SEC Info℠ | Home | Search | My Interests | Help | Sign In | Please Sign In | ||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/04/23 Digital Brands Group, Inc. S-1/A 10:4.2M Toppan Merrill/FA |
Document/Exhibit Description Pages Size 1: S-1/A Pre-Effective Amendment to Registration Statement HTML 3.55M (General Form) 2: EX-1.1 Underwriting Agreement or Conflict Minerals Report HTML 87K 3: EX-4.30 Instrument Defining the Rights of Security Holders HTML 77K 4: EX-4.31 Instrument Defining the Rights of Security Holders HTML 86K 5: EX-4.32 Instrument Defining the Rights of Security Holders HTML 96K 6: EX-5.1 Opinion of Counsel re: Legality HTML 23K 7: EX-10.53 Material Contract HTML 179K 8: EX-23.1 Consent of Expert or Counsel HTML 7K 9: EX-23.2 Consent of Expert or Counsel HTML 6K 10: EX-FILING FEES Filing Fees HTML 34K
tm2318654-6_s1a - block - 40.5728923s |
|
Delaware
|
| |
5699
|
| |
46-1942864
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Thomas J. Poletti, Esq.
Veronica Lah, Esq. Manatt, Phelps & Phillips, LLP 695 Town Center Drive, 14th Floor Costa Mesa, CA 92626 Tel: (714) 312-7500 |
| |
Louis A. Bevilacqua, Esq.
Bevilacqua PLLC 1050 Connecticut Avenue, NW, Suite 500 Washington, DC 20036 Tel: (202) 869-0888 |
|
|
☐ Large accelerated filer
|
| |
☐ Accelerated filer
|
| |
☐ Non-accelerated filer
|
| |
☒ Smaller reporting company
|
|
| | | | | | | | | |
☒ Emerging growth company
|
|
| | |
Per Share
|
| |
Per Pre-Funded
Warrant |
| |
Total
|
|
Public offering price
|
| |
|
| |
|
| |
|
|
Placement Agent fees(1)
|
| | | | | | | | | |
Proceeds to us, before expenses(2)
|
| | | | | | | | | |
| | | | | 1 | | | |
| | | | | 6 | | | |
| | | | | 8 | | | |
| | | | | 32 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 35 | | | |
| Capitalization | | | | | 36 | | |
| | | | | 38 | | | |
| | | | | 64 | | | |
| | | | | 78 | | | |
| | | | | 86 | | | |
| | | | | 92 | | | |
| | | | | 94 | | | |
| | | | | 108 | | | |
| | | | | 114 | | | |
| | | | | 115 | | | |
| | | | | F-1 | | |
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted |
| |||||||||
Cash and cash equivalents
|
| | | $ | 1,969,250 | | | | | $ | 1,706,845 | | | | | | | | |
Total assets
|
| | | $ | 33,129,832 | | | | | $ | 30,111,865 | | | | | | | | |
Total current liabilities(1)
|
| | | $ | 40,140,987 | | | | | $ | 21,328,512 | | | | | | | | |
Total liabilities(1)
|
| | | $ | 40,992,853 | | | | | $ | 21,960,484 | | | | | | | | |
Stockholders' equity: | | | | | | | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 1,000,000,000 shares
authorized actual, pro forma and pro forma as adjusted; 5,974,969 shares issued and outstanding actual, 7,927,549 shares issued and outstanding pro forma, and shares issued and outstanding pro forma as adjusted |
| | | | 598 | | | | | | 793 | | | | | | | | |
Series A Convertible Preferred Stock, par value $0.0001; 6,800 shares authorized actual, pro forma and pro forma as adjusted; 6,300 shares issued and outstanding actual, pro forma and pro forma as adjusted,
|
| | | | 1 | | | | | | 1 | | | | | | | | |
Series B Preferred Stock, par value $0.0001; no shares authorized actual; 1 share authorized pro forma and pro forma as adjusted; 0 shares issued and outstanding actual; 1 share issued and outstanding pro forma and pro forma, as adjusted
|
| | | | — | | | | | | — | | | | | | | | |
Series C Convertible Preferred Stock, par value $0.0001; no
shares authorized actual, 5,761 shares authorized pro forma and pro forma as adjusted; 0 shares issued and outstanding actual; 5,761 shares issued and outstanding pro forma and pro forma as adjusted |
| | | | — | | | | | | 6 | | | | | | | | |
Additional paid-in capital
|
| | | | 102,020,045 | | | | | | 109,029,844 | | | | | | | | |
Accumulated deficit
|
| | | | (109,883,665) | | | | | | (100,879,263) | | | | | | | | |
Total stockholders' equity (deficit)
|
| | | | (7,863,021) | | | | | | 8,151,381 | | | | | | | | |
Total capitalization
|
| | | $ | 33,129,832 | | | | | $ | 30,111,865 | | | | | | | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
Net revenues
|
| | | $ | 5,095,234 | | | | | $ | 3,432,410 | | |
Cost of net revenues
|
| | | | 2,656,652 | | | | | | 2,292,191 | | |
Gross profit
|
| | | | 2,438,582 | | | | | | 1,140,219 | | |
General and administrative
|
| | | | 4,636,844 | | | | | | 4,277,955 | | |
Sales and marketing
|
| | | | 1,115,643 | | | | | | 1,040,572 | | |
Other operating expenses
|
| | | | 270,185 | | | | | | 1,403,169 | | |
Operating loss
|
| | | | (3,584,090) | | | | | | (5,581,477) | | |
Other expenses
|
| | | | (2,552,259) | | | | | | (2,251,465) | | |
Loss before provision for income taxes
|
| | | | (6,136,349) | | | | | | (7,832,942) | | |
Provision for income taxes
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (6,136,349) | | | | | $ | (7,832,942) | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (6,136,349) | | | | | $ | (7,832,942) | | |
Non-cash adjustments
|
| | | $ | 3,774,961 | | | | | $ | 3,652,067 | | |
Change in operating assets and liabilities
|
| | | $ | 668,867 | | | | | $ | 3,545,719 | | |
Net cash used in operating activities
|
| | | $ | (1,692,520) | | | | | $ | (635,156) | | |
Net cash provided by (used in) investing activities
|
| | | $ | 87,379 | | | | | $ | (5,576) | | |
Net cash provided by financing activities
|
| | | $ | 2,291,109 | | | | | $ | 678,351 | | |
Net change in cash
|
| | | $ | 685,968 | | | | | $ | 37,619 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | | | |
2021
|
| |||||||
Net revenues
|
| | | $ | 13,971,178 | | | | | $ | 7,584,859 | | |
Cost of net revenues
|
| | | | 8,030,908 | | | | | | 5,716,587 | | |
Gross profit
|
| | | | 5,940,270 | | | | | | 1,868,272 | | |
General and administrative
|
| | | | 16,371,536 | | | | | | 16,752,516 | | |
Sales and marketing
|
| | | | 4,950,635 | | | | | | 3,810,583 | | |
Other operating expenses
|
| | | | 16,715,204 | | | | | | 12,653,831 | | |
Operating loss
|
| | | | (32,097,105) | | | | | | (31,348,658) | | |
Other expenses
|
| | | | (5,946,257) | | | | | | (2,109,419) | | |
Loss before provision for income taxes
|
| | | | (38,043,362) | | | | | | (33,458,077) | | |
Provision for income taxes
|
| | | | — | | | | | | 1,100,120 | | |
Net loss
|
| | | $ | (38,043,362) | | | | | $ | (32,357,957) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | | | |
2021
|
| |||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (38,043,362) | | | | | $ | (32,357,957) | | |
Non-cash adjustments
|
| | | $ | 23,122,024 | | | | | $ | 17,758,597 | | |
Change in operating assets and liabilities
|
| | | $ | 4,350,447 | | | | | $ | 381,001 | | |
Net cash used in operating activities
|
| | | $ | (10,570,889) | | | | | $ | (14,218,359) | | |
Net cash used in investing activities
|
| | | $ | (7,313,384) | | | | | $ | (6,011,053) | | |
Net cash provided by financing activities
|
| | | $ | 18,639,161 | | | | | $ | 20,181,820 | | |
Net change in cash
|
| | | $ | 754,888 | | | | | $ | (47,592) | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
Net revenues
|
| | | $ | 4,376,379 | | | | | $ | 7,803,268 | | |
Cost of net revenues
|
| | | | 2,383,139 | | | | | | 4,947,494 | | |
Gross profit
|
| | | | 1,993,240 | | | | | | 2,855,774 | | |
Operating expenses
|
| | | | 5,372,410 | | | | | | 7,157,934 | | |
Operating income (loss)
|
| | | | (3,379,170) | | | | | | (4,302,160) | | |
Other income (loss)
|
| | | | (2,433,587) | | | | | | (2,257,936) | | |
Loss before provision for income taxes
|
| | | | (5,812,757) | | | | | | (6,560,096) | | |
Provision for income taxes
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (5,812,757) | | | | | $ | (6,560,096) | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (5,812,757) | | | | | $ | (6,560,096) | | |
Non-cash adjustments
|
| | | $ | 3,774,962 | | | | | $ | 2,379,221 | | |
Change in operating assets and liabilities
|
| | | $ | 668,867 | | | | | $ | 3,545,719 | | |
Net cash used in operating activities
|
| | | $ | (1,368,928) | | | | | $ | (635,156) | | |
Net cash provided by (used in) investing activities
|
| | | $ | 87,379 | | | | | $ | (5,576) | | |
Net cash provided by financing activities
|
| | | $ | 2,291,109 | | | | | $ | 887,051 | | |
Net change in cash
|
| | | $ | 1,009,560 | | | | | $ | 246,319 | | |
| | | | | | | | |
Pro Forma
Adjustments |
| | | | | | | | | | |||||||||
| | |
DBGI
As Reported |
| |
H&J
|
| |
Sundry
Conversion and Norwest Waiver |
| |
Notes
|
| |
Pro Forma as
Adjusted |
| ||||||||||||
Net revenues
|
| | | $ | 5,095,234 | | | | | $ | (718,855) | | | | | $ | — | | | |
(c)
|
| | | $ | 4,376,379 | | |
Cost of net revenues
|
| | | | 2,656,652 | | | | | | (273,513) | | | | | | — | | | |
(c)
|
| | | | 2,383,139 | | |
Gross profit
|
| | | | 2,438,582 | | | | | | (445,342) | | | | | | — | | | | | | | | | 1,993,240 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 4,636,844 | | | | | | (473,971) | | | | | | — | | | |
(c), (d)
|
| | | | 4,162,873 | | |
Sales and marketing
|
| | | | 1,115,643 | | | | | | (176,292) | | | | | | — | | | |
(c)
|
| | | | 939,351 | | |
Distribution
|
| | | | 270,185 | | | | | | — | | | | | | — | | | | | | | | | 270,185 | | |
Total operating expenses
|
| | | | 6,022,672 | | | | | | (650,262) | | | | | | — | | | | | | | | | 5,372,410 | | |
Loss from operations
|
| | | | (3,584,090) | | | | | | 204,920 | | | | | | — | | | | | | | | | (3,379,170) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,873,270) | | | | | | 8,672 | | | | | | 110,000 | | | |
(c), (e)
|
| | | | (1,754,598) | | |
Other non-operating income (expenses)
|
| | | | (678,989) | | | | | | — | | | | | | — | | | | | | | | | (678,989) | | |
Total other income (expense), net
|
| | | | (2,552,259) | | | | | | 8,672 | | | | | | 110,000 | | | | | | | | | (2,433,587) | | |
Income tax benefit (provision)
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | — | | |
Net loss
|
| | | $ | (6,136,349) | | | | | $ | 213,592 | | | | | $ | 110,000 | | | | | | | | $ | (5,812,757) | | |
Weighted average common shares outstanding – basic and diluted
|
| | | | 5,670,362 | | | | | | | | | | | | | | | | | | | | | 7,622,942 | | |
Net loss per common share – basic and diluted
|
| | | $ | (1.08) | | | | | | | | | | | | | | | | | | | | $ | (0.76) | | |
| | | | | | | | | | | | | | |
Pro Forma
Adjustments |
| | | | | | | | | | |||||||||
| | |
DBGI
As Reported |
| |
Sundry (1)
|
| |
H&J
|
| |
Sundry
Conversion and Norwest Waiver |
| |
Notes
|
| |
Pro Forma
Adjustments |
| |||||||||||||||
Net revenues
|
| | | $ | 13,971,178 | | | | | $ | 14,548,083 | | | | | $ | (3,637,620) | | | | | $ | — | | | |
(b)
|
| | | $ | 24,881,640 | | |
Cost of net revenues
|
| | | | 8,030,908 | | | | | | 9,694,857 | | | | | | (1,241,594) | | | | | | — | | | |
(b)
|
| | | | 16,484,171 | | |
Gross profit
|
| | | | 5,940,270 | | | | | | 4,853,226 | | | | | | (2,396,026) | | | | | | — | | | | | | | | | 8,397,469 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 16,371,536 | | | | | | 3,433,633 | | | | | | (2,303,855) | | | | | | — | | | |
(b), (c)
|
| | | | 17,501,314 | | |
Sales and marketing
|
| | | | 4,950,635 | | | | | | 913,052 | | | | | | (931,650) | | | | | | — | | | |
(b)
|
| | | | 4,932,036 | | |
Distribution
|
| | | | 611,569 | | | | | | 2,736,181 | | | | | | — | | | | | | — | | | | | | | | | 3,347,750 | | |
Impairment
|
| | | | 15,539,332 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 15,539,332 | | |
Change in fair value of contingent consideration
|
| | | | 564,303 | | | | | | — | | | | | | — | | | | | | (564,303) | | | |
(e)
|
| | | | — | | |
Total operating expenses
|
| | | | 38,037,375 | | | | | | 7,082,866 | | | | | | (3,235,505) | | | | | | (564,303) | | | | | | | | | 41,320,433 | | |
Loss from operations
|
| | | | (32,097,105) | | | | | | (2,229,640) | | | | | | 839,478 | | | | | | 564,303 | | | | | | | | | (32,922,963) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (9,014,337) | | | | | | (9,099) | | | | | | 52,927 | | | | | | — | | | |
(b)
|
| | | | (8,970,509) | | |
Other non-operating income
(expenses) |
| | | | 3,068,080 | | | | | | (52,354) | | | | | | — | | | | | | — | | | | | | | | | 3,015,726 | | |
Total other income (expense), net
|
| | | | (5,946,257) | | | | | | (61,453) | | | | | | 52,927 | | | | | | — | | | | | | | | | (5,954,783) | | |
Income tax benefit (provision)
|
| | | | — | | | | | | (800) | | | | | | — | | | | | | — | | | | | | | | | — | | |
Net loss
|
| | | $ | (38,043,362) | | | | | $ | (2,291,893) | | | | | $ | 892,405 | | | | | $ | 564,303 | | | | | | | | $ | (38,877,746) | | |
Weighted average common shares outstanding – basic and
diluted |
| | | | 771,297 | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,723,877 | | |
Net loss per common share – basic and diluted
|
| | | $ | (49.32) | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (14.27) | | |
| | | | | | | | |
Pro Forma
Adjustments |
| | | | | | | | | | |||||||||
| | |
DBGI
As Reported |
| |
H&J
|
| |
Sundry
Conversion and Norwest Waiver |
| |
Notes
|
| |
Pro Forma as
Adjusted |
| ||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,969,250 | | | | | $ | (262,405) | | | | | $ | — | | | |
(a)
|
| | | $ | 1,706,845 | | |
Accounts receivable, net
|
| | | | 345,439 | | | | | | (55,782) | | | | | | — | | | |
(a)
|
| | | | 289,657 | | |
Due from factor, net
|
| | | | 590,253 | | | | | | — | | | | | | — | | | | | | | | | 590,253 | | |
Inventory
|
| | | | 4,926,094 | | | | | | — | | | | | | — | | | | | | | | | 4,926,094 | | |
Prepaid expenses and other current assets
|
| | | | 1,071,330 | | | | | | (186,928) | | | | | | — | | | |
(a)
|
| | | | 884,402 | | |
Total current assets
|
| | | | 8,902,366 | | | | | | (505,115) | | | | | | — | | | | | | | | | 8,397,251 | | |
Property, equipment and software, net
|
| | | | 71,803 | | | | | | — | | | | | | — | | | | | | | | | 71,803 | | |
Goodwill
|
| | | | 10,103,812 | | | | | | (1,130,310) | | | | | | — | | | |
(a)
|
| | | | 8,973,502 | | |
Intangible assets, net
|
| | | | 13,473,151 | | | | | | (1,378,126) | | | | | | — | | | |
(a)
|
| | | | 12,095,025 | | |
Deposits
|
| | | | 110,962 | | | | | | (4,416) | | | | | | — | | | |
(a)
|
| | | | 106,546 | | |
Right of use asset
|
| | | | 467,738 | | | | | | — | | | | | | — | | | | | | | | | 467,738 | | |
Total assets
|
| | | $ | 33,129,832 | | | | | $ | (3,017,967) | | | | | $ | — | | | | | | | | $ | 30,111,865 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 7,671,050 | | | | | $ | (45,969) | | | | | $ | — | | | |
(a)
|
| | | $ | 7,625,081 | | |
Accrued expenses and other liabilities
|
| | | | 4,921,970 | | | | | | (610,114) | | | | | | — | | | |
(a)
|
| | | | 4,311,856 | | |
Deferred revenue
|
| | | | 317,421 | | | | | | (317,421) | | | | | | — | | | |
(a)
|
| | | | — | | |
Due to related parties
|
| | | | 452,055 | | | | | | (1,008) | | | | | | — | | | |
(a)
|
| | | | 451,047 | | |
Contingent consideration liability
|
| | | | 12,098,475 | | | | | | (1,400,000) | | | | | | (10,698,475) | | | |
(a), (b)
|
| | | | — | | |
Convertible note payable, net
|
| | | | 100,000 | | | | | | — | | | | | | — | | | | | | | | | 100,000 | | |
Accrued interest payable
|
| | | | 1,780,535 | | | | | | — | | | | | | (110,000) | | | |
(b)
|
| | | | 1,670,535 | | |
Note payable – related party
|
| | | | 129,489 | | | | | | (129,489) | | | | | | — | | | |
(a)
|
| | | | — | | |
Loan payable, current
|
| | | | 1,329,507 | | | | | | — | | | | | | — | | | | | | | | | 1,329,507 | | |
Promissory note payable, net
|
| | | | 10,914,831 | | | | | | — | | | | | | (5,500,000) | | | |
(b)
|
| | | | 5,414,831 | | |
Right of use liability, current portion
|
| | | | 425,654 | | | | | | — | | | | | | — | | | | | | | | | 425,654 | | |
Total current liabilities
|
| | | | 40,140,987 | | | | | | (2,504,000) | | | | | | (16,308,475) | | | | | | | | | 21,328,512 | | |
Loan payable
|
| | | | 798,759 | | | | | | (219,894) | | | | | | — | | | |
(a)
|
| | | | 578,865 | | |
Right of use liability
|
| | | | 53,107 | | | | | | — | | | | | | — | | | | | | | | | 53,107 | | |
Total liabilities
|
| | | | 40,992,853 | | | | | | (2,723,895) | | | | | | (16,308,475) | | | | | | | | | 21,960,484 | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity (deficit): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | 1 | | | | | | — | | | | | | 6 | | | |
(b)
|
| | | | 7 | | |
Common stock
|
| | | | 598 | | | | | | — | | | | | | 195 | | | |
(b)
|
| | | | 793 | | |
Additional paid-in capital
|
| | | | 102,020,045 | | | | | | 1,400,000 | | | | | | 5,609,799 | | | |
(a), (b)
|
| | | | 109,029,844 | | |
Accumulated deficit
|
| | | | (109,883,665) | | | | | | (1,694,073) | | | | | | 10,698,475 | | | |
(a), (b)
|
| | | | (100,879,263) | | |
Total stockholders’ equity (deficit)
|
| | | | (7,863,021) | | | | | | (294,073) | | | | | | 16,308,475 | | | | | | | | | 8,151,381 | | |
Total liabilities and stockholders’ equity (deficit)
|
| | | $ | 33,129,832 | | | | | $ | (3,017,967) | | | | | $ | — | | | | | | | | $ | 30,111,865 | | |
|
Settlement of contingent consideration
|
| | | $ | 1,400,000 | | |
|
Less: cash payment to H&J Seller
|
| | | | (229,000) | | |
|
Less: common shares issued to H&J Seller
|
| | | | (1,400,000) | | |
|
Total fair value of consideration received
|
| | | | (229,000) | | |
| Carrying amount of assets and liabilities | | | | | | | |
|
Cash and cash equivalents
|
| | | | 33,405 | | |
|
Accounts receivable, net
|
| | | | 55,782 | | |
|
Prepaid expenses and other current assets
|
| | | | 186,928 | | |
|
Goodwill
|
| | | | 1,130,310 | | |
|
Intangible assets, net
|
| | | | 1,378,126 | | |
|
Deposits
|
| | | | 4,416 | | |
|
Accounts payable
|
| | | | (45,969) | | |
|
Accrued expenses and other liabilities
|
| | | | (610,114) | | |
|
Deferred revenue
|
| | | | (317,421) | | |
|
Due to related parties
|
| | | | (1,008) | | |
|
Loan payable
|
| | | | (219,894) | | |
|
Note payable – related party
|
| | | | (129,489) | | |
|
Total carrying amount of assets and liabilities
|
| | | | 1,465,073 | | |
|
Gain (loss) on disposal
|
| | | $ | (1,694,073) | | |
Location
|
| |
Type
|
| |
Square
Footage (approximate) |
| |
Lease
Expiration |
| ||||||
Vernon, California
|
| |
Corporate Warehouse and Distribution Center
|
| | | | 42,206 | | | | | | 2023 | | |
Los Angeles, California
|
| | Showroom | | | | | 2,000 | | | | | | 2025 | | |
Name
|
| |
Age
|
| |
Position
|
|
Executive Officers and Directors | | | | | | | |
| | 50 | | | Director, President and Chief Executive Officer | | |
Laura Dowling
|
| | 44 | | | Chief Marketing Officer | |
| | 40 | | | Chief Financial Officer | | |
Mark T. Lynn
|
| | 39 | | | Director | |
Trevor Pettennude
|
| | 55 | | | Director | |
Jameeka Green Aaron
|
| | 42 | | | Director | |
Huong “Lucy” Doan
|
| | 53 | | | Director | |
Name and Principal Position
|
| |
Fiscal
Year |
| |
Salary
|
| |
Bonus
|
| |
Option
Awards |
| |
Stock
Awards(1) |
| |
Total
|
| ||||||||||||||||||
John “Hil” Davis
|
| | | | 2022 | | | | | $ | 350,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
President and Chief Executive Officer
|
| | | | 2021 | | | | | $ | 350,000 | | | | | $ | — | | | | | $ | 3,704,483 | | | | | $ | 233,184 | | | | | $ | 4,287,667 | | |
Laura Dowling
|
| | | | 2022 | | | | | $ | 300,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Chief Marketing Officer
|
| | | | 2021 | | | | | $ | 300,000 | | | | | $ | — | | | | | $ | 691,135 | | | | | $ | — | | | | | $ | 991,135 | | |
| | | | 2022 | | | | | $ | 250,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | |
Chief Financial Officer
|
| | | | 2021 | | | | | $ | 250,000 | | | | | $ | — | | | | | $ | 221,163 | | | | | $ | — | | | | | $ | 471,163 | | |
| | |
Option Awards
|
| | | | | | | |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Options(#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options(#) Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock That Have Not Vested (#) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
| |||||||||||||||||||||||||||
John “Hil” Davis
|
| | | | 21,440 | | | | | | 18,909 | | | | | | 2,531 | | | | | $ | 421.88 | | | | | | May-23 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Laura Dowling
|
| | | | 4,640 | | | | | | 3,968 | | | | | | 672 | | | | | $ | 408.94 | | | | | | May-23 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 1,760 | | | | | | 1,354 | | | | | | 406 | | | | | $ | 396.31 | | | | | | May-23 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Name of Beneficial Owner
|
| |
Number of
Shares Beneficially Owned Before Offering |
| |
Percentage of
Shares Outstanding Before Offering |
| |
Number of
Shares Beneficially Owned After Offering |
| |
Percentage of
Shares Outstanding After Offering |
| ||||||
Executive Officers and Directors | | | | | | | | | | | | | | | | | | | |
John “Hil” Davis(1)
|
| | | | 17,136 | | | |
*
|
| | | | 17,136 | | | |
*
|
|
Laura Dowling(2)
|
| | | | 3,347 | | | |
*
|
| | | | 3,347 | | | |
*
|
|
Reid Yeoman(3)
|
| | | | 1,140 | | | |
*
|
| | | | 1,140 | | | |
*
|
|
Mark Lynn(4)
|
| | | | 5,074 | | | |
*
|
| | | | 5,074 | | | |
*
|
|
Trevor Pettennude(5)
|
| | | | 3,286 | | | |
*
|
| | | | 3,286 | | | |
*
|
|
Jameeka Aaron(6)
|
| | | | 150 | | | |
*
|
| | | | 150 | | | |
*
|
|
Huong “Lucy” Doan(7)
|
| | | | 200 | | | |
*
|
| | | | 200 | | | |
*
|
|
All executive officers, directors and director nominees
as a group (7 persons)(8) |
| | | | 30,333 | | | |
*
|
| | | | 30,333 | | | |
*
|
|
Five Percent Holders of Common Stock | | | | | | | | | | | | | | | | | | | |
D. Jones Tailored Collection, Ltd.(9)
|
| | | | 1,974,501 | | | |
24.91%
|
| | | | 1,974,501 | | | |
24.91%
|
|
Boco4-DSTLD-Senior Debt, LLC(10)
|
| | | | 677,419 | | | |
7.87%
|
| | | | 677,419 | | | |
7.87%
|
|
George Levy(11)
|
| | | | 2,642,957 | | | |
25%
|
| | | | 2,642,957 | | | |
25%
|
|
Matthieu Leblan(12)
|
| | | | 2,642,957 | | | |
25%
|
| | | | 2,642,957 | | | |
25%
|
|
Moise Emquies(13)
|
| | | | 1,370,297 | | | |
14.75%
|
| | | | 1,370,297 | | | |
14.75%
|
|
Carol Ann Emquies(14)
|
| | | | 906,556 | | | |
10.26%
|
| | | | 906,556 | | | |
10.26%
|
|
Name and Address of Beneficial Owner
|
| |
Number of Shares
of Series A Convertible Preferred Stock Beneficially Owned Before |
| |
Percentage of
Shares Outstanding Before(1) |
| |
Number of Shares
of Series A Convertible Preferred Stock Beneficially Owned After |
| |
Percentage of
Shares Outstanding After |
| ||||||||||||
Five Percent Holders of DBG Series A Convertible Preferred Stock
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Boco4-DSTLD-Senior Debt, LLC(2)
|
| | | | 6,300 | | | | | | 100% | | | | | | 6,300 | | | | | | 100% | | |
Executive Officers and Directors
|
| | | | | | | | | | | | | | | | | | | | | | | | |
John “Hil” Davis
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Laura Dowling
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | |
Mark Lynn
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Trevor Pettennude
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jameeka Aaron
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Huong “Lucy” Doan
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All executive officers, directors
and director nominees as a group (7 persons) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Name and Address of Beneficial Owner
|
| |
Number of Shares
of Series B Convertible Preferred Stock Beneficially Owned Before |
| |
Percentage of
Shares Outstanding Before |
| |
Number of Shares
of Series B Convertible Preferred Stock Beneficially Owned After |
| |
Percentage of
Shares Outstanding After |
| ||||||||||||
Executive Officers and Directors
|
| | | | | | | | | | | | | | | | | | | | | | | | |
John “Hil” Davis(1)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Laura Dowling
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | |
Mark Lynn
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Trevor Pettennude
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jameeka Aaron
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Huong “Lucy” Doan
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All executive officers, directors
and director nominees as a group (7 persons) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Name and Address of Beneficial Owner
|
| |
Number of Shares
of Series C Convertible Preferred Stock Beneficially Owned Before |
| |
Percentage of
Shares Outstanding Before(1) |
| |
Number of Shares
of Series C Convertible Preferred Stock Beneficially Owned After |
| |
Percentage of
Shares Outstanding After |
| ||||||||||||
Five Percent Holders of DBG Series C Convertible Preferred Stock
|
| | | | | | | | | | | | | | | | | | | | | | | | |
George Levy(2)
|
| | | | 1,895 | | | | | | 32.90% | | | | | | 1,895 | | | | | | 32.90% | | |
Matthieu Leblan(3)
|
| | | | 1,895 | | | | | | 32.90% | | | | | | 1,895 | | | | | | 32.90% | | |
Moise Emquies(4)
|
| | | | 975 | | | | | | 16.92% | | | | | | 975 | | | | | | 16.92% | | |
Carol Ann Emquies(5)
|
| | | | 650 | | | | | | 11.28% | | | | | | 650 | | | | | | 11.28% | | |
Executive Officers and Directors
|
| | | | | | | | | | | | | | | | | | | | | | | | |
John “Hil” Davis
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Laura Dowling
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | |
Mark Lynn
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Trevor Pettennude
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jameeka Aaron
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Huong “Lucy” Doan
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All executive officers, directors
and director nominees as a group (7 persons) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Per Share
|
| |
Per Pre-Funded
Warrant |
| |
Total
|
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | |
|
| |||||
Placement Agent fees(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds to us, before expenses(2)
|
| | | $ | | | | | $ | | | | | $ | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | |
| | | | | F-19 | | | |
| | | | | F-20 | | | |
| | | | | F-21 | | | |
| | | | | F-22 | | | |
| | | | | F-23 | | | |
| | | | | F-24 | | |
| | | | | F-57 | | | |
| | | | | F-58 | | | |
| | | | | F-59 | | | |
| | | | | F-60 | | | |
| | | | | F-61 | | |
| | | | | F-67 | | | |
| | | | | F-68 | | | |
| | | | | F-69 | | | |
| | | | | F-70 | | | |
| | | | | F-71 | | |
| | | | | F-78 | | | |
| | | | | F-80 | | | |
| | | | | F-81 | | | |
| | | | | F-82 | | | |
| | | | | F-83 | | | |
| | | | | F-84 | | |
| | | | | | ||||||||
| | |
Unaudited
|
| |
Audited
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,969,250 | | | | | $ | 1,283,282 | | |
Accounts receivable, net
|
| | | | 345,439 | | | | | | 628,386 | | |
Due from factor, net
|
| | | | 590,253 | | | | | | 839,400 | | |
Inventory
|
| | | | 4,926,094 | | | | | | 5,225,282 | | |
Prepaid expenses and other current assets
|
| | | | 1,071,330 | | | | | | 853,044 | | |
Total current assets
|
| | | | 8,902,366 | | | | | | 8,829,394 | | |
Property, equipment and software, net
|
| | | | 71,803 | | | | | | 76,657 | | |
Goodwill
|
| | | | 10,103,812 | | | | | | 10,103,812 | | |
Intangible assets, net
|
| | | | 13,473,151 | | | | | | 14,427,503 | | |
Deposits
|
| | | | 110,962 | | | | | | 198,341 | | |
Right of use asset
|
| | | | 467,738 | | | | | | 102,349 | | |
Total assets
|
| | | $ | 33,129,832 | | | | | $ | 33,738,056 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 7,671,050 | | | | | $ | 8,098,165 | | |
Accrued expenses and other liabilities
|
| | | | 4,921,970 | | | | | | 4,457,115 | | |
Deferred revenue
|
| | | | 317,421 | | | | | | 202,129 | | |
Due to related parties
|
| | | | 452,055 | | | | | | 556,225 | | |
Contingent consideration liability
|
| | | | 12,098,475 | | | | | | 12,098,475 | | |
Convertible note payable, net
|
| | | | 100,000 | | | | | | 2,721,800 | | |
Accrued interest payable
|
| | | | 1,780,535 | | | | | | 1,561,795 | | |
Note payable – related party
|
| | | | 129,489 | | | | | | 129,489 | | |
Loans payable, current
|
| | | | 1,329,507 | | | | | | 1,966,250 | | |
Promissory notes payable, net
|
| | | | 10,914,831 | | | | | | 9,000,000 | | |
Right of use liability, current portion
|
| | | | 425,654 | | | | | | 102,349 | | |
Total current liabilities
|
| | | | 40,140,987 | | | | | | 40,893,792 | | |
Loans payable, net of current portion
|
| | | | 798,759 | | | | | | 297,438 | | |
Right of use liability
|
| | | | 53,107 | | | | | | — | | |
Total liabilities
|
| | | | 40,992,853 | | | | | | 41,191,230 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Undesignated preferred stock, $0.0001 par, 10,000,000 shares authorized, 0 shares issued and outstanding as of both March 31, 2023 and December 31, 2022
|
| | | | — | | | | | | — | | |
Series A preferred stock, $0.0001 par, 1 share authorized, no shares issued and outstanding as of March 31, 2023 and December 31, 2022
|
| | | | — | | | | | | — | | |
Series A convertible preferred stock, $0.0001 par, 6,800 shares designated, 6,300 shares issued and outstanding as of both March 31, 2023 and December 31, 2022
|
| | | | 1 | | | | | | 1 | | |
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 5,974,969 and 4,468,939 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
|
| | | | 598 | | | | | | 447 | | |
Additional paid-in capital
|
| | | | 102,020,045 | | | | | | 96,293,694 | | |
Accumulated deficit
|
| | | | (109,883,665) | | | | | | (103,747,316) | | |
Total stockholders’ deficit
|
| | | | (7,863,021) | | | | | | (7,453,174) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 33,129,832 | | | | | $ | 33,738,056 | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
| | | | | | | | |
Restated
|
| |||
Net revenues
|
| | | $ | 5,095,234 | | | | | $ | 3,432,410 | | |
Cost of net revenues
|
| | | | 2,656,652 | | | | | | 2,292,191 | | |
Gross profit
|
| | | | 2,438,582 | | | | | | 1,140,219 | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative
|
| | | | 4,636,844 | | | | | | 4,277,955 | | |
Sales and marketing
|
| | | | 1,115,643 | | | | | | 1,040,572 | | |
Distribution
|
| | | | 270,185 | | | | | | 202,848 | | |
Change in fair value of contingent consideration
|
| | | | — | | | | | | 1,200,321 | | |
Total operating expenses
|
| | | | 6,022,672 | | | | | | 6,721,696 | | |
Loss from operations
|
| | | | (3,584,090) | | | | | | (5,581,477) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,873,270) | | | | | | (1,567,877) | | |
Other non-operating income (expenses)
|
| | | | (678,989) | | | | | | (683,588) | | |
Total other income (expense), net
|
| | | | (2,552,259) | | | | | | (2,251,465) | | |
Income tax benefit (provision)
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (6,136,349) | | | | | $ | (7,832,942) | | |
Weighted average common shares outstanding – basic and diluted
|
| | | | 5,670,362 | | | | | | 132,351 | | |
Net loss per common share – basic and diluted
|
| | | $ | (1.08) | | | | | $ | (59.18) | | |
| | |
Series A Convertible
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31, 2021
|
| | | | — | | | | | $ | — | | | | | | 130,018 | | | | | $ | 13 | | | | | $ | 58,614,160 | | | | | $ | (65,703,954) | | | | | $ | (7,089,781) | | |
Conversion of notes into common stock
|
| | | | — | | | | | | — | | | | | | 8,739 | | | | | | 1 | | | | | | 1,201,581 | | | | | | — | | | | | | 1,201,582 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 139,093 | | | | | | — | | | | | | 139,093 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7,832,942) | | | | | | (7,832,942) | | |
| | | | — | | | | | $ | — | | | | | | 138,757 | | | | | $ | 14 | | | | | $ | 59,954,834 | | | | | $ | (73,536,896) | | | | | $ | (13,582,048) | | | |
Balances at December 31, 2022
|
| | | | 6,300 | | | | | $ | 1 | | | | | | 4,468,939 | | | | | $ | 447 | | | | | $ | 96,293,694 | | | | | $ | (103,747,316) | | | | | $ | (7,453,174) | | |
Issuance of common stock pursuant to private placement
|
| | | | — | | | | | | — | | | | | | 1,277,140 | | | | | | 128 | | | | | | 4,999,875 | | | | | | — | | | | | | 5,000,003 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (536,927) | | | | | | — | | | | | | (536,927) | | |
Shares issued for services
|
| | | | — | | | | | | — | | | | | | 118,890 | | | | | | 12 | | | | | | 499,326 | | | | | | — | | | | | | 499,338 | | |
Shares and warrants issued with notes
|
| | | | — | | | | | | — | | | | | | 110,000 | | | | | | 11 | | | | | | 658,483 | | | | | | — | | | | | | 658,494 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 105,594 | | | | | | — | | | | | | 105,594 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,136,349) | | | | | | (6,136,349) | | |
| | | | 6,300 | | | | | $ | 1 | | | | | | 5,974,969 | | | | | $ | 598 | | | | | $ | 102,020,045 | | | | | $ | (109,883,665) | | | | | $ | (7,863,021) | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2022
|
| |||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (6,136,349) | | | | | $ | (7,832,942) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 959,207 | | | | | | 552,004 | | |
Amortization of loan discount and fees
|
| | | | 1,412,425 | | | | | | 1,093,583 | | |
Loss on extinguishment of debt
|
| | | | 689,100 | | | | | | — | | |
Stock-based compensation
|
| | | | 105,594 | | | | | | 139,093 | | |
Shares issued for services
|
| | | | 499,338 | | | | | | — | | |
Change in credits due customers
|
| | | | 109,298 | | | | | | (9,067) | | |
Change in fair value of warrant liability
|
| | | | — | | | | | | (5,970) | | |
Change in fair value of derivative liability
|
| | | | — | | | | | | 682,103 | | |
Change in fair value of contingent consideration
|
| | | | — | | | | | | 1,200,321 | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | 282,947 | | | | | | (49,554) | | |
Factored receivables
|
| | | | (77,776) | | | | | | 294,439 | | |
Inventory
|
| | | | 299,188 | | | | | | 262,753 | | |
Prepaid expenses and other current assets
|
| | | | (218,286) | | | | | | (126,369) | | |
Accounts payable
|
| | | | (416,093) | | | | | | 1,972,441 | | |
Accrued expenses and other liabilities
|
| | | | 464,855 | | | | | | 669,514 | | |
Deferred revenue
|
| | | | 115,292 | | | | | | 71,707 | | |
Accrued interest
|
| | | | 218,740 | | | | | | 450,788 | | |
Net cash used in operating activities
|
| | | | (1,692,520) | | | | | | (635,156) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchase of property, equipment and software
|
| | | | — | | | | | | (5,576) | | |
Deposits
|
| | | | 87,379 | | | | | | — | | |
Net cash provided by (used in) investing activities
|
| | | | 87,379 | | | | | | (5,576) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds (repayments) from related party advances
|
| | | | (104,170) | | | | | | (11,105) | | |
Advances (repayments) from factor
|
| | | | 217,625 | | | | | | (179,126) | | |
Issuance of loans and notes payable
|
| | | | 3,542,199 | | | | | | 868,582 | | |
Repayments of convertible notes and loans payable
|
| | | | (5,677,621) | | | | | | — | | |
Issuance of common stock pursuant to private placement
|
| | | | 5,000,003 | | | | | | — | | |
Offering costs
|
| | | | (686,927) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 2,291,109 | | | | | | 678,351 | | |
Net change in cash and cash equivalents
|
| | | | 685,968 | | | | | | 37,619 | | |
Cash and cash equivalents at beginning of period
|
| | | | 1,283,282 | | | | | | 528,394 | | |
Cash and cash equivalents at end of period
|
| | | $ | 1,969,250 | | | | | $ | 566,013 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | — | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | 60,465 | | | | | $ | — | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | |
Conversion of notes into common stock
|
| | | $ | — | | | | | $ | 1,201,582 | | |
Right of use asset
|
| | | $ | 467,738 | | | | | $ | 250,244 | | |
| | |
Fair Value Measurements
as of March 31, 2023 Using: |
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Contingent consideration
|
| | | $ | — | | | | | $ | — | | | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | |
Fair Value Measurements
as of December 31, 2022 Using: |
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Contingent consideration
|
| | | $ | — | | | | | $ | — | | | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | | | | | ||||||||
Bailey
|
| | | $ | 10,698,475 | | | | | $ | 10,698,475 | | |
Harper & Jones
|
| | | | 1,400,000 | | | | | | 1,400,000 | | |
| | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | | | | | ||||||||
Raw materials
|
| | | $ | 1,512,651 | | | | | $ | 1,611,134 | | |
Work in process
|
| | | | 653,412 | | | | | | 888,643 | | |
Finished goods
|
| | | | 2,760,031 | | | | | | 2,725,505 | | |
Inventory
|
| | | $ | 4,926,094 | | | | | $ | 5,225,282 | | |
| | | | ||||||||||
| | | | |
2022
|
| |||||||
Convertible notes
|
| | | | — | | | | | | 51,648 | | |
Series A convertible preferred stock
|
| | | | 108 | | | | | | — | | |
Common stock warrants
|
| | | | 5,943,626 | | | | | | 9,145 | | |
Stock options
|
| | | | 38,951 | | | | | | 38,951 | | |
Total potentially dilutive shares
|
| | | | 5,982,685 | | | | | | 99,744 | | |
| | |
Three Months Ended
March 31, 2022 |
| |||
Net revenues
|
| | | $ | 8,606,548 | | |
Net loss
|
| | | $ | (8,292,427) | | |
Net loss per common share
|
| | | $ | (62.65) | | |
| | | | | | ||||||||
Outstanding receivables: | | | | | | | | | | | | | |
Without recourse
|
| | | $ | 1,065,335 | | | | | $ | 1,680,042 | | |
With recourse
|
| | | | 76,956 | | | | | | 65,411 | | |
Matured funds and deposits
|
| | | | 108,147 | | | | | | 81,055 | | |
Advances
|
| | | | (415,201) | | | | | | (632,826) | | |
Credits due customers
|
| | | | (244,984) | | | | | | (354,282) | | |
| | | | $ | 590,253 | | | | | $ | 839,400 | | |
| | | | |
December 31
2022 |
| |||||||
Bailey
|
| | | $ | 3,158,123 | | | | | $ | 3,158,123 | | |
Harper & Jones
|
| | | | 1,130,311 | | | | | | 1,130,311 | | |
Stateside
|
| | | | 2,104,056 | | | | | | 2,104,056 | | |
Sundry
|
| | | | 3,711,322 | | | | | | 3,711,322 | | |
| | | | $ | 10,103,812 | | | | | $ | 10,103,812 | | |
| | |
Gross
Amount |
| |
Accumulated
Amortization |
| |
Carrying
Value |
| |||||||||
Amortized: | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 11,452,230 | | | | | $ | (4,554,959) | | | | | $ | 6,897,271 | | |
| | | | $ | 11,452,230 | | | | | $ | (4,554,959) | | | | | $ | 6,897,271 | | |
Indefinite-lived: | | | | | | | | | | | | | | | | | | | |
Brand name
|
| | | $ | 6,575,880 | | | | | | — | | | | | | 6,575,880 | | |
| | | | $ | 18,028,110 | | | | | $ | (4,554,959) | | | | | $ | 13,473,151 | | |
| | | | | | ||||||||
Accrued expenses
|
| | | $ | 602,053 | | | | | $ | 705,135 | | |
Reserve for returns
|
| | | | 294,147 | | | | | | 307,725 | | |
Payroll related liabilities
|
| | | | 3,586,356 | | | | | | 2,974,362 | | |
Sales tax liability
|
| | | | 267,419 | | | | | | 339,843 | | |
Other liabilities
|
| | | | 171,995 | | | | | | 130,050 | | |
| | | | $ | 4,921,970 | | | | | $ | 4,457,115 | | |
| | |
Principal
|
| |
Unamortized
Debt Discount |
| |
Convertible Note
Payable, Net |
| |||||||||
Balance, December 31, 2022
|
| | | $ | 4,100,000 | | | | | $ | (1,378,200) | | | | | $ | 2,721,800 | | |
Repayments of notes
|
| | | | (4,000,000) | | | | | | — | | | | | | (4,000,000) | | |
Amortization of debt discount
|
| | | | — | | | | | | 689,100 | | | | | | 689,100 | | |
Loss on extinguishment of debt
|
| | | | — | | | | | | 689,100 | | | | | | 689,100 | | |
Balance, March 31, 2023
|
| | | $ | 100,000 | | | | | $ | — | | | | | $ | 100,000 | | |
| | | | | | ||||||||
Bailey Note
|
| | | $ | 3,500,000 | | | | | $ | 3,500,000 | | |
Sundry Note
|
| | | | 5,500,000 | | | | | | 5,500,000 | | |
March 2023 Notes – principal
|
| | | | 2,458,750 | | | | | | — | | |
March 2023 Notes – unamortized debt discount
|
| | | | (543,919) | | | | | | — | | |
Promissory note payable, net
|
| | | $ | 10,914,831 | | | | | $ | 9,000,000 | | |
| | |
Common
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2022
|
| | | | 4,418,320 | | | | | $ | 8.37 | | |
Granted
|
| | | | 2,327,446 | | | | | | 3.98 | | |
Exercised
|
| | | | (802,140) | | | | | | 3.92 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – March 31, 2023
|
| | | | 5,943,626 | | | | | $ | 7.75 | | |
Exercisable at December 31, 2022
|
| | | | 4,281,956 | | | | | $ | 8.42 | | |
Exercisable at March 31, 2023
|
| | | | 5,807,262 | | | | | $ | 7.78 | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,283,282 | | | | | $ | 528,394 | | |
Accounts receivable, net
|
| | | | 628,386 | | | | | | 89,394 | | |
Due from factor, net
|
| | | | 839,400 | | | | | | 985,288 | | |
Inventory
|
| | | | 5,225,282 | | | | | | 2,755,358 | | |
Prepaid expenses and other current assets
|
| | | | 853,044 | | | | | | 417,900 | | |
Total current assets
|
| | | | 8,829,394 | | | | | | 4,776,334 | | |
Deferred offering costs
|
| | | | — | | | | | | 367,696 | | |
Property, equipment and software, net
|
| | | | 76,657 | | | | | | 97,265 | | |
Goodwill
|
| | | | 10,103,812 | | | | | | 18,264,822 | | |
Intangible assets, net
|
| | | | 14,427,503 | | | | | | 12,841,313 | | |
Deposits
|
| | | | 198,341 | | | | | | 137,794 | | |
Right of use asset, net
|
| | | | 102,349 | | | | | | — | | |
Total assets
|
| | | $ | 33,738,056 | | | | | $ | 36,485,224 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 8,098,165 | | | | | $ | 6,562,690 | | |
Accrued expenses and other liabilities
|
| | | | 4,457,115 | | | | | | 2,237,145 | | |
Deferred revenue
|
| | | | 202,129 | | | | | | 276,397 | | |
Due to related parties
|
| | | | 556,225 | | | | | | 277,635 | | |
Contingent consideration liability
|
| | | | 12,098,475 | | | | | | 12,179,476 | | |
Convertible note payable, net
|
| | | | 2,721,800 | | | | | | 100,000 | | |
Accrued interest payable
|
| | | | 1,561,795 | | | | | | 1,110,679 | | |
Note payable – related party
|
| | | | 129,489 | | | | | | 299,489 | | |
Venture debt, net of discount
|
| | | | — | | | | | | 6,001,755 | | |
Loan payable, current
|
| | | | 1,966,250 | | | | | | 2,502,000 | | |
Promissory note payable
|
| | | | 9,000,000 | | | | | | 3,500,000 | | |
Right of use liability, current portion
|
| | | | 102,349 | | | | | | — | | |
Total current liabilities
|
| | | | 40,893,792 | | | | | | 35,047,266 | | |
Convertible note payable, net
|
| | | | — | | | | | | 5,501,614 | | |
Loan payable
|
| | | | 297,438 | | | | | | 713,182 | | |
Derivative liability
|
| | | | — | | | | | | 2,294,720 | | |
Warrant liability
|
| | | | — | | | | | | 18,223 | | |
Total liabilities
|
| | | | 41,191,230 | | | | | | 43,575,005 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Undesignated preferred stock, $0.0001 par, 10,000,000 shares authorized, 0 shares issued and outstanding as of both December 31, 2022 and 2021
|
| | | | — | | | | | | — | | |
Series A preferred stock, $0.0001 par, 1 share authorized, no shares issued and
outstanding as of December 31, 2022 or 2021 |
| | | | — | | | | | | — | | |
Series A convertible preferred stock, $0.0001 par, 6,800 shares designated, 6,300 shares issued and outstanding as of December 31, 2022, none authorized or outstanding as of December 31, 2021
|
| | | | 1 | | | | | | — | | |
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 4,468,939 and 130,018 shares issued and outstanding as of December 31, 2022 and 2021, respectively
|
| | | | 447 | | | | | | 13 | | |
Additional paid-in capital
|
| | | | 96,293,694 | | | | | | 58,614,160 | | |
Accumulated deficit
|
| | | | (103,747,316) | | | | | | (65,703,954) | | |
Total stockholders’ deficit
|
| | | | (7,453,174) | | | | | | (7,089,781) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 33,738,056 | | | | | $ | 36,485,224 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | | | |
2021
|
| |||||||
| | | | | | | | |
As Restated
|
| |||
Net revenues
|
| | | $ | 13,971,178 | | | | | $ | 7,584,859 | | |
Cost of net revenues
|
| | | | 8,030,908 | | | | | | 5,716,587 | | |
Gross profit
|
| | | | 5,940,270 | | | | | | 1,868,272 | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative
|
| | | | 16,371,536 | | | | | | 16,752,516 | | |
Sales and marketing
|
| | | | 4,950,635 | | | | | | 3,810,583 | | |
Distribution
|
| | | | 611,569 | | | | | | 489,371 | | |
Impairment
|
| | | | 15,539,332 | | | | | | 3,400,000 | | |
Change in fair value of contingent consideration
|
| | | | 564,303 | | | | | | 8,764,460 | | |
Total operating expenses
|
| | | | 38,037,375 | | | | | | 33,216,930 | | |
Loss from operations
|
| | | | (32,097,105) | | | | | | (31,348,658) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense
|
| | | | (9,014,337) | | | | | | (3,663,921) | | |
Other non-operating income (expenses)
|
| | | | 3,068,080 | | | | | | 1,554,502 | | |
Total other income (expense), net
|
| | | | (5,946,257) | | | | | | (2,109,419) | | |
Income tax benefit (provision)
|
| | | | — | | | | | | 1,100,120 | | |
Net loss
|
| | | $ | (38,043,362) | | | | | $ | (32,357,957) | | |
Weighted average common shares outstanding – basic and diluted
|
| | | | 771,297 | | | | | | 76,289 | | |
Net loss per common share – basic and diluted
|
| | | $ | (49.32) | | | | | $ | (424.15) | | |
| | |
Series Seed
Preferred Stock |
| |
Series A
Preferred Stock |
| |
Series A-2
Preferred Stock |
| |
Series A-3
Preferred Stock |
| |
Series CF
Preferred Stock |
| |
Series B
Preferred Stock |
| |
Series A Convertible
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | — | | | | | $ | — | | | | | | 6,642 | | | | | $ | 1 | | | | | $ | 27,482,060 | | | | | $ | (33,345,997) | | | | | $ | (5,857,645) | | |
Conversion of preferred stock into common
stock |
| | | | (20,714,518) | | | | | | (2,071) | | | | | | (5,654,072) | | | | | | (565) | | | | | | (5,932,742) | | | | | | (593) | | | | | | (9,032,330) | | | | | | (904) | | | | | | (836,331) | | | | | | (83) | | | | | | (20,754,717) | | | | | | (2,075) | | | | | | — | | | | | | — | | | | | | 40,272 | | | | | | 4 | | | | | | 6,287 | | | | | | — | | | | | | — | | |
Issuance of common stock in public
offering |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 24,096 | | | | | | 2 | | | | | | 10,000,000 | | | | | | — | | | | | | 10,000,002 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,116,957) | | | | | | — | | | | | | (2,116,957) | | |
Exercise of over-allotment option, net of offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,614 | | | | | | — | | | | | | 1,364,997 | | | | | | — | | | | | | 1,364,997 | | |
Conversion of debt into common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,352 | | | | | | 1 | | | | | | 2,680,288 | | | | | | — | | | | | | 2,680,289 | | |
Conversion of related party notes and payables into common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,524 | | | | | | — | | | | | | 257,515 | | | | | | — | | | | | | 257,515 | | |
Common stock issued in connection with business combination
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 32,943 | | | | | | 3 | | | | | | 11,428,735 | | | | | | — | | | | | | 11,428,738 | | |
Exercise of warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,869 | | | | | | — | | | | | | 1,768,046 | | | | | | — | | | | | | 1,768,046 | | |
Common stock issued pursuant to consulting
agreement |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,415 | | | | | | — | | | | | | 595,500 | | | | | | — | | | | | | 595,500 | | |
Issuance of common stock pursuant to equity
line of credit |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,264 | | | | | | — | | | | | | 367,696 | | | | | | — | | | | | | 367,696 | | |
Common stock and warrants issued in connection with notes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,300 | | | | | | — | | | | | | 501,658 | | | | | | — | | | | | | 501,658 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 727 | | | | | | — | | | | | | 4,278,337 | | | | | | — | | | | | | 4,278,337 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (32,357,957) | | | | | | (32,357,957) | | |
Balances at December 31, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 130,018 | | | | | | 13 | | | | | | 58,614,160 | | | | | | (65,703,954) | | | | | | (7,089,781) | | |
Issuance of common stock in public
offering |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 373,898 | | | | | | 37 | | | | | | 9,347,413 | | | | | | — | | | | | | 9,347,450 | | |
Issuance of common stock and exercise of pre-funded warrants in public offering
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,818,181 | | | | | | 182 | | | | | | 9,999,814 | | | | | | — | | | | | | 9,999,996 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,921,646) | | | | | | — | | | | | | (2,921,646) | | |
Common stock issued in connection with business combination
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 90,909 | | | | | | 9 | | | | | | 999,991 | | | | | | — | | | | | | 1,000,000 | | |
Common stock issued pursuant to consulting
agreement |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 750 | | | | | | — | | | | | | 123,000 | | | | | | — | | | | | | 123,000 | | |
Warrant and common shares issued with notes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 60,000 | | | | | | 6 | | | | | | 1,368,735 | | | | | | — | | | | | | 1,368,741 | | |
Conversion of notes and derivative liability into common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,995,183 | | | | | | 200 | | | | | | 11,983,189 | | | | | | — | | | | | | 11,983,389 | | |
Conversion of venture debt into Series A convertible preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,300 | | | | | | 1 | | | | | | — | | | | | | — | | | | | | 6,299,999 | | | | | | — | | | | | | 6,300,000 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 479,038 | | | | | | — | | | | | | 479,038 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (38,043,362) | | | | | | (38,043,362) | | |
Balances at December 31, 2022
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 6,300 | | | | | $ | 1 | | | | | | 4,468,939 | | | | | $ | 447 | | | | | $ | 96,293,694 | | | | | $ | (103,747,316) | | | | | $ | (7,453,174) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | | | |
2021
|
| |||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (38,043,362) | | | | | $ | (32,357,957) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 2,226,376 | | | | | | 1,220,736 | | |
Amortization of loan discount and fees
|
| | | | 6,506,384 | | | | | | 1,382,222 | | |
Stock-based compensation
|
| | | | 602,038 | | | | | | 4,800,337 | | |
Fees incurred in connection with debt financings
|
| | | | 568,149 | | | | | | 560,309 | | |
Change in fair value of warrant liability
|
| | | | (18,223) | | | | | | 11,958 | | |
Change in fair value of derivative liability
|
| | | | (1,354,434) | | | | | | (910,204) | | |
Change in fair value of contingent consideration
|
| | | | 564,303 | | | | | | 8,764,460 | | |
Impairment of goodwill and intangible assets
|
| | | | 15,539,332 | | | | | | 3,400,000 | | |
Forgiveness of Payroll Protection Program
|
| | | | (1,760,755) | | | | | | (407,994) | | |
Change in credit reserve
|
| | | | (118,840) | | | | | | 36,893 | | |
Deferred offering costs
|
| | | | 367,696 | | | | | | — | | |
Deferred income tax benefit
|
| | | | — | | | | | | (1,100,120) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (475,036) | | | | | | 150,288 | | |
Due from factor, net
|
| | | | 655,708 | | | | | | (399,701) | | |
Inventory
|
| | | | 471,831 | | | | | | (911,293) | | |
Prepaid expenses and other current assets
|
| | | | (402,515) | | | | | | (151,917) | | |
Accounts payable
|
| | | | 919,131 | | | | | | 456,690 | | |
Accrued expenses and other liabilities
|
| | | | 1,992,649 | | | | | | 834,489 | | |
Deferred revenue
|
| | | | (74,268) | | | | | | 4,882 | | |
Due to related parties
|
| | | | 278,590 | | | | | | (63,550) | | |
Accrued interest
|
| | | | 984,358 | | | | | | 461,113 | | |
Net cash used in operating activities
|
| | | | (10,570,889) | | | | | | (14,218,359) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Cash acquired (consideration) pursuant to business combination
|
| | | | (7,247,303) | | | | | | (5,936,757) | | |
Purchase of property, equipment and software
|
| | | | (5,533) | | | | | | (43,179) | | |
Deposits
|
| | | | (60,548) | | | | | | (31,117) | | |
Net cash used in investing activities
|
| | | | (7,313,384) | | | | | | (6,011,053) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Repayments of related party notes
|
| | | | (170,000) | | | | | | — | | |
Advances (repayments) from factor
|
| | | | (3,096) | | | | | | (41,200) | | |
Repayment of contingent consideration
|
| | | | (645,304) | | | | | | — | | |
Proceeds from venture debt
|
| | | | 237,500 | | | | | | — | | |
Issuance of loans payable
|
| | | | 3,280,360 | | | | | | 2,779,910 | | |
Repayments of convertible and promissory notes
|
| | | | (7,437,349) | | | | | | (2,006,628) | | |
Issuance of convertible notes payable
|
| | | | 6,951,250 | | | | | | 8,433,650 | | |
Proceeds from public offering
|
| | | | 19,347,446 | | | | | | 10,000,002 | | |
Exercise of over-allotment option with public offering, net
|
| | | | — | | | | | | 1,364,997 | | |
Exercise of warrants
|
| | | | — | | | | | | 1,768,046 | | |
Offering costs
|
| | | | (2,921,646) | | | | | | (2,116,957) | | |
Net cash provided by financing activities
|
| | | | 18,639,161 | | | | | | 20,181,820 | | |
Net change in cash and cash equivalents
|
| | | | 754,888 | | | | | | (47,592) | | |
Cash and cash equivalents at beginning of period
|
| | | | 528,394 | | | | | | 575,986 | | |
Cash and cash equivalents at end of period
|
| | | $ | 1,283,282 | | | | | $ | 528,394 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | — | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | 734,869 | | | | | $ | 902,089 | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | |
Conversion of notes, warrants and derivatives into common stock
|
| | | $ | 11,983,389 | | | | | $ | 2,680,289 | | |
Right of use asset
|
| | | $ | 102,349 | | | | | $ | — | | |
Warrant and common shares issued with notes
|
| | | $ | 1,368,741 | | | | | $ | — | | |
Derivative liability in connection with convertible note
|
| | | $ | 559,957 | | | | | $ | 3,204,924 | | |
Conversion of venture debt into preferred stock
|
| | | $ | 6,300,000 | | | | | $ | — | | |
Conversion of related party notes and payables into preferred and common stock
|
| | | $ | — | | | | | $ | 257,515 | | |
Conversion of preferred stock into common stock
|
| | | $ | — | | | | | $ | 6,291 | | |
Conversion of contingent consideration into common stock
|
| | | $ | — | | | | | $ | 73,500 | | |
Common shares issued pursuant to equity line of credit
|
| | | $ | — | | | | | $ | 367,696 | | |
| | |
Fair Value Measurements
as of December 31, 2022 Using: |
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Contingent consideration
|
| | | | — | | | | | | — | | | | | | 12,098,475 | | | | | | 12,098,475 | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 12,098,475 | | | | | $ | 12,098,475 | | |
| | |
Fair Value Measurements
as of December 31, 2021 Using: |
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | $ | — | | | | | $ | 18,223 | | | | | $ | — | | | | | $ | 18,223 | | |
Contingent consideration
|
| | | | — | | | | | | — | | | | | | 12,179,476 | | | | | | 12,179,476 | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | 2,294,720 | | | | | | 2,294,720 | | |
| | | | $ | — | | | | | $ | 18,223 | | | | | $ | 14,474,196 | | | | | $ | 14,492,419 | | |
| | |
Warrant
Liability |
| |||
Outstanding as of December 31, 2020
|
| | | $ | 6,265 | | |
Change in fair value
|
| | | | 11,958 | | |
Outstanding as of December 31, 2021
|
| | | | 18,223 | | |
Change in fair value
|
| | | | (18,223) | | |
Outstanding as of December 31, 2022
|
| | | $ | — | | |
| | |
Contingent
Consideration Liability |
| |||
Balance as of December 31, 2020
|
| | | $ | — | | |
Initial recognition in connection with acquisition of Harper & Jones
|
| | | | 3,421,516 | | |
Stock price guarantee per consulting agreement
|
| | | | 67,000 | | |
Conversion into shares
|
| | | | (73,500) | | |
Change in fair value
|
| | | | 8,764,460 | | |
Outstanding as of December 31, 2021
|
| | | | 12,179,476 | | |
Repayments to Harper & Jones seller
|
| | | | (645,304) | | |
Change in fair value
|
| | | | 564,303 | | |
Outstanding as of December 31, 2022
|
| | | $ | 12,098,475 | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Bailey
|
| | | $ | 10,698,475 | | | | | | 7,935,016 | | |
Harper & Jones
|
| | | | 1,400,000 | | | | | | 4,244,460 | | |
| | | | $ | 12,098,475 | | | | | $ | 12,179,476 | | |
| | |
Derivative
Liability |
| |||
Outstanding as of December 31, 2020
|
| | | $ | — | | |
Initial fair value on issuance of convertible note
|
| | | | 3,204,924 | | |
Change in fair value
|
| | | | (910,204) | | |
Outstanding as of December 31, 2021
|
| | | | 2,294,720 | | |
Initial fair value on issuance of convertible note
|
| | | | 559,957 | | |
Conversion of underlying notes into common stock
|
| | | | (1,500,243) | | |
Change in fair value
|
| | | | (1,354,434) | | |
Outstanding as of December 31, 2022
|
| | | $ | — | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Raw materials
|
| | | $ | 1,611,134 | | | | | $ | 292,167 | | |
Work in process
|
| | | | 888,643 | | | | | | 242,673 | | |
Finished goods
|
| | | | 2,725,505 | | | | | | 2,220,519 | | |
Inventory
|
| | | $ | 5,225,282 | | | | | $ | 2,755,358 | | |
|
Customer relationships
|
| |
3 years
|
|
| | |
Year Ended December 31,
|
| |||||||||
| | | | |
2021
|
| |||||||
Bailey brand name
|
| | | $ | 2,182,000 | | | | | $ | 3,400,000 | | |
Harper & Jones brand name
|
| | | | 1,485,000 | | | | | | — | | |
Total impairment of intangibles
|
| | | | 3,667,000 | | | | | | 3,400,000 | | |
Bailey goodwill
|
| | | | 3,321,095 | | | | | | — | | |
Harper & Jones goodwill
|
| | | | 8,551,237 | | | | | | — | | |
Total impairment of goodwill
|
| | | | 11,872,332 | | | | | | — | | |
Total impairment
|
| | | $ | 15,539,332 | | | | | $ | 3,400,000 | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Convertible notes
|
| | | | 947,867 | | | | | | 47,912 | | |
Series A convertible preferred stock
|
| | | | 108,000 | | | | | | — | | |
Common stock warrants
|
| | | | 4,418,320 | | | | | | 35,801 | | |
Stock options
|
| | | | 38,951 | | | | | | 38,951 | | |
Total potentially dilutive shares
|
| | | | 5,513,138 | | | | | | 122,664 | | |
|
Cash
|
| | | $ | 7,500,000 | | |
|
Promissory notes payable
|
| | | | 5,500,000 | | |
|
Common stock
|
| | | | 1,000,000 | | |
|
Purchase price consideration
|
| | | $ | 14,000,000 | | |
| | |
Purchase Price
Allocation |
| |||
Cash and cash equivalents
|
| | | $ | 252,697 | | |
Accounts receivable, net
|
| | | | 63,956 | | |
Due from factor, net
|
| | | | 387,884 | | |
Inventory
|
| | | | 2,941,755 | | |
Prepaid expenses and other current assets
|
| | | | 32,629 | | |
Property, equipment and software, net
|
| | | | 48,985 | | |
Goodwill
|
| | | | 3,711,322 | | |
Intangible assets
|
| | | | 7,403,800 | | |
Accounts payable
|
| | | | (615,706) | | |
Accrued expenses and other liabilities
|
| | | | (227,321) | | |
Purchase price consideration
|
| | | $ | 14,000,000 | | |
|
Cash
|
| | | $ | 500,000 | | |
|
Common stock
|
| | | | 8,025,542 | | |
|
Contingent consideration
|
| | | | 3,421,516 | | |
|
Purchase price consideration
|
| | | $ | 11,947,058 | | |
| | |
Purchase Price
Allocation |
| |||
Cash and cash equivalents
|
| | | $ | 24,335 | | |
Accounts receivable, net
|
| | | | 49,472 | | |
Due from factor, net
|
| | | | — | | |
Inventory
|
| | | | 77,159 | | |
Prepaid expenses and other current assets
|
| | | | 69,715 | | |
Property, equipment and software, net
|
| | | | 83,986 | | |
Goodwill
|
| | | | 9,681,548 | | |
Intangible assets
|
| | | | 3,936,030 | | |
Accounts payable
|
| | | | (51,927) | | |
Accrued expenses and other liabilities
|
| | | | (107,957) | | |
Purchase price consideration
|
| | | $ | 11,947,058 | | |
|
Cash
|
| | | $ | 5,000,000 | | |
|
Common stock
|
| | | | 3,403,196 | | |
|
Purchase price consideration
|
| | | $ | 8,403,196 | | |
| | |
Purchase Price
Allocation |
| |||
Cash and cash equivalents
|
| | | | 32,700 | | |
Accounts receivable, net
|
| | | | 154,678 | | |
Due from factor, net
|
| | | | 371,247 | | |
Inventory
|
| | | | 603,625 | | |
Prepaid expenses and other current assets
|
| | | | 7,970 | | |
Deposits
|
| | | | 9,595 | | |
Property, equipment and software, net
|
| | | | — | | |
Goodwill
|
| | | | 2,104,056 | | |
Intangible assets
|
| | | | 5,939,140 | | |
Accounts payable
|
| | | | (374,443) | | |
Accrued expenses and other liabilities
|
| | | | (445,372) | | |
| | | | $ | 8,403,196 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | | | |
2021
|
| |||||||
Net revenues
|
| | | $ | 28,519,261 | | | | | $ | 34,635,426 | | |
Net loss
|
| | | $ | (42,001,415) | | | | | $ | (33,171,473) | | |
Net loss per common share
|
| | | $ | (54.46) | | | | | $ | (434.81) | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Outstanding receivables: | | | | | | | | | | | | | |
Without recourse
|
| | | $ | 564,548 | | | | | $ | 579,295 | | |
With recourse
|
| | | | 352,379 | | | | | | 361,584 | | |
Advances
|
| | | | 118,521 | | | | | | 121,617 | | |
Credits due customers
|
| | | | (196,048) | | | | | | (77,208) | | |
| | | | $ | 839,400 | | | | | $ | 985,288 | | |
| | |
Bailey
|
| |
Harper & Jones
|
| |
Stateside
|
| |
Sundry
|
| |
Total
|
| |||||||||||||||
Balances at December 31, 2020
|
| | | $ | 6,479,218 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,479,218 | | |
Business combinations
|
| | | | — | | | | | | 9,681,548 | | | | | | 2,104,056 | | | | | | — | | | | | | 11,785,604 | | |
Impairment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balances at December 31, 2021
|
| | | | 6,479,218 | | | | | | 9,681,548 | | | | | | 2,104,056 | | | | | | — | | | | | | 18,264,822 | | |
Business combination
|
| | | | — | | | | | | — | | | | | | — | | | | | | 3,711,322 | | | | | | 3,711,322 | | |
Impairment
|
| | | | (3,321,095) | | | | | | (8,551,237) | | | | | | — | | | | | | — | | | | | | (11,872,332) | | |
Balances at December 31, 2022
|
| | | $ | 3,158,123 | | | | | $ | 1,130,311 | | | | | $ | 2,104,056 | | | | | $ | 3,711,322 | | | | | $ | 10,103,812 | | |
| |
Gross
Amount |
| |
Accumulated
Amortization |
| |
Carrying
Value |
| ||||||||||
Amortized: | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 11,452,230 | | | | | | (3,600,607) | | | | | $ | 7,851,623 | | |
| | | | | 11,452,230 | | | | | | (3,600,607) | | | | | | 7,851,623 | | |
Indefinite-lived: | | | | | | | | | | | | | | | | | | | |
Brand name
|
| | | $ | 6,575,880 | | | | | | — | | | | | | 6,575,880 | | |
| | | | $ | 18,028,110 | | | | | $ | (3,600,607) | | | | | $ | 14,427,503 | | |
| |
Gross
Amount |
| |
Accumulated
Amortization |
| |
Carrying
Value |
| ||||||||||
Amortized: | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 6,453,750 | | | | | | (1,449,357) | | | | | $ | 5,004,393 | | |
| | | | | 6,453,750 | | | | | | (1,449,357) | | | | | | 5,004,393 | | |
Indefinite-lived: | | | | | | | | | | | | | | | | | | | |
Brand name
|
| | | $ | 7,836,920 | | | | | | — | | | | | | 7,836,920 | | |
| | | | $ | 14,290,670 | | | | | $ | (1,449,357) | | | | | $ | 12,841,313 | | |
Year Ending December 31,
|
| | | | | | |
| | | | 3,496,577 | | | |
2024
|
| | | | 2,688,886 | | |
2025
|
| | | | 1,666,160 | | |
| | | | $ | 7,851,623 | | |
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Accrued expenses
|
| | | $ | 705,135 | | | | | $ | 213,740 | | |
Reserve for returns
|
| | | | 307,725 | | | | | | 33,933 | | |
Payroll related liabilities
|
| | | | 2,974,361 | | | | | | 1,204,665 | | |
Sales tax liability
|
| | | | 339,843 | | | | | | 268,723 | | |
Due to seller
|
| | | | — | | | | | | 396,320 | | |
Other liabilities
|
| | | | 130,050 | | | | | | 119,764 | | |
| | | | $ | 4,457,115 | | | | | $ | 2,237,145 | | |
| | |
Principal
|
| |
Unamortized
Debt Discount |
| |
Convertible Note
Payable, Net |
| |||||||||
Balance, December 31, 2020
|
| | | $ | 100,000 | | | | | $ | — | | | | | $ | 100,000 | | |
Issuance of Oasis note, net of issuance costs
|
| | | | 5,265,000 | | | | | | (715,000) | | | | | | 4,550,000 | | |
Issuance of FirstFire First note, net of issuance costs
|
| | | | 1,575,000 | | | | | | (315,000) | | | | | | 1,260,000 | | |
Issuance of Second FirstFire note, net of issuance costs
|
| | | | 2,625,000 | | | | | | (530,000) | | | | | | 2,095,000 | | |
Derivative liability in connection with notes
|
| | | | — | | | | | | (3,204,924) | | | | | | (3,204,924) | | |
Amortization of debt discount
|
| | | | — | | | | | | 801,538 | | | | | | 801,538 | | |
Balance, December 31, 2021
|
| | | | 9,565,000 | | | | | | (3,963,386) | | | | | | 5,601,614 | | |
Proceeds from issuance of notes
|
| | | | 8,943,750 | | | | | | (1,992,500) | | | | | | 6,951,250 | | |
Repayments of notes
|
| | | | (4,943,750) | | | | | | — | | | | | | (4,943,750) | | |
Conversion of notes into common stock
|
| | | | (9,465,000) | | | | | | — | | | | | | (9,465,000) | | |
Warrant and common shares issued with convertible
notes |
| | | | — | | | | | | (1,368,741) | | | | | | (1,368,741) | | |
Derivative liability in connection with notes
|
| | | | — | | | | | | (559,957) | | | | | | (559,957) | | |
Amortization of debt discount
|
| | | | — | | | | | | 6,506,384 | | | | | | 6,506,384 | | |
Balance, December 31, 2022
|
| | | $ | 4,100,000 | | | | | $ | (1,378,200) | | | | | $ | 2,721,800 | | |
| | |
Common
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2020
|
| | | | 9,146 | | | | | $ | 266 | | |
Granted
|
| | | | 30,120 | | | | | | 458 | | |
Conversion of preferred stock warrants upon IPO
|
| | | | 516 | | | | | | 766 | | |
Exercised
|
| | | | (3,869) | | | | | | 457 | | |
Forfeited
|
| | | | (112) | | | | | | 766 | | |
Outstanding – December 31, 2021
|
| | | | 35,801 | | | | | $ | 412 | | |
Granted
|
| | | | 6,032,700 | | | | | | 5.61 | | |
Exercised
|
| | | | (1,650,181) | | | | | | 5.25 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2022
|
| | | | 4,418,320 | | | | | $ | 8.37 | | |
Exercisable at December 31, 2021
|
| | | | 35,801 | | | | | $ | 412 | | |
Exercisable at December 31, 2022
|
| | | | 4,281,956 | | | | | $ | 8.42 | | |
| | |
Options
|
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2020
|
| | | | 11,631 | | | | | $ | 234 | | |
Granted
|
| | | | 27,320 | | | | | | 415 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2021
|
| | | | 38,951 | | | | | $ | 362 | | |
Granted
|
| | | | — | | | | | | — | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2022
|
| | | | 38,951 | | | | | $ | 362 | | |
Exercisable at December 31, 2021
|
| | | | 31,646 | | | | | $ | 359 | | |
Exercisable at December 31, 2022
|
| | | | 34,713 | | | | | $ | 405 | | |
Weighted average duration (years) to expiration of outstanding options at
December 31, 2022 |
| | | | 7.00 | | | | | | | | |
| | |
Year Ended December 31,
|
| ||||||
| | | | |
2021
|
| ||||
Risk Free Interest Rate
|
| | | | n/a | | | |
0.34% – 0.85%
|
|
Expected Dividend Yield
|
| | | | n/a | | | |
0.00%
|
|
Expected Volatility
|
| | | | n/a | | | |
58.00%
|
|
Expected Life (years)
|
| | | | n/a | | | |
5.18
|
|
| | | | ||||||||||
| | | | |
2021
|
| |||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating loss carryforwards
|
| | | $ | 16,733,582 | | | | | $ | 13,108,371 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Depreciation timing differences
|
| | | | — | | | | | | (5,103) | | |
Valuation allowance
|
| | | | (16,733,582) | | | | | | (13,103,268) | | |
Net deferred tax assets
|
| | | $ | — | | | | | $ | — | | |
| | | | | | ||||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 762,607 | | | | | $ | 417,235 | | |
Accounts receivable, net of allowance
|
| | | | 238,779 | | | | | | 124,342 | | |
Due from factor
|
| | | | 416,226 | | | | | | 590,022 | | |
Inventory
|
| | | | 3,207,105 | | | | | | 4,917,128 | | |
Prepaid expenses and other current assets
|
| | | | 170,602 | | | | | | 219,902 | | |
Total current assets
|
| | | | 4,795,319 | | | | | | 6,268,628 | | |
Fixed assets, net
|
| | | | 112,602 | | | | | | 161,954 | | |
Deposits
|
| | | | 9,612 | | | | | | 19,742 | | |
Total assets
|
| | | $ | 4,917,533 | | | | | $ | 6,450,324 | | |
LIABILITIES AND MEMBERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 1,345,197 | | | | | $ | 1,142,671 | | |
Accrued liabilities
|
| | | | 490,396 | | | | | | 773,274 | | |
Loan payable, related party
|
| | | | 495,000 | | | | | | — | | |
Total liabilities
|
| | | | 2,330,593 | | | | | | 1,915,945 | | |
Commitments and contingencies (Note 7) | | | | | | | | | | | | | |
Members’ equity
|
| | | | 2,586,939 | | | | | | 4,534,379 | | |
Total members’ equity
|
| | | | 2,586,939 | | | | | | 4,534,379 | | |
Total liabilities and members’ equity
|
| | | $ | 4,917,533 | | | | | $ | 6,450,324 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | | | |
2021
|
| |||||||
Net revenues
|
| | | $ | 11,868,420 | | | | | $ | 18,151,326 | | |
Cost of goods sold
|
| | | | 8,026,234 | | | | | | 10,890,796 | | |
Gross profit
|
| | | | 3,842,186 | | | | | | 7,260,530 | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative
|
| | | | 2,682,642 | | | | | | 2,286,956 | | |
Distribution
|
| | | | 731,545 | | | | | | 863,185 | | |
Sales and marketing
|
| | | | 2,260,763 | | | | | | 3,168,990 | | |
Total operating expenses
|
| | | | 5,674,950 | | | | | | 6,319,131 | | |
Income (loss) from operations
|
| | | | (1,832,764) | | | | | | 941,399 | | |
Other income (expense), net | | | | | | | | | | | | | |
Other income
|
| | | | — | | | | | | 689,171 | | |
Interest expense
|
| | | | (43,876) | | | | | | (50,510) | | |
Total other income (expense), net
|
| | | | (43,876) | | | | | | 638,661 | | |
Provision for income taxes
|
| | | | 800 | | | | | | 800 | | |
Net income (loss)
|
| | | $ | (1,877,440) | | | | | $ | 1,579,260 | | |
| | |
Members’
Equity |
| |||
Balances at December 31, 2020
|
| | | $ | 4,630,468 | | |
Distributions
|
| | | | (1,780,000) | | |
Net income
|
| | | | 1,579,260 | | |
Balances at September 30, 2021
|
| | | $ | 4,429,728 | | |
Balances at December 31, 2021
|
| | | $ | 4,534,379 | | |
Distributions
|
| | | | (70,000) | | |
Net loss
|
| | | | (1,877,440) | | |
Balances at September 30, 2022
|
| | | $ | 2,586,939 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | | | |
2021
|
| |||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | (1,877,440) | | | | | $ | 1,579,260 | | |
Adjustments to reconcile net income (loss) to net cash provided by operating
activities: |
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 40,500 | | | | | | 43,200 | | |
Bad debt
|
| | | | — | | | | | | 7,068 | | |
Other income – PPP forgiveness
|
| | | | — | | | | | | (689,171) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (114,438) | | | | | | (140,037) | | |
Due from factor
|
| | | | 1,181,097 | | | | | | 721,984 | | |
Inventory
|
| | | | 1,710,023 | | | | | | 938,206 | | |
Prepaid expenses and other current assets
|
| | | | 49,300 | | | | | | (109,952) | | |
Accounts payable
|
| | | | 202,526 | | | | | | (690,300) | | |
Accrued liabilities
|
| | | | (282,878) | | | | | | (629,131) | | |
Net cash provided by operating activities
|
| | | | 908,690 | | | | | | 1,031,127 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | — | | | | | | (5,000) | | |
Proceeds from sale of property and equipment
|
| | | | 8,852 | | | | | | — | | |
Deposits
|
| | | | 10,130 | | | | | | — | | |
Net cash provided by (used in) investing activities
|
| | | | 18,982 | | | | | | (5,000) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from loans payable
|
| | | | — | | | | | | 630,637 | | |
Proceeds from loan payable, related party
|
| | | | 995,000 | | | | | | — | | |
Repayments to loan payable, related party
|
| | | | (500,000) | | | | | | — | | |
Factor advances (repayments), net
|
| | | | (1,007,300) | | | | | | (185,000) | | |
Distributions
|
| | | | (70,000) | | | | | | (1,780,000) | | |
Net cash used in financing activities
|
| | | | (582,300) | | | | | | (1,334,363) | | |
Net change in cash and cash equivalents
|
| | | | 345,372 | | | | | | (308,236) | | |
Cash at beginning of period
|
| | | | 417,235 | | | | | | 733,440 | | |
Cash at end of period
|
| | | $ | 762,607 | | | | | $ | 425,204 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 800 | | | | | $ | 800 | | |
Cash paid for interest
|
| | | $ | 43,876 | | | | | $ | 50,510 | | |
| | | | | | ||||||||
Outstanding receivables | | | | | | | | | | | | | |
Without recourse
|
| | | $ | 702,432 | | | | | $ | 1,886,591 | | |
With recourse
|
| | | | 580 | | | | | | 11,000 | | |
| | | | | 703,012 | | | | | | 1,897,591 | | |
Advances
|
| | | | (202,000) | | | | | | (1,209,300) | | |
Credits due customers
|
| | | | (84,787) | | | | | | (98,269) | | |
Due from factor
|
| | | $ | 416,226 | | | | | $ | 590,022 | | |
| | | | | | ||||||||
Raw materials
|
| | | $ | 1,139,267 | | | | | $ | 1,746,722 | | |
Work in progress
|
| | | | 1,272,861 | | | | | | 1,951,549 | | |
Finished goods
|
| | | | 794,977 | | | | | | 1,218,857 | | |
Inventory
|
| | | $ | 3,207,105 | | | | | $ | 4,917,128 | | |
| | | | | | ||||||||
Leasehold improvements and showrooms
|
| | | $ | 198,658 | | | | | $ | 198,658 | | |
Furniture and equipment
|
| | | | 174,005 | | | | | | 183,005 | | |
Automobiles
|
| | | | 34,220 | | | | | | 34,072 | | |
| | | | | 406,883 | | | | | | 415,735 | | |
Less: accumulated depreciation and amortization
|
| | | | (294,281) | | | | | | (253,781) | | |
Fixed assets, net
|
| | | $ | 112,602 | | | | | $ | 161,954 | | |
| | | | ||||
ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash
|
| | | $ | 179,441 | | |
Accounts receivable, net of allowance
|
| | | | 63,956 | | |
Due from factor
|
| | | | 387,884 | | |
Inventory
|
| | | | 2,941,755 | | |
Prepaid expenses and other current assets
|
| | | | 83,120 | | |
Total current assets
|
| | | | 3,656,157 | | |
Fixed assets, net
|
| | | | 48,985 | | |
Deposits
|
| | | | 9,612 | | |
Total assets
|
| | | $ | 3,714,753 | | |
LIABILITIES AND MEMBERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable
|
| | | $ | 613,595 | | |
Accrued liabilities
|
| | | | 633,672 | | |
Loan payable, related party
|
| | | | 395,000 | | |
Total liabilities
|
| | | | 1,642,267 | | |
Commitments and contingencies | | | | | | | |
Members’ equity
|
| | | | 2,072,486 | | |
Total members’ equity
|
| | | | 2,072,486 | | |
Total liabilities and members’ equity
|
| | | $ | 3,714,753 | | |
| | | | ||||
Net revenues
|
| | | $ | 14,548,083 | | |
Cost of goods sold
|
| | | | 9,694,857 | | |
Gross profit
|
| | | | 4,853,226 | | |
Operating expenses: | | | | | | | |
General and administrative
|
| | | | 3,433,633 | | |
Distribution
|
| | | | 913,052 | | |
Sales and marketing
|
| | | | 2,736,181 | | |
Total operating expenses
|
| | | | 7,082,866 | | |
Income (loss) from operations
|
| | | | (2,229,640) | | |
Other income (expense), net | | | | | | | |
Other income
|
| | | | 13,878 | | |
Other expenses
|
| | | | (66,232) | | |
Interest expense
|
| | | | (9,099) | | |
Total other income (expense), net
|
| | | | (61,453) | | |
Provision for income taxes
|
| | | | 800 | | |
Net income (loss)
|
| | | $ | (2,291,893) | | |
| | |
Members’
Equity |
| |||
Balances at December 31, 2021
|
| | | $ | 4,534,379 | | |
Distributions
|
| | | | (170,000) | | |
Net loss
|
| | | | (2,291,893) | | |
Balances at December 30, 2022
|
| | | $ | 2,072,486 | | |
| | |
Period Ended
December 30, 2022 |
| |||
Cash flows from operating activities: | | | | | | | |
Net loss
|
| | | $ | (2,291,893) | | |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization
|
| | | | 37,885 | | |
Changes in operating assets and liabilities:
|
| | | | | | |
Accounts receivable
|
| | | | 60,386 | | |
Due from factor
|
| | | | 473,341 | | |
Inventory
|
| | | | 1,975,373 | | |
Prepaid expenses and other current assets
|
| | | | 136,781 | | |
Accounts payable
|
| | | | (529,075) | | |
Accrued liabilities
|
| | | | (139,602) | | |
Net cash used in operating activities
|
| | | | (276,805) | | |
Cash flows from investing activities: | | | | | | | |
Proceeds from sale of property and equipment
|
| | | | 75,084 | | |
Deposits
|
| | | | 10,130 | | |
Net cash provided by (used in) investing activities
|
| | | | 85,214 | | |
Cash flows from financing activities: | | | | | | | |
Proceeds from loans payable
|
| | | | — | | |
Proceeds from loan payable, related party
|
| | | | 995,000 | | |
Repayments to loan payable, related party
|
| | | | (600,000) | | |
Factor advances (repayments), net
|
| | | | (271,203) | | |
Distributions
|
| | | | (170,000) | | |
Net cash used in financing activities
|
| | | | (46,203) | | |
Net change in cash
|
| | | | (237,794) | | |
Cash at beginning of period
|
| | | | 417,235 | | |
Cash at end of period
|
| | | $ | 179,441 | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid for income taxes
|
| | | $ | 800 | | |
Cash paid for interest
|
| | | $ | 9,099 | | |
| | | | ||||
Outstanding receivables | | | | | | | |
Without recourse
|
| | | $ | 1,463,496 | | |
With recourse
|
| | | | 8,533 | | |
| | | | | 1,472,029 | | |
Advances
|
| | | | (938,097) | | |
Credits due customers
|
| | | | (146,048) | | |
Due from factor
|
| | | $ | 387,884 | | |
| | | | ||||
Raw materials
|
| | | $ | 1,214,778 | | |
Work in progress
|
| | | | 787,532 | | |
Finished goods
|
| | | | 939,445 | | |
Inventory
|
| | | $ | 2,941,755 | | |
| | | | ||||
Leasehold improvements and showrooms
|
| | | $ | 108,383 | | |
Furniture and equipment
|
| | | | 174,006 | | |
Automobiles
|
| | | | 34,220 | | |
| | | | | 316,608 | | |
Less: accumulated depreciation and amortization
|
| | | | (267,623) | | |
Fixed assets, net
|
| | | $ | 48,985 | | |
| | | | ||||
ASSETS | | | | | | | |
Current assets:
|
| | | $ | 417,235 | | |
Cash
|
| | | | | | |
Accounts receivable, net of allowance
|
| | | | 124,342 | | |
Due from factor
|
| | | | 590,022 | | |
Inventory
|
| | | | 4,917,128 | | |
Prepaid expenses and other current assets
|
| | | | 219,901 | | |
Total current assets
|
| | | | 6,268,628 | | |
Fixed assets, net
|
| | | | 161,954 | | |
Deposits
|
| | | | 19,742 | | |
Total assets
|
| | | $ | 6,450,324 | | |
LIABILITIES AND MEMBERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable
|
| | | $ | 1,142,671 | | |
Accrued liabilities
|
| | | | 773,274 | | |
Loan payable, current
|
| | | | — | | |
Total current liabilities
|
| | | | 1,915,945 | | |
Loan payable, net of current portion
|
| | | | — | | |
Total liabilities
|
| | | | 1,915,945 | | |
Commitments and contingencies (Note 7) | | | | | | | |
Members’ equity
|
| | | | 4,534,379 | | |
Total members’ equity
|
| | | | 4,534,379 | | |
Total liabilities and members’ equity
|
| | | $ | 6,450,324 | | |
| | | | ||||
Net revenues
|
| | | $ | 22,800,825 | | |
Cost of goods sold
|
| | | | 13,638,553 | | |
Gross profit
|
| | | | 9,162,272 | | |
Operating expenses: | | | | | | | |
General and administrative
|
| | | | 3,201,811 | | |
Distribution
|
| | | | 1,080,964 | | |
Sales and marketing
|
| | | | 4,374,667 | | |
Total operating expenses
|
| | | | 8,657,442 | | |
Income from operations
|
| | | | 504,830 | | |
Other income (expense), net Other income
|
| | | | 1,319,899 | | |
Interest expense
|
| | | | (70,018) | | |
Total other income (expense), net
|
| | | | 1,249,881 | | |
Provision for income taxes
|
| | | | 800 | | |
Net income
|
| | | $ | 1,753,911 | | |
| | |
Members’
Equity |
| |||
Balances at December 31, 2020
|
| | | $ | 4,630,468 | | |
Distributions
|
| | | | (1,850,000) | | |
Net income
|
| | | | 1,753,911 | | |
Balances at December 31, 2021
|
| | | $ | 4,534,379 | | |
| | | | ||||
Cash flows from operating activities: | | | | | | | |
Net income
|
| | | $ | 1,753,911 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization
|
| | | | 53,851 | | |
Bad debt
|
| | | | 9,976 | | |
Other income – PPP forgiveness
|
| | | | (1,319,808) | | |
Changes in operating assets and liabilities:
|
| | | | | | |
Accounts receivable
|
| | | | 44,740 | | |
Due from factor
|
| | | | 363,083 | | |
Inventory
|
| | | | 830,698 | | |
Due from related party
|
| | | | — | | |
Prepaid expenses and other current assets
|
| | | | (117,777) | | |
Accounts payable
|
| | | | (258,122) | | |
Accrued liabilities
|
| | | | (440,694) | | |
Net cash provided by operating activities
|
| | | | 919,858 | | |
Cash flows from investing activities: | | | | | | | |
Purchase of property and equipment
|
| | | | — | | |
Net cash used in investing activities
|
| | | | — | | |
Cash flows from financing activities: | | | | | | | |
Proceeds from loans payable
|
| | | | 480,637 | | |
Factor advances (repayments), net
|
| | | | 133,300 | | |
Distributions
|
| | | | (1,850,000) | | |
Net cash used in financing activities
|
| | | | (1,236,063) | | |
Net change in cash and cash equivalents
|
| | | | (316,205) | | |
Cash and cash equivalents at beginning of year
|
| | | | 733,440 | | |
Cash and cash equivalents at end of year
|
| | | $ | 417,235 | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid for income taxes
|
| | | $ | 800 | | |
Cash paid for interest
|
| | | $ | 70,018 | | |
| | | | ||||
Outstanding receivables | | | | | | | |
Without recourse
|
| | | $ | 1,886,591 | | |
With recourse
|
| | | | 11,000 | | |
| | | | | 1,897,591 | | |
Advances
|
| | | | (1,209,300) | | |
Credits due customers
|
| | | | (98,269) | | |
Due from factor
|
| | | $ | 590,022 | | |
| | | | ||||
Raw materials
|
| | | $ | 1,746,722 | | |
Work in progress
|
| | | | 1,951,549 | | |
Finished goods
|
| | | | 1,218,857 | | |
Inventory
|
| | | $ | 4,917,128 | | |
| | | | ||||
Leasehold improvements and showrooms
|
| | | $ | 198,658 | | |
Furniture and equipment
|
| | | | 183,005 | | |
Automobiles
|
| | | | 34,072 | | |
| | | | | 415,735 | | |
Less: accumulated depreciation and amortization
|
| | | | (253,781) | | |
Fixed assets, net
|
| | | $ | 161,954 | | |
|
2022
|
| | | $ | 15,516 | | |
| | | | | $ | 15,516 | | |
|
SEC Filing Fee
|
| | | $ | 565 | | |
|
Placement Agent Expenses and non-accountable expense allowance
|
| | | $ | 664,900.00* | | |
|
Legal Fees and Expenses
|
| | | $ | 300,000.00* | | |
|
Accounting Fees and Expenses
|
| | | $ | 10,000.00* | | |
|
Transfer Agent and Registrar Expenses
|
| | | $ | 5,000.00* | | |
|
Miscellaneous Fees and Expenses, including FINRA filing fee
|
| | | $ | 19,535** | | |
|
Total
|
| | | $ | 1,000,000.00* | | |
|
NAME
|
| |
TITLE
|
| |
DATE
|
|
|
|
| |
Director, President and Chief Executive Officer
|
| | | |
|
/s/ Reid Yeoman
|
| |
Chief Financial Officer
(Principal financial and accounting officer) |
| | | |
|
*
Mark T. Lynn
|
| |
Director
|
| | | |
|
*
Trevor Pettennude
|
| |
Director
|
| | | |
|
*
Jameeka Aaron Green
|
| |
Director
|
| | | |
|
*
Huong “Lucy” Doan
|
| |
Director
|
| | | |
|
*By:
John Hilburn Davis IV
attorney-in-fact |
| | | | | |
This ‘S-1/A’ Filing | Date | Other Filings | ||
---|---|---|---|---|
5/5/27 | ||||
1/31/25 | ||||
1/17/24 | ||||
12/31/23 | ||||
10/31/23 | ||||
9/30/23 | ||||
9/15/23 | ||||
9/6/23 | ||||
8/21/23 | DEF 14A | |||
Filed on: | 8/4/23 | |||
7/31/23 | ||||
7/27/23 | 8-K | |||
6/30/23 | 8-K | |||
6/27/23 | 8-K, PRE 14A, S-1 | |||
6/21/23 | 8-K | |||
6/20/23 | ||||
6/14/23 | ||||
5/30/23 | 8-K | |||
5/23/23 | 8-K | |||
5/22/23 | 10-Q | |||
5/16/23 | ||||
5/15/23 | NT 10-Q | |||
5/9/23 | ||||
5/5/23 | ||||
5/4/23 | 8-K | |||
4/17/23 | 10-K, 8-K | |||
4/7/23 | 8-K, 8-K/A | |||
3/31/23 | 10-Q, NT 10-Q | |||
3/21/23 | ||||
2/15/23 | ||||
2/7/23 | ||||
1/17/23 | 8-K, D | |||
1/11/23 | 8-K | |||
1/1/23 | ||||
12/31/22 | 10-K, NT 10-K | |||
12/30/22 | 8-K | |||
12/29/22 | 8-K | |||
12/15/22 | ||||
12/10/22 | ||||
11/29/22 | 8-K, EFFECT, S-1/A | |||
11/28/22 | CORRESP, S-1/A | |||
11/14/22 | 10-Q, 8-K | |||
11/11/22 | ||||
11/9/22 | EFFECT | |||
11/3/22 | 8-K, S-3/A | |||
11/1/22 | 8-K | |||
10/30/22 | ||||
10/21/22 | 8-K | |||
10/13/22 | 8-K, DEF 14A | |||
10/4/22 | ||||
9/30/22 | 10-Q | |||
9/29/22 | 8-K | |||
9/21/22 | 8-K | |||
9/8/22 | S-3/A | |||
8/31/22 | 8-K | |||
8/1/22 | ||||
7/28/22 | ||||
7/27/22 | 8-K | |||
7/21/22 | 8-K | |||
7/18/22 | ||||
6/30/22 | 10-Q | |||
5/31/22 | 8-K | |||
5/18/22 | ||||
5/10/22 | 4, 8-K | |||
5/9/22 | 424B4 | |||
5/5/22 | 8-K, CORRESP, EFFECT, S-1/A | |||
4/18/22 | S-1 | |||
4/8/22 | 8-K | |||
3/31/22 | 10-K, 10-Q, 8-K | |||
1/27/22 | ||||
1/19/22 | 8-K, DRS | |||
1/18/22 | 8-K, DRS | |||
1/17/22 | ||||
1/1/22 | ||||
12/31/21 | 10-K | |||
12/30/21 | UPLOAD | |||
12/16/21 | S-1/A | |||
12/15/21 | ||||
12/6/21 | ||||
11/16/21 | 8-K, 8-K/A | |||
11/13/21 | ||||
10/31/21 | ||||
10/1/21 | 8-K | |||
9/30/21 | 10-Q | |||
8/30/21 | ||||
8/27/21 | 8-K, 8-K/A | |||
7/22/21 | ||||
6/30/21 | 10-Q | |||
6/28/21 | 10-Q, 8-K | |||
5/18/21 | 3, 8-K, S-8 | |||
5/13/21 | 3, CERT, CORRESP, EFFECT | |||
5/12/21 | CORRESP, S-1/A | |||
5/10/21 | 8-A12B, UPLOAD | |||
3/31/21 | 10-Q | |||
3/25/21 | ||||
2/23/21 | ||||
1/1/21 | ||||
12/31/20 | DRS | |||
12/21/20 | ||||
11/30/20 | ||||
10/1/20 | ||||
9/24/20 | ||||
3/10/20 | ||||
2/12/20 | 1-U | |||
1/30/20 | ||||
12/31/19 | 1-K | |||
12/12/19 | ||||
7/22/19 | ||||
1/1/19 | ||||
12/15/18 | ||||
1/17/14 | ||||
1/1/14 | ||||
1/30/13 | ||||
9/17/12 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 9/18/23 Digital Brands Group, Inc. S-1 154:23M Toppan Merrill/FA 8/24/23 Digital Brands Group, Inc. S-1/A 153:24M Toppan Merrill/FA 8/21/23 Digital Brands Group, Inc. 10-Q 6/30/23 73:8M Toppan Merrill/FA |