Digital Brands Group gets $3.53M note default notice

Q: What are the default terms of DBGI’s convertible note?

The Note bears 20% per annum default interest on amounts not paid when due. During an Event of Default, Shakawe Capital LLC may convert at the greater of 90% of the lowest closing price in the prior five trading days and the floor price, subject to beneficial ownership limitations and the Nasdaq 19.99% cap.

The note states 20% annual default interest on amounts not paid when due, and a conversion formula that applies during an Event of Default.

Available on EDGAR 11/02/2026 - 06:01 AM EST Accepted by SEC EDGAR 10/30/2026 - 05:57 PM EDT

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(Very High)

Filing Sentiment

(Very Negative)How Sentiment works

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Form Type

8-K

Rhea-AI Filing Summary

Digital Brands Group, Inc. (DBGI) received a default notice from Shakawe Capital LLC, holder of the company’s $3,529,412 unsecured convertible promissory note issued July 23, 2026. The company disputes certain assertions in the notice and is evaluating potential resolution alternatives, including a consensual resolution or extension. It said it could not assure an agreement on acceptable terms or at all.

The Note bears 20% per annum default interest on amounts not paid when due. During an Event of Default, Shakawe may convert at a default conversion price equal to the greater of 90% of the lowest closing price in the prior five trading days and the floor price, subject to beneficial ownership limitations and the Nasdaq 19.99% cap. The company said acceleration or legal proceedings could materially adversely affect its liquidity, financial condition and results of operations.

0 points · 0 major

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It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance works How Sentiment works

1 major · 1 point

Hollow bars mark forward-looking points. How the balance works

Positive

None.

Negative

Major point. Forward-looking: it has not happened yet and may not happen.Potential acceleration of the $3,529,412 note could materially affect liquidity and results. 5.4× market cap

Filing Explained

Shakawe says the note is immediately due at 120% of amounts owed, while the company disputes the default assertions.

The filing says Shakawe Capital alleged that Digital Brands Group missed a $1,000,000 scheduled payment due October 23, 2026 and failed to file the required registration statement by August 7, 2026; the company disputes some assertions in the notice. Shakawe asserts that the note is immediately due at the Mandatory Default Amount, defined in the notice as 120% of outstanding principal, accrued interest and other amounts owing, plus additional amounts including registration-rights liquidated damages.

The notice states there is no cure period and says Shakawe would engage counsel and commence legal proceedings unless an acceptable extension proposal arrived by the end of October 29, 2026.

8-K Event Classification

Item 2.04 — Triggering Events That Accelerate or Increase a Direct Financial Obligation

1 item

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation Financial

An event triggered acceleration or increase of an existing financial obligation, such as a debt covenant breach.

Key Figures

Note principal: $3,529,412 Default interest: 20% per annum Default conversion-price factor: 90% +2 more

5 metrics

Note principal $3,529,412 Unsecured convertible promissory note issued July 23, 2026

Default interest 20% per annum Applies to amounts not paid when due

Default conversion-price factor 90% Compared with the lowest closing price in the prior five trading days and the floor price

Conversion-price reference period 5 trading days Prior to conversion

Nasdaq cap 19.99% Applies to conversion during an Event of Default

Key Terms

unsecured convertible promissory note, default interest, default conversion price, beneficial ownership limitations, +1 more

5 terms

unsecured convertible promissory note financial

"unsecured convertible promissory note in the principal amount of $3,529,412"

default interest financial

"bears default interest of 20% per annum on amounts not paid when due"

Default interest is an extra, higher interest rate that kicks in when a borrower fails to make required payments or otherwise breaches loan terms. Think of it as a penalty interest or late fee that increases the cost of unpaid debt, causing overdue balances to grow faster. Investors care because default interest raises potential recoveries, affects cash flow timing, and signals heightened credit risk that can change a loan or bond's value.

default conversion price financial

"the default conversion price, which is the greater of 90% of the lowest closing price"

beneficial ownership limitations financial

"subject to the beneficial ownership limitations and the Nasdaq 19.99% cap"

Beneficial ownership limitations are rules or contractual caps that restrict how much of a company’s stock an individual or entity can be treated as owning or controlling for legal, regulatory or corporate-governance purposes. They matter to investors because such limits affect voting power, reporting obligations, takeover risk and the ability to increase a stake — like an elevator weight limit or a lane divider that prevents any one car from taking over the whole road.

floor price financial

"the lowest closing price in the prior five trading days and the floor price"

The floor price is the minimum price at which a security, asset, or offering will be sold or accepted, acting like a seller’s “bottom line” or a reserve in an auction. For investors it matters because it sets a visible downside limit and can influence trading, valuation, and expectations of risk—like knowing there’s a safety net that a sale won’t go below a set level.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

When did DBGI receive the Shakawe notice?

Digital Brands Group said it received Shakawe Capital LLC’s written notice on October 29, 2026.

What are the default terms of DBGI’s convertible note?

The Note bears 20% per annum default interest on amounts not paid when due. During an Event of Default, Shakawe Capital LLC may convert at the greater of 90% of the lowest closing price in the prior five trading days and the floor price, subject to beneficial ownership limitations and the Nasdaq 19.99% cap.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 29, 2026

DIGITAL BRANDS GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada

001-40400

46-1942864

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification Number)

350 Texas Ave, Suite 250, Round Rock, TX		78664
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (720) 937-9286

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On October 29, 2026, Digital Brands Group, Inc. (the “Company”) received a written notice of default (the “Notice”) from Shakawe Capital LLC (the “Holder”), the holder of the Company’s unsecured convertible promissory note in the principal amount of $3,529,412 issued on July 23, 2026 (the “Note”) pursuant to the Securities Purchase Agreement dated July 23, 2026 (the “Purchase Agreement”), as previously reported in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 24, 2026 (the “Prior Form 8-K”). In the Notice, the Holder asserted that Events of Default had occurred under the Note based on the Company’s alleged (i) failure to make a scheduled partial payment of $1,000,000 that was due on October 23, 2026 pursuant to the repayment schedule under the Note, and (ii) failure to file a registration statement by August 7, 2026, the Filing Date required under the Registration Rights Agreement entered into in connection with the Purchase Agreement (the “Registration Rights Agreement”). Capitalized terms not defined under this Item 2.04 have the meanings ascribed to them in the Note or the Registration Rights Agreement, as applicable.

In the Notice, the Holder asserted that, pursuant to Sections 2.1 and 2.2 of the Note, the Note is immediately due and payable in full at the Mandatory Default Amount, equal to 120% of outstanding principal, accrued interest and other amounts owing, plus additional amounts, including liquidated damages under the Registration Rights Agreement, arising from the alleged failure to timely file the registration statement and to repay the Note when due. The Note bears default interest of 20% per annum on amounts not paid when due. During an Event of Default, the Holder may convert the Note at the default conversion price, which is the greater of 90% of the lowest closing price in the prior five trading days and the floor price, subject to the beneficial ownership limitations and the Nasdaq 19.99% cap. The Notice states that there is no cure period under the Note and that the default is effective immediately, and that, unless the Holder receives an acceptable proposal for an extension by the end of the day on October 29, 2026, the Holder intends to engage counsel and commence legal proceedings against the Company.

The Company disputes certain of the assertions in the Notice and is evaluating potential resolution alternatives, including engaging with the Holder regarding a consensual resolution or extension, while preserving all rights, remedies and defenses available to the Company under the transaction documents and applicable law. No assurance can be given that the Company will reach an agreement with the Holder on acceptable terms or at all, or as to the timing or outcome of this matter. An acceleration of the Note, or any legal proceedings commenced by the Holder, could have a material adverse effect on the Company’s liquidity, financial condition and results of operations.

The foregoing description of the Note and the Registration Rights Agreement is qualified in its entirety by reference to the full text of such documents, copies of which were filed as Exhibits 10.2 and 10.4, respectively, to the Prior Form 8-K and are incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DIGITAL BRANDS GROUP, INC.

Date: October 30, 2026	By:	/s/ John Hilburn Davis IV
		John Hilburn Davis IV
		President and Chief Executive Officer

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

3 documents