UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

 

 

 

FOSSIL GROUP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-41040		75-2018505
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

Primary Standard Industrial Classification Code Number: 5094

 

901 S. Central Expressway Richardson, Texas		75080		(972) 234-2525
(Address of principal executive offices)		(Zip Code)		(Registrant’s telephone number, including area code)

 

 

Approximate date of commencement of proposed sale of the securities to the public:

As soon as practicable after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.

 

TABLE OF ADDITIONAL REGISTRANTS

In addition to Fossil Group, Inc., the following direct or indirect subsidiaries of Fossil Group, Inc. will be guarantors of debt securities issued by Fossil Group, Inc. and are co-registrants:

 

Exact Name of registrant as specified in its charter		State or other jurisdiction of incorporation or organization		I.R.S. Employer Identification Number
Fossil Canada Inc.(1)		New Brunswick, Canada		—
Fossil (Europe) GmbH(2)		Germany		—
Fossil Global Holdings, Inc.(1)		Delaware		393613591
Fossil Intermediate, Inc.(1)		Delaware		510357223
Fossil Partners, L.P.(1)		Texas		752555693
Fossil Stores I, Inc.(1)		Delaware		752573030
Fossil Trust(1)		Delaware		510357226
Fossil (UK) Limited(3)		England and Wales		—
Fossil (UK) Holdings Limited(3)		England and Wales		—

(1)	The address of the principal executive office for these guarantors is 901 S. Central Expressway, Richardson, Texas 75080, and the telephone number is (972) 234-2525.

(2)	The address of the principal executive office for this guarantor is Oberwinkl 1, 83355 Grabenstätt, Germany and the telephone number is +49 (0) 8661-622-6000.

(3)	The address of the principal executive office for these guarantors is Ashton House, 497 Silbury Boulevard, Milton Keynes, MK9 2LD, England, and there is no telephone number as there is no landline.

EXPLANATORY NOTE

Pursuant to Rule 429 under the Securities Act of 1933, as amended (the “Securities Act”), the prospectus (the “Prospectus”) that is part of this registration statement (the “S-3 Registration Statement”) is a combined prospectus that also is part of the registration statement on Form S-4 (the “S-4 Registration Statement”) being filed concurrently with the S-3 Registration Statement.

This S-3 Registration Statement registers the primary issuance by Fossil Group, Inc. (the “Company”) of (i) the offer and sale of, in the aggregate, up to $12,941,327 principal amount of new 9.500% First-Out First Lien Secured Senior Notes due 2029 (the “First-Out Notes”) pursuant to rights of Holders (as defined herein) to subscribe (“Subscription Rights”) to purchase First-Out Notes, and, in the aggregate, up to 379,957 shares of Common Stock, par value $0.01 (“Common Stock”) issuable on account of a Holder’s exercise of their Subscription Rights (the “New Stock Investment”) and (ii) the offer and sale of, in the aggregate, (x) up to 1,194,584 shares of Common Stock upon exercise of warrants (“Initial Public Warrants”) issuable in the Exchange Offer (as defined herein) and (y) alternatively, the offer and sale of pre-funded warrants (“Pre-Funded Public Warrants”) to purchase such shares of Common Stock upon exercise of Initial Public Warrants, and the shares of Common Stock issuable upon exercise of such Pre-Funded Public Warrants.

The S-4 Registration Statement registers the primary issuance to Holders of the Company’s 7.00% Senior Notes due 2026 (“Old Notes”) of (i) the offer and sale in the Exchange Offer and the Consent Solicitation (as defined herein) of, in the aggregate, up to $59,729,200 principal amount of First-Out Notes and up to $59,729,200 principal amount of new 7.500% Second-Out Second Lien Secured Senior Notes due 2029 (“Second-Out Notes”), (ii) the offer and sale in the Exchange Offer of Initial Public Warrants to purchase, in the aggregate, up to 1,194,584 shares of Common Stock, (iii) the offer and sale in the Exchange Offer of, in the aggregate, up to $398,195 principal amount of First-Out Notes or $398,195 principal amount of Second-Out Notes, as applicable, in the form of the Consent Premium (as defined herein) and (iv) the offer and sale of, in the aggregate, (x) up to 1,194,584 shares of Common Stock upon exercise of the Initial Public Warrants, and (y) alternatively, the offer and sale of Pre-Funded Public Warrants to purchase such shares of Common Stock upon exercise of Initial Public Warrants, and the shares of Common Stock issuable upon exercise of such Pre-Funded Public Warrants.

 

If the Company does not complete the Exchange Offer for any reason, the Company will not accept any Old Notes for exchange and will not issue any New Notes or Initial Public Warrants.

The Exchange Offer expires at 5:00 p.m. New York City time on October 7, 2025 unless extended.

 

 

Consent Solicitation

Concurrently with the Exchange Offer, the Company is soliciting each Holder, upon the terms and conditions set forth in this prospectus, to consent to the Exchange Offer Amendments (as defined herein) and the UK Proceeding Amendments (as defined herein, and together with the Exchange Offer Amendments, the “Proposed Amendments”). We refer to these solicitations collectively as the “Consent Solicitation.”

The Old Notes are governed by the Old Notes Indenture (as defined herein). By tendering Old Notes for exchange in the Exchange Offer, a Holder will be deemed to have validly (i) delivered their consent in the Consent Solicitation to the Proposed Amendments to the Old Notes Indenture, as further described under “The Proposed Amendments” and (ii) appointed the Information, Exchange and Subscription Agent as their proxy to implement a restructuring of the Company’s Old Notes on substantially the same terms as the Exchange Offer (with the exception of the Exchange Offer Amendments) through a proceeding under the UK Companies Act 2006 of England and Wales (a “UK Proceeding”), as further described under “The UK Proceeding.”

Holders who tender their Old Notes in the Exchange Offer and Supporting Holders who deliver their Old Notes in the Supporting Holders Exchange and, therefore, are deemed to have provided their consents in the Consent Solicitation to the Proposed Amendments on or prior to the Exchange Offer Expiration Time (as defined herein) will receive their pro rata portion of a Consent Premium (as defined herein). The Consent Premium will consist of an amount of New Notes aggregating $1.0 million in face amount.

For purposes of the Consent Solicitation, a Holder’s “pro rata portion” of the Consent Premium will be determined as the proportion that such Holder’s Old Notes validly tendered and not withdrawn represent of the aggregate of all Old Notes validly tendered and not withdrawn in the Exchange Offer and Old Notes delivered by the Supporting Holders in the Supporting Holders Exchange, based on the principal amount of Old Notes so tendered and not withdrawn and delivered by such Holder. New Money Participants will receive their Consent Premium in the form of First-Out Notes and Non-New Money Participants will receive their Consent Premium in the form of Second-Out Notes.

If the Company does not complete the Exchange Offer for any reason, the Company will not issue any New Notes in respect of the Consent Premium.

If we complete the Exchange Offer without using a UK Proceeding and, as a result, the Exchange Offer Amendments to the Old Notes Indenture become effective, Holders that that do not participate in the Exchange Offer will not receive New Notes and will continue to hold Old Notes governed by the relevant Old Notes Indenture as amended by the Exchange Offer Amendments. The Exchange Offer Amendments include, among other things, amendments to the Old Notes Indenture that will result in the Old Notes being subordinated in right of payment to the New Notes and the ABL Facility (as defined herein), as described under the caption “The Proposed Amendments—Exchange Offer Amendments,” to the fullest extent permitted by Section 316(b) of the Trust Indenture Act of 1939, as amended (the “TIA”), and the Old Notes Indenture.

 

 

Rights Offering

Concurrently with the Exchange Offer and Consent Solicitation, the Company is launching a Rights Offering to Holders of Old Notes, as to which the Supporting Holders have separately agreed in the Transaction Support Agreement to participate on a private placement basis. Such Holders will receive their pro rata portion of rights

to subscribe (“Subscription Rights”) to purchase First-Out Notes in the New Money Financing at a purchase price equal to 100% of the face amount of the First-Out Notes so purchased and to receive on account of such purchase one share of Common Stock for each $34.06 of First-Out Notes so purchased (the “Rights Offering”). $12,941,327 of First-Out Notes offered in the New Money Financing (as defined herein) will be offered in respect of Old Notes held by Holders (other than the Supporting Holders) pursuant to the Rights Offering, and the remaining $19,558,673 of First-Out Notes will be allocated to the Supporting Holders pursuant to the Transaction Support Agreement (as defined herein). The corresponding pro rata portion of First-Out Notes offered in the New Money Financing is subject to adjustment to the extent the Supporting Holders purchase additional Old Notes prior to the consummation of the Transactions. Any Old Notes purchased by the Supporting Holders will be exchanged for First-Out Notes in the Supporting Holders Exchange. To participate in the Rights Offering, a Holder must subscribe for and purchase their Required Subscription Amount (as defined herein). The Subscription Rights corresponding to Old Notes will trade together with, and be evidenced by, the underlying Old Notes until the applicable Expiration Time, subject to such limitations, if any, that would be applicable to the transferability of the underlying existing Old Notes. If the Company does not complete the Exchange Offer for any reason, the Company will not accept any subscription for First-Out Notes in the Rights Offering. For purposes of the Rights Offering, a Holder’s “pro rata portion” of the Subscription Rights will be the proportion that the aggregate principal amount of such Holder’s Old Notes represents of the aggregate principal amount of all Old Notes outstanding.

Prior to the registration statements of which this prospectus forms a part becoming effective, a New Money Participant may indicate their interest in exercising their Subscription Right by making a conditional offer to buy First-Out Notes pursuant to the Rights Offering, in accordance with a subscription worksheet attached as Annex A to this prospectus to be utilized in connection with participation in the Rights Offering (the “Subscription Worksheet”). However, no such conditional offer to buy may be accepted or confirmed and no amount of the purchase price thereof may be deposited until the registration statements of which this prospectus forms a part have been declared effective by the U.S. Securities and Exchange Commission (the “SEC”), and any such offer to buy may be withdrawn or revoked by a Holder, without obligation or commitment of any kind, at any time prior to its acceptance following the Exchange Offer Expiration Time or Conditional Expiration Time, as the case may be. Any Holder who intends to submit a conditional offer to buy First-Out Notes should review the procedures for making a conditional offer to buy and the acceptance thereof. See “The Rights Offering—Conditional Offers to Buy.” Similarly, the Exchange Offer and Consent Solicitation will not be consummated until after the Exchange Offer Expiration Time or Conditional Expiration Time, as the case may be, and the effectiveness of the registration statements of which this prospectus forms a part. We will provide notice of the effective date, or anticipated effective date, of the registration statements of which this prospectus forms a part, by (among other means) a press release and a Current Report on Form 8-K under the Exchange Act. The effective date will be at least three business days prior to the Exchange Offer Expiration Time or Conditional Expiration Time, as the case may be, and the acceptance of any such conditional offers to buy in the Rights Offering and tenders of Old Notes in the Exchange Offer. If the applicable Expiration Time would be later than October 30, 2025 (or December 31, 2025 if the Exchange Offer is completed by way of a UK Proceeding), we cannot complete the Transactions unless the consent of the Supporting Holders has been obtained in accordance with the Transaction Support Agreement.

You may not consent to the Proposed Amendments without tendering your Old Notes in the Exchange Offer but you may participate in the Rights Offering without tendering your Old Notes in the Exchange Offer.

 

 

In the event that (i) the Minimum Tender Condition (or any other condition to completing the Exchange Offer without a UK Proceeding) is not satisfied or waived by the Exchange Offer Expiration Time, (ii) the Company is required to proceed with the UK Proceeding pursuant to the Transaction Support Agreement, (iii) the registration statements of which this prospectus forms a part have been declared effective by the SEC and remain effective, (iv) the Exchange Offer is successfully completed by way of a UK Proceeding and (v) you have not tendered your Old Notes (or you have validly withdrawn such tender), your Old Notes will be exchanged into Second-Out Notes and you will receive your pro rata portion of Initial Public Warrants in the same amount you would have

received had you participated in the Exchange Offer pursuant to the UK Proceeding. If you have validly tendered and not validly withdrawn your Old Notes, you will receive the same consideration in the UK Proceeding as in an Exchange Offer completed without a UK Proceeding, including First-Out Notes to the extent you have participated in the Rights Offering. See “The UK Proceeding.”

If the Exchange Offer is successfully completed by way of a UK Proceeding, no Old Notes will remain outstanding.

 

 

Certain existing Holders collectively hold approximately 60% of the aggregate principal amount of the Old Notes as of the date of the launch of the Exchange Offer, the Consent Solicitation and the Rights Offering and executed a Transaction Support Agreement with the Company Parties (as defined herein). The Supporting Holders have agreed to purchase First-Out Notes in an amount equal to their respective pro rata portion of the New Money Financing, and, in the event that not all Holders participate in the Rights Offering, to purchase additional First-Out Notes in a concurrent private transaction on substantially the same terms as Holders in the Rights Offering in an amount equal to the principal amount of the First-Out Notes unpurchased in the Rights Offering. The Supporting Holders have agreed to exchange all of their respective Old Notes for new First-Out Notes in a concurrent private transaction, to consent to the Proposed Amendments and to support a UK Proceeding, in each case, in accordance with the terms set forth in the Transaction Support Agreement. See “The Transaction Support Agreement.”

Exercise of Warrants and Pre-Funded Warrants

This prospectus also relates to (i) the issuance by the Company of up to 1,194,584 shares of Common Stock issuable upon exercise of the Initial Public Warrants, (ii) up to 1,194,584 Pre-Funded Public Warrants issuable upon exercise of the Initial Public Warrants and (iii) up to 1,194,584 shares of Common Stock issuable upon exercise of the Pre-Funded Public Warrants. See “Description of the Common Stock” and “Description of the Initial Public Warrants and Pre-Funded Public Warrants.”

Our Common Stock is listed on The Nasdaq Stock Market LLC, under the symbol “FOSL. On September 8, 2025, the last reported sale prices of our Common Stock was $2.98 per share.

Summary Transactions Information

Transactions Information

The table below provides in summary form a brief description of the principal aspects of the Exchange Offer, the Consent Solicitation and the Rights Offering (collectively, the “Transactions”), along with the consideration ultimately deliverable to Holders who successfully participate therein as well as the relevant participation deadline. The table is provided for your convenience, and does not describe the requirements for participation, conditions or other features of each such aspect of each Transaction. Before making any decision to participate or not in the Transactions, or the extent of such participation, you should refer to the more detailed discussions of each such aspect under the captions “The Exchange Offer and Consent Solicitation,” “The Rights Offering,” the “Transaction Support Agreement,” and the “Proposed Amendments.”

 

Offering		Offering Description		Consideration		Deadline to Participate
Exchange Offer		Exchange of Old Notes for:   •  First-Out Notes or   •  Second-Out Notes		New Money Participants will receive:   •  First-Out Notes and   •  Initial Public Warrants   Non-New Money Participants will receive:   •  Second-Out Notes and   •  Initial Public Warrants   Holders who agree to tender their Old Notes in the Exchange Offer will be deemed to have validly given their consent to the Proposed Amendments in the Consent Solicitation and to have provided a proxy with respect to the UK Proceeding		Exchange Offer Expiration Time in the event the restructuring of the Old Notes is not implemented through a UK Proceeding or the Conditional Expiration Time in the event that the restructuring of the Old Notes is implemented through a UK Proceeding
Rights Offering		Subscription Rights to:   •  Purchase new First-Out Notes		Holders in the Rights Offering will receive:   •  First-Out Notes and   •  Common Stock   Only Holders who purchase the Required Subscription Amount may participate in the Rights Offering. Holders who exercise their Subscription Rights are New Money Participants eligible to receive First-Out Notes in the Exchange Offer		Exchange Offer Expiration Time in the event the restructuring of the Old Notes is not implemented through a UK Proceeding or the Conditional Expiration Time in the event that the restructuring of the Old Notes is implemented through a UK Proceeding
Consent Solicitation		Consent to the Proposed Amendments		New Money Participants will receive:   •  Consent Premium payable in First-Out Notes   Non-New Money Participants will receive:   •  Consent Premium payable in Second-Out Notes   Only Holders who also tender their Old Notes in the Exchange Offer as noted above will receive the Consent Premium		Exchange Offer Expiration Time

Exchange Offer and Rights Offering Information

The table below provides important information in summary form for New Money Participants and Non-New Money Participants in connection with their participation in the Exchange Offer and the Rights Offering. However, the below table is in summary form only and Holders should reference “The Exchange Offer” and “The Rights Offering” in this prospectus for additional information.

 

Offer to Exchange for Holders of Old Notes (7.00% Senior Notes due 2026, CUSIP 34988V304)		Exchange Consideration1 2		Important Information Regarding New Money Participation
Exchange consideration for New Money Participants per ONE tendered Old Note (with a face value of $25.00 each)		25 First-Out Notes with a face value of $1.00 each and pro rata portion of Initial Public Warrants (or Private Warrants in the case of Supporting Holders)		•  Holders (other than the Supporting Holders) will be automatically charged by DTC on the Subscription Payment Deadline (as defined herein) for their subscribed First-Out Notes, in accordance with the Subscription Worksheet. There is no separate charge for the shares of Common Stock allocated to New Money Participants.   •  Supporting Holders must deliver funding at a later date in accordance with the Backstop Commitment and will have two options for receiving their exchange consideration. Supporting Holders may:   •  receive through ATOP their exchange consideration (other than the Private Warrants) and related additional First-Out Notes (with no designation); or   •  designate one or more affiliates to receive such exchange consideration in accordance with the completed Designation Form and related Designation Spreadsheet (to be delivered directly to Supporting Holders by the Exchange Agent for this purpose).   Supporting Holders must provide their unique Supporting Holder Code (to be provided by the Exchange Agent to the Supporting Holders) to their DTC Participant in order to select one of the two options reserved for Supporting Holders.   •  Holders purchasing First-Out Notes in the Rights Offering for the Required Subscription Amount will receive on account of such purchase one share of Common Stock for each $34.06 of First-Out Notes so purchased.
Exchange consideration for Non-New Money Participants per ONE Old Note tendered (with a face value of $25.00 each)		25 Second-Out Notes with a face value of $1.00 each and pro rata portion of Initial Public Warrants		•  Not applicable for Non-New Money Participants, who are only exchanging their Old Notes.
Exchange consideration for New Money Participants who are NOT exchanging but are participating in the Rights Offering		Not applicable; no exchange. Holders will continue to hold their Old Notes, with terms as amended (see “The Proposed Amendments”)		•  Holders will be automatically charged by DTC on the Subscription Payment Deadline for their subscribed First-Out Notes, in accordance with the Subscription Worksheet. There is no separate charge for the shares of Common Stock allocated to New Money Participants.   •  Holders purchasing First-Out Notes in the Rights Offering for the Required Subscription Amount will receive on account of such purchase one share of Common Stock for each $34.06 of First-Out Notes so purchased.

(1)

Holders who validly exchange their Old Notes will receive accrued and unpaid interest in cash on the Old Notes accepted for exchange, from the applicable last interest payment date to, but not including, the Settlement Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

(2)	Holders who validly tender their Old Notes in the Exchange Offer will also receive the Consent Premium, in the form of additional First-Out Notes for New Money Participants or additional Second-Out Notes for Non-New Money Participants.

 

Subject to applicable law, the Exchange Offer, the Consent Solicitation, the Rights Offering and the UK Proceeding are each being made independently of each other, and the Company reserves the right to terminate, withdraw or amend each of the Exchange Offer, the Consent Solicitation, the Rights Offering and the UK Proceeding independently of each other at any time and from time to time, as described in this prospectus.

See “Risk Factors” beginning on page 37 of this prospectus and in the documents we have incorporated by reference herein for a discussion of the factors you should consider in connection with the Transactions and New Notes.

The consummation of the Transactions is subject to, and conditional upon, the satisfaction or, where permitted, the waiver, of the conditions discussed under “The Exchange Offer and Consent Solicitation—Conditions to the Exchange Offer” and “The UK Proceeding—General” including, among other things, the Minimum Tender Condition (in the event the restructuring of the Old Notes is not implemented through a UK Proceeding) being met, the Transaction Support Agreement, including the Backstop Commitment (as defined herein) agreed thereunder, remaining in full force and effect (see “The Transaction Support Agreement”) and the registration statements of which this prospectus forms a part having been declared effective and remaining effective on the Settlement Date. The Company may, in compliance with the Transaction Support Agreement and with consent from the Supporting Holders, waive any such conditions at or prior to the applicable Expiration Time, except the condition that the registration statements of which this prospectus forms a part have been declared effective by the SEC and remains effective on the Settlement Date.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

None of the Company, the applicable New Trustee (as defined herein), the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee (as defined herein) or any director, officer, employee, agent or affiliate of any such person has expressed any opinion as to whether the terms of the Transactions are fair. In addition, none of the clearing systems has expressed any opinion as to whether the terms of the Transactions are fair. None of the Company, the applicable New Trustee, the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee or any director, officer, employee, agent or affiliate of any such person makes any recommendation that Holders participate in the Transactions or refrain from doing so, and no one has been authorized by Company, the applicable New Trustee, the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee or any director, officer, employee, agent or affiliate of any such person to make any such recommendation. Holders must make their own decision as to whether to participate in the Transactions or refrain from doing so.

 

 

The Dealer Manager for the Transactions is:

 

 

The date of this prospectus is    , 2025.

Dear Holder,

You may have heard that Fossil Group, Inc. (the “Company”) is undertaking an important restructuring of its 7% Senior Notes Due 2026, which we are calling the “Old Notes” in this document. The attached prospectus explains the restructuring in full detail. (Any capitalized terms that are not otherwise defined in this letter are defined in the attached prospectus.)

Certain institutional holders—called Supporting Holders—have already agreed to participate in the restructuring by exchanging their Old Notes and participating in a “New Money” Rights Offering, which will raise additional funds for the Company. This means they have agreed to exchange their Old Notes for new notes—referred to as “First-Out Notes”— and pay for additional First-Out Notes as part of the related Rights Offering. They have separately agreed to purchase any First-Out Notes that are not purchased by other holders in the Rights Offering.

All other holders also have the right to participate in this important restructuring transaction by selecting one of the exchange options described below. The Company needs a minimum of 90% of the Old Notes to be tendered for exchange to consummate the Exchange Offer. If the 90% participation level for the Exchange Offer is not reached (or waived), the Company will undertake the UK Proceeding instead of the Exchange Offer, as outlined in the attached prospectus. The UK Proceeding will include the same two exchange options listed below. Additionally, if the UK Proceeding is approved by the Court, any non-exchanging holder would automatically have their Old Notes exchanged for Second-Out Notes. The UK Proceeding would take additional time and expense for the Company, and the Company’s goal is that enough holders of Old Notes participate in the Exchange Offer so that a UK Proceeding is not needed.

The options are as follows:

 

•

Exchange and New Money. Exchange your Old Notes for First-Out Notes on a one-for-one basis in value and also participate in the “New Money” Rights Offering by paying for the additional First-Out Notes being subscribed for.

 

•

Exchange Only. Exchange your Old Notes for Second-Out Notes on a one-for-one basis in value but do not participate in the “New Money” Rights Offering. There is no payment due for this option.

 

•

New Money Only. Participate in the “New Money” Rights Offering without exchanging your Old Notes in the Exchange Offer, by paying for the First-Out Notes being subscribed for.

In addition to the exchange of Old Notes for New Notes, the first two options shown above include (a) a Consent Premium in the form of additional New Notes of the same type received in the Exchange Offer, (b) Initial Public Warrants to purchase either Common Stock or Pre-Funded Public Warrants to purchase Common Stock, (c) the automatic consent to certain proposed amendments in the Consent Solicitation and (d) providing an automatic proxy to vote to accept the UK Proceeding in the event the Exchange Offer is not successful.

Subscribing holders who participate in either of the New Money options will also automatically receive shares of Common Stock, as described in the Subscription Worksheet. Any subscription payments required in the New Money options will be automatically taken from your account following the Exchange Offer Expiration Time or Conditional Expiration Time, as applicable.

 

Q:	How do I participate in one of the options outlined above?

A:

You must provide your instruction to the bank, broker or other nominee holding your Old Notes. The Exchange Offer Expiration Time is 5:00pm New York City time on October 7, 2025, and you should give your instructions to your bank, broker or other nominee holding your Old Notes in sufficient time for them to act on your behalf by the Exchange Offer Expiration Time. They will likely need your instructions well in advance of the deadline. Please follow their directions about how and when to relay your instructions to them.

In order to participate in any of the options outlined above, you must cause your bank, broker or other nominee to electronically deliver your Old Notes into the appropriate DTC ATOP event on or before the applicable Expiration Time, as outlined in the attached prospectus. If you wish to participate in the “New Money” Rights Offering, please complete the Subscription Worksheet attached to the prospectus as Annex A so you will know the cost for your new money subscription. All Old Notes that have been delivered through DTC’s ATOP will be restricted from further trading or transfer until the consummation of the Transactions or the withdraw of your instructions relating thereto, as outlined in the attached prospectus.

 

Q:	What will happen to my Old Notes if I do not participate in the Exchange Offer?

A:

You will continue to hold your Old Notes unless the Company completes the UK Proceeding, as described above, in which case your Old Notes will be exchanged for Second-Out Notes. However, after giving effect to the Proposed Amendments, your Old Notes will be subordinated obligations of the Company, and you will no longer benefit from certain existing protections under the Old Notes Indenture.

The Company also intends to apply for the delisting of the Old Notes, with no plans to list them on another exchange. It may become more difficult for you to sell or transfer your unexchanged Old Notes.

The transaction is complex and many financial and other disclosures are required to be provided by the Company, and these are included in the attached prospectus. None of the Company, the Dealer Manager or the Information, Exchange and Subscription Agent makes any recommendation that you participate in the transaction or refrain from doing so. You must make your own decision as to whether to participate in the transaction or refrain from doing so.

If you or your broker or other advisor would like to discuss anything further, the Dealer Manager’s team at Cantor Fitzgerald & Co. will be happy to assist.

 

Any questions regarding the terms of the Transactions may be directed to the Dealer Manager via email at Ian.Brostowski@cantor.com (with the subject line to include “Fossil”) or phone at +1 (212) 829-7145; Attention: Tom Pernetti and Ian Brostowski.

The Information, Exchange and Subscription Agent is Epiq Corporate Restructuring, LLC. Questions and requests for assistance or for additional copies of the prospectus may be directed to the Information, Exchange and Subscription Agent at its email address at: Registration@epiqglobal.com (with the subject line to include “Fossil”) or via phone at +1 (646) 362-6336.

Sincerely,

FOSSIL GROUP, INC.

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS			ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			vii
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE			ix
PRESENTATION OF FINANCIAL AND OTHER INFORMATION			x
IMPORTANT TIMES AND DATES			xi
SUMMARY			1
RISK FACTORS			37
SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION			65
THE EXCHANGE OFFER AND CONSENT SOLICITATION			66
THE RIGHTS OFFERING			79
THE TRANSACTION SUPPORT AGREEMENT			84
THE PROPOSED AMENDMENTS			87
THE UK PROCEEDING			93
THE INFORMATION, EXCHANGE AND SUBSCRIPTION AGENT; DEALER MANGER			98
USE OF PROCEEDS			99
CAPITALIZATION			100
DESCRIPTION OF THE FIRST-OUT NOTES			101
DESCRIPTION OF THE SECOND-OUT NOTES			184
DESCRIPTION OF THE COMMON STOCK			248
DESCRIPTION OF THE INITIAL PUBLIC WARRANTS AND PRE-FUNDED PUBLIC WARRANTS			251
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS			254
LIMITATIONS ON VALIDITY AND ENFORCEABILITY OF THE GUARANTEES AND THE SECURITY INTERESTS AND CERTAIN INSOLVENCY CONSIDERATIONS			255
ENFORCEABILITY OF CIVIL LIABILITIES			293
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			297
PLAN OF DISTRIBUTION			316
NOTICES TO CERTAIN NON-U.S. HOLDERS			318
LEGAL MATTERS			321
EXPERTS			321

 

i

ABOUT THIS PROSPECTUS

No person is authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus. We and our subsidiaries and the dealer manager take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is not an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction where any such offer or solicitation is unlawful. The delivery of this prospectus will not, under any circumstances, create any implication that there has been no change in our and our subsidiaries’ affairs since the date of this prospectus or that the information contained or incorporated by reference herein is correct as of any time subsequent to the date of such information. Our and our subsidiaries’ business, financial condition, results of operations and prospects may have changed since those dates.

This prospectus is part of a registration statement on Form S-3 that we have filed with the SEC. We have concurrently filed with the SEC a registration statement on Form S-4 of which this prospectus forms a part. Prior to making any decision with respect to the Transactions, you should read this prospectus and any prospectus supplement, together with the documents incorporated by reference herein and therein, the registration statement, the exhibits thereto and the additional information described under the heading “Where You Can Find More Information; Incorporation By Reference.”

References in this prospectus to “$” and “dollars” are to the currency of the United States.

To ensure timely delivery of Old Notes prior to the Exchange Offer Expiration Time, follow the directions of your broker, dealer, commercial bank, trust company or other institution with respect to the delivery of your instructions.

 

ii

TERMS USED IN THIS PROSPECTUS

The terms used in this prospectus shall have the meanings ascribed to them below, unless the context requires otherwise:

 

•

“Backstop Commitment” means the commitment of the Backstop Providers to purchase up to the full amount of the New Money Financing, reduced, pro rata by the amount of First-Out Notes subscribed for and purchased in the Rights Offering by Holders other than the Supporting Holders in the Rights Offering.

 

•

“Backstop Premium” has such meaning as set forth in the Transaction Support Agreement.

 

•

“Backstop Providers” means the Supporting Holders party to the Transaction Support Agreement.

 

•

“Common Stock” means the Company’s common stock, par value $0.01 per share.

 

•

“Companies Act 2006” means the UK Companies Act 2006 of England and Wales.

 

•

“Consent Premium” means the premium to be paid to Holders (including the Supporting Holders acting pursuant to the terms of the Transaction Support Agreement) that tender their Old Notes for exchange and (i) consent to the Proposed Amendments and (ii) appoint the Information, Exchange and Subscription Agent as their proxy for the UK Proceeding in the Consent Solicitation, in an amount aggregating $1.0 million in face amount of New Notes. For purposes of the Consent Solicitation, a Holder’s “pro rata portion” of the Consent Premium will be determined as the proportion that such Holder’s Old Notes validly tendered and not withdrawn represent of the aggregate of all Old Notes validly tendered and not withdrawn in the Exchange Offer and Old Notes delivered by the Supporting Holders in the Supporting Holders Exchange, based on the principal amount of Old Notes so tendered and not withdrawn and delivered by such Holder. New Money Participants will receive their Consent Premium in the form of First-Out Notes and Non-New Money Participants will receive their Consent Premium in the form of Second-Out Notes.

 

•

“Consent Solicitation” means the Company’s solicitation from each Holder to consent to the Proposed Amendments, as described under “The Exchange Offer and Consent Solicitation—The Consent Solicitation.”

 

•

“Convening Hearing” means the initial hearing in the English court in relation to the Restructuring Plan where the Plan Company will seek approval to convene the Plan Meeting.

 

•

“Deed of Contribution” means the Company’s entry into a deed of contribution with the Plan Company pursuant to which the Company (as issuer of the Old Notes) will have a right of contribution against the Plan Company in respect of the Company’s liabilities under the Old Notes.

 

•

“Exchange Offer” means the registered offering by the Company to exchange any and all of the Company’s Old Notes for (i) in the case of a New Money Participant, (A) First-Out Notes and (B) such New Money Participant’s pro rata portion of the Initial Public Warrants; and (ii) in the case of a Non-New Money Participant, (A) Second-Out Notes and (B) such Non-New Money Participant’s pro rata portion of the Initial Public Warrants, which may be completed by way of a UK Proceeding described herein. For purposes of the Exchange Offer, a Holder’s “pro rata portion” of the Initial Public Warrants will be determined as the proportion that such Holder’s Old Notes validly tendered and not withdrawn represent of the aggregate of all Old Notes validly tendered and not withdrawn in the Exchange Offer and Old Notes delivered by the Supporting Holders for exchange in the Supporting Holders Exchange, based on the principal amount of Old Notes so tendered and not withdrawn and delivered by such Holder or, in the case of a UK Proceeding, based on the total Old Notes outstanding.

 

•

“Exchange Offer Amendments” means proposed amendments to the Old Notes Indenture to: (A) to remove or modify certain covenants and events of default under the Old Notes Indenture that can be removed with the consent of Holders representing a majority of the aggregate principal amount outstanding of the Old Notes and (B) subordinate the Old Notes in right of payment to the New Notes

 

iii

and ABL Facility to the fullest extent permitted by Section 316(b) of the TIA and the Old Notes Indenture, in each case as described under “The Proposed Amendments—Exchange Offer Amendments.” The Exchange Offer Amendments will not go into effect unless (i) the Minimum Tender Condition (and any other condition to completing the Exchange Offer without a UK Proceeding) has been satisfied or waived, (ii) the Transaction Support Agreement, including the Backstop Commitment agreed thereunder, remains in full force and effect (see “The Transaction Support Agreement”) and (iii) the registration statements of which this prospectus forms a part are effective and will not become operative until the Settlement Date for an Exchange Offer completed without a UK Proceeding.

 

•

“Explanatory Statement” means the explanatory statement required to be provided pursuant to section 901D of the Companies Act 2006 which will include, among other things, further detailed information in relation to the Restructuring Plan in substance similar to that contained in this prospectus.

 

•

“First-Out Notes” means the Company’s new 9.500% First-Out First Lien Secured Senior Notes due 2029.

 

•

“First-Out Notes Collateral Agent” means Wilmington Trust, National Association, as the collateral agent of the First-Out Notes.

 

•

“First-Out Notes Trustee” means Wilmington Trust, National Association, as trustee of the First-Out Notes.

 

•

“First Supplemental Indenture” means the first supplemental indenture to the Old Notes Base Indenture dated November 8, 2021, between the Company and The Bank of New York Mellon Trust Company, N.A.

 

•

“Foreign Guarantors” means Fossil Canada Inc., Fossil (Europe) GmbH, Fossil (UK) Limited and Fossil (UK) Holdings Limited, all wholly owned subsidiaries of the Company and guarantors of the New Notes, and certain other future subsidiaries of the Company as required pursuant to the applicable indenture.

 

•

“Fossil,” “the Company,” “we,” “our” and “us,” or like terms, means Fossil Group, Inc. and not to any of its subsidiaries, unless otherwise stated or the context so requires.

 

•

“Guarantor Accession” means the accession of the Plan Company as guarantor in respect of the Company’s liabilities under the Old Notes pursuant to the Second Supplemental Indenture.

 

•

“Guarantors” means Fossil Canada Inc., Fossil (Europe) GmbH, Fossil Global Holdings, Inc., Fossil Intermediate, Inc., Fossil Partners, L.P., Fossil Stores I, Inc., Fossil Trust, Fossil (UK) Limited and Fossil (UK) Holdings Limited, all wholly owned subsidiaries of the Company and guarantors of the New Notes, and certain other future subsidiaries of the Company as required pursuant to the applicable indenture.

 

•

“Holder” means a holder of Old Notes.

 

•

“Initial Public Warrants” means warrants having such terms and conditions as are described under “Description of the Initial Public Warrants and Pre-Funded Public Warrants—Initial Public Warrants” to purchase (i) shares of Common Stock or, (ii) if a Holder elects, Pre-Funded Public Warrants to purchase Common Stock, pro rata, issued on the Settlement Date to all Holders (other than the Supporting Holders) that exchange their Old Notes. For purposes of the Exchange Offer, a Holder’s “pro rata portion” of the Initial Public Warrants will be determined as the proportion the aggregate principal amount of such Holder’s Old Notes validly tendered and not withdrawn represent of the aggregate of all Old Notes validly tendered and not withdrawn in the Exchange Offer and Old Notes delivered by the Supporting Holders in the Supporting Holders Exchange, or, in the case of a UK Proceeding, based on the total Old Notes outstanding.

 

•

“Minimum Tender Condition” means the valid tender (without valid withdrawal) (or delivery for exchange) of at least 90% in aggregate principal amount of the Old Notes delivered by Holders (including the Supporting Holders) in the Exchange Offer or pursuant to the Transaction Support

 

iv

Agreement at or by the Exchange Offer Expiration Time, in each case as described under “The Exchange Offer and Consent Solicitation—Conditions to the Exchange Offer, If We Do Not Proceed with a UK Proceeding” and “The Transaction Support Agreement.”

 

•

“New Money Financing” means a new money financing whereby the Company will offer and sell an aggregate of $32.5 million in face amount of First-Out Notes to Holders (including the Supporting Holders).

 

•

“New Money Participants” means Holders (including the Supporting Holders) that purchase First-Out Notes in the New Money Financing.

 

•

“New Notes” means, collectively, to the First-Out Notes and Second-Out Notes.

 

•

“New Stock Investment” means for Holders who purchase First-Out Notes in the New Money Financing, the receipt, on account of such purchase, of one share of Common Stock for each $34.06 of First-Out Notes so purchased.

 

•

“New Trustee” means the First-Out Notes Trustee or the Second-Out Notes Trustee, as applicable.

 

•

“Non-New Money Participants” means Holders that do not purchase any First-Out Notes in the New Money Financing.

 

•

“Notes Collateral Agent” means the First-Out Notes Collateral Agent or the Second-Out Notes Collateral Agent, as applicable.

 

•

“Old Notes” means the Company’s 7.00% Senior Notes due 2026.

 

•

“Old Notes Base Indenture” means the indenture dated November 8, 2021 between the Company and The Bank of New York Mellon Trust Company, N.A.

 

•

“Old Notes Indenture” means, collectively, to the Old Notes Base Indenture, the First Supplemental Indenture, the supplemental indentures, as the case may be, implementing, including by the Second Supplemental Indenture, the Exchange Offer Amendments and the UK Proceeding Amendments, as the same may be further amended.

 

•

“Old Notes Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee of the Old Notes.

 

•

“Plan Company” means Fossil (UK) Global Services Ltd., a company formed under the laws of England and Wales.

 

•

“Plan Effective Date” means the date on which an office copy of the order of the English court sanctioning the Restructuring Plan under section 901F or 901G (as applicable) of the Companies Act 2006 of England and Wales is delivered to the Registrar of Companies.

 

•

“Plan Meeting” means the meeting of the Plan Creditors to vote on this Restructuring Plan convened pursuant to an order of the English court (and any adjournment of such meeting).

 

•

“Private Warrants” means the warrants to purchase Common Stock or pre-funded warrants issuable pursuant to the Transaction Support Agreement to the Supporting Holders in the Supporting Holders Exchange.

 

•

“Proposed Amendments” means the Exchange Offer Amendments and the UK Proceeding Amendments.

 

•

“Required Subscription Amount” means the amount of First-Out Notes a Holder must subscribe for and purchase to participate in the Rights Offering, which is equal to their pro rata portion of the New Money Financing, such pro rata portion determined based upon the aggregate principal amount of Old Notes held by such Holder in comparison to the total aggregate principal amount of Old Notes outstanding.

 

 

v

•

“Requisite Consent Condition” means the receipt of consents (without valid withdrawal) of the majority in aggregate principal amount of the Old Notes held by Holders delivered under the Consent Solicitation or Transaction Support Agreement at or by the Exchange Offer Expiration Time, in each case as described under “The Exchange Offer and Consent Solicitation—The Consent Solicitation” and “The Transaction Support Agreement.”

 

•

“Restructuring Plan” means an English law restructuring plan pursuant to Part 26A of the Companies Act 2006.

 

•

“Rights Offering” means the offer of Subscription Rights to Holders to purchase First-Out Notes pursuant to this prospectus.

 

•

“Sanction Hearing” means the second and final hearing in the English court to sanction the Restructuring Plan.

 

•

“Second-Out Notes” means the Company’s new 7.500% Second-Out Second Lien Secured Senior Notes due 2029.

 

•

“Second-Out Notes Collateral Agent” means Wilmington Trust, National Association, as the collateral agent of the Second-Out Notes.

 

•

“Second-Out Notes Trustee” means Wilmington Trust, National Association, as trustee of the Second-Out Notes.

 

•

“Second Supplemental Indenture” means a second supplemental indenture to be entered into among the Company, the Plan Company and The Bank of New York Mellon Trust Company, N.A, to add the Plan Company as a guarantor to the Old Notes prior to the Exchange Offer Expiration Time.

 

•

“Subscription Payment Deadline” means on or about the date that is one business day after the Exchange Offer Expiration Time or on or about the date that is one business day after the Conditional Expiration Time, as applicable.

 

•

“Subscription Rights” means a right to subscribe to purchase First-Out Notes offered pursuant to this prospectus.

 

•

“Supporting Holders Exchange” means the exchange of Old Notes pursuant to the Transaction Support Agreement, in which the Supporting Holders will exchange (on a private placement basis) their Old Notes for First-Out Notes at 100% of the face amount of Old Notes plus accrued and unpaid interest and their respective portion of Private Warrants, which shall be effectuated through the submission of such Supporting Holder’s Old Notes into one of the options available to the Supporting Holders.

 

•

“Supporting Holders” means the Holders party to the Transaction Support Agreement.

 

•

“Transaction Support Agreement” means the transaction support agreement, dated as of August 13, 2025, by and among, the Company, the Plan Company, and certain direct and indirect subsidiaries of the Company identified therein and the Supporting Holders.

 

•

“Transactions” means the Exchange Offer, the Consent Solicitation and the Rights Offering.

 

•

“UK Proceeding Amendments” means proposed amendments to the Old Notes Indenture to: (i) change the governing law of the Old Notes and Old Notes Indenture to the laws of England and Wales, and (ii) delete the covenant described under Section 4.03 (Exchange Listing) of the First Supplemental Indenture, in each case as described under “The Proposed Amendments—UK Proceeding Amendments.”

 

•

“UK Proceeding Threshold” means the approval required to be able to implement a restructuring plan pursuant to Part 26A of the Companies Act 2006 of England and Wales as described under “The UK Proceeding.”

 

•

“UK Proceeding” means the implementation of a restructuring of the Company’s Old Notes on substantially the same terms as the Exchange Offer (with the exception of the Exchange Offer Amendments) through a proceeding under the Companies Act 2006.

 

vi

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this prospectus or in our other documents that are incorporated by reference herein that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements can be identified by words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “aim” “seek,” “believe,” “continue,” “will,” “may,” “would,” “could” or “should” or other words of similar meaning. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to:

 

•

risks related to the success of our restructuring and turnaround plans;

 

•

risks related to strengthening our balance sheet and liquidity and improving working capital;

 

•

risks related to our planned non-core asset sales;

 

•

increased political uncertainty;

 

•

the effect of worldwide economic conditions, including recessionary risks;

 

•

the effect of pandemics;

 

•

the impact of any activist shareholders;

 

•

the failure to meet the continued listing requirements of NASDAQ;

 

•

significant changes in consumer spending patterns or preferences and lower levels of consumer spending resulting from inflation, a general economic downturn or generally reduced shopping activity caused by public safety or consumer confidence concerns;

 

•

interruptions or delays in the supply of key components or products;

 

•

acts of war or acts of terrorism;

 

•

loss of key facilities;

 

•

a data security or privacy breach or information systems disruptions;

 

•

changes in foreign currency valuations in relation to the U.S. dollar;

 

•

the performance of our products within the prevailing retail environment;

 

•

customer acceptance of both new designs and newly-introduced product lines;

 

•

changes in the mix of product sales;

 

•

the effects of vigorous competition in the markets in which we operate;

 

•

compliance with debt covenants and other contractual provisions and our ability to meet debt service obligations;

 

•

risks related to the success of our business strategy;

 

•

the termination or non-renewal of material licenses;

 

•

risks related to foreign operations and manufacturing;

 

•

changes in the costs of materials and labor;

 

•

government regulation and tariffs;

 

•

our ability to secure and protect trademarks and other intellectual property rights;

 

•

levels of traffic to and management of our retail stores;

 

 

vii

•

if the Transactions are not consummated, the potential delays and significant costs of alternative transactions, which may not be available to us on acceptable terms, or at all, which in turn may impact our ability to continue as a going concern;

 

•

the significant costs incurred by us in connection with the Transactions;

 

•

our inability to comply with the restrictive debt covenants contained in the New Notes; and

 

•

loss of key personnel or failure to attract and retain key employees and the outcome of current and possible future litigation.

See “Risk Factors” contained elsewhere in, and incorporated by reference into, this prospectus or any applicable prospectus supplement from our filings with the SEC, including in our Annual Report on Form 10-K, as amended, for the fiscal year ended December 28, 2024, our Quarterly Reports on Form 10-Q for the quarterly periods ended April 5, 2025, and July 5, 2025, and subsequent filings with the SEC, as incorporated by reference into this prospectus.

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are incorporated by reference herein. Any forward-looking statement speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

 

viii

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read these SEC filings, and this registration statement, over the Internet at the SEC’s website at www.sec.gov.

In addition to this registration statement on Form S-3 of which this prospectus forms a part, the Company has concurrently filed with the SEC a registration statement on Form S-4 of which this prospectus forms a part.

The registration statements of which this prospectus forms a part, including the attached exhibits and annexes, contain additional relevant information about the Company. The rules and regulations of the SEC allow the Company to omit certain information included in the registration statements from this prospectus.

We are incorporating by reference into this prospectus certain information that we have filed with the SEC, which means that we are disclosing important information to you by referring you to documents we have filed separately with the SEC. The documents incorporated by reference are considered part of this prospectus. This prospectus incorporates by reference the following (excluding any portions of such documents that have been “furnished” but not “filed” for purposes of the Exchange Act):

 

•

our Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 28, 2024, filed with the SEC on March 12, 2025 and April 28, 2025, respectively;

 

•

our Quarterly Reports on Form 10-Q for the quarterly periods ended April 5, 2025 and July 5, 2025, filed with the SEC on May 15, 2025 and August 14, 2025, respectively;

 

•

our Current Reports on Form 8-K, filed with the SEC on January 13, 2025, March  12, 2025, May  16, 2025, August  13, 2025 and August 14, 2025; and

 

•

the description of our Common Stock contained in Exhibit 4.1 of our Annual Report, and any amendment or report filed for the purpose of updating such description.

In addition, we incorporate by reference any filings made with the SEC in accordance with Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and before the date all of the securities offered hereby are sold or the offering is otherwise terminated (excluding any portions of such filings that have been “furnished” but not “filed” for purposes of the Exchange Act). Any such filings shall be deemed to be incorporated by reference and to be a part of this prospectus from the respective dates of filing of those documents. Any statement contained in a document or report incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document or report that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

We will provide, upon written or oral request, to each person to whom a prospectus is delivered, a copy of these filings (other than exhibits to such documents unless such exhibits are specifically incorporated by reference in any such documents) at no cost. We can be contacted at the address and phone number indicated below:

Fossil Group, Inc.

901 S. Central Expressway

Richardson, Texas 75080

Attention: Investor Relations

Tel: (972) 234-2525

Our SEC filings are also available to the public on the SEC’s internet website at http://www.sec.gov. Our incorporated reports and other documents may also be accessed at our website address: www.fossilgroup.com/investors/. The information contained on our website does not constitute a part of this prospectus, and our website address supplied above is intended to be an inactive textual reference only and not an active hyperlink to our website.

 

ix

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Trademarks, Service Marks, Trade Names and Copyrights

We use our FOSSIL, MICHELE, RELIC, SKAGEN and ZODIAC trademarks, as well as other trademarks, on certain watches and smartwatches, our FOSSIL and SKAGEN trademarks on jewelry, and our FOSSIL trademark on leather goods and other fashion accessories in the U.S. and in a significant number of foreign countries. We also use FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL and WSI as trademarks on retail stores and FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL, WSI, MISFIT, ZODIAC and MICHELE as trademarks on online e-commerce sites. This prospectus and the information incorporated by reference herein may also contain other trademarks, service marks, trade names and copyrights of ours or of other companies with whom we have, for example, licensing agreements to produce, market and distribute products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to or incorporated by reference into this prospectus may be listed without the TM, SM, ^© and ^® symbols, as applicable, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors, if any, to these trademarks, service marks, trade names and copyrights.

Basis of Presentation

We operate on a 52- or 53-week fiscal year. Each quarterly period has 13 weeks, except in a 53-week year when the first quarter has 14 weeks. The fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 consisted of 52 weeks.

Use of Non-GAAP Financial Measure

We refer to the term Adjusted EBITDA in this prospectus. This is a supplemental financial measure that is not required by, or prepared in accordance with, generally accepted accounting principles in the United States (“GAAP”). Any analysis of the non-GAAP financial measure should be used only in conjunction with results presented in accordance with GAAP.

Our presentation of the non-GAAP financial measure may not be comparable to similarly titled measures presented by other companies, and may not be comparable to similarly titled measures used in our various agreements.

For a presentation of income (loss) before income taxes as calculated under GAAP and a reconciliation to our Adjusted EBITDA, see “Summary—Summary Historical Financial Data” in this prospectus.

 

x

IMPORTANT TIMES AND DATES

The following summary of key dates is qualified in its entirety by the more detailed information appearing elsewhere in this prospectus. The below times and dates are subject to the right of the Company, in accordance with the Transaction Support Agreement, to extend, re-open, amend and/or terminate the Transactions (subject to applicable law, the Transaction Support Agreement, the Old Notes Indenture and as provided for in this prospectus). The Exchange Offer, the Consent Solicitation and the Rights Offering as described herein are conditioned upon the effectiveness of the registration statements of which this prospectus forms a part and no tenders may be accepted in the Exchange Offer and no conditional offers to subscribe for and purchase First-Out Notes in the Rights Offering may be accepted or confirmed (and no amount of the cash purchase price thereof may be deposited) until the registration statements of which this prospectus forms a part have been declared effective by the SEC.

In the event that the Minimum Tender Condition or any other condition to completing the Exchange Offer without a UK Proceeding has not been satisfied or waived as of the Exchange Offer Expiration Time, the Plan Company will issue a letter to all Holders notifying them of the Plan Company’s intention to formally propose the Restructuring Plan in the UK Proceeding. For further information regarding key dates related to the UK Proceeding, see “The UK Proceeding—Anticipated Process and Timeline.”

 

Event		Calendar Date and Time		Description
Commencement of the Exchange Offer, the Consent Solicitation and the Rights Offering		September 9, 2025		Launch of the Exchange Offer, the Consent Solicitation and the Rights Offering.
Exchange Offer Expiration Time		5:00pm New York City time on October 7, 2025; provided that in the event the registration statements of which this prospectus forms a part have not been declared effective by October 2, 2025 the Exchange Offer Expiration Time shall be extended to a time that is at least three business days after such declaration of effectiveness.		In the event that the Minimum Tender Condition (and other conditions to completing the Exchange Offer without a UK Proceeding) have been satisfied or waived and the Transaction Support Agreement, including the Backstop Commitment agreed thereunder, remains in full force and effect (see “The Transaction Support Agreement”), then the Exchange Offer Expiration Time will be:   The deadline for Holders to validly tender their Old Notes in the Exchange Offer in order to receive the corresponding exchange consideration based on whether they are a New Money Participant or a Non-New Money Participant, as applicable, and the Consent Premium.   The deadline for Holders who wish to participate in the Rights Offering to validly complete their subscription for the Required Subscription Amount in order to receive First-Out Notes and

 

xi

Event		Calendar Date and Time		Description
				Common Stock in the Rights Offering.   Under certain circumstances, the Exchange Offer Expiration Time may be extended, provided that that the Settlement Date shall not be later than October 30, 2025 unless otherwise agreed to by the Supporting Holders.   In the event that the Minimum Tender Condition (or any other condition to completing the Exchange Offer without a UK Proceeding) is not satisfied or waived by such date and the Company is required, pursuant to the Transaction Support Agreement, to proceed with the UK Proceeding, the Company will, subject to the terms of the Transaction Support Agreement, commence a UK Proceeding and seek to implement the restructuring of the Company’s Old Notes on substantially the same terms as the Exchange Offer (with the exception of the Exchange Offer Amendments) through a UK Proceeding. In such event, the Company will publicly announce its intention to commence a UK Proceeding and will extend the Exchange Offer and Rights Offering until the Conditional Expiration Time.
Conditional Expiration Time		5:00pm, New York City time on the date the UK Proceeding becomes binding on Holders, in the event that the UK Proceeding has been completed.		In the event that the Minimum Tender Condition (or any other condition to completing the Exchange Offer without a UK Proceeding) has not been satisfied or waived as of the Exchange Offer Expiration Time and the Company is required, pursuant to the Transaction Support Agreement, to proceed with the UK Proceeding, then the Conditional Expiration Time will be:   The deadline for Holders to validly tender their Old Notes in

 

xii

Event		Calendar Date and Time		Description
				order to, if the UK Proceeding is successfully consummated, receive the corresponding consideration in the Exchange Offer based on whether they are a New Money Participant or a Non-New Money Participant, as applicable.   The deadline for Holders who wish to participate in the Rights Offering to validly complete their subscription for the Required Subscription Amount in order to receive First-Out Notes and Common Stock in the Rights Offering.
Settlement Date		Promptly after the Exchange Offer Expiration Time or the Conditional Expiration Time, as the case may be (each, as applicable, the “Expiration Time”).   Expected to occur three business days following the Exchange Offer Expiration Time or, in the event the Company proceeds with the UK Proceeding, as soon as practicable following the Sanction Hearing.		In the event the Company completes the Exchange Offer without a UK Proceeding, on the Settlement Date, delivery and/or payment, as applicable, will be made of (i) in the case of New Money Participants who validly tendered (and did not validly withdraw) their Old Notes, validly completed their exercise of Subscription Rights (including full payment of the cash purchase price therefor) and provided their consent at or prior to the Exchange Offer Expiration Time, First-Out Notes, Common Stock, Initial Public Warrants and the Consent Premium; and (ii) in the case of Non-New Money Participants who validly tendered (and did not validly withdraw) their Old Notes and provided their consent prior to the Exchange Offer Expiration Time, the Second-Out Notes, Initial Public Warrants and the Consent Premium, plus, in the case of each of (i) and (ii), accrued and unpaid interest in cash on the Old Notes accepted for exchange, from the applicable last interest payment date to, but not including, the Settlement Date (subject to the right of Holders on the relevant

 

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Event		Calendar Date and Time		Description
				record date to receive interest due on the relevant interest payment date).   In the event the Company proceeds with a UK Proceeding, on the Settlement Date, delivery and/or payment, as applicable, will be made of (i) in the case of New Money Participants who validly tendered (and did not validly withdraw) their Old Notes, validly completed their exercise of Subscription Rights (including full payment of the cash purchase price therefor) and provided their consent at or prior to the Conditional Expiration Time, First-Out Notes, Common Stock, Initial Public Warrants and the Consent Premium; (ii) in the case of Non-New Money Participants who validly tendered (and did not validly withdraw) their Old Notes and provided their consent prior to the Conditional Expiration Time, the Second-Out Notes, Initial Public Warrants and the Consent Premium, and (iii) in the case of Holders who did not tender (or who tendered but validly withdrew) their Old Notes, Second-Out Notes and such Holder’s pro rata portion of Initial Public Warrants in the same amount as would have been delivered if such Holder had participated in the Exchange Offer, plus, in the case of each of (i), (ii) and (iii), accrued and unpaid interest in cash on the Old Notes accepted for exchange, from the applicable last interest payment date to, but not including, the Settlement Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

 

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In the event that the Transactions are not completed for any reason, including because the restructuring of the Old Notes through the UK Proceeding is terminated or otherwise not consummated at or prior to the Settlement Date, no consideration will be paid or become payable to the Holders and the Old Indenture and terms of the Old Notes will not be amended. In any such event, the Old Notes tendered pursuant to the Exchange Offer will be promptly returned to the tendering Holders, and the cash consideration paid upon exercise of Subscription Rights will be returned to such subscribing Holders, without interest.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Old Notes when such intermediary would need to receive instructions from a Holder in order for such Holder to be able to participate in, or revoke its instruction to participate in, the Transactions in accordance with the timetable of events set out above. The deadlines set by any such intermediary may be earlier than one or more of the deadlines above.

 

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RISK FACTORS

Investing in the New Notes involves significant risks, including the risks described below. Before making an investment in the New Notes, you should carefully consider, among other factors, the risks identified under “Risk Factors” in our Annual Report and other documents incorporated by reference herein. Please also refer to the section above entitled “Cautionary Note Regarding Forward-Looking Statements.” The risks described in the documents incorporated by reference in this prospectus are not the only ones we face. Additional risks not presently known or that we currently deem immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects. You should consult your own financial and legal advisors as to the risks entailed by participating in the Transactions, investing in the New Notes and the suitability of investing in the New Notes in light of your particular circumstances. Our business, financial condition and results of operations could be materially adversely affected by the materialization of any of these risks. The materialization of any of these risks could also result in a complete loss of your investment.

Risks Related to the Company

For a discussion of the risks related to our business, you should carefully consider the risks, uncertainties and assumptions discussed under “Item 1A. Risk Factors” in our Annual Report which are incorporated by reference into this prospectus and in other documents that we subsequently file with the SEC that update, supplement or supersede such information. See “Where You Can Find More Information; Incorporation By Reference.”

Risks Related to the Transactions

The completion of the Transactions may not occur or may be delayed significantly, terminated or challenged by our creditors.

The consummation of the Transactions is conditional upon the satisfaction and waiver of certain conditions. See “The Exchange Offer and Consent Solicitation—Conditions to the Exchange Offer” and “The Rights Offering—Conditional Offers to Buy.” In addition, subject to the Transaction Support Agreement and applicable law, the Company also has the right to terminate or withdraw the Transactions upon the occurrence of certain events, including if any condition to the Transactions is not satisfied or waived at or prior to the Settlement Date. Further, pursuant to the Transaction Support Agreement, the governing bodies of the Company Parties may, after consulting with counsel, terminate the Transactions if they determine that proceeding with the Transactions would be inconsistent with their fiduciary duties if there is an alternative, more advantageous option available. See “The Transaction Support Agreement—Termination Rights.”

We have negotiated the terms of the Transactions with the Supporting Holders who collectively represent ownership of approximately 60% of the aggregate principal amount of the outstanding Old Notes eligible to consent to the Proposed Amendments and to vote on a UK Proceeding as of the date of this prospectus. Pursuant to the terms of the Transaction Support Agreement, such Supporting Holders have agreed to separately exchange all of their respective Old Notes for First-Out Notes and certain of these Supporting Holders have committed to purchase an additional amount of First-Out Notes equal to the amount of First-Out Notes unpurchased in the Rights Offering. See “The Transaction Support Agreement.”

Even if the Transactions are completed, they may not be completed on the schedule described in this prospectus. Accordingly, Holders participating in the Transactions may have to wait longer than expected to receive their New Notes. Accordingly, Holders participating in the Transactions will not be able to effect transfers or sales of their Old Notes tendered pursuant to the Exchange Offer or any New Notes, Common Stock or Initial Public Warrants to be issued in the Transactions during the pendency of the Transactions unless they withdraw. Such Holders may not be able to promptly transfer or sell their Old Notes or New Notes or timely react to adverse trading conditions and could suffer losses as a result of these restrictions on transferability.

Additionally, certain of our creditors may attempt to challenge the progress or consummation of the Transactions, which may result in the delay or termination of the Transactions. These creditors could commence

 

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litigation or other legal actions that may enjoin, impede, delay or result in the termination of the Transactions or require us to pay damages in the event of an adverse judicial decision. While we intend to oppose any such litigation or other efforts that may materialize, we cannot assure you of our success.

Any significant delay, or failure, to complete the Transactions could have a material adverse effect on our business, results of operations and financial condition.

Uncertainty about the Transactions may adversely affect our relationships with our customers, suppliers and employees, which could negatively affect our business, whether or not the Transactions are completed.

The announcement of the Transactions may cause uncertainties in our relationships with our customers and suppliers, which could impair our ability to maintain or expand our business. Furthermore, uncertainties about the Transactions may cause current and prospective employees to experience uncertainty about their future with us. These uncertainties may impair our ability to retain, recruit or motivate key employees, which could adversely affect our business. Further, our current or potential business partners may decide to delay, defer or cancel entering into new business arrangements with us pending consummation of the Transactions. The occurrence of these events individually or in combination could materially and adversely affect our business, financial condition and results of operations.

Holders are responsible for consulting with their advisors and we have not obtained a third-party determination that the Transactions are fair to Holders.

Holders should consult their own tax, accounting, financial and legal advisors regarding the suitability for themselves of the tax, accounting, financial, legal and other consequences of participating or not participating in the Transactions. None of the Company, the applicable New Trustee, the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee or any director, officer, employee, agent or affiliate of any such person, is acting for any Holder, or will be responsible to any Holder for providing any protections which would be afforded to its clients or for providing advice in relation to the Transactions, and accordingly none of the Company, the applicable New Trustee, the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee or any director, officer, employee, agent or affiliate of any such person, makes any recommendation as to whether holders should tender their Old Notes pursuant to the Exchange Offer.

We have not retained and do not intend to retain any unaffiliated representative to act solely on behalf of the Holders for purposes of preparing a report concerning the fairness of the Transactions. The future value of the New Notes received by a Holder may not equal or exceed the value of the Old Notes tendered.

You may not receive New Notes, Initial Public Warrants and/or Common Stock, as applicable, in the Exchange Offer or First-Out Notes and Common Stock in the Rights Offering if the procedures for the Transactions are not followed.

We will issue to Holders of Old Notes their pro rata portion of Subscription Rights to purchase First-Out Notes in the New Money Financing at a purchase price equal to 100% of the face amount of the First-Out Notes so purchased and to receive on account of such purchase one share of Common Stock for each $34.06 of First-Out Notes so purchased. To participate in the Rights Offering, Holders must validly subscribe for and purchase the Required Subscription Amount in the Rights Offering in accordance with the procedures set forth in “The Rights Offering—Method of Subscription”

Holders that participate in the Rights Offering and purchase their Required Subscription Amount will also be entitled to exchange Old Notes for First-Out Notes in the Exchange Offer. In order to validly participate in the Exchange Offer, Holders must also tender their Old Notes in accordance with the procedures set forth in “The Exchange Offer and Consent Solicitation—Method of Exchange for New Notes.”

 

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In all cases, you are responsible for complying with all of the procedures of the Transactions. If the Old Notes are registered in the name of your broker, dealer, commercial bank, trust company or other nominee, you should allow sufficient time to ensure timely delivery of the Old Notes in accordance with the procedures. If you are the beneficial owner of Old Notes that are registered in the name of your broker, dealer, commercial bank, trust company or other nominee, and you wish to participate in the Transactions, you should promptly contact the person in whose name your Old Notes are registered and instruct that person to tender your Old Notes on your behalf. None of the Company, the applicable New Trustee, the Dealer Manager, the Information, Exchange and Subscription Agent, the Old Notes Trustee or any director, officer, employee, agent or affiliate of any such person is under any duty to extend the Transactions or give notification of defects or irregularities with respect to the tenders of Old Notes for exchange or subscriptions in the Rights Offering. Failure to validly tender Old Notes or subscribe for New Notes may limit a Holder’s ability to receive New Notes, Initial Public Warrants and/or Common Stock in the Transactions.

If we consummate the Consent Solicitation and the Exchange Offer Amendments become operative, Holders of the Old Notes will no longer benefit from the protections provided by certain of the covenants and events of default and other provisions in the Old Notes Indenture.

If the Exchange Offer Amendments become operative, any Old Notes that are not validly tendered or not accepted for exchange in the Exchange Offer will remain outstanding immediately following the completion of the Exchange Offer and will be subject to the terms of the Old Notes Indenture as modified by the Exchange Offer Amendments. If you do not tender your Old Notes in the Exchange Offer and the Exchange Offer Amendments become operative, you will be bound by the Exchange Offer Amendments even if you do not consent to them.

The Exchange Offer Amendments will not go into effect unless (i) the Minimum Tender Condition (and any other condition to completing the Exchange Offer without a UK Proceeding) has been satisfied or waived, (ii) the Transaction Support Agreement, including the Backstop Commitment agreed thereunder, remains in full force and effect (see “The Transaction Support Agreement”) and (iii) the registration statements of which this prospectus forms a part are effective and will not become operative until the Settlement Date for an Exchange Offer completed without a UK Proceeding.

Among other things, as a result of the Exchange Offer Amendments, certain of the covenants and events of default contained in the Old Notes Indenture and the Old Notes will be eliminated or modified. The Exchange Offer Amendments will (i) remove or modify certain covenants and events of default under the Old Notes that can be removed with the consent of Holders representing a majority of the aggregate principal amount outstanding of the Old Notes, (ii) subordinate in right of payment the Old Notes to the New Notes and the ABL Facility, as described under the caption “The Proposed Amendments—Exchange Offer Amendments,” on the terms set forth in the applicable supplemental indenture to the fullest extent permitted by Section 316(b) of the TIA and the Old Notes Indenture, and (iii) make certain other amendments to the Old Notes Indenture. See “The Proposed Amendments—Exchange Offer Amendments.” As a result, in the event of a bankruptcy or insolvency of the Company, holders of the New Notes will be better positioned to recover upon their investment in comparison to Holders of the Old Notes. Further, the Old Notes are currently traded on the NASDAQ Global Select Market under the symbol “FOSLL.” If we complete the Transactions, we expect to delist the Old Notes from the NASDAQ Global Select Market.

The Supporting Holders who collectively hold approximately 60% of the aggregate principal amount of the Old Notes eligible to vote in the Consent Solicitation as of the date of this prospectus have executed a Transaction Support Agreement with the Company. The Supporting Holders have agreed to exchange all of their Old Notes for First-Out Notes and to consent to the Proposed Amendments in the Consent Solicitation in accordance with the terms set forth herein and pursuant to the terms of the Transaction Support Agreement. Accordingly, the Company has already received support of approximately 60% of Holders in the Exchange Offer and Consent Solicitation. See “The Transaction Support Agreement.”

 

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Even if you choose not to participate in the Exchange Offer, if the Company implements a UK Proceeding that is sanctioned by the English court and is ultimately successfully implemented, your Old Notes will be automatically exchanged into Second-Out Notes.

If the Company is required to proceed with a UK Proceeding in accordance with the Transaction Support Agreement and such UK Proceeding is sanctioned by the English court and ultimately successfully implemented, your Old Notes will be automatically exchanged into Second-Out Notes at 100% of the face amount of the Old Notes held immediately prior to the completion of the UK Proceeding. You will additionally receive a pro rata portion of Initial Public Warrants in the same amount as you would have received if you had participated in the Exchange Offer. See “Description of the Second-Out Notes.” Additionally, in such case, Holders that did not validly participate in the Exchange Offer will not receive the Consent Premium.

The New Notes have a later maturity than the Old Notes, potentially increasing the risk that the Company will be unable to repay or refinance such Holder’s New Notes when they mature.

The New Notes being offered in the Exchange Offer have a later maturity date than the Old Notes. Holders who tender their Old Notes in the Exchange Offer and whose tender is accepted for exchange, or Holders whose Old Notes are automatically exchanged into Second-Out Notes in connection with a successful UK Proceeding, will be exposed to the risk of nonpayment on the New Notes that they hold for a longer period of time. Further, if the Company does not proceed with a UK Proceeding and the Exchange Offer is consummated, non-tendering Holders or those Holders whose Old Notes were not accepted for exchange will hold securities with an earlier maturity date than the New Notes. This can potentially increase the risk of non-payment on the New Notes. For example, following the maturity date of the Old Notes, but prior to the maturity date of New Notes, the Company may become subject to a bankruptcy or a similar proceeding. If so, such Holders of Old Notes may be entitled to payment in full, and there is a risk that the holders of the New Notes with a later maturity date may not be entitled to payment in full.

The Transactions may be cancelled or delayed, and no interest will be paid on the purchase price submitted in connection with the Rights Offering.

The Company has the right, subject to its rights and obligations under the Transaction Support Agreement, to terminate or withdraw, at its sole discretion, the Transactions upon the occurrence of certain events, including if any condition to the Transactions is not satisfied prior to the applicable Expiration Time. Even if the Transactions are consummated, they may not be consummated on the schedule described in this prospectus. Accordingly, holders participating in the Transactions may have to wait longer than expected to receive their New Notes (or to have their subscriptions and related purchase prices and Old Notes returned to them in the event the Company terminates the Transactions), during which time such Holders will not be able to effect transfers or sales of their Old Notes without withdrawing. No interest will be paid to Holders on any purchase price submitted in connection with the Rights Offering regardless of whether the Company accepts the Old Notes or extends, amends or terminates the Rights Offering and the Exchange Offer or the Old Notes tendered and purchase price provided are withdrawn.

We may repurchase any Old Notes that are not exchanged in the Exchange Offer on terms that are more favorable to the Holders of the Old Notes than the terms of the Exchange Offer.

We or our affiliates may, to the extent permitted by applicable law, the Credit Agreement and the indentures governing the New Notes, after the applicable Expiration Time, acquire Old Notes that are not tendered and accepted in the Exchange Offer through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemption or otherwise, upon such terms and at such prices as we may determine, which may be more favorable to holders than the terms of the Rights Offering and the Exchange Offer. There can be no assurance as to which, if any, of these alternatives or combinations thereof we or our affiliates may choose to pursue in the future.

 

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Holders who exchange their Old Notes will release and waive any and all existing claims such Holders might otherwise have against us in connection with the Old Notes or the Old Notes Indenture.

Exchanging an Old Note in the Exchange Offer will constitute a waiver to the extent such Old Note is accepted in such Exchange Offer and the Exchange Offer or UK Proceeding is consummated, pursuant to which such Holder will release and waive any existing claims such Holder might have against the Company or any guarantor, if applicable, in connection with the Old Notes or the Old Notes Indenture. Once the applicable Expiration Time has passed, Holders who have tendered and not withdrawn their Old Notes at or prior to the applicable Expiration Time will not be able to revoke their waiver.

We have and will continue to incur significant costs in conducting the Transactions.

The Transactions have resulted, and will continue to result, in significant costs to us, including advisory and professional fees. These costs and fees have and will continue to reduce our available cash flow, which could have an adverse effect on our business prospects, financial condition and results of operations.

We may fail to realize the anticipated benefits of the Transactions.

Following the completion of the Transactions, we expect to benefit from, among other things, an improved capital structure, a reduced but still significant refinancing risk, an increased ability to engage in strategic transactions and grow our shareholder base, and a reduced delisting risk. If we are not able to successfully achieve these objectives, then the anticipated benefits of the Transactions may not be realized fully or at all or may take longer to realize than expected.

Old Notes tendered and not validly withdrawn at or prior to the applicable Expiration Time may not be withdrawn at any time after the applicable Expiration Time (except in certain limited circumstances where additional withdrawal rights are required by law).

Tenders of Old Notes in connection with the Exchange Offer and subscriptions made in connection with the Rights Offering may be withdrawn at any time prior to the applicable Expiration Time. However, following the applicable Expiration Time, tenders of Old Notes in the Exchange Offer and subscriptions made in connection with the Rights Offering may not be validly withdrawn unless the Company is otherwise required by law to permit withdrawal.

The Exchange Offer Amendments will not go into effect unless (i) the Minimum Tender Condition (and any other condition to completing the Exchange Offer without a UK Proceeding) has been satisfied or waived as of the Exchange Offer Expiration Time, (ii) the Transaction Support Agreement, including the Backstop Commitment agreed thereunder, remains in full force and effect (see “The Transaction Support Agreement”) and (iii) the registration statements of which this prospectus forms a part are effective, and will not become operative until the Settlement Date for an Exchange Offer completed without a UK Proceeding. Once effective, consents to the Exchange Offer Amendments will be irrevocable. The UK Proceeding Amendments will not go into effect unless the Minimum Tender Condition (or any other condition to completing the Exchange Offer without a UK Proceeding) is not satisfied or waived by the Exchange Offer Expiration Time and the Company is required to proceed with the UK Proceeding in accordance with the Transaction Support Agreement. Once effective, consents to the UK Proceeding Amendments will be irrevocable.

Prior to becoming irrevocable, consents may only be revoked by validly withdrawing the associated tendered Old Notes. In the event the Company pursues a UK Proceeding, a Holder will still be entitled to validly withdraw tendered Old Notes after the Exchange Offer Expiration Time and prior to the Conditional Expiration Time, but any such withdrawal will not constitute a valid revocation of such Holder’s consent to the Proposed Amendments once such Proposed Amendments go into effect.

If a Holder has not tendered their Old Notes in the Exchange Offer, and, as a result, has not been deemed to have provided their proxy to the Information, Exchange and Subscription Agent in respect of the UK Proceeding and

 

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wishes to vote for or against a UK Proceeding, such Holder must follow the procedures that will be established for voting on the UK Proceeding in the event the Exchange Offer (or any other condition to completing the Exchange Offer without a UK Proceeding) is not consummated. See “The UK Proceeding.”

Submitting a conditional offer to buy First-Out Notes pursuant to the Rights Offering does not guarantee receipt of such First-Out Notes at the Settlement Date.

The Rights Offering is conditioned upon the effectiveness of the registration statements of which this prospectus forms a part and no conditional offers to subscribe for and purchase First-Out Notes may be accepted or confirmed (and no amount of the cash purchase price thereof may be deposited) until the registration statements of which this prospectus forms a part have been declared effective by the SEC.

Notwithstanding any other provisions relating to Subscription Rights, we will not be required to accept any conditional offer to buy First-Out Notes in the Rights Offering validly submitted (and not validly withdrawn), and may terminate, amend or extend any offer or delay or refrain from accepting such conditional offer to buy or transferring any consideration to the First-Out Notes Trustee (or persons performing a similar function) in respect of any Subscription Rights, if any of the conditions described under “The Exchange Offer and Consent Solicitation—Conditions to the Exchange Offer” have not been satisfied or waived, or are reasonably determined by us to have not been satisfied or waived.

The Exchange Offer may result in reduced liquidity for the Old Notes that are not exchanged.

To the extent tenders of Old Notes for exchange in the Exchange Offer are accepted for exchange by the Company and the Exchange Offer is completed, the trading market for the Old Notes that are not exchanged could become more limited than the existing trading market for such Old Notes currently and could cease to exist altogether if the consummation of the Exchange Offer results in the reduction in the principal amount of such Old Notes. Further, the Old Notes are currently traded on the NASDAQ Global Select Market under the symbol “FOSLL.” If we complete the Transactions, we expect to delist the Old Notes from the NASDAQ Global Select Market, which may further impact trading. A more limited trading market, whether due to a reduced principal amount outstanding or otherwise, might adversely affect the liquidity, market price and price volatility of the Old Notes. The Old Notes may trade at a discount to the price at which they would trade if the current principal amount outstanding were not reduced. There can be no assurance that an active market in the Old Notes will exist, develop or be maintained, or as to the prices at which the Old Notes may trade, whether or not the Exchange Offer is consummated.

Failure to complete the Transactions successfully could negatively affect the prices of the Old Notes.

Several conditions must be satisfied or waived (to the extent waivable) in order to complete the Transactions. The conditions to the Transactions may not be satisfied, and if such conditions are not satisfied or waived (to the extent waivable), the Transactions may not occur or may be delayed. If the Transactions are not completed or are delayed, the market price of the Old Notes may decline to the extent that the current market price reflects an assumption that such Transactions have been or will be completed.

The Subscription Rights in the Rights Offering are not transferable separately from the Old Notes, and there is no market for the Subscription Rights.

The Subscription Rights in the Rights Offering are not transferable separately from the Old Notes. You may not sell, transfer or assign your Subscription Rights to anyone else without also selling or transferring your Old Notes. As a result, you may not submit a conditional offer to purchase First-Out Notes in the Rights Offering and separately transfer your Old Notes. In order to transfer your Old Notes, you must validly withdraw your conditional offer and any transfer of your Old Notes will accordingly have your Subscription Rights transferred alongside such transferred Old Notes. Because the Subscription Rights are not transferable separately from the

 

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Old Notes, there is no market or other means for you to directly realize any value associated with the Subscription Rights. You must exercise (or cause your custodian bank, depositary, broker, trust company or other nominee to exercise) your Subscription Rights and acquire the securities issuable thereunder, and such securities must appreciate in value, for you to potentially realize any value from your Subscription Rights.

You will not be able to resell any of the securities that you may receive pursuant to the exercise of Subscription Rights immediately upon the applicable Expiration Time.

We expect to deliver the First-Out Notes and corresponding shares of Common Stock purchased in the Rights Offering to New Money Participants on the Settlement Date. Until such First-Out Notes and Common Stock are delivered, you will not be able to sell such First-Out Notes or Common Stock that you subscribe for in connection with the Rights Offering.

You will not receive interest on subscription funds, including any funds ultimately returned to you if we are unable to consummate the Rights Offering or if it is otherwise unsuccessful.

To exercise your Subscription Rights, you will be required to deliver the completed Subscription Form and any other required paperwork to the Information, Exchange and Subscription Agent along with the applicable purchase price. You will not earn any interest on your payment of the purchase price while it is being held by the Information, Exchange and Subscription Agent pending the settlement of the Rights Offering, even if we amend the terms of the Rights Offering to extend the subscription period. If we cancel the Rights Offering, neither we nor the Information, Exchange and Subscription Agent will have any obligation with respect to the Subscription Rights except to return to you, without interest or penalty, any payment of the purchase price that you have made.

Risks Related to the UK Proceeding

The effectiveness of the Restructuring Plan requires approval of the Plan Creditors.

In order for the Restructuring Plan to become binding on the Plan Company and all Holders, the Restructuring Plan must be approved by the requisite majority pursuant to Part 26A of the Companies Act 2006 (the “Requisite Majority”) at a Plan Meeting that has been ordered by the English court.

In relation to the Restructuring Plan, the Plan Company intends to propose that the Holders vote together as a single class of creditors at the Plan Meeting. Pursuant to Part 26A of the Companies Act 2006, for a single class restructuring plan to be approved at a plan meeting, approval from at least 75% in value of holders present and voting (in person or by proxy) at a Plan Meeting will be required.

However, the composition of the classes of Plan Creditors in the Restructuring Plan is ultimately a matter for the English court to determine. Therefore, there is a risk that the English court declares that the Plan Creditors should be separated into more than one class. In such circumstances, the “Requisite Majority” for approval shall be:

 

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at the meeting ordered to be summoned by the English court, a majority representing 75% in value of the class of Plan Creditors present and voting (either in person or by way of video conference, or by proxy) votes in favor of the Restructuring Plan; or

 

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a majority representing 75% in value of at least one class of Plan Creditors votes in favor of the Restructuring Plan and the English court is satisfied that: (i) that class would receive a payment and/or have a genuine economic interest in the Plan Company in the relevant alternative and (ii) each dissenting class would be no worse off under the Restructuring Plan than in the relevant alternative.

In order for the Restructuring Plan to become effective, the Restructuring Plan must then be sanctioned by an order of the English court and an official copy of the order must be delivered to the Registrar of Companies for registration.

 

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If the Requisite Majority is obtained, the Restructuring Plan is expected to be made effective on or around November 10, 2025 by the delivery of copies of the order of the English court sanctioning the Restructuring Plan under Section 901F or 901G (as applicable) of the Companies Act 2006 (the “Sanction Order”) to the Registrar of Companies. If the Restructuring Plan becomes effective, the Plan Creditors will be bound by its terms from the date on which the Restructuring Plan is anticipated to be effective, i.e., the Plan Effective Date.

Pursuant to the Transaction Support Agreement (as described in further detail in “The Transaction Support Agreement”), the parties thereto have agreed to support the Restructuring Plan and, although the Supporting Holders will be Plan Creditors and are expected to vote in favor of the Restructuring Plan pursuant to the terms of the Transaction Support Agreement, in the event that the Transaction Support Agreement is terminated in accordance with its terms, any Plan Creditor that was party to the Transaction Support Agreement would cease to be bound by its obligation to support the Restructuring Plan.

If the Requisite Majority is not obtained, the Restructuring Plan will be withdrawn and will not become effective and the compromise and arrangement contemplated by the Restructuring Plan will not be implemented.

Accordingly, in the event that the Minimum Tender Condition (or any other condition to completing the Exchange Offer without a UK Proceeding) has not been satisfied or waived as of the Exchange Offer Expiration Time and the Company is required, pursuant to the Transaction Support Agreement, to proceed with the UK Proceeding, if the Restructuring Plan is then not implemented, the Company and its subsidiaries could face immediate adverse consequences including, among others, difficulty maintaining business, financing and operational relationships, and a reduced interest in the Company from investors, finance providers and potential purchasers. In such event, it is likely that the Company and its subsidiaries will need to pursue alternative near-term restructuring transactions to address its capital structure and liquidity needs, including potential asset sales delivered through commencement of voluntary cases under Chapter 11 of Title 11 of the United States Code. These alternative restructuring transactions are likely to lead to a materially lower return to all Plan Creditors when compared to the expected return under either the Exchange Offer or the Restructuring Plan.

The Restructuring Plan may be objected to and may not be completed.

It is possible for a person with an interest in the Restructuring Plan (whether a Holder who has not provided their proxy or otherwise) to lodge objections to the Restructuring Plan with the English court. If such objections have been lodged, to attend or be represented at either the Convening Hearing or the Sanction Hearing to make representations, for example: (i) that a Holder disagrees with the Plan Company’s proposals regarding the convening of the Plan Meeting (including the proposed composition of the voting class); (ii) that the Restructuring Plan should not be sanctioned; and/or (iii) to appeal against the Sanction Order granted by the English court. Therefore, even if the Restructuring Plan is approved at the Plan Meeting, there can be no assurance that objections will not be made at or before the Sanction Hearing, or that an appeal will not be made against the grant of the Sanction Order and that any such objections or appeal will not delay or possibly prevent the restructuring of the Old Notes.

Effectiveness of the Restructuring Plan requires the sanction of the English court.

In order for a Restructuring Plan to become effective, it must receive the sanction of the English court. The English court will not sanction a Restructuring Plan and grant the Sanction Order unless it is satisfied that the correct procedures have been followed, the proposed arrangements are fair and that there are no other reasons why the Restructuring Plan should not be approved, such that the Restructuring Plan would not be effective. There can be no assurance that the English court will determine that the Restructuring Plan is fair or that the English court will not conclude that there are other reasons why the Restructuring Plan should not be sanctioned. If the English court does not sanction the Restructuring Plan, or sanctions it subject to conditions or amendments which: (i) the Company deems unacceptable; or (ii) would have (directly or indirectly) a material adverse effect on the interests of any of the Holders and such conditions or amendments are not approved by any of the Holders, the Restructuring Plan will not become effective and the restructuring of the Old Notes will not be implemented.

 

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If the conditions precedent to the Restructuring Plan being fully effective and implemented (the “Restructuring Conditions”) are not satisfied or waived, the Restructuring Plan may not be completed.

Implementation of the Restructuring Plan cannot be commenced unless the Restructuring Conditions are satisfied or waived in accordance with the terms of the Restructuring Plan and/or the other documents required to implement the restructuring of the Old Notes on substantially the same terms as the Exchange Offer (with the exception of the Exchange Offer Amendments) via the Restructuring Plan (the “Restructuring Documents”), as applicable. There is also a risk that the relevant parties to the Restructuring Documents may disagree as to when a condition precedent has been satisfied or waived (or will refuse to waive a condition precedent), meaning that the implementation of the Restructuring Plan cannot be finalized.

Furthermore, in order to complete the UK Proceeding, the registration statements of which this prospectus forms a part must be declared effective by the SEC and remain effective on the Settlement Date and there is no assurance this will be the case such that the UK Proceeding will be able to be successfully implemented.

A Restructuring Plan does not guarantee the viability of the business.

While it is anticipated that a Restructuring Plan (if required) and the restructuring of the Old Notes will help to ensure the continued viability of the business of the Company and its subsidiaries and facilitate the Company and its subsidiaries achieving their Turnaround Plan, there may be other factors which have an impact on its financial performance, business, affairs and continued progress.

The successful implementation of a Restructuring Plan and the restructuring of the Old Notes cannot therefore be taken as an indication or guarantee of the continued viability of the business of the Company and its subsidiaries.

Certain of the Company’s material contracts may contain termination clauses which could be triggered by a Restructuring Plan.

The Company may be party to certain material contracts that contain termination provisions which may be triggered by a Restructuring Plan. Certain of these material contracts might also be terminable as a result of insolvency-related events. There can be no assurance that the Company has identified all contracts material to its business with termination clauses that may be triggered by a Restructuring Plan or insolvency-related events. If the Company triggers such a termination clause in any of its material contracts (or in a number of contracts that, when looked at together, are material to its business) and a consent or waiver is not obtained from the relevant counterparty, such counterparty may terminate or threaten to terminate the contract, which could have a material adverse effect on the Company’s business, operating results, financial condition or prospects.

A Restructuring Plan may not be recognized or enforced in the United States.

It is contemplated that, if a Restructuring Plan is required, the Company will seek recognition of the Restructuring Plan under Chapter 15, Title 11 of the United States Bankruptcy Code. However, there is a possibility that the U.S. Bankruptcy Court will not recognize the Restructuring Plan under Chapter 15, Title 11 of the United States Bankruptcy Code. If the U.S. Bankruptcy Court declines to recognize the Restructuring Plan under Chapter 15, Title 11 of the United States Bankruptcy Code, the Restructuring Plan may not be recognized or be enforceable against a Holder in the United States.

Risks Related to the New Notes, Our Guarantees and Our Indebtedness

We have, and following the completion of the Transactions will continue to have, a substantial amount of indebtedness and this substantial level of indebtedness could materially adversely affect our ability to generate sufficient cash to fulfill our obligations under such indebtedness, to react to changes in our business and to incur additional indebtedness to fund future needs.

As of July 5, 2025, after giving effect to the Exchange Offer and the Rights Offering, assuming all Holders participate in full as New Money Participants, and the use of proceeds therefrom, (i) the Company would have

 

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had $180 million in total indebtedness outstanding, consisting of the First-Out Notes; and (ii) the Company and the Guarantors would have had $180 million in total indebtedness outstanding, consisting of the First-Out Notes. Our substantial indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences for our business. For example, it could:

 

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make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing such indebtedness;

 

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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, business development and other purposes;

 

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compromise our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, due to our high level of debt and the restrictive covenants in the credit agreement that governs our ABL Facility and the indentures governing the New Notes;

 

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limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

 

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limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes;

 

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prevent us from raising the funds necessary to repurchase all of the notes tendered to us upon the occurrence of certain changes of control, which would constitute a default under the indentures governing such indebtedness; and

 

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limit our ability to redeem, repurchase, defease or otherwise acquire or retire for value any subordinated indebtedness we may incur.

These restrictions could adversely affect our financial condition and limit our ability to successfully implement our growth strategy.

In addition, we may need additional financing to support our business and pursue our growth strategy. Our ability to obtain additional financing, if and when required, will depend on investor demand, our operating performance, the condition of the capital markets and other factors. We cannot assure you that additional financing will be available to us on favorable terms when required, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our common stock, and, in the case of equity and equity-linked securities, our existing stockholders may experience dilution.

The Credit Agreement that governs the ABL Facility and the indentures governing the New Notes each impose significant operating and financial restrictions on us and our restricted subsidiaries, which may prevent us from capitalizing on business opportunities.

The Credit Agreement that governs the ABL Facility and indentures governing the New Notes each impose significant operating and financial restrictions on us and our restricted subsidiaries. These restrictions limit our ability and the ability of our restricted subsidiaries to, among other things:

 

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incur or guarantee additional debt or issue disqualified stock or preferred stock;

 

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pay dividends and make other distributions on, or redeem or repurchase, capital stock;

 

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make certain investments;

 

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incur certain liens;

 

•

enter into transactions with affiliates;

 

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•

merge or consolidate;

 

•

enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to the Company or the Guarantors;

 

•

prepay, redeem or repurchase certain indebtedness that is subordinated in right of payment to the New Notes and the ABL Facility; and

 

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transfer or sell assets.

In addition, we are required to comply with a minimum level of availability under the ABL Facility. See “Description of Certain Other Indebtedness.”

As a result of the restrictions described above, we will be limited as to how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above as well as other terms of our indebtedness and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.

Despite our indebtedness levels on the Settlement Date after giving effect to the Transactions, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the Credit Agreement that governs the ABL Facility and indentures governing the New Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness that may be incurred in compliance with these restrictions could be substantial. If we incur additional debt above the levels that will be in effect on the Settlement Date after giving effect to the Transactions, the risks associated with our leverage, including those described above, would increase. In addition, as of the date hereof, we had $4.7 million of availability to incur additional secured indebtedness under our ABL Facility. Further, the restrictions in the indentures governing the New Notes and the Credit Agreement that governs the ABL Facility will not prevent us from incurring obligations, such as trade payables, that do not constitute indebtedness as defined in such debt instruments.

We may be unable to service our indebtedness, including the New Notes, which could result in our bankruptcy or liquidation.

Our ability to make scheduled payments on and to refinance our indebtedness, including the New Notes, depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors, all of which are beyond our control, including the availability of financing in the banking and capital markets. Lower net revenues generally will reduce our cash flow. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, including the New Notes, to refinance our debt or to fund our other liquidity needs. Some of our debt, including the ABL Facility, will or may mature before the maturity dates of the New Notes.

If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, including the New Notes, which could cause us to default on

 

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our debt obligations and impair our liquidity. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

If we fail to comply with the covenants under the ABL Facility, we could become in default thereunder, and by reason of cross-acceleration or cross-default provisions, other indebtedness may then become immediately due and payable. If our operating performance declines, we may in the future need to obtain waivers from the required lenders under the ABL Facility to avoid being in default. If we breach our covenants under the ABL Facility and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under our ABL Facility. Moreover, in the event of a default, the holders of our indebtedness could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest, if any. The lenders under our ABL Facility could also elect to terminate their commitments thereunder, cease making further loans, and institute foreclosure or other enforcement proceedings against their collateral. The lenders could exercise their rights, as described above, and we could be forced into a bankruptcy, liquidation or other insolvency proceeding.

We may be required to repay the ABL Facility prior to its stated maturity date under the Credit Agreement if the springing maturity feature is triggered or otherwise reserve amounts for repayment of indebtedness.

The ABL Facility has a stated maturity date of August 13, 2030, but includes a springing maturity feature that will cause the stated maturity date to spring ahead to the date that is 91 days prior to the maturity date of material indebtedness (as defined therein) if such material indebtedness remains outstanding on such 91st day. In certain other cases, the Credit Agreement requires the Company to establish, on such 91st day, a reserve in an amount equal to the aggregate principal amount of indebtedness coming due. If such features are triggered, we will be required to pay all amounts outstanding under the ABL Facility sooner than they would otherwise be due or establish reserves to repay such maturing indebtedness. We may not have sufficient funds available to pay or reserve such amounts at that time, and we may not be able to raise additional funds to pay or reserve such amounts on a timely basis, on terms we find acceptable, or at all.

An increase in market interest rates could result in a decrease in the value of the New Notes.

In general, as market interest rates rise, notes bearing interest at a fixed rate decline in value. Consequently, if you receive New Notes, and the market interest rates subsequently increase, the market value of your New Notes may decline. We cannot predict the future level of market interest rates.

An active trading market for the New Notes may not develop, which could limit the market price of the New Notes or your ability to sell them.

The New Notes are a new issue of debt securities for which there currently is no trading market. We cannot provide any assurances that an active trading market will develop for the New Notes or that you will be able to sell your New Notes. If the New Notes are traded after their initial issuance, their trading price may be below par depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors. We cannot assure you that a liquid trading market will develop for the New Notes, that you will be able to sell your New Notes at a particular time or that the price you receive when you sell will be favorable. To the extent an active trading market does not develop, the liquidity and trading price for the New Notes may be harmed. Accordingly, you may be required to bear the financial risk of an investment in the New Notes for an indefinite period of time. In addition, there may be a limited number of buyers when you decide to sell your New Notes. This may affect the price, if any, offered for your New Notes or your ability to sell your New Notes when desired or at all.

 

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The ratings for the New Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.

Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. A rating is not a recommendation to purchase, sell or hold the New Notes. Ratings do not reflect market prices or suitability of a security for a particular investor and the rating of the New Notes may not reflect all risks related to us and our business, or the structure or market value of the New Notes. We may elect to issue other securities for which we may seek to obtain a rating in the future. If we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or the market value of the New Notes.

We may not be able to repurchase the New Notes upon a change of control.

Upon the occurrence of specific kinds of change of control events, we will be required to offer to repurchase all outstanding New Notes at a purchase price equal to their principal amount, together with accrued and unpaid interest, if any, to the repurchase date plus, for the First-Out Notes, a premium of 7.5% of principal amount and, for the Second-Out Notes, a premium of 1% of principal amount. Additionally, under the terms of the ABL Facility, a change of control may constitute an event of default that permits the lenders to accelerate the maturity of borrowings under the respective agreements and terminate their commitments to lend. The source of funds for any purchase of the New Notes and repayment of borrowings under the ABL Facility would be our available cash or cash generated from our and our subsidiaries’ operations or other sources, including borrowings, sales of assets or sales of equity. We may not be able to repurchase the New Notes upon a change of control because we may not have sufficient financial resources to purchase all of the debt securities that are tendered upon a change of control and repay our other indebtedness that will become due. We may require additional financing from third parties to fund any such purchases, and we may be unable to obtain financing on satisfactory terms or at all. Further, our ability to repurchase the New Notes may be limited by law. In order to avoid the obligations to repurchase the New Notes and events of default and potential breaches of the terms of the ABL Facility, we may have to avoid certain change of control transactions that would otherwise be beneficial to us.

In addition, in connection with certain tender offers, including an exchange offer, for either series of New Notes, if holders of not less than 90% in aggregate principal amount of the outstanding New Notes of such series validly tender and do not withdraw such notes in such tender offer and we, or any third party making such a tender offer in lieu of us, purchases or exchanges, all of the notes of such series validly tendered and not withdrawn by such holders, we or such third party will have the right to redeem the New Notes of such series that remain outstanding in whole, but not in part, following such purchase or exchange at a price equal to the price offered to each other holder of such series of New Notes (which may be less than par and will exclude any early tender or exchange premium and any accrued and unpaid interest paid to any Holder in such offer payment). See “Description of First-Out Notes—Optional Redemption” and “Description of Second-Out Notes—Optional Redemption.”

We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the notes.

Legal uncertainty regarding what constitutes a change of control and the provisions of the indentures governing the New Notes may allow us to enter into transactions, such as acquisitions, asset sales, refinancings or recapitalizations, that would not constitute a change of control but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the New Notes. The definition of change of control for purposes of the New Notes will include a phrase relating to the transfer of “all or substantially all” of our assets taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require us to repurchase your New Notes as a result of a transfer of less than all of our assets to another person may be uncertain.

 

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Applicable fraudulent transfer laws may permit a court to void the New Notes or the guarantees thereof and any related security, and if that occurs, you may not receive any payments on the notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the New Notes and the incurrence of the guarantees of the New Notes and any related security. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the New Notes or the guarantees thereof and any related security could be voided as a fraudulent transfer or conveyance if the Company or a guarantor, as applicable, (i) issued the notes or incurred its guarantee with the intent of hindering, delaying or defrauding creditors or (ii) received less than reasonably equivalent value or fair consideration in return for either issuing the New Notes or incurring the guarantees or any related security and, in the case of (ii) only, one of the following is also true at the time thereof:

 

•

the Company or such Guarantor, as applicable, was insolvent or rendered insolvent by reason of the issuance of the New Notes or the incurrence of its guarantees;

 

•

the issuance of the New Notes or the incurrence of its guarantees left the Company or such Guarantor, as applicable, with an unreasonably small amount of capital or assets to carry on the business;

 

•

the Company or such Guarantor intended to, or believed that it would, incur indebtedness beyond its ability to pay as they mature; or

 

•

the Company or such Guarantor, as applicable, issued the New Notes or incurred its guarantees to or for the benefit of an insider (e.g., a director, an officer, a person in control, etc., of the Company or such Guarantor), under an employment contract and not in the ordinary course of business.

As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or a valid antecedent debt is secured or satisfied. A court would likely find that a Guarantor did not receive reasonably equivalent value or fair consideration for its guarantee or security interest to the extent the Guarantor did not obtain a reasonably equivalent benefit directly or indirectly from the issuance of the New Notes.

We cannot be certain as to the standards a court would use to determine whether or not the Company or a Guarantor was insolvent at the relevant time or, regardless of the standard that a court uses, whether the New Notes or the guarantees thereof and any related security would be subordinated to other indebtedness. In general, however, a court would deem an entity insolvent if:

 

•

the sum of its indebtedness, including contingent and unliquidated liabilities, was greater than the fair saleable value of all of its assets;

 

•

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing indebtedness, including contingent liabilities, as they become absolute and mature;

 

•

it generally ceased to pay its indebtedness in the ordinary course of business other than as a result of a bona fide dispute; or

 

•

it could not pay its indebtedness as they became due.

If a court were to find that the issuance of the New Notes or the incurrence of a guarantee thereof and any related security was a fraudulent transfer or conveyance or other reviewable transaction, the court could void the payment obligations under the New Notes or that guarantee or security interest, could subordinate the New Notes or that guarantee or security interest to presently existing and future indebtedness of the Company or of the relevant guarantor or could require the holders of the New Notes to repay any amounts received with respect to the New Notes or that guarantee or security interest. In the event of a finding that a fraudulent transfer or conveyance or other reviewable transaction occurred, you may not receive any repayment on the notes. The indentures governing the New Notes will also permit guarantees by foreign subsidiaries to be limited to the extent necessary to comply with applicable local law, and these limitations could limit the value of the guarantees. Further, the avoidance of the New Notes could result in an event of default with respect to our and

 

50

our subsidiaries’ other indebtedness that could result in acceleration of that indebtedness.

Finally, as a court of equity, the bankruptcy court in the United States may subordinate the claims in respect of the New Notes to other claims against us under the principle of equitable subordination if the court determines that (i) the holder of New Notes engaged in some type of inequitable conduct, (ii) the inequitable conduct resulted in injury to our other creditors of the Company or such Guarantor, as applicable, or conferred an unfair advantage upon the holders of the New Notes and (iii) equitable subordination is not inconsistent with the provisions of title 11 of the United States Code (the “Bankruptcy Code”). Similar limitations could apply in other jurisdictions. With respect to such other jurisdictions, there may be certain local limitations on perfection of collateral or enforcement against security interests which could affect your ability to realize the full or intended benefits of the security interests over the collateral, which limitations may be material.

You may have difficulty enforcing U.S. bankruptcy and insolvency laws.

Under the Bankruptcy Code, U.S. bankruptcy courts are given jurisdiction over a debtor’s property wherever it is located, including property situated in other countries. However, courts outside of the United States may not recognize the U.S. bankruptcy court’s jurisdiction. Accordingly, you may have difficulty administering a U.S. bankruptcy case or a ruling of a U.S. bankruptcy court involving any guarantors organized outside of the United States, because their center of main interest and/or the substantial majority of their respective property may be located outside of the United States. Any orders or judgments of a bankruptcy court in the United States may not be enforceable against the guarantors organized outside of the United States with respect to their respective property located outside the United States. Similar difficulties may arise in administering bankruptcy cases in other jurisdictions.

In addition, in the event of bankruptcy, insolvency, corporate reorganization or a similar event, proceedings could be initiated in any of the jurisdictions of organization of the Company or guarantors, including a future guarantor. Your rights under the New Notes and the guarantees may therefore be subject to the laws of multiple jurisdictions, and you may not be able to enforce effectively your rights in multiple bankruptcy, insolvency and other similar proceedings. See “—Enforcement of the New Notes, the guarantees in respect thereof and the Collateral securing the foregoing across multiple foreign jurisdictions may be difficult and involve long recovery times.” In addition, there are differences between the bankruptcy, insolvency, corporate reorganization, foreign exchange, administration and other laws of the United States and other jurisdictions of the guarantors and potential future guarantors, including in respect of creditors’ rights and remedies, priority of creditors, priority claims, the ability to obtain post-petition interest and the duration of insolvency or other proceedings, and any such differences may be material.

There are circumstances other than repayment or discharge of the New Notes under which the guarantees and the Collateral securing the notes will be released automatically, without your consent or the consent of the applicable New Trustee.

Under various circumstances, the guarantees of the New Notes and any related security will be released automatically. The guarantee of a guarantor of the New Notes and any related security will be automatically released to the extent such guarantor or security interest is released in connection with a sale or other disposition of the equity interests of such guarantor in a transaction not prohibited by the indentures governing the New Notes. As a result, the Collateral securing the New Notes may be released automatically to enable the sale, transfer or other disposal of such Collateral in transactions not prohibited by the indentures governing the New Notes, including the sale of any entity in its entirety that owns or holds such Collateral. The Collateral securing the New Notes may also be released automatically upon the release of such guarantor from its guarantee as permitted by the indentures governing the New Notes or when such guarantor otherwise ceases to be a guarantor.

If the guarantee of any guarantor is released, no holder of the New Notes will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities, including trade payables and preferred stock, if any,

 

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whether secured or unsecured, of that subsidiary will be structurally senior to the claim of any holders of the New Notes. For a description of all circumstances in which a guarantor’s subsidiary guarantee and the Collateral securing the New Notes will be automatically released], see “Description of First-Out Notes— Note Guarantees,” “Description of First-Out Notes—Intercreditor Agreements—Use and Release of Collateral,” “Description of Second-Out Notes— Note Guarantees” and “Description of Second-Out Notes—Intercreditor Agreements—Use and Release of Collateral.”

The New Notes and the guarantees will be structurally subordinated to the indebtedness and other obligations of the subsidiaries of the Company that are not guarantors.

The New Notes, including the guarantees of the New Notes, will be structurally subordinated to any indebtedness and other liabilities, including trade payables, of the subsidiaries of the Company that are not guarantors. Any right we have to receive assets of any of our subsidiaries upon the subsidiary’s liquidation or reorganization (and the consequent right of the holders of the New Notes to participate in those assets) will be effectively subordinated to the claims of that subsidiary’s creditors, except to the extent that we are recognized as a creditor of the subsidiary, in which case our claims would still be subordinated in right of payment to any security in the assets of the subsidiary and any indebtedness of the subsidiary senior to that which we hold. This may have the effect of reducing the amount of liquidation or similar proceeds paid to holders of the New Notes.

The Second-Out Notes will be secured by liens that rank junior to the First-Out Notes and other indebtedness and will be subordinated in right of payment to the First-Out Notes.

The Second-Out Notes and related guarantees will be secured by liens that rank junior to the liens securing the First-Out Notes and will be subordinated in right of payment to the First-Out Notes (in both cases, subject to the First-Out/Second-Out Intercreditor Agreement). As a result, the Second-Out Notes and related guarantees will be effectively subordinated to all of the Company’s existing secured indebtedness (other than, with respect to the ABL Facility, the Notes Priority Collateral) or obligations that rank senior to the Second-Out Notes, including the First-Out Notes and the Second-Out Notes will be effectively subordinated to all liabilities of any non-Guarantor subsidiary of the Company.

The effect of this subordination is that upon a default in payment on, or the acceleration of, any indebtedness under First-Out Notes or other secured indebtedness that ranks senior to the Second-Out Notes (or in the event of bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding of us or the subsidiary guarantors) the proceeds from the sale of the assets securing such indebtedness or obligations will be available to pay obligations on the Second-Out Notes only after all such indebtedness under the First-Out Notes and other senior indebtedness have been paid in full. Because the Second-Out Notes and the respective note guarantees will be secured by liens that rank junior to the liens securing the First-Out Notes and those other obligations, it is possible that there will be no assets remaining from which claims of holders of the Second-Out Notes can be satisfied or, if any assets remain, that the remaining assets will be insufficient to satisfy those claims in full. If the value of any remaining assets is less than the aggregate outstanding principal amount of the Second-Out Notes, and all other debt secured with liens ranking equally with the liens securing the Second-Out Notes, we may be unable to satisfy our obligations under the Second-Out Notes. As a result, the holders of the Second-Out Notes may receive less, ratably, than holders of the First-Out Notes in the event of our or the subsidiary guarantors’ bankruptcy, insolvency, liquidation, dissolution or reorganization, and you may lose a portion of or the entire value of your investment in the Second-Out Notes.

In addition, the Second-Out Notes Indenture and the First-Out/Second-Out Intercreditor Agreement will provide that in the event that holders of the First-Out Notes (including the New Trustee, as applicable, and/or First-Out Notes Collateral Agent acting on their behalf) enter into any amendment, waiver or consent in respect of the First-Out Notes Indenture and/or related documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, the First-Out Notes Indenture and/or documents, then, subject to limited exceptions, such amendment, waiver or consent shall apply automatically to any comparable provision of the Second-Out Notes Indenture without the consent of the holders of the Second-Out Notes and

 

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without any action by the New Trustee, as applicable, or the Second-Out Notes Collateral Agent or other representative. As a result, amendments to the Second-Out Notes Indenture may be made without your consent following the issuance of the Second-Out Notes.

We may be unable to repay or refinance the New Notes at maturity.

At the applicable maturity date of each series of the New Notes, the entire outstanding principal amount of each series of the New Notes, together with accrued and unpaid interest, will become due and payable. We may not have the funds to fulfill these obligations or the ability to refinance these obligations. Additionally, the First-Out Notes mature at an earlier date than the Second-Out Notes and are to be repaid at a premium. Therefore, after repayment of the First-Out Notes, we may not have the funds to fulfill our obligations under the Second-Out Notes. If the maturity date occurs at a time when other arrangements prohibit us from repaying the New Notes, we could try to obtain waivers of such prohibitions from the lenders and holders under those arrangements, or we could attempt to refinance the borrowings that contain the restrictions. In these circumstances, if we cannot obtain such waivers or refinance these borrowings, we would be unable to repay the New Notes at maturity.

Enforcement of the New Notes, the guarantees in respect thereof and the Collateral securing the foregoing across multiple foreign jurisdictions may be difficult and involve long recovery times.

The Foreign Guarantors are organized under the laws of Canada (or a province thereof), England and Wales and Germany and certain Collateral is governed by the laws of such jurisdiction or located in such jurisdiction. As a result, the Collateral will be governed by the laws of such jurisdictions. In the event of judicial liquidation, bankruptcy, insolvency or a similar event, proceedings could be initiated in any of these jurisdictions. Your rights under the New Notes, the guarantees of the New Notes and the Collateral will thus be subject to the laws of a number of jurisdictions, and it may be difficult to effectively enforce such rights in multijurisdictional liquidation, bankruptcy, insolvency and other similar proceedings. Moreover, such multijurisdictional proceedings are typically complex and costly for creditors and often result in substantial uncertainty and delay in the enforcement of creditors’ rights. The judicial liquidation, bankruptcy, insolvency, administration and other laws of the Foreign Guarantors’ jurisdiction of organization which govern the security interest in the Collateral may be materially different from, or conflict with, each other and with the laws of the United States, including in the areas of creditors’ rights, priority of creditors, the ability to obtain post-petition interest and the duration of the insolvency proceeding. The application of these various laws in multiple jurisdictions could trigger disputes over which jurisdictions’ law should apply and could adversely affect your ability to enforce the Collateral securing the New Notes and to realize any recovery under the New Notes and the guarantees of the New Notes. See “Limitations on Validity and Enforceability of the Guarantees and the Security Interests and Certain Insolvency Law Considerations.”

Moreover, in certain jurisdictions, including Germany, it is unclear whether all security interests in the Collateral securing the New Notes give the security agent a right to prevent other creditors from foreclosing on and realizing the Collateral or whether certain security interests only give the security agent and the holders of the New Notes priority (according to their rank) in the distribution of any proceeds of such realization. Accordingly, the security agent and the holders of the New Notes may not be able to avoid foreclosure by other creditors (including unsecured creditors) on such Collateral.

It is possible that some of the Collateral securing the New Notes may not be enforceable.

The creation of security interests to secure the obligations of a third party may be limited under Canadian, English and Welsh and German law. As a result, enforcement of the Collateral securing the New Notes may be subject to certain statutory limitations or defenses or to limitations contained in the terms of the security documents designed to ensure compliance with applicable statutory requirements. See “Limitations on Validity and Enforceability of the Guarantees and the Security Interests and Certain Insolvency Law Considerations”.

 

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There are additional limitations on guarantees and security interests provided by our German Guarantor in the corporate form of a German limited liability company.

Any grant of a guarantee or security interest by a guarantor or security provider, respectively, will be subject to certain German capital maintenance rules of the German Act regarding companies with limited liability (Gesetz betreffend die Gesellschaften mit beschränkter Haftung) (the “GmbHG”) if that guarantor or security provider, respectively, is incorporated in Germany in the legal form of a German limited liability company (Gesellschaft mit beschränkter Haftung—a “GmbH”) and it guarantees or secures liabilities of its direct or indirect shareholders or subsidiaries of such shareholder that are not subsidiaries of that guarantor or security provider (i.e. up-stream or side stream securities). As a general rule, sections 30 and 31 of the GmbHG (“Sections 30 and 31 GmbHG”) prohibit a GmbH from disbursing its assets to its shareholders to the extent that the amount of the GmbH’s net assets (i.e., assets minus liabilities and liability reserves) is or would fall below the amount of its stated share capital (Stammkapital). Guarantees or security interests granted by a GmbH in order to guarantee or secure liabilities of a direct or indirect parent or sister company are considered disbursements under Sections 30 and 31 GmbHG. Therefore, in order to enable Fossil (Europe) GmbH (the “German Guarantor”) to grant a guarantee and to provide security interests to secure liabilities of a direct or indirect parent or sister company without the risk of violating Sections 30 and 31 GmbHG and to limit any potential personal liability of management, it is standard market practice for credit agreements, indentures, guarantees and security documents to contain so-called “limitation language” in relation to subsidiaries incorporated in Germany in the legal form of a GmbH. Pursuant to such “limitation language,” the beneficiaries of the guarantees and security interests, respectively, contractually agree, subject to certain exemptions, to enforce the guarantees and security interests against the German subsidiary only if and to the extent that such enforcement does not result in the subsidiary’s net assets falling below, or increasing an existing shortfall of, its stated share capital. See “Limitations on Validity and Enforceability of the Guarantees and the Security Interests and Certain Insolvency Considerations—Germany—Security—Limitations on Validity and Enforceability of the Guarantees and the Security Interests.”

Accordingly, as a matter of German corporate law, the relevant documents in relation to such guarantees and security interests granted by a GmbH will contain such contractual limitation language and such guarantees or security interests will be limited in the manner described. This could lead to a situation in which the respective guarantee or security interest granted by such GmbH cannot be enforced at all.

Relevant insolvency laws in foreign jurisdictions may provide you with less protection than U.S. bankruptcy law.

The procedural and substantive provisions of the insolvency and similar laws in many of the jurisdictions in which the Foreign Guarantors are organized are generally less favorable to secured creditors than comparable provisions of U.S. law and afford debtors and unsecured creditors only limited protection from secured creditors.

In the event that any one or more of the Foreign Guarantors, if any, or any other of our subsidiaries experiences financial difficulty, it is not possible to predict with certainty in which jurisdiction or jurisdictions insolvency, corporate arrangement (if applicable) or similar proceedings would be commenced, or the outcome of such proceedings. Any enforcement of the guarantees or security after bankruptcy or an insolvency event in such other jurisdictions will be subject to the insolvency laws of the relevant entity’s jurisdiction of organization or other jurisdictions. The application of these laws, or any conflict among them, could call into question which particular jurisdiction’s laws should apply, adversely affect your ability to enforce your rights under the guarantees or the security in these jurisdictions and limit any amounts that you may receive. See “Limitations on Validity and Enforceability of the Guarantees and the Security Interests and Certain Insolvency Considerations” for a description of the insolvency and similar laws in these jurisdictions, which could limit the enforceability of the guarantees and the security interests.

 

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Risks Related to the Collateral

The Company and the Guarantors will have control over the Collateral and the sale of particular assets could reduce their value.

The security documents will allow the Company and the Guarantors to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from the Collateral. So long as no event of default under the indentures that will govern the New Notes or the ABL Facility would result therefrom, the Company and the Guarantors may, among other things, without any release or consent by the applicable Notes Collateral Agent, conduct ordinary course activities with respect to the Collateral, such as selling, abandoning or otherwise disposing of Collateral and making ordinary course cash payments, including repayments of indebtedness. See “Description of First-Out Notes—Intercreditor Agreements—Use and Release of Collateral” and “Description of Second-Out Notes—Intercreditor Agreements—Use and Release of Collateral.”

The New Notes and the guarantees in respect thereof will be secured only to the extent of the value of the Collateral that has been granted as security for the New Notes and the guarantees in respect thereof, and such security may not be sufficient to satisfy the obligations under the New Notes and the guarantees in respect thereof.

The holders of the New Notes and the guarantees in respect thereof will be secured only by the Collateral. The Collateral will also secure the obligations under the ABL Facility, and may, to the extent permitted by the terms of the indentures that will govern the New Notes, the First-Out/Second-Out Intercreditor Agreement and the ABL Intercreditor Agreement, secure debt we may incur in the future, including debt that ranks on a pari passu basis with the New Notes and the guarantees in respect thereof with respect to the Collateral. Any debt that ranks on a pari passu basis with the New Notes and the guarantees in respect thereof with respect to the Collateral will dilute the claims of the holders of the New Notes to the extent of such debt.

No appraisals have been prepared by or on behalf of the Company or the Guarantors in connection with the issuance of the New Notes. The value of the Collateral may be subject to fluctuations based on factors that include, among others, general economic conditions, industry conditions and similar factors. The amount to be received upon an enforcement of such Collateral will depend upon many factors, including, among others, the ability to sell the Collateral in an orderly sale, the availability of buyers, whether or not our business is sold as a going concern, the jurisdiction in which the enforcement action or sale is completed, the ability to readily liquidate the Collateral and the condition of the Collateral. Further, there may not be any buyer willing and able to purchase our business as a going concern, or willing to buy a significant portion of our assets in the event of an enforcement action. The book value of the Collateral should not be relied on as a measure of realizable value for such assets. All or a portion of the Collateral may be illiquid and may have no readily ascertainable market value. Likewise, we cannot assure you that there will be a market for the sale of the Collateral, or, if such a market exists, that there will not be a substantial delay in our liquidation.

To the extent that security interests and other rights granted to other parties encumber assets constituting Collateral, those parties have or may exercise rights and remedies with respect to the assets subject to their security interests or other rights that could adversely affect the value of that Collateral and the ability of the applicable Notes Collateral Agent to take any enforcement action with respect to that Collateral.

There is no guarantee that the value of the Collateral will be sufficient to enable the Company or the Guarantors to satisfy their obligations under the New Notes or the guarantees in respect thereof.

It may be difficult to realize the value of the Collateral securing the New Notes.

The Collateral securing the New Notes will be subject to any and all exceptions, defects, encumbrances, liens and other imperfections permitted under the indentures that will govern the New Notes, the First-Out/Second-Out

 

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Intercreditor Agreement and the ABL Intercreditor Agreement. The existence of any such exceptions, defects, encumbrances, liens and other imperfections could adversely affect the value of the Collateral securing the New Notes, as well as the ability of the applicable Notes Collateral Agent to realize or foreclose on such Collateral. Furthermore, the first-priority ranking of security interests can be affected by a variety of factors, including, among others, the timely satisfaction of perfection requirements, statutory liens or recharacterization under applicable law.

The security interests of the applicable Notes Collateral Agent will be subject to practical problems generally associated with the realization of security interests in Collateral. It is impossible to predict how long payments under the New Notes could be delayed following commencement of a bankruptcy proceeding, whether or when the applicable Notes Collateral Agent could repossess or dispose of the Collateral or whether or to what extent a holder of the New Notes may be compensated for any delay in payment or loss of value of the Collateral. In addition, the applicable Notes Collateral Agent may need to obtain the consent of third parties and make additional filings or foreclose on Collateral. We cannot assure you that the consents of any third parties, if any, will be given when required to facilitate additional filings or foreclosure on any such assets. Accordingly, the applicable Notes Collateral Agent may not have the ability to foreclose or otherwise enforce against those assets, and the value of the Collateral may significantly decrease.

The security interests in the Collateral in the New Notes will be granted to the First-Out Notes Collateral Agent in respect of the First-Out Notes and the Second-Out Notes Collateral Agent in respect of the Second-Out Notes, rather than directly to the holders of the respective New Notes. The ability of any applicable Notes Collateral Agent to enforce claims against the Collateral may be restricted by law, the First-Out/Second-Out Intercreditor Agreement and the ABL Intercreditor Agreement.

The security interests in the Collateral that will secure our obligations under the New Notes and the obligations of the Guarantors under the guarantees in respect thereof will not be granted directly to the holders of the New Notes but will be granted only in favor of the applicable Notes Collateral Agent. The indentures that will govern the New Notes, the First-Out/Second-Out Intercreditor Agreement and the ABL Intercreditor Agreement regulate the mechanism under which enforcement of the respective security documents is provided. As a consequence, holders of the New Notes will not have direct security interests and will not be entitled to take enforcement action in respect of the Collateral securing the New Notes, except through their New Trustee, who will (subject to the provisions of the indentures that will govern the New Notes) provide instructions to the applicable Notes Collateral Agent in respect of the Collateral.

The New Notes and the guarantees in respect thereof will be secured on a second-priority basis or third-priority basis, as applicable, by the ABL Priority Collateral that secures the obligations under the ABL Facility, and such Collateral, together with the value of the Collateral securing the New Notes on a first-lien basis or second-lien basis, as applicable, may not be sufficient to satisfy the obligations under the New Notes and the guarantees in respect thereof.

The New Notes and the guarantees in respect thereof will be secured on a second-priority basis or third-priority basis, as applicable, by the ABL Priority Collateral owned by the Company that secures the obligations under the ABL Facility. The amount, if any, to be received by the holders of the New Notes upon an enforcement of any ABL Priority Collateral, will be subject first to the discharge in full of all outstanding obligations, including banking service and hedging obligations, secured under the ABL Facility, which rank first in relation to the ABL Priority Collateral. There is no guarantee that the value of such ABL Priority Collateral, together with the value of Collateral securing the New Notes on a first-priority basis or second-priority basis, as applicable, and any other proceeds received on behalf of the holders of the New Notes, will be sufficient to enable the Company or the Guarantors to satisfy their obligations under the New Notes or the guarantees in respect thereof.

 

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Your rights in the Collateral for the New Notes may be adversely affected by any failure to perfect the security interest in the Collateral and other issues generally associated with the realization of security interests in Collateral.

Under applicable law, a security interest in certain tangible and intangible assets can only be properly perfected (including enforceability vis-à-vis third parties upon registration before the relevant public registries), and its priority retained, through certain actions undertaken by the secured party and/or the grantor of the security. The liens on the Collateral securing the New Notes may not be perfected with respect to the claims of such New Notes if we fail or are unable to take the actions we are required to take to perfect any of those liens. In addition, applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate and certain proceeds, can only be perfected at or promptly following the time such property and rights are acquired and identified.

Neither the New Trustee nor the applicable Notes Collateral Agent will be obligated to monitor, and we may not comply with, our obligations to inform the respective New Trustee or the applicable Notes Collateral Agent of, any future acquisition of property and rights by us, and we may not take the necessary action to properly perfect the security interest in such property or rights. Such failure may result in the invalidity of the security interest in the Collateral for the New Notes or adversely affect the priority of the security interest in favor of the New Notes against third parties.

Not all assets will be included in the Collateral.

The New Notes will be effectively subordinated to any existing or future indebtedness of the Company that is secured by a lien on assets that do not constitute a part of the Collateral to the extent of the value of such assets. To the extent the claims of holders of the New Notes exceed the value of the Collateral securing the New Notes, claims of the holders of the New Notes related to any excluded assets will |rank equally with the claims of the holders of any other unsecured indebtedness. As a result, if the value of the assets granted as security for the New Notes is less than the value of the claims of the holders of the New Notes, those claims may not be satisfied in full before the claims of the unsecured creditors are paid.

Any future pledge of the Collateral or guarantee may be avoidable in bankruptcy.

Certain security interests in the Collateral securing the New Notes will neither be in place nor perfected on the Settlement Date. To the extent any security interests required by the indentures that will govern the New Notes and related security documents are not created and perfected on or prior to the Settlement Date, such indentures will require us to create and perfect all such security interests following the Settlement Date. Collateral pledged, or guarantees issued, after the Settlement Date may be treated under bankruptcy law as if they were pledged to secure, or delivered to guarantee, as applicable, previously existing indebtedness.

Any future pledge of the Collateral or issuance of a guarantee in favor of the holders of the New Notes (including any liens delivered or reinstated and/or pursuant to guarantees delivered in connection therewith after the date the New Notes are issued) may be avoidable by the pledgor (as a debtor in possession), guarantor (as a debtor in possession), by its trustee in bankruptcy, or potentially by other creditors if certain events or circumstances exist or occur, including, among others, if (i) the pledgor or guarantor is insolvent at the time of the pledge and/or issuance of the guarantee, (ii) the pledge and/or issuance of the guarantee (as applicable) permits the holders of the New Notes to receive a greater recovery in a hypothetical Chapter 7 case than if such pledge and/or guarantee (as applicable) had not been given and (iii) a bankruptcy proceeding in respect of the pledgor or guarantor is commenced within 90 days following the pledge or the perfection thereof and/or the issuance of the guarantee (as applicable), or, in certain circumstances, a longer period. Accordingly, if the Company or any Guarantor were to file for bankruptcy protection after the Settlement Date and any pledge of the Collateral not pledged, or any guarantees not issued, on the Settlement Date had been pledged or perfected or issued (as applicable) less than 90 days before commencement of such bankruptcy proceeding, such pledges or guarantees are materially more likely to be avoided as a preference by the bankruptcy court than if delivered on the Settlement Date (even if the

 

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other guarantees or liens (as applicable) issued on the Settlement Date would no longer be subject to such risk). To the extent that the grant of any such security interest and/or guarantee is avoided as a preference or otherwise, you would lose the benefit of the security interest and/or guarantee (as applicable).

Rights of holders of the New Notes in the Collateral may be adversely affected during bankruptcy proceedings.

The right of the applicable Notes Collateral Agent to foreclose upon, repossess and dispose of the Collateral securing the New Notes and the related guarantees is likely to be significantly impaired (or at a minimum delayed) by federal bankruptcy law if bankruptcy proceedings are commenced by or against the Company or the Guarantors prior to, or possibly even after, the applicable Notes Collateral Agent has repossessed and disposed of the Collateral. Under the Bankruptcy Code, a secured creditor, such as the applicable Notes Collateral Agent for the New Notes, is prohibited from foreclosing upon or repossessing its security from a debtor in a bankruptcy case, or from disposing of security previously repossessed from a debtor, without prior bankruptcy court approval (which may not be given under the circumstances). Moreover, bankruptcy law permits the debtor to continue to retain and use collateral, and the proceeds, products, rents or profits of the Collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to the circumstances, but it is intended in general to protect the value of the secured creditor’s interest in its collateral and may include cash payments or the granting of additional or replacement security, if and at such time as the court in its discretion determines, for any diminution in the value of the Collateral as a result of the automatic stay of repossession or disposition or any use of the Collateral by the debtor during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of its collateral if the value of the collateral exceeds the debt it secures. In view of both the lack of a precise definition of the term “adequate protection” under the Bankruptcy Code and the broad discretionary powers of a bankruptcy court, it is impossible to predict how, whether or when payments under the notes could be made following the commencement of a bankruptcy case, the length of the delay in making any such payments or whether any such payment will be made at all or in what form, whether or when the applicable Notes Collateral Agent could or would repossess or dispose of the Collateral, the value of the Collateral as of the commencement date of any bankruptcy proceedings, or whether or to what extent or in what form holders of the notes would be compensated for any delay in payment or loss of the value of the Collateral through the requirements of “adequate protection.”

The Collateral for the New Notes is subject to casualty risks.

Although we maintain insurance policies to insure against losses, there are certain losses that may be either uninsurable or not economically insurable, in whole or in part. As a result, it is possible that the insurance proceeds will not compensate us fully for our losses in the event of a catastrophic loss. We cannot assure you that any insurance proceeds received by us upon the total or partial loss of the Collateral for the New Notes will be sufficient to satisfy all of our secured obligations, including the New Notes.

Lien searches may not reveal all existing liens on the Collateral.

We cannot guarantee that the lien searches conducted on the Collateral securing the New Notes or the guarantees in respect thereof will reveal all existing liens on such Collateral. Any existing undiscovered lien could be significant, could be prior in ranking to the liens securing the New Notes or the guarantees in respect thereof and could have an adverse effect on the ability of the applicable Notes Collateral Agent to realize or foreclose upon such Collateral. Certain statutory priority liens may also exist that cannot be discovered by lien searches.

Risks Related to the Common Stock and Warrants

Our failure to meet the continued listing requirements of NASDAQ could result in a delisting of our Common Stock.

If we fail to satisfy the continued listing requirements of NASDAQ, such as the corporate governance requirements or the minimum closing bid price requirement, NASDAQ may take steps to delist our Common

 

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Stock. While we did not receive any delisting notices in 2024, our Common Stock closed below the $1.00 closing bid requirement for NASDAQ on a number of trading dates in early 2024. Such a delisting would likely have a negative effect on the price of our Common Stock and would likely impair your ability to sell or purchase our Common Stock. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with NASDAQ’s listing requirements. Additionally, if our Common Stock is not listed on, or becomes delisted from, NASDAQ for any reason, and is quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our Common Stock may be more limited than if we were quoted or listed on NASDAQ or another national securities exchange. Holders of our Common Stock may be unable to sell their Common Stock unless a market can be established or sustained.

Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.

Stockholders may, from time to time, engage in proxy solicitations or advance stockholder proposals, or otherwise attempt to effect changes and assert influence on our Board and management. For example, in February 2024, an activist stockholder nominated four directors for election at our 2024 annual meeting of stockholders. We reached an agreement in March 2024 with the activist stockholder, which resulted in the activist stockholder and the Company each nominating one candidate to our Board at our 2024 annual meeting. Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our Board could have an adverse effect on our operating results and financial condition. A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses and administrative and associated costs and require significant time and attention by our Board and management, diverting their attention from the pursuit of our business strategy. Any perceived uncertainties as to our future direction and control, our ability to execute on our strategy, or changes to the composition of our Board or senior management team arising from a proxy contest could lead to the perception of a change in the direction of our business or instability which may result in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified personnel, any of which could adversely affect our business and operating results. If individuals are ultimately elected to our Board with a specific goal, it may adversely affect our ability to effectively implement our business strategy and create additional value for our stockholders. We may choose to initiate, or may become subject to, litigation as a result of a proxy contest or matters arising from the proxy contest, which would serve as a further distraction to our Board and management and would require us to incur significant additional costs. In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

We may continue to experience rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our common stock may fluctuate dramatically, and may decline rapidly, regardless of any developments in our business.

Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our common stock or result in fluctuations in the price or trading volume of our common stock, including:

 

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the impact of tariffs on our business;

 

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the impact of any future pandemic;

 

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actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings and liquidity;

 

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our decision not to, or our current inability to, pay dividends or other distributions;

 

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publication of research reports by analysts or others about us or the specialty retail industry, which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis;

 

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changes in market valuations of similar companies;

 

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market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders;

 

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additions or departures of key personnel;

 

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actions by activist and institutional or significant stockholders;

 

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short interest in our stock and the market response to such short interest;

 

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a dramatic increase in the number of individual holders of our stock and their participation in social media platforms targeted at speculative investing;

 

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speculation in the press or investment community about our company or industry;

 

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financial results reported or comments or releases by certain of our significant public licensing partners pertaining to the watch category;

 

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strategic actions by us or our competitors, such as acquisitions or other investments;

 

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legislative, administrative, regulatory or other actions affecting our business or our industry, including positions taken by the Internal Revenue Service (“IRS”);

 

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investigations, proceedings, or litigation that involve or affect us;

 

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general market and economic conditions;

 

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a downgrade in our debt ratings; and

 

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the other risks identified herein.

Our organizational documents contain anti-takeover provisions that could discourage a proposal for a takeover.

Our certificate of incorporation and bylaws, as well as the General Corporation Law of the State of Delaware, contain provisions that may have the effect of discouraging a proposal for a takeover. These include a provision in our certificate of incorporation authorizing the issuance of “blank check” preferred stock and provisions in our bylaws establishing advance notice procedures with respect to certain stockholder proposals. Our bylaws may be amended by a vote of 80% of the Board, subject to repeal by a vote of 80% of the stockholders. In addition, Delaware law limits the ability of a Delaware corporation to engage in certain business combinations with interested stockholders.

Failure to meet our financial guidance or achieve other forward-looking statements we have provided to the public could result in a decline in our stock price.

From time to time, we provide public guidance on our expected financial results or disclose other forward-looking information for future periods. We manage our business to maximize our growth and profitability and not to achieve financial or operating targets for any particular reporting period. Although we believe that public guidance may provide investors with a better understanding of our expectations for the future and is useful to our existing and potential stockholders, such guidance is subject to risks, uncertainties and assumptions. Any such guidance or other forward-looking statements are predictions based on our then-existing expectations and projections about future events that we believe are reasonable. Actual events or results may differ materially from our expectations, and as such, our actual results may not be in line with guidance we have provided. We are

 

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under no duty to update any of our forward-looking statements to conform to actual results or to changes in our expectations, except as required by federal securities laws. If our financial results for a particular period do not meet our guidance or the expectations of investors, or if we reduce our guidance for future periods, the market price of our common stock may decline and stockholders could be adversely affected. Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk. In addition, our stock price may also decline if we fail to meet securities research analysts’ projections. Similarly, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price could decline.

There is currently no public market for the Initial Public Warrants or the Pre-Funded Public Warrants offered hereby and the Initial Public Warrants and the Pre-Funded Public Warrants will not be listed on any stock exchange.

There is currently no public market for the Initial Public Warrants or the Pre-Funded Public Warrants offered hereby and there can be no assurance that an active public market will develop or be sustained after completion of the offering. The Dealer Manager is not obligated to, and does not intend to, make a market in the Initial Public Warrants or the Pre-Funded Public Warrants and we do not intend to list the Initial Public Warrants or the Pre-Funded Public Warrants for trading on any securities exchange. In the event a public market for the Initial Public Warrants or the Pre-Funded Public Warrants does not develop or cannot be sustained, it is not possible to predict the price at which the Initial Public Warrants or the Pre-Funded Public Warrants will trade in the secondary market or whether such market will be liquid or illiquid. To the extent the Initial Public Warrants or the Pre-Funded Public Warrants are exercised, the number of Initial Public Warrants or the Pre-Funded Public Warrants outstanding will decrease, which could result in diminished liquidity for such remaining outstanding Initial Public Warrants or the Pre-Funded Public Warrants. A decrease in the liquidity of the Initial Public Warrants or the Pre-Funded Public Warrants may cause, in turn, an increase in the volatility associated with the price of the Initial Public Warrants or the Pre-Funded Public Warrants. To the extent that the Initial Public Warrants or the Pre-Funded Public Warrants are or become illiquid, an investor may have to exercise the Initial Public Warrants or the Pre-Funded Public Warrants to realize value.

Investors will have no rights as a shareholder with respect to their Initial Public Warrants or the Pre-Funded Public Warrants until they exercise their Initial Public Warrants or the Pre-Funded Public Warrants and acquire shares of our Common Stock.

Until you acquire shares of Common Stock upon exercise of your Initial Public Warrants or the Pre-Funded Public Warrants, you will have no rights with respect to the shares of Common Stock underlying such Initial Public Warrants or the Pre-Funded Public Warrants. Upon exercise of your Initial Public Warrants or the Pre-Funded Public Warrants, you will be entitled to exercise the rights of a shareholder only as to matters for which the record date occurs after the exercise date.

Risks Related to Taxation

The Exchange Offer and Rights Offering are complex and may be a fully-taxable transaction for U.S. federal income tax purposes.

The treatment of the Exchange Offer and Rights Offering is complex and subject to numerous interpretational issues and uncertainties in tax treatment. As relates to exchanging Holders, we intend to take the position for U.S. federal income tax purposes that the Exchange Offer and Rights Offering should be treated as part of a single integrated offer (particularly given the economic incentive of exchanging Old Notes for First-Out Notes for Holders that participate in the Rights Offering) and, accordingly, that the Subscription Rights should not be treated as a separate property right or otherwise accorded separate tax significance. As an integrated transaction, a Holder that exchanges their Old Notes and is a New Money Participant generally would be treated as exchanging their Old Notes and cash for an investment unit consisting of First-Out Notes, Common Stock and

 

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Initial Public Warrants and a Non-New Money Participant generally would be treated as exchanging Old Notes for an investment unit consisting of Second-Out Notes and Initial Public Warrants. There is no assurance that the U.S. Internal Revenue Service (“IRS”) will not assert that the Rights Offering should be treated as a separate transaction, in which event the receipt of the Subscription Rights potentially could be treated as a taxable receipt with the consequences discussed under “—Holders that do not exchange their Old Notes may recognize gain or loss for U.S. federal income tax purposes and the liquidity or tax reporting of their Old Notes may be impacted.”

An exchange of Old Notes in the Exchange Offer will be a fully taxable transaction for U.S. federal income tax purposes unless the exchange qualifies as a “recapitalization” for U.S. federal income tax purposes. We expect to take the position that the exchange of Old Notes for Second-Out Notes and Initial Public Warrants pursuant to the Exchange Offer qualifies as a recapitalization for U.S. federal income tax purposes. If the exchange so qualifies, a Holder would recognize gain (but not loss) in the exchange equal to the lesser of its realized gain and the issue price of any Second-Out Notes received from the Consent Premium. Although we expect that the exchange of Old Notes for First-Out Notes, Common Stock and Initial Public Warrants pursuant to the Exchange Offer and Rights Offering (inclusive of the First-Out Notes and the Common Stock in view of the treatment of the Exchange Offer and Rights Offering as a single integrated transaction) will also qualify as a recapitalization for U.S. federal income tax purposes due to the receipt of the Common Stock and Initial Public Warrants, Holders may nonetheless recognize a significant amount of their realized gain (but not loss) in such exchange since the First-Out Notes are not expected to constitute non-recognition property. We also believe that the First-Out Notes and Second-Out Notes received, as applicable, in the Consent Premium in recognition of an exchanging Holder’s deemed consents in the Consent Solicitation reasonably should be treated as part of the New Notes in exchange for their Old Notes and not as a separate payment or fee. However, there is no assurance that the IRS will not take a contrary position as to some or all of the matters as to which there are interpretational issues or uncertainties in treatment, including with respect to the computation of any gain (or loss) recognizable.

See “Material U.S. Federal Income Tax Considerations” for further information.

Holders that do not exchange their Old Notes may recognize gain or loss for U.S. federal income tax purposes and the liquidity or tax reporting of their Old Notes may be impacted.

Whether the adoption of the Proposed Amendments will constitute a realization event for U.S. federal income tax purposes depends on whether such adoption is considered to result in a “significant modification” of the Old Notes. If the adoption of the Proposed Amendments results in a “significant modification” of the Old Notes, there would be a deemed exchange of the Old Notes for the modified Old Notes (and the modified Old Notes would be treated as newly-issued for U.S. federal income tax purposes) that would result in Holders that do not tender their Old Notes pursuant to the Exchange Offer recognizing gain or loss for U.S. federal income tax purposes unless that deemed exchange qualifies as a “recapitalization” for U.S. federal income tax purposes. Additionally, any modified Old Notes that are considered to be newly issued as a result of a deemed exchange would (unlike the current Old Notes) be expected to be “issued” with original issue discount for U.S. federal income tax purposes (regardless of whether recapitalization treatment applies). Although the issue is not free from doubt, we intend to take the position that the adoption of the Proposed Amendments will not cause a significant modification of the Old Notes for U.S. federal income tax purposes and thus will not cause a deemed exchange of the Old Notes.

The treatment of the receipt of the Subscription Rights pursuant to the Rights Offering is uncertain. As discussed in the preceding risk factor with respect to exchanging Holders, we intend to take the position for U.S. federal income tax purposes that the Exchange Offer and Rights Offering should treated as part of a single integrated offer (particularly given the economic incentive of exchanging Old Notes for First-Out Notes for Holders that participate in the Rights Offering) and, accordingly, that the Subscription Rights should not be accorded separate significance. Consistent therewith, we believe that a Holder that does not separately exercise their Subscription Rights should simply be treated as rejecting the integrated offer. It is possible, however, that the Rights Offering and therefore the receipt and/or exercise of the Subscription Rights could be treated separate from the Exchange

 

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Offer for U.S. federal income tax purposes in accordance with its form. Even in such instance, the tax treatment of the Subscription Rights is uncertain. For example, the Subscription Rights could be treated for U.S. federal income tax purposes as: (i) a separate, potentially taxable property right (possibly to all Holders or just to an exercising Holder), the value of which would be separately tested to determine whether there would be a “significant modification” of the Old Notes due to an effective change in yield and, thus, a deemed exchange of the Holder’s Old Notes that are not exchanged for New Notes or (ii) as itself reflecting a modification of the terms of Old Note due to the fact that the Subscription Rights are not separately transferable but rather trade with the Old Notes, in which case the receipt of the Subscription Rights would appropriately be tested under general economic significance test together with the adoption of the Proposed Amendments. If the Subscription Rights results in a “significant modification” of the Old Notes, a Holder might recognize gain or loss as described above. Even if not resulting in a “significant” modification, there is a possibility certain of the Old Notes which remain outstanding after the Transactions could be considered to have been modified as a result of the receipt or exercise of the Subscription Rights (i.e., Old Notes held by an exercising Holder) while others may not. In such event, such modified Old Notes may not be “fungible” for U.S. federal income tax purposes with any Old Notes that are not also so modified. It is possible that this may have an adverse impact on the liquidity and also affect the tax reporting of any remaining Old Notes.

See “Material U.S. Federal Income Tax Considerations—Tax Consequences to Non-Exchanging Holders” for further information.

The New Notes are expected to be issued with original issue discount for U.S. federal income tax purposes.

The New Notes are expected to be issued with original issue discount for U.S. federal income tax purposes. In such case, a holder subject to U.S. federal income taxation generally will be required to include such original issue discount in gross income (as ordinary income) on a constant yield to maturity basis without a commensurate cash payment until final maturity, regardless of such holder’s method of accounting for U.S. federal income tax purposes. Consequently, such a holder could have a resulting tax liability without having received a corresponding amount of cash. See “Material U.S. Federal Income Tax Considerations—Tax Consequences to Exchanging Holders.”

We may recognize a significant amount of cancellation of indebtedness (“COD”) income as a result of the consummation of the Transactions.

The exchange of Old Notes pursuant to the Exchange Offer may result in a significant amount of COD income to the Company for U.S. federal income tax purposes. Since the amount of COD income recognized by the Company generally depends on the “issue price” of the New Notes as determined for U.S. federal income tax purposes (see “Material U.S. Federal Income Tax Considerations—Tax Consequences to Exchanging Holders—Issue Price of the New Notes”) and the fair market value of the Common Stock and Initial Public Warrants received, the precise amount of COD income, if any, resulting from the exchange of Old Notes cannot be determined until after the date of the exchange. However, we anticipate that all or substantially all of any COD income that it may recognize in connection with the exchanges will be offset by current-year tax losses. To the extent that such losses and the other tax attributes of the Company are not sufficient to fully offset any COD income (whether due to the amount of COD income, other income generated by the Company, limitations on the utilization of all or some of the Company’s tax attributes or otherwise), the Company may incur a resulting cash tax liability.

Our ability to use our net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations.

As of December 31, 2024, the Company has estimated federal net operating loss carryforwards of approximately $331 million and certain other tax attributes. If we undergo an “ownership change,” our ability to utilize our pre-ownership change losses and tax credits to offset post-ownership change taxable income or tax liability will

 

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be subject to certain limitations. In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation undergoes an “ownership change” if there is a greater than 50-percentage-point cumulative change (by value) in the equity ownership (including interests treated as equity ownership for this purpose) of certain stockholders over a rolling three-year period. Generally, the amount of the annual limitation is determined based on a corporation’s value immediately prior to the ownership change. In addition, for state income tax purposes, our ability to offset COD income with state net operating loss carryforwards and other tax attributes will be impacted by the mix of income between states and state-specific limitations. The Company does not believe at this time that the issuance of the Initial Public Warrants or Common Stock pursuant to the Transactions (or subsequent exercise of Initial Public Warrants or Pre-Funded Public Warrants by a Holder) will give rise to an ownership change. However, future issuances or sales of our Common Stock or other interests treated as our equity (including transactions involving our stock that are not within our control) could result in a current or subsequent ownership change.

 

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Pursuant to the indentures governing the New Notes, the New Notes will be jointly and severally, and unconditionally guaranteed on a senior secured basis, by Fossil Canada Inc., Fossil (Europe) GmbH, Fossil Global Holdings, Inc., Fossil Intermediate, Inc., Fossil Partners, L.P., Fossil Stores I, Inc., Fossil Trust, Fossil (UK) Limited and Fossil (UK) Holdings Limited, all wholly owned subsidiaries of the Company, and, if required pursuant to the applicable indenture, certain other future subsidiaries of the Company. See “Description of the First-Out Notes” and “Description of the Second-Out Notes.”

The following tables present the summarized financial information specified in Rule 1-02(bb)(1) of Regulation S-X for the Company and each Guarantor on a combined basis. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X. Intercompany balances and transactions among the Company and the Guarantors have been eliminated. Amounts attributable to the investment in consolidated subsidiaries of the Company that have not issued or guaranteed the New Notes have been excluded. Amounts due to, amounts due from, and transactions with non-obligor subsidiaries are separately disclosed, as applicable.

Combined Parent and Guarantor Subsidiaries Summarized Results of Operations

 

(in thousands)		27 Weeks Ended July 5, 2025				52 Weeks Ended December 28, 2024
Revenues		$	246,320			$	651,196
Revenue from non-obligor subsidiaries			10,856				33,203
Total selling, general and administrative expenses			173,067				447,061
Operating income			(59,002	)			(187,189	)
Income (loss) before income taxes			(50,056	)			(166,365	)
Net income (loss)			(51,803	)			(169,513	)

Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet

 

(in thousands)		As of July 5, 2025				As of December 28, 2024
Assets
Amounts due from non-obligor subsidiaries		$	109,516			$	106,028
Current assets			160,071				224,318
Non-current assets			99,272				107,684
Liabilities
Amounts due to non-obligor subsidiaries		$	256,243			$	227,889
Current liabilities			90,762				144,748
Non-current liabilities			235,422				239,224

 

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THE EXCHANGE OFFER AND CONSENT SOLICITATION

The Exchange Offer

The Company is offering Holders the opportunity to exchange all of their Old Notes for an equal aggregate principal amount of New Notes in the Exchange Offer as follows:

 

•

First-Out Notes: In the case of Holders of the Old Notes that exercise their Subscription Rights and validly subscribe for and purchase their Required Subscription Amount of First-Out Notes in the Rights Offering, First-Out Notes in an amount equal to 100% of the face amount of such First-Out Notes per equal face amount of Old Notes validly tendered (and not validly withdrawn) plus their pro rata portion of Initial Public Warrants.

 

•

Second-Out Notes: In the case of Holders that do not subscribe for and/or purchase their Required Subscription Amount of First-Out Notes in the Rights Offering, Second-Out Notes in an amount equal to 100% of the face amount of such Second-Out Notes per equal face amount of Old Notes validly tendered (and not validly withdrawn) plus their pro rata portion of Initial Public Warrants.

For purposes of the Exchange Offer, a Holder’s “pro rata portion” of the Initial Public Warrants will be determined as the proportion that such Holder’s Old Notes validly tendered and not withdrawn represent of the aggregate of all Old Notes validly tendered and not withdrawn in the Exchange Offer and Old Notes delivered by the Supporting Holders for exchange in the Supporting Holders Exchange, based on the principal amount of Old Notes so tendered and not withdrawn and delivered by such Holder or, in the case of a UK Proceeding, based on the total Old Notes outstanding.

In connection with the Exchange Offer, the Company is also soliciting from Holders in the Consent Solicitation consents for the Proposed Amendments. See “—Consent Solicitation.” You may not tender your Old Notes in the Exchange Offer without also providing your consent to the Proposed Amendments and your proxy to the Information, Exchange and Subscription Agent in support of the UK Proceeding. To validly participate in the Exchange Offer, a Holder must also tender all their Old Notes.

Subject to applicable law, the Exchange Offer, the Rights Offering, the Consent Solicitation and UK Proceeding are each being made independently of each other. The Company reserves the right to terminate, withdraw or amend one or more of the Exchange Offer, the Rights Offering, the Consent Solicitation and UK Proceeding independently of each other at any time and from time to time, as described in this prospectus.

The New Notes issued in the Exchange Offer will be issued in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof, and will be exchanged on a one-for-one basis of the face value of the Old Notes exchanged. See “Description of the First-Out Notes—General” and “Description of the Second-Out Notes—General.”

Each of the First-Out Notes and the Second-Out Notes is a new series of debt securities that will be issued under a separate indenture from each other and from that of the Old Notes. The terms of each series of New Notes will include those expressly set forth in such New Notes and the indenture governing such series of New Notes. See “Description of the First-Out Notes” and “Description of the Second-Out Notes.”

Holders of Old Notes that are accepted for exchange pursuant to the Exchange Offer will be entitled to receive accrued and unpaid interest, if any, in cash on such Old Notes up to, but excluding, the Settlement Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

The consummation of the Exchange Offer is subject to, and conditional upon, the satisfaction or, where permitted, the waiver of the conditions discussed under “—Conditions to the Exchange Offer, If We Do Not Proceed with a UK Proceeding,” including, among other things, the Minimum Tender Condition, the Transaction Support Agreement, including the Backstop Commitment agreed thereunder, remaining in full force and effect (see “The Transaction Support Agreement”) and the registration statements of which this prospectus forms a part having

 

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