Digital Brands Group Faces Delisting Threat Due to Share Issuance Error

Digital Brands Group, Inc. (NASDAQ: DBGI) is currently navigating a potential delisting scenario after notifying shareholders about an error in the issuance of shares. The company had previously issued 1,311,345 shares of its common stock to a specific note holder in contravention of Nasdaq Rule 56353(d. This issuance represented a discounted issuance exceeding 19.9% of the company’s total common shares outstanding, breaching both the terms of the Note and the Rule.

Acknowledging the error, Digital Brands Group requested the Holder to return the shares for cancellation by the company’s transfer agent. Additionally, the company informed The Nasdaq Stock Market LLC (“Nasdaq”) Listing Qualifications Staff about the inadvertent issuance and outlined plans to rectify the mistake.

On October 28, 2024, the company received a delist determination from the Staff for not complying with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2. This, in conjunction with the prior bid price deficiency disclosure on October 4, 2024, raises concerns about further delisting of the company’s securities from Nasdaq. Digital Brands Group intends to address this additional matter during a scheduled hearing with the Nasdaq Hearings Panel, primarily focused on the bid price discrepancy.

As per the Securities Exchange Act of 1934 filing, the company’s President and Chief Executive Officer, John Hilburn Davis IV, signed the document on November 1, 2024. The process of resolving the share issuance anomaly and complying with Nasdaq’s regulations will be closely monitored as Digital Brands Group aims to navigate through this regulatory challenge.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Digital Brands Group’s 8K filing here.

Digital Brands Group Company Profile

Digital Brands Group, Inc engages in the provision of apparel products under various brands on direct-to-consumer and wholesale basis. It operates through DSTLD, Bailey, H&J, Stateside, and Sundry segments. The company designs, manufactures, and sells women's apparel, such as tops, sweaters, dresses, jumpsuits, bottoms, sets, jackets, rompers, suiting, sportswear, shirts, jackets, pants, shorts, polos, T-shirts, skirts, athleisure bottoms, denims, and other accessory products, as well as suiting for men.