Digital Brands Group Secures $3.53M Convertible Note and $100M Equity Line

What Happened
Digital Brands Group, Inc. (DBGI) announced on July 23, 2026 that it entered into a Securities Purchase Agreement to issue a $3,529,412 unsecured convertible promissory note and an Equity Line of Credit (ELOC) committing up to $100,000,000 in common stock purchases. Aegis Capital Corp. was engaged as placement agent. The company said proceeds will be used for general working capital and to repay certain liabilities.

Key Details

• Note: $3,529,412 principal (reflecting a $3,000,000 subscription amount / 0.85); issued July 23, 2026; maturity January 23, 2027. Scheduled repayments: $1,000,000 due on or before each of Oct 23, 2026, Nov 23, 2026 and Dec 23, 2026, and $529,412 due Jan 23, 2027.
• Interest & default: Past-due amounts bear 20% per year; on default the Company must pay a mandatory default amount equal to 120% of outstanding principal plus accrued interest and other amounts. Conversion into common stock is permitted in whole/part upon an event of default at a formula based on market prices, subject to ownership caps.
• ELOC: Up to $100,000,000 commitment through July 23, 2029 (or earlier if fully used); sales priced at 95% of certain VWAP/lowest traded price metrics, subject to volume limits and a 19.99% Nasdaq cap (adjustable only with stockholder approval or purchaser waiver). Purchaser’s ownership limited to 4.99% (can be increased to 9.99% with notice). Company paid a 1% commitment fee in shares (or pre-funded warrants) for the facility.
• Placement & registration: Aegis receives a 3.0% commission on the $3,000,000 subscription and 3.0% on gross purchase price of put shares under the ELOC plus expense reimbursement. DBGI must file a registration statement (covering up to 200% of convertible note shares and ELOC shares) within 15 days and use best efforts to have it effective within 75 days; liquidated damages apply for certain registration failures.

Why It Matters
This filing shows DBGI has secured immediate near-term financing but with significant repayment and conversion risks: the note is short-term with high default interest/penalties and conversion rights that can dilute existing shareholders if a default occurs. The $100M ELOC provides potential ongoing capital but can also lead to dilution as shares are sold into the market, subject to caps and registration. Investors should watch the company’s liquidity (ability to meet the scheduled note repayments), progress on the registration filing, and any future use of the ELOC, all of which can materially affect share supply and shareholder value.