Financial Settlement - The company has tentatively agreed to pay $229,000 and issue $1,400,000 worth of common stock to former owners of H&J as part of a proposed settlement[19]. Revenue and Product Strategy - The company aims to increase direct-to-consumer revenue mix, which is expected to enhance margins and allow for lower price points[34]. - The company plans to launch a new product category in women's athleisure for 2024, capitalizing on a high repeat spend market[42]. - The company expects to roll out the ACE Studios brand in Q2 2023 as a digitally native first brand[47]. Brand and Market Positioning - The company operates four brands leveraging three channels: websites, wholesale, and own stores[21]. - The company identifies three ideal acquisition targets: mismanaged legacy brands, capital-constrained strong brands, and struggling wholesale brands transitioning to e-commerce[26]. - The company anticipates that pursuing acquisitions will enhance customer loyalty and increase average order value while reducing customer acquisition costs[27]. Distribution and Logistics - As of December 31, 2022, products are distributed through over 75 major department stores and more than 350 boutique stores[51]. - The company plans to review its distribution strategy in 2023, considering maintaining its own distribution centers versus using third-party solutions[62]. - The company relies on a limited number of suppliers to provide finished products, aiming to aggregate pricing power while planning to source additional factories to spread risks[60]. Marketing and Customer Engagement - The company consolidates marketing and tech contracts to achieve significant cost savings and increase operational efficiencies[29]. - The company utilizes a multi-pronged marketing strategy, with paid social media marketing as the primary customer acquisition channel, focusing on platforms like Facebook and Instagram[70]. - The company plans to develop and launch a company-wide loyalty program to engage and reward customers across all brands[87]. - The company has successfully tested retail "pop ups," resulting in higher average order value and lower customer returns[80]. Product Quality and Employee Information - The company focuses on creating high-quality, well-designed products at competitive prices, aiming to exceed consumer expectations for retention and repurchases[88]. - The company has 58 full-time employees as of December 31, 2022, with no labor-related work stoppages reported[95]. Legal and Compliance - The company’s website and related information are not considered part of the Annual Report on Form 10-K[96]. - All statements in securities filings, including forward-looking statements, are made as of the document date and are not updated unless legally required[96]. - There are no applicable quantitative and qualitative disclosures about market risk[359].

TABLE OF CONTENTS As Filed with Securities and Exchange Commission on February 6, 2023 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 DIGITAL BRANDS GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) Delaware 5699 46-1942864 (I.R.S. Employer Identification Number) 14 ...

UNDER THE SECURITIES ACT OF 1933 DIGITAL BRANDS GROUP, INC. FORM S-1 Table of Contents As Filed with Securities and Exchange Commission on January 30, 2023 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 REGISTRATION STATEMENT (Exact name of registrant as specified in its charter) (Primary Standard Industrial (State or other jurisdiction of incorporation or organization) Classification Code Number) 1400 Lavaca Street Austin, TX 78701 (209) 651-0172 (Address and telephone number of re ...

Financial Data and Key Metrics Changes - The company reported net sales of $3.4 million for Q3 2022, a 58.3% increase from $2.2 million in Q3 2021 [14] - Gross margin decreased to 48.3% from 55.9% year-over-year, impacted by deferred revenue accounting and increased production costs [18][19] - Loss from operations improved to $2.6 million from $7.9 million a year ago, indicating operational leverage [29] - Net loss attributable to common stockholders was $4.9 million, compared to $8.9 million a year ago [30] Business Line Data and Key Metrics Changes - Wholesale orders for Stateside increased over 50% for Q1 2023 compared to Q1 2022, indicating strong brand demand [6][7] - The launch of the Bailey Shop in October has shown strong consumer trends and sales, consolidating all brands into a single e-commerce platform [10][11] Market Data and Key Metrics Changes - The company is experiencing a significant increase in wholesale bookings, which is expected to positively impact cash flow and revenue recognition in Q4 [6][17] - The shift in advertising strategy to focus on the Bailey Shop has resulted in lower customer acquisition costs, with costs dropping to less than $15 per customer [25][26] Company Strategy and Development Direction - The company aims to continue growing its brand portfolio, with plans to add more brands over the next 12 to 18 months [11] - Licensing opportunities are being explored, which could provide high-margin revenue streams with limited associated costs [9] - The company is considering going private due to a significant disconnect between market valuation and operational performance [34][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow positivity in Q1 2023, driven by strong wholesale and e-commerce growth [13][31] - The company is optimistic about the Sundry acquisition and its potential to enhance EBITDA [31] - Management noted that the current market conditions present a unique opportunity for acquisitions, with increased interest from potential targets [45] Other Important Information - General and administrative expenses as a percentage of revenue decreased significantly, indicating improved operational efficiency [22] - The company has successfully reduced its debt, allowing for better working capital management and the ability to factor purchase orders [5][29] Q&A Session Summary Question: Consideration of Going Private - Management acknowledged the discussion around going private due to the disconnect between share price and company performance, indicating high interest in this option [34][36][41] Question: Future Acquisitions - Management confirmed active discussions regarding potential acquisitions, highlighting the influx of interest from companies seeking to be acquired [42][45] Question: Amazon Exposure - Management reported steady growth in Amazon sales and is exploring further opportunities in this channel, including potential private label businesses [47][48] Question: Debt Restructuring with Black Oak Capital - Management explained the conversion of debt to preferred equity with Black Oak Capital, which allows for improved cash flow and operational flexibility [50][52]

Financial Performance - Net revenues increased by $1.2 million to $3.4 million for the three months ended September 30, 2022, compared to $2.2 million in the same period in 2021[147]. - Gross profit rose by $0.5 million to $1.7 million for the three months ended September 30, 2022, with a gross margin of 48.3%, down from 55.9% in the same period in 2021[148][149]. - Operating loss for the three months ended September 30, 2022, was $2.6 million, an improvement from a loss of $7.9 million in the same period in 2021[146]. - Net revenues increased by $7.0 million to $10.6 million for the nine months ended September 30, 2022, compared to $3.6 million in the same period in 2021, primarily due to acquisitions of H&J and Stateside[155]. - Gross profit rose by $3.9 million to $5.3 million for the nine months ended September 30, 2022, compared to $1.4 million in the same period in 2021, with a gross margin of 50.0% compared to 39.1% in 2021[156][157]. - Net loss for the nine months ended September 30, 2022, was $22.3 million, a decrease of $0.4 million compared to a loss of $22.7 million in the same period in 2021[161]. Operating Expenses - Operating expenses decreased by $4.9 million to $4.2 million for the three months ended September 30, 2022, primarily due to a $4.0 million change in fair value of contingent consideration in 2021[151]. - Operating expenses increased by $1.6 million to $24.1 million for the nine months ended September 30, 2022, driven by higher general and administrative and marketing expenses[159]. - The company expects operating expenses to rise in total dollars and as a percentage of revenues as the revenue base increases[151]. Cash Flow and Financing - Cash used in operating activities decreased by $2.6 million to $8.7 million for the nine months ended September 30, 2022, compared to $11.5 million in 2021[167]. - Cash provided by financing activities was $8.4 million for the nine months ended September 30, 2022, down from $16.7 million in the same period in 2021[169]. - As of September 30, 2022, the company had cash of $195,399 and a working capital deficit of $40.7 million, raising doubts about its ability to continue as a going concern[163]. - The company plans to fund its capital needs through public or private equity offerings, debt financings, or other sources over the next twelve months[163]. - The company sold 373,898 shares of common stock at a public offering price of $2.50 per share, generating net proceeds of $8.1 million[164]. - The company has $9.9 million in outstanding principal related to convertible notes maturing through 2023[171]. Strategic Initiatives - The company has strategically expanded into an omnichannel brand offering, blending online and physical channels to enhance customer engagement and retention[128]. - The acquisition of Stateside in August 2021 contributed to increased revenue and gross profit in 2022[147]. - The company aims to increase "closet share," defined as the percentage of a customer's clothing units that belong to its brands, to drive higher revenue[127]. Supply Chain Challenges - Supply chain disruptions have led to increased costs in raw materials, shipping, and labor, with fabric prices rising between 10% to 100% depending on various factors[131][132].

Financial Data and Key Metrics Changes - The company reported a strong top-line result with a 273% year-over-year growth in net sales, reaching $3.7 million compared to $1 million in the same quarter last year [6][17] - Gross profit margin improved to 58.1%, an increase of 450% from 39.3% a year ago, with gross profit increasing by $1.8 million due to improved margins across all brands [6][18] - General and administrative expenses decreased significantly to 133.5% of revenues from 716.7% a year ago, with G&A expenses at $5 million compared to $7.2 million in the prior year [19] - Net loss attributed to common stockholders was $9.5 million or $0.27 per diluted share, an improvement from a net loss of $10.7 million or $1.97 per diluted share a year ago [23] Business Line Data and Key Metrics Changes - The second quarter was noted as the lowest wholesale revenue quarter due to lower demand, with only two months of wholesale shipping included [8][17] - Sales and marketing expenses decreased to 45.6% of revenue from 92% a year ago, reflecting a significant reduction in marketing costs [20] - Distribution expenses also declined to 5.9% of revenue from 7% a year ago, driven by the addition of new brands and consolidation of distribution centers [21] Market Data and Key Metrics Changes - The company is entering its peak wholesale season, with expectations for increased revenue and strong gross margins in the second half of the year [9][14] - The Sundry acquisition is projected to increase revenue by over $20 million and lead to immediate positive EBITDA post-approval [12][24] Company Strategy and Development Direction - The company is focused on expanding its wholesale and direct-to-consumer channels, with a new Head of Wholesale hired to enhance revenue growth [10][14] - The strategy includes consolidating operations to reduce costs, such as sharing one office and distribution center among brands [19][15] - The company aims to move from a negative working capital cycle to a positive one by implementing factoring, which will reduce the need for borrowing [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a clear path to profitability, emphasizing the importance of the Sundry acquisition and the expected revenue growth from wholesale channels [24] - The management highlighted the challenges of a negative working capital cycle but indicated that future changes would alleviate cash flow issues [14][25] Other Important Information - The company filed a proxy for a shareholder meeting to approve the Sundry acquisition and a reverse stock split to comply with NASDAQ listing rules [12][13] - The management noted that there were no inventory write-downs in the quarter, indicating strong brand performance [18] Q&A Session Summary - There were no questions from participants during the Q&A session, and the management reiterated the company's growth trajectory and upcoming acquisitions [26]

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Digital Brands Group, Inc. (NASDAQ:DBGI) Q1 2022 Earnings Conference Call May 16, 2022 5:30 PM ET Company Participants Hil Davis - President and Chief Executive Officer Conference Call Participants Operator Greetings, welcome to Digital Brands Group First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the c ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share DBGI The Nasdaq Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...

Financial Data and Key Metrics Changes - In Q4 2021, net revenues increased by 425% to $4 million compared to $0.8 million in Q4 2020, indicating significant growth across all portfolio brands [11] - Gross profit margin improved to 37.4% from a negative 4.8% year-over-year, with gross profit increasing by $1.5 million due to better margins across all brands [12] - General and administrative expense margin declined from 248% to 124%, reflecting improved cost leverage with higher revenue [13] - The net loss attributable to common shareholders in Q4 2021 was $9.7 million, or a loss of $0.76 per diluted share, compared to a net loss of $2.6 million or $3.97 per share in the previous year [19] - For fiscal 2021, net revenue increased by 44.8% to $7.6 million compared to $5.2 million in 2020, while the net loss attributable to common stockholders was $32.4 million, or $4.21 per diluted share [21] Business Line Data and Key Metrics Changes - The revenue growth in Q4 was driven by the inclusion of newly acquired brands, Stateside and Harper & Jones, which also experienced increased revenue [11] - Sales and marketing expenses rose significantly from $33,000 in Q4 2020 to $1.4 million in Q4 2021, correlating with the increase in revenue and customer acquisition [14] Market Data and Key Metrics Changes - The company is focusing on expanding its presence on Amazon, which is seen as a key channel for customer acquisition, although it takes time to build relevance and reviews on the platform [30][32] Company Strategy and Development Direction - The company plans to leverage both organic and acquisition revenue growth, with a focus on cross-merchandising its brands in 2022 to enhance customer engagement and repeat purchases [8][18] - The marketing strategy involves a three-step process: driving customers into the funnel, converting them into buyers, and encouraging repeat purchases and cross-merchandising [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing revenue growth and operational leverage throughout 2022, citing strong performance in January and February [27] - The company is excited about the momentum gained in 2021 and aims to accelerate growth by effectively utilizing IPO proceeds for marketing and customer acquisition [9][27] Other Important Information - The company added two brands to its portfolio in 2021 and announced a definitive agreement to acquire Sundry, which is expected to further drive revenue growth [7][8] Q&A Session Summary Question: Can you elaborate on customer acquisition, particularly regarding the distilled brand on Amazon? - Management noted that they just started testing on Amazon, which takes about three months to gain traction, and they are working on increasing reviews and driving traffic through marketing efforts [30][32] Question: Can you provide details on the cost basis for the predicted revenue increase? - Management confirmed a fiscal year 2022 revenue guidance of $37.5 million to $42.5 million, indicating no changes to previous forecasts [30]