EXPECTED TIMELINE OF PRINCIPAL EVENTS

IMPORTANT NOTICE TO PLAN CREDTORS

ARE YOU A PLAN CREDITOR?

OVERVIEW OF THE EFFECT OF THE RESTRUCTURING PLAN ON PLAN CREDITORS

THE ROLE OF THE RETAIL ADVOCATE

PART A BACKGROUND TO AND REASONS FOR THE RESTRUCTURING PLAN

PART B SUMMARY OF THE NOTES RESTRUCTURING

PART C SUMMARY OF THE TERMS OF CERTAIN KEY RESTRUCTURING DOCUMENTS

PART D CERTAIN LEGAL ASPECTS OF THE RESTRUCTURING PLAN

PART E RELEVANT ALTERNATIVE AND PLAN BENEFITS

PART F RISK FACTORS

Appendix 1 PLAN CREDITOR LETTER

Appendix 2 INSTRUCTIONS AND GUIDANCE FOR PLAN CREDITORS

SECTION 1 – GENERAL GUIDANCE

SECTION 2 – VOTING GUIDANCE FOR PLAN CREDITORS

Appendix 3 FORM OF NOTICE OF PLAN MEETING

Appendix 4 DEFINITIONS

Appendix 5 GROUP STRUCTURE CHART

Appendix 6 RESTRUCTURING PLAN

Appendix 7 RELEVANT ALTERNATIVE AND PLAN BENEFITS REPORT

Appendix 8 TRANSACTION IMPLEMENTATION DEED

Appendix 9 FIRST-OUT NOTES INDENTURE

Appendix 10 SECOND-OUT NOTES INDENTURE

Appendix 11 FIRST-OUT/SECOND-OUT INTERCREDITOR AGREEMENT

Appendix 12 ABL INTERCREDITOR AGREEMENT

Appendix 13 DEED OF RELEASE

Appendix 14 MUTUAL RELEASE AGREEMENT

completing the online form of Plan Creditor Letter and uploading all accompanying documents on the Plan Website; or

transmitting the validly completed Plan Creditor Letter (including the DTC Participant Certification) in a scanned PDF with all accompanying documentation via email to the Information Agent at: registration@epiqglobal.com with “Fossil” referenced in the subject line.

EVENT / DEADLINE

Record Date – the date on which the Plan Creditors’ entitlement to vote on the Restructuring Plan and the value of their Plan Claims are calculated from

Voting Instructions Deadline – subject to voting in person or via proxy at the Plan Meeting itself, the latest date and time by which the Plan Creditors must submit their Plan Creditor Letters and make their elections in respect of voting at the Plan Meeting

Plan Meeting – the date of the hybrid physical and virtual meeting of the Plan Creditors to vote (either in person, by way of video conference, or by proxy) on the Restructuring Plan

Sanction Hearing – the Court hearing to sanction the Restructuring Plan

Conditional Expiration Time – the latest time by which Plan Creditors will be able to elect to participate in the New Money Offering by instructing the DTC Participant(s) holding their Notes to validly electronically deliver their Notes into the event established on the ATOP system. If a Plan Creditor does so, they will be automatically agreeing to pay for their portion of the New Money Offering on the Subscription Payment Deadline

EVENT / DEADLINE

Plan Effective Date – the date on which the Restructuring Plan is anticipated to become effective (if sanctioned by the Court and assuming all conditions precedent are satisfied and/or waived in due course)

Subscription Payment Deadline – the date on which payment for the New Money Offering will be automatically charged by DTC to the DTC Participant (other than Supporting Holders) of the Plan Creditors that elect to participate in the New Money Offering

Restructuring Effective Date – the date on which the Notes Restructuring is anticipated to be implemented

Information

Tax

Electronic Form

Restrictions

Summary Only

Registration Statements and the Prospectus

Forward-Looking Statements

Risk Factors

Legal, Tax and Financial Advice

Other Jurisdictions

Plan Creditors

For the purposes of the Restructuring Plan, the Plan Creditors will include the Noteholders.

In particular, a Plan Creditor is any person who may have a claim against the Company in respect of the Notes. As the Notes are securities that are held in global form, the creditors under the Notes comprise those Noteholders who have beneficial interests in the Notes and who are the owners of the ultimate economic interest in the Notes, which they may hold directly or through an intermediary or participant. In the context of the Restructuring Plan, the Noteholders are considered contingent creditors of the Company as a result of their entitlement (pursuant to the terms of the Notes Indenture) to exchange their beneficial interests in the global certificates representing the Notes for individual certificated notes (registered in their names) in certain limited circumstances. The Noteholders may hold their beneficial interest indirectly via DTC Participants or may hold their beneficial interest via other nominees, with these nominees in turn holding beneficial interests via DTC Participants. These nominees are not creditors because they hold no real economic interest in the Notes, nor are they shown as holding a beneficial interest in the Notes in the records of DTC. Additional parties with an interest in the Notes are detailed below:

The Notes Trustee who, whilst having no economic interest in the Notes, is nevertheless a creditor of the Company by virtue of its right to enforce payments due in respect of the Notes pursuant to various clauses in the Notes Indenture;

DTC Participants (also referred to as Account Holders) who hold their beneficial interests in the Notes in book-entry form through DTC. Generally, DTC Participants are large banks, broker-dealers or other major financial institutions, which hold securities accounts with DTC and prime brokerage clients. DTC Participants may hold beneficial interests in the Notes for their own account (in which case they will be Noteholders) or as agents for the account of their clients (in which case they have no economic interests in the Notes, and may be known as “intermediaries” or “participants”). Cede & Co., as nominee for DTC, is the registered holder of the Notes held by DTC Participants and the Notes Trustee acts as custodian of the Notes held by DTC Participants;

Intermediaries who hold an interest in the Notes on behalf of another person or other persons, and do not hold that interest as a DTC Participant; and

Cede & Co. as nominee for DTC who, whilst also having no economic interest in the Notes, is nevertheless considered a creditor of the Company as it is the registered legal holder of the Notes in global form.

For the purposes of voting on the Restructuring Plan, only Plan Creditors who are the ultimate beneficial owners of the Notes at the Record Date, being Monday, 27 October 2025, will be entitled to attend and vote on the relevant Restructuring Plan unless the Company, in its sole and absolute discretion, elects to recognise a transfer of Notes after the Record Date. Note that while DTC Participants and Intermediaries can be Plan Creditors where they hold Notes on their own account, it is expected that the DTC Participants and Intermediaries will not attend the Plan Meeting or exercise their right to vote on the Restructuring Plan unless they are also an ultimate beneficial owner of the Notes (as applicable). The Chairperson will also be taking measures at the Plan Meeting to ensure that no double counting arises in respect of any Notes held by the Notes Trustee, Cede & Co., DTC Participants and Intermediaries and that only the votes of Plan Creditors are counted.

In order to vote on the Restructuring Plan and prove that you are the ultimate beneficial owner on the Record Date, Plan Creditors are required to either: (i) have had their DTC Participant(s) submit an Agent/Attorney-in-Fact and Proxy Nominee Form (in the form as was appended to the Registration Statements) and electronically deliver the Plan Creditor’s Notes into the ATOP system in accordance with the Exchange Offer prior to the Exchange Offer Expiration Time; or (ii) submit a Plan Creditor Letter to the

In determining whether a particular person is the ultimate beneficial owner, and therefore a Plan Creditor, entitled to a particular principal amount of Notes, each of the Company, the Chairperson and the Information Agent may rely on such evidence and/or information and/or certification as it shall, in its absolute discretion, think fit and, if it does so rely, such evidence, information and/or certification shall, in the absence of manifest error, be conclusive and binding on all concerned.

No Plan Creditor will be entitled to vote at the Plan Meeting if they:

are the target of any economic or financial sanctions laws or regulations, as amended from time to time, administered, enacted, or enforced by the United States, the United Kingdom, the United Nations, the European Union or any member states thereof, and any other jurisdiction applicable to the Group (“Sanctions”) (including, without limitation, by reason of ownership, control or agency (in accordance with applicable Sanctions laws or regulations) by or with any person that is the target of any applicable Sanctions laws or regulations) that: (A) prohibit them from dealing with the Notes or being offered, or otherwise accepting or receiving, any applicable related fees; or (B) prohibit them from otherwise engaging in any transaction in respect of the Restructuring Plan; or

hold any direct or indirect interest in the Notes through a DTC Participant, custodian or other member or participant in the clearing system that is described in paragraph 11.6(a) above such that the DTC Participant, custodian or other member or participant in the clearing system would be subject to the same prohibitions as those described in paragraph 11.6(a) above, except (subject to obtaining any relevant Required Licences (as defined below)) in circumstances where the dealing and/or other engagement in respect of the Notes in connection with the Restructuring Plan are not required to be conducted through that DTC Participant, custodian or other member or participant in the clearing system, (a “Sanctions Disqualified Person”), from the time of receipt of their Plan Creditor Letter to the date of the Plan Meeting.

The Company is continuously evaluating required steps to ensure continued compliance with its obligations under applicable Sanctions laws and regulations. As such, the Company may determine in its absolute discretion that authorisation from competent Sanctions authorities may be required in connection with, and to implement, the Notes Restructuring and that certain licences may be required in advance of the Plan Meeting (collectively referred to as the “Required Licences”).

If a person is in any doubt as to whether or not it is a Plan Creditor, such person should contact the Retail Advocate or the Information Agent using the contact details set out paragraph 49 (Questions and contact details).

Plan Claims

For the purposes of voting at the Plan Meeting, Plan Claims will be calculated for each Plan Creditor, by reference to its aggregate outstanding principal amount of Notes as at the Record Date (and as calculated with reference to the relevant provisions of the Notes Indenture).

Plan Claims calculated in this manner will, absent a manifest error, be deemed final and conclusive for the purposes of voting at the Plan Meeting.

Unless you are a Record Date Tendered Creditor, you must submit a Plan Creditor Letter by the Voting Instructions Deadline in order to provide evidence of your Plan Claim if you wish to vote at the Plan Meeting.

However, if a Plan Creditor has any queries and/or concerns relating to the above-described calculation methodology, such Plan Creditor should contact the Information Agent or the Retail Advocate as soon as possible and in any event prior to the Record Date.

General Note

Key Features of the Restructuring Plan and the Notes Restructuring

A summary of the:

terms of the Restructuring Plan (as set out at Appendix 6 (Restructuring Plan)) and the conditions precedent for it to be implemented are set out in detail at paragraphs 28 (Summary of the Restructuring Plan) and 29 (Key conditions to the Restructuring Plan) below; and

the New Money Offering are set out at paragraph 27 (Key Features of the Notes Restructuring as implemented via the Restructuring Plan) below.

If:

you vote in favour of the Restructuring Plan at the Plan Meeting and the requisite statutory majority of Plan Creditors approve it;

the Court sanctions the Restructuring Plan at the Sanction Hearing; and

all other conditions to the Restructuring Plan are satisfied or waived,

under the terms of the Restructuring Plan:

in accordance with the compromise effected by the Restructuring Plan on the Restructuring Effective Date, your holdings of Notes will be cancelled by the Notes Trustee, no longer be recorded on DTC and no longer be recorded in your holdings maintained with your DTC Participant(s) (also known as Account Holder(s) as explained at paragraph 11 (Plan Creditors) above); and

the Plan Consideration you will be issued on the Restructuring Effective Date will be as set out in the table below:

If you do NOT elect to participate in the New

Money, your DTC Participant(s) will be

issued with the following via DTC:

The key terms of:

the First-Out Notes are set out at paragraph 35 (First-Out Notes Indenture);

the Second-Out Notes are set out at paragraph 36 (Second-Out Notes Indenture); and

the Warrants are set out at paragraph 39 (Warrants).

Estimated Outcomes

The table below summarises the estimated outcomes for Plan Creditors through the Notes Restructuring if implemented through the Restructuring Plan and compares it to the Relevant Alternative. The calculations contained in the table have been prepared by the Company and its advisers with input taken from the Relevant Alternative and Plan Benefits Report (as set out at Appendix 7. (Relevant Alternative and Plan Benefits Report)) in respect of the estimated outcomes in the Relevant Alternative.

Estimated returns under the Relevant Alternative

Notes

Estimated Returns under the Restructuring Plan

Plan Creditor Returns – Worked Example

To provide further clarity on what these estimated returns for Plan Creditors mean in practice, the following worked example has been prepared by the Company and its advisers to demonstrate the application of the Restructuring Plan’s mechanics to a hypothetical Retail Holder (“Creditor A”) with a holding of Notes in an aggregate outstanding principal amount of US $1,000.00. The example walks through the calculation of returns for Creditor A under both the Relevant Alternative and the Restructuring Plan subject to their participation in the New Money Offering.

Figure 1: Creditor A in the Relevant Alternative

Figure 2: Returns to Creditor A as a New Money Participant

First Out Notes

1,000 / 150,000,000

= 0.0007% (to nearest four decimal places)

(1,000 / 150,000,000) * 32,500,000

= US $216.67 (to nearest two decimal places)

US $1,000 + $216.67

= US $1,216.67 (to nearest two decimal places)

0.0950 * 1,216.67 * 3.13 (assuming the First-Out Notes are issued on the Restructuring Effective Date of 13 November 2025)

= US $362.16 (to nearest two decimal places)

0.0750 * 1,216.67

= US $91.25 (to nearest two decimal places)

US $1,216.67 + US $362.16 + US $91.25

= US $1,670.08 (to the nearest two decimal places)

Note: This is on the basis that the Company considers the First-Out Notes will be paid out in full on maturity.

Common Stock

(32,500,000 / 34.06) * 0.0007%

= 6.00 (rounded down to the nearest whole number of shares)

6 * 2.59 (being FGI’s share price at market close on 3 October 2025)

=US $15.54 (to the nearest two decimal places)

Warrants

(1,000 / 150,000,000) * 3,000,000

= 20

20 * 0.50

= US $10.00 (to the nearest two decimal places)

20 * 2.59 (being FGI’s share price at market close on 3 October 2025)

=US $51.80 (to the nearest two decimal places)

51.80 – 10.00

= US $ 41.80

Conclusion

216.67 + 10.00

= US $226.67

US $1,670.08 + US $15.54 + US $41.80

= US $1,727.42

Figure 3: Returns to Creditor A as a Non-New Money Participant

Second-Out Notes

0.0750 * 1,000 * 3.63 (assuming the Second-Out Notes are issued on the Restructuring Effective Date of 13 November 2025)

= US $272.29 (to the nearest two decimal places)

US $1,000 + US $272.29

= US $1,272.29

Warrants

(1,000 / 150,000,000) * 3,000,000

= 20

20 * 0.50

= US $10.00

20 * 2.59 (being FGI’s share price at market close on 3 October 2025)

=US $51.80 (to the nearest two decimal places)

51.80 – 10.00

= US $ 41.80

Conclusion

US $1,272.29 + US $41.80

= US $1,314.09

Retail Advocate

The Company has appointed Mr. Jon Yorke to act as an independent representative (the “Retail Advocate”) of the Plan Creditors who are not professional or institutional investors and hold the Notes for their own personal account (the “Retail Holders”). Mr Yorke is an experienced insolvency and restructuring lawyer who has acted as the “Retail Advocate” in a number of other restructurings involving a restructuring plan pursuant to Part 26A of the Companies Act. Mr Yorke’s role is to engage with Retail Holders and consider their views on the Restructuring Plan, answer their questions, and present their views to the Court at both the Convening Hearing and the Sanction Hearing.

The role of the Retail Advocate can be summarised as follows:

Stage 1: Prior to the date of this Explanatory Statement, the Retail Advocate has and will continue to:

review correspondence received by him or the Company from Retail Holders setting out any comments and feedback on the Restructuring Plan;

seek to engage with Retail Holders to understand any concerns they have in relation to the Restructuring Plan;

ahead of the Convening Hearing, prepare a report for the Court on the comments, objections and challenges of the Retail Holders (if any), in particular in relation to: (A) the composition of the class of Plan Creditors for the purposes of voting on the Restructuring Plan; and (B) to the extent initial feedback has been received, the fairness of the Restructuring Plan; and

attend the Convening Hearing, represented by counsel, to answer any questions the Court might have in relation to the report or the role of the Retail Advocate.

Stage 2: following the Convening Hearing, the Retail Advocate will:

continue the engagement described in paragraph 17.2(a) above;

attend the Plan Meeting;

review the information provided to the Retail Holders and the relevant documentation in relation to the Restructuring Plan;

ahead of the Sanction Hearing, prepare a final report for the Court addressing all matters that may be of relevance to the Sanction Hearing; and

attend the Sanction Hearing, represented by counsel, to explain his role and the conclusions of his final report.

If a Retail Holder has any questions or objections regarding the Restructuring Plan or the Notes Restructuring, they are encouraged to contact the Retail Advocate, without charge, by emailing jy@fgadvocate.com.

Introduction

You are being sent this Explanatory Statement as a Plan Creditor. The Company has proposed the Restructuring Plan to the Plan Creditors in light of its circumstances described in paragraph 21 (The Group’s Financial Difficulties) below of this Part A (Background to and Reasons for the Restructuring Plan).

The Restructuring Plan is being proposed to Plan Creditors with the primary objective of facilitating the implementation of the Notes Restructuring. To achieve this, the Restructuring Plan aims to deliver the consents of the Plan Creditors required to facilitate the execution of all requisite documentation to bind the parties therein to perform the steps required to implement the Notes Restructuring.

The purpose of this Explanatory Statement, which is provided pursuant to section 901D of the Companies Act, is to provide you with sufficient information to make an informed decision on whether or not to approve the Restructuring Plan.

In considering the Restructuring Plan and whether to vote in favour of it, you should not rely only on this Part A (Background to and Reasons for the Restructuring Plan) but you should also consider the more detailed information contained in the remainder of the Explanatory Statement and the terms of the Restructuring Plan (the form of which is contained at Appendix 6 (Restructuring Plan)) and the Restructuring Documents appended to this Explanatory Statement.

This Explanatory Statement contains Parts A to F and the Appendices:

this Part A (Background to and Reasons for the Restructuring Plan) sets out the background to and the financial position of the Group and the reasons for the Restructuring Plan;

Part B (Summary of the Notes Restructuring) provides a summary of the Notes Restructuring (including the Restructuring Plan);

Part C (Summary of the Terms of Certain Key Restructuring Documents) provides a summary of the terms of certain key Restructuring Documents;

Part D (Certain Legal Aspects of the Restructuring Plan) sets out certain legal aspects of the Restructuring Plan;

Part E (Relevant Alternative and Plan Benefits) provides a summary of the estimated alternative outcomes for Plan Creditors in the event that the Restructuring Plan is not successful; and

Part F (Risk Factors) provides a summary of certain risk factors in relation to the Restructuring Plan.

Overview of the Group and its business

The Company was incorporated and registered in England and Wales on 8 August 2025 as a private limited company with registered company number 16637372. Its registered office is at Ashton House, 497 Silbury Boulevard, Milton Keynes, England, MK9 2LD.

The Company:

is incorporated in England and Wales;

is a UK resident for tax purposes; and

has its registered office located in England and Wales.

The Company is an indirect subsidiary of FGI and has been incorporated to promulgate the Restructuring Plan.

The Fossil group (the “Group”) consists of FGI and its direct and indirect subsidiaries, including the Company. The ordinary shares of FGI and the Notes are publicly listed on the NASDAQ Global Select Market under the symbol “FOSL” and “FOSLL”, respectively. Plan Creditors can obtain further information on FGI, including financial information from NASDAQ at https://nasdaq.com/market-activity/stocks/FOSL.

The Group was founded in 1984 and is headquartered in Richardson, Texas, with manufacturing facilities in India and operating companies in over 20 countries. The Group is a design, innovation and distribution company specialising in consumer fashion accessories, and its principal offerings include an extensive line of men’s and women’s fashion watches, jewellery, handbags, small leather goods, belts and sunglasses. The Group designs, develops, markets and distributes both its own brands, including FOSSIL, SKAGEN and MICHELE, in addition to certain licensed brands.

The Group’s products are sold across approximately 130 countries worldwide through 27 Group-owned sales subsidiaries and through a network of 63 independent distributors. In certain international markets, the Group’s products are also sold online and through licensed and franchised FOSSIL retail stores, retail concessions operated by the Group and kiosks. The Group also operates stores under two other brands, in which they offer certain of their owned and licensed brand products to curate a collection of designer watches and jewellery for women and men. The Group offers online and in-store experiences in the United States, Europe and Asia.

The Group operates in the UK through Fossil (UK) Holdings Limited and Fossil (UK) Limited. The Company is a wholly owned subsidiary of Fossil (UK) Limited. The Group’s UK sales are generated through wholesaler distributors and direct to consumer sales. In particular, the Group currently operates two (2) full price stores and nine (9) outlet stores in the UK and facilitates sales in the UK through its own websites. As at financial year end 2024, net sales in the UK segment accounted for GBP £30.7 million, which is equal to 3.4% of the Group’s consolidated revenue.

As part of FGI’s entry into the New ABL Facility (as discussed in paragraph 20.2 (The Group’s Financing Structure) below), the Group incorporated Fossil Global Holdings, Inc., a C-Corporation (Limited Liability) incorporated in Delaware on 4 August 2025. To create a single point of enforcement of the collateral granted by the Group for the New ABL Facility, First-Out Notes and Second-Out Notes, Fossil Global Holdings, Inc. was inserted as an intermediate holding company between FGI and the other subsidiaries within the Group. As at 7 October 2025, the contribution of equity interests in one subsidiary within the Group to Fossil Global Holdings, Inc. was still in the process of being implemented in accordance with applicable local law requirements. A simplified group structure chart of the Group as at 7 October 2025 is set out at Part 1 of Appendix 5 (Group Structure Chart) to this Explanatory Statement. An indicative group structure showing the finalised structure of the Group on the basis that these transfers and the Notes Restructuring have been completed is set out at Part 2 of Appendix 5 (Group Structure Chart) to this Explanatory Statement.

Plan Creditors can obtain further information on the Group, including financial information, from the Group’s investor website at https://www.fossilgroup.com/investors/.

The Group’s Financing Structure

As at the date of this Explanatory Statement, the principal debt facilities of the Group are provided under:

a US $150 million senior secured asset based revolving credit facility (the “New ABL Facility”) dated as of 13 August 2025 entered into by and among FGI and certain other Group Companies, ACF FINCO I LP, as administrative agent, and the lenders from time to time party thereto,

the Notes issued by FGI under the terms of the indenture dated 8 November 2021 and supplemented on 8 November 2021, 19 September 2025 and [●] October 2025 (together, the “Notes Indenture”) and maturing on 30 November 2026. The Company became a guarantor under the Notes on 19 September 2025 pursuant to a supplemental indenture.

On 13 August 2025, the New ABL Facility refinanced the Group’s existing US $275,000,000 senior secured asset based revolving credit facility (the “JPM ABL Facility”) dated 26 September 2019 entered into by and among FGI and certain other Group Companies, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. The New ABL Facility was entered into prior to launch of the Notes Restructuring in order to support the Group’s immediate short-term liquidity needs. This in turn has facilitated the potential Notes Restructuring as set out herein.

Whilst the New ABL Facility benefits from a security package granted in favour of the lenders from time to time under the New ABL Facility, the Notes are currently unsecured.

The Restructuring Plan only relates to the Notes and will not affect the rights of the creditors under the New ABL Facility or any other financing arrangements, other than as specified in the ABL Intercreditor Agreement.

All general unsecured claims against the Group (excluding claims arising under or in connection with the Notes) will be unimpaired by the Restructuring Plan. As at 30 August 2025, the Group had approximately US $424 million unsecured liabilities against it. These relate to the operating expenses of the Group and include both short -term and long-term operating expenses, including, among other things, unsecured trade payables, such as inventory, and other operating costs such as lease liabilities, professional services, payroll, utilities, shipping, royalties and taxes. As these are core operational costs and essential to ensure the continuity of the business, they will remain unimpaired by the Restructuring Plan.

The Group’s Financial Difficulties

As a consequence of a challenging global macro environment, the Group and its business have been experiencing slower consumer demand for the Group’s products, which has resulted in the Group having incurred losses and negative cash flow in recent fiscal years. In 2022, the business generated approximately US $1.7 billion in sales and had a net income (loss) of approximately US -$44 million. By 2024, sales had declined to US $1.1 billion and net income (loss) expanded to approximately US - $106 million. Further, during that time, the business used more than US $100 million in cash from operating activities.

In an effort to return the Group to profitability, in early 2023, the Group initiated its Transform and Grow plan, which focused on an operational restructuring of the Group. In 2024, the Group expanded the restructuring efforts to include strategic review of its business model and capital structure and began to explore additional debt and equity financing options. As part of this process, FGI formed a new committee and, in September 2024, appointed a new Chief Executive Officer and member of the Board of FGI, Franco Fogliato, to implement the strategic review and create a plan to return the Group to profitable growth (the “Turnaround Plan”). The Group also appointed a new Chief Financial Officer, Randy Greben in March 2025 and Pamela Edwards and Wendy Schoppert as independent directors to FGI’s Board in May 2025.

The implementation of the Turnaround Plan has been generally positive for the Group’s trading performance. However, the Group continues to navigate a highly challenging environment, exacerbated by recent tariff uncertainty. In that context, as part of the Turnaround Plan, throughout 2025 the Group has been actively exploring various initiatives to monetise non-core assets, improve working capital and

As explained in further detail below, the New ABL Facility was entered into on 13 August 2025 and replaced the JPM ABL Facility.

While it was originally intended that the New ABL Facility and the Notes Restructuring would be completed simultaneously, that was not possible for the reasons set out at paragraph 23.4 (The Transaction Support Agreement). Instead, the New ABL Facility was entered into prior to the Notes Restructuring in order to support the Group’s immediate short-term liquidity needs by providing additional funding necessary to navigate a period of tight liquidity in September 2025. This pressure was the result of:

September marking the commencement of the Group’s demanding seasonal working capital cycle, whereby the interaction between inventory levels and working capital expenditure causes acute liquidity pressure. The nature of the Group’s product offerings results in the Group’s inventory peaking between September and December each year in the run up to the western holiday period, during which period approximately 40% of its annual sales occur. Consistent with customary practice across its industry, the Group starts to build its inventory from approximately June, but sales do not begin to convert until around October each year. Accordingly, for approximately nine (9) months of each year the Group maintains a considerably smaller inventory but requires significant cash for investment in products for the following holiday season. This significant investment by the Group coincides with delayed customer collections, creating a spike in the outflow of cash while funds are tied up in stock and receivables remain outstanding; and

a projected drawdown under the New ABL Facility of approximately US $41 million before 10 October 2025 primarily to meet deferred license payments due in Q3 2025.

Notwithstanding that it delivered a solution to the Group’s short-term funding needs, the New ABL Facility does not offer a stand-alone long-term funding solution for the business, either to facilitate its return to profitable growth pursuant to the Turnaround Plan or, at a more basic level, to continue to discharge the Group’s basic operational functions including, among other things, to meet tax liabilities and pay employees. This is because, in practice, once the Group has accommodated its reduced borrowing base, covenant compliance maintenance and various minimum cash reserve requirements, the net headline borrowing capacity of US $150 million under the New ABL Facility is reduced, for all intents and purposes, to approximately US $101 million that is freely available to the Group.

This is for two principal reasons:

first, as detailed at paragraph 21.5 (The New ABL Facility) above, the Group operates within the confines of a demanding seasonal working capital cycle which, between January and September every year, severely compromises the Group’s ability to utilise the New ABL Facility as stock is sold and the business starts another production cycle. This is evidenced by the variance in the Group’s total borrowing base, which is projected to fluctuate between US $104 million and US $60m over the next 12 months; and

second, the terms of the New ABL Facility require the Group to maintain, at all times, minimum cash reserves of US $48 million comprising:

US $24 million to support its key operational business functions (such as salaries, rent, taxes, pensions, freight costs); and

US $25 million in the form of an availability block to avoid additional weekly reporting requirements.

Management of the Group consider that until the Group has fully implemented the Turnaround Plan, the Group will not be capable of supporting a fully drawn New ABL Facility (both in terms of producing sufficient inventory to secure borrowing and corresponding cash to facilitate repayment). This is a cashflow issue: even if the Group were able to drawdown under the New ABL Facility in full, which it cannot because of its seasonal inventory constraints, it would not have sufficient cash to service that borrowing while also funding its operating expenses.

The Group requires a minimum level of operating cash of US $58 million per month in order to maintain basic business functions. This figure comprises:

the US $24 million required to fund the Group’s bare minimum ordinary course business operations (see paragraph 21.7(b)(i) (The New ABL Facility) above), including essential outgoings such as payroll, rent, taxes, inventory and utilities;

reserves that the Group is required to maintain, including a US $15 million temporary reserve which the lenders under the New ABL Facility require to be released upon successful implementation of the Notes Restructuring;

restricted cash balances that the Group is required to maintain under certain lease agreements and other restricted cash balances in jurisdictions where it is difficult to repatriate funds (such as China); and

certain regulatory requirements (such as taxes) across the over 30 global jurisdictions in which the Group operates.

Without further funding, management of the Group considers the business would stall if the cash available to the Group fell below US $58 million as the Group could only continue operating for an additional two (2) to three (3) weeks.

The Group’s management estimates the ongoing liquidity needs of the Group and in light of the above, the Group requires additional liquidity to support it on an ongoing basis, in particular to bridge gaps during times of low inventory and high operational costs as the Group increases production ahead of the October to December period. Based on Management’s calculations, it is estimated that US $32.5 million in additional liquidity is necessary.

Management’s current projections, indicate that without the advancement of the US $32.5 million of New Money that would follow the successful implementation of the Restructuring Plan, the Group will not have sufficient cash to stay above the US $58 million minimum level of operating cash per month (see paragraph 21.10 (Minimum Operating Cash Requirements) above), required by the Group in order to maintain basic business functions. In particular, the Group projects that its liquidity will drop to US $57.6 million in September 2026 as a result of the Group’s investment in inventory ahead of the western holiday season (assuming continued funding under the New ABL Facility), without the additional US $32.5 million in New Money.

However, one cannot assess the New Money on a stand-alone basis given the consequences to the Group if the implementation of the Restructuring Plan is not successful. As the full funding under the New ABL Facility is conditional upon successful implementation of the Restructuring Plan (as explained at paragraph 21.16(e) (Maturity of the New Notes) below, which by its nature includes extension of the New Money), if the Restructuring Plan is not successful, the Group’s management estimates that there would cease to be continued funding available to the Group under the New ABL Facility, such that the Group would have insufficient cash to support even its basic business operations from January 2026 when the Group is projected to fall permanently below the Group’s minimum operating cash requirements. For the consequences of this, please see paragraph 51 (Relevant Alternative Analysis) below.

Further, the Notes are due for redemption on 30 November 2026. Absent the successful implementation of the Restructuring Plan, Management believes that the Group will have insufficient liquidity to redeem the Notes in circumstances where it has been unsuccessful in its attempts to refinance them in the open market.

As a result, the Group’s management believes that, without a solution to refinance the Notes, it will have no option but to include, in the Group’s third quarter 2025 10-Q due on 13 November 2025, a “going concern” self-disclosure. Such statement would give rise to substantial doubt regarding the Group’s ability to continue as a going concern for a period of 12 months from the date that the unaudited financial statements are issued. The Group’s management believes that any such statement is highly likely to cause tremendous reputational damage and value destruction, negatively impacting the Group’s business operations and crippling the effectiveness of the Turnaround Plan.

More specifically, absent the sanction of the Restructuring Plan and implementation of the Notes Restructuring such that the “going concern” self-disclosure is necessary, Management believes that:

given the cyclical nature of the Group’s business, the timing of the self-disclosure (in November, ahead of the western holiday season which is typically the Group’s most profitable period) will undoubtedly impact: (i) consumer confidence, which has the potential to diminish demand and support for the Group’s products, and public perception more generally; and (ii) supplier support and confidence, both of which are key to the viability of the Group’s business and its ability to generate positive income. Management would expect that, in response to a “going concern” self-disclosure, prudent suppliers will seek to tighten credit terms which could, in turn, precipitate supply chain disruptions, including product stoppages and delayed or diminished product delivery, thereby worsening the financial instability of the Group’s business;

the Group’s credit insurance provider is likely to withdraw or reduce credit insurance coverage upon a “going concern” self-disclosure, as part of its standard risk management;

a going concern self-disclosure is highly likely to increase financial instability and exacerbate the risk that the Group may not be able to meet its deferred license payments. The Group has deferred licence payments due under certain of its key license contracts from the second quarter to the third quarter of 2025 and, absent the sanction of the Restructuring Plan, the Group remains concerned about its continued ability to satisfy those payments in the normal course of business;

key suppliers will likely require more stringent payment terms, which would materially impact liquidity (which, as explained above, is already severely compromised between the months of January and September each year);

continued funding under the New ABL Facility is conditional upon the successful implementation of the Restructuring Plan in circumstances where the Exchange Transactions have failed. This condition was a fundamental requirement for Ares, the sole lender under the New ABL Facility, in respect of its agreement to provide finance to the Group. Under that agreement, any failure to implement the Notes Restructuring would constitute an event of default – including if the Sanction Hearing does not occur on or before 12 December 2025 – upon which Ares could elect to terminate the commitments under the New ABL Facility, accelerate the US $21 million currently drawn and draw-stop the financing, which will impair the Group’s access to vital liquidity and the Group’s listing. Given the fact that the New ABL Facility is considered a material contract, such an eventuality would trigger a Form 8-K filing by way of constituting a material change;

a “going concern” self-disclosure will likely catalyse employees across the Group’s supply chain to seek exit opportunities, particularly given the threat to employment posed by the Group’s pre-existing cost-cutting initiatives; and

the Group has extended or amended lease terms with certain key third parties (including landlords) as part of a major working capital initiative in Q4 2024; however, this remains an ongoing effort

The Group’s Efforts to find a Solution to its Financial Difficulties

As part of the Turnaround Plan, in August 2024, the Group engaged the international investment bank and advisory firm, Evercore Group LLC (“Evercore”), to assist in pursuing initiatives to procure additional funding and address upcoming debt maturities in relation to its existing liabilities at the time, being the Notes and JPM ABL Facility, including ways to: (i) monetise non-core assets; (ii) ensure a full or partial refinancing of the Notes and the JPM ABL Facility; and (iii) secure additional funding either on junior or senior priority terms. In that context, Evercore undertook a robust marketing process aimed at finding a comprehensive solution for the Notes, the JPM ABL Facility and the Group’s additional liquidity needs. In particular:

In December 2024, the Group began exploring the potential sale of three (3) specific non-core brands to be disposed of collectively or separately. Evercore approached twenty-seven (27) institutions, comprised of a range of strategic parties in the watch/jewellery space, brand aggregators/licensors and other financial investors. Whilst nine (9) parties received the long-form brand marketing materials following the initial outreach by Evercore, only five (5) parties submitted first round bids. While an offer for one (1) brand was agreed, it is not going ahead due to concerns relating to international tariff regimes and increased production costs.

The Group began exploring separate refinancing solutions, initially focusing on the JPM ABL Facility and the Notes in January 2025. This involved Evercore approaching:

in relation to the JPM ABL Facility, the lenders under the JPM ABL Facility and subsequently over thirty (30) other institutions, comprising a range of private credit funds and commercial banks; and

in relation to the Notes, nineteen (19) institutions comprising a range of private credit funds, bond investors and distressed debt investors, as well as two of the largest Noteholders: (A) HG Vora Capital Management, LLC (“HG Vora”); and (B) Nantahala Capital Management, LLC (“Nantahala”).

In relation to the JPM ABL Facility:

The Group initially approached the existing lenders under the JPM ABL Facility to explore a potential extension and amendment thereof, however, they were unable to come to an agreement on terms.

Following failure to agree terms with the existing lenders under the JPM ABL Facility, Evercore subsequently approached thirty-two (32) other institutions. Of these, nine (9) parties expressed initial interest in refinancing the JPM ABL Facility.

These discussions ultimately culminated in the Group entering into the New ABL Facility on 13 August 2025, with certain Ares Management Credit funds. The Group refinanced in full all outstanding claims under the JPM ABL Facility in cash at closing on 13 August 2025, with the New ABL Facility being used to provide controlled access to additional funding for the Group.

However, the Group’s continuing access to the full availability of the New ABL Facility is conditional upon the successful implementation of the Notes Restructuring, which includes provision of the New Money. This condition was a fundamental requirement for Ares in respect of its agreement to provide the New ABL Facility. Under the terms of the new agreement, any failure to implement the Notes

In relation to the Notes:

Evercore reached out to nineteen (19) institutions, comprising a range of private credit funds, bond investors and distressed debt investors to explore a new money financing, or a partial or full refinancing of the Notes on a wide range of terms. Only one (1) party submitted an indicative, non-binding offer to Evercore. This offer would have provided new money and partially refinanced the Notes, however, it would still have required an extension of the remaining Notes balance and was subsequently withdrawn by the relevant party following initial diligence.

In parallel, Evercore also approached HG Vora, one of the Group’s largest Noteholders in an effort to negotiate a potential extension of the Notes. The negotiations with HG Vora progressed to discussions relating to a consensual restructuring of the Notes, as well as the provision of additional funding to meet the funding needs identified in paragraph 21 (The Group’s Financial Difficulties).

Discussions with HG Vora focused on a holistic deal as HG Vora was only willing to consent to an extension of the Notes’ maturity if there was also a solution in place to the Group’s additional funding needs; their view was that the Group needed both the New Money and a maturity extension in order to provide the Group with sufficient liquidity and time to execute the Turnaround Plan. As noted above, Ares expressed a similar position throughout its discussions with Evercore and the Group, tying the provision of the New ABL Facility with the Notes Restructuring and the provision of New Money. Both HG Vora and Ares made their support contingent upon the Group securing additional, complementary sources of financing, a position which aligned with the Group’s desire for a holistic solution.

Initially US $65 million (inclusive of potential proceeds from non-core brand sales) was sought from HG Vora as part of a complete restructuring package that included an extension of the maturity of the Notes, which was declined and countered by an offer of US $22 million. In June 2025, as the non-core brand sales (referred to at paragraph 21.1 above) were ongoing at this time, when it became apparent the sales were at risk of not going ahead, the Group began to include Nantahala in the negotiations in order to explore additional capital options that Nantahala might provide. A third institutional Noteholder was approached but they declined to review any deal terms.

Ultimately, HG Vora, Nantahala and the Group settled on the provision, directly and through a backstop, of US $32.5 million of additional funding to the Group in order to satisfy the minimum additional funding requirements of the Group. The result was that, on 13 August 2025, certain members of the Group, including the Plan Company, entered into the transaction support agreement (the “TSA”) with HG Vora and Nantahala, to implement the Notes Restructuring.

Due to the Group’s improved trading performance in the intervening period since Evercore’s initial outreach to identify a comprehensive solution to the Group’s financial difficulties, in August 2025, in accordance with the permissions set out in the TSA, the Group instructed Evercore to go back to market to solicit alternative financing proposals to ensure that the transactions set out in the TSA represent the

In light of this, the Group wanted to reconfirm that there was no better alternative financing proposal available to it. Accordingly, following signing of the TSA, Evercore reached out to twenty-five (25) institutions, comprising a range of private credit funds, bond investors and distressed debt investors, requesting financing proposals to fully refinance the Notes and support the Group’s go-forward liquidity needs on a going concern and post-restructuring basis (the “Market Testing”). These institutions included eighteen (18) of the institutions that were previously approached by Evercore in early 2025 as part of the marketing exercise pursued in parallel with negotiations with the parties to the TSA.

Such alternative financing proposals were an attempt by the Group to source improved economic terms for itself and all Noteholders, avoid possible hold-outs to the Exchange Offer and mitigate the requirement for the Restructuring Plan. The Market Testing was also conducted on the basis that the Notes would need to be refinanced, as the original outreach earlier this year proved that there was no other implementable solution and the Noteholders’ consent is required to approve the amendments pursuant to the Consent Solicitation to change the governing law and support the implementation of the Restructuring Plan. Indicative financing proposals were requested by 12 September 2025 with an agreement in principle between the prospective financing party and the Group targeted for the first week of October 2025. Despite this exercise, by 12 September 2025, the Group had not received any financing proposals. that offered better terms for the Group and for Noteholders than those offered under the TSA and the Notes Restructuring, nor any actionable financing proposal at all, other than one, high-level non-binding verbal indication for a minority investment in a deal with more expensive terms than those agreed.

As explained above, the Group and its advisers considered multiple different transaction structures and implementation methodologies to address the Group’s financial difficulties. Ultimately, in absence of any workable offer, the Group concluded that the transactions proposed in accordance with the TSA under the Restructuring Documents represent the best option available to the Group to facilitate the Notes Restructuring.

The success of the Turnaround Plan and the future viability of the Group is contingent upon a successful implementation of the Notes Restructuring.

Support for the Notes Restructuring

As explained above, earlier this year the Group commenced negotiations with HG Vora and Nantahala (the “Supporting Holders”) which culminated in entry into the TSA. As at 7 October 2025, the Supporting Holders together hold approximately 62% of the aggregate principal amount of the Notes.

The TSA contemplates, among other things, that the Notes Restructuring will be implemented by way of a combination of: (i) the New Money Offering (as defined and described below); (ii) the Consent Solicitation (as defined and described below); (iii) a private exchange with the Supporting Holders (the “Private Exchange”); (iv) an SEC-registered exchange offering (the “Exchange Offer”) to all Noteholders other than the Supporting Holders (the Private Exchange and the Exchange Offer, together comprising the “Exchange Transactions”); (v) the issuance of Public Warrants and Private Warrants, as applicable (collectively, the “Warrants”), to purchase Common Stock or Pre-Funded Public Warrants or

The Supporting Holders have agreed, among other things, and subject to certain conditions, to:

participate in the Private Exchange;

participate in the Consent Solicitation;

use commercially reasonable efforts to take the steps reasonably necessary to support the Notes Restructuring, act in good faith, and take any and all actions or steps, or cause to be taken all actions or steps, reasonably necessary in order to support, facilitate, implement and/or consummate the Notes Restructuring in a manner consistent with the TSA, as promptly as practicable, and in any event, no later than: (i) if the Minimum Tender Condition has been satisfied or otherwise waived prior to the Initial Exchange Deadline (as defined in the TSA), 30 October 2025; and (ii) if, by the Initial Exchange Deadline, the UK Proceeding Trigger Event (as defined in the TSA) has occurred, 30 December 2025 (defined as the “Outside Date” in the TSA), including, without limitation, by taking any reasonable action contemplated by the TSA to facilitate the implementation and consummation of the Notes Restructuring and refraining from taking any actions inconsistent with, and not failing or omitting to take any action that is required by the TSA;

on a timely basis, negotiate in good faith, and timely execute, all definitive documents and deliver any other document, notice, confirmation, consent, order, instruction or direction, announcement, which in each case, is consistent with and may be necessary to support, facilitate, implement or otherwise give effect to the Notes Restructuring;

not object to or otherwise take actions to interfere with the Notes Restructuring;

validly and timely submit, and not withdraw, change, amend or revoke (including causing its nominee or custodian on behalf of itself and the accounts, funds, or affiliates for which it is acting as investment advisor, sub-advisor, or manager to validly and timely deliver and not withdraw), any approvals, consents, waivers, proxies, signature pages tenders, instructions or directions to agents, ballots, and/or other means of voting or participating in the Notes Restructuring with respect to all of their respective claims against FGI and/or the Company now owned or hereafter acquired by the Supporting Holders;

as the Backstop Parties, provide the Backstop Commitment; and

cast all of their votes (including by proxy, if applicable) in respect of their Notes in favour of the Restructuring Plan and any amendment or modification made in accordance with the TSA.

As explained above, entry into the TSA facilitated the contemporaneous refinancing of the JPM ABL Facility and entry into the New ABL Facility. While it had originally been envisaged that the New ABL Facility would be entered into at the same time as the successful implementation of the Notes Restructuring, the Group required access to the New ABL Facility to meet its ongoing liquidity requirements in order to navigate through a period of tight liquidity in September 2025. Accordingly, the lenders under the New ABL Facility agreed to enter into the New ABL Facility and provide the funding required to refinance the JPM ABL Facility and the funding required to navigate the September 2025 liquidity trough prior to successful implementation of the Notes Restructuring. The Group’s access to the remaining funds under the New ABL Facility remains conditional upon successful implementation of the Notes Restructuring.

As explained above, earlier this year the Group commenced negotiations with the Supporting Holders which culminated in entry into the TSA. As at 7 October 2025, the Supporting Holders together hold approximately 62% of the aggregate principal amount of the Notes.

Of the remaining Noteholders, based on data provided by Broadridge Financial Solutions, Inc. and Mediant Communications Inc. as of the end of July 2025, the Group estimates that approximately 24% of the outstanding Notes are held by Retail Holders through approximately 1,500 separate accounts. Accordingly, it was neither practicable nor feasible for the Group to engage with all Noteholders at such an early stage in the same manner as it had with the Supporting Holders. This was particularly the case given that, at the time, the Notes remained in free circulation and could be transferred by any Noteholder, making targeted outreach significantly more challenging.

The Company is aware that it is often difficult for corporations to identify and contact their Noteholders directly, particularly if they are Retail Holders. This is because Retail Holders hold their Notes through banks or brokerage houses, who due to confidentiality restrictions, will not disclose to the Company for whom they are acting as intermediary. However, in this knowledge, as widespread support for the Notes Restructuring is key to its success (not least given that the “Minimum Consent Tender Condition” in the Exchange Transaction is 90%), FGI and the Company have taken steps to engage with as many Noteholders as possible in the context of both the Exchange Transactions and the Restructuring Plan and has engaged the following third parties to assist in increasing this outreach and engagement:

Information Agent: On 25 July 2025, FGI and the Company engaged Epiq Corporate Restructuring, LLC to act as the “Information, Exchange and Subscription Agent” for the Exchange Transactions and as “Information Agent” for the Restructuring Plan, in respect of the Notes among other things, to: (i) field enquiries from Noteholders in connection with both the Exchange Offer and the Restructuring Plan, including acting as a contact point for the Noteholders; (ii) assist with the notification and dissemination of the documents relating to the Exchange Offer and the Restructuring Plan, and any other information relating thereto as required or desirable to be notified to Noteholders.

Dealer Manager: On 18 August 2025, in connection with the Exchange Transactions, FGI engaged Cantor Fitzgerald & Co. as the “Dealer Manager” to increase participation in the Exchange Offer through engagement with brokers, dealers, commercial banks, trust companies and other holders of the Notes and to solicit tenders of the Notes and the delivery of consents, proxies and subscriptions pursuant to the Exchange Offer.

Retail Advocate: On 17 September 2025, in connection with the Restructuring Plan, the Company appointed Jon Yorke to act as an independent representative of the Plan Creditors who are not professional or institutional investors and hold the Notes for their own personal account. His role is to engage with Plan Creditors who are Retail Holders and consider their views on the Restructuring Plan and present those views to the Court at both the Convening Hearing and the Sanction Hearing. As explained above, Mr Yorke, is an experienced English qualified insolvency and restructuring lawyer who has acted as the “Retail Advocate” in a number of other restructurings involving a restructuring plan pursuant to Part 26A of the Companies Act 2006 (as amended). He has appeared in the same capacity in various other High Court proceedings concerning the Companies Act 2006, including the high-profile restructurings of Petrofac Limited and Amigo Holdings Plc.

The contact details for these persons are set out at Section 49 (Questions and contact details) below.

Additionally, FGI and the Company, with the assistance of the Information Agent, have engaged in a campaign to: (i) widely publicise the Notes Restructuring; and (ii) disseminate the documentation and information in relation to both the Exchange Transactions and the Restructuring Plan as thoroughly as possible. The effect of these steps is intended to maximise outreach and awareness among Noteholders,

SEC Website: All information relating to the Exchange Transactions and certain key documents relating to the Restructuring Plan is publicly available by visiting EDGAR on the SEC website at www.sec.gov.

Mail: Copies of the Preliminary Prospectus were posted to the beneficial owners of the Notes, via mailing agents.

Plan Website: For the purposes of the Restructuring Plan, the Company has established the Plan Website (https://dm.epiq11.com/fossil) on which the key documentation and information in relation to the Restructuring Plan is made available.

DTC Legal Notice System: Key documentation and information in relation to the Exchange Transactions has been uploaded to the DTC Legal Notice System. Plan Creditors are notified of relevant uploads to the system via their respective DTC Participants.

Fossil Website: The Company has published, and intends to continue to publish, various press releases on its website, which is publicly accessible and is often circulated more widely by secondary media sources. Press releases have been published in relation to the Practice Statement Letter and entry into the TSA, with further releases anticipated for the: (i) Convening Hearing; (ii) distribution of this Explanatory Statement; (iii) the Plan Meeting; and (iv) the Sanction Hearing.

Newspaper Notices: On 26 September 2025, notices relating to the Practice Statement Letter and the Restructuring Plan were published in two widely circulated and reputable newspapers: The Financial Times and The New York Times. These publications were selected to ensure broad visibility across US, UK and international audiences, including both institutional investors and Retail Holders.

The Company has evaluated further outreach options but determined that additional measures are not presently feasible due to legal and practical constraints. Specifically, an online advertising and social media campaign aimed at increasing awareness of the Exchange Offer among Retail Holders could not be pursued due to restrictions under applicable U.S. securities laws. The Company therefore believes that it has pursued all reasonable avenues and taken all steps that could reasonably be expected of it in relation to communicating with the Noteholders.

As at 7 October 2025, the Company and its advisers are informed that:

approximately 62% of the outstanding principal amount of the Notes have entered into the TSA with, among others, the Company and FGI, in support of the terms of the Restructuring Plan; and

the Retail Advocate has received thirteen (13) enquiries from Retail Holders at the Retail Advocate’s email address: jy@fgadvocate.com;

the Information Agent has received seven (7) requests for login details from Plan Creditors to access the Plan Website: (https://dm.epiq11.com/fossil). Plan Creditors can obtain login details to the Plan website by emailing the Information Agent at registration@epiqglobal.com (with the subject line to include “Fossil”); and

approximately 71.95% of the outstanding principal amount of the Notes have, pursuant to the terms of the Exchange Transactions, are automatically appointing the Information Agent as their agent, attorney-in-fact and proxy to vote in favour of the Restructuring Plan at the Plan Meeting.

Purpose

The Restructuring Plan is necessary to implement the Notes Restructuring given the Exchange Offer did not obtain the requisite support. Together with the refinancing of the New ABL Facility, a successful Restructuring Plan will help ensure that the Group remains a going concern and has a stable platform to allow the Turnaround Plan to be successfully implemented, which shall facilitate the Group achieving profitable growth.

If the Restructuring Plan is sanctioned, Noteholders will receive a better recovery under the New Notes than would be anticipated under the Notes if the Restructuring Plan was not sanctioned and under the Relevant Alternative.

Upon implementation of the Restructuring Plan, the Group’s capital structure will be as set out in the table below. In relation to the New ABL Facility, the table sets out the full facility amount. However, as at 7 October 2025, only US $21 million has been drawn under the New ABL Facility. In relation to the Notes, the table below sets out the minimum amount of First-Out Notes and the maximum amount of Second-Out Notes which will be issued upon implementation of the Restructuring Plan. This represents the ‘base case’ which is the position if no other Noteholders other than the Supporting Holders participate in the New Money Offering.

The purpose of the Restructuring Plan therefore is to implement the Notes Restructuring in the manner described in, and contemplated by, the TSA, which will permit the Company and the wider Group to continue its businesses as a going concern, leaving Noteholders no worse off than in the likely alternative to the Notes Restructuring, being the Relevant Alternative.

The Restructuring Plan aims to:

reduce refinancing risk in relation to the Notes as the maturity of the First-Out Notes will be 1 January 2029 and the maturity of the Second-Out Notes will be 30 June 2029, rather than 30 November 2026 under the Notes;

provide the Group with an additional two (2) year runway to maturity for the New Notes, which will ensure a more stable and sustainable capital structure and one that is consistent with and will enable execution of the Turnaround Plan by the Group’s new management team;

reduce the Group’s risk of delisting from NASDAQ;

provide the Group with additional liquidity from the New Money Participants, which will improve the ongoing liquidity position of the Group as well as remove certain drawdown restrictions under the New ABL Facility that are in place pending successful implementation of the Notes Restructuring and enable the Group to finance ordinary course operations whilst avoiding sales at a deep discount in an insolvency process;

The New ABL Facility refinanced the US $275 million JPM ABL Facility on 13 August 2025.

provide all Plan Creditors with the opportunity to benefit from the potential upside of the implementation of the Notes Restructuring and the Turnaround Plan through issuing the Common Stock to New Money Participants and Warrants to all Plan Creditors;

eliminate, reduce, prevent or mitigate the effect of any of the financial difficulties faced by the Group including its ability to carry on as a going concern;

avoid the Company and other Group Companies having to file formal bankruptcy or insolvency proceedings, which would materially impact recoveries for Plan Creditors and mean that the Group’s general unsecured creditors (whose claims will be left unimpaired by the Restructuring Plan), would not be able to benefit from the Group’s continued operations;

protect the position of the approximately 4,539 full time and full time-equivalent employees of the Group; and

maintain commercial relationships with counterparties, including the Group’s key licensors, suppliers and landlords.

Summary of the Exchange Transactions

The Notes were originally publicly marketed to retail holders in September 2021 via an SEC-registered offering. SEC-registered offerings typically provide access to a wider pool of investors and often include retail holders. In connection with ensuring adequate protections for retail investors, SEC-registered offerings include substantial risk to issuers because such issuers have strict liability under the Securities Act which allows investors a right to sue for any misstatements or omissions of material fact contained in any prospectus materials issued pursuant to an SEC-registered offering.

As a result of the original issuance of the Notes being an SEC-registered offering, a substantial portion of the Notes are held by retail investors. As of 31 July 2025, data provided by Broadridge Financial Solutions, Inc. and Mediant Communications Inc. identified over 1,500 Non-Objecting Beneficial Owners of the Notes, the vast majority of which constituting retail holders, holding fewer than 1,000 Notes each. This substantial base of Retail Holders collectively represents approximately 24% of the total outstanding Notes through approximately 1,500 separate accounts and underscores the broad and diverse retail ownership of the Notes.

Due to the holdings breakdown of the Notes and applicable securities laws, FGI had to consider how to structure the Exchange Transactions and implement the Notes Restructuring via a methodology that ensured open and equal participation to all Noteholders (not just the Supporting Holders). An offering to Noteholders that was not registered with the SEC would have required that FGI exclude any Noteholders who did not meet certain sophistication requirements under applicable securities laws, which would have barred certain Noteholders – most notably the Retail Holders – the opportunity to participate in the Exchange Transactions. During the negotiations around the TSA, the Supporting Holders and their advisers assisted FGI and its advisers in designing the structure of the Exchange Transactions culminating in the execution of the TSA. As part of these negotiations, it was determined that the most efficient way to reach such a large number of dispersed Retail Holders and achieve the Minimum Tender Condition was to register the Exchange Offer (and the Rights Offering) with the SEC. As noted above at paragraph 23.7(b) (Engagement with other Plan Creditors), the Dealer Manager was engaged to provide services to FGI in connection with the Exchange Offer and support FGI in seeking to satisfy the Minimum Tender Condition. FGI is required to ensure that the Exchange Offer remains open for participation by all Noteholders until the occurrence of the Conditional Expiration Time in accordance with applicable SEC rules in respect of the Exchange Offer and Rights Offering.

The terms of the Restructuring Plan are substantially the same as the terms of the Exchange Offer with the exception that the Exchange Offer Amendments to the Notes Indenture will not be implemented as

remove or modify certain covenants in respect of events of default under the Notes Indenture that can be removed with the consent of Noteholders representing a majority of the aggregate principal amount outstanding of the Notes; and

subordinate the Notes in right of payment to the New Notes to the fullest extent permitted by Section 316(b) of the U.S. Trust Indenture Act of 1939, as amended (the “TIA”), and the Notes Indenture.

The Exchange Offer Amendments would only have come into effect if the Minimum Tender Condition (and any other condition to completing the Exchange Offer without the Restructuring Plan) had been satisfied or waived and the TSA, including the Backstop Commitments agreed thereunder, remained in full force and effect.

Company as Guarantor of the Notes and Change of Governing Law and Jurisdiction

For the purposes of promoting the overall restructuring of the Group as part of the Turnaround Plan and utilising the restructuring plan process in the UK, the TSA also provided that, as preliminary steps to launching the Restructuring Plan:

the Company would: (i) accede as a guarantor under the terms of the Notes through entry into the Supplemental Indenture with the Notes Trustee; and (ii) enter into the Deed of Contribution. Pursuant to the Supplemental Indenture, the Company became a guarantor under the Notes on 19 September 2025; and

the governing law and jurisdiction clauses of the Notes would be amended prior to the Convening Hearing to change the governing law of the Notes from New York law to English law (the “Governing Law Change”) and to submit to the exclusive jurisdiction of the courts of England and Wales.

The steps above are to assist the Company in establishing that it has a sufficient connection to the jurisdiction.

On 21 September 2025, the Company entered into the Deed of Contribution in favour of FGI, pursuant to which FGI has a right of contribution or “ricochet claims” against the Company in respect of FGI’s liabilities under the Notes. In the event that FGI makes a payment under the Notes, the Company has agreed to contribute to FGI 100% of the amount paid. The Deed of Contribution resulted in FGI having rights of contribution against the Company, essentially meaning that the Company is unable to effectively obtain a release or variation of the Plan Creditors’ rights against it in respect of the Notes without also releasing or varying the Plan Creditors’ rights against FGI.

On [●] October 2025, FGI, the Company and the Notes Trustee entered into a supplemental indenture (the “Restructuring Plan Supplemental Indenture”) to the Notes Indenture effecting the Governing Law Change by changing the governing laws of the Notes to the laws of England and Wales.

It was expressly disclosed in the Prospectus that the purpose of the Governing Law Change was to strengthen the connection to the English jurisdiction for the purposes of implementing the Notes Restructuring by way of the Restructuring Plan contemplated in this Explanatory Statement.

Noteholders that consented to the Consent Solicitation by the Exchange Offer Expiration Time will receive a consent premium (the “Consent Premium”) paid an amount aggregating US $1.0 million in face amount of New Notes, determined as the proportion that such

Key Features of the Notes Restructuring as implemented via the Restructuring Plan

The principal terms of the Notes Restructuring as agreed between the Group and the Supporting Holders are contained in the term sheet appended to the TSA and attached as an exhibit to the Current Report on Form 8-K filed by FGI with the SEC on 14 August 2025. Such terms are summarised below.

Pursuant to the TSA, the Group received commitments (the “Backstop Commitment”) from certain holders or beneficial holders of, or nominees, investment advisers, sub-advisers, or managers of discretionary accounts or funds that hold or beneficially hold, Notes on behalf of the Supporting Holders (each a “Backstop Provider”) to subscribe for First-Out Notes in an aggregate principal amount up to US $32.5 million (the “New Money”). The Backstop Commitments of the Backstop Providers may be subsequently reduced to the extent that other Noteholders elect to participate in the New Money Offering. As consideration for the Backstop Commitment, FGI will pay the Backstop Providers a backstop premium (the “Backstop Premium”) of US $1.625 million principal amount of First-Out Notes. The provision of the New Money is subject to the implementation of the Restructuring Plan, the provision of the agreed collateral for the New Notes and other customary conditions set out in the TSA. The Backstop Premium will be payable on the Restructuring Effective Date and will only be paid if the Notes Restructuring is implemented (whether by means of the Restructuring Plan or the Exchange Transactions).

All Noteholders will be afforded the opportunity to subscribe for their pro rata allocation of the New Money at a price equal to US $1.00 for each US $1.00 face value of new First-Out Notes (the “New Money Offering”).

Additionally, Noteholders that choose to subscribe for and purchase their pro rata portion of First-Out Notes as part of the New Money Offering (each such Noteholder being a “New Money Participant”) will be entitled to exchange their Notes for First-Out Notes as part of the Restructuring Plan.

New Money Participants will also receive a premium, at no additional cost, paid in common stock of FGI (such common stock having a par value of US $0.01 per share) (“Common Stock”) in an amount equal to one share of Common Stock for every US $34.06 of First-Out Notes subscribed for or purchased (the “New Money Premium”). The New Money Premium will be payable on the Restructuring Effective Date and will only be paid if the Notes Restructuring is implemented (whether by means of the Restructuring Plan or the Exchange Transactions).

The formula for calculation of each New Money Participant’s allocation of First-Out Notes as was explained at Annex A – Subscription Worksheet of the Registration Statements (the “Subscription Worksheet”) is set out below (and adopts defined terms from the Subscription Worksheet) (where applicable):

FACTOR

(Multiply the Aggregate Principal Amount of Notes Held by the Factor shown below)

New Money Participants were instructed in the Subscription Worksheet that if they hold their Notes through more than one DTC Participant, they were required to provide separate instructions to each applicable DTC Participant with respect to their participation in the New Money Offering.

Other than in respect of the Backstop Commitment for the Supporting Holders, there is no obligation for Plan Creditors to participate in the New Money Offering.

The Restructuring Plan will provide that all outstanding Notes (including all accrued and unpaid interest thereon, if any) will be deemed to have been paid or otherwise satisfied in full and released both against the Company as well as FGI a result of the Deed of Contribution (see paragraph 26 (Company as Guarantor of the Notes and Change of Governing Law and Jurisdiction) for further detail). In exchange, Noteholders (including the Supporting Holders) will be provided with the New Notes and the Warrants.

New Notes

Noteholders will be given one of the following (together, the “New Notes”) depending on whether the relevant Noteholder is a New Money Participant:

Noteholders that are New Money Participants will be provided with new 9.500% First-Out First Lien Senior Secured Notes maturing on 1 January 2029 (the “First-Out Notes”) in equal face amount to their outstanding Notes provided that they have subscribed for their pro rata allocation of the New Money Offering based upon the aggregate principal amount of Notes held by such Noteholder in comparison to the total aggregate principal amount of Notes outstanding (the “Required Subscription Amount”);⁴ or

This Factor is calculated on the basis of $US 32.5 million / US $150 million.

For example, a Noteholder who holds 4,000 Notes with an aggregate principal amount of US $100,000 owns 0.067% of the total aggregate principal amount of Notes outstanding and, therefore, has a Required Subscription Amount of US $21,666 (representing such Noteholder’s 0.067% pro rata portion of the US $32.5 million of First-Out Notes pursuant to the New Money Offering, rounded down to the nearest whole dollar).

Noteholders that are not New Money Participants will be provided with new 7.500% Second-Out Second Lien Senior Secured Notes maturing on 30 June 2029 (the “Second-Out Notes”) in equal face amount to their outstanding Notes in the event that they have not subscribed for their Required Subscription Amount.

Accordingly, the First-Out Notes will only be available to New Money Participants. All Noteholders who do not fund their pro rata portion of the New Money Offering shall receive Second-Out Notes in full satisfaction of their claim in relation to the Notes.

Compared to the outstanding Notes, the New Notes will have later principal repayment dates in order to create a stable platform upon which the Group can target and exercise its Turnaround Plan. The maturity dates of the First-Out Notes and the Second-Out Notes differ, with the maturity of the First-Out Notes (1 January 2029) being six months earlier than the maturity of the Second-Out Notes (30 June 2029).

The interest on the First-Out Notes and the Second-Out Notes will accrue on a cash pay per annum basis. The interest rates of the New Notes were negotiated at arm’s length between FGI and the Supporting Holders as part of the commercial discussions which culminated in the TSA. Whilst the Second-Out Notes incur a 0.5% per annum increase in coupon compared to the coupon under the Notes, this coupon is 2% per annum less than the coupon on the First-Out Notes. Notwithstanding this difference, the Company has concluded that: (i) the terms and conditions of the New Notes have been negotiated at arm’s length and on market terms (which is supported by the Market Testing conducted by Evercore) and the fact that the Group was unable to obtain more advantageous financing terms in the market pursuant to the Market Testing; and (ii) all Plan Creditors have been offered the opportunity to subscribe for their pro rata allocation of First-Out Notes by means of the New Money Offering regardless of whether they acceded to the TSA or otherwise vote in favour of the Restructuring Plan.

The New Notes will benefit from guarantees and security from certain Group Companies. The First-Out Notes shall be granted first lien security and the Second-Out Notes shall be granted second lien security, in each case, on the Notes Priority Collateral (as defined therein) and second lien security and third lien security, respectively, in respect of the ABL Priority Collateral (as defined therein). Otherwise, the New Notes will benefit from the same collateral as the New ABL Facility, subject to a prioritised security structure set out in a New York governed intercreditor agreement to be entered into between the lenders under the New ABL Facility and the respective collateral agent for the New Notes (the “ABL Intercreditor Agreement”).

The ABL Intercreditor Agreement will be entered into to govern the enforcement of collateral and the waterfall for the distribution of enforcement proceeds among the different classes of creditors of, inter alia, FGI and the relevant members of the Group. Under the ABL Intercreditor Agreement, subject to the prioritised security structure, the New ABL Facility will rank first, the First-Out Notes will rank second and the Second-Out Notes will rank third as regards enforcement and guarantee proceeds in respect of the ABL Priority Collateral (as defined therein). Such security also improves the expected returns to the Plan Creditors in both the First-Out Notes and Second-Out Notes and facilitates a better return than would be available in the Relevant Alternative.

Warrants

FGI will issue 3 million Warrants (comprising the Public and Private Warrants, together the “Warrants”) to all Noteholders (including the Supporting Holders) through the Restructuring Plan.

These Warrants will permit the holders to purchase shares of Common Stock or Pre-Funded Warrants on a pro rata basis (based on the amount of Notes exchanged into First-Out Notes

The Warrants will be issued on the Restructuring Effective Date and only issued if the Notes Restructuring is implemented (whether by means of the Restructuring Plan or the Exchange Transactions).

The TSA also provides for the following:

Consent Premium:

Noteholders that consented to the Consent Solicitation by the Exchange Offer Expiration Time will receive a consent premium paid in New Notes equal in principal amount to such participating Noteholder’s pro rata share of US $1.0 million in face amount of New Notes, as determined based on the aggregate principal amount of all Notes held by Noteholders that participate in the Consent Solicitation.

New Money Participants will receive their Consent Premium in the form of additional First-Out Notes. All other Noteholders will receive their Consent Premium in the form of Second-Out Notes.

The Supporting Holders were obligated pursuant to the TSA to provide their consent to the Consent Solicitation and to exchange their Notes into First-Out Notes.

The Consent Premium will be payable on the Restructuring Effective Date and will only be paid if the Notes Restructuring is implemented (whether by means of the Restructuring Plan or the Exchange Transactions).

Exit Fee: FGI will also pay an exit fee of 7.5% of the principal amount of the First-Out Notes due on any date of redemption, repayment, prepayment, acceleration, or maturity to all holders of First-Out Notes (the “Exit Fee”).

Fees, Costs and Expenses: FGI will pay the reasonable and documented fees, costs, and out of pocket expenses of the Supporting Holders’ legal advisers, incurred in connection with the negotiation and implementation of the Notes Restructuring in accordance with a separate fee reimbursement letter. FGI is required under the terms of the fee reimbursement letter to pay these fees, costs, and out of pocket expenses regardless of whether the Restructuring Plan is successfully implemented.

The Group has three (3) key license contracts and has entered into an agreement with two (2) key licensors, pursuant to which those counterparties have agreed to waive certain events of default or termination provisions which may arise as a direct or indirect result of the Restructuring Plan. The Group has also received verbal confirmation from the remaining other key licensor that is intends to support the Notes Restructuring and enter into a similar waiver agreement.

On 23 September 2025, FGI submitted an acceleration request to the SEC with respect to each Registration Statement, requesting that the effectiveness of each such Registration Statement be accelerated so that each Registration Statement become effective at 4:00 p.m. (New York City time) on 24 September 2025, or as soon as practicable thereafter.

The Registration Statements were declared effective as of 4:00 p.m. (New York City time) on 25 September 2025 by the SEC.

Summary of the Restructuring Plan

The Restructuring Plan is a compromise and arrangement between the Company, the Plan Creditors (and each of their successors and assigns) and the Plan Parties (as defined therein) (other than the Undertaking Transaction Parties (as defined therein)). The Restructuring Plan is set out in Appendix 6 (Restructuring Plan) to the Explanatory Statement.

If approved, the Restructuring Plan will provide for, amongst other things:

a compromise and release of all Plan Claims of any Plan Creditor, including in respect of all liabilities under the Notes Indenture and any Plan Claims which may be held, at any time, by any the Company or FGI (or any other Group Company) in respect of the Notes, in each case, arising directly or indirectly out of, or resulting from, any Restructuring Step being taken in accordance with the terms of the Transaction Implementation Deed;

the issuance of the Plan Consideration in exchange for the compromise and release of the Plan Claims in accordance with the terms of the Transaction Implementation Deed; and

an authority for the Company, on and from the Plan Effective Date, to sign, execute, notarise, release and deliver (whether as a deed or otherwise)the Transaction Implementation Deed and each other Restructuring Documents to give effect to the above and the Restructuring Plan on behalf of each Plan Creditor (as its lawful agent and attorney).

Key conditions to the Restructuring Plan

In order for the Restructuring Plan to become effective, it must be approved by a number representing at least 75% in value of the Plan Creditors (by reference to the outstanding principal amount of Notes) who are present and voting (in person or by proxy) at the Plan Meeting.

Even if the Plan Creditors approve the Restructuring Plan by the requisite majority and the Restructuring Plan is sanctioned by the Court, the Restructuring Plan will only be implemented if and when each of the conditions are satisfied or waived, including (but not limited to) the following (the “Exchange Conditions”):

a certificated copy of the order of the Court sanctioning the Restructuring Plan is filed with the Registrar of Companies;

no defaults or events of defaults having occurred and/or be continuing under the New ABL Facility;

the provision to the Group of the New Money;

the issuance of the Warrants;

the Group obtaining consents from three (3) key, licensors to waive any defaults or events of default arising as a result of the Notes Restructuring (amongst other matters). As at 7 October 2025, the Group has obtained such consents from two (2) of these licensors and anticipates receiving the remaining outstanding consent;

the approval of the Consent Solicitation to effectuate the Governing Law Change.; and

the Restructuring Documents being in Agreed Form.

Implementation of the Restructuring Plan

Before the Restructuring Plan can become effective and binding on the Company and the Plan Creditors, the Court must sanction the Restructuring Plan at the Sanction Hearing.

Pursuant to the Restructuring Plan, following:

the issuance by the Court of the Sanction Order; and

the delivery of the Sanction Order to the Registrar of Companies for registration,

On and from the Plan Effective Date, pursuant to clause 3 (Grant of Authority to Execute the Restructuring Documents) of the Restructuring Plan, each Plan Creditor will appoint the Company as its attorney and lawful agent and will authorise the Company to (among other things):

enter into, sign, execute, notarise, release and deliver, for and on behalf of such Plan Creditor, the Transaction Implementation Deed and each Restructuring Document to which that Plan Creditor is named as a part;

agree on its behalf any amendments or additions to the Restructuring Documents to which such Plan Creditor is expressed to be a party which

are necessary or reasonably desirable to give effect to, or reflect the terms of, the Restructuring Plan, the TSA, the Transaction Implementation Deed, and/or the transactions to be entered into in order to effect the Notes Restructuring (having consulted with the Legal Advisers and obtained confirmation in writing from the Consenting Noteholders’ Legal Advisers, such confirmation is to be provided within three (3) Business Days of receipt by the Consenting Noteholders’ Legal Advisers. If the written confirmation has not been provided within such time, and provided that no objection to such action has been raised by the Consenting Noteholders or the Consenting Noteholders’ Legal Advisers, the confirmation shall be deemed to have been granted);

are necessary to correct any manifest error (that could reasonably be expected to be considered as such by all of the parties to that Restructuring Document);

are minor or technical in nature and which the Company (having consulted with the Legal Advisers) reasonably considers necessary or desirable for the implementation of the Notes Restructuring;

complete any missing information, lists of parties and/or signature blocks;

insert the calculation and completion of any commitments, participations, allotments or allocations to any Plan Creditor or any other party under the Transaction Implementation Deed and the Restructuring Documents in accordance with the terms of the Restructuring Plan; and/or

take into account any modification of, or addition to, the Restructuring Plan, the Transaction Implementation Deed, and/or the Restructuring Documents approved or imposed by the Court in accordance with clause 6 (Modifications of this Restructuring Plan) of the Restructuring Plan,

enforce any Deeds of Undertaking to ensure the prompt execution by the relevant parties of any actions or documents required to implement the Notes Restructuring;

approve the Allocations Spreadsheet once agreed and delivered by the Information Agent in accordance with the terms of the Transaction Implementation Deed;

enter into, execute and deliver (whether as a deed or otherwise) for and on behalf of such Plan Creditor, any document, notice or instruction as may be necessary or desirable to give effect to the instruction under clause 3 (Grant of Authority to Execute the Restructuring Documents) of the Restructuring Plan;

grant powers of attorney in order to execute any relevant documents, deeds or other agreements referred to in, ancillary to or contemplated by the Restructuring Plan, the Transaction Implementation Deed and/or the Restructuring Documents; and

carry out related or ancillary actions that it considers to be reasonably necessary or desirable for the purposes of implementing the Restructuring Plan and the Notes Restructuring.

The Restructuring Plan will also impose a restriction on the ability of a Plan Creditor to commence certain proceedings. Pursuant to clause 9 (Stay of Prohibited Proceedings) of the Restructuring Plan, but subject to the exceptions in clause 9.4 (Stay of Prohibited Proceedings) of the Restructuring Plan, no Plan Creditor may commence any Prohibited Proceeding (as defined therein and being (broadly) any proceeding in respect of the Plan Claims or liabilities which are to be released pursuant to the Restructuring Plan and the Deed of Release).

At the Sanction Hearing, the Company may consent on behalf of the Plan Creditors to any modification of the Restructuring Plan, the Transaction Implementation Deed and the Restructuring Documents that the Court may think fit to approve or impose for the purpose of implementing and/or consummating the Restructuring Plan, provided that:

such amendment is consistent with the TSA;

no amendments may be made to clause 6 (Modification of the Restructuring Plan) of the Restructuring Plan; and

no amendment may be made if such amendment either: (a) has a material or, relative to the other Plan Creditors, disproportionate, adverse effect on the rights of a Plan Creditor; or (b) imposes any additional or new obligation on any Plan Creditor, unless each such affected Plan Creditor has provided its consent to such amendment or variation,

In order to successfully implement the Restructuring Plan, participation is required from, among others, the Undertaking Parties, each of whom will execute and deliver, prior to the Sanction Hearing, a Deed of Undertaking in favour of the Court, the Company, FGI and the Plan Creditors (“Deed of Undertaking”) pursuant to which it will agree to the relevant Restructuring Plan and agree and undertake to the Court, the Company, FGI and the Plan Creditors, among other things:

upon the Restructuring Plan being sanctioned by the Court, to be bound by the Restructuring Plan;

on and from the Restructuring Effective Date, to promptly do or procure to be done all such acts and things necessary or desirable for the purpose of giving effect to the Restructuring Plan and/or implementing the Notes Restructuring; and

to promptly execute the Restructuring Documents (and related documents) to which it is party in accordance with the Restructuring Plan and the Transaction Implementation Deed.

Transaction Implementation Deed

The Transaction Implementation Deed will govern the implementation of the Notes Restructuring. The Transaction Implementation Deed will be binding on, among others, the Company and all Plan Creditors.

The Agreed Form of the Transaction Implementation Deed is appended at Appendix 8 (Transaction Implementation Deed). Terms used in this section and not otherwise defined in Appendix 4 (Definitions) have the meaning given to them in the Transaction Implementation Deed.

The key elements of the Transaction Implementation Deed are summarised below. In case of any inconsistency between this summary and the Transaction Implementation Deed, the full form Transaction Implementation Deed shall prevail.

The Notes Restructuring is conditional on the satisfaction of the Restructuring Conditions Precedent (as defined in the Transaction Implementation Deed). Any Restructuring Conditions Precedent may only be waived with the requisite majority of creditor consents, or the consent of particular parties to the Transaction Implementation Deed, in accordance with the terms of clause 6.2 (Waiver of Restructuring Conditions Precedent) of the Transaction Implementation Deed.

As soon as reasonably practicable following the Plan Effective Date, the parties to the Transaction Implementation Deed will take the steps set out in clause 7 (Restructuring Steps) of the Transaction Implementation Deed in order to implement the Notes Restructuring.

A summary of the Restructuring Steps is set out below. Capitalised terms used in the table below but not otherwise defined in this Explanatory Statement shall have the meanings given to them in the Transaction Implementation Deed.

Upon completion of the final Restructuring Step, the Restructuring Effective Date will occur and be notified to relevant parties in accordance with the Transaction Implementation Deed. The Company will, among other matters, publish notice of the occurrence of the Restructuring Effective Date on the Plan Website.

The Transaction Implementation Deed will terminate automatically upon the earliest to occur of the following events:

the Restructuring Effective Date does not occur by 30 December 2025; and

by written consent of the Company, FGI and the Supporting Holders if such parties (in their absolute discretion having taken appropriate professional advice) consider that there is no reasonable prospect of the Notes Restructuring being successfully implemented.

Deed of Release

Consequences if the Restructuring Plan is not successful

Because the Minimum Tender Condition was not satisfied or waived by the Exchange Offer Expiration Time, the Notes Restructuring must now be implemented through the Restructuring Plan. Accordingly, the success of the Notes Restructuring and the future viability of the Group is contingent upon the approval of the Restructuring Plan by the requisite majority of Plan Creditors at the Plan Meeting and the sanction of the Restructuring Plan at the Sanction Hearing.

If the Restructuring Plan is not sanctioned by the Court at the Sanction Hearing and such order is not reversed, vacated or stayed within sixty (60) days of entry, the Supporting Holders (including the Backstop Providers) will be entitled to terminate the TSA and the forbearances contained in the TSA will fall away. Furthermore, continued funding under the New ABL Facility is inter-conditional upon sanction of the Restructuring Plan by the Court. If the Sanction Hearing does not occur on or before 12 December 2025 or if the Notes Restructuring is not implemented on or before 30 December 2025 and these milestones are not extended or waived, an event of default will occur under the New ABL Facility for failure to meet such milestones pursuant to Article VII (Events of Default). In the event that FGI is unable to negotiate a waiver, the occurrence of such an event of default will allow the lenders under the New ABL Facility to terminate the commitments thereunder, accelerate any outstanding obligations at that time and draw stop the New ABL Facility therefore materially impairing the Group’s access to necessary liquidity.

In those circumstances where an event of default for failure to meet a milestone is persisting under the New ABL Facility, the Group’s management consider it likely that the Supporting Holders would seek to terminate the TSA pursuant to Section 13 (Termination Events) thereof. If the TSA is terminated, the security granted in respect of the New ABL Facility would also become enforceable upon the occurrence of the event of default for failure to meet a milestone or to implement the Notes Restructuring. In this scenario, the lenders under the New ABL Facility may begin to take recovery action in respect of amounts owed to them or the directors of the Group Companies will likely conclude that such action is unavoidable and therefore proactively file for insolvency proceedings.

In such circumstances, the Group’s management consider it is very likely that the Group would lose the support of its consumer base, license partners, suppliers and other key stakeholders, which in turn would negatively impact the Group’s liquidity position and further damage its financial prospects.

Accordingly, as the Minimum Tender Condition was not satisfied or waived as of the Exchange Offer Expiration Time, the Company is required, pursuant to the TSA, to proceed with the Restructuring Plan. If the Restructuring Plan is not implemented, the Group will face immediate adverse consequences including, among others, the likely adverse impact of a “going concern” self-disclosure in the Group’s third quarter 2025 10-Q in the event the Notes Restructuring is not implemented before the accounts are issued on 13 November 2025 (as further described at paragraph 21.15 (Maturity of the New Notes) above), difficulty maintaining business, licensing, financing and operational relationships, and a reduced interest in the Group from investors, finance providers and potential purchasers. In such circumstances, the Group will need to pursue alternative near-term restructuring transactions, including potential asset sales delivered through commencement of voluntary cases under Chapter 11 of Title 11 of the United States Code, to address its capital structure and liquidity needs (the “Distressed Sale Scenario”). Given the timing available, it is unlikely that an alternative out-of-court implementation method for the Notes Restructuring that would leave the Group with a viable capital structure can be implemented. A Distressed Sale Scenario is likely to lead to a materially lower return to all Plan Creditors when compared to the expected return under the Restructuring Plan.

The Company therefore considers that if the Restructuring Plan is not approved, the Distressed Sale Scenario is the most likely alternative to the Restructuring Plan, and thus the “relevant alternative” for the purposes of Part 26A of the Companies Act (the “Relevant Alternative”).

The Relevant Alternative and Plan Benefits Report (appended to this Explanatory Statement at Appendix 7. (Relevant Alternative and Plan Benefits Report)) estimates that the returns to Plan Creditors in the Distressed Sale Scenario will be as set out in the table below. This would be less than the anticipated repayment in full under the First-Out Notes and Second-Out Notes under the Restructuring Plan.

The price achievable for the business in Chapter 11 of Title 11 of the United States Code will depend upon the available funding and time and increases the risk that licensors may exercise termination rights. Accordingly, the Group’s management believes that the outcome in this scenario is likely to be at the lower end of the range. The directors of the Company agree with the estimate contained in the table above. However, the directors emphasise that the calculations above represent estimated restructuring values and have been prepared solely for purposes of the Restructuring Plan and filing with the Court. The calculations are not required by, or prepared in accordance with, generally accepted accounting principles in the United States and have not been reviewed or commented upon by the Group’s auditors, Deloitte & Touche LLP. There can be no assurance that the estimates will prove accurate.

The analysis is detailed in the Relevant Alternative and Plan Benefits Report (appended to this Explanatory Statement at Appendix 7. (Relevant Alternative and Plan Benefits Report)) and summarised in Part E (Relevant Alternative and Plan Benefits) of this Explanatory Statement.

Proposal of the Restructuring Plan

The directors of the Company have proposed the Restructuring Plan in order to implement the Notes Restructuring for the following reasons:

the benefit to the Company and to the rest of the Group of the implementation of the Notes Restructuring via the Restructuring Plan as described in further detail in the previous sections, which will in turn benefit the Plan Creditors, not least as they are expected to be no worse off with respect to their recoveries should the Restructuring Plan be sanctioned than they would be in the Relevant Alternative; and

the likely negative alternative outcomes for Plan Creditors if the Restructuring Plan is not approved and/or the Notes Restructuring is not completed.

US $154 million assumed to include accrued interest from November 2025 to completion of the Distressed Sale Scenario.

The First-Out Notes Indenture;

The Second-Out Notes Indenture;

The First-Out / Second-Out Intercreditor Agreement;

The ABL Intercreditor Agreement;

The Warrants; and

The Mutual Release Agreement.

First-Out Notes Indenture

Document Overview

Key Term/Provision

Issuer:

Securities:

Up to US $185,125,000 aggregate principal amount (including the US $32.5 million of New Money, US $1.625 million in respect of the Backstop Premium and up to US $1.0 million Consent Premium) of 9.500% First-Out First Lien Secured Senior Notes due 2029.

One share of Common Stock for each US $34.06 of First-Out Notes purchased.

Interest Payment

Dates:

Interest:

Maturity Date:

Guarantees:

The Guarantors are: (i) Fossil Global Holdings, Inc.; (ii) Fossil Intermediate, Inc.; (iii) Fossil Canada, Inc.; (iv) Fossil Europe B.V.; (v) Swiss Technology Holding GmbH; (vi) Fossil Stores I, Inc.; (vii) Fossil Trust; (viii) Fossil Group Europe GmbH; (ix) Fossil Partners, L.P.; (x) Fossil (Europe) GmbH; (xi) Fossil (UK) Holdings Limited; and (xii) Fossil (UK) Limited.

The Guarantors will jointly and severally and unconditionally guarantee, on a senior basis, FGI’s obligations under the First-Out Notes and all obligations under the First-Out Notes Indenture to the maximum extent permitted by, but subject in all respects to, applicable law (including limitations as to capital maintenance, financial assistance, corporate benefit, exclusion of matters which might be deemed contra legem, director and officer fiduciary and other similar legal duties) and subject in all respects to customary enforcement limitation language and materiality considerations to be set forth in the First-Out Notes Indenture, the First-Out/Second-Out Intercreditor Agreement, the ABL Intercreditor Agreement and any other applicable intercreditor agreement (the “Guaranty and Security Principles”).

Not all of FGI’s subsidiaries will guarantee the First-Out Notes. In addition, not all of FGI’s future subsidiaries are required to guarantee the First-Out Notes. All of FGI’s subsidiaries shall be “restricted subsidiaries” and subject to the covenants, and FGI shall not be permitted to create or otherwise permit any “unrestricted” subsidiaries.

Security:

Ranking:

The First-Out Notes and related guarantees will be senior secured obligations of FGI and the Guarantors and will:

Assuming all Noteholders participate in the New Money Offering in full as New Money Participants, and the use of proceeds therefrom FGI and the Guarantors would have US $185.1 million in total indebtedness outstanding, consisting of the First-Out Notes.

Optional Redemption:

Certain Other Covenants:

The First-Out Notes Indenture restricts FGI’s ability and the ability of FGI’s subsidiaries to:

These covenants are subject to a number of significant limitations and exceptions.

Use of Proceeds:

Denomination:

Trustee:

Second-Out Notes Indenture

Document Overview

Key Term/Provision

Issuer:

Securities:

Interest Payment Dates:

Interest:

Maturity Date:

Guarantees:

The Guarantors are: (i) Fossil Global Holdings, Inc.; (ii) Fossil Intermediate, Inc.; (iii) Fossil Canada, Inc.; (iv) Fossil Europe B.V.; (v) Swiss Technology Holding GmbH; (vi) Fossil Stores I, Inc.; (vii) Fossil Trust; (viii) Fossil Group Europe GmbH; (ix) Fossil Partners, L.P.; (x) Fossil (Europe) GmbH; (xi) Fossil (UK) Holdings Limited; and (xii) Fossil (UK) Limited.

The Guarantors will jointly and severally and unconditionally guarantee, on a senior basis, FGI’s obligations under the Second-Out Notes and all obligations under the Second-Out Notes Indenture to the maximum extent permitted by, but subject in all respects to, applicable law (including limitations as to capital maintenance, financial assistance, corporate benefit, exclusion of matters which might be deemed contra legem, director and officer fiduciary and other similar legal duties) and subject in all respects to customary enforcement limitation language and materiality considerations to be set forth in the Second-Out Notes Indenture, the First-Out/Second-Out Intercreditor Agreement, the ABL Intercreditor Agreement and any other applicable intercreditor agreement (the “Second-Out Guaranty and Security Principles”).

Not all of FGI’s subsidiaries will guarantee the Second-Out Notes. In addition, not all of FGI’s future subsidiaries are required to guarantee the Second-Out Notes. All of FGI’s subsidiaries shall be “restricted subsidiaries” and subject to the covenants, and FGI shall not be permitted to create or otherwise permit any “unrestricted” subsidiaries.

Security:

Ranking:

The Second-Out Notes and related guarantees will be senior secured obligations of FGI and the Guarantors and will:

Assuming all Noteholders participate in full in the New Money Offering as New Money Participants, and the use of proceeds therefrom, FGI and the Guarantors would have US $185.1 million in total indebtedness outstanding, consisting of the First-Out Notes.

Optional Redemption:

Certain Other Covenants:

The Second-Out Notes Indenture restricts FGI’s ability and the ability of FGI’s subsidiaries to:

These covenants are subject to a number of significant limitations and exceptions.

Use of Proceeds:

Denomination:

Trustee:

First-Out/Second-Out Intercreditor Agreement

Document Overview

The First-Out/Second-Out Intercreditor Agreement will become effective pursuant to the Transaction Implementation Deed on the Restructuring Effective Date.

The First-Out/Second-Out Intercreditor Agreement governs the liabilities related to the First-Out Notes and the Second-Out Notes.

Key Term/Provision

Parties

Fossil Group, Inc. as the Issuer

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, Fossil (UK) Holdings Limited, Fossil Europe B.V., Swiss Technology Holding GmbH and Fossil Group Europe GmbH as the Grantors

Wilmington Trust, National Association as the Senior Representative for the Senior Notes Secured Parties and as Senior Trustee

Wilmington Trust, National Association as the Initial Junior Priority Representative and as the Junior Trustee

Instructing Group

Required Noteholders can instruct the Designated Senior Representative.

Junior Priority Majority Representatives representing at least a majority of the then aggregate principal amount of Junior Priority Debt Obligations can instruct the Designated Junior Priority Representative.

Subordination

Any Lien on the Shared Collateral securing or purporting to secure any Senior Obligations shall have priority over and be senior in all respects and prior to any Lien on the Shared Collateral securing or purporting to secure any Junior Priority Debt Obligations and any Lien on the Shared Collateral securing or purporting to secure any Junior Priority Debt Obligations shall be junior and subordinate in all respects to all Liens on the Shared Collateral securing or purporting to secure any Senior Obligations.

All Junior Priority Debt Obligations are subordinated and junior in right of payment to all Senior Obligations, such that the Senior Secured Parties shall be entitled to receive payment in full in cash of the amounts constituting the Senior Obligations before any Junior Priority Debt Party is entitled to receive any payment or other distribution on account of the Junior Priority Debt Obligations.

No Grantor may make, and no Junior Priority Debt Party may receive, any payment of principal, interest or any other amount with respect to the Junior Priority Debt Obligations other than as permitted pursuant to the terms of the First-Out/Second-Out Intercreditor Agreement, and no Junior Priority Debt Party shall exercise any right of set-off or recoupment with respect to any Junior Priority Debt Obligations, until the Discharge of Senior Obligations.

Until the Discharge of Senior Obligations, if any payment of principal, interest or any other amount with respect to the Junior Priority Debt Obligations is made, then such payment or distribution shall be held by the Junior Priority Debt Party in trust for the benefit of, and shall be promptly paid over or delivered to, the Designated Senior Representative for the benefit of Senior Secured Parties for application to the Senior Obligations.

Enforcement

Until the Discharge of Senior Obligations, the Designated Senior Representative (in the case of the Senior Agent, acting at the direction of the Required Noteholders) shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral.

So long as the Discharge of Senior Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Issuer or any other Grantor, the Junior Priority Representative nor any Junior Priority Debt Party will exercise any remedies against the Issuer or any other Grantor or interfere with any exercise of remedies by the Senior Representative or any Senior Secured Party.

Following the Discharge of Senior Obligations, the Designated Junior Priority Representative who may be instructed by the Junior Priority Majority Representatives shall have the exclusive right to exercise any right or remedy with respect to the Collateral.

Insolvency Event

“Insolvency or Liquidation Proceeding” is defined to mean

(1) any case or proceeding commenced by or against the Issuer or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganisation, recapitalisation or adjustment or marshalling of the assets or liabilities of the Issuer or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Issuer or any other Grantor or any similar case or

proceeding relative to the Issuer or any other Grantor or its creditors, as such, in each case whether or not voluntary;

(2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Issuer or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency;

(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Issuer or any other Grantor are determined and any payment or distribution is or may be made on account of such claims; or

(4) any proceeding seeking the appointment of any trustee, receiver, liquidator, custodian or other insolvency official with similar powers with respect to any Grantor or any of its assets.

Application of Proceeds

After an Event of Default (as defined therein) under any Senior Debt Document has occurred and until such Event of Default is cured or waived, so long as the Discharge of Senior Obligations has not occurred, any Shared Collateral or Proceeds received in connection with the sale or other disposition of, or collection on, such Shared Collateral upon the exercise of remedies or in any Insolvency or Liquidation Proceeding shall be applied by the Designated Senior Representative to the Senior Obligations in such order as specified in the relevant Senior Debt Documents until the Discharge of Senior Obligations has occurred. Upon the Discharge of Senior Obligations, each applicable Senior Representative shall deliver promptly to the Designated Junior Priority Representative any Shared Collateral or Proceeds to be applied by the Designated Junior Priority Representative to the Junior Priority Debt Obligations in such order as specified in the relevant Junior Priority Debt Documents.

Unless and until the Discharge of Senior Obligations has occurred and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, any Shared Collateral or Proceeds received by any Junior Priority Representative or Junior Priority Debt Party shall be segregated and held in trust for the benefit of and forthwith paid over to the Designated Senior Representative for the benefit of the Senior Secured Parties.

Amendments and Waivers

Governing Law

Jurisdiction

ABL Intercreditor Agreement

Document Overview

The ABL Intercreditor Agreement will become effective pursuant to the Transaction Implementation Deed on the Restructuring Effective Date.

The ABL Intercreditor Agreement governs the liabilities related to the New ABL Facility, the First-Out Notes and the Second-Out Notes.

Key Term/Provision

Parties

ACF FINCO I LP as ABL Agent

Wilmington Trust, National Association as First-Out Notes Collateral Agent

Wilmington Trust, National Association as Second-Out Notes Collateral Agent

Fossil Group, Inc., 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, Fossil (UK) Holdings Limited, Fossil Europe B.V., Fossil Group Europe GmbH and Swiss Technology Holding GmbH as the ABL Credit Parties and the Notes Credit Parties

Instructing Group

The Notes Collateral Agent shall act on behalf of the Notes Claimholders.

The ABL Agent shall act on behalf of the ABL Secured Parties.

Subordination

Any Lien on the Collateral granted to the ABL Secured Parties or the Notes Claimholders shall have the following priority:

(1) any Lien in respect of the ABL Priority Collateral securing the Notes Obligations shall be junior and subordinate to all Liens granted to the ABL Agent or any ABL Secured Party in such ABL Priority Collateral to secure the ABL Obligations;

(2) any Lien in respect of the ABL Priority Collateral securing the ABL Obligations shall be senior and prior to all Liens granted to any Notes Collateral Agent or Notes Claimholder in such ABL Priority Collateral to secure the Notes Obligations;

(3) any Lien in respect of the Notes Priority Collateral securing the ABL Obligations shall be junior and subordinate to all Liens granted to any Notes Collateral Agent or Notes Claimholder in such Notes Priority Collateral to secure the Notes Obligations;

(4) any Lien in respect of the Notes Priority Collateral securing the Notes Obligations shall be senior and priority to all Liens granted to the ABL Agent or any ABL Secured Party in such Notes Priority Collateral to secure the ABL Obligations; and

(5) as between the UK ABL Floating Charges and the UK Notes Floating Charges, the UK ABL Floating Charges shall be deemed to be the prior floating charges for the purposes of paragraph 15 of Schedule B1 to the IAUK.

Enforcement

Until the Discharge of ABL Obligations, whether or not an Insolvency Proceeding has been commenced by or against or in respect of any Credit Party, each Notes Collateral Agent agrees that the ABL Agent and the ABL Secured Parties shall have exclusive rights to enforce, exercise remedies and, in connection therewith, make determinations regarding the release, disposition, or restriction with respect to the ABL Priority Collateral without any consultation with or the consent of any Notes Collateral Agent or any Notes Claimholder.

Until the Discharge of Notes Obligations, whether or not an Insolvency Proceeding has been commenced by or against or in respect of any Credit Party, the ABL Agent agrees that the Controlling Notes Collateral Agent shall have exclusive rights to enforce, exercise remedies and, in connection therewith, make determinations regarding the release, disposition, or restriction with respect to the Notes Priority Collateral without any consultation with or the consent of the ABL Agent or any ABL Secured Party.

Insolvency Event

“Insolvency Proceeding” is defined to mean:

(1) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganisation, arrangement, insolvency, liquidation, receivership, dissolution, administration, winding-up or relief of debtors;

(2) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of a Person’s creditors generally or any substantial portion of a Person’s creditors;

(3) any case, action or proceeding pursuant to which a Court Appointed Official has been appointed with respect to any Credit Party or any of its assets, in each case covered by clauses (a), (b) and (c), undertaken under any Debtor Relief Laws; or

(4) any liquidation, dissolution, reorganisation, administration or winding up of any Credit Party, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy.

Application of Proceeds

In connection with any Exercise of Secured Creditor Remedies with respect to the ABL Priority Collateral (among other events), ABL Priority Collateral, ABL Priority Proceeds and all other Proceeds thereof shall be applied:

(1) first, to the payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies and in accordance with the ABL Documents;

(2) second, to the payment in full or discharge of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred;

(3) third, to the payment in full of the Notes Obligations in accordance with the Notes Documents until the Discharge of Notes Obligations shall have occurred; and

(4) fourth, the balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.

In connection with any Exercise of Secured Creditor Remedies with respect to the ABL Priority Collateral (among other events), Notes Priority Collateral and all other Proceeds thereof shall be applied:

(1) first, to the payment of costs and expenses of each Notes Collateral Agent in connection with such Exercise of Secured Creditor Remedies and in accordance with the Notes Documents;

(2) second, to the payment in full or discharge of the Notes Obligations in accordance with the Notes Documents until the Discharge of Notes Obligations shall have occurred;

(3) third, to the payment in full of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred; and

(4) fourth, the balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.

Amendments and Waivers

Governing Law

Jurisdiction

Warrants

Pursuant to the TSA, the Supporting Holders shall receive Private Warrants to purchase Common Stock or Pre-Funded Private Warrants in the Private Exchange. All other Noteholders shall receive Public Warrants to purchase Common Stock or Pre-Funded Public Warrants in the Exchange Offer. The Private Warrants and Public Warrants have substantially the same terms.

Pursuant to a warrant agency agreement dated on or around the Restructuring Effective Date (the “Warrant Agreement”) by FGI and Computershare Inc. and its affiliate, Computershare Trust Company, N.A., together as warrant agent (the “Warrant Agent”), the Public Warrants will be issued in book-entry form and shall initially be represented only by one or more global warrants deposited with the Warrant Agent on behalf of DTC and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

The Warrants will be exercisable at any time after their original issuance on the Restructuring Effective Date and prior to 10:00 p.m. (London time) / 5:00 p.m. (New York City time), on the date that is thirty (30) days after the Restructuring Effective Date. The Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to the Warrant Agent a duly executed exercise notice and by payment of the applicable exercise price in full in immediately available funds of the applicable aggregate exercise price for the number of shares of Common Stock or Pre-Funded Warrants purchased upon such exercise. No fractional shares of Common Stock will be issued upon the exercise of the Warrants or the Pre-Funded Warrants. As to any fraction of a share which a holder would otherwise be entitled to purchase upon such exercise, FGI will, at its election, either pay a cash adjustment in respect of

Each Warrant is exercisable for one share of Common Stock or one Pre-Funded Warrant.

The exercise price per whole share of Common Stock purchasable upon the exercise of a Warrant is US $0.50 per share (the “Common Stock Exercise Price”). The exercise price per whole Pre-Funded Warrant purchasable upon the exercise of a Warrant is US $0.49 per Pre-Funded Warrant (the “Pre-Funded Warrant Exercise Price”). The Common Stock Exercise Price and Pre-Funded Warrant Exercise Price are subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting shares of Common Stock and also upon any distributions of assets, including cash, stock or other property to all of FGI’s shareholders.

A holder will not have the right to exercise any portion of its Warrants if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise (the “Beneficial Ownership Limitation”), as such holder’s pro rata portion of ownership is determined in accordance with the terms of the Warrants.

However, any holder may increase or decrease the Beneficial Ownership Limitation upon at least sixty-one (61) days’ prior notice from such holder to FGI, provided that in no event will the Beneficial Ownership Limitation exceed 19.99%.

FGI does not plan on applying to list the Warrants on NASDAQ or any other national securities exchange or other nationally recognized trading system.

Subject to applicable laws, the Warrants may be offered for sale, sold, transferred or assigned without FGI’s consent. In the event of a fundamental transaction, as described in the Warrants and generally including FGI’s merger or consolidation with and into another person, the sale, transfer, conveyance or other disposition of all or substantially all of FGI’s assets, the completion of a purchase offer, tender offer or exchange offer for shares of Common Stock that is accepted by the holders of 50% or more of the outstanding shares of Common Stock, a reclassification, reorganisation or recapitalisation of the Common Stock, or the consummation by FGI of a stock or share purchase agreement or other business combination (including, without limitation, a reorganisation, recapitalisation, spin-off, merger or scheme of arrangement) with another person or group of persons whereby such other person or group acquires 50% or more of the outstanding shares of Common Stock, the holders of the Warrants will be entitled to receive, at the option of the holder upon subsequent exercise of the Warrants, the number of shares of common stock of the successor or acquiring corporation (or of FGI, if it is the surviving corporation), and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of Common Stock for which the Warrant is exercisable immediately prior to such fundamental transaction.

Warrant holders will not have the rights or privileges of a holder of shares of Common Stock with respect to the shares of Common Stock underlying such Warrants, including any voting rights, until the holder exercises such Warrants to purchase shares of Common Stock.

Mutual Release Agreement

Document Overview

Key Term/Provision

Parties

Released Parties

1.  The Company;

2.  FGI;

3.  The other Company Parties (as defined therein);

4.  The Supporting Holders; and

5.  With respect to each of the foregoing, any predecessors, affiliates, successors and assigns, subsidiaries, affiliates, managed accounts or funds, present and former shareholders, direct and indirect owners, and all of their respective current and former officers, directors, principals, members, partners, general partners, employees, agents, financial advisers, attorneys, accountants, investment bankers, consultants, representatives, managed companies, fund advisers and other professionals (each a “Related Party”).

Releasing Parties

1.  The Company;

2.  FGI;

3.  The other Company Parties (as defined therein); and

4.  The Supporting Holders.

Releases

Limitations