Financial Performance - Net revenues for Q3 2024 were $2.4 million, down 26.4% from $3.3 million in Q3 2023[4] - Gross profit margins decreased to 46.0% from 52.3% year-over-year, primarily due to fixed costs and lower digital revenue[4] - The net loss for Q3 2024 was $3.5 million, an improvement from a net loss of $5.4 million in Q3 2023[5] - Net loss per diluted share improved to $1.63 from $14.55 a year ago[5] - Net loss for September 30, 2024, was $7,735,452, compared to a net loss of $6,528,082 for the same period in 2023[9] - The company reported a net cash used in operating activities of $3,293,269 for the quarter ending September 30, 2024, compared to $6,457,639 for the same period in 2023[9] Expenses - General and administrative expenses decreased by $1.3 million to $2.4 million compared to $3.7 million a year ago[4] - Sales and marketing expenses were $655,000, down 43.5% from $1.2 million in the previous year[4] Future Outlook - The company expects a benefit of approximately $3.1 million to net earnings in fiscal 2025 due to reduced interest expenses starting Q1 2025[5] - A projected increase of over $4.5 million in earnings is anticipated from the conclusion of amortized non-cash expenses by the end of 2024[3] - The company plans to launch new initiatives including AVO and limited-edition online products to drive growth[3] Assets and Liabilities - Cash and cash equivalents increased to $289,346 as of September 30, 2024, from $20,773 at the end of December 31, 2023[10] - Total current assets rose to $6,397,774 as of September 30, 2024, up from $5,559,687 at December 31, 2023[10] - Inventory increased to $5,040,518 as of September 30, 2024, compared to $4,849,600 at December 31, 2023[10] - Total liabilities decreased to $23,274,075 as of September 30, 2024, from $23,733,441 at December 31, 2023[11] - Stockholders' equity was $19,046 as of September 30, 2024, significantly down from $1,602,592 at December 31, 2023[13] - The total assets decreased to $23,293,121 as of September 30, 2024, from $25,336,033 at December 31, 2023[12] Business Model - The company has a business model focused on direct-to-consumer and wholesale apparel, leveraging customer data for personalized marketing[14] Partnerships - Digital Brands Group partnered with VAYNERCOMMERCE to enhance digital revenue, which has already shown positive results[2]

Financial Performance - Net revenues decreased by $0.8 million to $2.4 million for the three months ended September 30, 2024, compared to $3.3 million in the same period in 2023 [186]. - Gross profit decreased by $0.6 million to $1.1 million for the three months ended September 30, 2024, with a gross margin of 46%, down from 52% in the previous year [187]. - Operating loss for the three months ended September 30, 2024, was $(2,144,165), compared to $(3,422,162) in the same period in 2023 [185]. - Loss before provision for income taxes was $(3,541,237) for the three months ended September 30, 2024, compared to $(5,435,994) in the previous year [185]. - Net revenues decreased by $2.7 million to $9.4 million for the nine months ended September 30, 2024, compared to $12.1 million in the same period in 2023 [191]. - Gross profit decreased by $1.6 million to $4.4 million for the nine months ended September 30, 2024, with a gross margin of 47%, down from 50% in the same period in 2023 [192]. - Net loss from continuing operations increased by $2.7 million to $7.7 million for the nine months ended September 30, 2024, compared to a net loss of $5.0 million in the same period in 2023 [194]. Operating Expenses - Operating expenses decreased by $1.3 million to $3.8 million for the three months ended September 30, 2024, primarily due to cost-cutting measures and synergies from the Sundry acquisition [188]. - General and administrative expenses decreased by $1.3 million, while sales and marketing expenses decreased by $0.5 million in the same period [188]. - Operating expenses increased by $4.3 million to $9.7 million for the nine months ended September 30, 2024, primarily due to a gain of $10.7 million in 2023 from the change in fair value of contingent consideration [193]. - Other expenses decreased to $2.5 million for the nine months ended September 30, 2024, compared to $5.6 million in the same period in 2023, primarily due to lower interest expenses [194]. Cash Flow and Financing - Cash used in operating activities decreased by $3.2 million to $3.3 million for the nine months ended September 30, 2024, compared to $6.5 million in the same period in 2023 [199]. - Cash provided by financing activities was $3.7 million for the nine months ended September 30, 2024, including $5.4 million in net proceeds from the issuance of common stock [200]. - As of September 30, 2024, the company had cash of $158,601 and a working capital deficit of $16.0 million, raising substantial doubt about its ability to continue as a going concern [197]. - The company intends to fund its operations primarily from funds raised through the equity line of credit agreement and may pursue secondary offerings or debt financings [197]. Debt and Bankruptcy Risks - As of September 30, 2024, the Company had an aggregate principal amount of debt outstanding of approximately $8.2 million, which is considered significant for its size and revenue base [143]. - The Company is currently unable to repay or refinance $3.5 million in notes related to the Bailey acquisition, posing a risk of bankruptcy or liquidation [145]. Market and Operational Challenges - Supply chain disruptions have led to increased costs in raw materials, with fabric prices rising between 10% to 100%, and shipping costs increasing from 25% to 300% [141]. - The decrease in revenues was attributed to a delay in wholesale shipments and lower e-commerce revenues due to reduced digital advertising spend [186]. Strategic Initiatives - The Company aims to enhance "closet share," defined as the percentage of a customer's clothing units owned from its brands, to drive higher revenue [136]. - Avo, a new women's essential brand launched in August 2024, offers products with prices ranging from $20 to $198, leveraging the Company's existing design and supply chain [140]. - The Company has strategically expanded into omnichannel offerings, blending online and physical retail to enhance customer engagement and lifetime value [137]. - The company aims to achieve near-term free cash flow through cash flow positive acquisitions and reducing customer acquisition costs [154]. - Future performance will depend on the ability to increase the customer base through both online and traditional wholesale distribution channels [149]. Securities and Stock Offerings - The Company executed a securities purchase agreement on April 7, 2023, resulting in promissory notes totaling approximately $2,500,000, with a remaining balance of about $1,789,668.37 exchanged for replacement notes [125]. - Between July 1, 2024, and October 22, 2024, the Company sold 5,256,263 shares of common stock, generating net proceeds of $2,063,396 [126]. - The recent offering on October 30, 2024, resulted in gross proceeds of approximately $3,000,000 from the sale of 6,233,650 shares of common stock and 24,109,350 pre-funded warrants [128]. Nasdaq Delisting Notification - The Company received a letter from Nasdaq notifying that its common stock will be delisted due to failure to maintain a minimum bid price of $1 per share, with an appeal submitted on October 9, 2024 [124].

Austin, TX, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its third quarter ended September 30, 2024. "Our third quarter was the last quarter we significantly focused on paying down debt and liabilities given the soft macro economy and the overhang of the election. Starting in October this year, we transitioned from cleaning up the balance sheet to focusing on increasin ...

Austin, TX, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. (“DBG”) (NASDAQ: DBGI), a curated collection of luxury lifestyle brands, today announces that it entered into a marketing partnership on October 21, 2024, with VAYNERCOMMERCE, https://vaynercommerce.com/. VAYNERCOMMERCE is a full service digital growth agency created by Gary Vaynerchuk, also known as GARYVEE. VAYNERCOMMERCE’s services aim to help digital companies scale their online presence and revenues. This partnership has already l ...

Group 1 - Digital Brands Group, Inc. has paid off $1.3 million in outstanding convertible notes, retiring all debt securities convertible into common stock [1] - The company has eliminated over $3.5 million in debt in 2024, including the recent payoff, to focus on growth and remove debt overhang [2] - The business model of Digital Brands Group is based on being a digitally native-first vertical brand, offering a variety of apparel through direct-to-consumer and wholesale channels [4] Group 2 - The CEO of Digital Brands Group, Hil Davis, emphasized the significance of cleaning up the balance sheet and the positive impact on the company's growth strategy [2] - The company leverages customer data and purchase history to create personalized content and looks, aiming to increase customer engagement and "closet share" [4]

Austin, TX, Oct. 28, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. (“DBG”) (NASDAQ: DBGI), a curated collection of luxury lifestyle brands, announces the pricing of its public offering of an aggregate of 30 million shares of common stock and/or pre-funded warrants to purchase common stock at a public offering price of $0.10 per share (minus $0.0001 per pre-funded warrant). The gross proceeds from the offering, before deducting the placement agent's fees and other offering expenses, are expected to be ...

Digital Brands Group, Inc. (NASDAQ:DBGI) Q2 2024 Earnings Conference Call August 19, 2024 5:00 PM ET Company Participants John McNamara - IR Hil Davis - CEO Conference Call Participants Operator Greetings. Welcome to the Digital Brands Group Second Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over t ...

Exhibit 99.1 Digital Brands Group Reports Second Quarter 2024 Financial Results Austin, TX— Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its second quarter ended June 30, 2024. "The company paid off over $5.0 million in debt and other liabilities during the first half of this year. The Company also lowered its G&A expenses by $4.5 million during the same period. Based on conversations with strategic pa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Delaware 46-1942864 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share DBGI The Nasdaq Stock Market LLC Warrants, each exercisable to purchase one share of common stock DBGIW The Nasdaq Stock Market LLC FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF TH ...

Austin, TX, Aug. 19, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its second quarter ended June 30, 2024. "The company paid off over $5.0 million in debt and other liabilities during the first half of this year. The Company also lowered its G&A expenses by $4.5 million during the same period. Based on conversations with strategic partners, we believe cleaning up the balance she ...