Digital Brands Group issues $2.2M in 20% OID notes due Sep 2023 with onerous conversion terms

Digital Brands Group, Inc.

Issued $2,208,750 aggregate principal of 20% OID notes for $1,800,000 subscription amount to multiple investors.
Notes mature September 30, 2023; prepayment allowed without penalty.
If not repaid by maturity, principal increases to 120%, interest at 20% annually, and notes become convertible at closing price.
Upon default conversion, if shareholder approval not obtained, CEO must personally guarantee repayment and pledge shares.
Require 50% repayment of remaining balance if subsequent financing < $7.5M, full repayment if ≥ $7.5M.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Digital Brands Group, Inc. entered into Securities Purchase Agreement with various purchasers valued at $2,208,750 (effective 2023-04-07).

Action: entry
Agreement: notes offering
Counterparty: various purchasers
Value: $2,208,750
Effective: 2023-04-07

Exact text from the filing

On April 7, 2023, Digital Brands Group, Inc. (the “Company”) and various purchasers (the “Investors”) executed a Securities Purchase Agreement (the “SPA”) whereby the Investors purchased from the Company 20% Original Issue Discount (the “OID”) promissory notes (the “Notes”) in the aggregate principal amount of $2,208,750 (with an aggregate subscription amount of $1,800,000).

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24 material agreements filed in the last 30 days. Browse all material agreements →

Digital Brands Group, Inc. filing history →

Source: SEC EDGAR

accession 0001104659-23-045079

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