Financial Performance and Equity - The Company reported stockholders' equity of $19,046, failing to meet the $2,500,000 requirement for Nasdaq listing[23]. - The Company received net proceeds of $2,063,386 from the sale of 105,125 shares of Common Stock between July 1, 2024, and October 22, 2024[25]. - The Offering on October 30, 2024, resulted in gross proceeds of approximately $3,000,000, with net proceeds of approximately $2,555,261 after fees[31]. - The Company reported net proceeds of $278,160 from the sale of 65,236 shares of Common Stock between October 23, 2024, and December 17, 2024[25]. - The Company raised approximately $7,500,000 in gross proceeds from the Offering, before deducting fees and expenses[44]. - The Placement Agent received a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering[44]. - The Company extended the Final Payment due date for settlement agreements with investors to November 4, 2024, totaling $1,789,668.37[24]. - The Company issued a promissory note of $260,000 with an original issue discount of $60,000, maturing on April 22, 2025[36]. - The Company entered into securities purchase agreements to issue 124,673 shares of common stock at $5.00 per share and 482,187 pre-funded warrants at $4.995 each[27]. - The Company issued 26,226 shares in error due to non-compliance with Nasdaq Listing Rule 5635(d), which were subsequently canceled[26]. Business Strategy and Operations - The Company aims to increase its "closet share," defined as the percentage of a customer's clothing units owned from its brands, to drive higher revenue[50]. - The Company plans to actively pursue acquisitions to enhance customer cohorts and deliver customized content[53]. - The Company is transitioning its brands from wholesale to digital direct-to-consumer models to improve margins and customer engagement[47]. - The Company leverages data analytics to create targeted marketing campaigns across its brand portfolio[57]. - The Company has centralized certain administrative functions to improve operational efficiency and reduce costs[58]. - The company plans to increase online revenues significantly by enhancing digital marketing efforts and optimizing website sales opportunities[67]. - The company aims to increase gross margins by ordering larger quantities to reduce upcharges associated with minimum order quantities[67]. - Direct-to-consumer sales are emphasized, allowing the company to eliminate wholesale mark-ups and offer sharper pricing[76]. - The marketing strategy includes paid social media, email marketing, and influencer collaborations to drive customer acquisition and retention[92]. - The company plans to develop and launch a company-wide loyalty program to engage and reward customers across all brands, utilizing reward points for purchases[104]. Product Pricing and Categories - Stateside's T-shirt prices range from $68 to $94, with other tops priced between $98 and $130, and bottoms from $80 to $144[63]. - Sundry's T-shirt prices range from $68 to $98, with other tops priced between $98 and $198, and bottoms from $80 to $228[65]. - DSTLD's denim prices range from $75 to $95, while T-shirts and tops range from $30 to $90, and casual pants from $85 to $109[69]. - Avo launched in late August 2024, with T-shirt prices ranging from $20 to $50 based on bundle size, and discounts of 40% for two units and 60% for three or more[71]. - ACE Studios suits were priced between $295 and $495, with dress shirts ranging from $55 to $65, and casual pants from $85 to $109[73]. - A new product category for 2025 in women's athleisure is planned, targeting a high repeat spend market[75]. Employee Relations and Workforce - As of December 31, 2024, the company had 41 full-time employees and maintains a strong relationship with them, with no labor-related work stoppages reported[112]. - The company emphasizes the importance of a diverse workforce and plans to focus on hiring and retaining underrepresented populations[113]. - The company is committed to the health and wellness of its employees, providing access to various health programs and benefits[114]. - Robust compensation and benefits programs are in place to meet employee needs[115]. Market Competition and Challenges - The company faces significant competition from established brands like Vince, James Perse, and Ralph Lauren, which have greater resources and market recognition[105]. - Quarterly operating results are historically stronger in the second half of the calendar year due to seasonality[106]. - The company is subject to evolving domestic and foreign laws regarding consumer protection, privacy, and data security, which could impose additional compliance burdens[107][108]. Corporate Actions - The Company completed a 2024 Reverse Stock Split at a ratio of 1-for-50, affecting the number of shares but not the authorized shares or voting rights[37]. - The Company entered into a vendor agreement with MavDB Consulting LLC for services valued at $3,000,000, with payment options including cash or shares[34]. - The Company submitted an application to list its common stock on a national securities exchange on February 20, 2025[45].
Digital Brands Group(DBGI) - 2024 Q4 - Annual Report