By Ben Hansel, Senior Financial Editor 247MarketNews
DENVER, Colo. (247marketnews)— Digital Brands Group (NASDAQ:DBGI) is attracting attention in Friday's premarket session after shares closed Thursday at $0.47, a new 52-week low. The early rebound may catch momentum traders' attention, but the company's latest financial disclosures suggest there may be more to evaluate than a low-priced stock bouncing off its bottom.
The immediate concern is a debt dispute disclosed in an October 30 SEC filing. Digital Brands Group reported receiving a default notice from Shakawe Capital LLC concerning a $3,529,412 unsecured convertible promissory note issued in July.
According to the filing, Shakawe alleged that the company failed to make a scheduled $1 million payment due October 23 and missed a required securities registration filing deadline. The lender asserted that the note had become immediately payable at 120% of outstanding principal, accrued interest and other amounts, plus potential additional obligations. The note also carries default interest of 20% annually on amounts not paid when due.
Digital Brands Group disputes certain assertions in the notice and said it was evaluating a negotiated resolution or extension, but cautioned that it could not guarantee an agreement and acknowledged that acceleration or litigation could materially harm its liquidity and financial condition.
For now, Thursday's $0.47 close and today's premarket recovery make DBGI a stock to watch.
About the Author
Ben Hansel is a financial and business writer with a background in business, sales, and finance. He graduated from the University of Texas at El Paso. His professional and educational background informs his coverage of financial markets, corporate developments, economic trends and the broader forces shaping the market.