Digital Brands Group, Inc.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
DBGI$0.28-39.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-09.
0001641172-25-003320
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001493152-26-016851
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 137 current paragraphs.
103 unchanged; 18 reworded; 16 added; 18 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Prepaid Marketing Expenses and Liability-Classified Share-Based Awards
Current report
The Company enters into long-term marketing, licensing, manufacturing, and sponsorship arrangements with third-party service providers under which it may issue common stock or equity-linked instruments in exchange for future services, including distribution, licensing access, product specification support, and marketing and promotional activities. These arrangements are accounted for as share-based payments to nonemployees in accordance with ASC 718,Compensation—Stock Compensation.
Current report
Where share-based consideration is determined to be in exchange for distinct goods or services, including those received from a customer, the Company accounts for such transactions as the purchase of services. The Company recognizes a prepaid marketing or service asset measured at the grant-date fair value of the share-based consideration issued, representing the value of services to be received over the contractual term. Such prepaid assets are amortized on a straight-line basis over the period in which the related services are received, which generally corresponds to the contractual service period.
Current report
Certain share-based arrangements include make-whole provisions that require the Company to deliver a fixed monetary value using a variable number of shares, or, in certain cases, cash. These provisions result in liability classification under ASC 718 and ASC 480,Distinguishing Liabilities from Equity, as the Company has an obligation to settle a fixed dollar amount rather than a fixed number of shares.
Current report
Liability-classified share-based awards are initially measured at fair value on the grant date and subsequently remeasured at fair value at each reporting date until settlement. Changes in fair value are recognized in earnings in the period of change. Compensation cost is recognized over the requisite service period, with cumulative adjustments recorded for changes in fair value.
Current report
The Company evaluates features within these arrangements, including make-whole provisions, under ASC 815,Derivatives and Hedging, to determine whether such features should be accounted for separately as derivatives. The Company has concluded that these features qualify for the scope exception applicable to share-based payment arrangements and therefore are not accounted for as freestanding or embedded derivatives. Accordingly, no bifurcation is required.
Current report
The fair value of liability-classified share-based awards is estimated using a Monte Carlo simulation model. This valuation technique incorporates significant assumptions, including the Company’s stock price, expected volatility, risk-free interest rate, expected term, and other market-based inputs. Due to the use of significant unobservable inputs, these measurements are classified within Level 3 of the fair value hierarchy.
Current report
Separately, certain contractual marketing investment commitments represent best-efforts obligations and do not create a present obligation or identifiable asset. Accordingly, such costs are expensed as incurred in accordance with ASC 720,Advertising Costs.
Current report
Inventory
Current report
Inventory 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, 2025 and 2024 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.
Current report
Sales and marketing expenses increased by $11.7 million for the year ended December 31, 2025 to $14.6 million compared to $2.9 million in 2024. The increase in sales and marketing expenses was primarily driven by the amortization of prepaid marketing assets under multi-year marketing and sponsorship agreements entered into during 2025, including collegiate NIL program agreements with AAA Tuscaloosa, Traffic Holdco, The Grove Collective, and Learfield, as well as cash-based marketing agreements with MavDB Consulting, Velora Marketing, i2i Marketing, and Candlelight Ventures.
Current report
Other Income (Expense)
Current report
Other income (expense) was $(1.3) million in the year ended December 31, 2025 as compared to$3.0 million in the year ended December 31, 2024. During the year ended December 31, 2025, the Company recorded a change in the fair value of share based liability of $(1.7) million.
Current report
Net Loss
Current report
The Company requires significant capital to meet its obligations as they become due. Management believes its existing cash resources and planned operations—including revenues expected from its collegiate apparel program, continued cost reduction measures, and the potential release of $5,744,174 in restricted cash currently held pursuant to the Series D offering—will be sufficient to fund operations for at least twelve months from the date of issuance of these financial statements. The Company may also pursue additional equity or debt financings as needed. There can be no assurance as to the availability or terms upon which such financing might be available. The Bailey sellers’ promissory note of $3,500,000 matured on December 8, 2025 and remains in default; management is in active discussions with the lender regarding repayment or extension.
Current report
In 2025, the Company completed an offering consisting of several equity offerings generating aggregate net financing proceeds of approximately $23.8 million, including the February 2025 S-1 offering ($6.6 million net), the Series D Convertible Preferred Stock offering ($11.4 million net), and warrant exercises ($6.3 million).
Removed paragraphs (18)
Previous report
Basis of Presentation and Principles of Consolidation
Previous report
Business Acquisitions
Previous report
We record our acquisitions under the acquisition method of accounting, under which most of the assets acquired and liabilities assumed are initially recorded at their respective fair values and any excess purchase price is reflected as goodwill. We utilize management estimates and, in some instances, independent third-party valuation firms to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration, if any. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance.
Previous report
The fair value of customer relationships, backlog and trade names/trademarks acquired in our acquisitions are determined using various valuation methods, based on a number of significant assumptions.
Previous report
We determine which assets have finite lives and then determine the estimated useful life of finite assets.
Previous report
The expected useful life of customer relationships is established as three years, which is the period over which these assets are expected to reasonably contribute to future cash flows. We expect to amortize such customer relationships using the straight-line method.
Previous report
The estimated fair values are subject to change during the measurement period, which is limited to one year subsequent to the acquisition date.
Previous report
Revenue Recognition
Previous report
Revenues are recognized when performance obligations are satisfied through the transfer of promised goods to our customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. We provide 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. We consider the sale of products as a single performance obligation. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses. Revenue is deferred for orders received for which associated shipments have not occurred.
Previous report
Accounts Receivable and Expected Credit Loss
Previous report
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. We do not accrue interest on the trade receivables. 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. 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 cried exposure related to our customers.
Previous report
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. Recovering 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.
Previous report
Sales and marketing expenses decreased by $1.1 million for the year ended December 31, 2024 to $2.9 million compared to $4 million in 2023. The decrease in sales and marketing expenses was primarily due to decreased spending on advertising and other cost-cutting marketing efforts.
Previous report
Other Expenses
Previous report
Other expenses decreased by $3.2 million to $3.0 million in the year ended December 31, 2024 compared to $6.2 million in the corresponding fiscal period in 2023. The decrease in other expenses in 2023 was primarily due to lower interest expense in 2024 compared to 2023.
Previous report
Net Loss from Continuing Operations
Previous report
As of December 31, 2024, we had cash of $164,431, but we had a working capital deficit of $16.1 million. The Company requires significant capital to meet its obligations as they become due. Throughout the next twelve months, the Company intends to fund its operations primarily from the funds raised through its operations. The Company may pursue secondary equity offerings or debt financings to provide working capital and satisfy debt obligations. 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.
Previous report
In 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.
Reworded paragraphs (18)
Previous wording
Unless otherwise indicated by the context, references to “DBG” refer to Digital Brands Group, Inc. solely, and references to the “Company,” “our,” “we,” “us” and similar terms refer to Digital Brands Group, Inc., together with its wholly-owned subsidiaries Bailey 44, LLC (“Bailey”), MOSBEST, LLC (“Stateside”) and Sunnyside (“Sundry”).
Current wording
Unless otherwise indicated by the context, references to “DBG” refer to Digital Brands Group, Inc. solely, and references to the “Company,” “our,” “we,” “us” and similar terms refer to Digital Brands Group, Inc., together with its wholly-owned subsidiaries Bailey 44, LLC (“Bailey”), MOSBEST, LLC (“Stateside”) and SUNNYSIDE, LLC (“Sundry”).
Previous wording
Digital Brands Group is a curated collection of lifestyle brands, including Bailey 44, DSTLD, Stateside, Sundry and ACE Studios, that offers a variety of apparel products through direct-to-consumer and wholesale distribution. Our complementary brand portfolio provides us with the unique opportunity to cross merchandise our brands. We aim for our customers to wear our brands head to toe and to capture what we call “closet share” by gaining insight into their preferences to create targeted and personalized content specific to their cohort. Operating our brands under one portfolio provides us with the ability to better utilize our technological, human capital and operational capabilities across all brands. As a result, we have been able to realize operational efficiencies and continue to identify additional cost saving opportunities to scale our brands and overall portfolio.
Current wording
Digital Brands Group is a curated collection of lifestyle apparel brands, including Bailey 44, DSTLD, Stateside, and Sundry, that offers a variety of apparel products through direct-to-consumer and wholesale distribution channels. In 2025, the Company launched its collegiate name, image and likeness (NIL) apparel program, entering into multi-year agreements with AAA Tuscaloosa (University of Alabama), Traffic Holdco, The Grove Collective (Ole Miss), and Learfield/Buffalo Sports Properties (University at Buffalo). Our complementary brand portfolio provides us with the unique opportunity to cross merchandise our brands. We aim for our customers to wear our brands head to toe and to capture what we call “closet share” by gaining insight into their preferences to create targeted and personalized content specific to their cohort. Operating our brands under one portfolio provides us with the ability to better utilize our technological, human capital and operational capabilities across all brands. As a result, we have been able to realize operational efficiencies and continue to identify additional cost saving opportunities to scale our brands and overall portfolio.
Previous wording
As of December 31, 2024, we had an aggregate principal amount of debt outstanding of approximately $6.5 million.
Current wording
As of December 31, 2025, we had an aggregate principal amount of debt outstanding of approximately $6.1 million.
Previous wording
Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”).
Current wording
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.
Previous wording
In addition, going forward, the amortization of the identifiable intangibles acquired in the acquisitions will be included in operating expenses.
Current wording
In addition, the amortization of the identifiable intangibles acquired in the acquisitions is included in operating expenses.
Previous wording
Net revenues decreased by $3.4 million to $11.6 million for the year ended December 31, 2024, compared to $14.9 million in the corresponding fiscal period in 2023. The decrease was primarily due to a delay in wholesale shipments, and lower ecommerce revenues across each brand due to less digital advertising spend.
Current wording
Net revenues decreased by $4.2 million to $7.4 million for the year ended December 31, 2025, compared to $11.6 million in the corresponding fiscal period in 2024. The decrease was primarily due to a delay in wholesale shipments, and lower ecommerce revenues across each brand due to less digital advertising spend.
Previous wording
Our gross profit decreased by $2.9 million for the year ended December 31, 2024 to $3.6 million from $6.5 million for the corresponding fiscal period in 2023. The decrease in gross margin was primarily attributable to a decrease in sales.
Current wording
Our gross profit decreased by $2.5 million for the year ended December 31, 2025 to $1.1 million from $3.6 million for the corresponding fiscal period in 2024. The decrease in gross margin was primarily attributable to a decrease in sales.
Previous wording
Our gross margin was 31.5% for the year ended December 31, 2024 compared to 43.9% for year ended December 31, 2023. The decrease in gross margin was due to corresponding decrease in the ecommerce revenue and write down of sundry’s inventory.
Current wording
Our gross margin was 14.3% for the year ended December 31, 2025 compared to 31.5% for year ended December 31, 2024. The decrease in gross margin was due to corresponding decrease in the ecommerce revenue and write down of Sundry’s inventory.
Previous wording
General and administrative expenses decreased by $5.6 million for the year ended December 31, 2024 to $8.7 million compared to $14.3 million in 2023. The decrease in general and administrative expenses was primarily due to lower consulting and professional fees, as well as other cost cutting measures across our company, as all brands achieved operational synergies in 2024. These synergies included the elimination of its warehouse, office, fulfillment and redundancies in headcount.
Current wording
General and administrative expenses increased by $1.0 million for the year ended December 31, 2025 to $9.7 million compared to $8.7 million in 2024. The increase was primarily due to accrued legal contingencies, partially offset by a decrease due to lower consulting and professional fees, as well as other cost cutting measures across our Company, as all brands achieved operational synergies in 2025. These synergies included the elimination of its warehouse, office, fulfillment and redundancies in headcount
Previous wording
General and administrative expenses as a percentage of revenue was 75% in 2024 as compared to 96% in 2023.
Current wording
General and administrative expenses as a percentage of revenue were 131% in 2025 compared to 75% in 2024, reflecting the significant revenue decline relative to the largely fixed cost base.
Previous wording
Sales and marketing expenses as a percentage of revenue was 25% in 2024 as compared to 27% in 2023.
Current wording
Sales and marketing expenses as a percentage of revenue was 198% in 2025 as compared to 25% in 2024.
Previous wording
Other operating expenses included distribution expenses, impairment and change in fair value of contingent consideration. Other operating expenses were $2.3 million in 2024 as compared to gain of $9.7 million in 2023, an increase in expenses of $12 million. In 2024, there was $1.3 million in impairment charges on Bailey’s and Stateside’s intangible assets. In 2023, the Company recorded a $10.7 million increase in the change in fair value of contingent consideration pertaining to the Norwest waiver for Bailey and H&J Settlement.
Current wording
Other operating expenses included distribution expenses, impairment and change in fair value of contingent consideration. Other operating expenses were $6.3 million in 2025 as compared to expenses of $2.3 million in 2024, an increase in expenses of $4.0 million. In 2025, there was $5.7 million in impairment charges on goodwill and intangible assets, comprising $3.2 million of goodwill impairment (Bailey and Stateside), $1.3 million of Stateside brand name impairment, and $1.2 million of OpenDaily technology asset impairment. In 2024, the Company recorded a $3.2 million increase in the change in fair value of contingent consideration pertaining to the Norwest waiver for Bailey and H&J Settlement.
Previous wording
Our net loss from continuing operations increased by $4.5 million to a loss of $13.2 million for the year ended December 31, 2024 compared to a loss of $8.7 million for the corresponding fiscal period in 2023 primarily due to the impairment and lower gross profit.
Current wording
Our net loss increased by $15.2 million to a loss of $28.3 million for the year ended December 31, 2025 compared to a loss of $13.1 million for the corresponding fiscal period in 2024 primarily due to the higher operating expenses and lower gross profit.
Previous wording
The following table presents selected captions from our statement of cash flows for the years ended December 31, 2024 and 2023:
Current wording
The following table presents selected captions from our condensed statement of cash flows for the years ended December 31, 2025 and 2024:
Previous wording
Our cash used in operating activities increased by $0.1 million to $6.1 million for the year ended December 31, 2024 as compared to cash used of $6 million for the corresponding fiscal period in 2023. The increase in net cash used in operating activities was primarily driven by a higher net loss in 2024, partially offset by a increase in non-cash adjustments of $5.4 million and lesser cash provided by changes in our operating assets and liabilities compared to 2023.
Current wording
For the year ended December 31, 2025, net cash used in operating activities was $15.9 million, compared to $6.2 million for the year ended December 31, 2024. The increase in cash used in operating activities was primarily driven by a higher net loss of $28.3 million in 2025 compared to $13.1 million in 2024, partially offset by non-cash adjustments of $6.6 million and favorable changes in operating assets and liabilities of $5.8 million.
Previous wording
Our cash provided by investing activities was $0 in the year ended December 31, 2024 as compared to $0.1 million for the corresponding fiscal period in 2023.
Current wording
Our cash provided by investing activities was $0 in the year ended December 31, 2025 and December 31, 2024.
Previous wording
Cash provided by financing activities was $6.3 million for the year ended December 31, 2024 compared of $4.7 million for the corresponding fiscal period in 2023. Cash inflows in 2024 included $9.4 million in equity proceeds after offering costs including proceeds from the exercise of warrants, $0.8 million from the issuance of notes, loans and merchant advances, partially offset by note, loan and notes payable repayments of $3.9 million. Cash inflows in 2023 were primarily related to $8.1 million in equity proceeds after offering costs, $1.1 million from exercise of warrants, $5.6 million from convertible notes and loans and advances from factor, partially offset by note repayments and related party advances of $10.3 million.
Current wording
Cash provided by financing activities was $23.4 million for the year ended December 31, 2025 compared to $6.3 million for the corresponding fiscal period in 2024. Cash inflows in 2025 included $11.4 million from the issuance of Series D Convertible Preferred Stock, $6.6 million from proceeds for the issuance of pre-funded warrants, $5.8 million from the exercise of warrants, and $0.2 million from the issuance of notes, loans and merchant advances, partially offset by note, loan and notes payable repayments of $0.7 million. Cash inflows in 2024 included $9.4 million in equity proceeds after offering costs including proceeds from the exercise of warrants, $0.8 million from the issuance of notes, loans and merchant advances, partially offset by note, loan and notes payable repayments of $3.9 million.
Previous wording
As of December 31, 2024, we have $6.5 million in outstanding principal on debt, primarily our promissory notes due to the Bailey44 Sellers, the March 2023 Notes, PPP and merchant advances. Aside from our remaining non-current SBA obligations, all outstanding loans have maturity dates through 2025.
Current wording
As of December 31, 2025, we have $6.1 million in outstanding principal on debt, primarily our promissory notes due to the Bailey44 Sellers, the March 2023 Notes, PPP and merchant advances. Aside from our remaining non-current SBA obligations, all outstanding loans have maturity dates through 2025.