1 share of our common stock to him at a per share exercise price equal to the IPO price, of which 75% of

the options vested on the effective date of the IPO and 25% of the options vest in accordance with the vesting schedule provided in the

Company’s 2020 Stock Plan.

Yeoman is an at-will employee and does not have a fixed employment term.

Compensation of Directors

No obligations with respect to compensation for non-employee directors have been accrued or paid for any periods presented.

Going forward, our board of directors believes that attracting and retaining qualified non-employee directors will be critical to the future value growth and governance of our company.

Our board of directors also believes that any compensation package for our non-employee directors should be equity-based to align the interests of these directors with our stockholders.

On the effective date of the previous offerings, each of our director nominees was granted options to purchase 20,000 shares of common stock at a per share exercise price equal to the price of the shares of common stock per the offering.

The options will vest over a one year period of time.

non-employee directors currently do not receive any compensation for their services.

Directors who are also our employees do not receive any additional compensation for their service on our board of

forward, our board of directors believes that attracting and retaining qualified non-employee directors will be critical to the future

value growth and governance of our company.

Our board of directors also believes that any compensation package for our non-employee directors

should be equity-based to align the interests of these directors with our stockholders.

On the effective date of the previous offerings,

each of our director nominees was granted options to purchase 400 shares of common stock at a per

share exercise price equal to the price of the shares of common stock per the offering.

The options will vest over a one year period

We may in the future grant additional options to our non-employee directors although there are no current plans to do so.

We do not currently intend to provide any cash compensation to our non- employee directors.

Directors who are also our employees will not receive any additional compensation for their service on our board of directors.

Incentive Stock Plan

We have adopted a 2020 Omnibus Incentive Stock Plan (the “2020 Plan”).

An aggregate of 1,320 shares of our common stock is reserved for issuance and available for awards under the 2020 Plan, including incentive stock options granted under the 2020 Plan.

The 2020 Plan administrator may grant awards to any employee, director, and consultants of the company and its subsidiaries.

To date, 1,093 grants (as adjusted for the Reverse Stock Split) have been made under the 2020 Plan and 227 shares remain eligible for issuance under the Plan.

The 2020 Plan is currently administered by the Compensation Committee of the Board as the Plan administrator.

The 2020 Plan administrator has the authority to determine, within the limits of the express provisions of the 2020 Plan, the individuals to whom awards will be granted, the nature, amount and terms of such awards and the objectives and conditions for earning such awards.

No awards may be made under the 2020 Plan after the tenth anniversary of its effective date.

Awards under the 2020 Plan may include incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted shares of common stock, restricted stock Units, performance share or Unit awards, other stock-based awards and cash-based incentive awards.

Stock Options

The 2020 Plan administrator may grant to a participant options to purchase our common stock that qualify as incentive stock options for purposes of Section 422 of the Internal Revenue Code (“incentive stock options”), options that do not qualify as incentive stock options (“non-qualified stock options”) or a combination thereof.

The terms and conditions of stock option grants, including the quantity, price, vesting periods, and other conditions on exercise will be determined by the 2020 Plan administrator.

The exercise price for stock

options will be determined by the 2020 Plan administrator in its discretion, but non-qualified stock options and incentive stock options may not be less than 100% of the fair market value of one share of our company’s common stock on the date when the stock option is granted.

Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise price may not be less than 110% of the fair market value of one share of common stock on the date the stock option is granted.

Stock options must be exercised within a period fixed by the 2020 Plan administrator that may not exceed ten years from the date of grant, except that in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise period may not exceed five years.

At the 2020 Plan administrator’s discretion, payment for shares of common stock on the exercise of stock options may be made in cash, shares of our common stock held by the participant or in any other form of consideration acceptable to the 2020 Plan administrator (including one or more forms of “cashless” or “net” exercise).

Stock Appreciation Rights

The 2020 Plan administrator may grant to a participant an award of SARs, which entitles the participant to receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of common stock on the exercise date over the SAR exercise price, times (ii) the number of shares of common stock with respect to which the SAR is exercised.

The exercise price for a SAR will be determined by the 2020 Plan administrator in its discretion;

provided, however, that in no event shall the exercise price be less than the fair market value of our common stock on the date of grant.

Restricted Shares and Restricted Units

The 2020 Plan administrator may award to a participant shares of common stock subject to specified restrictions (“restricted shares”).

Restricted shares are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified forfeiture period and/or the attainment of specified performance targets over the forfeiture period.

The 2020 Plan administrator also may award to a participant Units representing the right to receive shares of common stock in the future subject to the achievement of one or more goals relating to the completion of service by the participant and/or the achievement of performance or other objectives (“restricted Units”).

The terms and conditions of restricted share and restricted Unit awards are determined by the 2020 Plan administrator.

Performance Awards

The 2020 Plan administrator may grant performance awards to participants under such terms and conditions as the 2020 Plan administrator deems appropriate.

A performance award entitles a participant to receive a payment from us, the amount of which is based upon the attainment of predetermined performance targets over a specified award period.

Performance awards may be paid in cash, shares of common stock or a combination thereof, as determined by the 2020 Plan administrator.

Other Stock-Based Awards

The 2020 Plan administrator may grant equity-based or equity-related awards, referred to as “other stock- based awards,” other than options, SARs, restricted shares, restricted Units, or performance awards.

The terms and conditions of each other stock-based award will be determined by the 2020 Plan administrator.

Payment under any other stock-based awards will be made in common stock or cash, as determined by the 2020 Plan administrator.

Cash-Based Awards

The 2020 Plan administrator may grant cash-based incentive compensation awards, which would include performance-based annual cash incentive compensation to be paid to covered employees.

have adopted a 2020 Omnibus Incentive Stock Plan (the “2020 Plan”).

An aggregate of 26 shares of our common stock is reserved for issuance and available for awards under the 2020 Plan, including incentive stock options

granted under the 2020 Plan.

The 2020 Plan administrator may grant awards to any employee, director, and consultants of the company and

its subsidiaries.

To date, 22 grants have been made under the 2020 Plan and 4 shares remain

eligible for issuance under the 2020 Plan.

2020 Plan is currently administered by the Compensation Committee of the Board as the Plan administrator.

The 2020 Plan administrator

has the authority to determine, within the limits of the express provisions of the 2020 Plan, the individuals to whom awards will be

granted, the nature, amount and terms of such awards and the objectives and conditions for earning such awards.

No awards may be made

under the 2020 Plan after the tenth anniversary of its effective date.

under the 2020 Plan may include incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”),

restricted shares of common stock, restricted stock Units, performance share or Unit awards, other stock-based awards and cash-based

incentive awards.

2020 Plan administrator may grant to a participant options to purchase our common stock that qualify as incentive stock options for purposes

of Section 422 of the Internal Revenue Code (“incentive stock options”), options that do not qualify as incentive stock options

(“non-qualified stock options”) or a combination thereof.

The terms and conditions of stock option grants, including the

quantity, price, vesting periods, and other conditions on exercise will be determined by the 2020 Plan administrator.

The exercise price

for stock options will be determined by the 2020 Plan administrator in its discretion, but non-qualified stock options and incentive

stock options may not be less than 100% of the fair market value of one share of our company’s common stock on the date when the

stock option is granted.

Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined

voting power of all classes of our stock on the date of grant, the exercise price may not be less than 110% of the fair market value

of one share of common stock on the date the stock option is granted.

Stock options must be exercised within a period fixed by the 2020

Plan administrator that may not exceed ten years from the date of grant, except that in the case of incentive stock options granted to

a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise period may

not exceed five years.

At the 2020 Plan administrator’s discretion, payment for shares of common stock on the exercise of stock

options may be made in cash, shares of our common stock held by the participant or in any other form of consideration acceptable to the

2020 Plan administrator (including one or more forms of “cashless” or “net” exercise).

Appreciation Rights

2020 Plan administrator may grant to a participant an award of SARs, which entitles the participant to receive, upon its exercise, a

payment equal to (i) the excess of the fair market value of a share of common stock on the exercise date over the SAR exercise price,

times (ii) the number of shares of common stock with respect to which the SAR is exercised.

The exercise price for a SAR will be determined

by the 2020 Plan administrator in its discretion;

provided, however, that in no event shall the exercise price be less than the fair

market value of our common stock on the date of grant.

Shares and Restricted Units

2020 Plan administrator may award to a participant shares of common stock subject to specified restrictions (“restricted shares”).

Restricted shares are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified

forfeiture period and/or the attainment of specified performance targets over the forfeiture period.

The 2020 Plan administrator also

may award to a participant Units representing the right to receive shares of common stock in the future subject to the achievement of

one or more goals relating to the completion of service by the participant and/or the achievement of performance or other objectives

(“restricted Units”).

The terms and conditions of restricted share and restricted Unit awards are determined by the 2020

Plan administrator.

2020 Plan administrator may grant performance awards to participants under such terms and conditions as the 2020 Plan administrator deems

A performance award entitles a participant to receive a payment from us, the amount of which is based upon the attainment

of predetermined performance targets over a specified award period.

Performance awards may be paid in cash, shares of common stock or

a combination thereof, as determined by the 2020 Plan administrator.

Stock-Based Awards

2020 Plan administrator may grant equity-based or equity-related awards, referred to as “other stock- based awards,” other

than options, SARs, restricted shares, restricted Units, or performance awards.

The terms and conditions of each other stock-based award

will be determined by the 2020 Plan administrator.

Payment under any other stock-based awards will be made in common stock or cash, as

determined by the 2020 Plan administrator.

2020 Plan administrator may grant cash-based incentive compensation awards, which would include performance-based annual cash incentive

compensation to be paid to covered employees.

The terms and conditions of each cash-based award will be determined by the 2020 Plan administrator.

2013 Stock Plan

Eligibility and Administration

Our employees, outside directors and consultants are eligible to receive nonstatutory options or the direct award or sale of shares under our 2013 Stock Plan, while only our employees are eligible to receive grants of ISOs under our 2013 Stock Plan.

A person who owns more than 10% of the total combined voting power of all classes of our outstanding stock, of the outstanding common stock of our parent or subsidiary, is not eligible for the grant of an ISO unless the exercise prices is at least 110% of the fair market value of a share on the grant date and such ISO is not exercisable after five years from the grant date.

The 2013 Stock Plan may be administered by a committee of the board of directors, and if no committee is appointed, then the board of directors.

The board of directors has the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2013 Stock Plan, subject to its express terms and conditions.

Shares Available and Termination

In the event that shares previously issued under the 2013 Stock Plan are reacquired, such shares will be added to the available shares for issuance under the 2013 Stock Plan.

In the event that shares that would have otherwise been issuable under the 2013 Stock Plan were withheld in payment of the purchase price, exercise price, or withholding taxes, such shares will remain available for issuance under the 2013 Stock Plan.

In the event that an outstanding option or other right is cancelled or expired, the shares allocable to the unexcised portion of the option or other right will be added to the number of shares available under the 2013 Stock Plan.

The 2013 Stock Plan will terminate automatically 10 years after the later of (i) the date when the board of directors adopted the 2013 Stock Plan or (ii) the date when the board of directors approved the most recent increase in the number of shares reserved under the 2013 Stock Plan that was also approved by our stockholders.

The 2013 Stock Plan provides for the grant of shares of common stock and options, including ISO intended to qualify under Code Section 422 and nonstatutory options which are not intended to qualify.

All awards under the 2013 Stock plan will be det forth in award agreements, which will detail the terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The table below sets forth information regarding the projected beneficial ownership of our common stock as of April [•], 2024 by the following individuals or groups:

● each person or entity who is known by us to own beneficially more than 5% of our outstanding stock;

● each of our executive officers;

● each of our directors and director nominees;

● all of our directors, director nominees and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the securities in question.

Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares of our common stock held by them.

Shares of common stock issuable pursuant to a stock option, warrant or convertible note that is currently exercisable or convertible, or is exercisable or convertible within 60 days after the date of determination of ownership, are deemed to be outstanding and beneficially

owned for purposes of computing the percentage ownership of the holder of the stock option, warrant or convertible note but are not treated as outstanding for purposes of computing the percentage ownership of any other person.

The applicable percentage ownership in the following table is based on 1,698,568 shares of our common stock outstanding as of April 15, 2024.

and Administration

employees, outside directors and consultants are eligible to receive nonstatutory options or the direct award or sale of shares under

our 2013 Stock Plan, while only our employees are eligible to receive grants of ISOs under our 2013 Stock Plan.

A person who owns more

than 10% of the total combined voting power of all classes of our outstanding stock, of the outstanding common stock of our parent or

subsidiary, is not eligible for the grant of an ISO unless the exercise prices is at least 110% of the fair market value of a share on

the grant date and such ISO is not exercisable after five years from the grant date.

The 2013 Stock Plan may be administered by a committee

of the board of directors, and if no committee is appointed, then the board of directors.

The board of directors has the authority to

make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2013

Stock Plan, subject to its express terms and conditions.

Available and Termination

the event that shares previously issued under the 2013 Stock Plan are reacquired, such shares will be added to the available shares for

issuance under the 2013 Stock Plan.

In the event that shares that would have otherwise been issuable under the 2013 Stock Plan were withheld

in payment of the purchase price, exercise price, or withholding taxes, such shares will remain available for issuance under the 2013

In the event that an outstanding option or other right is cancelled or expired, the shares allocable to the unexcised portion

of the option or other right will be added to the number of shares available under the 2013 Stock Plan.

2013 Stock Plan will terminate automatically 10 years after the later of (i) the date when the board of directors adopted the 2013 Stock

Plan or (ii) the date when the board of directors approved the most recent increase in the number of shares reserved under the 2013 Stock

Plan that was also approved by our stockholders.

2013 Stock Plan provides for the grant of shares of common stock and options, including ISO intended to qualify under Code Section 422

and nonstatutory options which are not intended to qualify.

All awards under the 2013 Stock plan will be det forth in award agreements,

which will detail the terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise

Policies and Practices

Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

not have any formal policy that requires us to grant, or avoid granting, stock options at particular times.

Consistent with its annual

compensation cycle, if options are to be granted, the Compensation Committee generally seeks to grant annual stock option awards after

its Annual Report on Form 10-K has been filed.

The timing of any stock option grants in connection with new hires, promotions, or other

non-routine grants is tied to the event giving rise to the award (such as an employee’s commencement of employment or promotion

effective date).

As a result, in all cases, the timing of grants of stock options occurs independent of the release of any material nonpublic

information, and we do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

options were issued to executive officers in 2024 during any period beginning four business days before the filing of a periodic report

or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report

with the SEC.

No Pension Benefits

not maintain any plan that provides for payments or other benefits to its executive officers at, following or in connection with retirement

and including, without limitation, any tax-qualified defined benefit plans or supplemental executive retirement plans.

No Nonqualified Deferred

We do not maintain any defined contribution or other plan that provides for the deferral of compensation on a basis

that is not tax-qualified.

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

table below sets forth information regarding the projected beneficial ownership of our common stock as of April 9, 2025 by the

following individuals or groups:

person or entity who is known by us to own beneficially more than 5% of our outstanding stock;

of our executive officers;

of our directors and director nominees;

of our directors, director nominees and executive officers as a group.

ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the

securities in question.

Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table

below have sole voting and investment power with respect to all shares of our common stock held by them.

of common stock issuable pursuant to a stock option, warrant or convertible note that is currently exercisable or convertible, or is

exercisable or convertible within 60 days after the date of determination of ownership, are deemed to be outstanding and beneficially

owned for purposes of computing the percentage ownership of the holder of the stock option, warrant or convertible note but are not treated

as outstanding for purposes of computing the percentage ownership of any other person.

applicable percentage ownership in the following table is based on 4,146,494 shares of our common stock outstanding as of April 9,

After giving effect to the exercise of the Pre-Funded Warrants and excludes as of such date:

Unless otherwise indicated, the address for each officer, director and director nominee in the following table is c/o Digital Brands Group, Inc., 1400 Lavaca Street, Austin, TX 78701.

otherwise indicated, the address for each officer, director and director nominee in the following table is c/o Digital Brands Group,

Inc., 1400 Lavaca Street, Austin, TX 78701.

Percentage of

2 unchanged sentences

John “Hil” Davis

Reid Yeoman(2)

Trevor Pettenude(4)

Trevor Pettennude

Jameeka Aaron

1 unchanged sentence

All executive officers, directors and director nominees as a group (6 persons)

Less than one percent.

(1) Represents options exercisable at $1,000 per share.

(2) Represents options to acquire up to 38 shares of common stock, exercisable at $1,000 per share and options to acquire up to 8 shares of common stock, exercisable at $8,200 per share.

(3) Includes options to acquire up to 128 shares of common stock exercisable between $3,900 and $8,200 per share.

(4) Includes options to acquire up to 30 shares of common stock exercisable between $3,900 and $8,200 per share.

(5) Represents options exercisable at $1,000 per share.

(6) Represents options exercisable at $8,900 per share.

(7) Includes options to acquire up to 1,076 shares of common stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

As of December 31, 2023 and 2022, the Company made net repayments for amounts due to related parties totaling $130,205 and $170,000, respectively.

As of December 31, 2023 and December 31, 2022, amounts due to related parties were $400,012 and $556,217, respectively.

The advances are unsecured, non-interest bearing and due on demand.

than one percent.

options exercisable at $518,750 per share, and 1 share of common stock.

an option to acquire 1 share of common stock, exercisable at $518,750 per share.

options to acquire up to 3 shares of common stock, exercisable between $195,000 and $410,000 per share, and 1 share of common stock.

an option to acquire 1 share of common stock, exercisable at $195,000 per share, and 1 share of common stock.

options to acquire up to 23 shares of common stock.

RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

of December 31, 2024 and 2023, the Company made net repayments for amounts due to related parties totaling $11,909 and $130,205, respectively.

As of December 31, 2024 and 2023, amounts due to related parties were $411,921 and $400,012, respectively.

The advances are unsecured,

non-interest bearing and due on demand.

Amounts due to related parties consist of current and former executives, and a board member.

As of December 31, 2023 and 2022, due to related parties includes advances from the former officer, Mark Lynn, who also serves as a director, totaling $104,568 and $104,568, respectively, and accrued salary and expense reimbursements of $87,221 and $100,649, respectively, to current officers.

In October 2022, the Company received advances from a director, Trevor Pettennude, totaling $325,000.

The advances are unsecured, non-interest bearing and due on demand.

As of December 31, 2023 and 2022, the amounts $175,000 and $325,000, respectively, were outstanding .

Policies and Procedures for Related Person Transactions

Our board of directors intends to adopt a written related person policy to set forth the policies and procedures for the review and approval or ratification of related person transactions.

This policy will cover any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we are to be a participant, the amount involved exceeds $100,000 and a related person had or will have a direct or indirect material interest, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

Director Independence

Our board of directors has undertaken a review of the independence of each director.

Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Trevor Pettennude, Jameeka Aaron, and Huong “Lucy” Doan, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing standards of Nasdaq.

In making these determinations, our board of directors considered the current and prior relationships that each non- employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table provides information regarding the fees billed to us by Macias Gini & O’Connell LLP and dbb mckennon , in the fiscal years ended December 31, 2023 and 2022, respectively.

of December 31, 2024 and 2023, due to related parties includes advances from the former officer, Mark Lynn, who also serves as a director,

totaling $104,568 and $104,568, respectively, and accrued salary and expense reimbursements of $87,221 and $87,221, respectively, to

current officers.

October 2022, the Company received advances from a director, Trevor Pettennude, totaling $325,000.

The advances are unsecured, non-interest

bearing and due on demand.

As of December 31, 2024 and 2023, $190,000 and $175,000, respectively, were outstanding.

and Procedures for Related Person Transactions

board of directors intends to adopt a written related person policy to set forth the policies and procedures for the review and approval

or ratification of related person transactions.

This policy will cover any transaction, arrangement or relationship, or any series of

similar transactions, arrangements or relationships in which we are to be a participant, the amount involved exceeds $100,000 and a related

person had or will have a direct or indirect material interest, including purchases of goods or services by or from the related person

or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related

board of directors has undertaken a review of the independence of each director.

Based on information provided by each director concerning

his or her background, employment and affiliations, our board of directors has determined that Trevor Pettennude, Jameeka Aaron, and

Huong “Lucy” Doan, do not have a relationship that would interfere with the exercise of independent judgment in carrying

out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the

applicable rules and regulations of the SEC and the listing standards of Nasdaq.

In making these determinations, our board of directors

considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances

our board of directors deemed relevant in determining their independence.

ACCOUNTING FEES AND SERVICES

following table provides information regarding the fees billed to us by Macias Gini & O’Connell LLP in the fiscal years ended

December 31, 2024 and 2023, respectively.

All fees described below were approved by the Board:

3 unchanged sentences

All other fees (2)

Audit fees includes fees associated with the annual audits of our financial statements, quarterly reviews of our financial statements, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

Includes audit fees paid for pre-acquisition audits of the Company’s subsidiaries and other targets.

Pre-Approval Policy

Our audit committee is responsible for approving or pre-approving all auditing services (including comfort letters and statutory audits) and all permitted non-audit services by the independent auditor and pre-approve the related fees.

Pursuant to its charter, the audit committee delegated to each of its members, acting singly, the authority to pre-approve any audit services if the need for consideration of a pre-approval request arises between regularly scheduled meetings, with such approval presented to the audit committee at its next scheduled meeting or as soon as practicable thereafter.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

fees include fees associated with the annual audits of our financial statements, quarterly reviews of our financial statements,

and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory

filings or engagements.

audit fees paid for pre-acquisition audits of the Company’s subsidiaries and other targets.

audit committee is responsible for approving or pre-approving all auditing services (including comfort letters and statutory audits)

and all permitted non-audit services by the independent auditor and pre-approve the related fees.

Pursuant to its charter, the audit

committee delegated to each of its members, acting singly, the authority to pre-approve any audit services if the need for consideration

of a pre-approval request arises between regularly scheduled meetings, with such approval presented to the audit committee at its next

scheduled meeting or as soon as practicable thereafter.

FINANCIAL STATEMENT SCHEDULES

Financial Statements

For a list of the financial information included herein, see Index to the Financial Statements on page F-1.

a list of the financial information included herein, see Index to the Financial Statements on page F-1.

Financial Statement Schedules

Schedules have been omitted because they are not applicable, not material or because the information is included in the consolidated financial statements or the notes thereto.

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.

Membership Interest Purchase Agreement dated October 14, 2020 among D.

Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc.) (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

First Amendment to Membership Interest Purchase Agreement dated December 31, 2020 among D.

Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.2 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

have been omitted because they are not applicable, not material or because the information is included in the consolidated financial

statements or the notes thereto.

following is a list of exhibits filed as part of this Annual Report on Form 10-K.

Interest Purchase Agreement dated October 14, 2020 among D.

Jones Tailored Collection, LTD and Digital Brands Group (formerly known

as Denim.LA, Inc.) (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Registration Statement on Form

333-261865), filed with the SEC on January 6, 2022).

Agreement and Plan of Merger with Bailey 44, LLC dated February 12, 2020 among Bailey 44, LLC, Norwest Venture Partners XI, and Norwest Venture Partners XII, LP and Digital Brands Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.3 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Amendment to Membership Interest Purchase Agreement dated December 31, 2020 among D.

Jones Tailored Collection, LTD and Digital Brands

Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.2 of Digital Brands Group Inc.’s Registration

Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Second Amendment to Membership Interest Purchase Agreement Dated May 10, 2021 among

Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.

LA, Inc.) (incorporated by reference to Exhibit 2.4 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

and Plan of Merger with Bailey 44, LLC dated February 12, 2020 among Bailey 44, LLC, Norwest Venture Partners XI, and Norwest Venture

Partners XII, LP and Digital Brands Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.3 of Digital

Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Membership Interest Purchase Agreement, dated August 30, 2021, by and between Moise Emquies and Digital Brands Group, Inc.

(incorporated by reference to Exhibit 2.5 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Amendment to Membership Interest Purchase Agreement Dated May 10, 2021 among D.

Jones Tailored

Collection, LTD and Digital Brands Group (formerly known as Denim.

LA, Inc.) (incorporated

by reference to Exhibit 2.4 of Digital Brands Group Inc.’s Registration Statement on

Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Membership Interest Purchase Agreement, dated January 18, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies, Sunnyside, LLC, and George Levy as the Sellers’ representative (incorporated by reference to Exhibit 1.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 20, 2022).

Amended and Restated Membership Interest Purchase Agreement, dated June 17, 2022, by and among Digital Brands Group, Inc.

and Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on June 23, 2022).

Second Amended and Restated Membership Interest Purchase Agreement, dated October 13, 2022, by and among Digital Brands Group, Inc.

and Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022).

Sixth Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.3 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Interest Purchase Agreement, dated August 30, 2021, by and between Moise Emquies and Digital Brands Group, Inc.

(incorporated by

reference to Exhibit 2.5 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with

the SEC on January 6, 2022).

Interest Purchase Agreement, dated January 18, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies,

Sunnyside, LLC, and George Levy as the Sellers’ representative (incorporated by reference to Exhibit 1.1 of Digital Brands

Group Inc.’s Form 8-K filed with the SEC on January 20, 2022).

and Restated Membership Interest Purchase Agreement, dated June 17, 2022, by and among Digital Brands Group, Inc.

and Moise Emquies,

George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s

Form 8-K filed with the SEC on June 23, 2022).

Amended and Restated Membership Interest Purchase Agreement, dated October 13, 2022, by and among Digital Brands Group, Inc.

Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group

Inc.’s Form 8-K filed with the SEC on October 18, 2022).

Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.3 of Digital Brands Group

Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Certificate of Designation of Series A Preferred Stock, dated August 31, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2022).

Certificate of Designation of Series A Convertible Preferred Stock, dated September 29, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

Certificate of Correction of Series A Convertible Preferred Stock, dated October 3, 2022 (incorporated by reference to Exhibit 3.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

Certificate of Amendment of Certificate of Incorporation of Digital Brands Group, Inc.

dated October 13, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022).

Certificate of Amendment of Certificate of Incorporation of Digital Brands Group, Inc.

dated October 21, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 26, 2022).

Amended and Restated Bylaws of Registrant (incorporated by reference to Exhibit 3.5 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

of Designation of Series A Preferred Stock, dated August 31, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group

Inc.’s Form 8-K filed with the SEC on August 31, 2022).

of Designation of Series A Convertible Preferred Stock, dated September 29, 2022 (incorporated by reference to Exhibit 3.1 of Digital

Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

of Correction of Series A Convertible Preferred Stock, dated October 3, 2022 (incorporated by reference to Exhibit 3.2 of Digital

Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

of Amendment of Certificate of Incorporation of Digital Brands Group, Inc.

dated October 13, 2022 (incorporated by reference to Exhibit

3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022).

of Amendment of Certificate of Incorporation of Digital Brands Group, Inc.

dated October 21, 2022 (incorporated by reference to Exhibit

3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 26, 2022).

and Restated Bylaws of Registrant (incorporated by reference to Exhibit 3.5 of Digital Brands Group Inc.’s Registration Statement

on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Amendment No.

1 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 12, 2022).

Amendment No.

2 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2022).

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

1 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.1 of Digital

Brands Group Inc.’s Form 8-K filed with the SEC on August 12, 2022).

2 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.2 of Digital

Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2022).

of Common Stock Certificate (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Registration Statement

on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Warrant Agency Agreement, including Form of Warrant Certificate (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 18, 2021).

Representative’s Warrant Agreement (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 18, 2021).

Form of Lender’s Warrants (incorporated by reference to Exhibit 4.4 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agency Agreement, including Form of Warrant Certificate (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s

Form 8-K filed with the SEC on May 18, 2021).

Representative’s

Warrant Agreement (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May

of Lender’s Warrants (incorporated by reference to Exhibit 4.4 of Digital Brands Group Inc.’s Registration Statement

on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Form of Promissory Note, dated July 22, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

Form of Warrant, dated July 22, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

Form of Promissory Note, dated July 28, 2022, by Digital Brands Group, Inc.

in favor the New Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

Form of Warrant, dated July 28, 2022, by Digital Brands Group, Inc.

in favor the New Investor (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

Form of Promissory Notes issued to each of the Sellers, Jenny Murphy and Elodie Crichi (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022).

Registration Rights Agreement, dated August 30, 2021, by and between Digital Brands Group, Inc.

and Moise Emquies (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

Registration Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (Note) (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

Registration Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (ELOC) (incorporated by reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

Joinder and Amendment to Registration Rights Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 6, 2021).

Amendment to Registration Rights Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on November 19, 2021).

Registration Rights Agreement, dated April 8, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 12, 2022).

Registration Rights Agreement, dated July 22, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

Registration Rights Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc.

and the Investor (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

Underwriter’s Warrants issued to Alexander Capital L.P.

on May 5, 2022 (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 10, 2022)

Underwriter’s Warrants issued to Revere Securities, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 10, 2022)

Form of Class B Warrant (incorporated by reference to Exhibit 4.27 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

of Promissory Note, dated July 22, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit

10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

of Warrant, dated July 22, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.3

of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

of Promissory Note, dated July 28, 2022, by Digital Brands Group, Inc.

in favor the New Investor (incorporated by reference to Exhibit

10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

of Warrant, dated July 28, 2022, by Digital Brands Group, Inc.

in favor the New Investor (incorporated by reference to Exhibit 10.3

of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

of Promissory Notes issued to each of the Sellers, Jenny Murphy and Elodie Crichi (incorporated by reference to Exhibit 10.1 of Digital

Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022).

Rights Agreement, dated August 30, 2021, by and between Digital Brands Group, Inc.

and Moise Emquies (incorporated by reference to

Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (Note) (incorporated by

reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (ELOC) (incorporated by

reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021).

and Amendment to Registration Rights Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC

and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form

8-K filed with the SEC on October 6, 2021).

to Registration Rights Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire

Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with

the SEC on November 19, 2021).

Rights Agreement, dated April 8, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated by reference to

Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 12, 2022).

Rights Agreement, dated July 22, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated by reference to

Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022).

Rights Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc.

and the Investor (incorporated by reference to

Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

Underwriter’s

Warrants issued to Alexander Capital L.P.

on May 5, 2022 (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s

Form 8-K filed with the SEC on May 10, 2022)

Underwriter’s

Warrants issued to Revere Securities, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K

filed with the SEC on May 10, 2022)

of Class B Warrant (incorporated by reference to Exhibit 4.27 to the Registrant’s Registration Statement on Form S-1/A, filed

with the SEC on November 29, 2022 (File no.

333-268213)).

Form of Class C Warrant (incorporated by reference to Exhibit 4.28 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

of Class C Warrant (incorporated by reference to Exhibit 4.28 to the Registrant’s Registration Statement on Form S-1/A, filed

with the SEC on November 29, 2022 (File no.

333-268213)).

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.29 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

of Pre-Funded Warrant (incorporated by reference to Exhibit 4.29 to the Registrant’s Registration Statement on Form S-1/A,

filed with the SEC on November 29, 2022 (File no.

333-268213)).

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.30 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

of Placement Agent Warrant (incorporated by reference to Exhibit 4.30 to the Registrant’s Registration Statement on Form S-1/A,

filed with the SEC on November 29, 2022 (File no.

333-268213)).

Registration Rights Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Registration Rights Agreement, dated December 30, 2022, by and among Digital Brands Group, Inc.

and Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Form of Common Warrant (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

Form of Indemnification Agreement between the Registrant and each of its directors and officers (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Rights Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc.

and the Investors (incorporated by reference to

Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Rights Agreement, dated December 30, 2022, by and among Digital Brands Group, Inc.

and Moise Emquies, George Levy, Matthieu Leblan

and Carol Ann Emquies (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC

on January 4, 2023).

of Common Warrant (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January

of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC

on January 11, 2023).

of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the

SEC on January 11, 2023).

Description of Securities.

of Indemnification Agreement between the Registrant and each of its directors and officers (incorporated by reference to Exhibit

10.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

Form of Option Agreement with each of John “Hil” Davis, Laura Dowling and Reid Yeoman (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

of Option Agreement with each of John “Hil” Davis, Laura Dowling and Reid Yeoman (incorporated by reference to Exhibit

10.2 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

Form of Board of Directors Agreement, entered into by each of the Director Nominees (incorporated by reference to Exhibit 10.4 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

of Board of Directors Agreement, entered into by each of the Director Nominees (incorporated by reference to Exhibit 10.4 of Digital

Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Consulting Agreement dated as of April 8, 2021 between Alchemy Advisory LLC and Digital Brands Group, Inc.

(incorporated by reference to Exhibit 10.6 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agreement dated as of April 9, 2021 between Alchemy Advisory LLC and Digital Brands Group, Inc.

(incorporated by reference to Exhibit

10.6 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

1 unchanged sentence

333-261865), filed with the SEC on January 6, 2022).

Promissory Note, dated April 10, 2020, between Digital Brands Group (formally known as Denim.LA, Inc.) and JPMorgan Chase Bank, N.A.

(incorporated by reference to Exhibit 10.16 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Loan dated June 25, 2020, between Digital Brands Group and The Small Business Administration, an Agency of the U.S.

Government (incorporated by reference to Exhibit 10.17 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Promissory Note, dated April 5, 2020, between JPMorgan Chase Bank, N.A.

and Bailey 44, LLC (incorporated by reference to Exhibit 10.18 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 27, 2016 (incorporated by reference to Exhibit 10.23 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 16, 2018 (incorporated by reference to Exhibit 10.24 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated January 17, 2013 (incorporated by reference to Exhibit 10.25 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Amendment to Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated February 20, 2018 (incorporated by reference to Exhibit 10.26 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Secured Promissory Note to Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP of Bailey 44, LLC (incorporated by reference to Exhibit 10.28 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Securities Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference to Exhibit 10.31 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Note, dated April 10, 2020, between Digital Brands Group (formally known as Denim.LA, Inc.) and JPMorgan Chase Bank, N.A.

(incorporated

by reference to Exhibit 10.16 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed

with the SEC on January 6, 2022).

dated June 25, 2020, between Digital Brands Group and The Small Business Administration, an Agency of the U.S.

Government (incorporated

by reference to Exhibit 10.17 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed

with the SEC on January 6, 2022).

Note, dated April 5, 2020, between JPMorgan Chase Bank, N.A.

and Bailey 44, LLC (incorporated by reference to Exhibit 10.18 of Digital

Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Senior Secured Convertible Promissory Note, dated August 27, 2021, by Digital Brands Group, Inc.

in favor of Oasis Capital, LLC (incorporated by reference to Exhibit 10.32 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 27, 2016 (incorporated by reference to Exhibit

10.23 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

Equity Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference to Exhibit 10.33 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 16, 2018 (incorporated by reference to Exhibit

10.24 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

Amended and Restated Securities Purchase Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.34 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated January 17, 2013 (incorporated by reference to Exhibit

10.25 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January

Senior Secured Convertible Promissory Note, dated October 1, 2021, by Digital Brands Group, Inc.

in favor of FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.35 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

to Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated February 20, 2018 (incorporated by reference

to Exhibit 10.26 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the

SEC on January 6, 2022).

Promissory Note to Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP of Bailey 44, LLC (incorporated by reference

to Exhibit 10.28 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the

SEC on January 6, 2022).

Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference

to Exhibit 10.31 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the

SEC on January 6, 2022).

Secured Convertible Promissory Note, dated August 27, 2021, by Digital Brands Group, Inc.

in favor of Oasis Capital, LLC (incorporated

by reference to Exhibit 10.32 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed

with the SEC on January 6, 2022).

Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference

to Exhibit 10.33 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the

SEC on January 6, 2022).

and Restated Securities Purchase Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and

FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.34 of Digital Brands Group Inc.’s Registration

Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Security Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference to Exhibit 10.36 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Secured Convertible Promissory Note, dated October 1, 2021, by Digital Brands Group, Inc.

in favor of FirstFire Global Opportunities

Fund, LLC (incorporated by reference to Exhibit 10.35 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Joinder and Amendment to Security Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.37 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc.

and Oasis Capital, LLC (incorporated by reference to

Exhibit 10.36 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC

on January 6, 2022).

and Amendment to Security Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire

Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.37 of Digital Brands Group Inc.’s Registration Statement

on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Securities Purchase Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.40 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Purchase Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities

Fund, LLC (incorporated by reference to Exhibit 10.40 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Senior Secured Convertible Promissory Note, dated November 16, 2021, by Digital Brands Group, Inc.

in favor of FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.41 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Secured Convertible Promissory Note, dated November 16, 2021, by Digital Brands Group, Inc.

in favor of FirstFire Global Opportunities

Fund, LLC (incorporated by reference to Exhibit 10.41 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Waiver by FirstFire Global Opportunities Fund, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.42 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

by FirstFire Global Opportunities Fund, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.42 of Digital Brands

Group Inc.’s Registration Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Waiver by Oasis Capital, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.43 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

by Oasis Capital, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.43 of Digital Brands Group Inc.’s Registration

Statement on Form S-1/A (Reg.

333-261865), filed with the SEC on January 6, 2022).

Registration Rights Agreement, dated April 8, 2022, by among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

Securities Purchase Agreement, dated April 8, 2022, by among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

Form of Warrant, dated April 8, 2022, by Digital Brands Group, Inc.

in favor of the Investors (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

Agreement for the Purchase and Sale of Future Receipts, dated March 21, 2022, between Digital Brands Group, Inc.

and Advantage Platform Services Inc.

d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.45 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

Rights Agreement, dated April 9, 2022, by among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit

4.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

Purchase Agreement, dated April 9, 2022, by among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit

10.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

of Warrant, dated April 9, 2022, by Digital Brands Group, Inc.

in favor of the Investors (incorporated by reference to Exhibit 10.3

of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022).

for the Purchase and Sale of Future Receipts, dated March 21, 2022, between Digital Brands Group, Inc.

and Advantage Platform Services

d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.45 of Digital Brands Group Inc.’s Registration

Statement on Form S-1/A (Reg.

333- 264347), filed with the SEC on May 5, 2022).

Agreement for the Purchase and Sale of Future Receipts, dated March 29, 2022, between Digital Brands Group, Inc.

and Advantage Platform Services Inc.

d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.46 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg.

for the Purchase and Sale of Future Receipts, dated March 29, 2022, between Digital Brands Group, Inc.

and Advantage Platform Services

d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.46 of Digital Brands Group Inc.’s Registration

Statement on Form S-1/A (Reg.

333- 264347), filed with the SEC on May 5, 2022).

First Amendment to Securities Purchase Agreement, dated July 28, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

Securities Purchase Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc.

and the investor thereto (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

Form of Securities Purchase Agreement, by and between Digital Brands Group, Inc.

and the purchasers party thereto (incorporated by reference to Exhibit 10.38 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

Amendment to Securities Purchase Agreement, dated July 28, 2022, by and among Digital Brands Group, Inc.

and certain Investors (incorporated

by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022).

Purchase Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc.

and the investor thereto (incorporated by reference

to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022).

of Securities Purchase Agreement, by and between Digital Brands Group, Inc.

and the purchasers party thereto (incorporated by reference

to Exhibit 10.38 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no.

333-268213)).

Securities Purchase Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Form of Promissory Note, dated December 29, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Form of Securities Purchase Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

Form of Registration Rights Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

Form of Warrant, dated December 29, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

Form of Securities Purchase Agreement, dated April 7, 2023, by and among Digital Brands Group, Inc.

and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023).

Form of Promissory Note, dated April 7, 2023, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023).

30% OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc.

in favor of Erinn Thomas-

30% OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc.

in favor of Gary Carr.

30% OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc.

in favor of Mohsen Khorassani.

30% OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc.

in favor of 622 Capital, LLC.

30% OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc.

in favor of Dragon Dynamic Catalytic Bridge Sac Fund.

List of Subsidiaries of the Registrant.

(incorporated by reference to Exhibit 21.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1 (Reg.

Purchase Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc.

and the Investors (incorporated by reference

to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

of Promissory Note, dated December 29, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit

10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

of Securities Purchase Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated

by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

of Registration Rights Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated

by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023).

of Warrant, dated December 29, 2022, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit 10.3

of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023).

of Securities Purchase Agreement, dated April 7, 2023, by and among Digital Brands Group, Inc.

and the Investors (incorporated by

reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023).

of Promissory Note, dated April 7, 2023, by Digital Brands Group, Inc.

in favor each Investor (incorporated by reference to Exhibit

10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023).

Code of Ethics and Business Conduct.

Insider Trading Policy.

of Subsidiaries of the Registrant.

(incorporated by reference to Exhibit 21.1 of Digital Brands Group Inc.’s Registration Statement

on Form S-1 (Reg.

333-269463), filed with the SEC on January 30, 2023).

Consent of Macias Gini & O’Connell LLP.

Consent of dbbmckennon.

Consent of independent registered public accounting firm.

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)

2 unchanged sentences

Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Inline XBRL Instance

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Inline XBRL Taxonomy Extension Presentation

Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith

# Indicates management contract or compensatory plan or arrangement.

FORM 10-K SUMMARY

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DIGITAL BRANDS GROUP, INC.

/s/ John Hilburn Davis IV

April 15, 2024

Compensation Recovery Policy.

XBRL Instance

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Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

management contract or compensatory plan or arrangement.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

BRANDS GROUP, INC.

John Hilburn Davis IV

President and Chief Executive Officer

/s/ John Hilburn Davis IV

Director, President and Chief Executive Officer

April 15, 2024

Hilburn Davis IV

and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

John Hilburn Davis IV

(Principal Executive Officer)

/s/ Reid Yeoman

Chief Financial Officer

April 15, 2024

(Principal Financial and Accounting Officer)

April 15, 2024

/s/ Trevor Pettennude

April 15, 2024

President and Chief Executive Officer

Hilburn Davis IV

Executive Officer)

Financial Officer

Financial and Accounting Officer)

Trevor Pettennude

/s/ Jameeka Aaron Green

April 15, 2024

Jameeka Aaron Green

/s/ Huong “Lucy” Doan

April 15, 2024

Huong “Lucy” Doan

DIGITAL BRANDS GROUP, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB IS:

BRANDS GROUP, INC.

31, 2024 AND 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

CONSOLIDATED BALANCE SHEETS

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

(PCAOB ID 324)

To the Board of Directors and Shareholders of Digital Brands Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Digital Brands Group, Inc.

and Subsidiaries (collectively, the “Company”) as of December 31, 2023, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2023, and the related consolidated notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company’s recurring net losses since inception, negative cash flow from operations and lack of liquidity raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

of Independent Registered Public Accounting Firm

the Board of Directors and Shareholders of Digital Brands Group, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Digital Brands

and Subsidiaries (collectively, the “Company”) as of December 31, 2024 and December 31,2023, and the related consolidated

statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related consolidated

notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations

and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the entity will continue as a going concern.

As discussed in Note

2 to the financial statements, the Company’s recurring net losses since inception, negative cash flow from operations and lack

of liquidity raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of

material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of

its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over

financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Macias Gini & O’Connell LLP

We have served as the Company’s auditor since 2023.

Irvine, California

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Macias Gini & O’Connell LLP

have served as the Company’s auditor since 2023.

April 9, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Digital Brands Group, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Digital Brands Group, Inc.

and subsidiaries (collectively, the “Company”) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter – Correction of Error

As described in Note 3 to the consolidated financial statements, the Company corrected the classification of certain costs and expenses, and accordingly, restated amounts included in the 2022 consolidated statement of operations to conform with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company’s net losses from inception, negative cash flow from operations, and lack of liquidity raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ dbb mckennon (Firm No.

Newport Beach, California

April 17, 2023, except for the effects of the stock split and discontinued operations as described in Notes 1 and 3, for which the date is August 24, 2023

We served as the Company’s auditor from 2018 to 2023.

DIGITAL BRANDS GROUP, INC.

CONSOLIDATED BALANCE SHEETS

DIGITAL BRANDS GROUP,

BALANCE SHEETS

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses of $ 41,854 and $ 19,394 , respectively

Accounts receivable, net

Due from factor, net

Prepaid expenses and other current assets

Assets per discontinued operations, current

Total current assets

2 unchanged sentences

Right of use asset

Assets per discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

3 unchanged sentences

Due to related parties

Contingent consideration liability

Convertible note payable, net

2 unchanged sentences

Promissory note payable, net

Operating lease liability

Liabilities per discontinued operations, current

Right of use liability, current portion

Total current liabilities

Deferred tax liability

Liabilities per discontinued operations

Total liabilities

1 unchanged sentence

Stockholders’ equity (deficit):

Undesignated preferred stock, $ 0.0001 par, 10,000,000 shares authorized, 0 shares issued and outstanding as of both December 31, 2023 and 2022, respectively

Series A convertible preferred stock, $ 0.0001 par, 6,300 shares designated, 6,300 shares issued and outstanding as of both December 31, 2023 and 2022, respectively

Series C convertible preferred stock, $ 0.0001 par, 4,786 and 0 shares outstanding as of December 31, 2023 and 2022, respectively

Common stock, $ 0.0001 par, 1,000,000,000 shares authorized, 1,114,359 and 178,758 shares issued and outstanding as of December 31, 2023 and 2022, respectively

Undesignated preferred stock, $ 0.0001 par, 10,000,000 shares authorized, 0 shares issued and outstanding as of both December 31, 2024 and December 31, 2023

Series A convertible preferred stock, $ 0.0001 par, 6,300 shares designated, 6,300 shares issued and outstanding as of both December 31, 2024 and December 31, 2023

Series C convertible preferred stock, $ 0.0001 par, 1,344 and 4,786 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Preferred stock, value

Common stock, $ 0.0001 par, 1,000,000,000 shares authorized, 838,584 and 22,285 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

5 unchanged sentences

Total liabilities and stockholders’ equity (deficit)

See the accompanying notes to the consolidated financial statements.

DIGITAL BRANDS GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

the accompanying notes to the consolidated financial statements.

BRANDS GROUP, INC.

STATEMENTS OF OPERATIONS

Cost of net revenues

2 unchanged sentences

Sales and marketing

Impairment of intangible assets

Change in fair value of contingent consideration

4 unchanged sentences

( 2,095,312 )

Other (expense) income:

Other expense:

Interest expense

( 5,517,118 )

( 9,014,337 )

Other non-operating (expenses) income

Other non-operating expenses

Total other expense, net

( 6,221,284 )

( 5,946,257 )

Income tax benefit (provision)

2 unchanged sentences

( 8,684,630 )

(Loss) income from discontinued operations, net of tax

(Loss) from discontinued operations, net of tax

( 1,562,503 )

2 unchanged sentences

Weighted average common shares outstanding - basic and diluted

Net loss from continuing per common share - basic and diluted

See the accompanying notes to the consolidated financial statements.

DIGITAL BRANDS GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Net loss per common share - basic and diluted

the accompanying notes to the consolidated financial statements.

BRANDS GROUP, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Series A Convertible

Series C Convertible

Preferred Stock

Stockholders’

2 unchanged sentences

$ ( 7,453,174 )

Issuance of common stock in public offering

Issuance of common stock and exercise of pre-funded warrants in public offering

Offering costs

( 2,921,646 )

Common stock issued in connection with business combination

Common stock issued pursuant to consulting agreement

Warrant and common shares issued with notes

Conversion of notes and derivative liability into common stock

Conversion of venture debt into Series A convertible preferred stock

Stock-based compensation

( 38,043,362 )

Balances at December 31, 2022

( 103,747,316 )

( 7,453,174 )

Issuance of common stock pursuant to private placement, net of offering costs

Issuance of common stock pursuant to private placement

Shares and warrants issued with notes

Conversion of notes into preferred stock

Issuance of Series B preferred stock

Issuance of common stock pursuant to disposition

Cancellation of Series B preferred stock

Common stock issued for services

Exercise of Warrants

Issuance of common stock pursuant to private placement, net of offering costs

Issuance of common stock pursuant to private placement, net of offering

Conversion of preference shares into common stock

Stock-based compensation

Effect of reverse stock split

( 10,247,133 )

2 unchanged sentences

( 113,994,449 )

See the accompanying notes to the consolidated financial statements.

DIGITAL BRANDS GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

( 113,994,449 )

Issuance of common stock pursuant to private placements

Conversion of debt and interest into common stock

Shares issued for services

Conversion of preferred shares into common stock

Stock-based compensation

( 13,106,589 )

Balances at December 31, 2024

$ 125,772,412

$ ( 127,101,038 )

$ ( 1,328,541 )

$ 125,772,412

$ ( 127,101,038 )

$ ( 1,328,541 )

the accompanying notes to the consolidated financial statements.

BRANDS GROUP, INC.

STATEMENTS OF CASH FLOWS

Cash flows from operating activities:

4 unchanged sentences

Amortization of loan discount and fees

Impairment of intangibles

Loss on extinguishment of debt

2 unchanged sentences

Shares issued for services

Shares issued for loan interest conversion

Change in credit reserve

1 unchanged sentence

( 10,698,475 )

Non-cash lease expense

Deferred tax expense

Fees incurred in connection with debt financings

Change in fair value of warrant liability

Change in fair value of derivative liability

( 1,354,434 )

Impairment of goodwill and intangible assets

Forgiveness of Payroll Protection Program

( 1,760,755 )

Changes in operating assets and liabilities:

Accounts receivable, net

Due from factor, net

Due from factor

Prepaid expenses and other current assets

Accounts payable

( 1,114,242 )

Accrued expenses and other liabilities

Deferred revenue

Accrued interest payable

Due to related parties

Accrued interest

Lease liabilities

Net cash used in operating activities

2 unchanged sentences

Cash flows from investing activities:

Cash acquired (consideration) pursuant to business combination

( 7,247,303 )

Purchase of property, equipment and software

Net cash provided by (used in) investing activities

( 7,313,384 )

Net cash provided by investing activities

Cash flows from financing activities:

Repayments of elated party advances

Advances (repayments) from factor

Repayments of related party notes

Repayment of contingent consideration

Proceeds from venture debt

Repayments from related party advances

Advances from factor

Issuance of loans and note payable

Repayments of convertible and promissory notes

( 10,129,811 )

Repayments of convertible notes and loan payable

( 3,869,422 )

Issuance of convertible notes payable

Proceeds from public offering

Offering costs

( 10,129,811 )

Issuance of common stock, net of offering costs

Proceeds from exercise of warrants

Exercise of warrants

Issuance of common stock in public offering

Net cash provided by financing activities

3 unchanged sentences

Cash and cash equivalents at end of year

cash of discontinued operations

Cash of continuing operations at end of year

Supplemental disclosure of cash flow information:

2 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Conversion of notes into preferred stock

Conversion of notes into common stock

Right of use asset

Warrants issued in connection with note

Derivative liability in connection with convertible note

Conversion of related party notes and payables into preferred and common stock

Conversion of venture debt into preferred stock

See the accompanying notes to the consolidated financial statements.

DIGITAL BRANDS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shares issued for services and conversion of accounts payable

Conversion of preferred shares into common stock

Conversion of notes into preferred stock

the accompanying notes to the consolidated financial statements.

BRANDS GROUP, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE OF OPERATIONS

Digital Brands Group, Inc.

(the “Company” or “DBG”), was organized on September 17, 2012 under the laws of Delaware as a limited liability company under the name Denim.LA LLC.

The Company converted to a Delaware corporation on January 30, 2013 and changed its name to Denim.LA, Inc.

Brands Group, Inc.

(the “Company” or “DBG”), was organized on September 17, 2012 under the laws of Delaware as

a limited liability company under the name Denim.LA LLC.

The Company converted to a Delaware corporation on January 30, 2013 and changed

its name to Denim.LA, Inc.

Effective December 31, 2020, the Company changed its name to Digital Brands Group, Inc.

On February 12, 2020, Denim.LA, Inc.

entered into an Agreement and Plan of Merger with Bailey 44, LLC (“Bailey”), a Delaware limited liability company.

February 12, 2020, Denim.LA, Inc.

entered into an Agreement and Plan of Merger with Bailey 44, LLC (“Bailey”), a Delaware

limited liability company.

On the acquisition date, Bailey 44 , LLC became a wholly owned subsidiary of the Company.

On May 18, 2021, the Company closed its acquisition of Harper & Jones, LLC (“H&J”) pursuant to its Membership Interest Stock Purchase Agreement with D.

Jones Tailored Collection, Ltd.

to purchase 100 % of the issued and outstanding equity of Harper & Jones, LLC.

On the acquisition date, H&J became a wholly owned subsidiary of the Company.

On August 30, 2021, the Company closed its acquisition of Mosbest, LLC dba Stateside (“Stateside”) pursuant to its Membership Interest Purchase Agreement with Moise Emquies to purchase 100 % of the issued and outstanding equity of Stateside.

On the acquisition date, Stateside became a wholly owned subsidiary of the Company.

On December 30, 2022, the Company closed its previously announced acquisition of Sunnyside, LLC dba Sundry (“Sundry”) pursuant to its Second Amended and Restated Membership Interest Purchase Agreement with Moise Emquies to purchase 100 % of the issued and outstanding equity of Sundry.

August 30, 2021, the Company closed its acquisition of Mosbest, LLC dba Stateside (“Stateside”) pursuant to its Membership

Interest Purchase Agreement with Moise Emquies to purchase 100 % of the issued and outstanding equity of Stateside.

On the acquisition

date, Stateside became a wholly owned subsidiary of the Company.

December 30, 2022, the Company closed its previously announced acquisition of Sunnyside, LLC dba Sundry (“Sundry”) pursuant

to its Second Amended and Restated Membership Interest Purchase Agreement with Moise Emquies to purchase 100 % of the issued and outstanding

equity of Sundry.

On the acquisition date, Sundry became a wholly owned subsidiary of the Company.

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 agreed to make an aggregate cash payment of $ 229,000 to D.

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 agreed to make an aggregate cash

payment of $ 229,000 to D.

Jones Tailored Collection, Ltd.

Jones”), (ii) the Company issued 1,952,580 shares of common stock to D.

Jones, and (iii) the Company assigned and transferred one hundred percent ( 100 %) of the Company’s membership interest in H&J to D.

Jones”), (ii) the Company issued 39,052 shares of common

Jones, and (iii) the Company assigned and transferred one hundred percent ( 100 %) of the Company’s membership interest

The H&J Settlement was accounted for a business disposition.

Reverse Stock Split

On October 21, 2022, the Board of Directors approved a one -for-100 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock split became effective as of November 3, 2022.

Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.

On August 21, 2023, the Board of Directors approved a one -for-25 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock split became effective as of August 22, 2023.

August 21, 2023, the Board of Directors approved a one-for-25 reverse stock split of its issued and outstanding shares of common stock

and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock

split became effective as of August 22, 2023.

Accordingly, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock

split and adjustment of the preferred stock conversion ratios.

December 11, 2024, the Board of Directors approved a one-for-50 reverse stock split of its issued and outstanding shares of common stock

and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock

split became effective as of December 11, 2024.

Accordingly, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock

split and adjustment of the preferred stock conversion ratios.

GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has not generated profits since inception, has sustained net losses of $ 10,247,133 and $ 38,043,362 for the years ended December 31, 2023 and 2022, respectively, and has incurred negative cash flows from operations for the years ended December 31, 2023 and 2022.

The Company has historically lacked liquidity to satisfy obligations as they come due and as of December 31, 2023, and the Company had a working capital deficit of $ 17,655,720 .

These factors, among others, arise substantial doubt about the Company’s ability to continue as a going concern.

accompanying consolidated financial statements have been prepared on a going concern basis.

The Company has not generated profits

since inception, has sustained net losses of $ 13,106,589 and $ 10,247,133 for the years ended December 31, 2024 and 2023,

respectively, and has incurred negative cash flows from operations for the years ended December 31, 2024 and 2023.

The Company has

historically lacked liquidity to satisfy obligations as they come due and as of December 31, 2024, and the Company had a working

capital deficit of $ 16,122,611 .

These factors, among others, arise substantial doubt about the Company’s ability to continue

as a going concern.

The Company expects to continue to generate operating losses for the foreseeable future.

The accompanying consolidated financial statements do not include any adjustments as a result of this uncertainty.

The Company’s ability to continue as a going concern for the next 12 months from the date the financial statements were available to be issued is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or to obtain additional capital financing.

Through the date the financial statements were available to be issued, the Company has been primarily financed through the issuance of capital stock and debt.

In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities.

The issuance of additional equity would result in dilution to existing shareholders.

If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations.

No assurance can be given that the Company will be successful in these efforts.

The accompanying

consolidated financial statements do not include any adjustments as a result of this uncertainty.

the date the financial statements were available to be issued, the Company has been primarily financed through the issuance of capital

stock and debt.

In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to

reduce expenses, which it has done, or obtain financing through the sale of debt and/or equity securities, which it has done.

of additional equity would result in dilution to existing shareholders, which did occur in February 2025.

If the Company is unable to

obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would

be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect

on the business, financial condition and results of operations.

While the Company has several potential sources of cash including cash

warrants that are registered and exercisable that are in the money, the ability to file for an ELOC and shelf eligibility for an At-The-Market

(“ATM”), no assurance can be given that the Company will be successful in these efforts.

February 2025, the Company completed an offering consisting of the sale of common stock, warrants and pre-funded warrants for gross proceeds

of $ 7,500,000 , before deducting placement agent fees and commissions and other offering expenses.

Refer Note 14 Subsequent events for

further detail.

of April 4, 2025, the date of issuance of these condensed consolidated financial statements, the Company expects that its cash and cash

equivalents of $ 164,433 , together with the net proceeds received from the February 2025 offering, and measures described below, will

be sufficient to fund its operating expenses, debt obligations and capital expenditure requirements for at least one year from the date

these consolidated financial statements are issued.

the next twelve months, the Company intends to fund its operations from the funds raised through the offering.

Additionally, the

Company intends to fund operations from increased revenues due to its new marketing efforts and increased wholesale pricing and a more

wholesale doors, through settlement and renegotiation of aged payables, conversions of outstanding debt and accrued interest, and continuing

its cost cutting measures, which the Company has already made during the first three months of 2025.

The Company also plans to continue to fund its capital funding needs

through a combination of public or private equity offerings, debt financings or other sources.

This includes warrant exercises, an equity

line of credit and At-The-Market (“ATM”) equity financings made available to us.

The Company has 22,730,680 warrants

outstanding in connection with the offering in Registration Statement No.

3330-284508 filed on February 18, 2025.

The Company has

an inducement agreement that was signed by the Company and the investors that allows the Company at its discretion to require the warrant

holders to exercise warrants up to an aggregate value of $ 2 million in warrants per thirty calendar days commencing on April 8,

2025, which would increase the Company’s cash position by $ 15 million over the next eight months.

There can be no assurance as to the availability or terms upon which

such financing and capital might be available in the future.

If the Company is unable to secure additional funding, it may be forced to

curtail or suspend its business plans.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, H&J, Stateside and Sundry from the dates of acquisition.

of Presentation

accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America

of Consolidation

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, Stateside and Sundry

from the dates of acquisition.

All inter-company transactions and balances have been eliminated on consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

D iscontinued Operations

Certain prior year accounts have been reclassified to conform with current year presentation regarding income (loss) from discontinued operations.

H&J’s assets and liabilities as of December 31, 2022 have also been reclassified on the consolidated balance sheet.

Cash and Equivalents and Concentration of Credit Risk

The Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents.

As of December 31, 2023 and 2022, the Company did not hold any cash equivalents.

The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits of $ 250,000 .

Fair Value of Financial Instruments

FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Level 3 — Unobservable inputs for the asset or liability.

Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, due from factor, prepaid expenses, accounts payable, accrued expenses, deferred revenue, due to related parties, related party note payable, accrued interest, loan payable and convertible debt.

The carrying value of these assets and liabilities is representative of their fair market value, due to the short maturity of these instruments.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values:

Fair Value Measurements

as of December 31, 2023 Using:

Contingent consideration

Fair Value Measurements

as of December 31, 2022 Using:

Contingent consideration

Contingent Consideration

The Company records a contingent consideration liability relating to stock price guarantees included in its acquisition and consulting agreements.

The estimated fair value of the contingent consideration is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.

The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions.

Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations.

The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios.

Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the Company’s future financial results.

The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements

have been achieved.

Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid-in capital in the stockholders’ equity section of the Company’s consolidated balance sheets.

The fair value of the contingent consideration liability related to the Company’s business combinations is valued using the Monte Carlo simulation model.

The Monte Carlo simulation inputs include the stock price, volatility of common stock, timing of settlement and resale restrictions and limits.

The fair value of the contingent consideration is then calculated based on guaranteed equity values at settlement as defined in the acquisition agreements.

Changes in contingent consideration liability during the years ended December 31, 2023 and 2022 are as follows:

Consideration

Balance as of December 31, 2022

Norwest Waiver - settlement of Bailey44 contingent consideration

( 10,698,475 )

H&J Settlement Agreement - settlement of H&J contingent consideration

( 1,400,000 )

Outstanding as of December 31, 2023

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 (the “Bailey Merger Agreement”), among the Company, Bailey 44, LLC, Norwest Venture Partners XI, LP, and Norwest Venture Partners XII, LP and Denim.LA Acquisition Corp.

This transaction is known as the “Norwest Waiver”.

As a result of the Norwest Waiver, the Company recorded a fair value of $ 0 pertaining to the contingent consideration contemplated under the Bailey Merger Agreement, resulting in a gain in the change in fair value of contingent consideration of $ 10,698,475 .

H&J Settlement Agreement

On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby the Company transferred 100 % of its membership interests in H&J to D.

Jones (the “H&J Seller”).

Pursuant to the Settlement Agreement, the Company agreed to make an aggregate cash payment of $ 229,000 to the H&J Seller and the Company issued 1,952,580 shares of common stock to the H&J Seller.

In connection with the Settlement Agreement, the parties agreed that no further shares were owed to the H&J Seller resulting from the stock price guarantee pursuant to the May 2021 H&J acquisition.

As a result, the Company recorded a gain in the change in fair value of contingent consideration of $ 1,400,000 .

The change in fair value was included in loss from discontinued operations in the consolidated statements of operations.

See Note 4 for further detail.

The detail of contingent consideration by company is as follows:

Harper & Jones

Derivative Liability

In connection with the Company’s convertible notes, the Company recorded a derivative liability (see Note 7).

The estimated fair value of the derivative liability is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.

The fair value of the derivative liability is valued using a multinomial lattice model.

The multinomial lattice inputs include the underlying stock price, volatility of common stock and remaining term of the convertible note.

Changes in derivative liability during the years ended December 31, 2023 and 2022 are as follows:

Outstanding as of December 31, 2021

Initial fair value on issuance of convertible note

Conversion of underlying notes into common stock

( 1,500,243 )

Change in fair value

( 1,354,434 )

Outstanding as of December 31, 2022

Initial fair value on issuance of convertible note

Change in fair value

Outstanding as of December 31, 2023

During the year ended December 31, 2022, the Company utilized the following inputs for the fair value of the derivative liability:

volatility of 70.9 % - 96.7 %, risk-free rate of 2.71 % - 3.74 %, and remaining term ranging from .08 years - 0.62 years.

The change in fair value of the derivative liability is included in other non-operating income (expense), net in the consolidated statements of operations.

Accounts Receivable and Expected Credit Loss

We carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net amount expected to be collected on the financial asset.

All receivables are expected to be collected within one year of the consolidated balance sheet.

and Equivalents and Concentration of Credit Risk

Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents.

As of December

31, 2024 and 2023, the Company did not hold any cash equivalents.

The Company’s cash and cash equivalents in bank deposit accounts,

at times, may exceed federally insured limits of $ 250,000 .

Value of Financial Instruments

Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, due

to related parties, related party note payable, and convertible debt.

The carrying value of these assets and liabilities is representative

of their fair market value, due to the short maturity of these instruments.

Receivable and Expected Credit Loss

carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net

amount expected to be collected on the financial asset.

All receivables are expected to be collected within one year of the consolidated

balance sheet.

We do not accrue interest on the trade receivables.

Management evaluates the ability to collect accounts receivable based on a combination of factors.

Management evaluates the ability to collect accounts receivable based

on a combination of factors.

Receivables are determined to be past due based on individual credit terms.

An allowance for credit losses is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial position.

An allowance for credit losses

is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial

Receivables are written off in the year deemed uncollectible after efforts to collect the receivables have proven unsuccessful.

We do not have any off-balance sheet credit exposure related to our customers.

We periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the statement of operations.

Such estimates are based on general economic conditions, the financial conditions of customers, and the amount and age of past due accounts.

Past due accounts are written off against that allowance only after all collection attempts have been exhausted and the prospects for recovery are remote.

periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the

statement of operations.

Such estimates are based on general economic conditions, the financial conditions of customers, and the amount

and age of past due accounts.

Past due accounts are written off against that allowance only after all collection attempts have been exhausted

and the prospects for recovery are remote.

Recoveries of accounts receivable previously written off are recorded as income when received.

The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk.

As of December 31, 2023, the Company determined an allowance for credit losses of $ 41,854 .

Inventory is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and H&J and first-in, first-out method for Bailey, Stateside and Sundry.

The inventory balances as of December 31, 2023 and 2022 consist substantially of finished good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in progress.

Inventory consisted of the following:

The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes

to mitigate credit risk.

of December 31, 2024 and December 31, 2023, the Company determined an allowance for credit losses of $ 295,837

and $ 41,854 ,

respectively.

is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and first-in,

first-out method for Bailey, Stateside and Sundry.

The inventory balances as of December 31, 2024 and 2023 consist substantially of finished

good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in

consisted of the following:

SCHEDULE OF INVENTORY

Raw materials

1 unchanged sentence

Finished goods

Property, Equipment, and Software

Property, equipment, and software are recorded at cost.

Depreciation/amortization is recorded for property, equipment, and software using the straight-line method over the estimated useful lives of assets.

The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable.

The balances at December 31, 2023 and 2022 consist of software with three ( 3 ) year lives, property and equipment with three ( 3 ) to ten ( 10 ) year lives, and leasehold improvements which are depreciated over the shorter of the lease life or expected life.

Depreciation and amortization charges on property, equipment, and software are included in general and administrative expenses and amounted to $ 50,823 and $ 75,126 for the years ended December 31, 2023 and 2022, respectively.

Business Combinations

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination.

The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

Equipment, and Software

equipment, and software are recorded at cost.

Depreciation/amortization is recorded for property, equipment, and software using the straight-line

method over the estimated useful lives of assets.

The Company reviews the recoverability of all long-lived assets, including the related

useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable.

The balances at December 31, 2024 and 2023 consist of software with three ( 3 ) year lives, property and equipment with three ( 3 ) to ten

( 10 ) year lives, and leasehold improvements which are depreciated over the shorter of the lease life or expected life .

and amortization charges on property, equipment, and software are included in general and administrative expenses and amounted to $ 31,422

and $ 50,823 for the years ended December 31, 2024 and 2023, respectively.

Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination.

The purchase price

of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated

fair values at the acquisition date.

The excess of the purchase price over those fair values is recognized as goodwill.

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition.

Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity.

In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.

Intangible assets are established with business combinations and consist of brand names and customer relationships.

Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method.

During the measurement

period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined,

to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

If the assets acquired are not a business,

the Company accounts for the transaction or other event as an asset acquisition.

Under both methods, the Company recognizes the identifiable

assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity.

In addition, for transactions that

are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets

acquired and liabilities assumed in a business combination.

assets are established with business combinations and consist of brand names and customer relationships.

Intangible assets with finite

lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using

the straight-line method.

The estimated useful lives of amortizable intangible assets are as follows:

Customer relationships

Long-Lived Assets

The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.

If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.

Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment and upon the occurrence of certain events or substantive changes in circumstances.

The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting

unit is less than its carrying amount.

An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test.

If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required.

The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill.

It is our practice, at a minimum, to perform a qualitative or quantitative goodwill impairment test in the fourth quarter every year.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets established in connection with business combinations consist of the brand name.

The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value.

SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION

relationships

Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances

indicate that the carrying amount of an asset may not be recoverable.

If the sum of the expected cash flows, undiscounted, is less than

the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its

and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment

and upon the occurrence of certain events or substantive changes in circumstances.

The annual goodwill impairment test allows for the

option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is

less than its carrying amount.

An entity may choose to perform the qualitative assessment on none, some or all of its reporting units

or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment

If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less

than its carrying value, the quantitative impairment test is required.

quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and

its fair value, but not to exceed the carrying amount of goodwill.

It is our practice, at a minimum, to perform a qualitative or quantitative

goodwill impairment test in the fourth quarter every year.

Indefinite-Lived

Intangible Assets

Indefinite-lived

intangible assets established in connection with business combinations consist of the brand name.

The impairment test for identifiable

indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value.

If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Annual Impairment Tests

At December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not be recoverable.

The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets.

Upon the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater than the respective carrying values.

Impairment Tests

December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the

Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not

be recoverable.

The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s

initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets.

the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater

than the respective carrying values.

As such, no impairment was recorded.

The Company utilized the enterprise value approach in the impairment

tests of each reporting unit in 2023.

As of December 31, 2023, the Bailey44 reporting unit, which has an attributable goodwill balance

of $ 3,158,123 , has a negative carrying amount.

December 31, 2024, management determined that certain events and circumstances occurred that indicated that the carrying value of the

Company’s brand name assets, and the carrying amount of the reporting units, pertaining to each reporting unit (Bailey44, Stateside

and Sundry) may not be recoverable.

The qualitative assessment was primarily due to reduced or stagnant revenues of each entities as

compared to the Company’s initial projections at the time of each respective acquisitions, as well as certain entities’ liabilities

in excess of assets.

As such, the Company compared the estimated fair value of the brand names with its carrying value and recorded an

impairment loss of $ 1,388,000 in the consolidated statements of operations, as detailed below by entity.

Additionally, the Company compared

the fair value of the reporting units to the carrying amounts and recorded no impairment loss pertaining to goodwill in the consolidated

statements of operations.

The Company utilized the enterprise value approach in the impairment tests of each reporting unit in 2024.

As of December 31, 2023, the Bailey44 reporting unit, which has an attributable goodwill balance of $3,158,123, has a negative carrying amount.

At December 31, 2022, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44 and Harper & Jones may not be recoverable.

As such, the Company compared the estimated fair value of the brand names with its carrying value and recorded an impairment loss of $ 3,667,000 in the consolidated statements of operations.

Additionally, the Company compared the fair value of the reporting units to the carrying amounts and recorded an impairment loss of $ 11,872,332 pertaining to goodwill in the consolidated statements of operations.

The following is a summary of goodwill and intangible impairment recorded pertaining to each entity:

following is a summary of goodwill and intangible impairment recorded pertaining to each entity:

SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT

Bailey brand name

Harper & Jones brand name

Stateside brand name

Total impairment of intangibles

Bailey goodwill

Harper & Jones goodwill

Total impairment of goodwill

Total impairment

In determining the fair value of the respective reporting units, management estimated the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants at the measurement date.

This includes reviewing market comparables such as revenue multipliers and assigning certain assets and liabilities to the reporting units, such as the respective working capital deficits of each entity and debt obligations that would need to be assumed by a market participant buyer in an orderly transaction.

The Company calculated the carrying amounts of each reporting unit by utilizing the entities’ assets and liabilities at December 31, 2023, including the carrying value of the identifiable intangible assets and goodwill assigned to the respective reporting units.

Convertible Instruments

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

determining the fair value of the respective reporting units, management estimated the price that would be received to sell the reporting

unit as a whole in an orderly transaction between market participants at the measurement date.

This includes reviewing market comparables

such as revenue multipliers and assigning certain assets and liabilities to the reporting units, such as the respective working capital

deficits of each entity and debt obligations that would need to be assumed by a market participant buyer in an orderly transaction.

Company calculated the carrying amounts of each reporting unit by utilizing the entities’ assets and liabilities at December 31,

2024 and 2023 respectively, including the carrying value of the identifiable intangible assets and goodwill assigned to the respective

reporting units.

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative

financial instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and

risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair

value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur

and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable U.S.

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares.

Accounting for Preferred Stock

ASC 480, Distinguishing Liabilities from Equity, includes standards for how an issuer of equity (including equity shares issued by consolidated entities) classifies and measures on its balance sheet certain financial instruments with characteristics of both liabilities and equity.

Management is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions, among other provisions in the agreement.

Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should be accounted for as a derivative instrument.

If the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required.

Management determined that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company.

The Company has presented preferred stock within stockholders’ equity.

Costs incurred directly for the issuance of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred stock.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records,

when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon

the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective

conversion price embedded in the note.

Debt discounts under these arrangements are amortized over the term of the related debt to their

stated date of redemption.

The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded

in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction

and the effective conversion price embedded in the preferred shares.

for Preferred Stock

480, Distinguishing Liabilities from Equity, includes standards for how an issuer of equity (including equity shares issued by consolidated

entities) classifies and measures on its balance sheet certain financial instruments with characteristics of both liabilities and equity.

is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions, among other

provisions in the agreement.

Specifically, management is required to determine whether the embedded conversion feature in the preferred

stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required and whether

the conversion feature should be accounted for as a derivative instrument.

the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability

accounting under ASC 815, Derivatives and Hedging, is not required.

Management determined that the host contract of the preferred stock

is more akin to equity, and accordingly, liability accounting is not required by the Company.

The Company has presented preferred stock

within stockholders’ equity.

incurred directly for the issuance of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting

in a discount to the preferred stock.

The discount is not amortized.

Revenue Recognition

In accordance with FASB ASC 606, Revenue from Contracts with Customers ¸ the Company determines revenue recognition through the following steps:

● Identification of a contract with a customer;

● Identification of the performance obligations in the contract

● Determination of the transaction price

● Allocation of the transaction price to the performance obligations in the contract, and

● Recognition of revenue when or as the performance obligations are satisfied

Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers.

Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, upon shipment of product.

This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.

The Company derives its revenue primarily from wholesale and e-commerce transactions.

For both channels, revenue is recognized at the time the product is shipped to the customer, which is the point in time when control is transferred.

The Company considers the sale of products as a single performance obligation.

The Company provides the customer the right of return on the product and revenue is adjusted based on an estimate of the expected returns based on historical rates.

The Company deducts discounts, sales tax, and estimated refunds to arrive at net revenue.

Sales tax collected from clients is not considered revenue and is included in accrued expenses until remitted to the taxing authorities.

Shipping and handling fees charged to customers are included in net revenues.

All shipping and handling costs are accounted for as distribution expenses, and are therefore not evaluated as a separate performance obligation.

Cost of Revenues

Cost of revenues consists primarily of inventory sold and related freight-in.

Cost of revenues includes direct labor pertaining to our inventory production activities and an allocation of overhead costs including rent and insurance.

Cost of revenues also includes inventory write-offs and reserves.

Shipping and Handling

The Company recognizes shipping and handling billed to customers as a component of net revenues, and the cost of shipping and handling as distribution costs.

Total shipping and handling billed to customers as a component of net revenues was approximately $ 128,000 and $ 72,000 for the years ended December 31, 2023 and 2022, respectively.

Total shipping and handling costs included in distribution costs were approximately $ 1,016,716 and $ 525,000 , respectively.

Advertising and Promotion

Advertising and promotional costs are expensed as incurred.

Advertising and promotional expense for the years ended December 31, 2023 and 2022 amounted to approximately $ 728,000 and $ 1,178,000 , respectively.

accordance with FASB ASC 606, Revenue from Contracts with Customers ¸ the Company determines revenue recognition through

the following steps:

● Identification

of a contract with a customer;

● Identification

of the performance obligations in the contract

● Determination

of the transaction price

of the transaction price to the performance obligations in the contract, and

● Recognition

of revenue when or as the performance obligations are satisfied

is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers

in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers.

transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, upon

shipment of product.

This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer

Company derives its revenue primarily from wholesale and e-commerce transactions.

For both channels, revenue is recognized at the time

the product is shipped to the customer, which is the point in time when control is transferred.

The Company considers the sale of products

as a single performance obligation.

For the Company’s licensing agreement via Bailey44, the Company recognizes royalty revenue

on a monthly basis over the term of the license agreement.

Company provides the customer the right of return on the product and revenue is adjusted based on an estimate of the expected returns

based on historical rates.

Company deducts discounts, sales tax, and estimated refunds to arrive at net revenue.

Sales tax collected from clients is not considered

revenue and is included in accrued expenses until remitted to the taxing authorities.

Shipping and handling fees charged to customers

are included in net revenues.

All shipping and handling costs are accounted for as distribution expenses, and are therefore not evaluated

as a separate performance obligation.

of revenues consists primarily of inventory sold and related freight-in.

Cost of revenues includes direct labor pertaining to our inventory

production activities and an allocation of overhead costs including rent and insurance.

Cost of revenues also includes inventory write-offs

and reserves.

Company recognizes shipping and handling billed to customers as a component of net revenues, and the cost of shipping and handling as

distribution costs.

Total shipping and handling billed to customers as a component of net revenues was approximately $ 75,000 and $ 128,000

for the years ended December 31, 2024 and 2023, respectively.

Total shipping and handling costs included in distribution costs were $ 907,843

and $ 1,016,716 , respectively.

and Promotion

and promotional costs are expensed as incurred.

Advertising and promotional expense for the years ended December 31,2024 and 2023 amounted

to approximately $ 138,000 and $ 728,000 , respectively.

The amounts are included in sales and marketing expense.

General and Administrative

General and administrative expenses consist primarily of compensation and benefits costs, professional services and information technology.

General and administrative expenses also include payment processing fees, design and warehousing fees.

Common Stock Purchase Warrants and Other Derivative Financial Instruments

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation.

Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged.

At December 31, 2023 and 2022, the Company did not have any derivative instruments that were designated as hedges.

Stock Option and Warrant Valuation

Stock option and warrant valuation models require the input of highly subjective assumptions.

The fair value of stock-based payment awards was estimated using the Black-Scholes option model.

For warrants and stock options issued to non- employees, the Company accounts for the expected life based on the contractual life of the warrants and stock options.

For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification.

The simplified method is based on the average of the vesting tranches and the contractual life of each grant.

For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants.

and Administrative

and administrative expenses consist primarily of compensation and benefits costs, professional services and information technology.

and administrative expenses also include payment processing fees, design and warehousing fees.

Stock Purchase Warrants and Other Derivative Financial Instruments

Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative

instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and

requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation.

for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types

of relationships designated are based on the exposures hedged.

At December 31, 2024 and 2023, the Company did not have any derivative

instruments that were designated as hedges.

Option and Warrant Valuation

option and warrant valuation models require the input of highly subjective assumptions.

The fair value of stock-based payment awards

was estimated using the Black-Scholes option model.

For warrants and stock options issued to non- employees, the Company accounts for

the expected life based on the contractual life of the warrants and stock options.

For employees, the Company accounts for the expected

life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined

in the accounting standards codification.

The simplified method is based on the average of the vesting tranches and the contractual life

of each grant.

For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate

the fair value of options grants.

The risk-free interest rate was determined from the implied yields of U.S.

Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.

Treasury zero-coupon bonds

with a remaining life consistent with the expected term of the options.

The number of stock award forfeitures are recognized as incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest.

Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718.

ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.

Stock-based compensation is recognized as an expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services.

The Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight-line basis over the vesting period of the award.

Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility.

Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires

the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately

expected to vest.

Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to

employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718.

is also applied to awards modified, repurchased, or cancelled during the periods reported.

Stock-based compensation is recognized as

an expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services.

Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight-line

basis over the vesting period of the award.

Determining the appropriate fair value of stock-based awards requires the input of subjective

assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and

expected stock price volatility.

The Company used the Black-Scholes option pricing model to value its stock option awards.

The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

Deferred Offering Costs

The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs.

Prior to the completion of an offering, offering costs are capitalized.

The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed.

As of December 31, 2020, the Company had capitalized $ 214,647 in deferred offering costs.

Upon completion of the IPO in May 2021, all capitalized deferred offering costs were charged to additional paid-in capital.

As of December 31, 2021, the Company capitalized $ 367,696 in deferred offering costs pertaining to its equity line of credit agreement with Oasis (Note 8).

In 2022, the Company wrote off these costs to general and administrative expenses in the consolidated statements of operations as the equity line of credit financing never occurred.

Segment Information

In accordance with ASC 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated.

As of December 31, 2023 our operating segments included:

DSTLD, Bailey, Stateside and Sundry.

Each operating segment currently reports to the Chief Executive Officer.

Each of our brands serve or are expected to serve customers through our wholesale, in store and online channels, allowing us to execute on our omni-channel strategy.

We have determined that each of our operating segments share similar economic and other qualitative characteristics, and therefore the results of our operating segments are aggregated into one reportable segment.

All of the operating segments have met the aggregation criteria and have been aggregated and are presented as one reportable segment, as permitted by ASC 280.

We continually monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments.

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes.

Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse.

A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized.

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date.

In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture.

The Company presents basic and diluted net earnings

or loss per share.

Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding.

Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive.

As all potentially dilutive securities are anti-dilutive as of December 31, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each year.

Potentially dilutive items outstanding as of December 31, 2023 and 2022 are as follows:

Convertible notes

The assumptions

used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties

and the application of management’s judgment.

As a result, if factors change and management uses different assumptions, stock-based

compensation expense could be materially different for future awards.

accordance with ASC 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business

activities are managed and evaluated.

As of December 31, 2024, we had one operating segment which pertains to the sale of apparel.

brands and reporting units currently report to the Chief Executive Officer.

Each of our brands serve or are expected to serve customers through

our wholesale, in store and online channels, allowing us to execute on our omni-channel strategy.

We have determined that each of our

brands share similar economic and other qualitative characteristics, and therefore the results of our operating businesses

are aggregated into one reportable segment.

All of the operating businesses have met the aggregation criteria and have been aggregated

and are presented as one reportable segment, as permitted by ASC 280.

We continually monitor and review our segment reporting structure

in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments.

Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes.

Under the liability method, deferred

taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using

tax rates expected to be in effect during the years in which the basis differences reverse.

A valuation allowance is recorded when it

is unlikely that the deferred tax assets will not be realized.

We assess our income tax positions and record tax benefits for all years

subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date.

In accordance

with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy

will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing

authority that has full knowledge of all relevant information.

For those income tax positions where there is less than 50% likelihood

that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

Loss per Share

earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during

the period, excluding shares subject to redemption or forfeiture.

The Company presents basic and diluted net earnings or loss per share.

Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period,

adjusted for potentially dilutive securities outstanding.

Potentially dilutive securities are excluded from the computation of the diluted

net loss per share if their inclusion would be anti-dilutive.

As all potentially dilutive securities are anti-dilutive as of December

31, 2024 and 2023, diluted net loss per share is the same as basic net loss per share for each year.

Potentially dilutive items outstanding

as of December 31, 2024 and 2023 are as follows

SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING

Series A convertible preferred stock

3 unchanged sentences

Total potentially dilutive shares

The stock options and warrants above are out-of-the-money as of December 31, 2023 and 2022.

On January 1, 2022, the Company adopted ASC 842, Leases , as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from lease arrangements.

stock options and warrants above are out-of-the-money as of December 31, 2024 and 2023.

January 1, 2022, the Company adopted ASC 842, Leases , as amended, which supersedes the lease accounting guidance under Topic 840,

and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the

balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from lease arrangements.

The Company adopted the new guidance using a modified retrospective method.

Under this method, the Company elected to apply the new accounting standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment to the beginning balance of retained earnings.

Under this method, the Company elected to apply the new accounting

standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment

to the beginning balance of retained earnings.

Accordingly, prior periods have not been recast to reflect the new accounting standard.

The cumulative effect of applying the provisions of ASC 842 had no material impact on accumulated deficit.

The Company elected transitional practical expedients for existing leases which eliminated the requirements to reassess existing lease classification, initial direct costs, and whether contracts contain leases.

Also, the Company elected to present the payments associated with short-term leases as an expense in statements of operations.

Company elected transitional practical expedients for existing leases which eliminated the requirements to reassess existing lease classification,

initial direct costs, and whether contracts contain leases.

Also, the Company elected to present the payments associated with short-term

leases as an expense in statements of operations.

Short-term leases are leases with a lease term of 12 months or less.

Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02:

Leases (Topic 842).

The new guidance generally requires an entity to recognize on its balance sheet operating and financing lease liabilities and corresponding right-of-use assets.

The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018 and early adoption is permitted.

The new standard requires a modified retrospective transition for existing leases to each prior reporting period presented.

The Company elected to utilize the extended adoption period available to the Company as an emerging growth company.

The Company has adopted ASU 2016-02 as of January 1, 2022.

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instrument – Credit Losses”.

This ASU, and the related ASUs issued subsequently by the FASB introduce a new model for recognizing credit loss on financial assets not accounted for at fair values through net income, including loans, debt securities, trade receivables, net investment in leases and available-for-sale debt securities.

The new ASU broadens the information that an entity must consider in developing estimates of expected credit losses and requires an entity to estimate credit losses over the life of an exposure based on historical information, current information and reasonable supportable forecasts.

The Company adopted this ASU on January 1, 2023, using the modified retrospective approach.

The adoption of this ASU did not have a material impact on financial statements as Company’s customers are direct consumers and pay at the time of purchase.

As of December 31, 2023, the Company determined an allowance for expected credit loss of $ 48,326 .

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

Accounting Pronouncements

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires

disclosure of incremental segment information on an annual and interim basis, primarily disclosure of significant segment expense categories

and amounts for each reportable segment.

The new standard is effective for annual periods beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 in the annual financial statements for

the twelve months ended December 31, 2024, and for interim periods beginning in 2025.

The Company believes the amendments of ASU 2023-07

will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures

upon adoption.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires greater

disaggregation of income tax disclosures related to the income tax reconciliation and income taxes paid.

The amendments improve the transparency

of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation

and (2) income taxes paid disaggregated by jurisdiction.

The new standard is effective for annual periods beginning after December 15,

2024, and early adoption is permitted.

The Company believes the amendments of ASU 2023-09 will not have a significant impact on the Company’s

consolidated financial statements and will include all required disclosures upon adoption.

does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying

financial statements.

As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

The following accounting pronouncements have been issued as of April 15, 2024 but are not yet effective and may affect the future financial reporting by the Company:

● ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity:

This ASU addresses the complexity of certain guidance for convertible instruments and contracts in an entity’s own equity.

The ASU is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

For all other entities, the ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

● ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions:

The ASU is intended to clarify the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of the security.

For public business entities, the amendments in ASU 2022- 03 are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

For all other entities, the ASU is effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years.

BUSINESS COMBINATIONS

2022 Acquisition

On December 30, 2022, the Company completed its previously announced acquisition (the “ Sundry Acquisition”) of all of the issued and outstanding membership interests of Sunnyside, LLC, a California limited liability company (“Sundry”), pursuant to that certain Second Amended and Restated Membership Interest Purchase Agreement (the “ Sundry Agreement”), dated October 13, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (“ Sundry Sellers”), George Levy as the Sundry Sellers’ representative, the Company as Buyer, and Sundry.

Pursuant to the Agreement, Sellers, as the holders of all of the outstanding membership interests of Sundry, exchanged all of such membership interests for (i) $ 7.5 million in cash, (ii) $ 5.5 million in promissory notes of the Company (the “Sundry Notes”), and (iii) a number of shares of common stock of the Company equal to $ 1.0 million (the “Sundry Shares”), calculated in accordance with the terms of the Agreement, which consideration was paid or delivered to the Sellers, Jenny Murphy and Elodie Crichi.

Each Sundry Note bears interest at eight percent (8%) per annum and matured on February 15, 2023 (see Note 7).

The Company issued 90,909 shares of common stock to the Sundry Sellers on December 30, 2022 at a fair value of $ 1,000,000 .

The Company evaluated the acquisition of Sundry pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations.

The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition.

Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

Total fair value of the purchase price consideration was determined as follows:

December 30, 2022, the Company completed its previously announced acquisition (the “ Sundry Acquisition”) of all of the issued

and outstanding membership interests of Sunnyside, LLC, a California limited liability company (“Sundry”), pursuant to that

certain Second Amended and Restated Membership Interest Purchase Agreement (the “ Sundry Agreement”), dated October 13, 2022,

by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (“ Sundry Sellers”), George Levy as the Sundry

Sellers’ representative, the Company as Buyer, and Sundry.

to the Agreement, Sellers, as the holders of all of the outstanding membership interests of Sundry, exchanged all of such membership

interests for (i) $ 7.5 million in cash, (ii) $ 5.5 million in promissory notes of the Company (the “Sundry Notes”), and (iii)

a number of shares of common stock of the Company equal to $ 1.0 million (the “Sundry Shares”), calculated in accordance with

the terms of the Agreement, which consideration was paid or delivered to the Sellers, Jenny Murphy and Elodie Crichi.

Each Sundry Note

bears interest at eight percent ( 8 %) per annum and matured on February 15, 2023 (see Note 7).

The Company issued 90,909 shares of common

stock to the Sundry Sellers on December 30, 2022 at a fair value of $ 1,000,000 .

Company evaluated the acquisition of Sundry pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations.

The acquisition method

of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at

their estimated respective fair values as of the closing date of the acquisition.

Goodwill recognized in connection with this transaction

represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

fair value of the purchase price consideration was determined as follows:

SCHEDULE OF COMPONENTS OF PURCHASE PRICE CONSIDERATION

Promissory notes payable

Purchase price consideration

The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date.

Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities

assumed as of the purchase date.

The following table summarizes the purchase price allocation:

SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATION

Purchase Price

8 unchanged sentences

Purchase price consideration

The customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years .

The brand name is indefinite-lived.

customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years .

The brand name

is indefinite-lived.

The Company used the relief of royalty and income approach to estimate the fair value of intangible assets acquired.

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition.

is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible

assets that do not qualify for separate recognition.

The goodwill is not deductible for tax purposes.

The results of Sundry have been included in the consolidated financial statements since the date of acquisition.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the Company’s financial results as if the Sundry acquisition had occurred as of January 1, 2022.

The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date.

In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results.

The following unaudited pro forma financial information includes incremental property and equipment depreciation and intangible asset amortization as a result of the acquisitions.

The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

( 42,001,415 )

Net loss per common share

Previous Acquisitions

On February 12, 2020, the Company acquired 100 % of the membership interests of Bailey.

The purchase price consideration included (i) an aggregate of 20,754,717 shares of Series B Preferred Stock of the Company (the “Parent Stock”) and (ii) a promissory note in the principal amount of $ 4,500,000 .

The results of Sundry have been

included in the consolidated financial statements since the date of acquisition.

February 12, 2020, the Company acquired 100 % of the membership interests of Bailey.

The purchase price consideration included (i) an

aggregate of 20,754,717 shares of Series B Preferred Stock of the Company (the “Parent Stock”) and (ii) a promissory note

in the principal amount of $ 4,500,000 .

The total purchase price consideration was $ 15,500,000 .

DBG agreed that if at that date which is one year from the closing date of the IPO, the product of the number of shares of Parent Stock issued under the Merger multiplied by the sum of the closing price per share of the common stock of the Company on such date, plus Sold Parent Stock Gross Proceeds (as that term is defined in the Merger Agreement), does not exceed the sum of $ 11,000,000 less the value of any Holdback Shares cancelled further to the indemnification provisions of the Merger Agreement, then the Company shall issue to the Holders pro rata an additional aggregate number of shares of common stock of the Company equal to the valuation shortfall at a per share price equal to the then closing price per share of the common stock of the Company.

As of December 31, 2023 and 2022, the Company has a contingent consideration liability of $ 0 and $ 10,698,475 , respectively, based on the valuation shortfall as noted above.

On August 30, 2021, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Moise Emquies pursuant to which the Company acquired all of the issued and outstanding membership interests of MOSBEST, LLC, a California limited liability company (“Stateside” and such transaction, the “Stateside Acquisition”).

Pursuant to the MIPA, Moise Emquies, as the holder of all of the outstanding membership interests of Stateside, exchanged all of such membership interests for $ 5.0 million in cash and 1,101,538 shares of the Company’s common stock (the “Shares”), which number of Shares was calculated in accordance with the terms of the MIPA.

Of such amount, $ 375,000 in cash and a number of Shares equal to $ 375,000 , or 82,615 shares (calculated in accordance with the terms of the MIPA), is held in escrow to secure any working capital adjustments and indemnification claims.

agreed that if at that date which is one year from the closing date of the IPO, the product of the number of shares of Parent Stock issued

under the Merger multiplied by the sum of the closing price per share of the common stock of the Company on such date, plus Sold Parent

Stock Gross Proceeds (as that term is defined in the Merger Agreement), does not exceed the sum of $ 11,000,000 less the value of any

Holdback Shares cancelled further to the indemnification provisions of the Merger Agreement, then the Company shall issue to the Holders

pro rata an additional aggregate number of shares of common stock of the Company equal to the valuation shortfall at a per share price

equal to the then closing price per share of the common stock of the Company.

August 30, 2021, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Moise Emquies

pursuant to which the Company acquired all of the issued and outstanding membership interests of MOSBEST, LLC, a California limited

liability company (“Stateside” and such transaction, the “Stateside Acquisition”).

Pursuant to the MIPA,

Moise Emquies, as the holder of all of the outstanding membership interests of Stateside, exchanged all of such membership interests

for $ 5.0 million in cash and 22,031 shares of the Company’s common stock (the “Shares”), which number of Shares

was calculated in accordance with the terms of the MIPA.

Of such amount, $ 375,000 in cash and a number of Shares equal to $ 375,000 ,

or 1652 shares (calculated in accordance with the terms of the MIPA), is held in escrow to secure any working capital adjustments

and indemnification claims.

The MIPA contains customary representations, warranties and covenants by Moise Emquies.

The Company evaluated the acquisition of Stateside pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations.

Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

Total fair value of the purchase price consideration was determined as follows:

Company evaluated the acquisition of Stateside pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations.

The acquisition

method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured

at their estimated respective fair values as of the closing date of the acquisition.

Goodwill recognized in connection with this transaction

represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

fair value of the purchase price consideration was determined as follows:

SCHEDULE OF FAIR VALUE OF PURCHASE PRICE CONSIDERATION

Purchase price consideration

The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date.

Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities

assumed as of the purchase date.

The following table summarizes the purchase price allocation:

SCHEDULE OF ALLOCATION OF PURCHASE PRICE IN REGARD TO ACQUISITION

Purchase Price

7 unchanged sentences

Accrued expenses and other liabilities

The customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years .

The brand name is indefinite-lived.

price consideration

customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years .

The brand name

is indefinite-lived.

The Company used the relief of royalty and income approach to estimate the fair value of intangible assets acquired.

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition.

is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible

assets that do not qualify for separate recognition.

The goodwill is not deductible for tax purposes.

DISCONTINUED OPERATIONS

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 agreed to make an aggregate cash

payment of $ 229,000 to D.

Jones Tailored Collection, Ltd.

Jones”), (ii) the Company issued 1,952,580 shares of common stock to D.

Jones, and (iii) the Company assigned and transferred one hundred percent ( 100 %) of the Company’s membership interest in H&J to D.

Jones”), (ii) the Company issued 39,052 shares of common stock

Jones, and (iii) the Company assigned and transferred one hundred percent ( 100 %) of the Company’s membership interest in

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

The H&J Settlement was accounted for a business disposition in accordance with ASC 810-40-40-3A.

As of June 21, 2023, the Company no longer consolidated the assets, liabilities, revenues and expenses of H&J.

H&J Settlement was accounted for a business disposition in accordance with ASC 810-40-40-3A.

As of June 21, 2023, the Company no

longer consolidated the assets, liabilities, revenues and expenses of H&J.

The components of the disposition are as follows:

SCHEDULE OF COMPONENTS OF DISPOSITION

Cash payment due to H&J Seller

$ ( 229,000 )

Common shares issued to H&J Seller*

17 unchanged sentences

$ ( 1,523,940 )

* Represents the fair value of 1,952,580 shares of common stock issued to D.

The net assets of the discontinued operations at December 31, 2022 were not materially different from the balances as of June 21, 2023.

Through December 31, 2023, the Company has made payments to D.

Represents the fair value of 39,052 shares of common stock

December 31, 2023, the Company has made payments to D.

Jones totaling $ 200,000 .

The remaining balance of $ 29,000 is included in accrued expenses and other liabilities on the consolidated balance sheet.

The loss of disposition of business of $ 1,523,940 was included in income (loss) from discontinued operations, net of tax in the consolidated statements of operations.

In accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying consolidated statements of operations for the three and year ended December 31, 2023 and 2022.

The results of the discontinued operations of HJ for the year ended December 31, 2023 and 2022 consist of the following:

The remaining balance of $ 29,000 is included in accrued

expenses and other liabilities on the consolidated balance sheet.

loss of disposition of business of $ 1,523,940 was included in income (loss) from discontinued operations, net of tax in the consolidated

statements of operations.

accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing

operations in the accompanying consolidated statements of operations for the year ended December 31, 2023.

of the discontinued operations of HJ for the year ended December 31, 2023 consist of the following:

Cost of net revenues

16 unchanged sentences

DUE FROM FACTOR

The Company, via its subsidiaries, Bailey, Stateside and Sundry, assigns a portion of its trade accounts receivable to third- party factoring companies, who assumes the credit risk with respect to the collection of non-recourse accounts receivable.

The Company may request advances on the net sales factored at any time before their maturity date.

The factor charges a commission on the net sales factored for credit and collection services.

For one factoring company, interest on advances is charged as of the last day of each month at a rate equal to the LIBOR rate plus 2.5 % for Bailey.

For Stateside and Sundry, should total commission and fees payable be less than $ 30,000 in a single year, then the factor shall charge the difference between the actual fees in said year and $ 30,000 to the Company.

Interest on advances is charged as of the last day of each month at a rate equal to the greater of either, (a) the Chase Prime Rate + ( 2.0 )% or (b) ( 4.0 )% per annum.

For another factoring company, interest is charged at one-thirty- third (1/33) of one percent per day, such rate to increase or decrease in accordance with changes in the “Prime Rate”, which such prime rate to be deemed to be 4.25 % on the date of the agreement.

Advances are collateralized by a security interest in substantially all of the companies’ assets.

Due to/from factor consist of the following:

Company, via its subsidiaries, Bailey, Stateside and Sundry, assigns a portion of its trade accounts receivable to third- party

factoring companies, who assumes the credit risk with respect to the collection of non-recourse accounts receivable.

The Company may

request advances on the net sales factored at any time before their maturity date.

The factor charges a commission on the net sales

factored for credit and collection services.

For one factoring company, interest on advances is charged as of the last day of each

month at a rate equal to the LIBOR rate plus 2.5 % for Bailey.

For Stateside and Sundry, should total commission and fees payable be

less than $ 30,000 in a single year, then the factor shall charge the difference between the actual fees in said year and $ 30,000 to

Interest on advances is charged as of the last day of each month at a rate equal to the greater of either, (a) the

Chase Prime Rate + ( 2.0 )% or (b) ( 4.0 )% per annum.

For another factoring company, interest is charged at one-thirty-third (1/33) of

one percent per day, such rate to increase or decrease in accordance with changes in the “Prime Rate”, which such prime

rate to be deemed to be 4.25 % on the date of the agreement.

are collateralized by a security interest in substantially all of the companies’ assets.

to/from factor consist of the following:

SCHEDULE OF DUE TO/ FROM FACTOR

Outstanding receivables:

3 unchanged sentences

Credits due customers

Due from factor, net

GOODWILL AND INTANGIBLE ASSETS

The Company recorded goodwill from each of its business combinations.

The following is a summary of goodwill by entity for the years ended December 31, 2023 and 2022:

Refer to Note 3 for discussion on the goodwill impairment recorded in 2022.

In connection with the H&J disposition, the Company derecognized $ 1,130,311 in goodwill.

Intangible Assets

The following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, 2023 and 2022:

Company recorded goodwill from each of its business combinations.

The following is a summary of goodwill by entity for the years ended

December 31, 2024 and 2023:

SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION

following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, 2024 and 2023:

SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS

December 31, 2024

2 unchanged sentences

( 6,968,401 )

$ ( 1,388,000 )

$ ( 6,968,401 )

Indefinite-lived:

$ ( 1,388,000 )

$ ( 6,968,401 )

December 31, 2023

4 unchanged sentences

$ ( 4,494,223 )

Refer to Note 3 for discussion on the intangible asset impairment recorded in 2022.

The Company recorded amortization expense of $ 1,993,616 and $ 2,151,250 during the years ended December 31, 2023 and 2022, respectively, which is included in general and administrative expenses in the consolidated statements of operations.

Future amortization expense at December 31, 2023 is as follows:

to Note 3 for discussion on the intangible asset impairment recorded in 2024.

Company recorded amortization expense of $ 2,474,178 and $ 1,993,616 during the years ended December 31, 2024 and 2023, respectively, which

is included in general and administrative expenses in the consolidated statements of operations.

amortization expense at December 31, 2024 is as follows:

SCHEDULE OF FUTURE AMORTIZATION EXPENSE

Year Ending December 31,

LIABILITIES AND DEBT

Accrued Expenses and Other Liabilities

The Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of December 31, 2023 and 2022:

Expenses and Other Liabilities

Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of December 31,

2024 and 2023:

SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses

Reserve for returns

Payroll related liabilities

1 unchanged sentence

Other liabilities

Payroll related liabilities are primarily related in DBG and Bailey44 payroll taxes due to remit to federal and state authorities.

The amounts are subject to further penalties and interest.

As of December 31, 2023, accrued expenses included $ 535,000 in accrued common stock issuances pursuant to an advisory agreement for services performed in 2022.

Accrued expenses and

other liabilities

related liabilities are primarily related in DBG and Bailey44 payroll taxes due to remit to federal and state authorities.

are subject to further penalties and interest.

of December 31, 2024, accrued expenses included $ 535,000 in accrued common stock issuances pursuant to an advisory agreement for services

performed in 2022.

The 4 shares of common stock owed per the agreement are expected to be issued in the second quarter of 2025.

As of December 31, 2021, the gross loan balance with Black Oak Capital (“Black Oak”) pertaining to its senior credit agreement was $ 6,001,755 .

In February 2022, the Company received $ 237,500 in proceeds, including loan fees of $ 12,500 , from the existing venture debt lender under the same terms as the existing facility.

On September 29, 2022, the Company and Black Oak executed a Securities Purchase Agreement (the “Black Oak SPA”) whereby the Company issued 6,300 shares of Series A Convertible Preferred Stock to Black Oak for $ 1,000 per share (see Note 7).

The shares were issued pursuant to the conversion of Black Oak’s entire principal amount of $ 6,251,755 , and the Company recorded $ 48,245 in interest as part of the conversion.

Pursuant to the Black Oak SPA, all accrued interest remaining outstanding.

Accrued interest was $ 269,870 as of December 31, 2023 and 2022.

For the year ended December 31, 2022, $ 12,500 of loan fees and discounts from warrants were amortized to interest expense, leaving unamortized balance of $ 0 as of December 31, 2023 and 2022.

Interest expense was $ 0 and $ 573,455 for the years ended December 31, 2023 and 2022, respectively.

Convertible Debt

2020 Regulation CF Offering

As of December 31, 2023 and 2022, there was $ 100,000 remaining in outstanding principal that was not converted into equity (see table below).

Convertible Promissory Notes

On April 8, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“April Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 3,068,750 , consisting of original issue discount of $ 613,750 .

The Company received net proceeds of $ 2,313,750 after the original issue discount and fees, resulting in a debt discount of $ 755,000 .

Upon the Company’s public offering in May 2022 (see below), the Company repaid $ 3,068,750 to the investors and the debt discount was fully amortized.

In connection with the April Notes, the Company issued an aggregate of 12,577 warrants to purchase common stock at an exercise price of $ 122 per share.

The Company recognized $ 98,241 as a debt discount for the fair value of the warrants using the Black-Scholes option model, which was fully amortized upon the notes’ repayment in May.

On July 22 and July 28, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“July Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 1,875,000 , consisting of original issue discount of $ 375,000 .

The Company received net proceeds of $ 1,450,000 after the original issue discount and fees.

In connection with the July 22 and July 28 notes, the Company issued an aggregate of 41,124 and 27,655 warrants to purchase common stock at an exercise price of $ 15.20 and $ 11.30 per share, respectively.

The Company recognized $ 692,299 as a debt discount for the fair value of the warrants using the Black-Scholes option model, which will be amortized to interest expense over the life of the notes.

If the July Notes are not repaid in full by the maturity date or if any other event of default occurs, (1) the face value of the notes will be automatically increased to 120 %;

(2) the notes will begin generating an annual interest rate of 20 %, which will be paid in cash monthly until the default is cured;

and (3) if such default continues for 14 or more calendar days, at the Investors’ discretion, the notes shall become convertible at the option of the investors into shares of the Company’s common stock at a conversion price equal to the closing price of the Company’s common stock on the on the date of the note conversion.

The Company evaluated the terms of the conversion features of the July notes as noted above in accordance with ASC Topic No.

815 — 40, Derivatives and Hedging — Contracts in Entity’s Own Stock , and determined they are not indexed to the Company’s common stock and that the conversion features meet the definition of a liability.

The notes contain an indeterminate number of shares to settle with conversion options outside of the Company’s control.

Therefore, the Company bifurcated the conversion feature and accounted for it as a separate derivative liability.

Upon issuance of the July, the Company recognized a derivative liability at an aggregate fair value of $ 559,957 , which was recorded as a debt discount and will amortized over the life of the notes.

In December 2022, the Company fully repaid the outstanding principal of $ 1,875,000 pertaining to the July 22 and 28 notes, as well as an additional $ 416,923 due to the default provisions noted above.

This amount was included in interest expense in the consolidated statements of operations.

On December 29, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“December Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 4,000,000 , consisting of original issue discount of $ 800,000 .

The Company received net proceeds of $ 3,000,000 .

The December Notes were due and payable on February 15, 2023.

If the December Notes are not repaid in full by the maturity date or if any other event of default occurs, (1) the face value of the December Notes will be automatically increased to 120 %;

(2) the Notes will begin generating an annual interest rate of 20 %, which will be paid in cash monthly until the default is cured;

and (3) if such default continues for 14 or more calendar days, at the investors’ discretion, the December Notes shall become convertible at the option of the investors into shares of the Company’s common stock at a conversion price equal to the closing price of the Company’s common stock on the date of the note conversion.

In connection with the December Notes, the Company issued to the investors an aggregate of 469,480 warrants to purchase common stock at an exercise price equal to $ 4.26 , and 60,000 shares of common stock.

The Company recognized $ 428,200 as a debt discount for the fair value of the warrants and common shares using the Black-Scholes option model, resulting in a total debt discount of $ 1,378,200 .

The Company recognized $ 428,200 as a debt discount for the fair value of the warrants and common shares using the Black-Scholes option model, which will be amortized to interest expense over the life of the notes.

In February 2023, the principal of $ 4,000,000 of the December Notes were fully repaid.

The Company amortized $ 1,220,830 of debt discount up until the repayment date, and then recognized a loss on extinguishment of debt of $ 157,370 which is included in other non-operating income (expenses) on the consolidated statements of operations.

The following is a summary of the convertible notes for the years ended December 31, 2023 and 2022:

Convertible Note

Debt Discount

Balance, December 31, 2022

( 1,378,200 )

Repayments of notes

( 4,000,000 )

Amortization of debt discount

Loss on extinguishment of debt

Balance, December 31, 2023

During the years ended December 31, 2023 and 2022, the Company amortized $ 1,220,830 and $ 6,506,384 , respectively of debt discount to interest expense pertaining to all convertible notes.

As of December 31, 2022, there was no remaining derivative liability outstanding pertaining to any convertible notes.

Loan Payable — PPP and SBA Loan

In April 2022, Bailey received notification of full forgiveness of its 2 nd PPP Loan totaling $ 1,347,050 and partial forgiveness of its 1 st PPP Loan totaling $ 413,705 .

As of December 31, 2023 and December 31, 2022, Bailey had an outstanding PPP Loan balance of $ 933,295 and matures in 2026.

of December 31, 2024 and 2023, there was $ 100,000 remaining in outstanding principal that was not converted into equity (see table below).

Capital Convertible Promissory Note

April 30, 2024, the Company issued a convertible promissory note in the original principal amount of $ 250,000

(the “Note”) to Target Capital 1

LLC, an Arizona limited liability company (the “Note Holder”), with a maturity date of April

30, 2025 (the “Maturity Date”).

to the terms of the Note, the Company agreed to pay the principal sum and a one-time interest charge of $ 50,000

to the Note Holder.

In May 2024, the Company

fully repaid the Note Holder $ 300,000 ,

including the principal and interest.

The Company issued 1,000

shares of common stock to the Note Holder as

commitment shares.

Payable — PPP and SBA Loan

April 2022, Bailey received notification of full forgiveness of its 2 nd PPP Loan totaling $ 1,347,050 and partial forgiveness

of its 1 st PPP Loan totaling $ 413,705 .

As of December 31, 2024 and December 31, 2023, Bailey had an outstanding PPP Loan balance

of $ 933,295 and matures in 2026.

Merchant Advances

Future Sales Receipts

In 2022, the Company obtained several merchant advances.

These advances are, for the most part, secured by expected future sales transactions of the Company with expected payments on a weekly basis.

As of December 31, 2022, $ 896,334 remained outstanding.

During 2023, the Company received additional proceeds totaling $ 2,452,923 .

The Company made total cash repayments, pertaining to principal and interest of $ 4,518,512 .

The following is a summary of the merchant advances as of December 31, 2023 and 2022:

Sales Receipts

2022 through 2024, the Company obtained several merchant advances.

These advances are, for the most part, secured by expected future

sales transactions of the Company with expected payments on a weekly basis.

The Company made total cash repayments, pertaining to principal

and interest, of $ 1,838,682 for the year ending December 31, 2024.

following is a summary of the merchant advances as of December 31, 2024 and 2023:

SCHEDULE OF MERCHANT ADVANCES

unamortized debt discount

1 unchanged sentence

Merchant cash advances, net

The unamortized debt discount of $ 1,966,881 will be amortized to interest expense over the expected remaining terms of the agreements through the fourth quarter of 2024.

During the year ended December 31, 2023, the Company recorded $ 1,247,403 in interest expense pertaining to these advances.

In 2023, the Company refinanced two merchant advance agreements.

The refinances were accounted for as a loss extinguishment under ASC 470-50-40, and accordingly the Company recognized a loss on extinguishment of $ 559,147 which is included in other non-operating income (expenses) in the consolidated statements of operations.

In connection with these advances, the Company granted 6,095 warrants to purchase common stock at an exercise price of $ 131.25 to the lender.

In 2023, the Company obtained merchant advances totaling $ 690,000 from Shopify Capital and another lender and made repayments totaling $ 658,718 .

Company has outstanding merchant advances with Shopify Capital.

During the year ending December 2024, the Company made repayments of

As of December 31, 2024, the remaining principal outstanding was $ 6,664 .

These advances are, for the most part, secured by expected future sales transactions of the Company with expected payments on a daily basis.

In 2023, the Company obtained merchant advances totaling $ 312,938 from Gynger Inc.

As of December 31, 2023, the remaining principal outstanding was $ 273,188 and technically in default.

Promissory Note Payable

As of December 31, 2023 and 2022, the outstanding principal on the note to the sellers of Bailey was $ 3,500,000 .

The maturity date was December 31, 2022.

On July 5, 2023, the parties agreed to extend the maturity date to June 30, 2024.

The note incurs interest at 12 % per annum.

Interest expense was $ 420,000 and $ 420,000 for the yeas ended December 31, 2023 and 2022, all respectively, which was accrued and unpaid as of December 31, 2023.

As noted in Note 4, the Company issued a promissory note in the principal amount of $ 5,500,000 to the Sundry Holders pursuant to the Sundry acquisition.

The note bears interest at 8 % per annum and matured on February 15, 2023.

In February 2023, the parties verbally agreed to extend the maturity date to December 31, 2023.

Interest expense was $ 259,177 for the year ended December 31, 2023.

On June 21, 2023, the Company and the Sundry Holders executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 shares of Series C Convertible Preferred Stock to the Sundry Holders for $ 1,000 per share (see Note 7).

The shares were issued pursuant to the cancellation of the Sundry Holders’ entire principal amount of $ 5,500,000 and accrued interest of $ 259,177 .

In March 2023, the Company and various purchasers executed a Securities Purchase Agreement (“March 2023 Notes”) whereby the investors purchased from the Company promissory notes in the aggregate principal amount of $ 2,458,750 , consisting of original issue discount of $ 608,750 .

These advances are, for the most part, secured by expected

future sales transactions of the Company with expected payments on a daily basis.

Company also had outstanding merchant advances with Gynger, Inc.

In May 2024, the Company converted the outstanding principal and accrued

interest of $ 313,816 owed to Gynger for 2,120 shares of common stock.

of December 31, 2024, and 2023, the outstanding principal on the note to the sellers of Bailey was $ 3,500,000 .

On July 5, 2023, the parties

agreed to extend the maturity date to June 30, 2024.

Interest expense was $ 420,000 and $ 420,000 for the years ended December 31, 2024

and 2023 respectively, which was accrued and unpaid as of December 31, 2024.

The aforesaid mentioned Promissory note are in default as

of December 31 2024 and the parties are currently working on an extension.

March 2023, the Company and various purchasers executed a Securities Purchase Agreement (“March 2023 Notes”) whereby the

investors purchased from the Company promissory notes in the aggregate principal amount of $ 2,458,750 , consisting of original issue discount

of $ 608,750 .

The Company received net proceeds of $ 1,850,000 after additional fees.

The March 2023 Notes are due and payable on September 30, 2023 (the “Maturity Date”).

If the Company completes a debt or equity financing of less than $ 7,500,000 , the Company is required to repay 50 % of the remaining balance of the March 2023 Notes.

Following such 50 % repayment, the Company must also use any proceeds from any subsequent debt or equity financing to repay the March 2023 Notes.

Upon the closing of any debt or equity financing of $ 7,500,000 or greater, the Company is required to repay 100 % of the Notes with no penalties.

There is no additional interest after the 20 % original interest discount.

Upon the Company’s equity financing in September 2023, the Company repaid an aggregate $ 1,247,232 in principal to the respective noteholders.

The March 2023 Notes are due and payable on September

30, 2023 (the “Maturity Date”).

If the Company completes a debt or equity financing of less than $ 7,500,000 , the Company

is required to repay 50 % of the remaining balance of the March 2023 Notes.

Following such 50 % repayment, the Company must also use any

proceeds from any subsequent debt or equity financing to repay the March 2023 Notes.

Upon the closing of any debt or equity financing

of $ 7,500,000 or greater, the Company is required to repay 100 % of the Notes with no penalties.

There is no additional interest after

the 20 % original interest discount.

Upon the Company’s equity financing in September 2023, the Company repaid an aggregate $ 1,247,232

principal to the respective noteholders.

The Company recognized a debt discount of $ 608,750 , which was fully amortized through December

The notes contain certain conversion provisions upon an event of default.

The parties are currently working on an extension to the Maturity Date and have acknowledged that the default provisions have not been triggered.

It is expected that the March 2023 Notes will be fully repaid by the end of the second quarter of 2024.

In connection with the amendments, the Company increased the principal owed on the March 2023 Notes to $ 519,222 , with a corresponding increase to unamortized debt discount.

The following is a summary of promissory notes payable, net:

May 2024, the Company repaid $ 500,000 of

The parties mutually extended the maturity date to November 4, 2024 which initially had maturity date of September 30,

2024 and acknowledged that the default provisions had not been triggered.

The remaining outstanding amount of $ 1,230,741 was

fully repaid on November 4, 2024.

During the year ended December 31, 2024, the Company fully amortized the debt discount pertaining

to these notes.

following is a summary of promissory notes payable, net:

SCHEDULE OF PROMISSORY NOTES PAYABLE, NET

March 2023 Notes - principal

2 unchanged sentences

STOCKHOLDERS’ EQUITY (DEFICIT)

Amendments to Certificate of Incorporation

On October 13, 2022, the Company amended its Amended and Restated Certificate of Incorporation to increase to increase the number of authorized shares of the Company’s common stock from 200,000,000 to 1,000,000,000 , and in conjunction therewith, to increase the aggregate number of authorized shares to 1,010,000,000 shares.

The reverse stock split became effective as of November 3, 2022.

On August 21, 2023, the Board of Directors approved a one -for- 25 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock split became effective as of August 22, 2023.

The Company had 1,000,000,000 shares of common stock authorized with a par value of $ 0.0001 as of December 31, 2023.

Common stockholders have voting rights of one vote per share .

The voting, dividend, and liquidation rights of the holders of common stock are subject to and qualified by the rights, powers, and preferences of preferred stockholders.

2023 Transactions

On January 11, 2023, the Company, entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “January Private Placement”), an aggregate of 475,000 shares of the Company’s common stock (“Common Stock”), and accompanying warrants to purchase 475,000 shares of Common Stock, at a combined purchase price of $ 3.915 per share and Common Warrant, and (ii) 802,140 pre-funded warrants exercisable for 802,140 shares of Common Stock, and accompanying common warrants to purchase 802,140 shares of Common Stock, at a combined purchase price of $ 3.915 per pre-funded warrant and accompanying common warrant, to the investors, for aggregate gross proceeds from the January Private Placement of approximately $ 5 million before deducting placement agent fees and related offering expenses.

As a result of the transaction, the Company issued 1,277,140 shares of Common Stock, including the 475,000 shares and the immediate exercise of 802,140 pre-funded warrants, for gross proceeds of $ 5.0 million.

The Company received net proceeds of $ 4.3 million after deducting placement agent fees and offering expenses.

In January 2023, the Company issued 110,000 shares of common stock at a fair value of $ 322,300 to a former convertible noteholder pursuant to default provisions.

The amount was included in interest expense in the consolidated statements of operations.

In March 2023, the Company issued an aggregate of 118,890 shares of common stock to Sundry executives based on their employment agreements with the Company.

The fair value of $ 499,338 , or $ 4.20 per share as determined by the agreements, was included in general and administrative expenses in the consolidated statements of operations.

In June 2023, the Company issued 1,952,580 shares of common stock to D.

Jones at a fair value of $ 1,357,043 pursuant to the H&J Settlement Agreement.

On August 31, 2023, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “August Private Placement”), an aggregate of 32,000 shares of the Company’s Common Stock and accompanying Series A warrants to purchase up to 32,000 shares of Common Stock and Series B warrants to purchase up to 32,000 shares of Common Stock at a combined purchase price of $ 9.73 per share and common warrants, and (ii) 481,875 pre-funded warrants exercisable for 481,875 shares of Common Stock, and accompanying Series A Warrants to purchase up to 481,875 shares of Common Stock and Series B Warrants to purchase up to 481,875 shares of Common Stock, at a combined purchase price of $ 9.73 , for aggregate gross proceeds from the August Private Placement of approximately $ 5 million.

The Company received net proceeds of $ 3.8 million after deducting placement agent fees and offering expenses.

Through December 31, 2023, all 481,875 pre-funded warrants from the August Private Placement had been exercised for shares of Common Stock.

In connection with the August Private Placement, the Company entered into a warrant amendment (the “Warrant Amendment”) with certain investors to amend certain existing warrants to purchase up to 196,542 shares of Common Stock that were previously issued in December 2022 and January 2023 to the investors, with an exercise price of $ 131.25 per share and $ 95.00 per share, respectively (the “Amended Warrants”) as follows:

(i) to reduce the exercise price of the Amended Warrants to $ 9.43 per share, and (ii) to extend the original expiration date of the Amended Warrants so that they will terminate five and one half years from the closing of the offering.

Immediately following the Warrant Amendment, the Company exercised warrants for 123,814 shares of common stock for proceeds of $ 1,167,566 .

In September 2023, the Company issued 42,782 shares in accrued amounts owed to Sundry executives based on their employment agreements for a total value of $ 500,000 .

On September 10, 2023, the non-employee members of the board of directors adopted a 2023 Stock Purchase Plan (the “2023 Plan”) to enable the Company to attract, retain and motivate its employees.

Under the 2023 Plan, qualified employees can purchase shares of the Company’s common stock at fair market value by either the delivery of cash or the delivery of a form of acceptable non-recourse promissory note.

The aggregate number of common stock issuable under the 2023 Plan shall not exceed 65,000 subject to certain adjustment provided under the 2023 Plan.

Pursuant to the 2023 Plan, the Company issued an aggregate of 63,000 shares of common stock to certain employees and consultants with accompanying 5-year non-recourse promissory notes.

The issuance of the shares were considered for services, and as such the Company recorded $ 657,090 , or a fair value of $ 10.43 per share, in stock-based compensation which was included in general and administrative expenses int he consolidated statement of operations.

In October 2023, 975 shares of Series C Convertible Preferred Stock converted into 54,394 shares of common stock.

2022 Transactions

During the year ended December 31, 2022, the Company issued an aggregate of 79,807 shares of common stock pursuant to the conversion of the FirstFire and Oasis Notes (see Note 7).

In September 2022, the Company issued 30 shares of common stock pursuant to a consultant agreement at a fair value of $ 123,000 .

As part of the Sundry acquisition (see Note 4), the Company issued 3,636 shares of common stock to the Sundry Sellers at a fair value of $ 1,000,000 .

In connection with the December Notes, the Company issued 2,400 shares of common stock with a fair value of $ 264,000

Series A Preferred Stock

On August 31, 2022, the Company entered into a Subscription and Investment Representation Agreement with Hil Davis, its Chief Executive Officer, pursuant to which the Company agreed to issue 1 share of the Company’s Series A Preferred Stock to for $ 25,000 .

The issuance of the preferred stock reduced the due to related party balance.

The share of Series A Preferred Stock had 250,000,000 votes per share and voted together with the outstanding shares of the Company’s common stock as a single class exclusively with respect to any proposals to amend the Certificate of Incorporation to effect a reverse stock split of the Company’s common stock and to increase

the authorized number of shares of the Company’s common stock.

The terms of the Series A Preferred Stock provided that the outstanding share of Series A Preferred Stock would be redeemed in whole, but not in part, at any time:

(i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the approval of Proposals 2 and 6 presented at the Company’s 2022 annual shareholders meeting.

Following conclusion of the shareholders meeting, such share of the Company’s Series A Preferred Stock was redeemed.

On October 13, 2022, the outstanding share of the Company’s Series A Preferred Stock was redeemed for $ 25,000 .

On September 13, 2023, the Company filed a certificate of cancellation (the “Series A Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series A Certificate of Designation relating to the Series A Preferred Stock.

Series A Convertible Preferred Stock

On September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 shares out of the authorized but unissued shares of its preferred stock as Series A Convertible Preferred Stock.

Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

No other dividends shall be paid on shares of the Series A Preferred Stock.

With respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible.

The Series A Preferred Stock shall rank (i) senior to all of the Common Stock;

(ii) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”);

(iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”);

and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

Each share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series A Preferred Stock ($ 1,000 as of September 29, 2022) by the Conversion Price.

The conversion price for each share of the Series A Preferred Stock is the closing price of the Common Stock on September 29, 2022, which was $ 9.30 .

As of December 31, 2023 and 2022, there were 6,300 shares of Series A Convertible Preferred Stock issued and outstanding.

Series B Preferred Stock

On May 30, 2023, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with John Hilburn Davis IV, its Chief Executive Officer pursuant to which the Company agreed to issue and sell 1 share of the Company’s Series B Preferred Stock, par value $ 0.0001 per share (the “Series B Preferred Stock”) for $ 25,000 .

On May 30, 2023, the Company filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, designating the rights, preferences, privileges and restrictions of the share of Series B Preferred Stock.

The Certificate of Designation provides that the Series B Preferred Stock will have 250,000,000 votes per share of Series B Preferred Stock and will vote together with the outstanding shares of the Company’s common stock, par value 0.0001 per share (the “Common Stock”) and Series A Convertible Preferred Stock, par value 0.0001 per share (the “Series A Convertible Preferred Stock”) as a single class exclusively with respect to any proposal to amend the Company’s Sixth Amended and Restated Certificate of Incorporation (as may be amended and/or restated from time to time, the “Restated Certificate”) to effect a reverse stock split of the Company’s common stock.

The Series B Preferred Stock will be voted, without action by the holder, on any such proposal in the same proportion as shares of Common Stock and Series A Convertible Preferred Stock are voted.

The Series B Preferred Stock otherwise has no voting rights.

The Series B Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.

The Series B Preferred Stock has no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily.

The holder of the Series B Preferred Stock will not be entitled to receive dividends of any kind.

The outstanding share of Series B Preferred Stock shall be redeemed in whole, but not in part, at any time (i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the effectiveness of the amendment to the Restated Certificate implementing a reverse stock split.

Upon such redemption, the holder of the Series B Preferred Stock will receive consideration of $ 25,000 in cash.

On September 13, 2023, the Company filed a certificate of cancellation (the “Series B Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series B Certificate of Designation, and thereby eliminating all Series B Preferred Stock.

Series C Convertible Preferred Stock

On June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, 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 $ 0.717 which represents the lower of (i) the closing price per share of the Common Stock as reported on the Nasdaq on June 20, 2023, and (ii) the average closing price per share of Common Stock as reported on the Nasdaq for the five trading days preceding June 21, 2023.

The shares of Series C Preferred Stock were issued in consideration for the cancellation of certain promissory notes issued by the Company to the Sundry Investors dated December 30, 2022 (the “Sundry Loan Documents”).

to Certificate of Incorporation

August 21, 2023, the Board of Directors approved a one-for-25 reverse stock split of its issued and outstanding shares of common stock

and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock

split became effective as of August 22, 2023.

Accordingly, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock

split and adjustment of the preferred stock conversion ratios.

December 11, 2024, the Board of Directors approved a one-for-50 reverse stock split of its issued and outstanding shares of common stock

and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock.

The reverse stock

split became effective as of December 11, 2024.

Accordingly, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock

split and adjustment of the preferred stock conversion ratios.

Company had 1,000,000,000 shares of common stock authorized with a par value of $ 0.0001 as of December 31, 2024.

stockholders have voting rights of one vote per share.

The voting, dividend, and liquidation rights of the holders of common stock are

subject to and qualified by the rights, powers, and preferences of preferred stockholders.

May 3, 2024, the Company entered into that certain inducement offer to exercise common stock purchase warrants with the Investor

(the “Inducement Agreement”), pursuant to which (i) the Company agreed to lower the exercise price of the Existing

Warrants to $ 156.50 per share and (ii) the Investor agreed to exercise the Existing Warrants into 20,555 shares of common stock (the

“Exercise Shares”) by payment of the aggregate exercise price of $ 3,216,857 .

The closing occurred on May 7, 2024.

Company has issued all of the 20,555 shares of common stock underlying the Existing Warrants.

The Company received the entire gross

proceeds of $ 3,216,857 in May 2024, which represents the exercise of the entire 20,555 warrants at the $ 156.50 exercise price.

Company received net proceeds of $ 2,877,475 after placement agent fees and expenses.

In addition, pursuant to the Inducement

Agreement, the Company issued to the Investor a Series A-1 common share purchase warrant to purchase up to 20,555 shares of Common

Stock (“Series A-1 Warrant”) and Series B-1 common share purchase warrant to purchase up to 20,555 shares of Common

Stock (“Series B-1 Warrant”, and collectively with the Series A-1 Warrant, the “Warrants”) on May 7, 2024,

each at an initial exercise price equal to $ 144 per share of Common Stock.

The Series A-1 Warrant are exercisable immediately upon

issuance and expires five and one-half ( 5.5 ) years following the issuance date and the Series B-1 Warrant are exercisable

immediately upon issuance and expires fifteen ( 15 ) months following the issuance date.

In connection with the Inducement Agreement,

we entered into an engagement agreement with H.C.

Wainwright & Co., LLC (“Wainwright”), pursuant to which we have,

among other things, issued to Wainwright’s designees warrants to purchase up to 1,541 shares of Common Stock (the

“Wainwright Warrants”).

The terms of the Wainwright Warrants are substantially the same as the terms of the Series A-1

Warrant except that they have an exercise price of $ 195.63 per share.

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 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

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.

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 $ 2,546,213 from the Offering (the “Public Offering Proceeds”).

the year ended December 31, 2024, the Company issued an aggregate of 806,754 shares of common stock pursuant to the offerings detailed

above for net proceeds of $ 9,374,441 .

the year ended December 31, 2024, the Company issued an aggregate of 2,582 shares of common stock pursuant to services and conversion

of accounts payable totaling a fair value of $ 312,634 .

the year ended December 31, 2024, 3,442 shares of Series C Convertible Preferred Stock converted into 3,840 shares of common stock.

the year ended December 31, 2024, the Company issued an aggregate of 1,000

shares of common stock pursuant to conversion of accrued interest of a loan totaling a fair value of $ 4,950 .

May 2024, the Company converted the outstanding principal and accrued interest of $ 313,817 owed to Gynger for 2,120 shares of common

A Convertible Preferred Stock

September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 shares out of the authorized but unissued

shares of its preferred stock as Series A Convertible Preferred Stock

for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of

the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares

of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid

on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

No other dividends shall be paid

on shares of the Series A Preferred Stock.

respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast

that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible.

Series A Preferred Stock shall rank (i) senior to all of the Common Stock;

(ii) senior to any class or series of capital stock of the

Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”);

parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred

Stock (“Parity Securities”);

and (iv) junior to any class or series of capital stock of the Company hereafter created specifically

ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions

of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the

option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the

Series A Preferred Stock ($ 1,000 as of September 29, 2022) by the Conversion Price.

The conversion price for each share of the Series

A Preferred Stock is the closing price of the Common Stock on September 29, 2022, which was $ 9.30 .

of December 31, 2024 and December 31, 2023, there were 6,300 shares of Series A Convertible Preferred Stock issued and outstanding.

C Convertible Preferred Stock

June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and

Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, 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.

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 $ 0.717 which represents the lower of (i) the closing price per share of the Common Stock as reported on the

Nasdaq on June 20, 2023, and (ii) the average closing price per share of Common Stock as reported on the Nasdaq for the five trading

days preceding June 21, 2023.

The shares of Series C Preferred Stock were issued in consideration for the cancellation of certain

promissory notes issued by the Company to the Sundry Investors dated December 30, 2022 (the “Sundry Loan Documents”).

The following is a summary of the rights and preferences of the Series C Convertible Preferred Stock

On June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up to 5,761 shares out of the authorized but unissued shares of its preferred stock as Series C Convertible Preferred Stock.

The following is a summary of the principal terms of the Series C Preferred Stock.

Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

No other dividends shall be paid on shares of the Series C Preferred Stock.

The Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation.

The Series C Holders are also entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders are permitted to vote with the class of shares of Common Stock.

With respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated.

The Series C Preferred Stock shall rank (i) senior to all of the Common Stock;

June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up

to 5,761 shares out of the authorized but unissued shares of its preferred stock as Series C Convertible Preferred Stock.

The following

is a summary of the principal terms of the Series C Preferred Stock.

for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of

the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends

on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually

paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

No other dividends shall be

paid on shares of the Series C Preferred Stock.

Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation.

The Series C Holders are also

entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders

are permitted to vote with the class of shares of Common Stock.

respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast

that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the

ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company

eligible to vote on such matters as the date as of which the conversion price is calculated.

Series C Preferred Stock shall rank (i) senior to all of the Common Stock;

(ii) senior to Junior Securities;

(iii) on parity with Parity Securities;

and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

Subject to any superior liquidation rights of the holders of any Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the

Company the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock.

Each share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series C Preferred Stock ($ 1,000 as of June 21, 2023) by the Conversion Price.

The conversion price for each share of the Series C Preferred Stock is $ 0.717 , which is the lower of (a) the closing price per share of the Common Stock as reported on the NasdaqCM on June 20, 2023 (the trading day before the date of the Sundry SPA), and (b) the average closing price per share of Common Stock as reported on the NasdaqCM for the five trading days preceding the date of the Sundry SPA, subject to adjustment herein (the “Series C Conversion Price”).

The Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 % of the then Stated Value any time after June 21, 2023 and so long as there is an effective Registration Statement covering the shares issuable upon conversion of the Series C Preferred Stock.

In October 2023, 975 shares of Series C Convertible Preferred Stock converted into 54,394 shares of common stock.

2022 Underwriting Agreements and Public Offerings

On May 5, 2022, the Company entered into an underwriting agreement (the “Alexander Underwriting Agreement”) with Alexander Capital, L.P., acting as representative of the several underwriters named in the Alexander Underwriting Agreement (the “ Alexander Underwriters”), relating to the Company’s underwritten the offering pursuant to which the Company agreed to issue and sell 373,898 shares of the Company’s common stock.

The shares were sold to the public at a combined public offering price of $ 25 per share and were purchased by the Underwriters from the Company at a price of $ 23 per share.

The Company also granted the Alexander Underwriters a 45-day option to purchase up to an additional 56,085 shares of Common Stock at the same price, which expired and were not purchased.

The shares were sold in the Offering pursuant to a Registration Statement on Form S-1, as amended (File No.

333-264347) (the “Registration Statement”), a Registration Statement on Form S-1 pursuant to 462(b) of the Securities Act of 1933, as amended (File No.

333-264775), and a related prospectus filed with the Securities and Exchange Commission.

The public offering closed on May 10, 2022 and the Company sold 373,898 shares of common stock for total gross proceeds of $ 9.3 million.

The Company received net proceeds of $ 8.1 million after deducting underwriters’ discounts and commissions of $ 0.7 million and direct offering expenses of $ 0.5 million.

On November 29, 2022, the Company, entered into a Securities Purchase Agreement with investors pursuant to which the Company agreed to issue and sell, in an offering (i) an aggregate of 168,000 shares (the “Shares”) of the Company’s common stock, and accompanying Class B Warrants (the “Class B Warrants”) to purchase 168,000 shares of common stock and accompanying Class C Warrants (the “Class C Warrants”) to purchase 168,000 shares of Common Stock, at a combined public offering price of $ 5.50 per share and Class B Warrant and Class C Warrant, and (ii) 1,650,181 pre-funded warrants (the “Pre-Funded Warrants” and together with the Class B Warrants and the Class C Warrants, the “Warrants” and together with the Shares and the shares of common stock underlying the Warrants, the “Securities”) exercisable for 1,650,181 shares of Common Stock, and accompanying Class B Warrants to purchase 1,650,181 shares of Common Stock and Class C Warrants to purchase 1,650,181 shares of Common Stock, at a combined public offering price of $ 5.50 , less the exercise price of $ 0.0001 , per Pre-Funded Warrant and accompanying Class B Warrant and Class C Warrant, to the Investors, for aggregate gross proceeds from the offering of approximately $ 10 million before deducting placement agent fees and related offering expenses.

As a result of the transaction, the Company issued 1,818,181 shares of common stock, including the 168,000 shares and the immediate exercise of 1,650,181 pre-funded warrants, for gross proceeds of $ 10.0 million.

The Company received net proceeds of $ 9.0 million after deducting placement agent fees and offering expenses.

(iii) on parity with Parity

and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution

or winding up of the Company, whether voluntarily or involuntarily.

Subject to any superior liquidation rights of the holders of any

Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder

shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference

to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and

pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate

of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends

thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company

the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such

purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock.

share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option

of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series

C Preferred Stock ($ 1,000 as of June 21, 2023) by the Conversion Price.

The conversion price for each share of the Series C Preferred

Stock is $ 0.717 , which is the lower of (a) the closing price per share of the Common Stock as reported on the Nasdaq on June 20, 2023

(the trading day before the date of the Sundry SPA), and (b) the average closing price per share of Common Stock as reported on the Nasdaq

for the five trading days preceding the date of the Sundry SPA, subject to adjustment herein (the “Series C Conversion Price”).

Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 % of the then Stated Value any time

after June 21, 2023 and so long as there is an effective Registration Statement covering the shares issuable upon conversion of the Series

C Preferred Stock.

October 2023, 975 shares of Series C Convertible Preferred Stock converted into 1,088 shares of common stock.

the year ended December 31, 2024, 3,442 shares of Series C Convertible Preferred Stock converted into 3,840 shares of common stock.

of December 31, 2024 and December 31, 2023, there were 1,344 and 4,786 shares of Series C Convertible Preferred Stock issued and outstanding.

RELATED PARTY TRANSACTIONS

As of December 31, 2023 and 2022, the Company made net repayments for amounts due to related parties totaling $130,205 and $ 170,000 , respectively.

As of December 31, 2023 and December 31, 2022, amounts due to related parties were $ 400,012 and $ 556,217 , respectively.

The advances are unsecured, non-interest bearing and due on demand.

Amounts due to related parties consist of current and former executives, and a board member.

As of December 31, 2023 and 2022, due to related parties includes advances from the former officer, Mark Lynn, who also serves as a director, totaling $ 104,568 and $ 104,568 respectively, and accrued salary and expense reimbursements of $ 87,222 and $ 100,649 , respectively, to current officers.

In October 2022, the Company received advances from a director, Trevor Pettennude, totaling $ 325,000 .

The advances are unsecured, non-interest bearing and due on demand.

As of December 31, 2023 and 2022, the amounts $ 175,000 and $ 325,000 were outstanding.

As of December 31, 2023, due to related parties includes advances from the Chief Executive Officer of $ 33,222 .

of December 31, 2024 and 2023, the Company made net repayments for amounts due to related parties totaling $ 11,909 and $ 130,205 ,

respectively.

As of December 31, 2024 and 2023, amounts due to related parties were $ 411,921 and $ 400,012 , respectively.

advances are unsecured, non-interest bearing and due on demand.

Amounts due to related parties consist of current and former

executives, and a board member.

of December 31, 2024 and 2023, due to related parties includes advances from the former officer, Mark Lynn, who also serves as a director,

totaling $ 104,568 and $ 104,568 , respectively, and accrued salary and expense reimbursements of $ 87,221 and $ 87,221 , respectively, to

current officers.

October 2022, the Company received advances from a director, Trevor Pettennude, totaling $ 325,000 .

The advances are unsecured, non-interest

bearing and due on demand.

As of December 31, 2024 and 2023, the amounts $ 190,000 and $ 175,000 , respectively, were outstanding.

SHARE-BASED PAYMENTS

Common Stock Warrants

2023 Transactions

In connection with the January Private Placement, the Company granted 32,085 pre-funded warrants which were immediately exercised for shares of common stock.

The Company also granted an additional 51,085 warrants as part of the offering.

Each warrant has an exercise price of $ 9.43 per share, is immediately exercisable upon issuance and expires five years after issuance.

The Company also granted the placement agent 3,831 warrants to purchase common stock at an exercise price of $ 122.35 per share, which is immediately exercisable upon issuance and expires five years after issuance.

In connection with merchant advances (Note 6), the Company granted 6,095 warrants to purchase common stock at an exercise price of $ 131.25 .

The warrants are immediately exercisable upon issuance and expire five years after issuance.

In connection with the August Private Placement, the Company granted 481,875 pre-funded warrants, which had not yet been exercised for shares of common stock as of September 30, 2023.

These warrants are expected to be fully sold and exercised into shares in the fourth quarter of 2023.

The Company also granted an additional 1,027,750 warrants as part of the offering.

Each warrant has an exercise price of $ 9.43 per share, is immediately exercisable upon issuance and expires 5.5 years after issuance.

The Company also granted the placement agent 38,541 warrants to purchase common stock at an exercise price of $ 12.16 per share, which is immediately exercisable upon issuance and expires 5.5 years after issuance.

Immediately following the Warrant Amendment, the Company exercised warrants for 123,814 shares of common stock for proceeds of $ 1,167,566 .

2022 Transactions

In connection with the April note agreement, the Company granted warrants to acquire 12,577 shares of common stock at an exercise price of $ 122.00 per share expiring in April 2027.

On May 10, 2022, pursuant to the Underwriting Agreement, the Company issued the Underwriters’ Warrants to purchase up to an aggregate of 14,956 shares of common stock.

The Underwriters’ Warrants may be exercised beginning on November 1, 2022 until May 5, 2027.

The initial exercise price of each Underwriters’ Warrant is $ 32.50 per share, which represents 130 % of the public offering price.

The warrants expire in July 2027.

In connection with the November public offering, the Company granted 1,650,181 pre-funded warrants which were immediately exercised for shares of common stock.

The Company also granted an additional 1,818,181 Class B Warrants and 1,818,181 Class C Warrants as part of the offering.

Each Class B Warrant has an exercise price of $ 5.25 per share, is immediately exercisable upon issuance and expires five years after issuance.

Each Class C Warrant has an exercise price of $ 5.25 per share, is immediately exercisable upon

issuance and expires thirteen months after issuance.

The Company also granted the placement agent 136,364 warrants to purchase common stock at an exercise price of $ 6.88 per share, which are exercisable 180 days after issuance and expire in five years .

In connection with the December Notes, the Company issued to the investors an aggregate of 469,480 warrants to purchase common stock at an exercise price equal to $ 4.26 for a fair value of $ 164,200 .

The warrants are immediately exercisable.

The Company granted 44,000 warrants to purchase common stock at an exercise price of $ 5.00 to the lender in connection with its merchant advances.

A summary of information related to common stock warrants for the years ended December 31, 2023 and 2022 is as follows:

Exercise Price

Outstanding - December 31, 2022

Outstanding - December 31, 2023

Exercisable at December 31, 2022

Exercisable at December 31, 2023

Stock Options

2020 Incentive Stock Plan

The Company has adopted a 2020 Omnibus Incentive Stock Plan (the “2020 Plan”).

An aggregate of 1,320 shares of the Company’s common stock is reserved for issuance and available for awards under the 2020 Plan, including incentive stock options granted under the 2020 Plan.

The 2020 Plan administrator may grant awards to any employee, director, consultant or other person providing services to us or our affiliates.

During 2021, 1,093 options were granted to executives and directors at an exercise price from $ 385 to $ 415 per share.

As of December 31, 2022, 227 options were available for future issuance.

2013 Incentive Stock Plan

The Company has adopted the 2013 Stock Plan, as amended and restated (the “Plan”), which provides for the grant of shares of stock options, stock appreciation rights, and stock awards (performance shares) to employees, non-employee directors, and non-employee consultants.

The number of shares authorized by the Plan was 11,964 shares as December 31, 2023 and 2022.

The option exercise price generally may not be less than the underlying stock’s fair market value at the date of the grant and generally have a term often years.

The amounts granted each calendar year to an employee or non-employee is limited depending on the type of award.

Stock options comprise all of the awards granted since the Plan’s inception.

Shares available for grant under the Plan amounted to 333 and as of December 31, 2023.

Vesting generally occurs over a period of immediately to four years .

A summary of information related to stock options under our 2013 and 2020 Stock Plan for the years ended December 31, 2023 and 2022 is as follows:

Stock Warrants

summary of information related to common stock warrants for the years ended December 31, 2024 and 2023 is as follows:

SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS

Exercise Price

3 unchanged sentences

Exercisable at December 31, 2024

Weighted average duration (years) to expiration of outstanding options at December 31, 2023

Stock-based compensation expense of $ 408,810 and $ 479,038 was recognized during the year ended December 31, 2023 and 2022, respectively.

During the year ended December 31, 2023 and 2022, $ 351,214 and $ 421,442 was recorded to general and administrative expenses, and $ 57,596 and $ 57,596 was recorded to sales and marketing expense in the consolidated statements of operations, all respectively.

Total unrecognized compensation cost related to non-vested stock option awards as of December 31, 2023 amounted to $ 169,190 and will be recognized over a weighted average period of 0.46 years.

of December 31, 2024 and December 31, 2023, the Company had 31 stock options outstanding with a weighted average exercise price of $ 452,500

compensation expense of $ 169,614 and $ 408,810 was recognized for the year ended December 31, 2024 and 2023.

LEASE OBLIGATIONS

Rent is classified by function on the consolidated statements of operations either as general and administrative, sales and marketing, or cost of revenue.

The Company determines whether an arrangement is or contains a lease at inception by evaluating potential lease agreements including services and operating agreements to determine whether an identified asset exists that the Company controls over the term of the arrangement.

is classified by function on the consolidated statements of operations either as general and administrative, sales and marketing, or

cost of revenue.

Company determines whether an arrangement is or contains a lease at inception by evaluating potential lease agreements including services

and operating agreements to determine whether an identified asset exists that the Company controls over the term of the arrangement.

Lease commencement is determined to be when the lessor provides access to, and the right to control, the identified asset.

The rental payments for the Company’s leases are typically structured as either fixed or variable payments.

Fixed rent payments include stated minimum rent and stated minimum rent with stated increases.

The Company considers lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from the calculation of lease liabilities.

Management uses judgment in determining lease classification, including determination of the economic life and the fair market value of the identified asset.

The fair market value of the identified asset is generally estimated based on comparable market data provided by third-party sources.

In January 2023, the Company entered into a lease agreement extension for its corporate office and distribution center in Vernon, California that expires on January 31, 2025.

The lease has monthly base rent payments of $ 12,000 .

The Company recognized a right of use asset of $ 31,597 and lease liability of $ 170,002 using a discount rate of 10.0 %.

In September 2023, the Company entered into a lease agreement extension for a showroom space in Los Angeles, California that commences in March 2023 and expires in September 2024.

The lease has a monthly base rent of $ 25,000 .

The Company recognized a right of use asset of $ 658,091 and lease liability of $ 1,040,812 using a discount rate of 10.0 %.

The following is a summary of operating lease assets and liabilities:

Operating leases

ROU operating lease assets

Current portion of operating lease

Total operating lease liabilities

Operating leases

Weighted average remaining lease term (years)

Weighted average discount rate

Future minimum payments - 2024

Less imputed interest

Total lease obligations

company currently maintains two leased properties under month-to-month agreements, which are classified as short-term leases in accordance

with ASC 842.

The first property, located in Vernon, California, serves as the Corporate Warehouse and Distribution Center, encompassing

approximately 42,000 square feet with a monthly base rent of $ 12,000 .

The second property, situated in Los Angeles, California, functions

as a Showroom, covering approximately 2,000 square feet with a monthly base rent of $ 25,000 .

CONTINGENCIES

● On March 21, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 43,501 .

Such amounts include interest due, and are included in accounts payable, net of payments made to date, in the accompanying consolidated balance sheets.

The Company does not believe it is probable that the losses in excess of such trade payables will be incurred.

● On February 7, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 182,400 .

Such amounts include interest due, and are included in accounts payable, net of payments made to date, in the accompanying consolidated balance sheets.

The Company does not believe it is probable that the losses in excess of such trade payables will be incurred.

● On November 9, 2022, a vendor filed a lawsuit against Digital Brand’s Group related to prior services rendered.

The claims (including fines, fees, and legal expenses) total an aggregate of $ 50,190 .

The matter was settled in January 2023 and are on payment plans which will be paid off in the second quarter of 2024.

● In August 2020 and March 2021, two lawsuits were filed against Bailey’s by third-party’s related to prior services rendered.

The claims (including fines, fees, and legal expenses) total an aggregate of $ 96,900 .

Both matters were settled in February 2022 and are on payment plans which will be paid off in the second quarter of 2024.

● On December 21, 2020, a Company investor filed a lawsuit against DBG for reimbursement of their investment totaling $ 100,000 .

Claimed amounts are included in short-term convertible note payable in the accompanying consolidated balance sheets and the Company does not believe it is probable that losses in excess of such short-term note payable will be incurred.

The Company is actively working to resolve this matter.

● On November 16, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 345,384 , which represents past due fees and late fees.

Such amounts are included in the accompanying balance sheets.

The Company does not believe it is probable that the losses in excess of such pay trade payables will be incurred.

● On November 15, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 582,208 , which represents “double damages.

The amount due to the vendor is $ 292,604 .

Such amounts are included in the

accompanying balance sheets.

The Company does not believe it is probable that the losses in excess of such pay trade payables will be incurred.

● On December 21, 2023, a former employee from over two years ago filed a wrongful termination lawsuit against the Company.

On March 21, 2023, a vendor filed a lawsuit against Digital

Brands Group related to trade payables totaling approximately $ 43,501 .

Such amounts include interest due, and are included in accounts

payable, net of payments made to date, in the accompanying consolidated balance sheets.

The Company does not believe it is probable that

the losses in excess of such trade payables will be incurred.

On November 16, 2023 a vendor filed a lawsuit against Digital

Brands Group related to trade payables totaling approximately $ 345,384 , which represents past due fees and late fees.

Such amounts are

included in the accompanying balance sheets.

The Company does not believe it is probable that the losses in excess of such pay trade

payables will be incurred.

December 21, 2023, a former employee from over two years ago filed a wrongful termination

lawsuit against the Company.

The Company is disputing this claim and has been awarded arbitration

for this matter.

March 20, 2024, a former employee from over two years ago filed a wrongful termination lawsuit

against the Company.

The Company is disputing this claim.

To this point, this same law firm recently sent a demand letter for another wrongful termination of a temporary worker we used from a third party placement agency.

This person was not a Company employee at any time.

● A vendor filed a lawsuit against Bailey 44 related to a retail store lease in the amount of $ 1.5 million.

This person was not a Company employee

at any time and was temporary worker we used from a third party placement agency.

April 17, 2024, a former employee filed a wrongful termination lawsuit against the Company.

The Company is disputing this claim and has been awarded arbitration for this matter.

This employee was part of the marketing team.

The marketing team was let go and the Company

moved to a third-party outsourced marketing solution.

A vendor filed a lawsuit against Bailey 44 related to a retail

store lease in the amount of $ 1.5 million.

The Company is disputing the claim for damages and the matter is ongoing.

The vendor has recently updated the claim to now be $ 450,968 after signing a long-term lease with another brand for this location.

The Company is disputing this new amount after review of the lease.

All claims above, to the extent management believes it will be liable, have been included in accounts payable and accrued expenses and other liabilities in the accompanying consolidated balance sheet as of December 31, 2023.

Depending on the nature of the proceeding, claim, or investigation, we may be subject to monetary damage awards, fines, penalties, or injunctive orders.

Furthermore, the outcome of these matters could materially adversely affect our business, results of operations, and financial condition.

The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters.

While it is not possible to determine the outcomes, we believe based on our current knowledge that the resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on our business, results of operations, cash flows, or financial condition.

Except as may be set forth above the Company is not a party to any legal proceedings, and the Company is not aware of any claims or actions pending or threatened against us.

In the future, the Company might from time to time become involved in litigation relating to claims arising from its ordinary course of business, the resolution of which the Company does not anticipate would have a material adverse impact on our financial position, results of operations or cash flows.

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.

The differences relate primarily to depreciable assets using accelerated depreciation methods for income tax purposes, share-based compensation expense, and for net operating loss carryforwards.

As of December 31, 2023, and 2022, the Company had net deferred tax assets before valuation allowance of $ 17,882,355 and $ 16,733,585 , respectively.

The following table presents the deferred tax assets and liabilities by source:

The vendor has recently

updated the claim to now be $ 450,968 after signing a long-term lease with another brand for this location.

The Company is disputing this

new amount after review of the lease.

On November 15, 2023, a vendor filed a lawsuit against Digital

Brands Group related to trade payables totaling approximately $ 582,208 , which represents “double damages.” The amount due

to the vendor is $ 292,604 .

Such amounts are included in the accompanying balance sheets.

The Company does not believe it is probable

that losses in excess of such pay trade payables will be incurred.

The matter was settled for $ 400,000 and is currently on a monthly

payment plan.

claims above, to the extent management believes it will be liable, have been included in accounts payable and accrued expenses and other

liabilities in the accompanying consolidated balance sheet as of December 31, 2024.

on the nature of the proceeding, claim, or investigation, we may be subject to monetary damage awards, fines, penalties, or

injunctive orders.

Furthermore, the outcome of these matters could materially adversely affect our business, results of operations,

and financial condition.

The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and

subject to significant judgment to determine the likelihood and amount of loss related to such matters.

While it is not possible to

determine the outcomes, we believe based on our current knowledge that the resolution of all such pending matters will not, either

individually or in the aggregate, have a material adverse effect on our business, results of operations, cash flows, or financial

as may be set forth above the Company is not a party to any legal proceedings, and the Company is not aware of any claims or actions

pending or threatened against us.

In the future, the Company might from time to time become involved in litigation relating to claims

arising from its ordinary course of business, the resolution of which the Company does not anticipate would have a material adverse impact

on our financial position, results of operations or cash flows.

taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.

The differences relate primarily to depreciable assets using accelerated depreciation methods for income tax purposes, indefinite-lived intangibles, and for net operating loss carryforwards.

As of December 31, 2024, and 2023, the Company had net deferred tax assets before

valuation allowance of $ 20,288,246 and $ 17,882,335 , respectively.

The following table presents the deferred tax assets and liabilities

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

3 unchanged sentences

( 1,244,949 )

( 1,840,170 )

Valuation allowance

1 unchanged sentence

( 17,882,335 )

Net deferred tax assets (liabilities)

A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:

Statutory federal rate

State income taxes net of federal income tax benefit

Permanent adjustment

Change in valuation allowance

Effective income tax rate

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due, cumulative losses through December 31, 2023, and no history of generating taxable income.

Therefore, valuation allowances of $ 17,882,355 and $16,733,582 were recorded as of December 31, 2023 and 2022, respectively.

Valuation allowance increased by $ 1,148,773 and $ 3,630,314 during the years ended December 31, 2023 and 2022, respectively.

Deferred tax assets were calculated using the Company’s combined statutory tax rate, which it estimated to be approximately 28.0 %.

The Company has evaluated its valuation allowance assertion which resulted in a full valuation allowance and residual naked credit given the net operating losses generated post 2017 are subject to a 80% limitation.

As a result, the Company recorded a net deferred tax liability of $ 368,034 based on its assessment of the utilization of deferred tax assets surrounding the Company’s indefinite lived intangible assets.

The effective rate is reduced to ( 4.4 %) and 0 % for 2023 and 2022 due to the full valuation allowance on its net deferred tax assets.

The Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income.

At December 31, 2023 and 2022, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $ 69,242,000 and $ 59,865,000 , for which losses from 2018 forward can be carried forward indefinitely.

As a result of prior operating losses, the Company has net operating loss, or “NOL,” carryforwards for federal income tax purposes.

The ability to utilize NOL carryforwards to reduce taxable income in future years could become subject to significant limitations under Section 382 of the Internal Revenue Code if the Company undergoes an ownership change.

The Company would undergo an ownership change if, among other things, the stockholders who own, directly or indirectly, 5 % or more of our common stock, or are otherwise treated as “5% shareholders” under Section 382 of the U.S.

Internal Revenue Code and the regulations promulgated thereunder, increase their aggregate percentage ownership of the Company’s stock by more than 50 percentage points over the lowest percentage of the stock owned by these stockholders at any time during the testing period, which is generally the three-year period preceding the potential ownership change.

The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions.

The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.

The Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from 2018 on remain open to examination.

Net deferred tax assets

$ ( 248,990 )

$ ( 368,014 )

Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.

making such a determination, the Company considers all available positive and negative evidence, including future reversals of

existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation

allowance is required due, cumulative losses through December 31, 2024, and no history of generating taxable income.

valuation allowances of $ 20,883,467 and $ 17,882,335 were recorded as of December 31, 2024 and 2023, respectively.

allowance increased by $ 3,001,132 and $ 2,620,909 during the years ended December 31, 2024 and 2023, respectively.

assets were calculated using the Company’s combined effective tax rate, which it estimated to be approximately 28.0 %.

effective rate is reduced to 0 % for 2024 and 2023 due to the full valuation allowance on its net deferred tax assets.

has permanent differences, consisting of non- deductible impairments of goodwill and intangible assets of $ 1.4 million and

amortization of non-cash debt issuance costs of $ 2.4 million.

Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income.

At December 31, 2024 and 2023, the Company had net operating loss carryforwards available to offset future taxable income in the amounts

of approximately $ 78,274,991 and $ 69,241,882 , for which losses from 2018 forward can be carried forward indefinitely.

a result of prior operating losses, the Company has net operating loss, or “NOL,” carryforwards for federal income tax purposes.

The ability to utilize NOL carryforwards to reduce taxable income in future years could become subject to significant limitations under

Section 382 of the Internal Revenue Code if the Company undergoes an ownership change.

The Company would undergo an ownership change

if, among other things, the stockholders who own, directly or indirectly, 5 % or more of our common stock, or are otherwise treated as

“5% shareholders” under Section 382 of the U.S.

Internal Revenue Code and the regulations promulgated thereunder, increase

their aggregate percentage ownership of the Company’s stock by more than 50 percentage points over the lowest percentage of the

stock owned by these stockholders at any time during the testing period, which is generally the three-year period preceding the potential

ownership change.

Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions.

The Company will

recognize interest and penalties related to any uncertain tax positions through its income tax expense.

Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from 2020 on remain open to

SUBSEQUENT EVENTS

Through the issuance date, the Company has issued 481,172 shares of common stock pursuant to an At-The-Market Offering Agreement for an at-the-market offering (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC, as sales agent (“Wainwright”).

Through the issuance date, the Company converted shares of Series C Preferred Stock into 50,043 shares of common stock.

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.

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.

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.

Purchase Agreement

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.

Asset Purchase Agreement

1, 2025, the Company entered into an Asset Purchase Agreement (the “Open Daily APA”) with Open Daily Technologies Inc.

Pursuant to the terms of the Open Daily APA, the Company agreed to purchase, and Open Daily agreed to sell certain intellectual

property owned by Open Daily, including, but not limited to, patent applications, trademarks, and software products and platforms (the

“Open Daily Assets”), but not any liability or obligation of Open Daily in connection with the Company’s purchase of

the Open Daily Assets, in exchange for the issuance by the Company of 344,827 shares of the Company’s common stock (the “Open

Daily Acquisition”).

The Open Daily Acquisition closed on April 2, 2025.

Daily APA contains certain covenants, representations, warranties and closing conditions customary for an agreement of this type, including,

but not limited to, non-competition and non-solicitation provisions.

of Pre-Funded Warrants

February 2025, an aggregate of 2,728,750 pre-funded warrants were exercised for shares of common stock.

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 9A. Controls and Procedures