UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

 

☒	Preliminary Proxy Statement

 

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

☐	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material Pursuant to §240.14a-12

 

 

DESTINATION XL GROUP, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

 

Payment of Filing Fee (Check the appropriate box):

 

☐	No fee required.

 

☐	Fee paid previously with preliminary materials.

 

☒	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

PRELIMINARY PROXY STATEMENT DATED JULY 17, 2026—SUBJECT TO COMPLETION

 

555 Turnpike Street

Canton, Massachusetts 02021

 

 

Dear DXL Stockholders:

You are invited to attend the special meeting of stockholders of Destination XL Group, Inc., a Delaware corporation (“DXL”), which will be held at [●] a.m., Eastern Time, on [●], 2026 (the “special meeting”). The special meeting will be held at the corporate offices of DXL located at 555 Turnpike Street, Canton, Massachusetts 02021.

On December 11, 2025, DXL, Divine Merger Sub I, Inc., a Delaware corporation and wholly owned direct subsidiary of DXL (the “merger subsidiary”), and FBB Holdings I, Inc., a Delaware corporation (“FBB”), entered into an Agreement and Plan of Merger (the “merger agreement”), pursuant to which the merger subsidiary would merge with and into FBB, with FBB continuing as the surviving corporation as a wholly owned subsidiary of DXL (the “merger”).

Under the terms of the merger agreement, if the merger is consummated, at the effective time of the merger, each share of common stock, par value $0.01 per share, of FBB (“FBB common stock”) (excluding (i) any shares held as treasury stock by FBB or held or owned by DXL or any subsidiary of DXL or FBB, (ii) any dissenting shares, and (iii) any shares held by a FBB stockholder that is an unaccredited investor) would be converted into the right to receive that number of fully paid and nonassessable shares of the common stock, par value $0.01 per share, of DXL (“DXL common stock”) equal to the exchange ratio, which would be calculated based on the total number of the new issuance of DXL common stock (which would be the number of shares equal to the fully diluted DXL shares multiplied by the quotient of fifty-five percent (55%) divided by forty-five percent (45%)) divided by the number of FBB common stock issued and outstanding immediately prior to the effective time of the merger. If the merger is consummated, immediately following the effective time of the merger, FBB stockholders would be expected to own or hold rights to acquire 55% of the combined company (as defined below) and DXL stockholders would be expected to own or hold rights to acquire 45% of the combined company, in each case, on a fully diluted basis using the treasury stock method. If the merger is consummated, DXL would continue to operate under the same name (the “combined company”).

The Board of Directors of DXL (the “DXL Board”) has continued to evaluate the merger, including in light of developments since the execution of the merger agreement. As part of that evaluation, the DXL Board has considered, among other things, the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. Notwithstanding this determination, the DXL Board is contractually obligated under the merger agreement to submit the issuance proposal to DXL stockholders for approval.

At the special meeting, DXL will ask its stockholders to consider and vote on the following matters:

 

•

a proposal to approve the issuance of shares of DXL common stock as the merger consideration pursuant to the terms of the merger agreement and the resulting “change of control” under the Nasdaq rules (“proposal 1” or “issuance proposal”);

 

•

a proposal to approve and adopt an amendment to the restated certificate of incorporation of DXL to effect a reverse stock split at a ratio of not less than 1-for-2 and not more than 1-for-30 pursuant to the amendment set forth in Section 1 on Annex C to the proxy statement (“proposal 2” or “reverse stock split proposal”);

 

•

a proposal to approve and adopt an amendment to the Second Amended and Restated 2016 Incentive Compensation Plan (the “2016 plan”) to (a) increase the total number of shares of DXL common stock available for issuance under the 2016 plan by 13,500,000 shares; (b) increase the total number of shares of DXL common stock available for issuance upon the exercise of incentive stock options granted under the 2016 plan by 13,500,000 shares; (c) change the share fungible rate from 1.9 shares to 1.5 shares; and (d) remove the annual per participant limitations with respect to the share amount and/or dollar value of awards that can be granted under the 2016 plan (“proposal 3” or “2016 plan proposal”); and

 

•

a proposal to approve an adjournment or postponement of the special meeting for the purpose of soliciting additional proxies with respect to the issuance proposal, the reverse stock split proposal and/or the 2016 plan proposal (“proposal 4” or “adjournment proposal”).

As described in the accompanying proxy statement, certain of DXL stockholders, including the directors and chief financial officer of DXL, who in the aggregate own approximately [●]% of the shares of DXL common stock outstanding as of the record date, are parties to voting agreements with FBB, whereby such stockholders agreed to vote their shares in favor of the approval of each of proposals 1, 2 and 4, subject to the terms therein. These voting agreements were entered into in connection with the execution of the merger agreement, prior to the DXL Board’s ongoing evaluation of the merger and updated determination to recommend that DXL stockholders vote against the issuance proposal. The voting agreements remain binding on the stockholders subject thereto, notwithstanding the updated position of the DXL Board, unless and until they terminate in accordance with their terms.

In December 2025, the DXL Board unanimously approved the merger agreement and determined that it was fair to, and in the best interests of, DXL and its stockholders as of the date of its approval. However, after careful consideration, including continued evaluation of the merger, including in light of developments since the execution of the merger agreement, with the assistance of external financial and legal advisors, the DXL Board has withdrawn its prior recommendation in favor of the merger and the issuance proposal.

Accordingly, the DXL Board unanimously recommends that DXL stockholders vote (i) “AGAINST” the issuance proposal, (ii) “FOR” the reverse stock split proposal, (iii) “FOR” the 2016 plan proposal, and (iv) “FOR” the adjournment proposal.

This proxy statement includes information regarding FBB, its business, financial condition and prospects, as well as statements regarding the potential strategic and financial benefits of the merger and the expected performance of the combined company that have been provided by FBB or its representatives and reflect FBB’s views. The DXL Board has continued to evaluate the merger, including in light of developments since the execution of the merger agreement. As part of that evaluation, the DXL Board has considered, among other things, the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. As a result, certain statements identified in this proxy statement as coming from FBB regarding the anticipated benefits of the merger, the outlook for the

combined company or the strategic rationale for the transaction may differ from, or be inconsistent with, the current views of the DXL Board. Accordingly, stockholders are presented with differing perspectives in this proxy statement and are urged to carefully consider the DXL Board’s recommendation that stockholders vote “AGAINST” the issuance proposal, together with the other information contained in this proxy statement, including the risks described under “Risks Related to the Merger,” in determining how to vote on the proposals.

Shares of DXL common stock are currently listed on The Nasdaq Global Market under the symbol “DXLG”. If the merger is consummated, it is expected that DXL common stock would trade on The Nasdaq Global Market under the symbol “DXLG”. More information about DXL, FBB and the proposed transactions is contained in the accompanying proxy statement.

DXL URGES YOU TO READ THE PROXY STATEMENT CAREFULLY AND IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 28.

Your vote is important. Whether or not you expect to attend the special meeting, please complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the special meeting. You can also vote your shares via the internet or by telephone as provided in the instructions set forth in the enclosed proxy card. If you hold your shares in “street name” through a broker, you should follow the procedures provided by your broker.

The DXL Board appreciates your careful consideration of these important matters and encourages you to vote your shares.

Sincerely,

 

Lionel F. Conacher		Harvey S. Kanter
Chairman of the DXL Board		President and Chief Executive Officer

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger described in this proxy statement or the DXL common stock to be issued in connection with the merger or determined if this proxy statement is accurate or adequate. Any representation to the contrary is a criminal offense.

This proxy statement is dated  , 2026 and is first being mailed to stockholders on or about   , 2026.

PRELIMINARY PROXY STATEMENT DATED JULY 17, 2026—SUBJECT TO COMPLETION

DESTINATION XL GROUP, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON [●], 2026

To the Stockholders of Destination XL Group, Inc.:

Notice is hereby given that a special meeting of stockholders of Destination XL Group, Inc. (“DXL”) will be held at the corporate offices of DXL, located at 555 Turnpike Street, Canton, Massachusetts 02021, at [●] a.m., Eastern Time on [●], 2026 to consider and vote on the following proposals:

 

1.

To approve the issuance of shares of DXL common stock as the merger consideration pursuant to the terms of the merger agreement and the resulting “change of control” under the Nasdaq rules (“proposal 1” or “issuance proposal”);

 

2.

To approve and adopt an amendment to the restated certificate of incorporation of DXL to effect a reverse stock split at a ratio of not less than 1-for-2 and not more than 1-for-30 pursuant to the amendment set forth in Section 1 on Annex C to the proxy statement (“proposal 2” or “reverse stock split proposal”);

 

3.

To approve and adopt an amendment to the Second Amended and Restated 2016 Incentive Compensation Plan to (a) increase the total number of shares of DXL common stock available for issuance under the 2016 plan by 13,500,000 shares; (b) increase the total number of shares of DXL common stock available for issuance upon the exercise of incentive stock options granted under the 2016 plan by 13,500,000 shares; (c) change the share fungible rate from 1.9 shares to 1.5 shares; and (d) remove the annual per participant limitations with respect to the share amount and/or dollar value of awards that can be granted under the 2016 plan (“proposal 3” or “2016 plan proposal”); and

 

4.

To approve an adjournment or postponement of the special meeting for the purpose of soliciting additional proxies with respect to the issuance proposal, the reverse stock split proposal and/or the 2016 plan proposal (“proposal 4” or “adjournment proposal”).

The issuance proposal, the reverse stock split proposal and the 2016 plan proposal each require the affirmative vote of a majority of the votes cast by DXL stockholders at the special meeting. Approval of the issuance proposal is a condition to the completion of the merger. Although approval of the reverse stock split proposal is not expressly stated in the merger agreement as a condition to the completion of the merger, the merger agreement includes a condition to the merger that the DXL common stock to be issued as merger consideration be authorized for listing on The Nasdaq Stock Market (“Nasdaq”), subject to official notice of issuance. In order to consummate the merger with FBB, DXL must satisfy the Nasdaq initial listing standards, which require, among other things, a minimum bid price of $4.00 per share. On [●], 2026, the last practicable date before the printing of the proxy statement, the closing price per share of DXL common stock as reported on Nasdaq was $[●] per share. Accordingly, although not expressly stated in the merger agreement as a condition precedent to the completion of the merger, approval of the reverse stock split proposal is expected to be necessary to enable DXL to meet the minimum bid price requirement for Nasdaq listing and to satisfy the related Nasdaq-listing condition to the completion of the merger. In addition, regardless of whether the issuance proposal is approved and the merger is consummated, the reverse stock split proposal is imperative to provide DXL with flexibility to regain and maintain compliance with the minimum bid price requirement for continued listing on Nasdaq. If DXL is unable to regain and maintain compliance with Nasdaq listing standards, DXL common stock would become subject to delisting, which would adversely affect the liquidity and marketability of DXL common stock. Accordingly, the Board of Directors of DXL (the “DXL Board”) believes that approval of the reverse stock split proposal is necessary to support DXL’s ongoing capital markets profile and strategic flexibility, regardless of whether the merger is consummated. Approval of the 2016 plan proposal and the adjournment proposal is not a condition to the completion of the merger with FBB. However, the DXL Board believes approval of the 2016 plan proposal is important to ensure that a sufficient number of shares of DXL common stock are available for issuance to participants under the 2016 plan to support DXL’s ongoing compensation programs, regardless of whether the merger is consummated.

These proposals are more fully described in the proxy statement following this notice.

The DXL Board has withdrawn its prior recommendation in favor of the merger and the issuance proposal and now recommends that you vote (i) “AGAINST” the issuance proposal, (ii) “FOR” the reverse stock split proposal, (iii) “FOR” the 2016 plan proposal, and (iv) “FOR” the adjournment proposal.

The DXL Board has fixed the close of business on [●], 2026 as the record date for the determination of the stockholders entitled to notice of, and to vote at, the special meeting. Accordingly, only stockholders of record at the close of business on that date will be entitled to vote at the special meeting. A list of the stockholders of record as of the close of business on [●] will be available for inspection by any of our stockholders for any purpose germane to the special meeting during normal business hours at our principal executive offices, 555 Turnpike Street, Canton, Massachusetts 02021, beginning on [●] and at the special meeting. Stockholders are invited to attend the special meeting in person. Regardless of whether you plan to attend the special meeting, please mark, date, sign and return the enclosed proxy to ensure that your shares are represented at the special meeting.

By Order of the DXL Board,

Robert S. Molloy

General Counsel and Secretary

[●], 2026

Canton, Massachusetts

TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER			1
SUMMARY			10
MARKET PRICE AND DIVIDEND INFORMATION			25
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			26
RISK FACTORS			28
Risks Related to the Merger			28
Risks Related to the Reverse Stock Split			35
Risks Related to DXL			37
Risks Related to FBB			37
Risks Related to the Combined Company			57
THE MERGER			65
Terms of the Merger			65
Prior Approval and Continued Evaluation of the Merger			65
Effect on DXL if the Merger is Not Completed			66
Background of the Merger			66
DXL’s Reasons for Recommending Against the Issuance Proposal; Updated Recommendation of the DXL Board			80
December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL			84
May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL			96
Certain Financial Projections			105
Interests of DXL’s Directors and Executive Officers in the Merger			109
Accounting Treatment			115
Federal Securities Law Consequences; Resale Restrictions			115
Material U.S. Federal Income Tax Consequences of the Merger and the Reverse Stock Split			115
THE SPECIAL MEETING			117
Date, Time and Place			117
Purpose of the Special Meeting			117
Record Date; Shares Outstanding and Entitled to Vote			118
Quorum			118
How to Vote Your Shares			118
How to Change Your Vote			119
Proxies; Counting Your Vote			119
Appraisal Rights			119
Voting by DXL’s Directors and Certain Stockholders			120
Solicitation of Proxies			120
THE MERGER AGREEMENT			121
Structure of the Business Combination			121
Effects of the Merger; Certificate of Incorporation; By-Laws			121
Directors and Executive Officers of the Combined Company Following the Merger			121
Closing of the Merger; Effective Time			122
Merger Consideration			122
Exchange Ratio			123
Treatment of Unaccredited Investor Shares			123
Treatment of FBB Equity Awards			123
Treatment of DXL Equity and Performance-Based Awards			123
Exchange and Payment Procedures			123
Termination of Exchange Fund			124
Lost, Stolen or Destroyed Certificates			124

 

i

		Page
Representations and Warranties			124
Conduct of Business Pending the Merger			126
Required Stockholder Vote			127
Board Recommendation			128
Non-Solicitation of Acquisition Proposals			128
Employee Benefits Matters			132
Directors’ and Officers’ Indemnification and Insurance			133
Financing			133
Nasdaq Listing			134
Conditions to the Closing of the Merger			134
Termination of the Merger Agreement			135
Termination Fee; Expense Reimbursement			136
Amendments; Extensions; Waivers			137
Assignment			137
Entire Agreement; No Third-Party Beneficiaries			137
Expenses			138
Specific Performance			138
Governing Law and Jurisdiction			138
AGREEMENTS RELATED TO THE MERGER			139
Voting Agreements			139
Lock-Up Agreements			139
Private Placement			140
PROPOSAL 1: ISSUANCE PROPOSAL			141
PROPOSAL 2: REVERSE STOCK SPLIT PROPOSAL			143
PROPOSAL 3: 2016 PLAN PROPOSAL			151
PROPOSAL 4: ADJOURNMENT PROPOSAL			167
DXL’S BUSINESS			168
DXL’S EXECUTIVE COMPENSATION			169
FBB’S BUSINESS			170
DXL’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			178
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT DXL’S MARKET RISK			179
FBB’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			180
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			200
DESCRIPTION OF DXL’S CAPITAL STOCK			218
EXECUTIVE OFFICERS AND DIRECTORS FOLLOWING THE MERGER			221
PRINCIPAL STOCKHOLDERS OF DXL			226
WHERE YOU CAN FIND ADDITIONAL INFORMATION			228
HOUSEHOLDING			228
FUTURE STOCKHOLDER PROPOSALS			228
INFORMATION INCORPORATED BY REFERENCE			229
MISCELLANEOUS			230
FBB HOLDINGS I, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1
ANNEX A: AGREEMENT AND PLAN OF MERGER			A-1
ANNEX B: GUGGENHEIM SECURITIES, LLC OPINION			B-1
ANNEX C: PROPOSED CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF DESTINATION XL GROUP, INC.			C-1
ANNEX D: PROPOSED AMENDMENT TO DESTINATION XL GROUP, INC. SECOND AMENDED AND RESTATED 2016 INCENTIVE COMPENSATION PLAN			D-1

 

ii

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following section provides answers to frequently asked questions about the special meeting of stockholders and the merger. This section, however, only provides summary information. These questions and answers may not address all issues that may be important to you as a stockholder. For a more complete response to these questions and for additional information, please refer to the cross-referenced pages below. You should carefully read this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions under the section of this proxy statement entitled “Where You Can Find Additional Information”.

Except as specifically indicated, the following information and all other information contained in this proxy statement does not give effect to the reverse stock split described in Proposal 2.

 

Q:	What is the merger?

 

A:

Destination XL Group, Inc., a Delaware corporation (“DXL”), Divine Merger Sub I, Inc., a Delaware corporation and wholly owned direct subsidiary of DXL (the “merger subsidiary”), and FBB Holdings I, Inc., a Delaware corporation (“FBB”), have entered into an Agreement and Plan of Merger, dated as of December 11, 2025 (the “merger agreement”), that contains the terms and conditions of the proposed business combination of DXL and FBB. Under the merger agreement, at the effective time of the merger, the merger subsidiary would merge with and into FBB, with FBB continuing as the surviving corporation as a wholly owned subsidiary of DXL (the “merger”). If the merger is consummated, DXL would continue to operate under the same name (the “combined company”). The combined company would be expected to trade on The Nasdaq Global Market under the ticker symbol “DXLG”.

Under the terms of the merger agreement, if the merger is consummated, at the effective time of the merger, each share of common stock, par value $0.01 per share, of FBB (“FBB common stock”) (excluding (i) any shares held as treasury stock by FBB or held or owned by DXL or any subsidiary of DXL or FBB, (ii) any dissenting shares, and (iii) any shares held by a FBB stockholder that is an unaccredited investor) would be converted into the right to receive that number of fully paid and nonassessable shares of the common stock, par value $0.01 per share, of DXL (“DXL common stock”) equal to the exchange ratio, which would be calculated based on the total number of the new issuance of DXL common stock (which would be the number of shares equal to the fully diluted DXL shares multiplied by the quotient of fifty-five percent (55%) divided by forty-five percent (45%)) divided by the number of FBB common stock issued and outstanding immediately prior to the effective time of the merger. If the merger is consummated, immediately following the effective time of the merger, FBB stockholders would be expected to own or hold rights to acquire 55% of the combined company and DXL stockholders would be expected to own or hold rights to acquire 45% of the combined company, in each case, on a fully diluted basis using the treasury stock method.

Each share of DXL common stock, each option to purchase DXL common stock and each DXL restricted stock unit award that is issued and outstanding at the effective time of the merger would remain issued and outstanding and would be unaffected by the merger, other than adjustments for the reverse stock split and those shares subject to acceleration upon the consummation of the merger. The DXL performance stock unit award would be treated in accordance with its existing terms.

Each DXL performance-based award that is outstanding under the DXL long-term incentive plan (the “LTIP”) at the effective time of the merger, if the merger is consummated, (a) would be cancelled and paid out on a pro rata basis equal to the product of (i) the earned amount of the award based on the actual achievement of the applicable performance metrics through the latest practicable date prior to the closing of the merger and (ii) a fraction, the numerator of which is the number of calendar days elapsed from the first day of the performance period to the closing of the merger and the denominator of which is the total number

 

1

of calendar days in the applicable performance period and (b) the payment would be made in a combination of cash (up to a maximum aggregate value of $1.4 million) and the remainder in shares of DXL common stock. Based on current performance, it is unlikely that the performance targets under the LTIP would be achieved. The time-vested portion of the current LTIP awards would be treated in accordance with their existing terms following the effective time of the merger and would continue to vest accordingly.

 

Q:	Why am I receiving these proxy materials?

 

A:

You are receiving these proxy materials because you have been identified as a stockholder of DXL as of the record date, and thus you are entitled to vote at DXL’s special meeting of stockholders (the “special meeting”). This document contains important information about the merger and the special meeting and serves as a proxy statement of DXL used to solicit proxies for the special meeting. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of DXL common stock voted by proxy without attending the special meeting. Your vote is important, and DXL encourages you to submit your proxy as soon as possible, whether or not you intend to attend the special meeting.

 

Q:	Why is DXL submitting the issuance proposal for stockholder vote if the DXL Board recommends voting “AGAINST” the issuance proposal?

 

A:

DXL is submitting the issuance proposal for stockholder vote because DXL is contractually obligated to do so under the terms of the merger agreement. The merger agreement does not permit DXL to terminate the agreement solely as a result of a change in recommendation by the Board of Directors of DXL (the “DXL Board”), and, accordingly, DXL remains obligated to submit the issuance proposal to its stockholders for a vote and the merger agreement remains in effect unless and until terminated in accordance with its terms. By contrast, following a change in recommendation by the DXL Board, FBB has the right to terminate the merger agreement under specified circumstances, in which case DXL would be required to pay FBB a termination fee of $2.5 million and/or an out-of-pocket fees and expense reimbursement of up to $950,000. For more information, please see the section entitled “The Merger Agreement—Termination Fee; Expense Reimbursement.”

The merger was previously unanimously approved by the DXL Board in December 2025. The discussion in this proxy statement summarizes the considerations evaluated at the time the merger agreement was approved. As part of that evaluation, the DXL Board has considered, among other things, the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. For a more complete discussion of the DXL Board’s current recommendation and the reasons for that determination, please see the section entitled “The Merger—DXL’s Reasons for Recommending Against the Issuance Proposal; Updated Recommendation of the DXL Board.”

 

Q:	Does this proxy statement include different perspectives regarding the merger?

 

A:

Yes. This proxy statement includes information regarding FBB, its business, financial condition and prospects, as well as statements regarding the potential strategic and financial benefits of the merger and the expected performance of the combined company. Certain information has been provided by FBB or its representatives and reflects the views, including assumptions, projections and judgments of FBB.

The merger was previously unanimously approved by the DXL Board in December 2025. The DXL Board has continued to evaluate the merger, including in light of developments since the execution of the merger agreement. As part of that evaluation, the DXL Board has considered, among other things, the increasingly

 

2

challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. As a result, certain statements identified in this proxy statement as having been made or provided by FBB or its representatives regarding the anticipated benefits of the merger, the outlook for the combined company or the strategic rationale for the transaction may differ from, or be inconsistent with, the current views of the DXL Board. The DXL Board does not adopt or endorse such statements as reflecting its current views, and any anticipated benefits, synergies or other forward-looking matters described in such statements are subject to risks and uncertainties and may not be achieved.

Accordingly, stockholders are presented with differing perspectives in this proxy statement and are urged to carefully consider the DXL Board’s recommendation that stockholders vote “AGAINST” the issuance proposal, together with the other information contained in this proxy statement, including the risks described under “Risks Related to the Merger,” in determining how to vote on the proposals. DXL stockholders should also not place undue reliance on forward-looking statements or projections regarding the combined company.

 

Q:	What is required to consummate the merger?

 

A:

The consummation of the proposed merger with FBB is subject to a number of closing conditions, including the approval of the issuance proposal. Although approval of the reverse stock split proposal is not expressly stated in the merger agreement as a condition to the completion of the merger, the merger agreement includes a condition to the merger that the DXL common stock to be issued as merger consideration be authorized for listing on The Nasdaq Stock Market (“Nasdaq”), subject to official notice of issuance. In order to consummate the merger with FBB, DXL must satisfy the Nasdaq initial listing standards, which require, among other things, a minimum bid price of $4.00 per share. On [●], 2026, the last practicable date before the printing of the proxy statement, the closing price per share of DXL common stock as reported on Nasdaq was $[●] per share. Accordingly, although not a standalone condition precedent, approval of the reverse stock split proposal is expected to be necessary to enable DXL to meet the minimum bid price requirement for Nasdaq listing and to satisfy the related Nasdaq-listing condition to the completion of the merger. In addition, regardless of whether the issuance proposal is approved and the merger is consummated, the reverse stock split proposal is imperative to provide DXL with flexibility to regain and maintain compliance with the minimum bid price requirement for continued listing on Nasdaq. If DXL is unable to regain and maintain compliance with Nasdaq listing standards, DXL common stock would become subject to delisting, which would adversely affect the liquidity and marketability of DXL common stock. Accordingly, the DXL Board believes that approval of the reverse stock split proposal is necessary to support DXL’s ongoing capital markets profile and strategic flexibility, regardless of whether the merger is consummated. For a more complete description of the closing conditions under the merger agreement, please see the section entitled “The Merger Agreement—Conditions to the Closing of the Merger”.

 

Q:	Why is stockholder approval required for the issuance of shares of DXL common stock to existing stockholders of FBB in connection with the merger?

 

A:

DXL common stock is listed on The Nasdaq Global Market, and, as such, DXL is subject to Nasdaq Listing Rule 5635. Under Nasdaq Listing Rule 5635(a), stockholder approval is required prior to the issuance of common stock, among other things, in connection with the acquisition of another company’s stock, if the number of shares of common stock to be issued is in excess of 20% of the number of shares of common stock then outstanding. Under Nasdaq Listing Rule 5635(b), a company listed on Nasdaq is required to obtain stockholder approval prior to an issuance of stock that would result in a “change of control” of the listed company. Based on the structure of the merger and the expected ownership of DXL common stock if the merger is consummated, the issuance of shares of DXL common stock would result in a “change of control” of DXL for purposes of Nasdaq Listing Rule 5635(b).

 

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In the case of the merger, the number of shares of DXL common stock to be issued would be based on, among other factors, the reverse stock split ratio and the total number of outstanding shares of DXL common stock , on a fully diluted basis using the treasury stock method. Based on the assumptions set forth in this proxy statement, DXL would be expected to issue approximately [●] million shares of DXL common stock on a fully diluted basis, and DXL common stock to be issued pursuant to the merger agreement would represent greater than 20% of its voting stock. Such issuance would also be expected to result in a change of control under the Nasdaq rules. Accordingly, because the issuance of DXL common stock in connection with the merger would exceed these thresholds and would be expected to result in a change of control under the Nasdaq rules, stockholder approval is required to authorize the issuance of shares of DXL common stock in connection with the merger and the resulting “change of control” of DXL under the Nasdaq rules.

As described elsewhere in this proxy statement, the DXL Board has continued to evaluate the merger, including developments since the execution of the merger agreement, and has withdrawn its prior recommendation in favor of the merger and the issuance proposal and now recommends that stockholders vote “AGAINST” the issuance proposal.

 

Q:	What is the reverse stock split and why is it necessary?

 

A:

If the reverse stock split proposal is approved, prior to the effective time of the merger (in the event the issuance proposal is approved and the merger is to be consummated) or at such time as the DXL Board determines (in the event the issuance proposal is not approved and the merger is not consummated), by virtue of the filing of an amendment to the restated certificate of incorporation in the form of Section 1 of the certificate of amendment attached as Annex C to this proxy statement and incorporated herein by reference, the outstanding shares of DXL common stock will be combined into a lesser number of shares at a ratio in the range of one new share for every 2 to 30 shares outstanding (or any whole number in between) to be determined by the DXL Board and agreed to by FBB prior to the effective time and publicly announced by DXL and identified in the certificate of amendment so filed. The DXL Board believes that a reverse stock split is necessary for a number of reasons. In order to consummate the merger with FBB, DXL must satisfy the Nasdaq initial listing standards, which require, among other things, a minimum bid price of $4.00 per share. On [●], 2026, the last practicable date before the printing of the proxy statement, the closing price per share of DXL common stock as reported on Nasdaq was $[●] per share. Accordingly, approval of the reverse stock split proposal would be expected, if the merger is consummated, to enable DXL to meet the minimum bid price requirement for Nasdaq listing and to satisfy the related Nasdaq listing condition to the completion of the merger. In addition, regardless of whether the issuance proposal is approved and the merger is consummated, the reverse stock split proposal is imperative to provide DXL with flexibility to regain and maintain compliance with the minimum bid price requirement for continued listing on Nasdaq. If DXL is unable to regain and maintain compliance with Nasdaq listing standards, DXL common stock would become subject to delisting, which would adversely affect the liquidity and marketability of DXL common stock. Accordingly, the DXL Board believes that approval of the reverse stock split proposal is necessary to support DXL’s ongoing capital markets profile and strategic flexibility, regardless of whether the merger is consummated.

 

Q:	How does the DXL Board recommend that DXL stockholders vote?

 

A:	After careful consideration, the DXL Board unanimously recommends that DXL stockholders vote:

 

•

AGAINST proposal 1 to approve the issuance of shares of DXL common stock as the merger consideration pursuant to the terms of the merger agreement and the resulting “change of control” under the Nasdaq rules (“proposal 1” or “issuance proposal”);

 

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FOR proposal 2 to approve and adopt an amendment to the restated certificate of incorporation of DXL to effect a reverse stock split at a ratio of not less than 1-for-2 and not more than 1-for-30 pursuant to the amendment set forth in Section 1 on Annex C to this proxy statement (“proposal 2” or “reverse stock split proposal”);

 

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FOR proposal 3 to approve and adopt an amendment to the Second Amended and Restated 2016 Incentive Compensation Plan to (a) increase the total number of shares of DXL common stock available for issuance under the 2016 plan by 13,500,000 shares; (b) increase the total number of shares of DXL common stock available for issuance upon the exercise of incentive stock options granted under the 2016 plan by 13,500,000 shares; (c) change the share fungible rate from 1.9 shares to 1.5 shares; and (d) remove the annual per participant limitations with respect to the share amount and/or dollar value of awards that can be granted under the 2016 plan (“proposal 3” or “2016 plan proposal”); and

 

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FOR proposal 4 to approve an adjournment or postponement of the special meeting for the purpose of soliciting additional proxies with respect to the issuance proposal, the reverse stock split proposal and/or the 2016 plan proposal (“proposal 4” or “adjournment proposal”).

The DXL Board believes that approval of the reverse stock split proposal and the 2016 plan proposal is important for DXL’s ongoing operations and capital markets positioning, regardless of whether the merger is consummated.

 

Q:	What risks should DXL stockholders consider in deciding whether to vote in favor of the issuance proposal and the reverse stock split proposal?

 

A:

DXL stockholders should carefully read the section of this proxy statement entitled “Risk Factors” beginning on page 28, which sets forth certain risks and uncertainties related to the merger and reverse stock split, risks and uncertainties to which the combined company’s business, if the merger is consummated, would be subject, risks and uncertainties to which DXL, as an independent company, is subject, and risks and uncertainties to which FBB, as an independent company, is subject.

In particular, stockholders should carefully consider the DXL Board’s recent determination that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are not in the best interests of DXL stockholders under the current terms of the merger agreement. Stockholders should also consider the potential effects of the voting agreements entered into by certain stockholders in connection with the execution of the merger agreement, which may increase the likelihood that the issuance proposal is approved notwithstanding the DXL Board’s recommendation against it.

 

Q:	When do you expect the merger to be consummated?

 

A:

If, notwithstanding the DXL Board’s recommendation against the issuance proposal, the DXL stockholders approve the issuance proposal, the consummation of the merger is expected to occur as promptly as practicable. The merger would be consummated, if at all, after the special meeting and following satisfaction or waiver of all closing conditions of the merger. For a more complete description of the closing conditions under the merger agreement, please see the section entitled “The Merger Agreement—Conditions to the Closing of the Merger”.

 

Q:	Are there any federal or state regulatory requirements that must be complied with or federal or state regulatory approvals or clearances that must be obtained in connection with the merger?

 

A:

Neither DXL nor FBB is required to make any filings or to obtain any approvals or clearances from any antitrust regulatory authorities in the United States or other countries to consummate the merger. In the United States, DXL must comply with applicable federal and state securities laws and the Nasdaq rules in connection with the issuance of shares of DXL common stock in the merger, including the filing with the SEC of this proxy statement and the required stockholder approval for the resulting “change of control” of DXL under the Nasdaq rules. Prior to consummation of the merger, DXL intends to file an initial listing application with Nasdaq pursuant to Nasdaq’s “reverse merger” rules and to effect the initial listing of DXL common stock issuable in connection with the merger.

 

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Q:	What is the private placement?

 

A:

Around the date of the merger agreement, FBB entered into commitment and subscription agreements with certain lenders under its existing term loan facility and Jim Fogarty (the “private placement investors”), pursuant to which the private placement investors agreed to purchase, and FBB agreed to sell, shares of FBB common stock for an aggregate purchase price of approximately $92 million immediately prior to the consummation of the merger (the “private placement”). The private placement investors subscribed to purchase these shares of FBB common stock through either (i) the payment of cash consideration and/or (ii) the exchange for cancellation of the principal amount of FBB’s outstanding term loan debt owed to such investor (the “debt-for-equity exchange”), with the total proceeds being used to pay down a portion of the outstanding indebtedness under FBB’s term loan facility. In addition, in connection with the private placement, the private placement investors were granted certain registration rights in the merger agreement with respect to the shares of DXL common stock they would receive if the merger is consummated in exchange for shares of FBB common stock. Such registration rights would require the combined company to use reasonable best efforts to prepare and file a registration statement with the SEC as soon as practicable following the closing of the merger but in no event later than the 30th day following such closing to register the resale of the shares purchased in the private placement. The closing of the private placement would occur immediately prior to the closing of the merger and is a condition to closing the merger.

 

Q:	What are the material U.S. federal income tax consequences of the merger and the reverse stock split to DXL stockholders?

 

A:

DXL stockholders would not sell, exchange or dispose of any shares of DXL common stock as a result of the merger if the merger is consummated. Thus, there would be no material U.S. federal income tax consequences to DXL stockholders as a result of the merger. DXL stockholders would not be expected to recognize gain or loss upon the reverse stock split.

For a more complete description of the material U.S. federal income tax consequences of the merger and the reverse stock split, please see the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger and the Reverse Stock Split”.

 

Q:	What constitutes a quorum for the special meeting?

 

A:

A majority of the issued and outstanding shares entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. Abstentions and broker non-votes will be included in determining the number of shares present and entitled to vote at the meeting for the purpose of determining the presence of a quorum.

 

Q:	What is the vote required to approve each proposal at the special meeting?

 

A:	1:  Issuance proposal

 

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Standard: Approval of the issuance proposal requires the affirmative vote of a majority of the votes cast by DXL stockholders.

 

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Effect of abstentions and broker non-votes: If you fail to vote, mark “ABSTAIN” on your proxy card, or fail to instruct your bank, broker or other nominee with respect to the issuance proposal, it will have no effect on the outcome of the proposal.

 

2:

Reverse stock split proposal

 

•

Standard: Approval of the reverse stock split proposal requires the affirmative vote of a majority of the votes cast by DXL stockholders.

 

•

Effect of abstentions and broker non-votes: If you fail to vote, mark “ABSTAIN” on your proxy card, or fail to instruct your bank, broker or other nominee with respect to the reverse stock split proposal, it will have no effect on the outcome of the proposal.

 

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3:

2016 plan proposal

 

•

Standard: Approval of the 2016 plan proposal requires the affirmative vote of a majority of the votes cast by DXL stockholders.

 

•

Effect of abstentions and broker non-votes: If you fail to vote, mark “ABSTAIN” on your proxy card, or fail to instruct your bank, broker or other nominee with respect to the 2016 plan proposal, it will have no effect on the outcome of the proposal.

 

4:

Adjournment proposal

 

•

Standard: Approval of the adjournment proposal requires the affirmative vote of a majority of the votes cast by DXL stockholders.

 

•

Effect of abstentions and broker non-votes: If you fail to vote, mark “ABSTAIN” on your proxy card, or fail to instruct your bank, broker or other nominee with respect to the adjournment proposal, it will have no effect on the outcome of the proposal.

 

Q:	Who would serve on the board of directors of the combined company following the merger?

 

A:

If the merger is consummated, DXL’s board of directors would consist of nine directors. The board would include four directors designated by DXL, consisting of Lionel F. Conacher, Carmen R. Bauza, Jack Boyle and Willem Mesdag. The board would also include four directors designated by FBB, consisting of Jim Fogarty, Yasir Anwar, Steven Tesoriere, and Josh Beer. One independent director would be mutually agreed to by DXL and FBB.

 

Q:	Who would lead the combined company as senior management following the merger?

 

A:	If the merger is consummated, Jim Fogarty would serve as Chief Executive Officer of DXL. Mr. Fogarty currently serves as Chief Executive Officer of FBB. Peter Stratton would continue to serve as Chief Financial Officer of DXL following the merger.

 

Q:	Are there any DXL stockholders already committed to voting in favor of the issuance proposal, the reverse stock split proposal and the adjournment proposal?

 

A:

Yes. Certain DXL stockholders, including the directors and chief financial officer of DXL, who collectively own approximately [●]% of DXL’s outstanding common stock as of the record date are subject to voting agreements, pursuant to which each such stockholder agreed to vote such stockholder’s shares of DXL common stock in favor of the transactions contemplated by the merger agreement. These voting agreements were entered into in connection with the execution of the merger agreement, prior to the DXL Board’s ongoing evaluation of the merger and updated determination to recommend that DXL stockholders vote against the issuance proposal. The voting agreements remain binding on the stockholders subject thereto, notwithstanding the updated position of the DXL Board, unless and until they terminate in accordance with their terms. Please see the section entitled “Agreements Related To The Merger”.

 

Q:	Why are my proxy and vote important?

 

A:	If you do not submit a proxy or attend the special meeting in person, it will be more difficult for DXL to obtain the necessary quorum to hold the special meeting.

 

Q:	When and where is the special meeting?

 

A:	The special meeting will take place at [●] a.m., Eastern Time on [●], 2026 at DXL’s corporate offices located at 555 Turnpike Street, Canton, Massachusetts 02021.

 

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Q:	Who is entitled to attend the special meeting?

 

A:	All holders of shares of DXL common stock as of the close of business on [●], 2026, the record date for the special meeting (the “record date”) are entitled to receive notice of, attend the special meeting and any adjournment or postponement thereof, and vote at the special meeting.

You are entitled to attend and vote at the special meeting only if you were a DXL stockholder as of the record date or hold a valid proxy for the special meeting.

 

Q:	What do I need to do now?

 

A:

After you have carefully read this proxy statement and have decided how you wish to vote your shares of DXL common stock, please vote your shares promptly so that your shares are represented and voted at the special meeting. If you hold your shares in your name as a stockholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. If you hold your shares in “street name” through a bank, broker or other nominee, you must direct your bank, broker or other nominee how to vote in accordance with the voting instruction card.

 

Q:	How can I vote my shares of DXL common stock?

 

A:	A holder of DXL common stock may vote by proxy or in person at the special meeting. If you hold your shares of DXL common stock in your name as a holder of record, to submit a proxy, you, as a holder of DXL common stock, may use one of the following methods:

 

•

By telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions.

 

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Through the Internet: by visiting the website indicated on the accompanying proxy card and following the instructions.

 

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By mail: by completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage if mailed in the United States.

If you intend to submit your proxy by telephone or via the Internet, you must do so by 11:59 p.m., Eastern Time, on the day before the special meeting. If you intend to submit your proxy by mail, your completed proxy card must be received prior to the special meeting.

If a holder’s shares are held in “street name” by a bank, broker, or other nominee, the holder should check the voting form used by that firm to determine whether the holder may vote by telephone or the Internet.

Even if you plan to attend the special meeting, DXL recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the special meeting.

 

Q:	If my shares are held in “street name” by my bank or broker, will my bank or broker automatically vote my shares for me?

 

A:

No. Your bank or broker cannot vote your shares on proposals 1, 2 and 3, but may vote your shares on proposal 4, without instructions from you. If your shares are held in “street name” through a bank, broker or other nominee, you must provide the record holder of your shares of DXL common stock with instructions on how to vote the shares. Please follow the voting instructions provided by the bank or broker. You may not vote shares held in street name by returning a proxy card directly to DXL, or by voting at the special meeting, unless you provide a “legal proxy”, which you must obtain from your broker, bank, or other nominee. Further, brokers, banks, or other nominees who hold shares of DXL common stock on behalf of their customers may not give a proxy to DXL to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks, and other nominees do not have discretionary voting power on these matters.

 

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Q:	Can I change my vote after I have delivered my proxy or voting instruction card?

 

A:	Yes. If you are the record holder of your shares, you may revoke your proxy in any of the following ways:

 

•

Re-submitting your vote via the Internet or by telephone, by 11:59 p.m., Eastern Time, on [●], 2026;

 

•

Submitting another properly completed proxy card bearing a later date which is received prior to the meeting date;

 

•

Attending the special meeting, notifying the corporate secretary and voting by ballot at the special meeting; or

 

•

Submitting a written notice that you are revoking your proxy. The notice must be sent to 555 Turnpike Street, Canton, Massachusetts 02021, Attention: Secretary, and must be received before your DXL common stock has been voted at the special meeting.

If your shares are held by a broker, bank, or other nominee, you should contact your broker, bank, or other nominee to change your vote.

 

Q:	What should I do if I receive more than one set of voting materials?

 

A:

DXL stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold shares of DXL common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of DXL common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this proxy statement to ensure that you vote every share of DXL common stock that you own.

 

Q:	Am I entitled to appraisal rights?

 

A:	No. DXL stockholders are not entitled to appraisal rights in connection with the merger or any of the proposals to be voted on at the special meeting.

 

Q:	Have FBB stockholders agreed to adopt the merger agreement?

 

A:	Yes. On December 11, 2025, FBB stockholders adopted the merger agreement and approved the merger and related transactions by written consent.

 

Q:	Who is paying for this proxy solicitation?

 

A:

DXL and FBB will equally share the cost of the printing, mailing and filing of this proxy statement and the fees paid to a financial printer or the SEC. DXL will pay any other fees and expenses incurred by it. DXL and FBB may use the services of their directors, officers and other employees to solicit proxies from DXL stockholders without additional compensation. DXL has also retained MacKenzie Partners, Inc., a proxy solicitation firm, to assist in the solicitation of proxies for a fee of $17,500, plus the reimbursement of out-of-pocket expenses incurred by it on DXL’s behalf. Arrangements will also be made with banks, brokers, nominees, custodians and fiduciaries who are record holders of DXL common stock for the forwarding of solicitation materials to the beneficial owners of DXL common stock. Upon request of the record holders, DXL will reimburse these banks, brokers, nominees, custodians and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials.

 

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MARKET PRICE AND DIVIDEND INFORMATION

DXL common stock is listed for trading on The Nasdaq Global Market under the symbol “DXLG”. On June 30, 2026, DXL submitted a transfer application to transfer the listing of its common stock from The Nasdaq Global Market to The Nasdaq Capital Market.

On December 10, 2025, the last trading day prior to the public announcement of the proposed merger on December 11, 2025, the closing price per share of DXL common stock as reported on Nasdaq was $1.08 per share. On [●], 2026, the last practicable date before the printing of this proxy statement, the closing price per share of DXL common stock as reported on Nasdaq was $[●] per share.

If the merger is consummated, and subject to successful application for initial listing with Nasdaq, DXL common stock would be expected to continue to be listed on The Nasdaq Capital Market under the symbol “DXLG”.

As of the record date, DXL had approximately [●] stockholders of record.

DXL has never declared or paid cash dividends on DXL common stock. DXL currently anticipates that all of its earnings in the foreseeable future will be used for the operation and growth of its business and paying down debt. Future payment of dividends and share buybacks, if any, will be at the discretion of the DXL Board.

FBB common stock is not listed for trading.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference into this proxy statement, contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These statements, as they relate to DXL or FBB, the management of either such company or the proposed transaction between DXL or FBB, involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. Forward-looking statements are not historical facts but rather are based on current plans, expectations, estimates and projections, and therefore, you are cautioned not to place undue reliance on them. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the management of DXL, as well as assumptions made by, and information currently available to management. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. In light of developments since the execution of the merger agreement as described in this proxy statement, including the DXL Board’s withdrawal of its prior recommendation and its recommendation that stockholders vote “AGAINST” the issuance proposal, the forward-looking statements in this proxy statement should be evaluated in that context. DXL and FBB undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. DXL uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “outlook,” “predicts,” “potential,” “continue,” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including, but not limited to, those described in the documents DXL has filed with the SEC as well as the possibility that (i) risks associated with DXL’s ability to obtain the stockholder approval required to consummate the proposed transaction, including approval of the issuance of shares of DXL common stock in the merger and the resulting “change of control” of DXL under the Nasdaq rules or the contemplated reverse stock split, and the timing of the closing of the proposed transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe, or at all, or that the closing of the proposed transaction, will not occur; (ii) the response of DXL stockholders to the proposed transaction; (iii) the DXL Board’s recommendation that stockholders vote “AGAINST” the issuance proposal and the resulting uncertainty regarding whether the merger will be completed; (iv) risks related to DXL’s ability to manage its operating expenses and its expenses associated with the proposed transaction pending closing; (v) risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed transaction, including continued listing on Nasdaq; (vi) the risk that as a result of adjustments to the post-closing equity split, DXL stockholders and FBB stockholders could own more or less of the combined company than is currently anticipated; (vii) risks related to the market price of DXL common stock relative to the exchange ratio; (viii) unexpected liabilities, costs, charges, expenditures or expenses resulting from the proposed transaction; (ix) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (x) DXL’s ability to retain personnel as a result of the announcement or completion of the proposed transaction; (xi) risks associated with the possible failure to realize certain anticipated benefits of the proposed transaction, including with respect to future financial and operating results; and (xii) risks associated with the possible failure to properly and effectively integrate the proposed transaction. Additionally, forward-looking statements related to FBB’s future expectations are subject to numerous risks and uncertainties. Neither DXL nor FBB gives any assurance that either DXL or FBB will achieve its expectations.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of DXL described in the “Risk Factors” section of this proxy statement, DXL’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed by DXL from time to time with the SEC. Please see the section entitled “Where You Can Find Additional Information”.

All forward-looking statements included in this proxy statement are based upon information available to DXL and FBB on the date hereof. If any of these risks or uncertainties materialize or any of these assumptions prove incorrect, the results of operations of DXL, FBB or the combined company, if the

 

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merger is consummated, could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement are current only as of the date on which the statements were made. DXL and FBB do not undertake any obligation to publicly update any forward-looking statements to reflect events or circumstances after the date on which any statement is made, the occurrence of unanticipated events or any new information that becomes available in the future, except as required by law.

 

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RISK FACTORS

You should carefully consider the following risk factors relating to the consummation of the merger and to the combined company following the merger in deciding how to vote for the proposals presented in this proxy statement. These factors should be considered in conjunction with the other information included or incorporated by reference by DXL in this proxy statement.

Risks Related to the Merger

The DXL Board’s recommendation that stockholders vote against the issuance proposal may create uncertainty regarding the outcome of the stockholder vote and may adversely affect the market price of DXL common stock.

The DXL Board has determined to recommend that DXL stockholders vote against the issuance proposal. This recommendation may create significant uncertainty regarding the likelihood that the merger will be consummated. Such uncertainty may result in increased volatility in the trading price of DXL common stock and may adversely affect DXL’s ability to maintain or attract investors, including institutional investors that may have investment mandates tied to transaction outcomes or strategic direction.

Moreover, market participants may interpret the DXL Board’s recommendation as an indication that the merger is not in the best interests of DXL or its stockholders or that there are risks or uncertainties not fully reflected in the trading price of DXL common stock, which could negatively impact investor confidence and the market price of DXL common stock, potentially for an extended period of time.

The DXL Board’s change in recommendation may adversely affect DXL’s relationships with FBB and increase the likelihood of disputes, including litigation.

The DXL Board’s recommendation that stockholders vote against the issuance proposal may give rise to questions regarding DXL’s obligations under the merger agreement, depending on the circumstances under which such recommendation was made and any applicable contractual provisions, including any provisions governing changes in recommendation, fiduciary duties or efforts covenants. As a result, the change in recommendation may lead to disputes with FBB, including claims that DXL has breached its obligations under the merger agreement or failed to comply with applicable covenants or standards of conduct. Such disputes may result in litigation, including actions seeking damages, injunctive relief or the enforcement of contractual provisions, including specific performance, which could be costly and time-consuming and could divert management’s attention from DXL’s business and, if adversely determined, could result in monetary or equitable remedies that could have a material adverse effect on DXL’s financial condition and results of operations.

Certain stockholders entered into voting agreements in connection with the merger agreement in favor of the issuance proposal, which may increase the likelihood that the issuance proposal is approved notwithstanding the DXL Board’s recommendation against it.

Certain stockholders of DXL entered into voting agreements pursuant to which they have agreed to vote their shares of DXL common stock in favor of the issuance proposal. These voting agreements were entered into in connection with the execution of the merger agreement, prior to the DXL Board’s ongoing evaluation of the merger and updated determination to recommend that DXL stockholders vote against the issuance proposal. The voting agreements remain binding on the stockholders subject thereto, notwithstanding the updated position of the DXL Board, unless and until they terminate in accordance with their terms. As a result of these voting commitments, the likelihood that the issuance proposal will be approved may be increased, even though the DXL Board has withdrawn its prior recommendation in favor of the merger and the issuance proposal and now recommends that stockholders vote “AGAINST” the issuance proposal, and such outcome may occur irrespective of the views of other stockholders.

 

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In particular, these voting agreements may make it more difficult for other DXL stockholders to influence the outcome of the vote on the issuance proposal, and may reduce the practical impact of votes cast by stockholders who do not support the issuance proposal. Accordingly, the issuance proposal could be approved despite the DXL Board’s recent determination, after its ongoing evaluation of the merger and in light of developments since the execution of the merger agreement, that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are not in the best interests of DXL stockholders.

If the issuance proposal is approved, and the other conditions to the merger are satisfied or waived (including the reverse stock split approval), the merger would be completed, notwithstanding the DXL Board’s recommendation against the issuance proposal, and stockholders who did not vote in favor of the issuance proposal would nevertheless be subject to the effects of the completed transaction.

The DXL Board’s recommendation against the issuance proposal may increase the likelihood that the merger is not consummated and that DXL will be subject to the risks associated with remaining a standalone company.

In light of the DXL Board’s recommendation, there is a heightened risk that DXL stockholders will not approve the merger. If the merger is not consummated, DXL will continue to operate as a standalone company. In that event, DXL would remain subject to the risks associated with its standalone business, including those described elsewhere in this proxy statement, and may have incurred significant costs and disruption in pursuing the merger without realizing any corresponding benefits, which could adversely affect DXL’s operating results and financial condition.

The DXL Board’s recommendation against the issuance proposal may encourage alternative transactions or unsolicited proposals, which could create additional uncertainty and volatility.

The DXL Board’s recommendation against the issuance proposal may signal to third parties that DXL could be open to alternative strategic transactions, subject to the limitations in the merger agreement. As a result, DXL may receive unsolicited acquisition proposals or be subject to takeover attempts or proxy contests, including actions by stockholders or other parties seeking to influence the composition of the DXL Board or DXL’s strategic direction. While such developments could result in alternative transactions that may be favorable to stockholders, they could also lead to additional uncertainty, increased volatility in the price of DXL common stock, additional transaction costs and potential disruption to DXL’s business operations, as well as increased demands on management and the DXL Board.

The existence of differing views between DXL and FBB regarding the merger may adversely affect the parties’ ability to complete the transaction or collaborate effectively.

The DXL Board’s recommendation against the issuance proposal reflects a divergence in views between DXL and FBB regarding the merits of the transaction. This divergence may impair the parties’ ability to cooperate effectively in fulfilling their respective obligations under the merger agreement, including efforts to satisfy closing conditions and to manage ongoing obligations during the interim period. This lack of alignment could create operational inefficiencies, delay required actions, and adversely affect the overall business performance of DXL during the pendency of the transaction, including by creating uncertainty among employees, customers, suppliers and other business partners.

Information regarding FBB and the potential benefits of the merger in this proxy statement is based in part on information provided by FBB, and stockholders are presented with differing perspectives regarding the merger.

This proxy statement includes information regarding FBB, its business, financial condition and prospects, as well as statements regarding the potential strategic and financial benefits of the merger and the expected performance

 

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of the combined company. Certain of this information has been provided by FBB or its representatives and reflects FBB’s views regarding the anticipated benefits of the transaction, which may involve assumptions, projections and judgments that are inherently uncertain and subject to change.

After careful consideration, including continued evaluation of the merger, including in light of developments since the execution of the merger agreement, with the assistance of external financial and legal advisors, the DXL Board has withdrawn its prior recommendation in favor of the merger and the issuance proposal. The DXL Board now believes that the merger and transactions contemplated by the merger agreement (including the proposed stock issuance) are not in the best interests of DXL and its stockholders. As a result, certain statements identified in this proxy statement as having been made or provided by FBB or its representatives regarding the expected benefits of the merger, the outlook for the combined company or the strategic rationale for the transaction may differ from, or be inconsistent with, the views of the DXL Board. The DXL Board does not adopt or endorse such statements as reflecting its current views, and any anticipated benefits, synergies or other forward-looking matters described in such statements are subject to risks and uncertainties and may not be achieved.

Accordingly, stockholders are presented with differing perspectives in this proxy statement and should carefully consider the DXL Board’s recommendation against the issuance proposal, together with the other information included in this proxy statement, including the risks described in this section, in determining how to vote on the proposals presented, and should not place undue reliance on forward-looking statements or projections regarding the combined company.

If the merger with FBB is not consummated for any reason, including as a result of the DXL Board’s recommendation against the issuance proposal or a failure to obtain stockholder approval, DXL’s business could suffer materially and DXL’s stock price could decline.

The consummation of the proposed merger with FBB is subject to a number of closing conditions, including the approval by DXL stockholders, approval by Nasdaq of DXL’s listing application for DXL common stock to be issued as merger consideration, and other customary closing conditions. If the merger is not consummated for any reason, including as a result of the DXL Board’s recommendation against the issuance proposal or a failure to obtain stockholder approval, DXL may be subject to a number of material risks, and its business and stock price could be adversely affected, as follows:

 

•

DXL has incurred and expects to continue to incur significant expenses related to the proposed merger with FBB even if the merger is not consummated.

 

•

The merger agreement contains covenants relating to DXL’s solicitation of competing acquisition proposals and the conduct of DXL’s business between the date of signing the merger agreement and the closing of the merger. As a result, significant business decisions and transactions before the closing of the merger are restricted or prohibited. Accordingly, DXL may be unable to pursue business opportunities that would otherwise be in its best interest as a standalone company. If the merger agreement is terminated after DXL has invested significant time and resources in the transaction process, DXL may have a limited ability to continue its current operations without obtaining additional financing to fund its operations.

 

•

DXL could be obligated to pay FBB a $2.5 million termination fee in connection with the termination of the merger agreement, depending on the reason for the termination.

 

•

DXL could be obligated to pay FBB a $950,000 out-of-pocket fees and expense reimbursement in connection with the termination of the merger agreement, depending on the reason for the termination.

 

•

DXL’s business partners and investors in general may view the failure to consummate the merger as a poor reflection on its business or prospects.

 

•

Some of DXL’s suppliers and other business partners may seek to change or terminate their relationships with DXL as a result of the proposed merger.

 

•

As a result of the proposed merger, current and prospective employees could experience uncertainty about their future roles within the combined company. This uncertainty may adversely affect DXL’s ability to retain its key employees, who may seek other employment opportunities.

 

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•

DXL’s management team may be distracted from day-to-day operations as a result of the proposed merger.

 

•

The market price of DXL common stock may decline to the extent that the current market price reflects a market assumption that the proposed merger will be completed.

In addition, if the merger agreement is terminated and the DXL Board determines to seek another business combination, it may not be able to find a third party willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the merger.

Some of DXL’s directors and executive officers have conflicts of interest and/or economic interests in connection with the merger that are different from, or in addition to, those of DXL stockholders generally.

When considering how to vote on the proposals related to the merger, DXL stockholders should be aware that DXL’s directors and executive officers have conflicts of interest and/or certain interests, including economic interests, in the merger that may be different from, or in addition to, the interests of DXL stockholders more generally, including, among others, their continued service as a director of either the combined company or DXL as a standalone company, retention and severance benefits, the potential payout of certain DXL LTIP awards, and continued indemnification. For a more detailed discussion, see “The Merger—Interests of DXL’s Directors and Executive Officers in the Merger”. 

The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes and other causes.

In general, either party can refuse to complete the merger upon the occurrence of a material adverse effect affecting the other party between December 11, 2025, the date of the merger agreement, and the closing of the merger. However, some types of changes do not permit either party to refuse to complete the merger, even if such changes would have a material adverse effect on DXL or FBB, to the extent they resulted from the following:

 

(i)

changes in general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global economy generally;

 

(ii)

changes in conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world;

 

(iii)

changes in conditions in the industries in which such persons generally conduct business;

 

(iv)

changes in regulatory, legislative or political conditions in the United States or any other country or region in the world;

 

(v)

any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, terrorism (including cyberattacks or cyberterrorism) or military actions (including any escalation or general worsening of any such hostilities, acts of war, sabotage, terrorism or military actions) in the United States or any other country or region in the world;

 

(vi)

earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, weather conditions, epidemics, pandemics or disease outbreaks and other force majeure events in the United States or any other country or region in the world;

 

(vii)

any change resulting from the announcement of the merger agreement or the pendency of the merger and the transactions contemplated by the merger agreement;

 

(viii)

the compliance by any party with the terms of the merger agreement, including any action taken or refrained from being taken pursuant to or in accordance with the merger agreement;

 

(ix)

any action taken or refrained from being taken, in each case which such person has expressly approved, consented to or requested in writing following the date of the merger agreement;

 

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(x)

changes or proposed changes in GAAP or other accounting standards or in any applicable laws or regulations (or the enforcement or interpretation of any of the foregoing);

 

(xi)

changes in the price or trading volume of the DXL common stock, in and of itself (it being understood that any cause of such change may be deemed to constitute, in and of itself, a material adverse effect under the merger agreement and may be taken into consideration when determining whether a material adverse effect has occurred, to the extent not otherwise excluded under the merger agreement); and

 

(xii)

any failure, in and of itself, by such person to meet (A) any public estimates or expectations of revenue, earnings or other financial performance or results of operations for any period; or (B) any internal budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that any cause of any such failure may be deemed to constitute, in and of itself, a material adverse effect under the merger agreement and may be taken into consideration when determining whether a material adverse effect has occurred, to the extent not otherwise excluded under the merger agreement).

Notwithstanding the above, with respect to clauses (i), (ii), (iv), (v), (vi) and (x), to the extent that such change has had a disproportionate adverse effect on such person relative to other companies of a similar size operating in the industries in which such person conducted business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a material adverse effect under the merger agreement.

DXL stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

In the event the merger is consummated, if the combined company is unable to realize the strategic and financial benefits currently anticipated from the merger, DXL stockholders will have experienced substantial dilution of their ownership interest without receiving any commensurate benefit. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition and stock price following the merger.

During the pendency of the merger, DXL may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain actions because of restrictions in the merger agreement.

Covenants in the merger agreement impede the ability of DXL or FBB to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the merger. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors. In addition, while the merger agreement is in effect and subject to limited exceptions, each party is prohibited from soliciting, initiating, or facilitating the communication, engaging in any communications, discussions or negotiations, or taking any action that could reasonably be expected to lead to certain acquisition inquiries or acquisition proposal, such as certain acquisitions of such party’s common stock, tender offers for such party’s common stock, and mergers or other business combinations. Any such transactions could be favorable to DXL stockholders.

Because the lack of a public market for FBB common stock makes it difficult to evaluate the fairness of the merger, FBB stockholders may receive consideration in the merger that is greater than or less than the fair market value of FBB common stock.

The outstanding share capital of FBB is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of FBB. Because the percentage of DXL’s equity to be issued to FBB stockholders was determined based on negotiations between the parties, it is possible that the value of the DXL common stock to be issued in connection with the merger would be greater than the fair market value of FBB. Alternatively, it is possible that the value of the shares of DXL common stock to be issued in connection with the merger would be less than the fair market value of FBB.

 

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In the event the merger is consummated, the combined company would incur significant transaction costs as a result of the merger, including investment banking, legal and accounting fees. In addition, the combined company would incur significant consolidation and integration expenses, which cannot be accurately estimated at this time. These costs could include the possible relocation of certain operations as well as costs associated with terminating existing office leases and the loss of benefits of certain favorable office leases. Actual transaction costs may substantially exceed FBB’s estimates and may have an adverse effect on the combined company’s financial condition and operating results.

The merger would result in an annual limitation on DXL’s ability to utilize its net operating loss carryforwards.

Under Section 382 of the Code, use of DXL’s net operating loss carryforwards (“NOLs”) would be limited if DXL experiences an “ownership change.” For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock increases by more than 50 percentage points over its lowest ownership percentage within a specified testing period. DXL would experience an ownership change as a result of the merger, and therefore its ability to utilize its NOLs and certain credit carryforwards remaining at the effective time would be limited. The limitation would be determined by the fair market value of DXL common stock outstanding prior to the ownership change, multiplied by the applicable federal rate. Limitations imposed on DXL’s ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than they would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs.

DXL and FBB may become involved in securities litigation or stockholder derivative litigation in connection with the merger in the future, and this could divert the attention of DXL and FBB management and harm the combined company’s business, and insurance coverage may not be sufficient to cover all related costs and damages.

Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction. DXL, FBB and the combined company may become involved in this type of litigation in connection with the merger in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the business of DXL, FBB and the combined company.

Failure to consummate the merger may result in DXL paying a termination fee and/or out-of-pocket fees and expenses to FBB and could harm the price of DXL common stock and the future business and operations of each company.

If the merger is not completed and the merger agreement is terminated under certain circumstances, DXL may be required to pay FBB a termination fee of $2.5 million and/or an out-of-pocket fees and expense reimbursement of up to $950,000. Even if a termination fee or expense reimbursement is not payable in connection with a termination of the merger agreement, DXL will have incurred significant fees and expenses, which must be paid whether or not the merger is consummated. Further, if the merger is not consummated, it could significantly harm the market price of DXL common stock.

Once the merger has consummated, there can be no further recourse by either party or its stockholders for a breach of any representation or warranty.

The representations and warranties of FBB, DXL and the merger subsidiary contained in the merger agreement or any certificate or instrument delivered pursuant to the merger agreement would terminate at the effective time of the merger, and there would be no recourse for any breach of such representations and warranties following the closing of the merger.

 

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The exchange ratio is not adjustable based on the market price of DXL common stock so the merger consideration at the closing would have, if the merger is consummated, greater or lesser value than the market price at the time the merger agreement was signed.

Under the terms of the merger agreement, at the effective time of the merger, each share of FBB common stock (excluding (i) shares held as treasury stock by FBB or held or owned by DXL, the merger subsidiary or any subsidiary of DXL or FBB, (ii) dissenting shares, and (iii) unaccredited investor shares), after giving effect to the cancellation of all FBB warrants outstanding, would be converted solely into the right to receive a number of validly issued, fully paid and nonassessable shares of DXL’s common stock equal to the exchange ratio, which would be calculated based on the total number of the new issuance of DXL common stock (which would be the number of shares equal to the fully diluted DXL shares multiplied by the quotient of fifty-five percent (55%) divided by forty-five percent (45%)) divided by the number of FBB common stock issued and outstanding immediately prior to the effective time of the merger.

If the merger is consummated, immediately following the effective time of the merger, FBB stockholders would be expected to own or hold rights to acquire 55% of the combined company and DXL stockholders would be expected to own or hold rights to acquire 45% of the combined company, in each case, on a fully diluted basis using the treasury stock method.

Any changes in the market price of DXL common stock before the completion of the merger would not affect the number of shares of DXL common stock issuable to FBB stockholders pursuant to the merger agreement. Therefore, if before the completion of the merger the market price of DXL common stock declines from the market price on the date of the merger agreement, then FBB stockholders would receive, if the merger is consummated, merger consideration with substantially lower value than the value of such merger consideration on the date of the merger agreement. Similarly, if before the completion of the merger the market price of DXL common stock increases from the market price of DXL common stock on the date of the merger agreement, then FBB stockholders would receive, if the merger is consummated, merger consideration with substantially greater value than the value of such merger consideration on the date of the merger agreement. The merger agreement does not include a price-based termination right. Because the exchange ratio does not adjust as a result of changes in the market price of DXL common stock, for each one percentage point change in the market price of DXL common stock, there is a corresponding one percentage point rise or decline, respectively, in the value of the total merger consideration payable to FBB stockholders pursuant to the merger agreement.

Certain provisions of the merger agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the merger agreement.

The terms of the merger agreement prohibit each of DXL and FBB from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when, among other things, the DXL Board or the board of directors of FBB, as applicable, determines in good faith after consultation with its financial advisors and outside legal counsel that an unsolicited alternative takeover proposal is or is reasonably likely to result in a superior takeover proposal, and that failure to cooperate with the proponent of the proposal could be reasonably likely to violate the fiduciary duties of the DXL Board or the board of directors of FBB, as applicable.

If the conditions to the merger are not met, the merger may not occur.

Even if the share issuances and amendments to the restated certificate of incorporation to effect the reverse stock split expected to be necessary for the merger are approved by DXL stockholders, specified conditions must be satisfied or waived to complete the merger. These conditions are set forth in the merger agreement and described in the section entitled “The Merger Agreement—Conditions to the Closing of the Merger”. DXL cannot assure you that all of the conditions would be satisfied or waived. If the conditions are not satisfied or waived, the merger would not occur or would be delayed, and DXL and FBB each may lose some or all of the intended benefits of the merger.

 

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Risks Related to the Reverse Stock Split

There can be no assurance that the per-share market price of DXL common stock following the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of shares of DXL common stock issued and outstanding before the reverse stock split.

The principal purpose of the reverse stock split is to increase the per-share market price of DXL common stock above the minimum bid price requirement under the Nasdaq rules so that DXL can maintain its listing on Nasdaq. Also, in order to consummate the merger with FBB, DXL must satisfy the Nasdaq initial listing standards, which require, among other things, a minimum bid price of $4.00 per share. However, there can be no assurance that the market price per share of DXL common stock after the reverse stock split will be unchanged or increase in proportion to the reduction in the number of shares of DXL common stock issued and outstanding before the reverse stock split. For example, based on the closing price of DXL common stock on [●], 2026 of $0.[●] per share, if the DXL Board were to implement the reverse stock split and utilize a ratio of 1-for-[●] shares, the per share price of DXL common stock immediately after giving effect to the reverse stock split would be expected to be $[●]. DXL cannot assure you that the market price per post-reverse stock split share will exceed or remain in excess of the (i) $4.00 minimum bid price initial listing requirement in connection with the merger, which requires the combined company to have a minimum bid price of $4.00 per share, or the (ii) $1.00 minimum bid price for a sustained period of time to meet the continued listing requirements should the merger not be completed. In addition, the reverse stock split may not result in a per share price that would attract brokers and investors who do not trade in lower-priced stocks. If the merger is not consummated, even if the market price per post-split share of DXL common stock remains in excess of $1.00 per share, DXL may be delisted due to a failure to meet other Nasdaq continued listing requirements, including requirements related to the minimum stockholders’ equity requirement, the minimum number of shares that must be in the public float, the minimum market value of the public float and the minimum number of “round lot” holders.

If the reverse stock split proposal is not approved, DXL may be unable to regain compliance with Nasdaq’s minimum bid price requirement, which could result in the delisting of DXL common stock and have a material adverse effect on DXL and, if the merger is completed, the combined company.

Nasdaq has continued listing standards that DXL must maintain to avoid delisting, including, among others, a minimum bid price requirement of $1.00 per share (the “minimum bid price requirement”). On February 4, 2026, DXL received a letter from the Listing Qualifications staff of Nasdaq indicating that, based upon the closing bid price of DXL common stock for the last 30 consecutive business days, it was not in compliance with the minimum bid price requirement. At that time, DXL was provided a compliance period of 180 calendar days to regain compliance with the minimum bid price requirement, which compliance period is expected to expire on or around August 3, 2026. If DXL is unable to regain compliance within the initial 180-day period, it may be eligible for an additional compliance period of 180 calendar days to regain compliance if it meets certain requirements, including if it (i) transfers its listing to The Nasdaq Capital Market and (ii) meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However, if Nasdaq concludes that DXL will not be able to cure the deficiency, or if DXL determines not to submit a transfer application or make the required representation, Nasdaq will provide notice to DXL that its common stock will be subject to delisting. On June 30, 2026, DXL (i) submitted a transfer application to Nasdaq to transfer to The Nasdaq Capital Market and (ii) provided written notice to Nasdaq requesting an additional compliance period of 180 calendar days, advising Nasdaq that it submitted a transfer application, and advising Nasdaq that it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement.

DXL is seeking stockholder approval for the reverse stock split to provide the DXL Board the ability, if necessary, to increase the price of DXL common stock in order to meet the minimum bid price requirement for continued listing of DXL common stock on Nasdaq, should DXL be unable to regain compliance during the initial compliance period or any additional compliance period provided by Nasdaq. Additionally, if the DXL

 

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Board does not implement the reverse stock split within one year of the date on which the reverse stock split is approved by DXL stockholders, the authority granted in this proposal to implement the reverse stock split will terminate, which could further limit DXL’s flexibility to address any future non-compliance with the minimum bid price requirement.

The reverse stock split requires approval by DXL stockholders, and there can be no assurance that such approval will be obtained. If the reverse stock split proposal is not approved, the DXL Board will not have the authority to effect the reverse stock split and DXL may be unable to cure the minimum bid price deficiency within the applicable compliance period. As a result, DXL common stock could become subject to delisting from Nasdaq. If DXL common stock were delisted, it may trade on an over-the-counter market, which could result in reduced liquidity, increased volatility and a diminished trading market for DXL common stock. Additionally, delisting from Nasdaq could result in, among other things: (i) reduced institutional investor interest, as many institutional investors and investment funds are restricted from investing in or maintaining positions in securities not listed on a national securities exchange; (ii) a significant impairment of DXL’s ability, or, if the merger is completed, the combined company’s ability, to raise capital through public or private equity offerings on acceptable terms, or at all; and (iii) reputational harm, which could negatively impact relationships with customers, suppliers, employees and other business partners. In addition, if the merger is completed prior to DXL regaining compliance with the minimum bid price requirement, the combined company would inherit this deficiency and, if the reverse stock split has not been implemented, would face the same risk of delisting from Nasdaq, which could have a material adverse effect on the combined company’s stock price, liquidity and ability to raise capital. Even if the reverse stock split proposal is approved and the DXL Board implements the reverse stock split, there can be no assurance that the market price of DXL common stock will increase proportionately, or that the market price will remain at a level sufficient to satisfy or maintain Nasdaq’s minimum bid price requirement or any other continued listing requirements. Accordingly, even if the reverse stock split is approved and implemented, there is no guarantee that DXL common stock, or, if the merger is completed, the combined company’s common stock, will not ultimately be delisted from Nasdaq.

If the reverse stock split is approved and effected, the resulting per-share market price may not attract institutional investors or investment funds and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of DXL common stock may not improve.

While the DXL Board believes that a higher stock price may help generate investor interest, there can be no assurance that the reverse stock split will result in a per-share market price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of DXL common stock may not necessarily improve.

The reverse stock split will have the effect of increasing the number of authorized shares of DXL common stock available for future issuance, and any such future issuances may have a dilutive effect on its earnings per share, voting power and other interests of existing DXL stockholders.

The reverse stock split will not apply to the number of authorized shares available for issuance under DXL’s charter. Therefore, because the number of issued and outstanding shares of DXL common stock will decrease as a result of the reverse stock split, it will have the effect of increasing the number of authorized shares available for issuance. Future issuances of DXL common stock may, depending on the circumstances, have a dilutive effect on the earnings per share, voting power and other interests of existing DXL stockholders. For example, DXL may use the additional authorized but unissued shares to restructure existing indebtedness, raise additional capital through equity financing, enter into strategic partnerships, or sell securities convertible into or exercisable for DXL common stock, any of which may result in substantial dilution to existing DXL stockholders.

The reverse stock split may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell.

The reverse stock split may result in some stockholders owning “odd lots” of less than 100 shares of DXL common stock on a post-split basis. These odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.

 

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The reduced number of issued shares of DXL common stock resulting from the reverse stock split could adversely affect the liquidity of DXL common stock and result in higher transaction costs if the merger is not consummated.

Although the DXL Board believes that the decrease in the number of shares of DXL common stock issued as a result of the reverse stock split and the anticipated increase in the market price of DXL common stock could encourage interest in DXL common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares issued after the reverse stock split. The reverse stock split may also result in higher transaction costs if the merger is not consummated. The liquidity of DXL common stock may be negatively impacted by the reverse stock split, given the reduced number of shares that would be outstanding after the reverse stock split if the merger is not consummated, particularly if the stock price does not increase as a result of the reverse stock split. Accordingly, the reverse stock split may not achieve the desired results of increasing marketability and liquidity of DXL common stock if the merger is not consummated.

Risks Related to DXL

For risks related to the business of DXL, please refer to the section entitled “Item 1A. Risk Factors” set forth in DXL’s Annual Report on Form 10-K for the year ended January 31, 2026 as filed with the SEC on March 19, 2026.

Risks Related to FBB

This section includes information regarding FBB, FBB’s business, financial condition and prospects, and the potential benefits of the merger, which has been provided by FBB or its representatives and reflects FBB’s views. FBB continues to support the merger. The merger was previously unanimously approved by the DXL Board in December 2025. The DXL Board has continued to evaluate the merger, including in light of developments since the execution of the merger agreement. As part of that evaluation, the DXL Board has considered, among other things, the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. Accordingly, certain statements in this proxy statement regarding FBB, the anticipated benefits of the merger, the combined company or future performance may differ from, and in certain cases may be inconsistent with, the current views of the DXL Board. DXL stockholders should not view the inclusion of information provided by FBB or statements regarding the potential benefits of the merger as a recommendation by the DXL Board or as an indication that the DXL Board believes such statements will be realized. Such statements are subject to significant uncertainties and risks, many of which are outside the control of DXL, and there can be no assurance that any of the anticipated benefits of the merger would be achieved. Accordingly, stockholders are urged to carefully consider the DXL Board’s current recommendation against the issuance proposal, together with the other information contained in this proxy statement, including the risks described under “Risks Related to the Merger,” in determining how to vote on the proposals.

Unless otherwise indicated or the context otherwise requires, references in this Risks Related to FBB section to “FullBeauty Brands,” the “Company,” “we,” “us,” “our” and other similar terms collectively refer to FBB Holdings I, Inc. and its subsidiaries.

We operate in an industry that involves numerous risks and uncertainties. You should carefully consider the risk factors discussed below, as well as the other information presented herein, as described in “FBB’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this proxy statement, in evaluating us and our business. The risks and uncertainties described below may change over time and other risks and uncertainties,

 

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including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or prospects could be materially and adversely affected.

General economic conditions may adversely affect our business.

Our performance is subject to macroeconomic conditions and their impact on levels of consumer spending. Some of the factors negatively impacting discretionary consumer spending include general economic conditions, high unemployment, increased taxation, high consumer debt, reductions in net worth based on severe market declines (such as in residential real estate markets), higher fuel, energy and other prices, increasing interest rates, inflation, severe weather conditions and low consumer confidence. In addition, any significant volatility in the financial markets could negatively impact the levels of future discretionary consumer spending. Consumer confidence is also affected by the domestic and international political situation. Our financial condition and operations could be impacted by changes in government regulations in areas including, but not limited to, taxes, trade policies, tariffs, customs regulations, data privacy and security and artificial intelligence (“AI”). The outbreak or escalation of war, geopolitical instability, or the occurrence of terrorist acts or other hostilities primarily in or affecting the United States, could lead to a decrease in spending by consumers. In addition, natural disasters, industrial accidents, and acts of war in various parts of the world could have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending. Such macroeconomic and other factors could have a negative effect on consumer spending in the United States, which in turn could have a material and adverse effect on our business, results of operations, financial condition, and cash flows. While our business is diversified across product categories and is not heavily concentrated in any single selling period, we generally experience modestly higher sales volume in the second and fourth quarters, and a downturn in consumer spending during those periods could have a disproportionate effect on our results.

Our business depends on customers’ use of our digital platforms, including our e-commerce websites, and response to print media and digital marketing strategies; if our overall marketing strategies, including maintenance of a robust customer list, are not successful, our business and results of operations could be adversely affected.

Our business depends on customers’ use of our e-commerce websites and their response to our digital marketing and print media strategies. The level of customer traffic and volume of customer purchases on our e-commerce websites is substantially dependent on our ability to provide attractive and accessible websites that promote a high-quality customer experience. Customer response to our print media and digital marketing is substantially dependent on merchandise assortment, merchandise availability and creative presentation, as well as the selection of customers to whom our marketing is directed, changes in marketing strategies and the size and frequency of our communications. Although we utilize sophisticated in-house database modeling to enhance the effectiveness of our targeted online and print marketing campaigns, there can be no assurance that our efforts will be successful. Our maintenance of a robust customer list, which we believe includes desirable demographic characteristics for the products we offer, has also been a key component of our overall strategy. If we are unable to maintain and increase customers’ use of our e-commerce websites and the volume of goods they purchase, if the performance of our e-commerce websites, emails and catalogs declines, if our overall marketing strategy is not successful, or if evolving laws and regulations impact how we are able to use our digital marketing channels or otherwise govern e-commerce websites, our business and results of operations could be adversely affected. See “—Regulatory, administrative and litigation developments, including government regulation of e-commerce and digital marketing specifically, are evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.”

If we fail to acquire new customers, or fail to do so in a cost-effective manner, we may not be able to increase or maintain revenue or profitability.

Our success depends on our ability to acquire customers in a cost-effective manner. In order to expand our customer base, we may need to appeal to and acquire customers who have historically used other means of

 

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commerce to purchase fashion apparel and home goods and may prefer alternatives to our offerings, such as traditional brick and mortar retailers or the websites of our competitors. We have made significant investments related to customer acquisition and expect to continue to spend significant amounts to acquire additional customers, and we cannot be assured that we will always succeed in doing so in a cost-effective manner. If the quality of our shopping experience declines or if consumers do not perceive the products we offer to be of high value and quality, we may not be able to acquire new customers. If we are unable to acquire new customers who purchase products in numbers sufficient to grow our business, our net revenue may stagnate or decrease, and our business, financial condition and operating results may be materially adversely affected.

We utilize paid and non-paid advertising to acquire new customers. Our paid advertising includes search engine marketing, display advertising and paid social media advertisements. Our non-paid advertising efforts include search engine optimization, non-paid social media, mobile “push” notifications and email. We obtain a significant amount of traffic via search engines, and we also seek to obtain traffic via social networking websites and other channels used by our current and prospective customers. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our sites can be negatively affected. A major search engine could change its algorithms in a manner that negatively affects our paid or non-paid search ranking, and competitive dynamics could impact the effectiveness of search engine marketing or search engine optimization. As e-commerce and social networking continue to evolve, we may be unable to establish, develop or maintain relationships with these channels on acceptable terms. Increased competition for online advertising inventory, reduced effectiveness of targeted advertising due to evolving data privacy regulations, and higher customer acquisition costs could further reduce marketing efficiency and negatively impact our profitability and cash flow. In addition, evolving laws and regulations governing digital marketing and data privacy may impact our ability to use our current advertising strategies more broadly. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers and our financial condition would suffer. See “—Regulatory, administrative and litigation developments, including government regulation of e-commerce and digital marketing specifically, are evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.”

Our business and results of operations could be adversely affected if we fail to accurately predict apparel trends and customer preferences.

We believe that continued success depends on our ability to provide a compelling value proposition for our customers. Our products and services must satisfy the desires of our customers, whose preferences may change over time. Apparel trends and customer preferences are volatile and tend to change rapidly, particularly women’s apparel. In order to be successful, we must identify, obtain supplies of, and offer to customers attractive, high-quality and affordable merchandise on a continuous and timely basis. Our success depends in large part upon our ability to predict effectively and respond to changing fashion tastes and consumer demands and to translate market trends to appropriate saleable product offerings. If we are unable to predict or respond to changing styles or trends successfully and misjudge the market for products or any new product lines, our sales will be impacted and we may be faced with a substantial amount of unsold inventory and missed opportunities. In response, we may be forced to rely on markdowns or promotional sales to dispose of excess, slow-moving inventory, which would decrease our revenues and margins. Failure to effectively gauge the direction of customer preferences, or convey a compelling brand image or price/value equation to customers may result in lower sales and lower operating income. This could have an adverse effect on our business and results of operations.

Our use and planned expansion of AI technologies present operational, regulatory, cybersecurity, legal, and reputational risks that could adversely affect our business, financial condition, and results of operations.

We are increasingly leveraging AI, machine learning, and automated decision-making tools in certain aspects of our business and may expand such use in the future. While we believe these technologies may improve operational efficiency, enhance customer experience, and support data-driven decision-making, their use presents risks and uncertainties that could adversely affect our business, financial condition, and results of operations.

 

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AI technologies are complex and rapidly evolving. Our AI systems, including those developed internally or provided by third-party vendors, may produce inaccurate, misleading, or biased outputs, or may fail to perform as intended. Such failures could have a negative impact on our business, customer interactions, or brand reputation and could expose us to liability, regulatory actions, and threats of litigation. In addition, our use of AI technologies may present challenges in asserting intellectual property ownership over the resulting output, and could increase our exposure to claims of intellectual property infringement, data privacy violations, cybersecurity risks, or contractual disputes, particularly where AI systems rely on third-party data, models, or infrastructure. Securing and enforcing intellectual property rights in rapidly evolving areas can be costly and time-consuming, and our current protections may be insufficient. See “—We may be unable to protect our trademarks and other intellectual property rights.”

The regulatory environment surrounding AI is evolving in the United States and internationally. New or proposed laws and regulations may impose compliance obligations, require changes to our practices, increase costs, or restrict our ability to deploy AI tools in certain contexts. For example, federal and state legislatures have enacted or are considering enacting laws governing the use of artificial intelligence technologies to make decisions, such as pricing decisions or decisions that could have a significant impact on consumers. Regulatory scrutiny, litigation, or governmental investigations related to AI usage could result in reputational harm, penalties, or operational limitations.

AI systems may also require significant investments in technology infrastructure, data governance, cybersecurity controls, and personnel training. If we are unable to successfully integrate AI into our operations, manage associated risks, or realize anticipated benefits, our competitive position and financial performance could be adversely affected.

The growing adoption of AI-driven search and discovery tools by consumers may reduce the effectiveness of traditional digital marketing channels, including search engine marketing and search engine optimization, on which we rely to drive traffic to our e-commerce websites. If consumers increasingly discover and purchase products through AI-powered platforms rather than conventional search engines or direct website visits, our customer acquisition model could be disrupted, and our marketing costs could increase without a corresponding increase in sales.

Furthermore, reliance on third-party AI-related service providers subjects us to risks related to service availability, model performance, data handling practices, and vendor solvency. Any disruption, security incident, or failure by such providers could materially impact our operations.

If we fail to implement appropriate governance, oversight, and internal controls over our AI initiatives, or if stakeholders perceive our use of AI as unethical, unsafe, or inconsistent with applicable standards, our reputation and stakeholder trust in us could be harmed and we may be subject to regulatory scrutiny, litigation or governmental investigations. Ensuring that our employees use only Company-approved AI technologies presents an additional challenge; unauthorized use of AI tools could expose us to data security, intellectual property, or regulatory risks outside of our existing controls.

Our business largely depends on a strong brand image and, if we are unable to maintain and enhance our brand image, or fail to adequately protect our brand image, we may be unable to increase or maintain our level of sales.

We believe that our brand image and brand awareness around our different brands has contributed significantly to the success of our business. We also believe that maintaining and enhancing our brand image is important to maintaining and expanding our customer base. Our ability to successfully integrate new brands and to expand into new markets or to maintain the strength and distinctiveness of our brand image in our existing markets will be adversely impacted if we fail to connect with our target customers. Maintaining and enhancing our brand image may require us to make substantial investments in areas such as merchandising, marketing, operations,

 

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community relations, catalog and website graphics and employee training, which could adversely affect our cash flow, and which may ultimately be unsuccessful. Furthermore, our brand image could be jeopardized if we fail to maintain high standards for merchandise quality, if we fail to comply with local laws and regulations or if we experience negative publicity or other negative events that affect our image and reputation.

Some of these risks may be beyond our ability to control, such as the effects of negative publicity, including on social media, regarding our company, our vendors or other strategic partners. Failure to successfully market and maintain our brand image in new and existing markets could harm our business, results of operations and financial condition.

If we do not efficiently manage inventory levels, our results of operations could be adversely affected.

We must maintain sufficient inventory levels to operate our business successfully, but we must also avoid accumulating excess inventory, which increases working capital needs and may lower gross margins. We obtain most of our inventory from vendors located outside the United States. Some of these vendors often require lengthy advance notice of order requirements to be able to supply products in the quantities requested. This usually requires us to order merchandise and enter commitments for the purchase of such merchandise, well in advance of the time these products will be offered for sale. In addition, certain of our vendors may require minimum order quantities for certain of our products that exceed our near-term sales expectations, which may require us to purchase and hold excess inventory. As a result, it may be difficult to respond to changes in the consumer preferences or other changes in the markets for our products. If we do not accurately forecast demand for our products or the time it will take to obtain new inventory, inventory levels will not be appropriate, and our results of operations could be adversely affected. Excess inventory may also require increased markdown activity, which could materially reduce gross margins and negatively impact operating income.

Additional tariffs on product imported to the United States, retaliatory trade actions taken by other countries, and resulting trade wars have had, and may continue to have, a material adverse impact on our business.

Because most of our inventory is sourced from vendors located outside the United States, our business is subject to risks associated with international trade. These risks include the imposition of new or increased tariffs, duties or other import-related charges, changes in trade agreements, trade restrictions, quotas, sanctions, and changes in the interpretation or enforcement of existing trade laws and regulations.

In 2025, the United States government announced the imposition of additional tariffs and reciprocal tariffs on most goods imported into the United States. Multiple nations, including China, responded with reciprocal tariffs and other trade actions, which triggered the U.S. government to increase the reciprocal tariffs on countries that retaliated against the U.S. enacted trade policy. The recent and ongoing enactment of tariffs by the government of the United States (including as a result of the recent Supreme Court ruling on tariff authority), along with the unpredictability of the tariff rates, pose a significant risk to our business operations, and have, and may continue to, materially increase our costs and reduce our margins. The tariffs have resulted in, and may also continue to lead to, additional order cancellations and higher pricing for our products, reducing consumer demand and further impacting our sales volume. Successful challenges to the authorization of certain tariffs, including under Learning Resources, Inc. v. Trump, may entitle companies to refunds or other offsets. There remains significant uncertainty regarding the implementation of such decision, including the process that will govern refund claims, the timing of any potential refunds, and the ultimate amounts, if any, that we recover. We are actively monitoring the impact of any tariffs that become effective, as well as potential retaliatory tariffs imposed by other countries and will continue to work on strategies to moderate or minimize the effects of trade actions.

There can be no assurance that our efforts to diversify sourcing across geographies, negotiate cost sharing with vendors, adjust pricing without materially affecting demand, and manage inventory levels will be successful, or that they will fully or significantly offset the negative impact of the tariffs on our business. Given the uncertainty regarding the scope and duration of current and potential tariffs, as well as the potential for additional trade

 

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actions by the United States or other countries, the specific impact to our business, results of operations, cash flows, and financial condition is uncertain, but could continue to be material. The extent of any such impact will further depend on the ultimate tariff rates imposed under current and any future statutory authorities, the duration of such measures, and the outcome of ongoing and potential legal challenges.

Our success depends on our ability to build and maintain a high-quality workforce, and competition for talent may make it difficult to do so.

Our success depends, in part, on having a high-quality management team and workforce with the appropriate skills, experience and leadership capabilities to support our business and execute our strategic initiatives. Our success also depends, in part, on our ability to recruit, retain and motivate our employees sufficiently, both to maintain our current business and to execute our strategic initiatives. Competition for experienced and well-qualified employees in our industry is particularly intense in many of the places where we do business, and we may not be successful in attracting and retaining such personnel. Changes to our current and future office environments, adoption of new work models and our business requirements or expectations about when or how often employees work either on-site or remotely may not meet the expectations of our employees. As certain jobs and employers increasingly operate remotely, traditional geographic competition for talent may change in ways that cannot be fully predicted at this time. If our employment proposition is not perceived as favorable compared to other companies’ policies, it could negatively impact our ability to attract, hire and retain our employees. In addition, changes in U.S. immigration policy or the availability of work visas could affect our ability to attract and retain skilled employees in areas such as technology, data analytics, and e-commerce operations, and could more broadly affect labor availability in industries on which our supply chain and outsourced operations depend.

In particular, our success depends on the continued service and performance of our senior management team and other key personnel. The loss of one or more members of senior management could result in diminished organizational focus, weaker operating execution, and reduced ability to identify and pursue strategic initiatives.

Our business could suffer because of increases in the price of raw materials, labor, energy and freight.

Raw materials used to manufacture our merchandise are subject to availability constraints and price volatility caused by a variety of factors including high or low demand for fabrics, labor conditions, transportation or freight costs, currency fluctuations, acreage devoted to cotton crops and crop yields, climate change, weather conditions, supply conditions, economic inflation, tariffs, environmental protection, other standards and other unpredictable factors. Increases in the price of cotton, wool, petroleum-based man-made materials and other raw materials used in the production of fabric and accessories, as well as increases in labor and energy costs, could result in increases in the costs of our products and the expense of transporting them to our distribution centers and to our customers. There can be no assurance that we will be able to reflect any such higher costs in the prices for our products. Consequently, higher product costs could have a negative effect on our gross profit margin and increased selling prices could have a negative effect on our sales volume. To the extent that we cannot offset cost increases with other cost reductions or efficiencies, such increased costs may result in increased product prices, which could lead to reduced customer demand and adversely affect our business and results of operations.

Our business would suffer if our distribution center or customer care center were shut down, disrupted, or not successfully optimized.

Our business would suffer materially if our distribution center or customer care center were shut down, disrupted, or not successfully optimized. Most of the merchandise we purchase is shipped directly to our distribution center in Indianapolis, Indiana, where it is prepared for shipment to the customer. Our ability to meet consumer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies depends on the proper operation of this facility. We also maintain a customer care center in El Paso, Texas, supplemented by outsourced resources in the Philippines, that collectively receive millions of points of contact, including phone calls, emails and live chats, annually, maintains a live online chat capability and responds to social media

 

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comments. As a result of damage to, or prolonged interruption of, operations at any of our distribution center or customer care facilities due to a work stoppage, supply chain disruption, weather conditions such as tornado, flood, blizzard, the impact of climate change, epidemics, pandemics, labor shortages, or other disruptions or other natural disaster or event, we could lose sales or incur significantly higher costs and longer lead times associated with distributing our products to customers, or experience delayed response time to customers at our customer care center.

We maintain business interruption and property insurance, but our insurance coverage may not be sufficient, or insurance proceeds may not be paid to us timely if our distribution center or our customer care center is shut down for any unplanned reason. These factors could have a material adverse effect on our business and results of operations.

If we do not adequately predict customer demand or otherwise optimize and operate our distribution center successfully, it could result in excess or insufficient fulfillment capacity, or result in increased costs, or both, or harm our business in other ways. Orders from several of our websites are fulfilled primarily from a single location. As we continue to add distribution center capability or add new businesses with different requirements, our distribution center systems become increasingly complex and operating them becomes more challenging. We may be unable to adequately operate and staff our distribution center efficiently.

In addition, a failure to optimize inventory in our distribution center will increase our net shipping cost by requiring, among other things, partial shipments. Our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war or terrorism, acts of God and similar factors.

We rely on third parties to deliver our merchandise and catalogs to our customers, and our business could be negatively impacted by disruptions in the operations of these third-party service providers.

We rely on third-party shipping partners, such as FedEx and DHL, to deliver our merchandise and on the United States Postal Service (“USPS”) to deliver our catalogs to our customers. Relying on these third-party delivery services puts us at risk for cost increases that they may demand or disruptions in their operations, such as employee strikes, inclement weather and their inability to meet our shipping demands. If we are forced to use other delivery services, our costs could increase and we may be unable to meet shipment deadlines. Moreover, we may be unable to obtain terms as favorable as those received from the transportation providers we currently use, which would further increase our costs. In addition, if our products are not delivered to our customers on time, our customers may cancel their orders, or we may lose business from these customers in the future. These circumstances may negatively impact our financial condition and results of operations.

System interruptions that impair customer access to our sites or other performance failures in our technology infrastructure could damage our business, reputation and brand and substantially harm our business and results of operations.

We rely extensively on our information technology systems to track inventory, manage our supply chain, record and process transactions, manage customer communications, summarize results and manage our business. We must periodically update or upgrade our IT platforms to ensure that we continue to provide compelling customer experiences. The failure of our IT systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems or difficulty in integrating new systems could adversely impact our business. In addition, our IT systems may be subject to damage and/or interruption from power outages, computer, network and telecommunications failures, computer viruses, hackers, terrorist attacks, denial of service attacks, security breaches, ransomware, phishing and social engineering scams, usage errors by our employees and harmful acts by our website visitors, and similar events. If our IT systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer loss of critical data (including customer data) and interruptions or delays in our operations in the interim. Any significant disruption in our

 

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IT systems or loss of or access to data could harm our reputation and credibility and could adversely affect our business, financial condition or results of operations. See “—Unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system or otherwise, could severely hurt our business.”

We use complex proprietary hardware and software in our technology infrastructure, which we seek to continually update and improve. We may not always be successful in executing these upgrades and improvements, and the operation of our systems may be subject to failure. We have in the past and may in the future experience slowdowns or interruptions in some or all our sites when we are updating them, and new technologies or infrastructures may not be fully integrated with existing systems on a timely basis, or at all. Significant capital investment may be required to keep up with rapid technological change (including the successful utilization of data analytics, AI and machine learning). The failure of our IT systems to operate effectively and remain innovative may result in reduced efficiency and may have an adverse effect on our reputation, results of operations and financial condition. See “—Our use and planned expansion of AI technologies present operational, regulatory, cybersecurity, legal, and reputational risks that could adversely affect our business, financial condition, and results of operations.”

Additionally, if we expand our use of third-party services, including cloud-based services, our technology infrastructure may be subject to increased risk of slowdown or interruption as a result of integration with such services and/or failures by such third parties and our contractual and operational safeguards may not be effective in preventing the failure of these systems or services to operate effectively and be available. Our net revenue depends on the number of visitors who shop on our sites and the volume of orders we can handle. Unavailability of our sites or reduced order fulfillment performance would reduce the volume of goods sold and could also materially adversely affect consumer perception of our brand. As our transaction volume grows and we expand our use of third-party cloud-based services, the demands on our technology platform will increase, and there can be no assurance that we will be able to scale our systems and infrastructure on a timely or cost-effective basis. Any slowdown or failure of our sites and the underlying technological infrastructure could harm our business, reputation and our ability to acquire, retain and serve our customers, which could materially adversely affect our results of operations. Our disaster recovery plan may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.

Unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system or otherwise, could severely hurt our business.

Our business involves the receipt, storage and transmission of customers’ personal information, consumer preferences and payment card information, as well as confidential information about our employees, suppliers and our business, some of which is entrusted to third-party service providers and vendors. Despite the security measures we have in place, including commercially available systems, software, tools and monitoring, our facilities and systems — and those of third parties with which we do business — may be vulnerable to security breaches, cyber-attacks, acts of vandalism, computer viruses, misplaced or lost data, AI-enabled threats, and human errors. The methods used to obtain unauthorized access to or penetrate our systems or systems of our third-party providers and to access our sensitive information are constantly evolving and may be difficult to anticipate or detect for extended periods. Our associates, contractors or third-party partners may also purposefully or inadvertently cause breaches. There is no guarantee that our safeguards will be adequate against all threats.

Despite our efforts, an electronic security breach in our systems (or in the systems of third parties with which we do business and that process data on our behalf) that results in the unauthorized release of individually identifiable customer or other sensitive data could nonetheless occur and have a material adverse effect on our reputation and lead to financial losses from remedial actions, loss of business or potential liability, including possible punitive damages. In the event of a security breach, there can be no assurance that limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any claim. We also cannot provide assurances that our existing cyber insurance coverage

 

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will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim. Successful assertion of one or more large claims against us that exceeds available insurance coverage or results in changes to our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, financial condition and results of operations.

We maintain a cybersecurity program that includes technical safeguards, employee training, incident response procedures, and third-party security assessments designed to protect our systems and data. Despite these measures, no security program can eliminate all risk, and our defenses may not be sufficient to prevent or detect every potential intrusion, attack, or data loss event.

As part of the combined company following the merger, we expect to integrate and align our cybersecurity practices with those of DXL, including its enterprise risk management framework. There can be no assurance that this integration will be achieved without disruption or that the combined company’s cybersecurity program will be sufficient to address the expanded threat surface of the larger organization.

In addition, as the regulatory environment relating to retailers and other companies’ obligation to protect such sensitive data becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could result in additional costs, and a material failure on our part to comply could subject us to fines or other regulatory sanctions and potentially to lawsuits. See “—Failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws, regulations or industry standards relating to privacy, data protection, advertising and consumer protection, could adversely affect our business, financial condition, and results of operations.” Further, we could be required to expend significant capital and other resources to address any data security incident or breach, which may not be covered or fully covered by our insurance, and which may involve payments for investigations, forensic analyses, legal advice, public relations advice, system repair or replacement or other services.

Increases in postage, paper and printing costs could adversely affect the costs of producing and distributing our catalog and promotional mailings, which could have an adverse effect on our business and results of operations.

Mailings of catalogs and other print media are a key aspect of our business. We currently use the USPS for distribution of substantially all our catalogs and are therefore vulnerable to postal rate increases, including potential discontinuation of bulk mailing discounts we currently leverage for cost savings. Increases in postage, paper and printing costs would increase the cost of our catalog mailings and could reduce our profitability to the extent that we are unable to offset such increases by raising prices, by implementing more efficient printing, mailing, delivery and order fulfillment systems or by using alternative direct-mail formats.

The market price for paper has fluctuated significantly in the past and may continue to fluctuate in the future. We do not have multi-year fixed-price contracts for the supply of paper and are not guaranteed access to, or reasonable prices for, the amounts required for our business over the long term. We also depend upon a limited number of external vendors to print and mail our catalogs, which subjects us to pricing risks and disruption if any printer experiences production issues or fails to perform. Any inability to source paper or printing services in the quality and quantity required, or any material increase in associated costs, could impact customer acquisition, result in lost sales or otherwise adversely affect our business.

The increasing popularity of GLP-1 medications could reduce demand for our products and adversely affect our business.

In recent years, GLP-1 receptor agonists used as weight-loss medications, including widely publicized drugs such as Wegovy and Ozempic, have experienced accelerated development, rapid adoption and significant media attention. These medications are designed to promote weight loss and may result in meaningful and sustained

 

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reductions in body weight for certain individuals. To the extent that these medications become more widely available, more affordable, or more commonly prescribed, a portion of our customer base may experience weight loss that reduces their need for plus-size apparel.

Our business is focused on serving plus-size and extended plus-size individuals. If a significant number of current or potential customers reduce their apparel size or shift their purchasing preferences to smaller-size assortments not offered by us, overall demand for our products could decline. In addition, customers experiencing rapid or ongoing weight changes may defer apparel purchases, reduce purchase frequency, or migrate to competitors with broader size ranges. Any such changes in customer behavior could negatively impact our sales, inventory planning, merchandising strategy, and long-term growth prospects.

The long-term magnitude and duration of any such demand shifts remain uncertain. Weight changes may occur gradually and may vary significantly by individual customer. At the same time, these trends may also present potential opportunities for our business. Customers experiencing size transitions may require replacement wardrobes across multiple size ranges over time, which could increase purchase frequency or demand for a broader range of sizes and fits. We may also benefit from opportunities to introduce new fits or product lines, expand adjacent size categories, or strengthen customer relationships through personalized service and size-inclusive offerings.

Our portfolio of established plus-size brands, combined with our direct-to-consumer customer data and digital marketing capabilities, may position us to serve customers through weight transitions in ways that traditional retailers cannot. However, our ability to realize any such benefits will depend on our ability to anticipate and respond effectively to evolving consumer preferences, manage inventory and costs, and execute our strategic initiatives successfully. If the use of GLP-1 medications continues to grow and materially alters the purchasing patterns of our target demographics, the net effect on our business and results of operations could be adverse.

The inability of our customers to access credit could harm our business and results of operations.

A significant portion of our customers finance their purchases of our products with credit, including our private label credit cards, co-branded credit cards and other general purpose credit cards. If the banks providing such credit limit the amount of credit they make available to our customers, or otherwise increase the fees associated with such credit, or if access to credit is otherwise limited due to regulatory restrictions on credit card interest rates, our business and results of operations could be adversely affected. Any deterioration in consumer credit quality, increased delinquencies or changes in underwriting standards by our credit partners could reduce purchasing power among our customers.

Our indebtedness could adversely affect our financial health, limit our ability to obtain future financing, and reduce our flexibility to respond to changes in our business. In addition, any inability to access liquidity or the capital markets on acceptable terms could adversely affect our business, results of operations, financial position and cash flows.

As of January 3, 2026, we had significant indebtedness consisting of amounts outstanding under our term loan and asset-based revolving credit facility. For a description of our indebtedness please refer to the section entitled “FBB’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Description of Indebtedness.” In connection with the merger, our indebtedness is expected to be modified as further described in the section entitled “The Merger Agreement—Financing.” Our indebtedness could have significant consequences. Because of our indebtedness:

 

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our ability to satisfy our obligations with respect to our debt may be adversely affected;

 

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we may be more vulnerable to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are at variable rates of interest;

 

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our ability to obtain additional financing or pursue strategic acquisitions and investments may be limited, and we may be required to make non-strategic divestitures;

 

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a significant portion of our cash flow from operations may have to be dedicated to the payment of principal and interest on our debt, thereby reducing our ability to use that cash flow to fund our operations, capital expenditures and future business opportunities;

 

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we may be unable to renew or refinance our debt on terms as favorable as our existing debt or at all; and

 

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our flexibility to adjust to changing market conditions and our ability to withstand competitive pressures could be diminished.

If cash flow declines, we may be required to reduce capital expenditure, limit strategic investments, delay growth initiatives, or seek additional capital on terms that may be less favorable. In addition, increases in interest rates could increase our debt service obligations where borrowings are subject to variable rates.

We largely depend on cash generated from our existing operations to support our growth. If we were unable to generate sufficient cash from our existing operations, changes in the credit and capital markets, including market disruptions, limited liquidity and interest rate fluctuations, may increase the cost of financing or restrict the company’s access to this potential source of future liquidity. In addition, a decrease in the ratings that rating agencies assign to our short and long-term debt may also negatively impact our access to the debt capital markets and increase our cost of borrowing. As a result of occasional instability in the global financial markets, our liquidity may be affected, or our capital resources may not be sufficient to satisfy our liquidity needs. Although we believe that our existing cash and cash equivalents, cash provided by operations and available borrowings under our existing credit facilities will be adequate to satisfy our capital needs for the next 12 months, any renewed tightening of the credit markets could make it more difficult for us to access funds, enter into an agreement for new indebtedness or obtain funding through the issuance of our securities. Our credit facilities also have financial covenants which, if not met, may further impede our ability to access funds under such facilities.

The terms of our credit facilities may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.

We are a holding company, and our credit facility agreements are directly between our wholly owned subsidiaries and the relevant banking institutions. Our term loan and asset-based revolving credit facility, and any additional debt financing we may incur would likely contain, covenants requiring us to maintain or adhere to certain covenants that restrict our operations, which include limitations on our ability to, among other things: incur additional indebtedness; create liens on property; engage in mergers, consolidations and other fundamental changes; dispose of assets; make investments, loans or advances; make certain acquisitions; engage in certain transactions with affiliates; declare or pay dividends on, or repurchase, our stock; and change our lines of business or fiscal year. Our term loan facility includes a financial maintenance covenant based on leverage, and our asset-based revolving credit facility includes a springing financial maintenance covenant based on a fixed charge coverage ratio that becomes applicable in certain circumstances. Additionally, the ability of our subsidiaries to pay upstream dividends and make other distributions to us is subject to certain covenants and limitations pursuant to our credit facility.

Complying with these covenants could adversely affect our ability to respond to changes in our business, manage our operations, invest capital in new businesses and fund capital expenditures. Our ability to comply with these covenants may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events beyond our control. A failure to comply could result in an event of default, upon which lenders could elect to declare all amounts outstanding to be due and payable. If we are in default, we may be unable to borrow additional amounts under our facilities and our ability to obtain future financing may be negatively impacted. If our indebtedness were to be accelerated, it would have a material adverse effect on our financial condition.

 

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Failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws, regulations or industry standards relating to privacy, data protection, advertising and consumer protection, could adversely affect our business, financial condition, and results of operations.

In addition to our own sensitive and proprietary business information, we handle transactional and personal information about our employees, customers, consumers and users of our e-commerce websites. We also process data for a variety of marketing and advertising purposes, including email communications, affiliate partnerships, social media interactions, influencer partnerships, digital marketing, direct mailers and public relations initiatives, and, because of our data collection and processing activities, we are subject to various laws, regulations and industry standards. Increasingly complex and rigorous, and sometimes conflicting laws, regulatory standards, industry standards, external and internal privacy and security policies, contracts and other obligations govern the collection, use, retention, sharing and security of personal data, particularly in the context of digital marketing, which we rely upon to attract new customers. For example, the California Consumer Privacy Act of 2018 and similar state privacy laws impose obligations on companies to disclose to consumers information about how their personal data is collected, used, shared and stored and to provide certain individual privacy rights to persons, such as the right to request correction or deletion of personal data and the right to opt-out of certain sales or disclosures of personal data.

Laws, regulations and industry standards relating to privacy, data protection, marketing and advertising and consumer protection continue to evolve as various federal and state legislative and regulatory bodies, or self-regulatory organizations, expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, consumer protection and advertising. These requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices. Such evolving legislation may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources for compliance programs, and impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

Our practices may not have complied with or may not comply in the future with all such laws, regulations, standards, requirements and obligations. Any failure, or perceived failure, by us to comply with any federal or state privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject, contracts by which we are bound, or other obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities, customers, suppliers or others or other liabilities or may require us to change our operations and/or cease using certain data sets. Any such claims, proceedings or actions may also hurt our reputation, brand and business, force us to incur significant expenses in defense of such proceedings or actions, distract our management, increase our costs of doing business, result in a loss of customers, suppliers or vendors or result in the imposition of monetary penalties. We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business.

Further, we may publish privacy policies, marketing materials, and other statements, such as statements regarding compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair or misrepresentative of our practices, then we may be subject to investigation, enforcement actions by regulators or other adverse consequences. For example, our compliance with our privacy policies and our general consumer data privacy and security practices may be subject to review by the Federal Trade Commission or the Attorney General of the states in which we operate, which may bring enforcement actions to challenge allegedly unfair and deceptive trade practices, including the violation of privacy policies and representations or material omissions

 

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therein. Negative publicity we might receive regarding any actual or perceived violations of consumer privacy rights, including fines and enforcement actions against us or other similarly placed businesses, may also impair consumers’ trust in our privacy practices and make them reluctant to give their consent to share their data with us.

Federal and state governmental authorities continue to evaluate the privacy implications of third-party cookies and other online tracking methods used for behavioral advertising. Our use of such technologies subjects us to potential claims under the California Invasion of Privacy Act and similar laws, as well as risks from evolving legislation and browser-level restrictions that could limit the effectiveness of our digital marketing practices. If the use of these technologies is significantly restricted or our ability to employ them is impaired, our costs of operations could increase and our ability to acquire new customers on cost-effective terms could be materially and adversely affected.

We derive a significant portion of our operating income from our private label and co-brand credit card programs, and changes in consumer behavior, credit performance, or regulatory developments could materially reduce this revenue.

Our credit card operations facilitate sales and generate significant revenue from fees related to extending credit. Through both our primary private label credit card program and our “second look” co-branded credit card program, we receive royalty payments and other revenue sharing based primarily on net sales. The amount of revenue we earn is directly affected by customer purchase volume, revolving balances, credit quality, fee structures (including late fees), and applicable regulatory requirements. Regulatory developments, such as legislative actions by Consumer Financial Protection Bureau (CFPB), may materially reduce fee income and alter the economics of our agreement with our credit card partner. If certain fee limits are reduced or other regulatory changes occur, our royalty rates, marketing funds, and other revenue components may be reduced or restructured. In addition, declines in consumer spending, higher charge-offs, reduced approval rates, tighter credit standards, or operational changes by our bank partner could adversely impact net sales under the program. Any material reduction in credit card program revenue could have a material adverse effect on our financial condition, results of operations, and cash flows.

We are subject to payment-related risks, including in our credit card operations.

We accept payments using a variety of methods, including our private label credit cards, co-branded credit cards, credit and debit cards, gift cards, mobile payments and online payments. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted, making compliance more difficult, costly, or uncertain.

We are subject to the Payment Card Industry Data Security Standard (“PCI-DSS”), which is a multifaceted security standard that is designed to protect credit card account data as mandated by payment card industry entities. The PCI-DSS requires companies to adopt certain measures to ensure the security of cardholder information, and noncompliance with PCI-DSS can result in penalties ranging from $5,000 to $100,000 per month by credit card companies, litigation, damage to our reputation and revenue losses. We use vendors to help us with PCI-DSS compliance. Despite our compliance efforts, we may become subject to claims that we have violated PCI-DSS, based on past, present, and future business practices, which could have an adverse impact on our business and reputation.

The payment and payment process methods that we accept subject us to potential fraud and theft by threat actors, which could negatively impact our revenue and profitability. If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data is compromised due to a breach or misuse of data, we may be liable for costs incurred by third parties or our ability to accept or facilitate certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types,

 

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which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs, adversely affecting our business and operating results.

Changes in credit card use and applications, payment patterns, credit fraud, and default rates may also result from a variety of economic, legal, social, and other factors that we cannot control or predict with certainty. Changes that adversely impact our ability to extend credit and collect payments or our customers’ ability to use credit products could negatively affect our results.

Reliance on promotions and markdowns to encourage customer purchases could adversely affect our gross margins and results of operations.

The apparel industry is dominated by large brands and national/mass retailers, where price competition, promotion and branded product assortment drive differentiation between competitors in the industry. To be competitive, we must offer customers compelling products at attractive prices, including through promotions and markdowns. Increased reliance on promotions and markdowns to encourage customers to purchase our merchandise could have a negative impact on our gross margins, results of operations and brand image.

Our business relies heavily on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could have a material adverse effect on our net revenue and business.

Our business is highly dependent upon email and other messaging services for promoting our sites and products. Daily promotions offered through emails and other messages sent by us generate a significant portion of our revenue. We provide daily emails and periodic “push” communications to customers and other prospects informing them of what is available for purchase on our sites, and we believe these messages are an important part of our customer experience and help generate a substantial portion of our net revenue. If we are unable to successfully deliver emails or other messages to our subscribers, or if subscribers decline to open our emails or other messages, or otherwise “opt-out” of receiving emails from us, our net revenue and profitability would be materially adversely affected. Changes in how webmail applications organize and prioritize email may result in our emails being delivered in a less prominent location in a subscriber’s inbox or viewed as “spam” by our subscribers and may reduce the likelihood of that subscriber opening our emails. Actions by third parties to block, impose restrictions on or charge for the delivery of emails or other messages could also adversely impact our business. From time to time, internet service providers or other regulations that limit our ability to send such communications or impose additional requirements upon us in connection with sending such communications would also adversely impact our business. Our use of email and other messaging services to send communications about our sites or other matters may also result in legal claims against us, which may cause us increased expenses and, if successful, might result in fines and orders with costly reporting and compliance obligations or might limit or prohibit our ability to send emails or other messages. We also rely on social networking messaging services to send communications and to encourage customers to send communications. Changes to the terms of these social networking services that increase costs, limit promotional communications, limit our ability or our customers’ ability to send communications through their services, or disruptions or downtime experienced by these social networking services or decline in the use of or engagement with social networking services by customers and potential customers, could materially adversely affect our business, financial condition and operating results.

Significant merchandise returns could harm our business.

We allow our customers to return products, subject to our return policy. If merchandise returns are significant, or significantly more than we estimate, our business, prospects, financial condition and results of operations could be harmed. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. From time to time, our products are damaged in transit, or we may experience undetected production issues that result in products that do not meet our expected quality, which can increase return rates and harm our brand.

 

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Existing and increased competition in the apparel industry or decreasing demand for plus-size products may adversely affect our business and results of operations.

We compete with numerous direct-to-consumer companies and retailers, including national department store chains, men’s and women’s specialty apparel chains, outdoor specialty stores, apparel catalog businesses, sportswear marketers and online apparel businesses that sell similar lines of merchandise, for customers, vendors and personnel. Decreased demand for plus-sized clothing compared to an unchanged or increased number of competitors could lead to increased competition. Our competitors may be able to adopt more aggressive pricing and promotional policies, adapt to changes in customer tastes or requirements more quickly, devote greater resources to the design, sourcing, distribution, marketing and sale of their products or generate greater national brand recognition than us. In addition, our competitors may seek to emulate facets of our business strategy, which could result in a reduction of any competitive advantage or special appeal that we might possess. An inability to overcome these potential competitive disadvantages or effectively market our products relative to our competitors could have an adverse effect on our business and results of operations.

From time to time, we may acquire new companies, enter strategic partnerships, expand our existing brand portfolio or launch new brands or collections, and our failure to successfully perform these activities could negatively affect our business.

As part of our growth strategy, we may pursue acquisitions or enter strategic partnerships that are consistent with our mission and enable us to leverage our competitive strengths. We have made strategic acquisitions in the past and may in the future consider strategic transactions and business arrangements, including acquisitions, asset purchases, strategic partnerships, joint ventures, restructurings, divestitures and investments. Acquiring and integrating new businesses involves additional risks that could adversely affect our growth and results of operations, including difficulties assimilating acquired operations, personnel, financial systems and general operating procedures, diversion of our capital and management’s attention from other business issues and opportunities, and the need to make accurate assumptions regarding valuation, operations and growth potential. Newly acquired businesses may be unprofitable, and we may incur significant costs and expenses in connection with any acquisition, including in remerchandising and rebranding. Our ability to integrate newly acquired products or other acquired assets will depend on the successful expansion of our existing financial controls, distribution models, information systems, management and human resources and on attracting, training and retaining qualified employees. Any such transaction may require us to incur non-recurring or other charges, may increase our near and long-term expenditure and may pose significant integration challenges or disrupt our management or business, which could harm our operations and financial results. In addition, we may finance any future acquisition with equity or debt financing. Equity financing could result in dilution of stockholders, and any additional leverage that may be incurred with respect to any future acquisitions could adversely affect our profitability and limit our ability to capitalize on future business opportunities.

Additionally, we may launch new collections or expand our existing brand portfolio, both of which may require significant upfront investments, including investments in marketing, information technology and additional personnel. We may not be able to generate satisfactory revenue from these efforts to offset these upfront costs. Any lack of market acceptance of our efforts to launch new collections or expand our existing brand portfolio could have a material adverse effect on our business, prospects, financial condition and results of operations.

Regulatory, administrative and litigation developments, including government regulation of e-commerce and digital marketing specifically, are evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

Laws and regulations at the local, state, federal and international levels frequently change, and the ultimate cost of compliance cannot be precisely estimated. In addition, we cannot predict the impact that may result from regulatory or administrative changes. Changes in regulations, the imposition of additional regulations, or the enactment of any new or more stringent legislation that impacts employment and labor, advertising, data privacy,

 

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labeling, trade, product safety, transportation and logistics, tax, accounting, operations, or environmental issues, among others, could have an adverse impact on our results of operations, financial position and cash flows. Additionally, from time to time, we are involved in litigation incidental to our business. Our current exposure could change in the event of the discovery of damaging facts with respect to legal matters pending against us or determinations by judges, juries or other finders of fact that are not in accordance with management’s evaluation of the claims. Should management’s evaluation prove incorrect, our exposure could greatly exceed expectations and have a material adverse effect on our results of operations, financial position and cash flows.

In addition, laws and regulations governing the use of digital marketing channels are rapidly evolving. It may become more difficult for us to comply with such laws, and future data privacy laws and regulations or industry standards, as well as related enforcement, may restrict or limit our ability to use some or all the marketing strategies on which we currently rely. The failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these digital marketing channels could adversely impact our reputation or subject us to fines or other penalties. See “—Failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws, regulations or industry standards relating to privacy, data protection, advertising and consumer protection, could adversely affect our business, financial condition, and results of operations.”

We cannot be sure that our agents’, suppliers’ and other partners’ practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others. Any such proceedings or actions could force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our sites by customers and vendors and may result in the imposition of monetary liability. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations. Adverse legal or regulatory developments could substantially harm our business. In particular, if we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our customer base may be adversely affected, and we may not be able to maintain or grow our net revenue and expand our business as anticipated.

In addition, as part of the combined public company following the merger, we may become subject to evolving disclosure and compliance obligations related to environmental, social, and governance matters, including proposed federal and state requirements regarding climate-related financial risk and greenhouse gas emissions disclosures. Many of these requirements remain subject to ongoing legal challenges and implementation uncertainty, and compliance could require the development of new data collection processes, internal controls, and reporting capabilities that we have not previously maintained as a private company.

Our business is subject to risks associated with global sourcing and manufacturing.

We source substantially all our products from a network of vendors primarily in Asia and Africa, both directly and through the utilization of agents in select countries. We may also source products indirectly through domestic vendors with foreign sources. Our inability to effectively source inventory directly could negatively impact our ability to deliver our inventory supply and could disrupt our business, which may adversely affect our operating results.

We are at risk for increases in vendor costs and cannot be certain that we will not experience operational difficulties with these third-party vendors, such as reductions in the availability of production capacity, decline in plus-size clothing expertise, errors in complying with merchandise specifications, insufficient quality control and failure to meet production deadlines. The inability of a vendor to ship orders in a timely manner or to meet our safety, quality and social compliance standards could have a material adverse impact on our business, results of operations, financial position and cash flows.

 

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Additionally, we face a variety of risks generally associated with doing business in foreign markets and importing merchandise from abroad (see also “— Additional tariffs on product imported to the United States, retaliatory trade actions taken by other countries, and resulting trade wars have had, and may continue to have, a material adverse impact on our business”), including but not limited to:

 

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financial, political or labor instability in any of the countries in which our merchandise is manufactured or the channels through which it passes;

 

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fluctuations in the value of the U.S. dollar against foreign currencies;

 

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inability of our manufacturers to comply with local laws, including labor laws, health and safety laws or labor practices;

 

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increased security and regulatory requirements applicable to imported goods;

 

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impact of natural disasters, industrial accidents and public health concerns on our foreign sourcing offices and vendor manufacturing operations;

 

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delays and disruptions in shipping due to port security considerations, labor disputes, political instability or access restrictions to shipping routes such as the Suez Canal;

 

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regulations under the United States Foreign Corrupt Practices Act of 1977, as amended, and similar laws, economic sanctions laws, regulations and regimes (including those administered by the Office of Foreign Assets Control of the United States Department of the Treasury), restrictions related to forced labor and human rights concerns, and other international laws and regulations; and

 

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increased costs and delays of transportation.

We currently ship most of our products from vendors to our domestic distribution centers by ocean. If a disruption occurs in the operation of ports through which our products transit, including disruptions caused by geopolitical instability affecting shipping routes, we and our vendors may have to ship some or all of our products from Asia or other regions by air freight or to alternative shipping destinations in the United States or Canada. Shipping by air is significantly more expensive than shipping by ocean and our profitability could be reduced. Similarly, shipping to alternative destinations in the United States or neighboring countries could lead to increased lead times and costs for our products. A disruption at ports (domestic or abroad) through which our products are imported could have a material adverse effect on our results of operations, financial position and cash flows.

We require our independent manufacturers to operate in compliance with applicable laws and our internal requirements, and we work with a third-party audit vendor to confirm a responsible and ethical supply chain. Our vendor code of conduct, guidelines for vendors or other vendor compliance programs promote ethical business practices and we monitor compliance with them; however, we do not control these manufacturers, their labor practices, the health and safety conditions of their facilities or from where they buy their raw materials. Any violation of labor, health, environmental, safety or other laws, including issues relating to human rights abuses, forced labor, or workplace safety violations, by any of the independent manufacturers we use could damage our reputation and could have a material adverse effect on our business.

Unseasonal or severe weather conditions may adversely affect our merchandise sales.

Our business may be adversely affected by unseasonal weather conditions. Sales of certain seasonal apparel items, are dependent in part on the weather and may decline in years in which weather conditions do not favor the use of these products. Sales of our spring and summer products, which traditionally consist of lighter clothing, swimwear, and the like, may be adversely affected by cool or wet weather. Similarly, sales of our fall and winter products, which include sweaters, flannel, outerwear, and the like, may be adversely affected by mild, dry or warm weather.

 

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The effects of climate change may result in an increase in the frequency, severity, and duration of extreme weather conditions and natural disasters, as well as shifts in traditional seasonal weather patterns. Severe weather events may impact our ability to deliver orders to customers on schedule and staff our distribution and customer care centers, which could have an adverse effect on our business and results of operations. In addition, because we purchase inventory based in part on anticipated weather patterns, unanticipated weather or unseasonably severe weather may result in excess inventory or lost sales, either of which would have an adverse impact on our results of operations.

We may be unable to protect our trademarks and other intellectual property rights, and third parties may claim that we infringe on their intellectual property.

We believe that our trademarks and service marks are important to our success and competitive position due to their name recognition with our customers. We devote substantial resources to the establishment and protection of our trademarks and service marks on a worldwide basis, including in certain of the countries in which we have business operations or plan to have business operations. While we have registered our primary trademarks in our core product categories in the United States, because we have not registered all our trademarks in all categories, or in all foreign countries in which we may fulfill orders through third-party vendors for our merchandise, our international expansion and product merchandising using these marks could be limited.

In addition to trademark protection, we protect our assets through a combination of copyrights, trade secrets, patents and other intellectual property rights. Nevertheless, the actions we have taken, including establishing and protecting our trademarks and service marks, may not be adequate to prevent others from imitating our products or to prevent others from seeking to block sales of our products if we were to expand into other markets. Also, others may assert proprietary rights in our intellectual property, and we may not be able to successfully resolve these types of conflicts to our satisfaction. In addition, the laws of certain foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States and laws and enforcement mechanisms to protect our intellectual property from unauthorized usage in new technologies, like AI, are evolving and may be inadequate. See “—Our use and planned expansion of AI technologies present operational, regulatory, cybersecurity, legal, and reputational risks that could adversely affect our business, financial condition, and results of operations.”

Any litigation regarding our trademarks could be time-consuming and costly and we cannot assure that our rights in, or ownership of, our trademarks or other intellectual property rights would be upheld if challenged. The loss of exclusive use of our trademarks and other intellectual property could have a material adverse effect on our results of operations, financial position and cash flows.

We may be subject to costly litigation in the event third parties claim our products or services infringe upon their proprietary rights. Third parties may have, or may in the future obtain, patents, including design patents, that our products, brands or technology may infringe. Any of these third parties could make a claim of infringement against us, and we may also be subject to claims by third parties that we have breached their copyright, trademark or license usage rights. We also face the risk of infringing third-party intellectual property rights from the use of outputs generated using AI which may contain or be substantially similar to third-party material protected by intellectual property, including patents, copyrights or trademarks.

Litigation could result in substantial expense to us and significant diversion of efforts by our technical and management personnel. An adverse determination in any such proceeding could subject us to significant liabilities to third parties, could prevent us from using our trademarks or other intellectual property rights or could require us to seek licenses from third parties and such licenses may be costly and may not be available on acceptable terms or at all. Adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from commercializing our products, which would have a material adverse effect on our business, results of operations and financial condition.

 

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Matters relating to unionized employees and multiemployer plan obligations could adversely affect our business.

Some of our employees are represented by a union. Participation in labor unions could put us at increased risk of labor strikes and disruption of our operations. Responding to unionization attempts may distract management and our workforce. If a significant number of our employees were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements, it could significantly increase our costs. Any of these changes could adversely affect our business, financial condition, results of operations or cash flows.

In addition, the terms of our collective bargaining agreements require us to make periodic contributions on behalf of our unionized employees to defined benefit multiemployer pension plans. These plans have been determined to be in “critical status,” and we could be subject to withdrawal liability in the event of a withdrawal from such plans, which would be payable over an extended period and could adversely impact our results of operations.

Labor shortages or increases in labor costs could harm our business.

Any labor shortage, particularly those of which occur in our distribution center during peak-selling periods, may negatively impact our ability to process inventory in a timely manner. Additionally, because of the tight labor market, our hourly rates have increased to attract candidates. If we are unable to pass on these higher costs through price increases or reduced workforce hours, our margins and profitability may be adversely impacted, which could have a material adverse effect on our results of operations, financial position and cash flows.

Our growth may place significant strains on our resources.

Our growth may place a significant strain on our managerial, operational and financial resources. Moving forward, our systems, procedures or controls may not be adequate to support our operations, and we may be unable to achieve the rapid execution necessary to successfully implement our business plan. Our future operating results, if any, will also depend on our ability to add additional personnel commensurate with the growth of our operations, if any. If we are unable to manage growth effectively, our business, results of operations and financial condition will be adversely affected.

We may be subject to product liability claims or negative publicity if we need to recall any product we sell or if we fail to comply with applicable product safety laws.

The products we sell are regulated by many different governmental bodies, including but not limited to the Consumer Product Safety Commission and the Food and Drug Administration in the United States, and similar state laws (including California’s Proposition 65) and international regulatory authorities. Although we test the products sold on our websites, selected products still could present safety problems of which we are not aware. This could lead us to recall selected products, either voluntarily or at the direction of a governmental authority and may lead to a lack of consumer acceptance or loss of consumer trust. Product safety concerns, recalls, defects or errors could result in the rejection of our products by customers, damage to our reputation, lost sales, product liability litigation and increased costs, any or all of which could harm our business and have a material adverse effect on our financial position, results of operations and cash flows.

Some of the products we sell or manufacture may expose us to product liability claims relating to personal injury, death, or environmental or property damage. Certain third parties also sell products using our platform that may increase our exposure to product liability claims, such as if these sellers do not have sufficient protection from such claims. Although we maintain liability insurance, our coverage may not be adequate for liabilities actually incurred or insurance may not continue to be available to us on economically reasonable terms, or at all.

We are subject to taxation risks, including income tax liabilities and state and local tax obligations, which could adversely affect our business. We are subject to income taxes in the United States (federal and state). Tax laws,

 

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regulations and administrative practices in various jurisdictions may be subject to significant change due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our effective tax rates could be adversely affected by a tax authority challenging a position taken by the company, earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, losses incurred in jurisdictions for which we are not able to realize the related tax benefit, entry into new businesses and geographies and changes to our existing businesses, acquisitions (including integrations) and investments, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. We are also subject to audit in various jurisdictions, and such jurisdictions may assess additional income tax liabilities against us.

Although we believe our tax estimates are reasonable, the outcome of any tax audits, investigations, and related litigation could be materially different from our historical income tax provisions and accruals.

Developments in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.

One or more states or municipalities could assert that the Company is liable for sales and use, commerce, or similar type of taxes, which could adversely affect our business.

We ship product to retail customers throughout the United States. In South Dakota v. Wayfair, Inc. et al (“Wayfair”), the U.S. Supreme Court ruled that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. The effect of Wayfair was to uphold economic nexus principles in determining sales and use tax nexus. As a result of the decision, most states have adopted laws that require an out-of-state retailer to register and collect sales and use or other non-income type taxes upon meeting certain economic nexus standards regardless of whether the company has physical presence in the state. Although we believe we are complying with the applicable legislative requirements and collecting taxes where obligated to do so, our interpretation and application of the legislation may differ from the states, which could result in the states’ attempt to impose additional tax liabilities, including potential penalties and interest. Furthermore, the requirements by state or local governments on out-of-state sellers to collect sales and use taxes could deter future sales, which could have an adverse impact on our business.

Litigation costs and the outcome of litigation could have a material adverse effect on our business.

From time to time we may be subject to litigation claims through the ordinary course of our business operations regarding, but not limited to, employment matters, compliance with the Americans with Disabilities Act of 1990, footwear, apparel and accessory safety standards, product liability claims, security of customer and employee personal information, advertising and promotional practices, contractual relations with vendors, marketing and infringement of trademarks and other intellectual property rights. Litigation to defend ourselves against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations or cash flows.

If our intangible assets become impaired, we may be required to record a significant charge to earnings.

We have a significant amount of intangible assets. Our intangible asset balances as of January 3, 2026, was approximately $131.1 million. We test indefinite-lived intangible assets for impairment at least annually or more frequently if indicators of impairment exist. Such assets are considered to be impaired when the net book value of an intangible asset exceeds its estimated fair value. An impairment of a significant portion of our intangible assets could materially adversely affect our financial condition and results of operations.

 

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Risks Related to the Combined Company

The following risks relate to the combined company and would apply only if the merger is consummated. There can be no assurance that the merger will be consummated.

The combined company would have a substantial amount of indebtedness following the merger, which could materially adversely affect its financial condition and ability to comply with its covenants.

If the merger is consummated, the combined company would be expected to have a significant amount of indebtedness, including obligations under the A&R Term Loan Facility (defined below) and the Combined ABL Facility (defined below). The combined company’s level of indebtedness could have material consequences, including requiring a substantial portion of its cash flow from operations to be dedicated to the payment of principal and interest thereon, increasing its vulnerability to adverse economic and industry conditions, limiting its flexibility in planning for or reacting to changes in its business or competitive environment, limiting its ability to obtain additional financing for working capital, capital expenditures, acquisitions or other corporate purposes, and placing it at a competitive disadvantage relative to competitors with less indebtedness. If the combined company’s cash flow declines, it may be required to reduce capital expenditure, delay growth initiatives, or seek additional capital on less favorable terms.

The A&R Term Loan Facility and the Combined ABL Facility would contain financial and other restrictive covenants that limit our ability to, among other things:

 

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incur additional indebtedness or issue certain preferred equity;

 

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create liens on our assets;

 

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make dividends, distributions or other restricted payments;

 

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make certain investments or acquisitions;

 

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sell or otherwise dispose of assets;

 

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engage in mergers or other fundamental changes;

 

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engage in certain transactions with affiliates; and

 

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prepay or repurchase certain subordinated or junior indebtedness.

The A&R Term Loan Facility would include a financial maintenance covenant requiring compliance with a maximum total net leverage ratio. The Combined ABL Facility is expected to include a springing minimum fixed charge coverage ratio that becomes operative when borrowing availability falls below a specified threshold.

The combined company’s ability to comply with these covenants may be affected by events beyond its control, including prevailing economic, financial and industry conditions. If the combined company fails to comply with these covenants and is unable to obtain waivers or amendments from its lenders, an event of default could occur, which could result in the acceleration of indebtedness and the enforcement of remedies against collateral securing such indebtedness. In such circumstances, the combined company may not have sufficient liquidity to repay accelerated obligations and may not be able to obtain alternative financing on acceptable terms, or at all. Any of these factors could have a material adverse effect on the combined company’s business, financial condition, results of operations and cash flows.

For more information on the A&R Term Loan Facility and the Combined ABL Facility, please see the section entitled “The Merger Agreement—Financing”.

 

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The Combined ABL Facility has not yet been entered into, and the combined company may not be able to establish such facility on the anticipated terms or within the expected timeframe, which could adversely affect its liquidity and financial condition.

If the merger is consummated, the Combined ABL Facility is expected to be implemented in connection with the closing of the merger, subject to the terms and conditions set forth in the Bank of America Commitment Letter (as defined below). The Combined ABL Facility has not yet been entered into, and although DXL and FBB have agreed to use reasonable best efforts to establish the Combined ABL Facility, there can be no assurance that such facility would be entered into on the anticipated terms or within the expected timeframe if the conditions set forth in the Bank of America Commitment letter are not met.

In addition, availability under the Combined ABL Facility is expected to be subject to a borrowing base based primarily on eligible inventory and accounts receivable and may be reduced by reserves or other adjustments imposed by lenders. As a result, the amount of loans available for borrowing may fluctuate based on seasonal or other changes in working capital and lender discretion under the applicable credit documentation. If the Combined ABL Facility is not established on anticipated terms or if borrowing availability thereunder is more limited than expected, the combined company’s liquidity and financial flexibility could be adversely affected, which could have a material adverse effect on its business, financial condition and results of operations.

The combined company may incur losses for the foreseeable future and may never achieve profitability.

The combined company may never become profitable. The combined company may need to increase brand awareness, successfully grow its store portfolio, grow its digital business, maintain a state-of-the-art website, predict and respond to fashion trends, grow its existing customer base, hire qualified personnel, build successful collaborations and alliances, grow and sustain the number of transactions, units-per-transaction and share of wallet and operate at appropriate operating margins. Failure to grow its market share could have a material adverse effect on the combined company’s results of operations, cash flows, and financial position. Even if the combined company does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

The integration of FBB with DXL may present significant challenges, and the combined company may not realize anticipated synergies and other benefits of the merger.

The combination of independent businesses is complex, costly and time-consuming, and combining DXL’s and FBB’s businesses and operations may divert significant management attention and resources and disrupt the combined company’s business if the merger is consummated. The failure to meet the challenges involved in integrating the businesses and to realize the anticipated benefits of the transaction could cause an interruption of, or a loss of momentum in, the combined company’s business activities and could adversely affect its results of operations. The overall combination of the DXL business and the FBB business may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships. The risks and difficulties of integration include, among others:

 

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the diversion of management attention to integration matters;

 

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integrating operations and systems, including intellectual property and communications systems, administrative and information technology infrastructure and financial reporting and internal control systems, some of which may prove to be incompatible;

 

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conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the businesses;

 

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integrating employees and attracting and retaining key personnel, including talent;

 

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retaining existing, and obtaining new customers and suppliers;

 

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managing the expanded operations of a significantly larger and more complex company;

 

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realizing contingent liabilities that are larger than expected; and

 

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potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the transaction.

Many of these factors are outside of DXL’s control and, if the merger is consummated, would be outside the control of the combined company, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact the business, financial condition and results of operations of the combined company.

In addition, even if the operations of the DXL business and the FBB business are integrated successfully, the full benefits of the transaction may not be realized, including expected synergies, cost savings or sales or growth opportunities. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of the DXL business and the FBB business. All of these factors could cause dilution to the earnings per share of DXL, decrease or delay the projected accretive effect of the transaction, and negatively impact the price of DXL common stock following the transaction.

The success of the combined company would also depend on relationships with third parties and pre-existing customers of DXL and FBB, which relationships may be affected by customer or third-party preferences or public attitudes about the merger. Any adverse changes in these relationships could adversely affect the combined company’s business, financial condition or results of operations.

The combined company’s success would depend on its ability to maintain and renew relationships with pre-existing customers, suppliers and other third parties of both DXL and FBB, and its ability to establish new relationships. There can be no assurance that the business of the combined company would be able to maintain and renew pre-existing contracts and other business relationships, or enter into or maintain new contracts and other business relationships, on acceptable terms, if at all. The failure to maintain important business relationships could have a material adverse effect on the combined company’s business, financial condition or results of operations.

If the merger is consummated, the combined company’s stock price would be expected to be volatile, and the market price of its common stock may drop following the merger.

The market price of the combined company’s common stock following the merger could be subject to significant fluctuations. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate following the merger include:

 

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overall changes in the economy and general market volatility, including the effects of inflation and/or recession;

 

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news announcements regarding the combined company’s quarterly or annual results of operations;

 

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failure to meet or exceed financial projections the combined company may provide to the public;

 

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quarterly comparable sales;

 

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period-to-period fluctuations in the combined company’s financial results;

 

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announcement of significant acquisitions, strategic collaborations, joint ventures or capital commitments by the combined company or its competitors;

 

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entry into, or termination of, key agreements;

 

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competitive developments;

 

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loss of key employees;

 

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governmental regulation or changes in laws applicable to the combined company (such as increased wage and paid benefits laws);

 

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litigation affecting the combined company;

 

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changes in the market valuations of similar companies;

 

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sales of its common stock by the combined company or its stockholders in the future;

 

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trading volume of the combined company’s common stock;

 

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adverse publicity relating to the combined company’s markets; or

 

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market views as to the prospects of the combined company or the retail clothing industry generally.

Moreover, stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies or the retail clothing industry. These broad market fluctuations may also adversely affect the trading price of the combined company’s common stock.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Regardless of the merits or the ultimate results of such litigation, if instituted, such litigation could result in substantial costs and diversion of management’s attention and resources, which could significantly harm the combined company’s profitability and reputation.

Additionally, a decrease in the stock price of the combined company may cause the combined company’s common stock to no longer satisfy the continued listing standards of Nasdaq. If the combined company is unable to maintain the requirements for listing on Nasdaq, it could be delisted, which could have a materially adverse effect on its ability to raise additional funds as well as the price and liquidity of its common stock.

Financial reporting obligations of being a public company in the United States are expensive and time-consuming, and the combined company’s management would be required to devote substantial time to compliance matters.

If the merger is consummated, FBB as the accounting acquirer would be responsible for the combined company’s public company obligations. Although DXL is currently a public company, FBB has operated as a privately held company and has not been subject to public company reporting requirements. The combined company would therefore incur significant additional legal, accounting and other expenses as FBB implements and integrates the controls and procedures necessary for public company compliance for the first time. The obligations of being a public company in the United States require significant expenditures and would place significant demands on the combined company’s management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the listing requirements of the stock exchange on which the combined company’s securities are listed. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. In addition, the combined company expects these rules and regulations to make it more difficult and more expensive for the combined company to obtain director and officer liability insurance and the combined company may be required to incur substantial costs to maintain the same or similar coverage that FBB had as a privately held company. The combined company’s management and other personnel would need to devote a substantial amount of time to ensure that the combined company complies with all of these requirements and to keep pace with new regulations, otherwise the combined company may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

The sale or availability for sale of a substantial number of shares of common stock of the combined company after the merger and the private placement and after expiration of applicable lock-up periods could adversely affect the market price of such shares after the merger.

Sales of a substantial number of shares of common stock of the combined company in the public market after the merger, the private placement or if existing stockholders of DXL and FBB sell, or indicate an intention to sell, substantial amounts of the combined company’s common stock in the public market after expiration of applicable lock-up periods and other legal restrictions on resale, or the perception that these sales could occur, could adversely

 

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affect the market price of such shares and could materially impair the combined company’s ability to raise capital through equity offerings in the future. In addition, in connection with the private placement, the private placement investors were granted certain registration rights with respect to the shares of FBB common stock purchased in the private placement, which would be exchanged for shares of DXL common stock at the effective time. Such registration rights would require the combined company to use reasonable best efforts to prepare and file a registration statement with the SEC as soon as practicable following the closing of the merger but in no event later than the 30^th day following such closing to register the resale of the shares purchased in the private placement. DXL and FBB are unable to predict what effect, if any, market sales of securities held by significant stockholders, directors or officers of the combined company or the availability of these securities for future sale would have on the market price of the combined company’s common stock after the merger.

Ownership of the combined company’s common stock may be highly concentrated, and it may prevent other stockholders from influencing significant corporate decisions.

If the merger is consummated, former FBB stockholders (including the private placement investors) are estimated to beneficially own or control approximately 55% of the combined company on a fully diluted basis using the treasury stock method. Accordingly, former FBB stockholders would have substantial influence over the outcome of any corporate action of the combined company requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of the combined company’s assets or any other significant corporate transaction. These stockholders also may exert influence in delaying or preventing a change of control of the combined company, even if such change of control would benefit the other stockholders of the combined company.

Certain significant stockholders of the combined company could attempt to influence changes which could adversely affect the combined company’s operations, financial condition and the value of DXL common stock.

If the merger is consummated, certain former stockholders of FBB would hold significant ownership positions in the combined company, including Oaktree Opportunities Fund Xb Holdings (Delaware), L.P., Oaktree Opportunities Fund XI Holdings (Delaware), L.P. and certain of their affiliates (“Oaktree”), which would hold approximately 26.9% of the outstanding equity. Stockholders with significant ownership stakes may from time to time seek to influence corporate actions, engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes at the combined company. Such campaigns may seek to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by significant stockholders can be costly and time-consuming and could disrupt the combined company’s operations and divert the attention of the board of directors and senior management from executing the combined company’s business strategy. These actions could adversely affect the combined company’s operations, financial condition and the value of your investment in DXL common stock.

DXL and FBB do not anticipate that the combined company would pay any cash dividends in the foreseeable future.

The current expectation is that the combined company would be expected to retain its future earnings, if any, to fund the development and growth of the combined company’s business. As a result, capital appreciation, if any, of the combined company’s common stock would be the stockholders’ sole source of gain, if any, for the foreseeable future.

An active trading market for the combined company’s common stock may not be sustained and its stockholders may not be able to resell their shares of common stock for a profit, if at all.

Prior to the merger, there had been no public market for FBB’s common stock. An active trading market for the combined company’s shares of common stock may not be sustained. If an active market for its common stock is not sustained, it may be difficult for its stockholders to sell their shares at an attractive price, or at all.

 

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If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about the combined company, its business or its market, its stock price and trading volume could decline.

The trading market for the combined company’s common stock would be influenced by the research and reports that industry or equity research analysts publish about it and its business. Equity research analysts may elect not to provide research coverage of the combined company’s common stock after the completion of the merger, if the merger is consummated, and such lack of research coverage may adversely affect the market price of its common stock. In the event it does have equity research analyst coverage, the combined company would not have any control over the analysts, or the content and opinions included in their reports. The price of the combined company’s common stock could decline if one or more equity research analysts downgrade its stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of the combined company or fails to publish reports on it regularly, demand for its common stock could decrease, which in turn could cause its stock price or trading volume to decline.

The combined company must maintain effective internal controls over financial reporting, and if the combined company is unable to do so, the accuracy and timeliness of the combined company’s financial reporting may be adversely affected, which could have a material adverse effect on the combined company’s business and stock price.

The combined company must maintain effective internal control over financial reporting in order to accurately and timely report its results of operations and financial condition. In addition, as a public company, the Sarbanes-Oxley Act requires, among other things, that the combined company assess the effectiveness of its disclosure controls and procedures quarterly and the effectiveness of the combined company’s internal control over financial reporting at the end of each fiscal year.

The rules governing the standards that must be met for the combined company management to assess the combined company’s internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act are complex and require significant documentation, testing and possible remediation. These stringent standards require that the combined company’s audit committee be advised and regularly updated on management’s review of internal control over financial reporting. The combined company’s management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that are applicable to the combined company as a public company. If the combined company fails to staff the combined company’s accounting, finance and information technology functions adequately or maintain internal control over financial reporting adequate to meet the demands that would be placed upon the combined company as a public company, including the requirements of the Sarbanes-Oxley Act, the combined company’s business and reputation may be harmed and its stock price may decline. Furthermore, investor perceptions of the combined company may be adversely affected, which could cause a decline in the market price of its common stock.

The combined company’s success would depend significantly on its key personnel and its ability to attract and retain additional personnel.

In the event the merger is consummated, the combined company’s success would be dependent on the personal efforts, performance and abilities of its key management, which includes its executive officers as well as members of its senior management. The loss of any of its senior management may result in a loss of organizational focus, poor operating execution, an inability to identify and execute strategic initiatives, an impairment in its ability to identify new store locations, and an inability to consummate possible acquisitions. The competition is intense for the type of highly skilled individuals with relevant industry experience that the combined company would require, and it may not be able to continue to attract and retain new employees of the caliber needed to achieve its objectives.

 

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Anti-takeover provisions in the combined company’s charter documents and under Delaware law could make an acquisition of the combined company more difficult and may prevent attempts by the combined company’s stockholders to replace or remove the combined company’s management.

Provisions in the combined company’s amended and restated certificate of incorporation and bylaws may delay or prevent an acquisition or a change in management. These provisions include the ability of the board of directors to issue preferred stock without stockholder approval. In addition, because the combined company would be incorporated in Delaware, it is governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits stockholders owning in excess of 15% of the outstanding combined company’s voting stock from merging or combining with the combined company in certain circumstances. Although DXL and FBB believe these provisions collectively would provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with the combined company’s board of directors, they would apply even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by the combined company’s stockholders to replace or remove then current management by making it more difficult for stockholders to replace members of the board of directors of the combined company, which is responsible for appointing the members of management.

The bylaws of the combined company would provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between the combined company and its stockholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with the combined company or its directors, officers or other employees.

The amended and restated bylaws of the combined company would provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum for any state law claims for (a) any derivative action or proceeding brought on behalf of the combined company; (b) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer, stockholder, employee or agent of the combined company to the combined company or its stockholders; (c) any action asserting a claim against the combined company or any of its directors, officers, stockholders, employees or agents arising pursuant to any provision of the DGCL, the certificate of incorporation or the bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; (d) any action to interpret, apply, enforce or determine the validity of the certificate of incorporation or the bylaws; or (e) any action asserting a claim against the combined company or any of its directors, officers, stockholders, employees or agents governed by the internal affairs doctrine; provided, that these choice of forum provisions do not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. The amended and restated bylaws would provide that the federal district courts would be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. The choice of forum provision may make it more expensive for stockholders to bring a claim than if the stockholders were permitted to select another jurisdiction and limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the combined company or its directors, officers or other employees, which may discourage such lawsuits against the combined company and its directors, officers and other employees. If a court were to find the choice of forum provision contained in the bylaws to be inapplicable or unenforceable in an action, the combined company may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect the combined company’s business and financial condition. Any person or entity purchasing or otherwise acquiring any interest in shares of the combined company’s capital stock shall be deemed to have notice of and to have consented to the provisions of the combined company’s bylaws described above.

 

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The combined company’s business is seasonal and unfavorable general political and economic conditions could adversely affect the combined company’s business, financial condition or results of operations.

The combined company’s business is expected to be seasonal. Historically, a significant portion of DXL’s operating income has been generated during its second and fourth quarters. If, for any reason, the combined company miscalculates the demand for its products during these quarters, its sales in that quarter could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause the combined company’s annual operating results to suffer. Due to seasonality, the possible adverse impact from such risks is potentially greater if any such risks occur during the combined company’s second and fourth quarters. Additionally, the combined company’s operations may be negatively affected by local, regional or national political and economic conditions, such as levels of disposable consumer income, inflation, consumer debt, interest rates, consumer confidence and other macro issues. The volatile political environment increases the chance of other legislative and regulatory changes at both the federal and state level that could affect the combined company in ways it cannot predict. In addition, global economies, conflicts, trade negotiations and policies may directly or indirectly affect the combined company’s business.

 

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THE MERGER

This section and the section entitled “The Merger Agreement” beginning on page 121 of this proxy statement describe the material aspects of the merger, including the merger agreement. While DXL believes that this description covers the material terms of the merger and the merger agreement, it may not contain all of the information that is important to you. You should carefully read this entire proxy statement, including the merger agreement, which is attached as Annex A to this proxy statement, and the other documents to which DXL has referred to or incorporated by reference herein. For a more detailed description of where you can find those other documents, please see the section entitled “Where You Can Find Additional Information” beginning on page 228 of this proxy statement. As described elsewhere in this proxy statement, the DXL Board has continued to evaluate the merger, including developments since the execution of the merger agreement, and has withdrawn its prior recommendation in favor of the merger and the issuance proposal and now recommends that stockholders vote “AGAINST” the issuance proposal.

Terms of the Merger

Each of the DXL Board, the board of directors of a wholly owned direct subsidiary of DXL (the “merger subsidiary”) and the Board of Directors of FBB has unanimously approved the merger agreement. The merger agreement provides that, pursuant to the terms and subject to the conditions set forth in the merger agreement, the merger subsidiary would merge with and into FBB, with FBB continuing as the surviving corporation and as a wholly owned subsidiary of DXL (the “merger”).

Under the terms of the merger agreement, if the merger is consummated, at the effective time of the merger, each share of common stock, par value $0.01 per share, of FBB (“FBB common stock”) (excluding (i) any shares held as treasury stock by FBB or held or owned by DXL or any subsidiary of DXL or FBB, (ii) any dissenting shares, and (iii) any shares held by a FBB stockholder that is an unaccredited investor) would be converted into the right to receive that number of fully paid and nonassessable shares of the common stock, par value $0.01 per share, of DXL (“DXL common stock”) equal to the exchange ratio, which would be calculated based on the total number of shares outstanding of DXL common stock and FBB common stock immediately prior to the effective time of the merger, in each case, on a fully diluted basis using the treasury stock method. If the merger is consummated, immediately following the effective time of the merger, FBB stockholders would be expected to own or hold rights to acquire 55% of the combined company and DXL stockholders would be expected to own or hold rights to acquire 45% of the combined company, in each case, on a fully diluted basis using the treasury stock method. If the merger is consummated, DXL would continue to operate under the same name.

See the section entitled “The Merger Agreement” for additional and more detailed information regarding the legal documents that govern the merger, including information about conditions to the completion of the merger and provisions for terminating or amending the merger agreement.

Prior Approval and Continued Evaluation of the Merger

The merger agreement was unanimously approved by the DXL Board in December 2025 following consideration of the factors described elsewhere in this proxy statement. The discussion included in this proxy statement reflects the considerations evaluated at that time and, in part, information provided by FBB or its representatives, and is provided for historical context only. The DXL Board has continued to evaluate the merger, including in light of developments since the execution of the merger agreement. As part of that evaluation, the DXL Board has considered, among other things, the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, FBB’s level of indebtedness, concerns regarding FBB’s potential negative equity value, and the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders.

 

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For a more complete discussion of the DXL Board’s current recommendation and the reasons for that determination, please see “—DXL’s Reasons for Recommending Against the Issuance Proposal; Updated Recommendation of the DXL Board.”

Effect on DXL if the Merger is Not Completed

If the share issuances and amendments to the restated certificate of incorporation to effect the reverse stock split expected to be necessary for the merger are not approved by DXL stockholders, or if the merger is not consummated for any other reason, FBB will not be combined with DXL and DXL will continue to operate as it did prior to entering into the merger agreement. In addition, if the merger agreement is terminated and the DXL Board determines to seek another business combination, it may not be able to find a third party willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the merger. Moreover, DXL will also incur the costs and expenses of the merger and this proxy solicitation whether or not the merger is consummated.

Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement and certain events that followed, including developments since the execution of the merger agreement that caused the DXL Board to withdraw its prior recommendation in favor of the merger and the issuance proposal and recommend that the DXL stockholders vote against the issuance proposal. The following chronology does not purport to be complete and may not contain all of the information that is important to you, nor does it catalogue every conversation or correspondence by or among members of the DXL Board, DXL management, DXL’s advisors and representatives or other parties and their respective affiliates, advisors or representatives.

The DXL Board and its senior management regularly review and discuss DXL’s historical performance, future growth prospects and overall strategic objectives and consider a variety of potential financial and strategic opportunities to enhance stockholder value. These reviews have periodically included consideration of strategic and financial alternatives, including, but not limited to, a possible merger or sale transaction.

Prior to 2024, representatives of DXL and FBB, including Harvey Kanter, the chief executive officer of DXL, and Jim Fogarty, the chief executive officer of FBB, had occasionally met to discuss the potential for strategic transactions between the companies. In November 2023, Mr. Kanter was contacted by email by Mr. Fogarty for a meeting, and Mr. Kanter and Mr. Fogarty held a call to discuss the potential for a combination of DXL and FBB and indicated willingness to enter into a non-disclosure agreement to facilitate further discussions. On February 12, 2024, DXL, FBB, Oaktree, and Goldman Sachs Specialty Lending Group, L.P., entered into a certain mutual confidentiality and non-disclosure agreement. The agreement included a customary one-year standstill provision which did not contain a so-called “don’t ask, don’t waive” provision prohibiting FBB from requesting a private waiver of the standstill.

On February 13, 2024, at a meeting of the DXL Board, Mr. Kanter provided an update to the DXL Board regarding his communications with Mr. Fogarty about the potential combination between the companies. 

On February 25, 2024, representatives of each of DXL and FBB, including Mr. Kanter and Mr. Fogarty, met to discuss a potential combination transaction, including potential cost and commercial synergies. Over the next approximately two months, both parties conducted due diligence on each other and engaged in a series of meetings and break-out sessions to discuss the business and operations of each of DXL and FBB.

On April 11, 2024, DXL and Guggenheim Securities entered into a certain non-disclosure agreement in connection with the DXL Board’s evaluation of Guggenheim Securities’ role as a potential financial advisor for DXL’s review of strategic and financial alternatives, including, but not limited to, a possible merger or sale transaction.

On June 26, 2024, Fund 1 Investments, LLC (“PLP”), with respect to its shares of the DXL common stock held for the benefit of private investment vehicles for which Pleasant Lake Partners LLC serves as investment advisor, filed a Schedule 13D, disclosing its ownership of 5,732,261 shares of DXL Common Stock, representing a 9.8% ownership interest in DXL. Additionally, PLP also disclosed that it held certain cash-settled swaps, pursuant to

 

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cash-settled swap agreements with an unaffiliated third-party financial institution, which corresponded to an aggregate of 4,444,011 notional shares of the DXL common stock, representing approximately 7.6% of the outstanding shares of the DXL common stock.

On July 11, 2024, PLP amended its Schedule 13D to disclose that the cash-settled swaps corresponded to an aggregate of 5,136,073 notional shares of the DXL common stock, representing approximately 8.8% of the outstanding shares of the DXL common stock.

On July 31, 2024, at a meeting of the DXL Board, Mr. Kanter provided an update to the DXL Board regarding PLP, its ownership percentage in DXL and its prior interest in acquiring DXL. The DXL Board discussed that DXL was not for sale and that a non-disclosure agreement with a standstill would be required for further conversations with PLP.

On August 6, 2024, Lionel Conacher, the chairman of the DXL Board, Mr. Kanter and Peter Stratton, the chief financial officer of DXL, met with management of PLP. The purpose of the meeting was to introduce PLP to the chairman of the DXL Board and to better understand PLP’s intention as a large stockholder of DXL.

On August 13, 2024, PLP amended its Schedule 13D to disclose that the cash-settled swaps corresponded to an aggregate of 5,728,573 notional shares of the DXL common stock, representing approximately 9.8% of the outstanding shares of the DXL common stock.

On September 12, 2024, the DXL Board met by videoconference, with representatives from Greenberg Traurig, LLP, DXL’s outside counsel (“Greenberg Traurig”), to discuss the meeting with PLP and determined that DXL would be open to receiving a written proposal from PLP. The DXL Board instructed Greenberg Traurig to relay that determination to PLP’s counsel, which GT communicated on September 16, 2024.

On September 21, 2024, Mr. Fogarty called Mr. Kanter to discuss FBB’s intent to propose a merger between the two companies in a stock-for-stock transaction that would result in DXL stockholders owning 35% of the combined company and FBB stockholders owning 65% of the combined company. Later that same day, FBB delivered to DXL a non-binding indication of interest reflecting such proposal.

On September 27, 2024, the DXL Board met by videoconference, with representatives from Greenberg Traurig, and discussed FBB’s non-binding indication of interest and the recent communications with PLP. At the meeting, the DXL Board created a “Transaction Committee,” consisting of Messrs. Lionel Conacher, Jack Boyle and Willem Mesdag (the “DXL Transaction Committee”), to efficiently explore strategic and financial alternatives. The DXL Transaction Committee was granted full and exclusive authority of the DXL Board to take all actions with respect to exploring a potential strategic transaction with both FBB and PLP, including utilizing the DXL Board’s financial, accounting and legal advisors. The DXL Transaction Committee also directed Mr. Mesdag to meet with management of PLP to discuss a potential strategic partnership.

On October 2, 2024, representatives of Guggenheim Securities, at the direction of the DXL Transaction Committee, reached out to FBB to request that FBB provide certain financial information in order for DXL to better assess whether a potential combination transaction could be appropriate.

On October 8, 2024, at the direction of the DXL Transaction Committee, Mr. Mesdag met with management of PLP to discuss a possible strategic partnership.

On October 18, 2024, DXL, FBB, Oaktree, and Goldman Sachs Specialty Lending Group, L.P. entered into a certain amended confidentiality and non-disclosure agreement to extend the term of the agreement by eight months.

On October 28, 2024, Mr. Conacher met with Mr. Fogarty to discuss a possible strategic partnership and reviewed certain financial information about FBB that FBB had shared with DXL in advance of the meeting.

 

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On October 31, 2024, DXL and Guggenheim Securities entered into an engagement letter to formalize Guggenheim Securities’ role as lead financial advisor in connection with DXL’s review of strategic and financial alternatives, including a possible merger or sale transaction.

On November 23, 2024, PLP sent a letter to DXL seeking increased ownership interest in DXL and a waiver of Section 203 of the DGCL.

On November 25, 2024, the DXL Transaction Committee met with representatives of Guggenheim Securities to review the PLP letter and the possible strategic partnership opportunity with FBB. Representatives of Guggenheim Securities presented potential scenarios of a merger and discussed the various benefits and risks associated therewith to be considered by the DXL Transaction Committee in exploring the opportunities with both PLP and FBB.

On November 26, 2024, PLP further amended its Schedule 13D to disclose its ownership of 5,758,261 shares of DXL Common Stock, representing a 10.6% ownership interest in DXL. Additionally, PLP also disclosed that the cash-settled swaps it held corresponded to an aggregate of 5,763,573 notional shares of the DXL common stock, representing approximately 10.6% of the outstanding shares of the DXL common stock.

On December 10, 2024, DXL responded to PLP’s letter dated November 23, 2024, informing PLP that DXL determined to not authorize any further acquisition of DXL securities by PLP or exempt PLP from Section 203 of the DGCL at this time.

On December 10, 2024, representatives of Guggenheim Securities, at the direction of the DXL Transaction Committee, met with Mr. Fogarty and representatives from FBB’s largest stockholders and provided feedback from the DXL Transaction Committee as to DXL’s interest in pursuing a stock-for-stock merger with FBB that would result in DXL stockholders owning 50% of the combined company. FBB informed representatives of Guggenheim Securities that they would be open to pursuing such transaction, pending their due diligence on DXL. Representatives of Guggenheim Securities conveyed this message to DXL management on December 11, 2024, which was then communicated by DXL management to the DXL Transaction Committee.

On December 20, 2024, PLP delivered a non-binding, unsolicited letter to DXL expressing its interest in acquiring all of the outstanding shares of common stock of DXL that are not owned by PLP or its affiliates for cash consideration of $3.00 per share, subject to the completion of due diligence and negotiation of the terms of a definitive agreement. On the same day, the DXL Transaction Committee met with representatives of Guggenheim Securities to review the PLP letter and potential next steps. Following a presentation of financial analyses by Guggenheim Securities, the DXL Transaction Committee instructed Guggenheim Securities to communicate to PLP that while DXL appreciated the interest in the Company and welcomed further discussions subject to entering into a non-disclosure agreement to discuss the offer, PLP’s offer undervalued DXL. The DXL Transaction Committee believed that PLP would be able to improve its proposal if DXL provided PLP with non-public information after PLP’s entry into a confidentiality and non-disclosure agreement.

On December 23, 2024, PLP amended its Schedule 13D to disclose the offer letter, which was also filed as an exhibit to Schedule 13D. On the same day, the DXL Board met by videoconference, with representatives from Guggenheim Securities, to receive an update from the DXL Transaction Committee about PLP’s non-binding, unsolicited offer and to receive an update regarding the strategic opportunity with FBB. 

On January 7, 2025, the DXL Transaction Committee held a meeting and directed Guggenheim Securities to contact FBB and other potential interested parties to discuss and evaluate potential strategic transactions.

As directed by the DXL Transaction Committee, over the following several weeks, representatives of Guggenheim Securities reached out to approximately 20 parties, including both strategic and financial buyers, to discuss their interest in a potential strategic transaction. Out of the approximately 20 parties contacted, only FBB and PLP agreed to engage with DXL. Representatives of Guggenheim Securities provided regular updates to DXL management during such outreach and DXL management provided regular updates to the DXL Transaction Committee.

 

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On January 17, 2025, the DXL Transaction Committee was reconstituted to include the entire DXL Board in order to streamline decision-making and ensure full board alignment in support of continuing discussions and negotiations with both PLP and FBB. On the same day, DXL and PLP entered into a confidentiality and non-disclosure agreement, which provided for a term of one year and included an 8-month standstill provision which would terminate if DXL were to enter into an agreement with a third party providing for a change of control transaction of DXL.

On February 5, 2025, FBB was granted access to the virtual data room containing information regarding DXL for purposes of conducting due diligence on DXL.

On February 21, 2025, PLP was granted access to the virtual data room containing information regarding DXL for purposes of conducting due diligence on DXL.

During the next four months, FBB and its advisors conducted due diligence on DXL and PLP and its advisors separately conducted due diligence on DXL.

On April 30, 2025, PLP submitted a revised non-binding bid to acquire all of the outstanding shares of common stock of DXL that were not owned by PLP or its affiliates for $1.49 – $1.92 per share in cash. PLP explained that the reduction in the proposed value was primarily a result of the declining macroeconomic environment, potential tariffs and changing consumer behavior.

On May 2, 2025, FBB delivered to DXL an indicative non-binding proposal proposing, among other things, a stock-for-stock merger between the two companies that would result in DXL stockholders owning 40% of the combined company and FBB stockholders owning 60% of the combined company. The proposal provided that the initial board of directors of the combined company would be composed of nine members, with four designated by DXL, four designated by FBB and the chief executive officer of the combined company, and that the board of directors of the combined company would select the chairperson of the board as well as the chairpersons of the committees of the board. The proposal also provided that the combined company would be led by Mr. Fogarty as its chief executive officer.

On May 7, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig, and discussed the offers proposed by PLP and FBB. A representative from Guggenheim Securities discussed the potential synergies with each of PLP and FBB and reviewed DXL as a standalone company, and also discussed updating DXL’s business operating plan. Following the discussion, the DXL Transaction Committee directed Guggenheim Securities to continue the dialogue with each of PLP and FBB and to seek updated proposals from both PLP and FBB.

On May 30, 2025, representatives of FBB provided DXL senior management with certain financial projections for FBB covering the calendar years ending December 31, 2025 through December 31, 2029 (the “May 2025 FBB-Provided Financial Projections”).

On May 27, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig. The DXL Transaction Committee discussed certain financial projections and the various assumptions accompanying such projections, which were prepared by the DXL management team in advance of the meeting. Additionally, a representative of Greenberg Traurig discussed the fiduciary duties of the DXL Board when considering alternatives that may be available to DXL.

From May 2025 to June 2025, FBB and PLP conducted additional due diligence to further refine their respective bids. During this time, members of the senior management of DXL and FBB held virtual meetings to determine the potential strategic and cost synergy opportunity from a proposed merger.

On June 11, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig. A representative of Guggenheim Securities and members of the

 

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DXL management team provided an update on the recent communications with both FBB and PLP, and also discussed the timing and cadence of each proposal. The DXL Transaction Committee continued to discuss and assess the potential benefits of a business combination for DXL.

On June 22, 2025, PLP submitted a revised bid to acquire all of the outstanding shares of common stock of DXL that are not owned by PLP or its affiliates for $1.96 per share in cash.

On June 22, 2025, FBB reaffirmed its interest in a stock-for-stock merger with DXL that would result in DXL stockholders owning 40% of the combined company and FBB stockholders owning 60% of the combined company.

On June 23, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. A representative from Greenberg Traurig discussed the fiduciary duties of the DXL Board in general in assessing strategic transactions. The DXL Transaction Committee discussed the history and current status of negotiations, the terms proposed by FBB and PLP, the various benefits and risks of the proposals, and also considered DXL’s prospects as an independent company. Following this discussion, the DXL Transaction Committee directed Guggenheim Securities to provide PLP with DXL’s counteroffer of $3.00 per share purchase price.

Between June 23, 2025 and July 23, 2025, representatives of Guggenheim Securities, at the direction of the DXL Transaction Committee, and representatives of PLP had several conversations about valuation for a transaction with PLP. During these conversations, there was a verbal offer of $2.05 per share purchase price by PLP.

On July 20, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. A representative from Guggenheim Securities discussed valuation approaches and considerations in evaluating strategic transactions generally and provided an update on the status of discussions with PLP. Following this discussion, the DXL Transaction Committee determined that it would provide a number at which DXL would be willing to engage in transaction negotiations with PLP.

On July 23, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. A representative from Guggenheim Securities provided an update on the status of discussions with PLP since the July 20, 2025 DXL Transaction Committee meeting. Following this discussion, the DXL Transaction Committee approved a price of $2.20 per share to engage in transaction negotiations and directed Guggenheim Securities to relay this price to PLP. The same day, representatives of Guggenheim Securities relayed to PLP the DXL $2.20 per share price at which the DXL Transaction Committee would be willing to engage in transaction negotiations.

On July 23, 2025, DXL and PLP agreed to a non-binding $2.20 per share purchase price, subject to PLP’s due diligence on DXL and negotiation of the terms of a definitive agreement. Over the next couple of months, PLP conducted further due diligence on DXL.

On August 7, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the status of discussions with PLP. The DXL Transaction Committee instructed Greenberg Traurig to send the draft definitive agreement, which had been prepared by Greenberg Traurig and circulated to the full DXL Board in advance of this meeting, to PLP.

On September 3, 2025, PLP communicated to Guggenheim Securities that it had lowered its bid to $1.60 per share due to a decrease in DXL’s market price and general market conditions. Representatives of Guggenheim Securities informed DXL’s senior management of PLP’s decreased bid shortly thereafter.

Later on September 3, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the revised bid proposed by PLP. Following this discussion, the DXL Transaction Committee directed Guggenheim Securities to inform PLP that DXL was not interested in pursuing a sale transaction with PLP. The DXL Transaction Committee also instructed

 

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Guggenheim Securities to continue the dialogue with FBB about a potential transaction opportunity. That same day, representatives of Guggenheim Securities notified management of each of PLP and FBB of the DXL Transaction Committee’s decision.

On September 5, 2025, representatives of FBB reached out to representatives of Guggenheim Securities and described a potential financing transaction that could reduce FBB’s balance sheet debt prior to any transaction with DXL. Following FBB’s outreach, representatives of Guggenheim Securities informed DXL senior management of FBB’s proposal.

On September 17, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the recent conversation that Guggenheim Securities had with FBB regarding the potential reduction of FBB’s balance sheet debt. The DXL Transaction Committee reviewed detailed financial and market information about FBB and considered current and prospective market conditions, the potential synergies of the combined company, the various benefits and risks of a sale transaction with FBB, and DXL’s prospects as an independent company. Based upon these discussions, the DXL Transaction Committee instructed Guggenheim Securities to inform FBB that DXL would be interested in pursuing a stock-for-stock transaction with FBB if FBB’s debt was reduced by $125 million and if the merger would result in DXL stockholders owning 50% of the combined company.

On September 17, 2025, representatives of Guggenheim Securities met with representatives of FBB by telephone to provide feedback from the DXL Transaction Committee regarding its willingness to pursue a transaction if FBB’s debt was reduced by $125 million and DXL’s stockholders held 50% ownership of the combined company.

On September 19, 2025, FBB submitted a counteroffer, proposing a $100 million debt reduction and a stock-for-stock merger that would result in 40% ownership of the combined company for the DXL stockholders and 60% ownership of the combined company for the FBB stockholders.

On September 23, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig attending, and discussed and assessed the counteroffer by FBB. The DXL Transaction Committee again considered the financial prospects of remaining independent and the various benefits and risks of a sale transaction with FBB. Based upon these discussions, the DXL Transaction Committee instructed Guggenheim Securities to counteroffer with a $100 million debt reduction and 49% ownership of the combined company for the DXL stockholders. On the same day, as instructed by the DXL Transaction Committee, representatives of Guggenheim Securities submitted to DXL’s counteroffer to FBB, proposing a $100 million debt reduction and 49% ownership of the combined company for the DXL stockholders.

On September 24, 2025, representatives of FBB notified Guggenheim Securities that it was willing to transact on the terms provided in DXL’s latest counteroffer, which was to pursue a stock-for-stock merger, subject to the completion of due diligence review and negotiation of the terms of a definitive agreement.

On September 26, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig attending. A representative from Guggenheim Securities provided an update that FBB approved DXL’s counteroffer. Representatives of Guggenheim Securities and Greenberg Traurig also discussed the various factors to be considered by the DXL Transaction Committee in negotiating a definitive agreement, including contractual covenants with respect to FBB’s planned debt reduction. The representative of Greenberg Traurig also discussed general timing of the proposed transaction with FBB and the major action items needed to consummate the proposed transaction.

On September 29, 2025, representatives from each of DXL, FBB, Guggenheim Securities, Greenberg Traurig, Rothschild & Co (“Rothschild”), financial advisor to FBB, and Cleary Gottlieb Steen & Hamilton LLP (“Cleary Gottlieb”), outside counsel to FBB, met by videoconference to provide information about their respective organizations and the potential transaction between DXL and FBB.

 

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During October 2025, after reviewing additional operating results that became available following FBB’s delivery of its May 2025 FBB-Provided Financial Projections, DXL senior management raised questions regarding certain assumptions and forecasts reflected in those projections based on concerns regarding the continued reliability of those projections in light of FBB’s then-current operating performance and trends. Following discussions with DXL senior management concerning these matters, representatives of FBB orally communicated and discussed adjusted assumptions and forecasts. DXL senior management considered these adjusted assumptions and forecasts in its ongoing evaluation of FBB and the merger.

On October 1, 2025, representatives from Greenberg Traurig and Cleary Gottlieb met by videoconference to discuss legal and structuring topics, including the proposed timeline of the transaction.

On October 13, 2025, Greenberg Traurig distributed an initial draft of the merger agreement to Cleary Gottlieb. Between October 13, 2025 and December 11, 2025, multiple drafts of the merger agreement were exchanged and negotiated, and representatives of Greenberg Traurig and Cleary Gottlieb participated in a series of calls and videoconferences to discuss and negotiate various matters, including the merger agreement and other ancillary agreements and documents.

On October 14, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig attending. The DXL Transaction Committee discussed certain key terms in the merger agreement, and a representative from Greenberg Traurig provided the DXL Transaction Committee with an update regarding the status of the merger agreement.

On October 28, 2025, the DXL Transaction Committee met with Mr. Fogarty by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the current status of FBB and the contemplated transaction between the companies.

On October 30, 2025, representatives of FBB informed representatives of Guggenheim Securities that after conversations with its equity and debt holders, and due to a significant decrease in DXL’s stock price, FBB was submitting a revised offer, proposing a $75 million debt reduction and 49% ownership of the combined company for the DXL stockholders. Representatives of Guggenheim Securities informed DXL’s senior management of FBB’s revised offer shortly thereafter.

On October 31, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the latest proposal by FBB provided to Guggenheim Securities the day before this meeting. Following this discussion, the DXL Transaction Committee determined that FBB must reduce its debt by $100 million in order for the transaction to move forward. The DXL Transaction Committee instructed Guggenheim Securities to relay this position to FBB.

On October 31, 2025, representatives of Guggenheim Securities reached out to representatives of FBB to communicate the DXL Transaction Committee’s determination with respect to FBB’s debt.

On November 3, 2025, FBB countered with a $100 million debt reduction and 45% ownership of the combined company for the DXL stockholders.

On November 5, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig attending, and discussed the counteroffer by FBB. The DXL Transaction Committee again considered the financial prospects of remaining independent. Based upon these discussions, the DXL Transaction Committee instructed Guggenheim Securities to counteroffer with (i) a $100 million debt reduction, (ii) 45% ownership of the combined company for the DXL stockholders and (iii) a requirement that the board of directors of the combined company would be composed of nine members, with four designated by DXL, four designated by FBB and one independent director to be mutually agreed to by DXL and FBB, and that the designees of DXL would select the chairperson of the board of directors of the combined company.

 

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On November 5, 2025, representatives of Guggenheim Securities conveyed to representatives of FBB that DXL was prepared to move forward with negotiations at the terms set forth by the DXL Transaction Committee at its November 5 DXL Transaction Committee meeting.

On November 14, 2025, FBB informed representatives of Guggenheim Securities that, after consultation with its lenders and shareholders, FBB was only prepared to offer approximately $92 million in debt reduction. Representatives of FBB relayed this debt reduction limitation to Guggenheim Securities along with the accompanying proposal for ownership of approximately 45% ownership of the combined company for the DXL stockholders. FBB added that it agreed to DXL’s governance proposal relating to board composition.

On November 15, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and reviewed the counteroffer by FBB and the latest discussion that had taken place between FBB and Guggenheim Securities. The DXL Transaction Committee instructed Guggenheim Securities to (i) prepare certain pro forma financial information regarding the combined company based on financial projections provided to Guggenheim Securities by DXL’s senior management and (ii) request from FBB the debt documents in connection with FBB’s debt reduction for DXL’s review in connection with the proposed debt reduction.

On November 16, 2025, the DXL Transaction Committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. Representatives of Guggenheim Securities presented a preliminary financial analysis of the proposed terms by FBB, noting the $92 million in debt paydown as compared to the $100 million paydown the DXL Transaction Committee had previously proposed. Further, the DXL Transaction Committee and its advisors discussed whether to continue to engage in discussions with FBB. Following this discussion, the DXL Transaction Committee directed Guggenheim Securities to work with FBB, on DXL’s behalf, to finalize the transaction on the terms proposed by FBB, subject to finalization of definitive documentation.

On November 24, 2025, Greenberg Traurig delivered to Cleary Gottlieb an initial draft of the voting agreement, which provided, among other things, for certain DXL stockholders to vote in favor of the transactions contemplated by the merger agreement, and such agreement was subsequently negotiated and finalized over the next couple of weeks.

On November 26, 2025, Greenberg Traurig delivered to Cleary Gottlieb an initial draft of the lock-up agreement, and such agreement was subsequently negotiated and finalized over the next couple of weeks.

On November 30, 2025, the compensation committee of the DXL Board (the “DXL compensation committee”) met by videoconference, with representatives from Greenberg Traurig present, and discussed the treatment of DXL’s outstanding equity awards under DXL’s stock-approved incentive compensation plan in connection with the proposed transaction with FBB. The DXL compensation committee asked certain questions, which were responded to by representatives of Greenberg Traurig.

On December 1, 2025, FBB distributed to DXL certain debt documents in connection with its proposed debt reduction. Over the next several days, representatives of FBB and DXL had calls and videoconferences to discuss and negotiate the debt documents.

On December 1, 2025, the DXL Board met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. A representative of Greenberg Traurig provided an overview of the process for approving the merger transaction by the DXL Board and also discussed the current draft of the merger agreement. A representative of Guggenheim Securities provided an overview of the process for the DXL Board requesting Guggenheim Securities to issue a fairness opinion in connection with the transaction and discussed certain economic and strategic considerations in connection with the proposed merger with FBB.

On December 10, 2025, the DXL compensation committee met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed certain compensation arrangements in connection with the proposed merger with FBB, to ensure compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

 

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On December 10, 2025, the DXL Board met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. Representatives of Greenberg Traurig reviewed the final merger agreement, including the principal terms and conditions, as well as the ancillary agreements, and responded to questions from the DXL Board regarding the legal ramifications of those terms and conditions. The DXL Board was also reminded of its fiduciary duties to stockholders in connection with the proposed merger transaction, as well as the applicable legal standards governing their deliberations and decision-making process. Greenberg Traurig also summarized DXL’s rights and obligations under the proposed merger agreement. Also at this meeting of the DXL Board, Guggenheim Securities reviewed its financial analyses of the merger consideration and rendered an oral opinion, confirmed by delivery of a written opinion dated December 10, 2025, to the DXL Board to the effect that, as of that date and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the merger consideration was fair, from a financial point of view, to the stockholders of DXL. Guggenheim Securities also delivered to the DXL Board a copy of its conflicts disclosure letter, dated December 10, 2025, summarizing the material relationships that Guggenheim Securities has with FBB and other parties affiliated with FBB. All questions posed by the members of the DXL Board were answered by management and representatives of Guggenheim Securities and Greenberg Traurig, as appropriate, and the DXL Board engaged in a discussion regarding the terms of the proposed transaction, the results of the transaction process, and the factors supporting the DXL Board’s determination that the proposed transaction is in the best interests of DXL and its stockholders. After such presentations and discussions, the DXL Board voted unanimously to approve the resolutions which, among other things, formally approved the merger agreement and related matters and authorized management, with the assistance of counsel, to finalize the merger agreement and all related documents.

Following the December 10, 2025 DXL Board meeting, representatives of Greenberg Traurig, Guggenheim Securities, Cleary Gottlieb and Rothschild worked throughout the evening of December 10 and into the morning of December 11 to finalize the merger agreement and all related transaction documents.

On the morning of December 11, 2025, the DXL Board re-convened by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, and discussed the execution version of the merger agreement and transaction documents, including any edits from those reviewed at the December 10 DXL Board meeting. After review and discussion of the final merger agreement, the DXL Board voted unanimously to approve the resolutions, which, among other things, formally approved the definitive merger agreement and related matters and authorized management, with the assistance of counsel, to execute the merger agreement and all related documents.

Later that same day, representatives of DXL, Merger Sub, and FBB executed the merger agreement. Concurrently with the execution of the merger agreement, certain directors and stockholders of DXL executed voting agreements, and certain stockholders of FBB executed lock-up agreements. Immediately following the execution of the merger agreement, FBB delivered the FBB stockholder written consents approving the FBB stockholder matters, including approval of the merger. Later that afternoon, the transaction was publicly announced and representatives of DXL and FBB held a joint webcast for investors.

On January 9, 2026, DXL received an unsolicited takeover proposal (“unsolicited proposal”) from Zodiac Partners, a private holding company and an acquisition entity of Camac Partners, a registered investment firm based in Florida. On the same day, DXL shared the unsolicited proposal with Guggenheim Securities and Greenberg Traurig, and on January 10, 2026, DXL shared the unsolicited proposal with FBB.

On January 16, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, to discuss the unsolicited proposal and the material terms included therein, including the take-private proposal in an all-cash transaction and the acquisition price of $1.25 per share. The DXL Board carefully reviewed and considered the unsolicited proposal in accordance with the terms of the merger agreement and in consideration of its fiduciary duties under Delaware law. The DXL Board also consulted with outside legal and financial advisors. Following such consultation and deliberation among the members of the DXL Board, the DXL Board determined that the unsolicited proposal did not represent the best value or course of action for DXL stockholders, did not constitute a DXL Superior Proposal (as defined in the merger agreement), and was not reasonably likely to lead to a DXL Superior Proposal.

 

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On January 20, 2026, representatives of Guggenheim Securities, at the direction of the DXL Board, had a telephone conference with representatives of Zodiac Partners to inform Zodiac Partners of the DXL Board’s decision to not take any action with respect to the unsolicited proposal for the reasons set forth above. 

On January 27, 2026, Guggenheim Securities received a follow-up letter from Zodiac Partners addressed to the DXL Board, which reaffirmed Zodiac Partners’ continued interest in DXL and sought a limited due diligence process, and promptly shared the letter with the DXL Board.

On January 30, 2026, representatives of Greenberg Traurig, at the direction of the DXL Board, sent a response letter to Zodiac Partners setting forth the reasons why the DXL Board came to its determination to not take any actions with respect to the unsolicited proposal, including the DXL Board’s fiduciary duties under Delaware law as well as its determination that the unsolicited proposal did not constitute a DXL Superior Proposal under the merger agreement and was not likely to lead to a DXL Superior Proposal. Following such response letter, DXL did not engage in further negotiations with Zodiac Partners and did not provide Zodiac Partners with access to non-public information regarding DXL.

On April 2, 2026, the chief financial officer of DXL executed a voting agreement with FBB.

On May 11, 2026, DXL notified Mr. Kanter that it did not intend to renew his employment agreement. This notification was provided in accordance with Mr. Kanter’s expressed desire to retire, and as required by his employment agreement. Accordingly, Mr. Kanter’s employment agreement will expire and his employment with DXL will terminate on August 11, 2026.

On May 12, 2026, Zodiac Partners commenced a tender offer (the “Zodiac tender offer”) to acquire all outstanding shares of DXL common stock at a price of $0.82 per share in cash, subject to the terms and conditions set forth in the Offer to Purchase on Schedule TO filed with the U.S. Securities and Exchange Commission (the “SEC”). On the same date, DXL delivered a notice to FBB pursuant to the Merger Agreement informing FBB of the commencement of the Zodiac tender offer.

On May 13, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present, to discuss the Zodiac tender offer and the terms thereof. The DXL Board discussed its fiduciary duties to stockholders in connection with the proposed Zodiac tender offer as well as its obligations under the merger agreement.

On May 20, 2026, the DXL Board met by videoconference, with representatives from Greenberg Traurig present. In connection with the DXL Board’s evaluation of the Zodiac tender offer, DXL’s senior management updated certain previously prepared financial projections for DXL for the fiscal period ending January 31, 2035, which included projected revenues, operating income, capital expenditures, cost reductions, working capital requirements and other relevant financial metrics over such period. The projections had been reasonably prepared on bases reflecting the best then-currently available estimates and judgments of DXL’s senior management as to the expected future performance of DXL. The DXL Board discussed and approved these projections and determined to instruct Guggenheim Securities to use these projections in its May 2026 Supplemental Financial Analyses.

On May 22, 2026, DXL filed a Solicitation/Recommendation Statement on Schedule 14D-9C with the SEC, which included a press release stating that the DXL Board was evaluating the Zodiac tender offer in consultation with its financial and legal advisors and advising stockholders to take no action at that time pending such evaluation.

On May 24, 2026, the DXL Board met by videoconference, with representatives from Greenberg Traurig present. Following a request from DXL, FBB’s senior management updated certain previously prepared financial projections for FBB for the fiscal period ending December 31, 2029, which included projected revenues, operating income, capital expenditures, cost reductions, working capital requirements and other relevant financial

 

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metrics over such period (these projections being referred to herein as the May 2026 FBB-Provided Financial Projections (as defined in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL.”)). DXL senior management updated the DXL Board on discussions had with FBB senior management regarding the May 2026 FBB-Provided Financial Projections and the underlying assumptions made by FBB senior management in the preparation of such financial projections. In addition, DXL’s senior management updated the May 2026 FBB-Provided Financial Projections to extend them through the fiscal period ending December 31, 2034 and to adjust for other assumptions regarding macroeconomic conditions, consumer retail conditions, future revenue growth and operating margins reflecting the best then-currently available estimates and judgments of DXL’s senior management as to the expected future performance of FBB. The DXL Board discussed such FBB financial projections, as revised by DXL senior management in similar nature and degree as adjustments made to the May 2025 FBB-Provided Financial Projections, and determined to scale back some of the adjustments made by DXL senior management in order to give greater effect to FBB’s assumptions and forecasts (such FBB financial projections, as updated by DXL senior management and as further updated by the DXL Board are included and a part of the May 2026 DXL-Provided Financial Projections). The DXL Board discussed and approved the May 2026 DXL-Provided Financial Projections and determined to instruct Guggenheim Securities to use the May 2026 DXL-Provided Financial Projections in its May 2026 Supplemental Financial Analyses.

On May 25, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities, Greenberg Traurig and Joele Frank, Wilkinson Brimmer Katcher (“Joele Frank”) present. The DXL Board discussed the status of the Zodiac tender offer, including the timeline for DXL’s responses and the legal requirements relating to the Schedule 14D-9. Representatives of Greenberg Traurig reviewed fiduciary duty considerations applicable to the DXL Board in evaluating the Zodiac tender offer, as well as the provisions of the merger agreement relating to a potential change of recommendation and the termination fee that would be payable to FBB in certain circumstances pursuant to the merger agreement. In connection with the DXL Board’s evaluation of the Zodiac tender offer and its continuing evaluation of the merger, the DXL Board, together with its advisors, reviewed and discussed the May 2026 DXL-Provided Financial Projections. The DXL Board, together with its advisors, also discussed the material assumptions underlying the May 2026 DXL-Provided Financial Projections, including assumptions regarding macroeconomic conditions, consumer retail conditions, future revenue growth and operating margins, the nature and degree of adjustments to certain assumptions and forecasts underlying FBB’s May 2025 FBB-Provided Financial Projections following discussions with DXL senior management, as well as the inherent uncertainties associated with such projections. Guggenheim Securities was previously directed by the DXL Board to rely upon the May 2026 DXL-Provided Financial Projections in connection with the preparation of the May 2026 Supplemental Financial Analyses (as described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL”). Following that discussion, and to facilitate the DXL Board’s continuing evaluation of the merger, representatives of Guggenheim Securities reviewed with the DXL Board the May 2026 Supplemental Financial Analyses. Guggenheim Securities further advised the DXL Board that, in light of the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates and the May 2026 Supplemental Financial Analyses (as such terms are defined in the section entitled, “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL”), the DXL Board should no longer rely on the December 2025 Opinion expressed in Guggenheim Securities’ December 10, 2025 letter to the DXL Board or on the financial analyses Guggenheim Securities reviewed with the DXL Board at the December 10, 2025 DXL Board meeting in connection with the December 2025 Opinion. Guggenheim Securities also delivered to the DXL Board a copy of its conflicts disclosure letter, dated May 26, 2026, summarizing the material relationships that Guggenheim Securities has with FBB, Zodiac Partners and other parties affiliated with FBB and Zodiac Partners.

On May 26, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities, Greenberg Traurig and Joele Frank present. The DXL Board revisited and reiterated everything discussed at the May 25, 2026 meeting. Following such discussion, the DXL Board (i) determined that the Zodiac tender offer is not in the best interests of DXL and its stockholders, (ii) recommended that stockholders reject the Zodiac tender offer and not tender their shares of DXL common stock pursuant to the Zodiac tender offer, (iii) determined that

 

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the merger and the transactions contemplated by the merger agreement are no longer in the best interests of DXL and its stockholders and (iv) determined that not withdrawing its recommendation to DXL’s stockholders that they approve the issuance proposal would be reasonably expected to violate the fiduciary duties of DXL’s directors under applicable law.

Also on May 26, 2026, DXL filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC, setting forth the DXL Board’s recommendation with respect to the Zodiac tender offer.

Pursuant to DXL’s determination and resolutions, on the same day, DXL delivered a notice to FBB pursuant to Section 5.06(f) of the merger agreement informing FBB of the DXL Board’s determination of its intent to effect a DXL Adverse Recommendation Change (the “notice”). In the notice, the DXL Board stated that, after consulting with its financial advisor and outside counsel, and taking into account updated financial analyses, it had determined that such action was necessary to comply with its fiduciary duties under applicable law. Subsequent to the delivery of the notice, DXL management and FBB management teams engaged in discussions regarding the DXL Board’s determination and the terms of the merger agreement, although FBB did not propose any modifications to the terms of the merger agreement.

On May 27, 2026, Zodiac Partners filed Amendment No. 1 to its Tender Offer Statement on Schedule TO with the SEC, amending and supplementing the Offer to Purchase.

On May 28, 2026, DXL received a comment letter from the staff of the Division of Corporation Finance of the SEC in connection with DXL’s Solicitation/Recommendation Statement on Schedule 14D-9 filed on May 26, 2026. In the comment letter, the SEC staff requested that DXL revise its disclosure to (i) provide additional detail regarding the financial analyses of Guggenheim Securities, including a more comprehensive description of such analyses, the underlying long-term forecasts and the material assumptions and limitations associated therewith, and (ii) revise or delete references to the Private Securities Litigation Reform Act of 1995 in light of the inapplicability of the forward-looking statement safe harbor provisions to statements made in connection with a tender offer.

Between May 28, 2026 and May 31, 2026, representatives of Guggenheim Securities, at the direction of the DXL Board, had a series of telephone conferences with representatives of Rothschild to discuss the DXL Board’s reasons for changing its recommendation regarding the merger.

On June 1, 2026, DXL senior management and FBB senior management met by videoconference, with representatives of Guggenheim Securities and Rothschild present, to discuss the May 2026 FBB-Provided Financial Projections and FBB initiatives, including strategic marketing initiatives.

On the morning of June 2, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities, Greenberg Traurig and Joele Frank present. DXL senior management updated the DXL Board on its June 1, 2026 meeting with FBB senior management. Representatives of Guggenheim Securities updated the DXL Board on its recent discussions with Rothschild. The DXL Board discussed the May 2026 DXL-Provided Financial Projections and the May 2026 FBB-Provided Financial Projections, the May 2026 Supplemental Financial Analyses, the increasingly challenging consumer environment since the execution of the merger agreement, and FBB’s indebtedness. The DXL Board discussed and concluded that, even accepting as correct and reliable (which the DXL Board did not) the May 2026 FBB-Provided Financial Projections, the DXL Board still could not recommend the merger as it is no longer advisable or in the best interests of DXL and its stockholders. The DXL Board (i) determined that the merger and the transactions contemplated by the merger agreement are not in the best interests of DXL and its stockholders, (ii) determined to withdraw its prior recommendation to DXL’s stockholders in favor of the merger and (iii) determined to recommend that DXL stockholders vote AGAINST the issuance proposal.

On the same day, Zodiac Partners filed Amendment No. 2 to its Tender Offer Statement on Schedule TO with the SEC, amending and supplementing the Offer to Purchase.

 

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Also on June 2, 2026, Cleary Gottlieb delivered a written response to DXL’s May 26, 2026 notice, asserting that DXL’s actions constituted a breach of the merger agreement and requesting that DXL retract the notice and refrain from effecting an adverse recommendation change. In its response, FBB contended, among other things, that the DXL Board’s determination did not satisfy the requirements for an adverse recommendation change under the merger agreement and that DXL had failed to negotiate in good faith pursuant to the terms thereof.

Later that evening, the DXL Board met by videoconference, with representatives from Guggenheim Securities, Greenberg Traurig and Joele Frank present. The DXL Board discussed the letter sent by Cleary Gottlieb on behalf of FBB that same day. The DXL Board reaffirmed its determination to recommend that DXL stockholders vote AGAINST the issuance proposal.

On June 3, 2026, DXL filed a Current Report on Form 8-K with the SEC providing an update regarding, among other things, the status of the merger and related matters. DXL publicly announced that the DXL Board had continued to evaluate the previously announced merger between DXL and FBB and was engaging with FBB in constructive discussions to determine the best path forward. DXL announced that, as part of its ongoing fiduciary duties to DXL’s stockholders, the DXL Board, with the assistance of external financial and legal advisors, had conducted a comprehensive ongoing evaluation of the merger. DXL further announced that, although the DXL Board continued to believe in the industrial logic of the combination, the DXL Board believed that the existing terms of the merger agreement were not in the best interests of DXL stockholders given the increasingly challenging consumer environment since the execution of the merger agreement in December 2025 and FBB’s indebtedness.

On June 5, 2026, DXL, after evaluating the requested revisions by the SEC with the assistance of its legal and financial advisors, filed an amendment to its Schedule 14D-9 (Schedule 14D-9/A) with the SEC.

On June 8, 2026, Greenberg Traurig was informed by the staff of the Division of Corporation Finance of the SEC that it had no further comments on DXL’s Schedule 14D-9.

On June 12, 2026, Zodiac Partners filed Amendment No. 3 to its Tender Offer Statement on Schedule TO with the SEC, which continued to relate to its offer to acquire all outstanding shares of DXL common stock at $0.82 per share in cash and described the terms and conditions of the Zodiac tender offer, including sources of funds and related arrangements.

On June 23, 2026, Zodiac Partners filed Amendment No. 4 to its Tender Offer Statement on Schedule TO with the SEC, which continued to relate to its offer to acquire all outstanding shares of DXL common stock, increased the offer price to $0.84 per share in cash and further amended and supplemented the terms and conditions of the Zodiac tender offer, including sources of funds and related arrangements, including through an Amended Offer to Purchase and related materials.

On June 23, 2026, DXL filed a Current Report on Form 8-K with the SEC providing an update regarding the revised unsolicited Zodiac tender offer. In the Form 8-K, the DXL Board stated that it was evaluating the revised Zodiac tender offer with the assistance of its financial and legal advisors and advised DXL stockholders to take no action at that time pending review by the DXL Board.

On June 23, 2026, DXL filed Amendment No. 2 to its Schedule 14D-9 with the SEC. The amendment supplemented and updated DXL’s prior disclosures in response to continuing developments relating to the Zodiac tender offer, the reasons for the DXL Board’s position, and other related disclosure.

On June 29, 2026, representatives of Cleary Gottlieb, on behalf of FBB, delivered a letter to DXL asserting that DXL’s delays in preparing and filing the updated proxy statement were inconsistent with DXL’s obligations under the merger agreement, and that DXL’s actions had caused a significant risk that the merger could not be consummated by the termination date in the merger agreement. FBB further asserted that any failure to hold the

 

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stockholder vote by the termination date would have been caused solely by DXL’s ongoing delay, for which FBB would hold DXL responsible under the merger agreement, and requested that DXL take immediate steps to accelerate the preparation and filing of the proxy statement. FBB also reserved all rights under the merger agreement.

On June 30, 2026, representatives of Greenberg Traurig, at the direction of the DXL Board, delivered a written response to FBB in response to Cleary Gottlieb’s June 2, 2026 letter. In its response, DXL disputed FBB’s assertions that DXL had breached the merger agreement in connection with the DXL Board’s adverse recommendation change and stated that DXL had complied with its obligations under the merger agreement and that the DXL Board had acted in good faith, after consultation with its financial and legal advisors, in determining that a failure to change its recommendation would be reasonably expected to violate the fiduciary duties of DXL’s directors. DXL further stated that FBB had not proposed any changes to the terms of the merger agreement for the DXL Board to consider following delivery of the notice, which was required by the merger agreement for DXL to negotiate in good faith. DXL also stated that, although FBB had not proposed any changes to the terms of the merger agreement, DXL had nevertheless engaged in discussions with FBB and its advisors regarding the DXL Board’s concerns. DXL also reiterated its view that the merger was no longer in the best interests of DXL’s stockholders and reserved all rights under the merger agreement.

On July 1, 2026, DXL entered into a Commitment Letter (the “Bank of America Commitment Letter”) with Bank of America, N.A. (“Bank of America”), pursuant to which Bank of America committed to provide the entire principal amount of the Combined ABL Facility, subject to the terms and conditions set forth therein. On July 1, DXL also entered into a Fee Letter with Bank of America, pursuant to which DXL agreed to pay certain fees to Bank of America in connection with the Combined ABL Facility.

On July 2, 2026, the DXL Board met by videoconference, with representatives from Guggenheim Securities and Greenberg Traurig present. The DXL Board discussed the status of the revised Zodiac tender offer, including the timeline for DXL’s response and the legal requirements relating to the Schedule 14D-9. A representative of Greenberg Traurig discussed the fiduciary duties of the DXL Board in evaluating the revised Zodiac tender offer, as well as DXL’s continuing obligations under the merger agreement. The DXL Board also revisited and discussed the financial analyses previously prepared by Guggenheim Securities, each of which were also discussed by the DXL Board at its May 25, 2026 and May 26, 2026 meetings. Following such discussion, the DXL Board determined that the revised Zodiac tender offer was not in the best interests of DXL and its stockholders and recommended that stockholders reject the revised Zodiac tender offer and not tender their shares of DXL common stock pursuant to the revised Zodiac tender offer. The DXL Board further discussed the proxy statement and other merger-related considerations.

On July 8, 2026, DXL filed a Current Report on Form 8-K with the SEC announcing that the DXL Board, following a review with its financial and legal advisors, had unanimously determined that the revised Zodiac tender offer to acquire all outstanding shares of DXL common stock for $0.84 per share in cash was not advisable and not in the best interests of DXL and its stockholders. The DXL Board also unanimously recommended that DXL stockholders reject the revised tender offer and not tender their shares.

On July 8, 2026, DXL filed Amendment No. 3 to its Schedule 14D-9 with the SEC. The amendment updated DXL’s disclosure regarding the revised Zodiac tender offer and reflected the DXL Board’s determination, following consultation with its financial and legal advisors, that the revised Zodiac tender offer was not advisable and not in the best interests of DXL and its stockholders. The amendment also included additional disclosure regarding the background of the revised Zodiac tender offer and the DXL Board’s reasons for recommending that DXL stockholders reject the revised Zodiac tender offer and not tender their shares.

On July 8, 2026, representatives of Greenberg Traurig, at the direction of the DXL Board, delivered a written response to FBB in response to Cleary Gottlieb’s June 29, 2026 letter. DXL disputed FBB’s assertions that DXL’s actions in connection with the preparation and filing of the proxy statement were inconsistent with DXL’s

 

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obligations under the merger agreement and asserted that DXL had complied with its obligations under the merger agreement. DXL also asserted that FBB’s account of the proxy statement preparation process omitted material facts, including the substantial revisions required following the DXL Board’s adverse recommendation change and delays in obtaining information, financial disclosures and other materials from FBB necessary to finalize the proxy statement. DXL further asserted that any delays in finalizing and filing the proxy statement were attributable to information and issues relating to FBB, rather than DXL, and that DXL had acted reasonably and promptly throughout the proxy statement preparation process. DXL objected to any suggestion that it had breached the merger agreement and reserved all rights and defenses available to it under the merger agreement.

DXL’s Reasons for Recommending Against the Issuance Proposal; Updated Recommendation of the DXL Board

The DXL Board, at a special meeting held on December 11, 2025, unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of DXL common stock to stockholders of FBB, were fair to and in the best interests of DXL and its stockholders, (ii) approved and adopted the merger agreement, and (iii) authorized and approved the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby, including the merger and the issuance of shares of DXL common stock to stockholders of FBB.

However, after careful consideration, including continued evaluation of the merger, including in light of developments since the execution of the merger agreement, with the assistance of external financial and legal advisors, the DXL Board has withdrawn its prior recommendation in favor of the merger and the issuance proposal. The DXL Board now believes that the merger and transactions contemplated by the merger agreement (including the proposed stock issuance) are not in the best interests of DXL and its stockholders.

Accordingly, the DXL Board unanimously recommends that DXL stockholders vote “AGAINST” the issuance proposal, “FOR” the reverse stock split proposal, “FOR” the 2016 plan proposal, and “FOR” the adjournment proposal.

As described above in “—Background of the Merger,” the DXL Transaction Committee was reconstituted on January 17, 2025 to include all members of the DXL Board, and accordingly all references to the DXL Transaction Committee in the Background of the Merger section refer to the full DXL Board from that date forward. In reaching its decision in December 2025 to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, and to originally recommend that DXL stockholders approve the issuance proposal, the DXL Board evaluated the merger agreement, the merger and the other transactions contemplated by the merger agreement in consultation with DXL’s management, as well as with DXL’s financial and legal advisors, and considered a number of factors, including the following:

 

•

each of DXL’s and FBB’s respective business, operations, historical and projected financial results, strategic outlooks, liquidity, funding needs, access to capital and potential prospects and commercial and competitive dynamics in the consumer sector;

 

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the strategic and financial rationale for the merger;

 

•

the potential operational, technological, infrastructure, risk and compliance considerations associated with combining the businesses, operations and assets of DXL and FBB;

 

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capital structure of the combined company following the transaction;

 

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its view with respect to other strategic alternatives potentially available to DXL, including continuing as a standalone company or pursuing alternative transactions;

 

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the potential operational, financial and integration-related considerations associated with combining the businesses, including potential commercial synergies;

 

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•

its review and discussions concerning the due diligence examination of the operations, financial condition, earnings, risk management and prospects of FBB;

 

•

the benefits and opportunities FBB was expected to bring, if the merger were completed, to the combined company;

 

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the expectation that the transaction would be, if completed, generally tax-free for United States federal income tax purposes to DXL stockholders;

 

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the fact that the consideration payable by DXL in the merger consists of DXL’s common stock, enabling DXL to acquire FBB without incurring the amount of indebtedness that would be required to fund an all-cash transaction;

 

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the fact that DXL’s stockholders as of immediately prior to the completion of the merger would be expected to own, if the merger were completed, 45% of the issued and outstanding shares of common stock of the combined company, on a fully diluted basis, immediately following completion of the merger;

 

•

the financial presentation and the opinion, each dated as of December 10, 2025, of Guggenheim Securities to the DXL Board as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration, which opinion was based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken (the “December 2025 Opinion”), as described in the section entitled “The Merger—December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL.” On May 26, 2026, following the discussion between and among the DXL Board and its outside legal and financial advisors regarding the May 2026 Supplemental Financial Analyses (as defined and described in the section entitled “The Merger—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL”), Guggenheim Securities advised the DXL Board that, in light of the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates and the May 2026 Supplemental Financial Analyses, the DXL Board should no longer rely on the December 2025 Opinion expressed in Guggenheim Securities’ December 10, 2025 letter to the DXL Board or on the financial analyses Guggenheim Securities reviewed with the DXL Board at the December 10, 2025 DXL Board meeting in connection with the December 2025 Opinion. The December 2025 Opinion was rendered only on and as of December 10, 2025 and has not been and will not be updated. DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise. The December 2025 Opinion and the summary of the financial analyses underlying the December 2025 Opinion should be read only together with the May 2026 Supplemental Financial Analyses;

 

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the terms of the merger agreement, which DXL reviewed with its legal advisor, including the representations, warranties, covenants, deal protection and termination provisions contained therein;

 

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the analyses presented by DXL’s legal advisors as to the structure of the merger, the merger agreement, the fiduciary and legal obligations applicable to directors when considering a sale or merger of a company, and the process that DXL (including the DXL Board) employed in considering the merger; and

 

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the effects of the merger on DXL’s employees, including the prospects for continued employment with the combined company if the merger were completed.

In reaching its updated determination in June 2026 that the existing terms of the merger agreement are not in the best interests of DXL stockholders, the DXL Board continued to evaluate the merger agreement, the merger and the other transactions contemplated by the merger agreement in consultation with DXL’s management, as well as with DXL’s financial and legal advisors, and reassessed the foregoing factors in light of developments since the execution of the merger agreement, including developments relating to market conditions, DXL’s business

 

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performance and updated information regarding FBB, and considered a number of additional factors, including the following:

 

•

the DXL Board’s ongoing evaluation of the merger, including in light of developments since the execution of the merger agreement, with the assistance of external financial and legal advisors, including multiple meetings and discussions regarding the evolving risk profile of the transaction, the assumptions underlying the previously anticipated benefits of the merger, the dilution in stockholder equity net book value, and the continued advisability of the transaction on its existing terms;

 

•

the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, including softer discretionary spending trends, increased promotional activity across the retail sector, continued inflationary pressures and reduced visibility into near-term demand, each of which, in the view of the DXL Board, increases execution risk and uncertainty associated with achieving projected operating performance and anticipated synergies;

 

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FBB’s indebtedness and the related concerns regarding leverage, execution risk and the best path forward for DXL and its stockholders, including the potential constraints that a more highly leveraged combined company could face with respect to financial flexibility, capital allocation, reinvestment in the business, and the ability to withstand adverse economic conditions, as well as the increased importance of successful integration and execution in order to realize any projected benefits of the merger;

 

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the DXL Board’s view that, based on FBB’s level of indebtedness (pro forma for the $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement), FBB may have negative equity value and, accordingly, the merger under its existing terms would be significantly economically dilutive to DXL and its stockholders;

 

•

the May 2026 Supplemental Financial Analyses, which do not constitute an opinion, view, report or appraisal as to the fairness, from a financial point of view, of the merger consideration or any other consideration in connection with the merger; and

 

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the ability of DXL to continue to consider alternatives and determine the path forward that best positions DXL and its stockholders for future success, including the DXL Board’s assessment of DXL’s standalone business prospects, strategic flexibility, and the potential to evaluate and pursue other value-enhancing opportunities over time, subject to the terms of the merger agreement.

In the course of this ongoing evaluation, the DXL Board also revisited the assumptions underlying the anticipated strategic, financial and operational benefits of the merger, including expected synergies, growth opportunities and integration-related efficiencies, and considered the extent to which such assumptions remained achievable in light of current conditions and updated information. The DXL Board determined that, taken together, the risks and uncertainties associated with the merger, including those described above and in the section entitled “Risk Factors,” outweighed the potential benefits of the transaction on the existing terms. Accordingly, after considering the factors described above, as well as other factors described elsewhere in this proxy statement, the DXL Board determined that the merger, on the terms currently contemplated, is not in the best interests of DXL and its stockholders and recommends that stockholders vote “AGAINST” the issuance proposal.

The DXL Board also considered the risks and uncertainties associated with the merger and concluded that, in light of developments since the execution of the merger agreement, those risks now outweigh the benefits of pursuing the merger on its current terms. These risks and uncertainties include, among others:

 

•

the risk that the existing terms of the merger agreement do not adequately address the deteriorating consumer environment and FBB’s indebtedness;

 

•

the risk that execution and integration challenges, leverage and market conditions could adversely affect DXL and, if the merger is consummated, the combined company and DXL stockholders;

 

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•

the advice from Guggenheim Securities to the DXL Board that based upon the updated information provided to Guggenheim Securities and current circumstances, the DXL Board should no longer rely on the December 2025 Opinion expressed in Guggenheim Securities’ December 10, 2025 letter to the DXL Board, or on the analyses Guggenheim Securities reviewed with the DXL Board at the December 10, 2025 DXL Board meeting in connection with the December 2025 Opinion;

 

•

the diversion of management attention and resources and uncertainty affecting employees, customers and suppliers during the pendency of the merger;

 

•

the possibility that the transaction will not be completed, despite the expenditure of time and resources and notwithstanding deal protection provisions in the merger agreement;

 

•

the possibility that the anticipated benefits of the transaction would not be realized when expected, or at all, including as a result of the impact of, or difficulties arising from, the integration of the two companies or as a result of the strength of the economy, general market conditions and competitive factors in the areas where DXL and FBB operate businesses;

 

•

the risk of losing key employees during the pendency of the merger and thereafter;

 

•

the restrictions on the conduct of DXL’s business during the period between execution of the merger agreement and the consummation of the merger, which could potentially delay or prevent DXL from undertaking business opportunities that might arise or certain other actions it might otherwise take with respect to its operations absent the pendency of the merger;

 

•

the potential effect of the merger on DXL’s overall business, including its relationships with customers, employees and suppliers;

 

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the fact that DXL stockholders would not be entitled to appraisal rights in connection with the merger;

 

•

the possibility of encountering difficulties in achieving anticipated cost savings and operating synergies in the amounts currently estimated or within the time frame currently contemplated;

 

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certain anticipated merger-related costs, which could be higher than expected;

 

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the fact that the merger agreement contains certain restrictions on the ability of DXL to solicit proposals for alternative transactions or engage in discussions regarding such proposals, including the requirement for DXL to pay FBB a termination fee of $2.5 million and reimburse FBB’s expenses up to $950,000 in certain circumstances;

 

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the potential for legal claims challenging the merger;

 

•

the risk that the merger may not be completed despite the combined efforts of DXL and FBB or that completion may be unduly delayed, including as a result of delays in obtaining the requisite approvals; and

 

•

the other risks described under the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors”.

The foregoing discussion of the information, risks and factors considered by the DXL Board is not intended to be exhaustive but includes the material factors and risks considered by the DXL Board. In reaching its decision to approve the merger agreement and the transactions contemplated thereby, and following its ongoing evaluation and determination to withdraw its prior recommendation and recommend that stockholders vote against the issuance proposal, the DXL Board did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The DXL Board considered all these factors as a whole in its continued evaluation of the merger agreement and the transactions contemplated thereby.

For the reasons set forth above, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are not in the best interests of DXL and its stockholders and has withdrawn its prior recommendation in favor of the merger and the issuance proposal.

 

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In considering the recommendation of the DXL Board, you should be aware that certain directors and executive officers of DXL may have interests in the merger that are different from, or in addition to, interests of DXL stockholders generally and may create potential conflicts of interest. The DXL Board was aware of these interests and considered them when evaluating and negotiating the merger agreement and the transactions contemplated thereby, and in making its recommendation to DXL stockholders. See “—Interests of DXL’s Directors and Executive Officers in the Merger” below.

FOR THE REASONS SET FORTH ABOVE, THE DXL BOARD UNANIMOUSLY RECOMMENDS THAT THE DXL STOCKHOLDERS VOTE (I) “AGAINST” THE ISSUANCE PROPOSAL, (II) “FOR” THE REVERSE STOCK SPLIT PROPOSAL, (III) “FOR” THE 2016 PLAN PROPOSAL AND (IV) “FOR” THE ADJOURNMENT PROPOSAL TO BE CONSIDERED AT THE SPECIAL MEETING.

December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL

On May 26, 2026, following the discussion between and among the DXL Board and its outside legal and financial advisors regarding the May 2026 Supplemental Financial Analyses (as defined and described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL”), Guggenheim Securities advised the DXL Board that, in light of the May 2026 DXL-Provided Financial Projections and the May 2026 Synergy Estimates (each as described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL”) and the May 2026 Supplemental Financial Analyses, the DXL Board should no longer rely on the December 2025 Opinion expressed in Guggenheim Securities’ December 10, 2025 letter to the DXL Board or on the financial analyses Guggenheim Securities reviewed with the DXL Board at the December 10, 2025 DXL Board meeting in connection with the December 2025 Opinion.

The December 2025 Opinion was rendered only on and as of December 10, 2025 and has not been and will not be updated. DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise. The December 2025 Opinion and the summary of the financial analyses underlying the December 2025 Opinion should be read only together with the May 2026 Supplemental Financial Analyses.

Overview of December 2025 Opinion

The DXL Board retained Guggenheim Securities in October 2024 as DXL’s financial advisor in connection with DXL’s assessment of potential strategic and financial alternatives and exploration and consideration of various potential extraordinary corporate transactions, including the merger. In selecting Guggenheim Securities as its financial advisor, the DXL Board considered that, among other things, Guggenheim Securities has had a long-standing investment banking relationship with DXL and is an internationally recognized investment banking, financial advisory and securities firm whose senior professionals have substantial experience advising companies in, among other industries, the retail and apparel industry. Guggenheim Securities, as part of its investment banking, financial advisory and capital markets businesses, is regularly engaged in the valuation and financial assessment of businesses and securities in connection with mergers and acquisitions, recapitalizations, spin-offs/split-offs, restructurings, securities offerings in both the private and public capital markets and valuations for corporate and other purposes.

At the December 10, 2025 meeting of the DXL Board, Guggenheim Securities rendered an oral opinion, which was confirmed by delivery of the December 2025 Opinion, to the DXL Board to the effect that, as of December 10, 2025 and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the merger consideration was fair, from a financial point of view, to the stockholders of DXL.

 

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This description of the December 2025 Opinion is qualified in its entirety by the full text of the December 2025 Opinion, which was rendered only on and as of December 10, 2025, and has not been and will not be updated, is attached as Annex B to this proxy statement and which you should read carefully and in its entirety, together with the May 2026 Supplemental Financial Analyses, as described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL.” The December 2025 Opinion sets forth the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken by Guggenheim Securities. The December 2025 Opinion, which was authorized for issuance by the Fairness Opinion and Valuation Committee of Guggenheim Securities, is necessarily based on economic, business, capital markets and other conditions, and the information made available to Guggenheim Securities as of December 10, 2025, the date of such opinion.

In rendering the December 2025 Opinion, Guggenheim Securities did not express any view or opinion as to (i) the prices at which the shares of common stock or other securities or financial instruments of or relating to DXL or FBB may trade or otherwise be transferable at any time, (ii) the potential effects of volatility in the credit, financial or equity markets on DXL or FBB, their respective securities or other financial instruments or the merger or (iii) the impact of the merger on the solvency or viability of DXL, FBB or merger subsidiary or the ability of DXL, FBB or merger subsidiary to pay their respective obligations when they come due.

In reading the discussion of the December 2025 Opinion set forth below, you should be aware that such opinion (and, as applicable, any materials provided in connection therewith or the summary of Guggenheim Securities’ underlying financial analyses elsewhere in this proxy statement):

 

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was provided to the DXL Board (in its capacity as such) for its information and assistance in connection with its evaluation of the merger consideration in December 2025;

 

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did not constitute a recommendation to the DXL Board with respect to the merger;

 

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does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise;

 

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did not address DXL’s underlying business or financial decision to pursue or effect the merger, the relative merits of the merger as compared to any alternative business or financial strategies that might exist for DXL or the effects of any other transaction in which DXL might engage;

 

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addressed only the fairness, from a financial point of view and as of the date of such opinion, of the merger consideration to the extent expressly specified in such opinion;

 

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expressed no view or opinion as to (i) any other term, aspect or implication of (x) the merger (including, without limitation, the form or structure of the merger) or the merger agreement or (y) any other agreement, transaction document or instrument contemplated by the merger agreement or to be entered into or amended in connection with the merger or (ii) the fairness, financial or otherwise, of the merger to, or of any consideration to be paid to or received by, the holders of any class of securities (other than as expressly specified in such opinion), creditors or other constituencies of DXL or FBB; and

 

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expressed no view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of DXL’s or FBB’s directors, officers or employees, or any class of such persons, in connection with the merger relative to the merger consideration or otherwise.

In connection with rendering the December 2025 Opinion, Guggenheim Securities:

 

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Reviewed a draft of the merger agreement, dated as of December 9, 2025;

 

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Reviewed certain publicly available business and financial information regarding DXL;

 

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Reviewed certain non-public business and financial information regarding DXL and FBB and their respective businesses and future prospects (including (i) certain financial projections for DXL on a

 

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standalone basis for the fiscal years ending January 31, 2026 through January 31, 2035, (ii) certain financial projections for FBB on a standalone basis for the calendar years ending December 31, 2025 through December 31, 2034, (iii) certain estimates as to potentially realizable existing net operating loss carry-forwards expected to be utilized by DXL and (iv) certain estimates as to potentially realizable benefits under Section 163(j) of the Code available and expected to be utilized by FBB (together, (i) through (iv), for purposes of this section and the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL,” the “December 2025 DXL-Provided Financial Projections”) and certain other estimates and other forward-looking information), all as prepared by, discussed with and approved for Guggenheim Securities’ use by DXL’s senior management (collectively with the December 2025 Synergy Estimates (as defined below), for purposes of this section, the “December 2025 DXL-Provided Information”);

 

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Reviewed certain non-public business and financial information regarding FBB and its business and future prospects (including certain financial projections for FBB on a standalone basis for the calendar years ending December 31, 2025 through December 31, 2029 (for purposes of this section and the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL,” the “December 2025 FBB-Provided Financial Projections,” and together with the December 2025 DXL-Provided Financial Projections, the “December 2025 Financial Projections”) and certain other estimates and other forward-looking information), all as prepared by and discussed with FBB’s senior management and reviewed by, discussed with and approved for Guggenheim Securities’ use by DXL’s senior management (collectively, for purposes of this section, the “December 2025 FBB-Provided Information”);

 

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Reviewed certain estimated cost savings, operating synergies and other combination benefits expected to result from the merger and estimated costs to achieve the same (collectively, for purposes of this section and the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL,” the “December 2025 Synergy Estimates” or the “December 2025 Synergies”), all as prepared by and discussed with DXL’s and FBB’s respective senior management and approved for Guggenheim Securities’ use by DXL’s senior management;

 

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Discussed with DXL’s senior management their then-current strategic and financial rationale for the merger as well as their then-current views regarding DXL’s and FBB’s respective businesses, operations, historical and projected financial results, liquidity, funding needs, access to capital and future prospects and the commercial and competitive dynamics in the consumer sector;

 

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Discussed with FBB’s senior management their then-current strategic and financial rationale for the merger as well as their then-current views regarding FBB’s business, operations, historical and projected financial results, liquidity, funding needs, access to capital and future prospects and the commercial and competitive dynamics in the consumer sector;

 

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Performed discounted cash flow analyses with respect to DXL, FBB and the December 2025 Synergies based on the December 2025 DXL-Provided Financial Projections and the December 2025 Synergy Estimates;

 

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Reviewed the historical prices, certain trading multiples and the trading activity of DXL common stock;

 

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Compared the financial performance of DXL and FBB and certain trading multiples and the trading activity of DXL common stock with corresponding data for certain publicly traded companies that Guggenheim Securities deemed relevant in evaluating DXL and FBB;

 

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Reviewed the pro forma financial results, financial condition and capitalization of DXL giving effect to the merger; and

 

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Conducted such other studies, analyses, inquiries and investigations as Guggenheim Securities deemed appropriate.

 

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With respect to the information used in arriving at the December 2025 Opinion, Guggenheim Securities noted that:

 

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Guggenheim Securities relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information provided by or discussed with DXL or FBB (including, without limitation, the December 2025 DXL-Provided Information and the December 2025 FBB-Provided Information) or obtained from public sources, data suppliers and other third parties.

 

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Guggenheim Securities (i) did not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and Guggenheim Securities did not independently verify, any such information (including, without limitation, the December 2025 DXL-Provided Information or the December 2025 FBB-Provided Information), (ii) expressed no view or opinion regarding the reasonableness or achievability of the December 2025 Financial Projections, the December 2025 Synergy Estimates, any other estimates or any other forward-looking information provided by DXL or FBB or the assumptions upon which any of the foregoing were based and (iii) relied upon the assurances of DXL’s senior management that they were (in the case of the December 2025 DXL-Provided Information) and assumed that FBB’s senior management were (in the case of the December 2025 FBB-Provided Information) unaware of any facts or circumstances that had made the December 2025 DXL-Provided Information or the December 2025 FBB-Provided Information incomplete, inaccurate or misleading.

 

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Guggenheim Securities (i) was advised by DXL’s senior management, and assumed, that the December 2025 DXL-Provided Financial Projections had been (y) reasonably prepared on bases reflecting the then-best currently available estimates and judgments of DXL’s senior management as to the expected future performance of DXL and FBB and (z) reviewed by the DXL Board with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with rendering its opinion, (ii) was advised by DXL’s senior management, and assumed, that the December 2025 Synergy Estimates had been (y) reasonably prepared on bases reflecting the then-best currently available estimates and judgments of DXL’s and FBB’s respective senior management as to the expected amounts and realization of the December 2025 Synergies and (z) reviewed by the DXL Board with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with rendering its opinion, (iii) assumed that the December 2025 FBB-Provided Financial Projections had been reasonably prepared on bases reflecting the then-best currently available estimates and judgments of FBB’s senior management as to the expected future performance of FBB on a standalone basis and (iv) assumed that any financial projections/forecasts, any other estimates and/or any other forward-looking information obtained by Guggenheim Securities from public sources, data suppliers and other third parties were reasonable and reliable.

Guggenheim Securities also noted certain other considerations with respect to its engagement and the rendering of the December 2025 Opinion:

 

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During the course of Guggenheim Securities’ engagement, Guggenheim Securities was asked by the DXL Board to solicit indications of interest from various potential third-party transaction counterparties regarding a potential extraordinary corporate transaction with or involving DXL, and Guggenheim Securities considered the results of such solicitation process in rendering the December 2025 Opinion.

 

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Guggenheim Securities did not perform or obtain any independent appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of DXL, FBB or any other entity or the solvency or fair value of DXL, FBB or any other entity, nor was Guggenheim Securities furnished with any such appraisals.

 

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Guggenheim Securities’ professionals are not legal, regulatory, tax, consulting, accounting, appraisal or actuarial experts and the December 2025 Opinion should not be construed as constituting advice with

 

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respect to such matters; accordingly, Guggenheim Securities relied on the assessments of DXL’s senior management, FBB’s senior management and DXL’s other professional advisors with respect to such matters. Guggenheim Securities assumed that the merger will qualify, for U.S. federal income tax purposes, as a “reorganization” within the meaning of Section 368(a) of the Code. Guggenheim Securities did not express any view or render any opinion regarding the tax consequences of the merger to DXL, FBB or their respective securityholders.

 

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Guggenheim Securities further assumed that:

 

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In all respects meaningful to its analyses, (i) the final executed form of the merger agreement would not differ from the draft that Guggenheim Securities reviewed, (ii) DXL, FBB and merger subsidiary will comply with all terms and provisions of the merger agreement and (iii) the representations and warranties of DXL, FBB and merger subsidiary contained in the merger agreement were true and correct and all conditions to the obligations of each party to the merger agreement to consummate the merger would be satisfied without any waiver, amendment or modification thereof;

 

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The merger will be consummated in a timely manner in accordance with the terms of the merger agreement and in compliance with all applicable legal and other requirements, without any delays, limitations, restrictions, conditions, waivers, amendments or modifications (regulatory, tax-related or otherwise) that would have an effect on DXL, FBB or the merger (including its contemplated benefits) in any way meaningful to Guggenheim Securities’ analyses and the December 2025 Opinion; and

 

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Concurrently with, but immediately prior to, the merger, those certain commitment and subscription agreements by and between FBB and the private placement investors will be consummated on the terms and subject to the conditions set forth in such commitment and subscription agreements, such that the aggregate amount of indebtedness of FBB upon consummation of the merger shall be as reflected in the December 2025 DXL-Provided Information.

Summary of Financial Analyses in Connection with the December 2025 Opinion

Overview of Financial Analyses in Connection with the December 2025 Opinion

This “Summary of Financial Analyses in Connection with the December 2025 Opinion” presents a summary of the principal financial analyses performed by Guggenheim Securities and presented to the DXL Board in connection with Guggenheim Securities’ rendering of the December 2025 Opinion.

Some of the financial analyses summarized below include summary data and information presented in tabular format. In order to understand fully such financial analyses, the summary data and tables must be read together with the full text of the summary. Considering the summary data and tables alone could create a misleading or incomplete view of Guggenheim Securities’ financial analyses in connection with the December 2025 Opinion.

The preparation of a fairness opinion is a complex process and involves various professional judgments and determinations as to the most appropriate and relevant financial analyses and the application of those methods to the particular circumstances involved. A fairness opinion therefore is not readily susceptible to partial analysis or summary description, and taking portions of the financial analyses set forth below, without considering such analyses as a whole, would in Guggenheim Securities’ view create an incomplete and misleading picture of the processes underlying the financial analyses considered in rendering the December 2025 Opinion, which was rendered only on and as of December 10, 2025 and has not been and will not be updated.

In arriving at the December 2025 Opinion, Guggenheim Securities:

 

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based its financial analyses on various assumptions, including assumptions concerning general economic, business and capital markets conditions and industry-specific and company-specific factors, all of which are beyond the control of DXL, FBB and Guggenheim Securities;

 

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did not form a view or opinion as to whether any individual financial analysis or factor, whether positive or negative, considered in isolation, supported or failed to support its opinion;

 

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considered the results of all its financial analyses and did not attribute any particular weight to any one financial analysis or factor; and

 

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ultimately arrived at the December 2025 Opinion based on the results of all its financial analyses assessed as a whole and believes that the totality of the factors considered and the various financial analyses performed by Guggenheim Securities in connection with the December 2025 Opinion operated collectively to support its determination as to the fairness, from a financial point of view and as of the date of such opinion, of the merger consideration, to the extent expressly specified in such opinion.

With respect to the financial analyses performed by Guggenheim Securities in connection with rendering the December 2025 Opinion:

 

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Such financial analyses, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses, including as set forth in the financial analyses described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL.”

 

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None of the selected publicly traded companies used in the selected publicly traded companies analysis described below is identical or directly comparable to DXL or FBB. However, such companies were selected by Guggenheim Securities, among other reasons, because they represented publicly traded companies which may be considered broadly similar, for purposes of Guggenheim Securities’ financial analyses, to DXL or FBB based on Guggenheim Securities’ familiarity with the retail and apparel sector in the United States.

 

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In any event, selected publicly traded companies analysis is not mathematical. Rather, such analysis involves complex considerations and professional judgments concerning the differences in business, operating, financial and capital markets-related characteristics and other factors regarding the selected publicly traded companies to which DXL and FBB were compared.

 

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Such financial analyses do not purport to be appraisals or to reflect the prices at which any securities may trade at the present time or at any time in the future.

 

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Unless otherwise noted below, (i) all of Guggenheim Securities’ financial analyses regarding FBB reflect the $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement and (ii) all stock price data is as of December 9, 2025.

Certain Definitions in Connection with the December 2025 Opinion and the May 2026 Supplemental Financial Analyses

Throughout this “Summary of Financial Analyses in Connection with the December 2025 Opinion” and the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL,” the following defined terms are used in connection with Guggenheim Securities’ various financial analyses:

 

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DCF: means discounted cash flow.

 

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EBITDA: means the relevant company’s operating earnings (after deduction of stock-based compensation) before interest, taxes, depreciation and amortization.

 

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EBITDA multiple: represents the relevant company’s Enterprise Value (as defined below) divided by its historical or projected EBITDA.

 

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Enterprise Value or EV: represents the relevant company’s Equity Value (as defined below) plus (i) the principal or face amount of total debt and certain other debt-like items and (ii) the principal or face amount of any non-controlling/minority interests less (iii) excess cash, cash equivalents, and short- and long-term marketable investments and certain other cash-like items.

 

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Equity Value: represents the relevant company’s (i) gross equity value as calculated (a) based on outstanding common shares, restricted stock units and performance stock units (in each of the foregoing cases, as applicable) plus shares issuable upon the conversion or exercise of all in-the-money convertible securities, stock options and/or stock warrants times (b) the relevant company’s stock price less (ii) the cash proceeds from the assumed exercise of all in-the-money stock options and stock warrants.

 

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Unlevered free cash flow: means the relevant company’s after-tax unlevered operating cash flow minus capital expenditures and changes in working capital.

DXL Standalone Financial Analyses in Connection with the December 2025 Opinion

Recap of DXL Standalone Financial Analyses. In evaluating DXL in connection with rendering the December 2025 Opinion, Guggenheim Securities performed various financial analyses which are summarized in the table below and described in more detail elsewhere herein, including discounted cash flow analyses. Solely for informational reference purposes, Guggenheim Securities also reviewed the selected publicly traded companies described below.

 

Recap of DXL Standalone Financial Analyses
		Reference Range for DXL on a Standalone Basis ($ per share)
Financial Analyses		Low				High
Discounted Cash Flow Analysis:
DXL Standalone DCF Valuation		$	1.50			$	1.79
DXL Standalone DCF Valuation Including
Net Operating Loss Tax Benefit		$	1.58			$	1.88
For Informational Reference Purposes Only
Selected Publicly Traded Companies Analysis:
DXL Standalone Public Market Trading Valuation Based on Wall Street Consensus Estimates		$	1.10			$	1.52
DXL Standalone Public Market Trading Valuation Based on DXL Management Projections		$	0.79			$	1.00

December 2025 DXL DCF Analysis. Guggenheim Securities performed standalone discounted cash flow analysis of DXL based on projected unlevered free cash flows (after deduction of stock-based compensation) for DXL and an estimate of its terminal/continuing value at the end of the projection horizon. Guggenheim Securities also performed discounted cash flow analysis of the net synergies expected to result from the merger.

In performing its discounted cash flow analysis with respect to DXL:

 

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Guggenheim Securities utilized the December 2025 DXL-Provided Financial Projections for DXL.

 

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Guggenheim Securities used a discount rate range of 15.0% – 17.0% based on its estimate of DXL’s weighted average cost of capital.

 

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In estimating DXL’s terminal/continuing value, Guggenheim Securities used a reference range of perpetual growth rates of DXL’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to DXL’s implied terminal year EBITDA multiples.

 

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Guggenheim Securities’ discounted cash flow analyses resulted in an overall reference range of (i) $1.50 – $1.79 per share for purposes of evaluating DXL common stock on a standalone intrinsic-value basis and (ii) $1.58 – $1.88 per share for purposes of evaluating DXL common stock on an intrinsic-value basis including the net present value of expected net operating loss tax benefits.

FBB Standalone Financial Analyses in Connection with the December 2025 Opinion

Recap of FBB Standalone Financial Analyses. In evaluating FBB in connection with rendering the December 2025 Opinion, Guggenheim Securities performed various financial analyses which are summarized in the table below and described in more detail elsewhere herein, including discounted cash flow analyses. Solely for informational reference purposes, Guggenheim Securities also reviewed the selected publicly traded companies described below.

 

Recap of FBB Standalone Financial Analyses
		Reference Range for FBB on a Standalone Basis ($ in millions)
Financial Analyses		Low				High
Discounted Cash Flow Analysis:
FBB Standalone DCF Valuation			$97.3			$	144.8
FBB Standalone DCF Valuation Including
§163(j) Tax Benefit			$107.0			$	155.3
For Informational Reference Purposes Only
Selected Publicly Traded Companies Analysis:
FBB Standalone Public Market Trading Valuation			($48.3	)			$33.1

December 2025 FBB DCF Analysis. Guggenheim Securities performed standalone discounted cash flow analysis of FBB based on projected unlevered free cash flows (after deduction of stock-based compensation) for FBB and an estimate of its terminal/continuing value at the end of the projection horizon. Guggenheim Securities also performed discounted cash flow analysis of the net synergies expected to result from the merger.

In performing its discounted cash flow analysis with respect to FBB:

 

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Guggenheim Securities utilized the December 2025 DXL-Provided Financial Projections for FBB.

 

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Guggenheim Securities used a discount rate range of 14.5% – 16.5% based on its estimate of FBB’s weighted average cost of capital.

 

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In estimating FBB’s terminal/continuing value, Guggenheim Securities used a reference range of perpetual growth rates of FBB’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to FBB’s implied terminal year EBITDA multiples.

Guggenheim Securities’ discounted cash flow analysis resulted in an overall reference range of (i) $97.3 million – $144.8 million for purposes of evaluating FBB’s common stock on a standalone intrinsic-value basis and (ii) $107.0 million – $155.3 million for purposes of evaluating FBB’s common stock on an intrinsic-value basis including the net present value of expected §163(j) tax benefits.

Relative Valuation Analyses in Connection with the December 2025 Opinion

In assessing the merger consideration in connection with rendering the December 2025 Opinion, Guggenheim Securities performed various relative valuation financial analyses which are summarized below. Solely for informational reference purposes, Guggenheim Securities also reviewed the implied ownership percentage derived using a selected publicly traded companies analysis.

 

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DXL Implied Ownership Analysis. In assessing implied ownership percentages for DXL’s stockholders and FBB’s stockholders (in each case as implied by the exchange ratio), Guggenheim Securities derived valuation reference ranges for the ownership percentages of DXL and FBB, respectively, using the financial methodology described in the captions “December 2025 DXL DCF Analysis” and “December 2025 FBB DCF Analysis.”

The following table summarizes the implied ownership percentages derived using the foregoing financial methodology. With respect to any indicated reference range of implied ownership percentages, the range was calculated by (i) dividing the low end of the implied per share price of DXL common stock (including the net present value of expected net operating loss tax benefits) in the financial analysis described under the caption “December 2025 DXL DCF Analysis” by the high end of the implied per share price of FBB’s common stock (including the net present value of expected §163(j) tax benefits) in the financial analysis described under the caption titled “December 2025 FBB DCF Analysis” and (ii) dividing the high end of the implied per share price of DXL common stock (including the net present value of expected net operating loss tax benefits) in the financial analysis described under the caption “December 2025 DXL DCF Analysis” by the low end of the implied per share price of FBB’s common stock (including the net present value of expected §163(j) tax benefits) in the financial analysis described under the caption titled “December 2025 FBB DCF Analysis.”

 

DXL Implied Ownership Analysis
DXL Merger-Implied Equity Ownership		45.0%
		Implied DXL Ownership Percentage
Financial Analyses		Low		High
Discounted Cash Flow Analysis		37%		51%
For Informational Reference Purposes
Selected Publicly Traded Companies Analysis:
Market-Implied Based on Wall Street Consensus (DXL and FBB at 3.1x – 5.2x CY2026E EV / EBITDA)		66%		100%
Market-Implied Based on DXL Management Projections (DXL and FBB at 3.1x – 5.2x CY2026E EV / EBITDA)		58%		100%

Guggenheim Securities’ financial analysis resulted in an implied ownership percentage reference range of 37% – 51%, as compared to the merger-implied ownership percentage by DXL stockholders of 45%.

Contribution Analysis. Guggenheim Securities compared (i) certain of DXL’s and FBB’s respective Equity Value contribution percentages and (ii) the net diluted merger-implied ownership splits for DXL’s stockholders and FBB’s stockholders (in each case as implied by the exchange ratio). In order to facilitate the comparability of such Equity Value contribution percentages with the merger-related equity ownership splits, Guggenheim Securities leverage

 

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adjusted FBB’s market-implied Enterprise Value based on FBB’s standalone net debt balance. The results of such contribution analysis, both with and without synergy estimates, are indicated in the table below:

 

DXL and FBB Contribution Analysis
Merger-Implied Equity Ownership Splits (DXL and FBB Stockholders, Respectively)			45.0	%			—				55.0%
Equity Value Contribution		DXL				Synergies				FBB
DCF Equity Value:
No Synergies			43.7	%			—				56.3%
Including Synergies			23.5	%			46.1	%			30.3%
Market-Implied Equity Value (FBB at 3.1x CY2026E EV / EBITDA):
No Synergies			N/A				—				N/A
Including Synergies			N/A				N/A				N/A
Market-Implied Equity Value (FBB at 5.2x CY2026E EV / EBITDA):
No Synergies			65.9	%			—				34.1%
Including Synergies			31.0	%			53.0	%			16.0%

DXL DCF Accretion/(Dilution) Analysis in Connection with the December 2025 Opinion

Guggenheim Securities analyzed the pro forma impact of the merger on DXL’s status quo standalone DCF valuation based on (i) the December 2025 DXL-Provided Financial Projections for DXL and FBB and the December 2025 Synergy Estimates, (ii) the merger consideration and (iii) FBB’s pro forma indebtedness after reflecting the $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement.

In performing its DCF accretion/(dilution) analysis with respect to DXL:

 

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Guggenheim Securities used discount rate ranges of (i) 15.00% – 17.00% on a status quo standalone basis (consistent with DXL’s estimated status quo weighted average cost of capital) and (ii) 13.25% – 15.25% on a pro forma combined-company basis (taking into account a smaller size/liquidity premium and higher leverage).

 

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In estimating DXL’s terminal/continuing value on both a status quo standalone basis and on a pro forma combined-company basis, Guggenheim Securities used a reference range of perpetual growth rates of DXL’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to DXL’s implied terminal year EBITDA multiples.

 

DXL DCF Accretion/(Dilution) Analysis
		Reference Range for DXL ($ per share)								% DCF Accretion/ (Dilution)
		Low				High				Midpoint
Status Quo Standalone DCF Valuation Including Net Operating Loss Tax Benefit		$	1.58			$	1.88
Pro Forma Combined Company DCF Valuation with $30 million of Synergies		$	2.84			$	3.68				+87	%

 

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Guggenheim Securities’ DCF accretion/(dilution) analysis resulted in an overall reference range of (i) $1.58 – $1.88 per share for purposes of evaluating DXL common stock on a status quo standalone intrinsic value basis and (ii) $2.84 – $3.68 per share for purposes of evaluating DXL common stock on a pro forma intrinsic value basis including $30 million of synergies from the December 2025 Synergy Estimates.

Other Financial Reviews Solely for Informational Reference Purposes in Connection with the December 2025 Opinion

In order to provide certain context for the financial analyses in connection with the December 2025 Opinion as described above, Guggenheim Securities undertook various additional financial reviews as summarized below solely for informational reference purposes. As a general matter, Guggenheim Securities did not consider such additional financial reviews to be determinative methodologies for purposes of its opinion.

DXL and FBB Selected Publicly Traded Companies Analysis. Guggenheim Securities reviewed and analyzed DXL’s historical stock price performance, trading metrics and the historical and projected financial performance for DXL and FBB compared to corresponding data for selected publicly traded companies that Guggenheim Securities deemed relevant for purposes of this analysis. Guggenheim Securities calculated, among other things, various public market trading multiples for DXL and the selected publicly traded companies (in the case of the selected publicly traded companies, based on Wall Street equity research consensus estimates and each company’s most recent publicly available financial filings), which are summarized in the table below:

 

DXL and FBB Selected Publicly Traded Companies Analysis
		Trading Enterprise Value / CY2026E EBITDA
Select Publicly Traded Company Peers
J. Jill, Inc.			3.1x
Genesco Inc.			3.6x
Duluth Holdings Inc.			4.8x
Torrid Holdings Inc.			5.2x
DXL
DXL (Wall Street Consensus Estimates)			3.1x

In performing its selected publicly traded companies analysis with respect to DXL, Guggenheim Securities selected, based on its professional judgment, a reference range of CY2026E EBITDA trading multiples of 3.1x – 5.2x and applied such trading multiples to the December 2025 DXL-Provided Financial Projections for DXL.

Guggenheim Securities’ selected publicly traded companies analysis resulted in an overall reference range of $0.79 – $1.00 per share for purposes of evaluating DXL common stock on a standalone basis.

Guggenheim Securities’ selected publicly traded companies analysis resulted in an overall reference range of ($48.3) million – $33.1 million for purposes of evaluating FBB’s common stock on a standalone basis.

DXL Stock Price Trading History. Guggenheim Securities reviewed DXL’s stock price trading history from December 9, 2024 through December 9, 2025 (the last trading day prior to the announcement of the merger), and Guggenheim Securities noted that DXL common stock generally had traded in a range of approximately $0.88 – $3.10 per share.

DXL Wall Street Equity Research Analyst Stock Price Targets. Guggenheim Securities reviewed available Wall Street equity research analyst stock price targets for DXL as published prior to December 9, 2025 (the last

 

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trading day prior to the announcement of the merger) and Guggenheim Securities noted that such Wall Street equity research analyst stock price targets for DXL common stock were $1.30 – $2.00 per share.

Other Considerations in Connection with the December 2025 Opinion

Except as described in the summary above, DXL did not provide specific instructions to, or place any limitations on, Guggenheim Securities with respect to the procedures to be followed or factors to be considered in performing its financial analyses or providing the December 2025 Opinion. The type and amount of consideration payable in the merger were determined through negotiations between DXL and FBB and were approved by the DXL Board. The decision to enter into the merger agreement was solely that of the DXL Board. The December 2025 Opinion, which was rendered only on and as of December 10, 2025 and has not been and will not be updated, was just one of the many factors taken into consideration by the DXL Board. DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise. Consequently, Guggenheim Securities’ financial analyses should not be viewed as determinative of the decision of the DXL Board with respect to the fairness, from a financial point of view, to DXL’s stockholders of the merger consideration.

Pursuant to the terms of Guggenheim Securities’ engagement as DXL’s financial advisor, DXL has agreed to pay Guggenheim Securities, upon consummation of the merger, a cash transaction fee (based upon a percentage of the aggregate merger consideration associated with the merger, subject to a minimum of $2,000,000), which cash transaction fee currently is estimated to be $2,000,000. Additionally, DXL may, in its discretion, increase the amount of such fee by up to 0.25% of the aggregate merger consideration. DXL has previously paid Guggenheim Securities (i) a cash milestone fee of $1,500,000 that became payable upon the rendering of the December 2025 Opinion and (ii) a cash work fee of $250,000 that became payable in May 2026, each of which will be credited against the foregoing cash transaction fee. In addition, DXL has agreed to reimburse Guggenheim Securities for certain expenses and to indemnify Guggenheim Securities against certain liabilities arising out of its engagement.

Aside from its current engagement by DXL, Guggenheim Securities has not been previously engaged by DXL during the two years prior to the rendering of the December 2025 Opinion to provide financial advisory or investment banking services for which Guggenheim Securities received fees. Guggenheim Securities has not been previously engaged by FBB during the two years prior to the rendering of the December 2025 Opinion to provide financial advisory or investment banking services for which Guggenheim Securities received fees, except that Guggenheim Securities acted as financial advisor to FBB in connection with its July 2024 acquisition of certain assets of Avenue Stores, for which Guggenheim Securities received agreed upon fees. Guggenheim Securities may in the future seek to provide DXL and FBB or their respective affiliates with financial advisory and investment banking services unrelated to the merger, for which services Guggenheim Securities would expect to receive compensation.

Guggenheim Securities and its affiliates and related entities engage in a wide range of financial services activities for its and their own accounts and the accounts of customers, including but not limited to: asset, investment and wealth management; insurance services; investment banking, corporate finance, mergers and acquisitions and restructuring; merchant banking; fixed income and equity sales, trading and research; and derivatives, foreign exchange and futures. In the ordinary course of these activities, Guggenheim Securities and its affiliates and related entities may (i) provide such financial services to DXL, FBB, other participants in the merger or their respective affiliates, for which services Guggenheim Securities and its affiliates and related entities may have received, and may in the future receive, compensation and (ii) directly and indirectly hold long and short positions, trade and otherwise conduct such activities in or with respect to loans, debt and equity securities and derivative products of or relating to DXL, FBB, other participants in the merger or their respective affiliates. Furthermore, Guggenheim Securities and its affiliates and related entities and its or their respective directors, officers, employees, consultants and agents may have investments in DXL, FBB, other participants in the merger or their respective affiliates.

 

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Consistent with applicable legal and regulatory guidelines, Guggenheim Securities has adopted certain policies and procedures to establish and maintain the independence of its research departments and personnel. As a result, Guggenheim Securities’ research analysts may hold views, make statements or investment recommendations and publish research reports with respect to DXL, FBB, other participants in the merger or their respective affiliates or the merger that differ from the views of Guggenheim Securities’ investment banking personnel.

May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL

Overview of the May 2026 Supplemental Financial Analyses

On May 26, 2026, following the discussion between and among the DXL Board and its outside legal and financial advisors regarding the May 2026 Supplemental Financial Analyses, Guggenheim Securities advised the DXL Board that, in light of the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates and the May 2026 Supplemental Financial Analyses, the DXL Board should no longer rely on the December 2025 Opinion expressed in Guggenheim Securities’ December 10, 2025 letter to the DXL Board or on the financial analyses Guggenheim Securities reviewed with the DXL Board at the December 10, 2025 DXL Board meeting in connection with the December 2025 Opinion.

The December 2025 Opinion was rendered only on and as of December 10, 2025 and has not been and will not be updated. DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise. Similarly, the May 2026 Supplemental Financial Analyses do not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise.

The May 2026 Supplemental Financial Analyses were provided to the DXL Board (in its capacity as such) for its information and assistance in connection with its ongoing evaluation of the merger. The May 2026 Supplemental Financial Analyses do not constitute an opinion, view, report or appraisal as to the fairness, from a financial point of view, of the merger consideration or any other consideration in connection with the merger. Aside from the December 2025 Opinion, Guggenheim Securities did not render any opinion, view, report or appraisal as to the fairness, from a financial point of view, of the merger consideration or any other consideration in connection with the merger.

In connection with the DXL Board’s ongoing evaluation of the merger, DXL’s senior management updated (i) the December 2025 DXL-Provided Financial Projections (comprised of (w) certain updated financial projections for DXL on a standalone basis for the fiscal years ending January 31, 2026 through January 31, 2035, (x) certain updated financial projections for FBB on a standalone basis for the calendar years ending December 31, 2025 through December 31, 2034, (y) certain updated estimates as to potentially realizable existing net operating loss carry-forwards expected to be utilized by DXL and (z) certain updated estimates as to potentially realizable benefits under Section 163(j) of the Code available and expected to be utilized by FBB) and (ii) the December 2025 Synergy Estimates, all as prepared by, discussed with and approved for Guggenheim Securities’ use by DXL’s senior management (each of the foregoing as so updated, the “May 2026 DXL-Provided Financial Projections” and the “May 2026 Synergy Estimates” or the “May 2026 Synergies”). In addition, FBB’s senior management updated the December 2025 FBB-Provided Financial Projections, as prepared by FBB’s senior management and discussed with DXL’s and FBB’s respective senior management (as so updated, the “May 2026 FBB-Provided Financial Projections”). Guggenheim Securities was directed by the DXL Board to rely upon the May 2026 DXL-Provided Financial Projections and the May 2026 Synergy Estimates in connection with the preparation of the May 2026 Supplemental Financial Analyses.

In connection with the May 2026 Supplemental Financial Analyses, Guggenheim Securities did not express any view or opinion as to (i) the prices at which the shares of common stock or other securities or financial instruments of or relating to DXL or FBB may trade or otherwise be transferable at any time, (ii) the potential effects of volatility in the credit, financial or equity markets on DXL or FBB, their respective securities or other

 

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financial instruments or the merger or (iii) the impact of the merger on the solvency or viability of DXL, FBB or merger subsidiary or the ability of DXL, FBB or merger subsidiary to pay their respective obligations when they come due.

To facilitate the DXL Board’s ongoing evaluation of the merger following DXL senior management’s updates to the December 2025 DXL-Provided Financial Projections, representatives of Guggenheim Securities prepared and reviewed with the DXL Board certain financial analyses, including the following:

 

•

Discounted cash flow analyses with respect to DXL, FBB and the May 2026 Synergies based on the May 2026 DXL-Provided Financial Projections and the May 2026 Synergy Estimates;

 

•

A selected public company trading analysis that compared the financial performance of DXL and FBB and certain trading multiples and the trading activity of DXL common stock with corresponding data for certain publicly traded companies that Guggenheim Securities deemed relevant in evaluating DXL and FBB;

 

•

A review of certain Wall Street equity research price targets for the DXL common stock;

 

•

A review of the historical prices, certain trading multiples and the trading activity of DXL common stock; and

 

•

Such other studies, analyses, inquiries and investigations as Guggenheim Securities deemed appropriate (the foregoing, collectively, the “May 2026 Supplemental Financial Analyses”).

In connection with the May 2026 Supplemental Financial Analyses, Guggenheim Securities:

 

•

Discussed with DXL’s senior management their then-current strategic and financial rationale for the merger as well as their then-current views regarding DXL’s and FBB’s respective businesses, operations, recent and projected financial results, liquidity, funding needs, access to capital and future prospects and the commercial and competitive dynamics in the consumer sector; and

 

•

Discussed with FBB’s senior management their then-current views regarding FBB’s business, operations, projected financial results and future prospects.

The DXL Board, together with DXL’s senior management and Guggenheim Securities, discussed the limitations of the May 2026 Supplemental Financial Analyses, including, among other things, that:

 

•

The May 2026 DXL-Provided Financial Projections and the May 2026 Synergy Estimates were not prepared with a view toward public disclosure, were inherently subject to significant judgment and uncertainty and were necessarily based on numerous variables and assumptions that were beyond DXL’s control;

 

•

The results of the May 2026 Supplemental Financial Analyses should be assessed as a whole rather than individually;

 

•

The May 2026 Supplemental Financial Analyses, particularly those based on estimates and projections, were not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such financial analyses; and

 

•

The May 2026 Supplemental Financial Analyses did not purport to be appraisals or reflect the prices at which the DXL common stock may trade at the present time or at any time in the future.

With respect to the information used in conducting the May 2026 Supplemental Financial Analyses, Guggenheim Securities noted that:

 

•

Guggenheim Securities relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information provided

 

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by or discussed with DXL or FBB (including, without limitation, the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates and the May 2026 FBB-Provided Financial Projections) or obtained from public sources, data suppliers and other third parties.

 

•

Guggenheim Securities (i) did not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and Guggenheim Securities did not independently verify, any such information (including, without limitation, the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates and the May 2026 FBB-Provided Financial Projections), (ii) expressed no view or opinion regarding the reasonableness or achievability of the May 2026 DXL-Provided Financial Projections, the May 2026 Synergy Estimates or the May 2026 FBB-Provided Financial Projections, any other estimates or any other forward-looking information provided by DXL or FBB or the assumptions upon which any of the foregoing were based and (iii) relied upon the assurances of DXL’s senior management that they were (in the case of the May 2026 DXL-Provided Financial Projections and the May 2026 Synergy Estimates) and assumed that FBB’s senior management were (in the case of the May 2026 FBB-Provided Financial Projections) unaware of any facts or circumstances that had made such incomplete, inaccurate or misleading.

 

•

Guggenheim Securities (i) was advised by DXL’s senior management, and assumed, that the May 2026 DXL-Provided Financial Projections had been (y) reasonably prepared on bases reflecting the then-best currently available estimates and judgments of DXL’s senior management as to the expected future performance of DXL and FBB and (z) reviewed by the DXL Board with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with performing the May 2026 Supplemental Financial Analyses, (ii) was advised by DXL’s senior management, and assumed, that the May 2026 Synergy Estimates had been (y) reasonably prepared on bases reflecting the then-best currently available estimates and judgments of DXL’s senior management as to the expected amounts and realization of the May 2026 Synergies and (z) reviewed by the DXL Board with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with performing the May 2026 Supplemental Financial Analyses, (iii) assumed that the May 2026 FBB-Provided Financial Projections had been reasonably prepared on bases reflecting the then-best currently available estimates and judgments of FBB’s senior management as to the expected future performance of FBB on a standalone basis and (iv) assumed that any financial projections/forecasts, any other estimates and/or any other forward-looking information obtained by Guggenheim Securities from public sources, data suppliers and other third parties were reasonable and reliable.

In connection with the May 2026 Supplemental Financial Analyses, Guggenheim Securities did not perform or obtain any independent appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of DXL, FBB or any other entity, or the solvency or fair value of DXL, FBB or any other entity. Guggenheim Securities’ professionals are not legal, regulatory, tax, consulting, accounting, appraisal or actuarial experts, and the May 2026 Supplemental Financial Analyses should not be construed as constituting advice with respect to such matters.

Unless otherwise noted below, all of Guggenheim Securities’ financial analyses regarding FBB reflect the $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement.

DXL Standalone Financial Analyses in Connection with the May 2026 Supplemental Financial Analyses

Recap of DXL Standalone Financial Analyses. In evaluating DXL in connection with conducting the May 2026 Supplemental Financial Analyses, Guggenheim Securities performed various financial analyses which are summarized in the table below and described in more detail elsewhere herein, including discounted cash flow

 

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analyses. Solely for informational reference purposes, Guggenheim Securities also reviewed the selected publicly traded companies described below.

 

Recap of DXL Standalone Financial Analyses
		Reference Range for DXL on a Standalone Basis ($ per share)
Financial Analyses		Low				High
Discounted Cash Flow Analysis:
DXL Standalone DCF Valuation		$	1.21			$	1.42
DXL Standalone DCF Valuation Including Net Operating Loss Tax Benefit		$	1.30			$	1.53
For Informational Reference Purposes Only
Selected Publicly Traded Companies Analysis:
DXL Standalone Public Market Trading Valuation Based on Wall Street Consensus Estimates		$	0.48			$	0.73
DXL Standalone Public Market Trading Valuation Based on DXL Management Projections		$	0.63			$	1.06

May 2026 DXL DCF Analysis. Guggenheim Securities performed standalone discounted cash flow analysis of DXL based on projected unlevered free cash flows (after deduction of stock-based compensation) for DXL and an estimate of its terminal/continuing value at the end of the projection horizon. Guggenheim Securities also performed discounted cash flow analysis of the net synergies expected to result from the merger.

In performing its discounted cash flow analysis with respect to DXL:

 

•

Guggenheim Securities utilized the May 2026 DXL-Provided Financial Projections for DXL.

 

•

Guggenheim Securities used a discount rate range of 15.25% – 17.25% based on its estimate of DXL’s weighted average cost of capital.

 

•

In estimating DXL’s terminal/continuing value, Guggenheim Securities used a reference range of perpetual growth rates of DXL’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to DXL’s implied terminal year EBITDA multiples.

Guggenheim Securities’ discounted cash flow analysis resulted in an overall reference range of (i) $1.21 – $1.42 per share for purposes of evaluating DXL common stock on a standalone intrinsic-value basis and (ii) $1.30 – $1.53 per share for purposes of evaluating DXL common stock on an intrinsic-value basis including the net present value of expected net operating loss tax benefits, as compared to (a) $1.50 – $1.79 per share and (b) $1.58 – $1.88 per share, respectively, when evaluated in connection with the December 2025 Opinion.

FBB Standalone Financial Analyses in Connection with the May 2026 Supplemental Financial Analyses

Recap of FBB Standalone Financial Analyses. In evaluating FBB in connection with conducting the May 2026 Supplemental Financial Analyses, Guggenheim Securities performed various financial analyses which are summarized in the table below and described in more detail elsewhere herein, including discounted cash flow

 

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analyses. Solely for informational reference purposes, Guggenheim Securities also reviewed the selected publicly traded companies described below.

 

Recap of FBB Standalone Financial Analyses
		Reference Range for FBB on a Standalone Basis ($ in millions)
Financial Analyses		Low				High
Discounted Cash Flow Analysis:
FBB Standalone DCF Valuation		($	22.5	)			($3.5	)
FBB Standalone DCF Valuation Including
§163(j) Tax Benefit		($	22.5	)			($3.5	)
For Informational Reference Purposes Only
Selected Publicly Traded Companies Analysis:
FBB Standalone Public Market Trading Valuation		($	61.8	)			$86.4

May 2026 FBB DCF Analysis. Guggenheim Securities performed standalone discounted cash flow analysis of FBB based on projected unlevered free cash flows (after deduction of stock-based compensation) for FBB and an estimate of its terminal/continuing value at the end of the projection horizon. Guggenheim Securities also performed discounted cash flow analysis of the net synergies expected to result from the merger.

In performing its discounted cash flow analysis with respect to FBB:

 

•

Guggenheim Securities utilized the May 2026 DXL-Provided Financial Projections for FBB.

 

•

Guggenheim Securities used a discount rate range of 14.75% – 16.75% based on its estimate of FBB’s weighted average cost of capital.

 

•

In estimating FBB’s terminal/continuing value, Guggenheim Securities used a reference range of perpetual growth rates of FBB’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to FBB’s implied terminal year EBITDA multiples.

Guggenheim Securities’ discounted cash flow analysis resulted in an overall reference range of (i) ($22.5) million – ($3.5) million for purposes of evaluating FBB’s common stock on a standalone intrinsic-value basis and (ii) ($22.5) million – ($3.5) million for purposes of evaluating FBB’s common stock on an intrinsic-value basis including the net present value of expected §163(j) tax benefits, as compared to overall reference ranges of (a) $97.3 million – $144.8 million and (b) $107.0 million – $155.3 million, respectively, when evaluated in connection with the December 2025 Opinion.

Relative Valuation Analyses in Connection with the May 2026 Supplemental Financial Analyses

In assessing the value of DXL and FBB in connection with the May 2026 Supplemental Financial Analyses, Guggenheim Securities performed various relative valuation financial analyses which are summarized below. Solely for informational reference purposes, Guggenheim Securities also reviewed the implied ownership percentage derived using a selected publicly traded companies analysis.

DXL Implied Ownership Analysis. In assessing implied ownership percentages for DXL’s stockholders and FBB’s stockholders (in each case as implied by the exchange ratio), Guggenheim Securities derived valuation reference ranges for the ownership percentages of DXL and FBB, respectively, using the financial methodology described in the captions “May 2026 DXL DCF Analysis” and “May 2026 FBB DCF Analysis”.

The following table summarizes the implied ownership percentages derived using the foregoing financial methodology. With respect to any indicated reference range of implied ownership percentages, the range was

 

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calculated by (i) dividing the low end of the implied per share price of DXL common stock (including the net present value of expected net operating loss tax benefits) in the financial analysis described under the caption “May 2026 DXL DCF Analysis” by the high end of the implied per share price of FBB’s common stock (including the net present value of expected §163(j) tax benefits) in the financial analysis described under the caption titled “May 2026 FBB DCF Analysis” and (ii) dividing the high end of the implied per share price of DXL common stock (including the net present value of expected net operating loss tax benefits) in the financial analysis described under the caption “May 2026 DXL DCF Analysis” by the low end of the implied per share price of FBB’s common stock (including the net present value of expected §163(j) tax benefits) in the financial analysis described under the caption titled “May 2026 FBB DCF Analysis”.

 

DXL Implied Ownership Analysis
DXL Merger-Implied Equity Ownership		45.0%
		Implied DXL Ownership Percentage
Financial Analyses		Low		High
Discounted Cash Flow Analysis		100%		100%
For Informational Reference Purposes
Selected Publicly Traded Companies Analysis:
Market-Implied Based on Wall Street Consensus (DXL and FBB at 3.1x – 7.0x CY2026E EV / EBITDA)		24%		100%
Market-Implied Based on DXL Management Projections (DXL and FBB at 3.1x – 7.0x CY2026E EV / EBITDA)		29%		100%

Guggenheim Securities’ financial analyses resulted in an implied ownership percentage of 100%, as compared to the merger-implied ownership percentage by DXL stockholders of 45%, and an implied ownership percentage reference range of 37% – 51% when evaluated in connection with the December 2025 Opinion.

DXL DCF Accretion/(Dilution) Analysis in Connection with the May 2026 Supplemental Financial Analyses

Guggenheim Securities analyzed the pro forma impact of the merger on DXL’s status quo standalone DCF valuation based on (i) the May 2026 DXL-Provided Financial Projections for DXL and FBB and the May 2026 Synergy Estimates, (ii) the merger consideration and (iii) FBB’s pro forma indebtedness after reflecting the $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement.

In performing its DCF accretion/(dilution) analysis with respect to DXL:

 

•

Guggenheim Securities used discount rate ranges of (i) 15.25% – 17.25% on a status quo standalone basis (consistent with DXL’s estimated status quo standalone weighted average cost of capital) and (ii) 13.50% – 15.50% on a pro forma combined-company basis (taking into account a smaller size/liquidity premium and higher leverage).

 

•

In estimating DXL’s terminal/continuing value on both a status quo standalone basis and on a pro forma combined-company basis, Guggenheim Securities used a reference range of perpetual growth rates of DXL’s terminal year normalized unlevered free cash flow of 0.00% – 1.00%. The terminal/continuing values implied by the foregoing perpetual growth rate reference range were cross-checked for reasonableness by reference to DXL’s implied terminal year EBITDA multiples.

 

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DXL DCF Accretion/(Dilution) Analysis
		Reference Range for DXL ($ per share)								% DCF Accretion/ (Dilution)
		Low				High				Midpoint
Status Quo Standalone DCF Valuation Including Net Operating Loss Tax Benefit		$	1.30			$	1.53
Pro Forma Combined Company DCF Valuation with $20 million of Synergies		$	1.18			$	1.63			(3%)
Pro Forma Combined Company DCF Valuation with $25 million of Synergies		$	1.34			$	1.82			+11%

Guggenheim Securities’ DCF accretion/(dilution) analysis resulted in an overall reference range of (i) $1.30 – $1.53 per share for purposes of evaluating DXL common stock on a status quo standalone intrinsic value basis, (ii) $1.18 – $1.63 per share for purposes of evaluating DXL common stock on a pro forma intrinsic value basis including $20 million of synergies from the May 2026 Synergy Estimates and (iii) $1.34 – $1.82 per share for purposes of evaluating DXL common stock on a pro forma intrinsic value basis including $25 million of synergies from the May 2026 Synergy Estimates, as compared to (a) $1.58 – $1.88 per share for purposes of evaluating DXL common stock on a status quo standalone intrinsic value basis and (b) $2.84 – $3.68 per share for purposes of evaluating DXL common stock on a pro forma intrinsic value basis including $30 million of synergies from the December 2025 Synergy Estimates, in each case of (a) and (b) when evaluated in connection with the December 2025 Opinion.

In Guggenheim Securities’ view, this updated DCF accretion/(dilution) analysis indicated that the existing economic terms of the merger would have to be significantly restructured to maintain the value proposition for DXL’s stockholders as implied by Guggenheim Securities’ financial analyses in connection with the December 2025 Opinion.

Debt/Equitization Analysis in Connection with the May 2026 Supplemental Financial Analyses

To further assist the DXL Board in connection with its ongoing evaluation of the merger, Guggenheim Securities performed a debt/equitization analysis to assess the required incremental debt reduction that would be needed by FBB in light of (i) DXL stockholders’ pro forma 45% economic ownership of the combined company and (ii) DXL’s contributed DCF-based equity value. Such debt/equitization analysis was performed based on DCF analyses for each of DXL and FBB on a standalone basis utilizing (i) the May 2026 DXL-Provided Financial Projections for each of DXL and FBB and (ii) solely for informational reference purposes, the May 2026 DXL-Provided Financial Projections for DXL and the May 2026 FBB-Provided Financial Projections for FBB. In each case, DXL’s contributed DCF-based equity value was grossed up (i.e., divided by DXL stockholders’ pro forma 45% economic ownership) and then multiplied by 55% (based on FBB stockholders’ pro forma 55% economic ownership) to determine FBB’s required contributed DCF-based equity value, with the required incremental debt reduction by FBB being back solved to achieve FBB’s required contributed DCF-based equity value.

 

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Based on the midpoints of its DCF analysis, Guggenheim Securities’ debt/equitization analysis indicated that FBB would be required to further reduce its indebtedness — beyond FBB’s $92 million debt/equitization that FBB is obligated to effect under the terms and conditions of the merger agreement — as indicated in the table below:

 

Debt/Equitization Analysis ($ in millions)
Primary Analysis		Required Incremental Debt Reduction by FBB (Beyond $92 Million)				Required Total Debt Reduction by FBB
May 2026 DXL-Provided Financial Projections for Each of DXL and FBB			($111.9	)		($	203.8	)
For Informational Reference Purposes Only
May 2026 DXL-Provided Financial Projections for DXL and May 2026 FBB-Provided Financial Projections for FBB			($38.0	)		($	129.9	)

Other Financial Reviews Solely for Informational Reference Purposes in Connection with the May 2026 Supplemental Financial Analyses

In order to provide certain context for the financial analyses in connection with the May 2026 Supplemental Financial Analyses as described above, Guggenheim Securities undertook various additional financial reviews as summarized below solely for informational reference purposes. As a general matter, Guggenheim Securities did not consider such additional financial reviews to be determinative methodologies for purposes of its analyses.

DXL and FBB Selected Publicly Traded Companies Analysis. Guggenheim Securities reviewed and analyzed DXL’s historical stock price performance, trading metrics and the historical and projected financial performance for DXL and FBB compared to corresponding data for selected publicly traded companies that Guggenheim Securities deemed relevant for purposes of this analysis. Guggenheim Securities calculated, among other things, various public market trading multiples for DXL and the selected publicly traded companies (in the case of the selected publicly traded companies, based on Wall Street equity research consensus estimates and each company’s most recent publicly available financial filings), which are summarized in the table below:

 

DXL and FBB Selected Publicly Traded Companies Analysis
		Trading Enterprise Value / CY2026E EBITDA
Select Publicly Traded Company Peers
J. Jill, Inc.			3.1x
Genesco Inc.			4.9x
Torrid Holdings Inc.			6.1x
Duluth Holdings Inc.			7.0x
DXL
DXL (Wall Street Consensus Estimates)			5.7x

In performing its selected publicly traded companies analysis with respect to DXL, Guggenheim Securities selected, based on its professional judgment, a reference range of CY2026E EBITDA trading multiples of 3.1x – 7.0x and applied such trading multiples to the May 2026 DXL-Provided Financial Projections for DXL.

 

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Guggenheim Securities’ selected publicly traded companies analysis resulted in an overall reference range of $0.63 – $1.06 per share for purposes of evaluating DXL common stock on a standalone basis, as compared to an overall reference range of $0.79 – $1.00 per share when evaluated in connection with the December 2025 Opinion.

Guggenheim Securities’ selected publicly traded companies analysis resulted in an overall reference range of ($61.8) million – $86.4 million for purposes of evaluating FBB’s common stock on a standalone basis, as compared to an overall reference range of ($48.3) million – $33.1 million when evaluated in connection with the December 2025 Opinion.

DXL Stock Price Trading History. Guggenheim Securities reviewed DXL’s stock price trading history from May 11, 2025 through May 11, 2026 (the last trading day prior to the Zodiac tender offer), and Guggenheim Securities noted that DXL common stock generally had traded in a range of approximately $0.44 – $1.69 per share, as compared to a range of approximately $0.88 – $3.10 per share from December 9, 2024 through December 9, 2025 (the last trading day prior to the announcement of the merger) in connection with the December 2025 Opinion.

DXL Wall Street Equity Research Analyst Stock Price Targets. Guggenheim Securities reviewed available Wall Street equity research analyst stock price targets for DXL as published prior to May 11, 2026 (the last trading day prior to the Zodiac tender offer) and Guggenheim Securities noted that such Wall Street equity research analyst stock price targets for DXL common stock were $1.00 – $1.50 per share, as compared to a range of $1.30 – $2.00 per share as published prior to December 9, 2025 (the last trading day prior to the announcement of the merger) in connection with the December 2025 Opinion.

Other Considerations in Connection with the May 2026 Supplemental Financial Analyses

Except as described in the summary above, DXL did not provide specific instructions to, or place any limitations on, Guggenheim Securities with respect to the procedures to be followed or factors to be considered in performing or providing the May 2026 Supplemental Financial Analyses. The decision to enter into and, conduct an ongoing evaluation of, the merger agreement was solely that of the DXL Board. The December 2025 Opinion, which was rendered only on and as of December 10, 2025 and has not been and will not be updated, was just one of the many factors taken into consideration by the DXL Board in December 2025 in entering into the merger agreement and the May 2026 Supplemental Financial Analyses was just one of many factors taken into consideration by the DXL Board in May 2026 in determining that the merger is not in the best interests of DXL stockholders. Consequently, Guggenheim Securities’ financial analyses in December of 2025, and subsequently in May 2026, should not be viewed as determinative of the decision of the DXL Board with respect to the merger.

DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise, and should be read only together with the May 2026 Supplemental Financial Analyses described in this section.

Pursuant to the terms of Guggenheim Securities’ engagement as DXL’s financial advisor, DXL has agreed to pay Guggenheim Securities, upon consummation of the merger, a cash transaction fee (based upon a percentage of the aggregate merger consideration associated with the merger, subject to a minimum of $2,000,000), which cash transaction fee currently is estimated to be $2,000,000. Additionally, DXL may, in its discretion, increase the amount of such fee by up to 0.25% of the aggregate merger consideration. DXL has previously paid Guggenheim Securities (i) a cash milestone fee of $1,500,000 that became payable upon the rendering of the December 2025 Opinion and (ii) a cash work fee of $250,000 that became payable in May 2026, each of which will be credited against the foregoing cash transaction fee. In addition, DXL has agreed to reimburse Guggenheim Securities for certain expenses and to indemnify Guggenheim Securities against certain liabilities arising out of its engagement.

 

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Aside from its current engagement by DXL, Guggenheim Securities has not been previously engaged by DXL during the two years prior to the delivery of the May 2026 Supplemental Financial Analyses to provide financial advisory or investment banking services for which Guggenheim Securities received fees. Guggenheim Securities has not been previously engaged by FBB during the two years prior to the delivery of the May 2026 Supplemental Financial Analyses to provide financial advisory or investment banking services for which Guggenheim Securities received fees, except that Guggenheim Securities acted as financial advisor to FBB in connection with its July 2024 acquisition of certain assets of Avenue Stores, for which Guggenheim Securities received agreed upon fees. Guggenheim Securities may in the future seek to provide DXL and FBB or their respective affiliates with financial advisory and investment banking services unrelated to the merger, for which services Guggenheim Securities would expect to receive compensation.

Guggenheim Securities and its affiliates and related entities engage in a wide range of financial services activities for its and their own accounts and the accounts of customers, including but not limited to: asset, investment and wealth management; insurance services; investment banking, corporate finance, mergers and acquisitions and restructuring; merchant banking; fixed income and equity sales, trading and research; and derivatives, foreign exchange and futures. In the ordinary course of these activities, Guggenheim Securities and its affiliates and related entities may (i) provide such financial services to DXL, FBB, Zodiac Partners, other participants in the merger or the Zodiac tender offer or their respective affiliates, for which services Guggenheim Securities and its affiliates and related entities may have received, and may in the future receive, compensation and (ii) directly and indirectly hold long and short positions, trade and otherwise conduct such activities in or with respect to loans, debt and equity securities and derivative products of or relating to DXL, FBB, Zodiac Partners, other participants in the merger or the Zodiac tender offer or their respective affiliates. Furthermore, Guggenheim Securities and its affiliates and related entities and its or their respective directors, officers, employees, consultants and agents may have investments in DXL, FBB, Zodiac Partners, other participants in the merger or the Zodiac tender offer or their respective affiliates.

Consistent with applicable legal and regulatory guidelines, Guggenheim Securities has adopted certain policies and procedures to establish and maintain the independence of its research departments and personnel. As a result, Guggenheim Securities’ research analysts may hold views, make statements or investment recommendations and publish research reports with respect to DXL, FBB, Zodiac Partners, other participants in the merger or the Zodiac tender offer or their respective affiliates or the merger that differ from the views of Guggenheim Securities’ investment banking personnel.

Certain Financial Projections

DXL does not, as a matter of course, publicly disclose long-term projections of future financial results due to the inherent unpredictability, uncertainty and subjectivity of underlying assumptions and estimates. However, DXL is including in this proxy statement certain unaudited prospective financial information for DXL and FBB that was made available to the DXL Board in connection with its evaluation of the merger as well as Guggenheim Securities for purposes of performing its financial analyses, as described above under “Summary—Summary Comparison of Key Analytical Results — May 2026 Supplemental Financial Analyses versus December 2025 Opinion,” “—December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL” and “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL.” We refer to this information as the “Financial Projections.” A summary of certain significant elements of this information is included in this proxy statement for the purpose of providing DXL stockholders access to certain nonpublic information made available to DXL, the DXL Board and Guggenheim Securities.

The inclusion of the Financial Projections should not be deemed an admission or representation by DXL, Guggenheim Securities, FBB or any of their respective officers, directors, affiliates, advisors, or other representatives with respect to such Financial Projections. The Financial Projections are not included to influence your views on the merger and the information from the Financial Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding FBB in this proxy statement.

 

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The Financial Projections contained in this section were not prepared for the purpose of, or with a view toward, public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, published guidelines of the SEC regarding forward-looking statements or generally accepted accounting principles.

Neither DXL’s nor FBB’s independent auditors nor any other independent accountants have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information. KPMG LLP reports incorporated by reference in this proxy statement relate to the previously issued financial statements of DXL. These reports, as well as the reports related to FBB included herein, do not extend to the Financial Projections and should not be read to do so.

Further, the Financial Projections do not take into account the effect of any possible failure of the merger to occur. No assurances can be given that the estimates and assumptions made in preparing the Financial Projections will prove accurate or that any of the Financial Projections will be realized.

Certain Standalone DXL Financial Projections used by Guggenheim Securities as of December 2025

The following table presents a summary of the 10-year DXL-Provided Financial Projections provided to Guggenheim Securities and approved for Guggenheim Securities’ use by DXL’s senior management, in the financial analyses performed in connection with the December 2025 Opinion as described in the section titled “—December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL.” The December 2025 Opinion was rendered only on and as of December 10, 2025 and has not been and will not be updated. DXL stockholders should not rely on the December 2025 Opinion and it does not constitute advice or a recommendation to any DXL stockholder as to how any DXL stockholder should vote or act in connection with the merger or otherwise. The December 2025 Opinion and the summary of the financial analyses underlying the December 2025 Opinion should be read only together with the May 2026 Supplemental Financial Analyses described in the section entitled “—May 2026 Supplemental Financial Analyses Prepared by Guggenheim Securities, Financial Advisor to DXL.”

($ in millions)

		Fiscal Year Ending the Following January
		2025E				2026E				2027E				2028E				2029E				2030E				2031E				2032E				2033E				2034E
Revenue		$	442			$	460			$	488			$	507			$	528			$	543			$	559			$	576			$	593			$	611
Adj. EBITDA(1)		$	3			$	6			$	13			$	18			$	25			$	29			$	33			$	37			$	40			$	43
Unlevered Free Cash Flow(2)		($	19	)		($	2	)		($	2	)		$	3			$	7			$	10			$	13			$	15			$	16			$	18

 

(1)

Adjusted EBITDA was calculated as earnings before interest, taxes, depreciation, and amortization, and adjusted for certain non-recurring items. Such non-recurring items would include any impairment (gain) of assets, transaction-related costs associated with the merger, restructuring costs, severance costs, and accruals for non-recurring legal settlements.

(2)	Unlevered Free Cash Flow was calculated as after-tax unlevered operating cash flow minus capital expenditures and changes in working capital.

Certain Standalone FBB Financial Projections used by Guggenheim Securities as of December 2025

The following table presents a summary of the 10-year DXL Management Case for FBB provided to Guggenheim Securities, and approved for Guggenheim Securities’ use by DXL’s senior management, in the financial analyses performed in connection with the December 2025 Opinion as described in the section entitled “—December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL.” As described in the section entitled “—December 2025 Opinion of Guggenheim Securities, Financial Advisor to DXL”, DXL was provided the December 2025 FBB-Provided Financial Projections for the years ending December 31, 2025 through December 31, 2029 by the management of FBB, and management of DXL prepared the DXL Management Case for FBB for the years ending December 31, 2025 through December 31, 2034, based on DXL management’s

 

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