DBGI Announces Purchase of Existing Convertible Notes and Note Conversion Extension by Holders

Core Viewpoint - Digital Brands Group, Inc. has announced that holders of its Series D Preferred Stock have entered into private agreements regarding their ownership and rights, which include conversion and sale limitations on the shares [1][2]. Group 1: Shareholder Agreements - The Company is not a party to the Shareholder Agreements and cannot enforce their terms [2]. - An aggregate of 9,375 Series D Shares are currently subject to a Conversion Standstill, preventing conversion into Common Stock until after May 31, 2026 [3][4]. Group 2: Conversion Standstill - The Transferee Holder of the 9,375 Series D Shares has agreed not to convert these shares into Common Stock until the end of the Conversion Standstill [3]. - The Transferring Holder also transferred certain Pre-Funded Warrants to the Transferee Holder as part of this agreement [3]. Group 3: Leak-out Limitations - After the Conversion Standstill, the Transferee Holder is subject to Leak-out Limitations on the sale of Common Stock, restricting sales to the greater of 5,000 shares or 1% of the average daily trading volume for the first 20 days, increasing to 10,000 shares or 3.5% thereafter [5][6]. - The shares of Common Stock issuable upon conversion of 9,375 Series D Shares are currently subject to these Leak-out Limitations [6]. Group 4: Extending Holders - Two existing holders, collectively owning 2,500 Series D Shares, granted an option to another holder, which included a Leak-out provision limiting sales to the greater of 1% of the average daily traded volume or 2,500 shares [7][8]. - The shares of Common Stock issuable upon conversion of 2,434 Series D Shares are currently subject to the Extending Holders' Leak-out [8].