Digital Brands Group Faces Potential Delisting from Nasdaq Due to Shareholder Equity Issue

On November 20, 2024, Digital Brands Group, Inc. (NASDAQ: DBGI) received notice from The Nasdaq Stock Market LLC that the company no longer met the $35,000,000 market value of listed securities requirement or the alternative $2,500,000 stockholders’ equity requirement, as outlined in Listing Rule 5550(b). This non-compliance could result in the delisting of the company’s securities from Nasdaq.

The deficiency in shareholder equity was revealed in the Company’s recent filing, where it reported stockholders’ equity of $19,046, falling short of the required amount. A hearing before the Nasdaq Hearings Panel is scheduled for December 3, 2024, to address this issue.

In efforts to improve its financial standing, Digital Brands Group completed an at-the-market offering agreement, generating net proceeds of approximately $1,320,873, and entered into securities purchase agreements, resulting in net proceeds of about $2,555,261. These transactions lifted the company’s shareholder equity past $2,500,000 by November 15, 2024, the date of the filing.

However, despite these actions, there remains uncertainty about regaining compliance with listing requirements, pending the decision of the Nasdaq Hearings Panel. The Company will need to demonstrate its ability to sustain long-term stockholders’ equity compliance during the upcoming hearing.

In other news related to Nasdaq compliance, Elevai Labs Inc. (NASDAQ: ELAB) recently announced a 1-for-200 reverse stock split to align with Nasdaq’s minimum bid price rule. Through this initiative, Elevai aims to maintain its presence on the Nasdaq Capital Market, ensuring continued visibility and investor confidence.

For further details on Digital Brands Group’s efforts to address the current compliance issue, interested parties can review the company’s full Form 8-K filing, accessible on the SEC’s website.

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.