Business Context and Reporting Period
Digital Brands Group, Inc. (DBGI), a Nevada corporation, filed this Form 8-K on June 9, 2026, to report the entry into a material definitive agreement. The company is headquartered in Round Rock, Texas, and its common stock trades on The Nasdaq Stock Market LLC.
Key Financial Metrics and Transaction Details
The filing details a new debt financing arrangement rather than periodic financial performance metrics. Key terms of the transaction include:
- Principal Amount: $238,050.00 (including a $13,050.00 original issue discount).
- Purchase Price (Net Proceeds): $207,000.00 (received June 10, 2026, minus fees).
- Interest: A one-time interest charge of 12% ($28,566.00) is included in the repayment schedule.
- Repayment Terms: Nine monthly payments of $29,624.00, commencing July 15, 2026, with maturity on March 15, 2027.
- Future Capacity: Additional tranches of up to $1,015,000.00 are available over the next 12 months subject to further agreement.
- Use of Proceeds: General working capital purposes.
Material Changes and Default Provisions
This filing represents a new material obligation. The filing text does not provide comparative financial data (e.g., revenue or profit changes) versus prior periods. However, the agreement includes significant default provisions:
- Default Penalty: Upon an event of default, the outstanding balance becomes immediately due at 150% of principal plus accrued interest, with default interest accruing at 22% per annum.
- Conversion Rights: In the event of default, the lender may convert the balance (including the Default Amount) into common stock at 61% of the lowest closing bid price during the ten trading days prior to conversion.
- Ownership Caps: The lender and affiliates are capped at owning 4.99% of outstanding shares at any time, and total convertible shares cannot exceed 19.99% of shares outstanding as of June 9, 2026.
Guidance, Risks, and Contingencies
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the terms of the note. The primary contingency is the potential for default, which would trigger a significant increase in the debt obligation and potential dilution of existing shareholders through the conversion feature. The transaction was executed as a private placement exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D.
Investor Verification Checklist
- Verify the company's current cash position to assess ability to meet the first payment due July 15, 2026.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) and Promissory Note (Exhibit 10.2) for specific covenants and events of default.
- Monitor the company's stock price to understand the potential dilution impact if the 61% conversion price is triggered.
- Confirm whether the company intends to utilize the additional $1,015,000.00 tranche capacity.