DBGI

Digital Brands Group, Inc.

NASDAQ · CONSUMER DISCRETIONARY · RETAIL-APPAREL & ACCESSORY STORES

1.13

−0.16 −12.69%

USD · close Oct 23

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MKT CAP $1.1MP/E —DIV YIELD —FCF YIELD —REV TTM $5.8M −33.6%NET INCOME −$44.4MNET DEBT $15.9M52W 1.13 – 711.20SEC XBRL · TTM TO Invalid Date

How DBGI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

83%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

−896

words, now 12,152

New in FY2025

We may not be able to maintain and enhance our existing brand portfolio if we receive customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, operating results and growth prospects. ● An economic downturn or economic uncertainty in the United States may adversely affect consumer discretionary spending and demand for our products. ● We operate in highly competitive markets and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our net revenue. ● Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. ● If we fail to retain existing customers, or fail to maintain average order value levels, we may not be able to maintain our revenue base and margins, which would have a material adverse effect on our business and operating results. ● We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected. ● Merchandise returns could harm our business. ● We rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity. ● Our sales and gross margins may decline as a result of increasing product costs and decreasing selling prices. ● Our operations are currently dependent on a single warehouse and distribution center, and the loss of, or disruption in, the warehouse and distribution center and other factors affecting the distribution of merchandise could have a material adverse effect on our business and operations. ● Our sales and gross margins may decline because of increasing freight costs. ● Increases in labor costs, including wages, could adversely affect our business, financial condition and results of operations. ● Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer. ● Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel. ● If we cannot successfully protect our intellectual property, our business could suffer. ● If the technology-based systems that give our customers the ability to shop with us online do not function effectively, our operating results could be materially adversely affected. ● Organizations face growing regulatory and compliance requirements. ● Our failure to comply with trade and other regulations could lead to investigations or actions by government regulators and negative publicity. ● Our business is affected by seasonality. ● The price of our common stock has in the past and may in the future fluctuate substantially. ● If we are not able to comply with the applicable continued listing requirements or standards of the NasdaqCM, Nasdaq could delist our common stock. ● If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, which could adversely affect the market price of our common stock. ● We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our common stock may be less attractive to investors and may make it more difficult to compare our performance with other public companies. ● Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price. ● Provisions in our articles of incorporation and bylaws and under Nevada law could discourage a takeover that stockholders may consider favorable. ● We may be required to issue additional shares of our common stock further to agreements whereby we acquired Bailey.
Our net loss was approximately $28.3 and $13.1 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, we had an accumulated deficit of $155.35 million.
We have received capital funding to continue the business operations The Company has historically incurred net losses and experienced negative cash flows from operations.
As of December 31, 2025, we had a working capital deficit of $5.45 million.
However, the Company has successfully obtained substantial capital funding, which provides the necessary liquidity to support its ongoing operations and allows it to continue as a going concern.
With this funding, we are positioned to execute our business strategy, invest in growth initiatives, and enhance our financial performance.
While additional funding may be required in the future to support expansion, we are confident in our ability to secure capital on acceptable terms as needed.
While we continue to monitor our financial position and capital needs, our recent funding strengthens our ability to operate effectively, respond to competitive pressures, and achieve long-term profitability.
As of December 31, 2025, we had an aggregate principal amount of debt outstanding of approximately $6.5 million.
As a result of our acquisitions of Sundry, Stateside and Bailey, our goodwill and intangible assets as of December 31, 2025 were $5.8 and $6.1 million, respectively.
During the years ended December 31, 2025, we recorded impairment expense of $4.4 million and $1.4 million pertaining to the goodwill and intangible assets.
From May 2021 to December 31, 2025, the high and low prices of our common stock as quoted on the NasdaqCM was $746,250 and $1.12, respectively (as appropriately adjusted for the 1-for-100 , 1-for-25 and 1-for-50 reverse stock splits effectuated by the Company in November 2022, August 2023 December 2024, respectively).
If we are not able to comply with the applicable continued listing requirements or standards of the NasdaqCM, Nasdaq could delist our common stock.
On January 17, 2023, Digital Brands Group, Inc.
(the “Company”) was notified by the Nasdaq Hearings Panel (the “Panel”) that the Company has evidenced compliance with all applicable requirements for continued listing on The NasdaqCM, including the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b).
The Company remained subject to a “Panel Monitor,” as that term is defined by Nasdaq Listing Rule 5815(d)(4)(A), through January 17, 2024.
There can be no assurance that we will successfully regain our Nasdaq listing.
As our Common Stock and warrants are currently traded on the OTC marketplace, and as of the date of filing these financial statements, the company has not yet returned to NasdaqCM, our stockholders may experience reduced liquidity and increased difficulty in obtaining accurate price quotations.
Additionally, the ability to issue additional securities for financing or other purposes, or to secure necessary funding in the future, may be materially and adversely affected due to the absence of a national securities exchange listing.
As a result of such failures, we could also become subject to investigations by Nasdaq, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, any of which could harm our reputation and financial condition and divert financial and management resources.
Provisions in articles of incorporation and bylaws and under Nevada law could discourage a takeover that stockholders may consider favorable.
Our articles of incorporation and bylaws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they, among other things: ● the Nevada Revised Statutes, or NRS, “acquisition of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling interest in certain Nevada corporations, and these “control share” laws provide generally that any person that acquires a “controlling interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights; and ● require the written request of stockholders holding an aggregate of 25% of shares of our common stock in order for stockholders to call a special meeting, which together with the elimination of stockholder action by written consent described above, makes it very difficult for stockholders to take action during the interim periods between annual meetings of stockholders.
As a Nevada corporation, we are also subject to the “acquisition of controlling interest” statutes contained in Sections 78.378 through 78.3793 of the NRS.
Under Nevada law, an acquiring person who acquires a controlling interest in an “issuing corporation” may not exercise voting rights on any control shares unless such voting rights are conferred by a majority vote of the disinterested stockholders at a special or annual meeting.
Additionally, Nevada’s business combination statutes prohibit an “interested stockholder” from entering into a “combination” with a Nevada corporation for three years after becoming an interested stockholder unless certain conditions are met, including board approval of the transaction.
Our board of directors and disinterested stockholders could rely on these provisions to prevent or delay an acquisition of us.

Gone since FY2024

We may not be able to maintain and enhance our existing brand portfolio if we receive customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, operating results and growth prospects. ● An economic downturn or economic uncertainty in the United States may adversely affect consumer discretionary spending and demand for our products. ● Adverse macroeconomic and geopolitical conditions, including trade policies and tariffs, may have a material adverse effect on the Company’s business, results of operations and financial condition. ● We operate in highly competitive markets and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our net revenue. ● Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. ● If we fail to retain existing customers, or fail to maintain average order value levels, we may not be able to maintain our revenue base and margins, which would have a material adverse effect on our business and operating results. ● We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected. ● Merchandise returns could harm our business. ● We rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity. ● Our sales and gross margins may decline as a result of increasing product costs and decreasing selling prices. ● Our operations are currently dependent on a single warehouse and distribution center, and the loss of, or disruption in, the warehouse and distribution center and other factors affecting the distribution of merchandise could have a material adverse effect on our business and operations. ● Our sales and gross margins may decline because of increasing freight costs. ● Increases in labor costs, including wages, could adversely affect our business, financial condition and results of operations. ● Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer. ● Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel. ● If we cannot successfully protect our intellectual property, our business could suffer. ● If the technology-based systems that give our customers the ability to shop with us online do not function effectively, our operating results could be materially adversely affected. ● Organizations face growing regulatory and compliance requirements. ● Our failure to comply with trade and other regulations could lead to investigations or actions by government regulators and negative publicity. ● Our business is affected by seasonality. ● The price of our common stock has in the past and may in the future fluctuate substantially. ● If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, which could adversely affect the market price of our common stock. ● We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our common stock may be less attractive to investors and may make it more difficult to compare our performance with other public companies. ● Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price. ● Provisions in our sixth amended and restated certificate of incorporation and bylaws and under Delaware law could discourage a takeover that stockholders may consider favorable. ● Our sixth amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders. ● We may be required to issue additional shares of our common stock further to agreements whereby we acquired Bailey.
Our net loss was approximately $13.2 and $10.3 million for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2024, we had an accumulated deficit of $127.2 million.
We have historically incurred net losses and experienced negative cash flows from operations.
The Company has historically incurred net losses and experienced negative cash flows from operations.
As of December 31, 2024, we had a working capital deficit of $16.1 million.
However, the Company has successfully obtained substantial capital funding, which, we believe, provides the necessary liquidity to support our ongoing operations.
With this funding, we believe we are positioned to execute our business strategy, invest in growth initiatives, and enhance our financial performance, although additional funding may be required in the future to support expansion.
We will continue to monitor our financial position and capital needs going forward.
As of December 31, 2024, we had an aggregate principal amount of debt outstanding of approximately $6.5 million.
As a result of our acquisitions of Sundry, Stateside and Bailey, our goodwill and intangible assets as of December 31, 2024 were $9.0 and $6.1 million, respectively.
During the years ended December 31, 2024, we recorded impairment expense of $0.0 million and $1.4 million pertaining to the goodwill and intangible assets.
Adverse macroeconomic and geopolitical conditions, including trade policies and tariffs, may have a material adverse effect on the Company’s business, results of operations and financial condition.
Challenging macroeconomic conditions, including as a result of geopolitical events, changes to international trade policies, public health crises, disruptions in global supply chains, and changes in inflation and interest rates, may negatively impact our costs from our suppliers and consumer demand for our products, as well as sales cycles, and in turn may materially affect the Company’s business, results of operations and financial condition.
Such economic factors and uncertainties are beyond the Company’s control and the Company has no comparative advantage in forecasting their effects.
The U.S. has established free trade laws and regulations that set certain duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.
Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where our supplies may be sourced could have a material adverse effect on our business and financial results.
In recent years, the U.S. and Chinese governments have imposed a series of significant incremental retaliatory tariffs to certain imported products.
Further, the U.S. administration recently has begun to enact additional or enhanced tariffs in various jurisdictions relevant to our business.
Implementation of tariffs or other restrictive trade measures by the United States and potentially reciprocally by other countries subject to such to tariffs remains highly uncertain.
If the actual and potential tariffs and reciprocal tariffs are implemented as currently proposed, our results of operations could be materially negatively impacted, both directly and indirectly through negative effects to our supply chain, as a result of increased costs, decreased demand and other adverse economic impacts, and we may not be able to successfully mitigate or offset such impacts.
Depending upon their implementation and duration, as well as our ability to mitigate their impact, these tariffs and any other future regulatory actions implemented on a broader range of products or raw materials could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, reduced sales and disruption in our supply chain.
Furthermore, additional trade restrictions could be adopted with little to no advance notice, and we may not be able to effectively mitigate the adverse impacts from such measures, which could further increase the cost of our products, disrupt our supply chain and impair our ability to effectively operate and compete in the countries where we do business.
The Company is closely monitoring this evolving situation but there can be no assurance that the Company will be able to mitigate the impacts of any trade measures, which could be material to the Company’s business operations or harm the Company’s competitive position.
From May 2021 to March 31, 2025, the high and low prices of our common stock as quoted on the Nasdaq Capital Market (through December 17, 2024) and the OTC Pink (beginning on December 18, 2024) was $746,250 and $1.03, respectively (as appropriately adjusted for Reverse Stock Splits).
As a result of such failures, we could also become subject to investigations by the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, any of which could harm our reputation and financial condition and divert financial and management resources.
Provisions in our sixth amended and restated certificate of incorporation and bylaws and under Delaware law could discourage a takeover that stockholders may consider favorable.
Our sixth amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they, among other things: ● establish a supermajority voting requirement of at least 66 2∕3% of the outstanding voting stock in order to amend certain provisions in our sixth amended and restated certificate of incorporation, which makes it more difficult for stockholders to eliminate anti- takeover provisions; ● eliminate stockholder-initiated action by written consent in lieu of a meeting, which hampers the ability of stockholders to take action during the interim periods between annual meetings of stockholders; and ● require the written request of stockholders holding an aggregate of 25% of shares of our common stock in order for stockholders to call a special meeting, which together with the elimination of stockholder action by written consent described above, makes it very difficult for stockholders to take action during the interim periods between annual meetings of stockholders.
As a Delaware corporation, we are also subject to the Delaware anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law.
Under Delaware law, a corporation may not engage in a business acquisition with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction.
Our board of directors could rely on this provision to prevent or delay an acquisition of us.
Our sixth amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Our sixth amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: ● any derivative action or proceeding brought on our behalf; ● any action asserting a breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; ● any action asserting a claim against us or our directors, officers or other employees arising under the Delaware General Corporation Law, our sixth amended and restated certificate of incorporation or our bylaws; ● any action or proceeding to interpret, apply, enforce or determine the validity of our sixth amended and restated certificate of incorporation or our bylaws; ● any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; or ● any action asserting a claim against us or our directors, officers or other employees that is governed by the “internal affairs doctrine” as that term is defined in Section 115 of the Delaware General Corporation Law.
Our sixth amended and restated certificate of incorporation further provides that unless the Company consents in writing to the selection of an alternative forum, the U.S. federal district courts have exclusive jurisdiction of the resolution of any complaint asserting a cause of action arising under the Securities Act.
The enforceability of similar exclusive federal forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and while the Delaware Supreme Court has ruled that this type of exclusive federal forum provision is facially valid under Delaware law, there is uncertainty as to whether other courts would enforce such provisions and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to this exclusive forum provision of our sixth amended and restated certificate of incorporation.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
Alternatively, if a court were to find this choice of forum provision in our sixth amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
Additional costs associated with resolving an action in other jurisdictions could materially adversely affect our business, financial condition and results of operations.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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