As
filed with the Securities and Exchange Commission on August 20, 2024
Registration
No. 333-274563
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-1 ON
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
DIGITAL
BRANDS GROUP, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction
of incorporation or organization) |
|
46-1942864
(I.R.S.
Employer
Identification Number) |
1400
Lavaca Street
Austin,
TX 78701
(209)
651-0172
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
John
Hilburn Davis IV
President
and Chief Executive Officer
1400
Lavaca Street
Austin,
TX 78701
(209)
651-0172
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Laura
Anthony, Esq.
Craig
D. Linder, Esq.
Anthony,
Linder & Cacomanolis, PLLC
1700
Palm Beach Lakes Blvd., Suite 820
West
Palm Beach, Florida 33401
Telephone:
(561) 514-0936
Approximate
date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.
If
the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check
the following box. ☐
If
any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer |
☐ |
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Accelerated
filer |
☐ |
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Non-accelerated
filer |
☒ |
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Smaller
reporting company |
☒ |
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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 7(a)(2)(B) of the Securities Act. ☐
THE
REGISTRANT HEREBY AMENDS THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
EXPLANATORY
NOTE
The
Registrant filed (A) a registration statement on Form S–1 (File No. 333-274563) with the Securities and Exchange Commission (the
“SEC”) on September 18, 2023, which was amended on September 21, 2023, and declared effective on September 25, 2023 (the
“Resale Registration Statement”) registering the issuance of up to an aggregate of 1,580,166 shares of our common stock,
par value $0.0001 per share, consisting of 32,000 shares of common stock, up to 481,875 shares of common stock issuable upon exercise
of pre-funded warrants (the “Pre-Funded Warrants”), up to 513,875 shares of common stock issuable upon exercise of Series
A Warrants (the “Series A Warrants”), up to 513,875 shares of common stock issuable upon exercise of Series B Warrants (the
“Series B Warrants) and 38,541 shares of common stock issuable upon exercise of placement agent warrants (the “Placement
Agent Warrants”). Subsequently, the Registrant filed a prospectus with respect to such Resale Registration Statement on September
25, 2023, as well as a prospectus supplement to such Resale Registration Statement on May 7, 2024.
If
any securities previously registered under the Resale Registration Statement (File No. 333-274563) were sold under the Resale Registration
Statement or pursuant to the exemption from registration provided by Rule 144, the amount of previously registered securities so sold
will not be included in the prospectus hereunder.
This
Post-Effective Amendment No. 1 to Form S-1 on Form S-3, is being filed to (i) convert the registration statement on Form S-1 into a registration
statement on Form S-3 and (ii) include an updated prospectus relating to the registration of Common Stock for issuance by the Registrant
and the offering and sale of Common Stock that was registered for resale by the selling security holders named in the prospectus to this
Post-Effective Amendment No. 1 to Form S-1 on Form S-3. Pursuant to Rule 429, Post-Effective Amendment No. 1 to Form S-1 on Form S-3
upon effectiveness will serve as a post-effective amendment to the Resale Registration Statement (File No. 333-274563).
No
additional securities are being registered under this Post-Effective Amendment No. 1 to Form S-1 on Form S-3 and all applicable registration
and filing fees were paid at the time of the original filing of the registration statement.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject
to Completion, dated August 20, 2024
PROSPECTUS
DIGITAL
BRANDS GROUP, INC.
COMMON
STOCK, $0.0001 PAR VALUE
687,541 SHARES
This
prospectus relates to the resale, from time to time, of up to 687,541 shares of our common stock, par value $0.0001 per share (“Common
Stock”), by the selling stockholders named herein. On or around August 31, 2023, we entered into a securities purchase agreement
(the “Agreement”) with Armistice Capital Master Fund Ltd. (the “Investor”). Pursuant to the Agreement, the Company
issued to the Investor a Series A common share purchase warrant to purchase up to 513,875 shares of Common Stock (“Series A Warrant”)
and Series B common share purchase warrant to purchase up to 513,875 shares of Common Stock (“Series B Warrant”, and collectively
with the Series A Warrant, the “Warrants”) on or around September 5, 2023, pursuant to Section 4(a)(2) of the Securities
Act of 1933, as amended (“Securities Act”), each at an initial exercise price equal to $9.43 per share of Common Stock. The
Series A Warrant is exercisable immediately upon issuance and expires five and one-half (5.5) years following the issuance date and the
Series B Warrant is exercisable immediately upon issuance and expires fifteen (15) months following the issuance date. On May 3, 2024,
we entered into an inducement offer to exercise of the Warrants (the “Inducement Agreement”) with the Investor, pursuant
to which the Company agreed to reduce the exercise price of such Warrants to $3.13 per share of Common Stock and the Investor exercised
the Warrants into 1,027,750 shares of Common Stock. Such shares of Common Stock may only be issued in accordance with the beneficial
ownership limitations in the Inducement Agreement, with the balance to be held in abeyance, which abeyance shall be evidenced through
the Warrants and shall be deemed prepaid thereafter (including the cash payment in full of the exercise price), and exercised pursuant
to a Notice of Exercise in the Warrants (provided no additional exercise price shall be due and payable). The balance of Common Stock
currently held in abeyance under the Warrants is 649,000 shares of Common Stock.
In
connection with the Agreement, we entered into an engagement agreement with H.C. Wainwright & Co., LLC (“Wainwright”),
pursuant to which we have, among other things, issued to Wainwright’s designees warrants to purchase up to 38,541 shares of Common
Stock (the “Wainwright Warrants”). The terms of the Wainwright Warrants are substantially the same as the terms of the Series
A Warrant except that they have an exercise price of $12.1625 per share.
Pursuant
to the Inducement Agreement, the Company is required to file a registration statement to register the resale of the shares of Common
Stock issuable upon exercise of the Warrants within 30 calendar days of the date of the Inducement Agreement.
We
are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares by any Selling
Stockholders, however, we will receive proceeds from the exercise of the Warrants and/or Wainwright Warrants if the Warrants and/or Wainwright
Warrants are exercised for cash. The Selling Stockholders may sell the shares of Common Stock underlying the Warrants and Wainwright
Warrants described in this prospectus in a number of different ways and at varying prices. We provide more information about how the
Selling Stockholders may resell its shares of our Common Stock underlying the Warrants and Wainwright Warrants in the section titled
“Plan of Distribution” beginning on page 8. We will pay the expenses incurred in registering the shares, including legal
and accounting fees.
Our
Common Stock and Class A Warrants trade on The Nasdaq Capital Market under the symbols “DBGI” and “DBGIW,” respectively.
On August 9, 2024, the last reported sale price of our Common Stock was $1.06 per share and Class A Warrants was $11.21 per share. Prospective
purchasers of our securities are urged to obtain current information as to the market prices of our Common Stock and Class A Warrants.
Investing
in our securities involves risks. Before deciding whether to invest in our securities, you should consider carefully the risks that we
have described on page 3 of this prospectus under the caption “Risk Factors.”
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is [●], 2024.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC. This prospectus does
not contain all of the information included in the registration statement. For a more complete understanding of the offering of the securities,
you should refer to the registration statement, including its exhibits. This prospectus, together with the documents incorporated by
reference into this prospectus, includes all material information relating to the offering of securities under this prospectus. You should
carefully read this prospectus, the information and documents incorporated herein by reference and the additional information under the
heading “Where You Can Find More Information” before making an investment decision.
We
and the Selling Stockholders have not authorized anyone to provide you with information different from that contained or incorporated
by reference in this prospectus. No dealer, salesperson or other person is authorized to give any information or to represent anything
not contained or incorporated by reference in this prospectus. We and the Selling Stockholders take no responsibility for, and can provide
no assurances as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the
securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the
information in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any
information incorporated herein by reference is accurate only as of the date of the document incorporated by reference, regardless of
the time of delivery of this prospectus or any sale of a security.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in the accompanying prospectus were made solely for the benefit of the parties to such agreement, including,
in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
Unless
the context otherwise requires, references to “we,” “our,” “us,” or the “Company” in
this prospectus mean Digital Brands Group, Inc., together with its subsidiaries.
PROSPECTUS
SUMMARY
The
following is a summary of what we believe to be the most important aspects of our business and a general description of the securities
that may be offered for resale or other disposition by the Selling Stockholders. We urge you to read this entire prospectus, including
the more detailed consolidated financial statements, notes to the consolidated financial statements and other information incorporated
by reference from our other filings with the SEC. Investing in our securities involves risks. Therefore, carefully consider the risk
factors set forth in our most recent annual and quarterly filings with the SEC, as well as other information in this prospectus and the
documents incorporated by reference herein, before purchasing our securities. Each of the risk factors could adversely affect our business,
operating results and financial condition, as well as adversely affect the value of an investment in our securities.
Overview
Digital
Brands Group is a curated collection of lifestyle brands, including Bailey 44, DSTLD, Stateside, Sundry and ACE Studios, that offers
a variety of apparel products through direct-to-consumer and wholesale distribution. Our complementary brand portfolio provides us with
the unique opportunity to cross merchandise our brands. We aim for our customers to wear our brands head to toe and to capture what we
call “closet share” by gaining insight into their preferences to create targeted and personalized content specific to their
cohort. Operating our brands under one portfolio provides us with the ability to better utilize our technological, human capital and
operational capabilities across all brands. As a result, we have been able to realize operational efficiencies and continue to identify
additional cost saving opportunities to scale our brands and overall portfolio.
Our
portfolio currently consists of four significant brands that leverage our three channels: our websites, wholesale and our own stores.
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Bailey 44 combines beautiful, luxe fabrics and on-trend designs to create sophisticated ready-to-wear capsules for women on-the-go.
Designing for real life, this brand focuses on feeling and comfort rather than how it looks on a runway. Bailey 44 is primarily a wholesale
brand, which we are transitioning to a digital, direct-to-consumer brand.
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DSTLD offers stylish high-quality garments without the luxury retail markup valuing customer experience over labels. DSTLD is
primarily a digital direct-to-consumer brand, to which we recently added select wholesale retailers to generate brand awareness.
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Stateside is an elevated, America first brand with all knitting, dyeing, cutting and sewing sourced and manufactured locally in
Los Angeles. The collection is influenced by the evolution of the classic T-shirt offering a simple yet elegant look. Stateside is primarily
a wholesale brand that we will be transitioning to a digital, direct-to-consumer brand.
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Sundry offers distinct collections of women’s clothing, including dresses, shirts, sweaters, skirts, shorts, athleisure
bottoms and other accessory products. Sundry’s products are coastal casual and consist of soft, relaxed and colorful designs that
feature a distinct French chic, resembling the spirits of the French Mediterranean and the energy of Venice Beach in Southern California.
Sundry is primarily a wholesale brand that we will be transitioning to a digital, direct-to-consumer brand.
We
believe that successful apparel brands sell in all revenue channels. However, each channel offers different margin structures and requires
different customer acquisition and retention strategies. We were founded as a digital-first retailer that has strategically expanded
into select wholesale and direct retail channels. We strive to strategically create omnichannel strategies for each of our brands that
blend physical and online channels to engage consumers in the channel of their choosing. Our products are sold direct-to-consumers principally
through our websites and our own showrooms, but also through our wholesale channel, primarily in specialty stores and select department
stores. With the continued expansion of our wholesale distribution, we believe developing an omnichannel solution further strengthens
our ability to efficiently acquire and retain customers while also driving high customer lifetime value.
We
believe that by leveraging a physical footprint to acquire customers and increase brand awareness, we can use digital marketing to focus
on retention and a very tight, disciplined high value new customer acquisition strategy, especially targeting potential customers lower
in the sales funnel. Building a direct relationship with the customer as the customer transacts directly with us allows us to better
understand our customer’s preferences and shopping habits. Our substantial experience as a company originally founded as a digitally
native-first retailer gives us the ability to strategically review and analyze the customer’s data, including contact information,
browsing and shopping cart data, purchase history and style preferences. This in turn has the effect of lowering our inventory risk and
cash needs since we can order and replenish product based on the data from our online sales history, replenish specific inventory by
size, color and SKU based on real times sales data, and control our mark-down and promotional strategies versus being told what mark
downs and promotions we have to offer by the department stores and boutique retailers.
We
define “closet share” as the percentage (“share”) of a customer’s clothing units that (“of closet”)
she or he owns in her or his closet and the amount of those units that go to the brands that are selling these units. For example, if
a customer buys 20 units of clothing a year and the brands that we own represent 10 of those units purchased, then our closet share is
50% of that customer’s closet, or 10 of our branded units divided by 20 units they purchased in entirety. Closet share is a similar
concept to the widely used term wallet share, it is just specific to the customer’s closet. The higher our closet share, the higher
our revenue as higher closet share suggests the customer is purchasing more of our brands than our competitors.
We
have strategically expanded into an omnichannel brand offering these styles and content not only on-line but at selected wholesale and
retail storefronts. We believe this approach allows us opportunities to successfully drive Lifetime Value (“LTV”) while increasing
new customer growth. We define Lifetime Value or LTV as an estimate of the average revenue that a customer will generate throughout their
lifespan as our customer. This value/revenue of a customer helps us determine many economic decisions, such as marketing budgets per
marketing channel, retention versus acquisition decisions, unit level economics, profitability and revenue forecasting.
We
acquired Bailey in February 2020, Stateside in August 2021 and Sundry in December 2022. We agreed on the consideration that we paid in
each acquisition in the course of arm’s length negotiations with the holders of the membership interests in each of Bailey, H&J,
Stateside and Sundry. In determining and negotiating this consideration, we relied on the experience and judgment of our management and
our evaluation of the potential synergies that could be achieved in combining the operations of Bailey, Stateside and Sundry. We did
not obtain independent valuations, appraisals or fairness opinions to support the consideration that we paid/agreed to pay.
Company
Information
We
were incorporated in Delaware in January 2013 under the name Denim.LA, Inc, and changed our name to Digital Brands Group, Inc. in December
2020. Our corporate offices are located at 1400 Lavaca Street, Austin, TX 78701. Our telephone number is (209) 651-0172. Our website
is www.digitalbrandsgroup.co. None of the information on our website or any other website identified herein is part of this prospectus
or the registration statement of which it forms a part.
THE
OFFERING
We
are registering for resale by the selling stockholders named herein the 687,541 shares as described below:
Securities
Offered |
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687,541
shares of our common stock issuable upon exercise of Warrants and Wainwright Warrants acquired by the selling stockholders in private
placement transactions on September 5, 2023. |
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Use
of Proceeds |
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We
will not receive any of the proceeds from the sale or other disposition of shares of our common stock by the selling stockholders,
or from the exercise of the Warrants since the Warrants are deemed prepaid, however, we will receive proceeds from the exercise of
the Wainwright Warrants if the Wainwright Warrants are exercised for cash and retain broad discretion over the use of such proceeds.
Our board of directors believes the flexibility in application of such proceeds is prudent. |
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Risk
Factors |
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Investing
in our securities involves a high degree of risk. See the information contained in or incorporated by reference under the heading
“Risk Factors” in this prospectus and in the documents incorporated by reference into this prospectus and any free writing
prospectus that we authorize for use. |
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Market
symbol and trading: |
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Our
common stock is listed on the Nasdaq Capital Market under the symbol “DBGI”. |
RISK
FACTORS
Investing
in our securities involves significant risks. You should review carefully the risks and uncertainties described under the heading “Risk
Factors” contained in, or incorporated into, the applicable prospectus supplement and any related free writing prospectus, and
under similar headings in the other documents that are incorporated by reference herein or therein, including but not limited to those
set forth in the “Risk Factors” section of our most recent Annual Report on Form 10-K filed with the SEC, as revised or supplemented
by our Quarterly Reports on Form 10-Q filed with the SEC since the filing of our most recent Annual Report on Form 10-K, all of which
are incorporated by reference into this prospectus, as updated by annual, quarterly and other reports and documents we file with the
SEC after the date of this prospectus and that are incorporated by reference herein or in the applicable prospectus supplement. You should
also carefully consider any other information we include or incorporate by reference in this prospectus or include in any applicable
prospectus supplement. Each of the risks described in these sections and documents could materially and adversely affect our business,
financial condition, results of operations and prospects, and could result in a partial or complete loss of your investment.
The
exercise of all or any number of outstanding Warrants may dilute your holding of shares of our common stock.
Pursuant
to the Agreement, the Company issued to the Investor a Series A common share purchase warrant to purchase up to 513,875 shares of Common
Stock (“Series A Warrant”) and Series B common share purchase warrant to purchase up to 513,875 shares of Common Stock (“Series
B Warrant”, and collectively with the Series A Warrant, the “Warrants”) on September 5, 2023, each at an initial exercise
price equal to $9.43 per share of Common Stock. In connection with the Agreement, we entered into an engagement agreement with Wainwright,
pursuant to which we have, among other things, issued to Wainwright’s designees warrants to purchase up to 38,541 shares of Common
Stock (the “Wainwright Warrants”). The terms of the Wainwright Warrants are substantially the same as the terms of the Series
A Warrant except that they have an exercise price of $12.1625 per share. In connection with the Inducement Agreement, we reduced the
exercise price of the Warrants to $3.13 per share of Common Stock and the Investor exercised the Warrants into 1,027,750 shares of Common
Stock. Such shares of Common Stock may only be issued in accordance with the beneficial ownership limitations in the Inducement Agreement,
with the balance to be held in abeyance, which abeyance shall be evidenced through the Warrants and shall be deemed prepaid thereafter
(including the cash payment in full of the exercise price), and exercised pursuant to a Notice of Exercise in the Warrants (provided
no additional exercise price shall be due and payable). Our shareholders could be subject to increased dilution upon the exercise of
the Warrants and/or Wainwright Warrants. In addition, the exercise of the Warrants and/or Wainwright Warrants, and the subsequent sale
of shares of common stock issued thereby, could have an adverse effect on the market for our common stock, including the price that a
shareholder could obtain for their shares. Further, our shareholders may experience dilution in the value of their investment in our
common stock upon the exercise of the Warrants and/or Wainwright Warrants.
The
number of shares of common stock which are registered, including the shares to be issued upon exercise of the Warrants and/or Wainwright
Warrants, is significant in relation to our currently outstanding common stock and could cause downward pressure on the market price
for our common stock.
The
number of shares of common stock registered for resale upon exercise of the Warrants and/or Wainwright Warrants is significant in relation
to the number of shares of common stock currently outstanding. If the Selling Securityholder determines to sell a substantial number
of shares into the market at any given time, there may not be sufficient demand in the market to purchase the shares without a decline
in the market price for our common stock. Moreover, continuous sales into the market of a number of shares in excess of the typical trading
volume for our common stock, or even the availability of such a large number of shares, could depress the trading market for our common
stock over an extended period of time.
Our
common stock may be delisted from The Nasdaq Capital Market if we cannot maintain compliance with Nasdaq Capital Market’s continued
listing requirements.
Our
common stock is listed on the Nasdaq Capital Market. There are a number of continued listing requirements that we must satisfy in order
to maintain our listing on the Nasdaq Capital Market.
We
cannot assure you our securities will meet the continued listing requirements to be listed on Nasdaq Capital Market in the future. If
the Nasdaq Capital Market delists our common stock from trading on its exchange, we could face significant material adverse consequences
including:
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a
limited availability of market quotations for our securities; |
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a
determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere
to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common
stock; |
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a
limited amount of news and analyst coverage for our company; and |
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a
decreased ability to issue additional securities or obtain additional financing in the future. |
If
we fail to maintain compliance with all applicable continued listing requirements for the Nasdaq Capital Market and Nasdaq Capital Market
determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, our ability to
obtain financing to repay debt and fund our operations.
If
our common stock is delisted from the The Nasdaq Capital Market and the price of our common stock remains below $5.00 per share, our
common stock would come within the definition of “penny stock”.
Transactions
in securities that are traded in the United States that are not traded on The Nasdaq Capital Market or on other securities exchange by
companies, with net tangible assets of $5,000,000 or less and a market price per share of less than $5.00, may be subject to the “penny
stock” rules. The market price of our common stock is currently less than $5.00 per share. If our common stock is delisted from
the The Nasdaq Capital Market and the price of our common stock remains below $5.00 per share and our net tangible assets remain $5,000,000
or less, our common stock would come within the definition of “penny stock”.
Under
these penny stock rules, broker-dealers that recommend such securities to persons other than institutional accredited investors:
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make a special written suitability determination for the purchaser; |
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receive
the purchaser’s written agreement to a transaction prior to sale; |
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provide
the purchaser with risk disclosure documents which identify risks associated with investing in “penny stocks” and which
describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and |
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obtain
a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure
document before a transaction in a “penny stock” can be completed. |
As
a result of these requirements, if our common stock is at such time subject to the “penny stock” rules, broker-dealers may
find it difficult to effectuate customer transactions and trading activity in these shares in the United States may be significantly
limited. Accordingly, the market price of the shares may be depressed, and investors may find it more difficult to sell the shares.
Our
common stock may be affected by limited trading volume and may fluctuate significantly.
Our
common stock is traded on the Nasdaq Capital Market. Although an active trading market has developed for our common stock, there can
be no assurance that an active trading market for our common stock will be sustained. Failure to maintain an active trading market for
our common stock may adversely affect our shareholders’ ability to sell our common stock in short time periods, or at all. Our
common stock has experienced, and may experience in the future, significant price and volume fluctuations, which could adversely affect
the market price of our common stock.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, including the documents we incorporate by reference into it, contains forward-looking statements within the meaning of Section
27A of the Securities Act, and Section 21E of the Exchange Act, the Private Securities Litigation Reform Act of 1995 (the “PSLRA”)
or in releases made by the SEC. Such statements include, without limitation, statements regarding our expectations, hopes or intentions
regarding the future. Statements that are not historical fact are forward- looking statements. These forward-looking statements can often
be identified by their use of words such as “expect,” “believe,” “anticipate,” “outlook,”
“could,” “target,” “project,” “intend,” “plan,” “seek,” “estimate,”
“should,” “will,” “may” and “assume,” as well as variations of such words and similar
expressions referring to the future. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.
The
forward-looking statements contained in or incorporated by reference into this prospectus are largely based on our expectations, which
reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently
known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain
and involve certain risks and uncertainties, many of which are beyond our control. If any of those risks and uncertainties materialize,
actual results could differ materially from those discussed in any such forward-looking statement. Among the factors that could cause
actual results to differ materially from those discussed in forward-looking statements are those discussed under the heading “Risk
Factors” below, those discussed under the heading “Risk Factors” and in other sections of our Annual Report on Form 10-K for the year ended December 31, 2023, as well as in our other reports filed from time to time with the SEC that are incorporated
by reference into this prospectus. See “Available Information” and “Incorporation of Certain Information by Reference”
for information about how to obtain copies of those documents.
All
readers are cautioned that the forward-looking statements contained in this prospectus and in the documents incorporated by reference
into this prospectus are not guarantees of future performance, and we cannot assure any reader that such statements will be realized
or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied
in the forward-looking statements. All forward-looking statements in this prospectus and the documents incorporated by reference into
it are made only as of the date of the document in which they are contained, based on information available to us as of the date of that
document, and we caution you not to place undue reliance on forward-looking statements in light of the risks and uncertainties associated
with them. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
USE
OF PROCEEDS
The
Selling Stockholders will receive all of the proceeds from the sale of shares of Common Stock under this prospectus. We will not receive
any proceeds from these sales, however, we will receive proceeds from the exercise of the Warrants and/or Wainwright Warrants if the
Warrants and/or Wainwright Warrants are exercised for cash and retain broad discretion over the use of such proceeds. Our board of directors
believes the flexibility in application of such proceeds is prudent. The Selling Stockholders will pay any underwriting discounts and
agent’s commissions and expenses it incurs for brokerage, accounting, tax or legal services or any other expenses they incur in
disposing of the shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered
by this prospectus. These may include, without limitation, all registration and filing fees, SEC filing fees and expenses of compliance
with state securities or “blue sky” laws.
SELLING
STOCKHOLDERS
This
prospectus relates to the resale, from time to time, of up to 687,541 shares of our common stock, par value $0.0001 per share (“Common
Stock”), by the selling stockholders named herein. On or around August 31, 2023, we entered into a securities purchase agreement
(the “Agreement”) with Armistice Capital Master Fund Ltd. (the “Investor”). Pursuant to the Agreement, the Company
issued to the Investor a Series A common share purchase warrant to purchase up to 513,875 shares of Common Stock (“Series A Warrant”)
and Series B common share purchase warrant to purchase up to 513,875 shares of Common Stock (“Series B Warrant”, and collectively
with the Series A Warrant, the “Warrants”) on or around September 5, 2023, pursuant to Section 4(a)(2) of the Securities
Act of 1933, as amended (“Securities Act”), each at an initial exercise price equal to $9.43 per share of Common Stock. The
Series A Warrant is exercisable immediately upon issuance and expires five and one-half (5.5) years following the issuance date and the
Series B Warrant is exercisable immediately upon issuance and expires fifteen (15) months following the issuance date. On May 3, 2024,
we entered into an inducement offer to exercise of the Warrants (the “Inducement Agreement”) with the Investor, pursuant
to which the Company agreed to reduce the exercise price of such Warrants to $3.13 per share of Common Stock and the Investor exercised
the Warrants into 1,027,750 shares of Common Stock. Such shares of Common Stock may only be issued in accordance with the beneficial
ownership limitations in the Inducement Agreement, with the balance to be held in abeyance, which abeyance shall be evidenced through
the Warrants and shall be deemed prepaid thereafter (including the cash payment in full of the exercise price), and exercised pursuant
to a Notice of Exercise in the Warrants (provided no additional exercise price shall be due and payable). The balance of Common Stock
currently held in abeyance under the Warrants is 649,000 shares of Common Stock.
In
connection with the Agreement, we entered into an engagement agreement with H.C. Wainwright & Co., LLC (“Wainwright”),
pursuant to which we have, among other things, issued to Wainwright’s designees warrants to purchase up to 38,541 shares of Common
Stock (the “Wainwright Warrants”). The terms of the Wainwright Warrants are substantially the same as the terms of the Series
A Warrant except that they have an exercise price of $12.1625 per share.
This
prospectus relates to the offer, resale or other disposition of up to 687,541 shares of our Common Stock issuable to the Selling Stockholders
upon exercise of the Warrants and Wainwright Warrants. We are registering the shares of Common Stock in order to permit the Selling Stockholders
to offer the shares for resale from time to time. None of the persons named in the table has held any position or office or had any other
material relationship with us or our affiliates during the three years prior to the date of this prospectus.
The
table below lists the Selling Stockholders and other information regarding their beneficial ownership (as determined under Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder) of shares
of our Common Stock. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the
power to vote or direct the voting thereof, or to dispose or direct the disposition thereof, or has the right to acquire such powers
within 60 days. The second column lists the number of shares of Common Stock beneficially owned by the Selling Stockholders as of August
19, 2024. The fourth column lists the shares of Common Stock being offered by the Selling Stockholders pursuant to this prospectus.
In
accordance with the terms of the Agreement, this prospectus covers the offer, resale or other disposition of the shares of Common Stock
issuable to the Selling Stockholders upon exercise of the Warrants and Wainwright Warrants issued to the Selling Stockholders pursuant
to the transactions contemplated by the Agreement and Inducement Agreement. Percentage ownership is based on 2,617,027 shares
of Common Stock outstanding as of August 19, 2024.
Because
the Selling Stockholders may dispose of all, none or some portion of its securities, no estimate can be given as to the number of securities
that will be beneficially owned by the Selling Stockholders upon termination of this offering. See “Plan of Distribution.”
For purposes of the table below, however, we have assumed that after termination of this offering none of the securities covered by this
prospectus will be beneficially owned by the Selling Stockholders and further assumed that the Selling Stockholders will not acquire
beneficial ownership of any additional securities during the offering. In addition, the Selling Stockholders may have sold, transferred
or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, our securities in transactions
exempt from the registration requirements of the Securities Act after the date on which the information in the table is presented. This
information is based upon our review of public filings, our stockholder and option holder registers and information furnished by the
Selling Stockholders.
Selling
Stockholders (1) | |
Shares
Beneficially Owned Immediately Prior to the Offering(4) | | |
Number
of Shares Being Offered for Resale Under this Prospectus(4) | | |
Number
of Shares Beneficially Owned After Sale of Warrant Shares(2) | | |
Percentage
of Outstanding Shares of Common Stock Beneficially Owned Immediately Following the Sale of Warrant Shares(3)(4) | |
Armistice Capital,
LLC(5) | |
| 2,796,296 | (5) | |
| 649,000 | | |
| 2,147,296 | | |
| 64.98 | % |
Michael Vasinkevich(6) | |
| 80,097 | (7) | |
| 24,714 | | |
| 55,383 | | |
| 1.0 | % |
Noam Rubinstein(6) | |
| 39,346 | (8) | |
| 12,140 | | |
| 27,206 | | |
| * | % |
Craig Schwabe(6) | |
| 4,215 | (9) | |
| 1,301 | | |
| 2,914 | | |
| * | % |
Charles Worthman(6) | |
| 1,250 | (10) | |
| 386 | | |
| 864 | | |
| * | % |
|
|
*less
than 1% |
|
|
|
|
(1) |
The
Warrants are subject to a beneficial ownership limitation of 4.99% (or, at the election of the holder, 9.99%) (the “Beneficial
Ownership Limitation”), which limitation precludes each Selling Stockholder from exercising any portion of its Warrants to
the extent that, following such exercise, such Selling Stockholder’s ownership of our Common Stock would exceed the Beneficial
Ownership Limitation. |
|
|
|
|
(2) |
Assumes
all shares offered by the selling securityholder hereby are sold and that the selling securityholder buys or sells no additional
shares of common stock prior to the completion of this offering. |
|
|
|
|
(3) |
Percentage
calculated based upon 2,617,027 shares of common stock outstanding as of August 19, 2024 and gives effect to the total
number of shares of common stock beneficially owned by the Selling Stockholders assuming full exercise of the Warrants and Wainwright
Warrants registered hereunder. |
|
|
|
|
(4) |
The
amounts and percentages in the table are provided without regard to the applicable Beneficial Ownership Limitation. “Beneficial
ownership” is a term broadly defined by the SEC in Rule 13d-3 under the Exchange Act and includes more than the typical form
of stock ownership, that is, stock held in the person’s name. The term also includes what is referred to as “indirect
ownership,” meaning ownership of shares as to which a person has or shares investment power. For purposes of this table, a
person or group of persons is deemed to have “beneficial ownership” of any shares that are currently exercisable or exercisable
within 60 days of August 19, 2024. |
|
|
|
|
(5) |
The
securities consist of common stock and warrants directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company
(the “Master Fund”) and may be deemed to be beneficially owned by: (i) Armistice Capital, LLC (“Armistice Capital”),
as the investment manager of the Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Warrants are subject
to a beneficial ownership limitation of 4.99%, which such limitation restrict the holder from exercising or releasing that portion
of warrant that would result in the holder and its affiliates owning, after exercise or release, a number of shares of common stock
in excess of the beneficial ownership limitation. The address of Armistice Capital, LLC is 510 Madison Avenue, 7th Floor, New York,
NY 10022. As of the date of this filing, Master Fund currently holds: |
|
(I) |
0
shares of the Company’s common stock; and |
|
|
|
|
(II) |
Series
B Warrants and Series C Warrants issued on or around November 23, 2022, subject to a 4.99% blocker, exercisable into an aggregate
of 91,796 shares of the Company’s common stock, and |
|
|
|
|
(III) |
Series
A Warrants and Series B Warrants issued on or around September 5, 2023, subject to a 9.99% blocker, exercisable into an aggregate
of 649,000 shares of the Company’s common stock, which are deemed prepaid in accordance with the Inducement Agreement, and |
|
|
|
|
(IV) |
Series
A-1 Warrants issued on or around May 7, 2024, subject to a 4.99% blocker, exercisable into 1,027,750 shares of the Company’s
common stock, and |
|
|
|
|
(V) |
Series
B-1 Warrants issued on or around May 7, 2024, subject to a 4.99% blocker, exercisable into 1,027,750 shares of the Company’s
common stock. |
|
(6) |
The
selling stockholder is affiliated with H.C. Wainwright & Co., LLC, a registered broker dealer with a registered address of c/o
H.C. Wainwright & Co., 430 Park Ave, 3rd Floor, New York, NY 10022, and has sole voting and dispositive power over the securities
held. The number of shares to be sold in this offering consists of shares of common stock issuable upon exercise of Wainwright Warrants,
which were received as compensation for our placement of the securities issued pursuant to the Inducement Agreement. The selling
stockholder acquired the Wainwright Warrants in the ordinary course of business and, at the time the Wainwright Warrants were acquired,
the selling stockholder had no agreement or understanding, directly or indirectly, with any person to distribute such securities.
|
|
|
|
|
(7) |
The
securities consist of common stock underlying warrants directly held by Michael Vasinkevich. Warrants are subject to a beneficial
ownership limitation of 4.99%, which such limitation restrict the holder from exercising or releasing that portion of warrant that
would result in the holder and its affiliates owning, after exercise or release, a number of shares of common stock in excess of
the beneficial ownership limitation. As of the date of this filing, Michael Vasinkevich currently holds: (i) warrants issued on or
around December 1, 2022, exercisable into an aggregate of 3,498 shares of the Company’s common stock, (ii) warrants issued
on or around January 13, 2023, exercisable into an aggregate of 2,457 shares of the Company’s common stock, (iii) warrants
issued on or around September 5, 2023, exercisable into an aggregate of 24,714 shares of the Company’s common stock, and (iv)
warrants issued on or around May 7, 2024, exercisable into an aggregate of 49,428 shares of the Company’s common stock. |
|
|
|
|
(8) |
The
securities consist of common stock underlying warrants directly held by Noam Rubinstein. Warrants are subject to a beneficial ownership
limitation of 4.99%, which such limitation restrict the holder from exercising or releasing that portion of warrant that would result
in the holder and its affiliates owning, after exercise or release, a number of shares of common stock in excess of the beneficial
ownership limitation. As of the date of this filing, Noam Rubinstein currently holds: (i) warrants issued on or around December 1,
2022, exercisable into an aggregate of 1,207 shares of the Company’s common stock, (ii) warrants issued on or around January
13, 2023, exercisable into an aggregate of 1,718 shares of the Company’s common stock, (iii) warrants issued on or around September
5, 2023, exercisable into an aggregate of 12,140 shares of the Company’s common stock, and (iv) warrants issued on or around
May 7, 2024, exercisable into an aggregate of 24,281 shares of the Company’s common stock. |
|
|
|
|
(9) |
The
securities consist of common stock underlying warrants directly held by Craig Schwabe. Warrants are subject to a beneficial ownership
limitation of 4.99%, which such limitation restrict the holder from exercising or releasing that portion of warrant that would result
in the holder and its affiliates owning, after exercise or release, a number of shares of common stock in excess of the beneficial
ownership limitation. As of the date of this filing, Craig Schwabe currently holds: (i) warrants issued on or around December 1,
2022, exercisable into an aggregate of 184 shares of the Company’s common stock, (ii) warrants issued on or around January
13, 2023, exercisable into an aggregate of 129 shares of the Company’s common stock, (iii) warrants issued on or around September
5, 2023, exercisable into an aggregate of 1,301 shares of the Company’s common stock, and (iv) warrants issued on or around
May 7, 2024, exercisable into an aggregate of 2,601 shares of the Company’s common stock. |
|
|
|
|
(10)
|
The
securities consist of common stock underlying warrants directly held by Charles Worthman. Warrants are subject to a beneficial ownership
limitation of 4.99%, which such limitation restrict the holder from exercising or releasing that portion of warrant that would result
in the holder and its affiliates owning, after exercise or release, a number of shares of common stock in excess of the beneficial
ownership limitation. As of the date of this filing, Charles Worthman currently holds: (i) warrants issued on or around December
1, 2022, exercisable into an aggregate of 55 shares of the Company’s common stock, (ii) warrants issued on or around January
13, 2023, exercisable into an aggregate of 38 shares of the Company’s common stock, (iii) warrants issued on or around September
5, 2023, exercisable into an aggregate of 386 shares of the Company’s common stock, and (iv) warrants issued on or around May
7, 2024, exercisable into an aggregate of 771 shares of the Company’s common stock. |
PLAN
OF DISTRIBUTION
We
are registering the shares of Common Stock issuable to the Selling Stockholders upon exercise of the Warrants and Wainwright Warrants
issued to the Selling Stockholders in connection with the Inducement Agreement, in order to permit the Selling Stockholders to offer
the shares for resale from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the
Selling Stockholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares
of Common Stock.
The
Selling Stockholders and any of its pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities
covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading facility on which the securities are traded
or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling securities.
|
● |
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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|
● |
block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
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|
|
● |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
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|
● |
an
exchange distribution in accordance with the rules of the applicable exchange; |
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|
● |
privately
negotiated transactions; |
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|
● |
settlement
of short sales; |
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|
● |
in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated
price per security; |
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|
● |
through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
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|
● |
a
combination of any such methods of sale; or |
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|
● |
any
other method permitted pursuant to applicable law. |
The
Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus. Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance
with FINRA Rule 2121.
In
connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each of the Selling Stockholders has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.
The
Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
We
agreed to keep this prospectus effective until the all of the securities have been sold pursuant to this prospectus or Rule 144 under
the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers
or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may
not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the shares of Common Stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
shares of Common Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the
sale (including by compliance with Rule 172 under the Securities Act).
CERTAIN
PROVISIONS OF DELAWARE LAW AND OF
THE COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS
Anti-Takeover
Provisions and Choice of Forum
Certain
provisions of Delaware law and our sixth amended and restated certificate of incorporation and bylaws could make the following more difficult:
|
● |
the
acquisition of us by means of a tender offer; |
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|
● |
acquisition
of control of us by means of a proxy contest or otherwise; and |
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|
● |
the
removal of our incumbent officers and directors. |
These
provisions, summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and
are designed to encourage persons seeking to acquire control of us to negotiate with our board of directors. We believe that the benefits
of increased protection against an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging
such proposals. Among other things, negotiation of such proposals could result in an improvement of their terms.
Delaware
Anti-Takeover Law. We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section
203 prohibits a publicly held Delaware corporation from engaging in a “business acquisition” with an “interested stockholder”
for a period of three years following the date the person became an interested stockholder, unless the “business acquisition”
or the transaction in which the person became an interested stockholder is approved by our board of directors in a prescribed manner.
Generally, a “business acquisition” includes a merger, asset or stock sale, or other transaction resulting in a financial
benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and
associates, owns or, within three years prior to the determination of interested stockholder status, did own, 15% or more of a corporation’s
voting stock. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by
the board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common
stock held by stockholders.
Stockholder
Meetings. Under our bylaws, only the board of directors, the chairman of the board, the chief executive officer and the president,
and stockholders holding an aggregate of 25% of our shares of our common stock may call special meetings of stockholders.
No
Cumulative Voting. Our sixth amended and restated certificate of incorporation and bylaws do not provide for cumulative voting in
the election of directors.
Action
by Written Consent of Stockholders Prohibited. Our sixth amended and restated certificate of incorporation does not allow stockholders
to act by written consent in lieu of a meeting, unless approved in advance by our board of directors.
Undesignated
Preferred Stock. The authorization of undesignated preferred stock makes it possible for the board of directors without stockholder
approval to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to obtain control
of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of
us.
Amendment
of Provisions in the Sixth Amended and Restated Certificate of Incorporation. The Sixth amended and restated certificate of incorporation
will generally require the affirmative vote of the holders of at least 662∕3% of the outstanding voting stock in order to amend
any provisions of the sixth amended and restated certificate of incorporation concerning, among other things:
|
● |
the
required vote to amend certain provisions of the sixth amended and restated certificate of incorporation; |
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● |
the
reservation of the board of director’s right to amend the amended and restated bylaws, with all rights granted to stockholders
being subject to this reservation; |
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|
● |
management
of the business by the board of directors; |
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|
● |
number
of directors and structure of the board of directors; |
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|
● |
removal
and appointment of directors; |
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|
● |
director
nominations by stockholders; |
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● |
prohibition
of action by written consent of stockholders; |
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● |
personal
liability of directors to us and our stockholders; and |
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● |
indemnification
of our directors, officers, employees and agents. |
Choice
of Forum. Our sixth amended and restated certificate of incorporation provides that, unless we consent in writing to the selection
of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware
lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack
subject matter jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for the following
types of actions or proceedings under Delaware statutory or common law:
|
● |
any
derivative action or proceeding brought on our behalf; |
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● |
any
action asserting a breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;
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● |
any
action asserting a claim against us or our directors, officers or other employees arising under the Delaware General Corporation
Law, our sixth amended and restated certificate of incorporation or our bylaws; |
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● |
any
action or proceeding to interpret, apply, enforce or determine the validity of our sixth amended and restated certificate of incorporation
or our bylaws; |
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● |
any
action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State
of Delaware; or |
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● |
any
action asserting a claim against us or our directors, officers or other employees that is governed by the “internal affairs
doctrine” as that term is defined in Section 115 of the Delaware General Corporation Law, in all cases to the fullest extent
permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
|
Our
sixth amended and restated certificate of incorporation further provides that unless the Company consents in writing to the selection
of an alternative forum, the U.S. federal district courts have exclusive jurisdiction of the resolution of any complaint asserting a
cause of action arising under the Securities Act. The enforceability of similar exclusive federal forum provisions in other companies’
organizational documents has been challenged in legal proceedings, and while the Delaware Supreme Court has ruled that this type of exclusive
federal forum provision is facially valid under Delaware law, there is uncertainty as to whether other courts would enforce such provisions
and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. This exclusive
forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which
the federal courts have exclusive jurisdiction.
Any
person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to
have consented to this exclusive forum provision of our sixth amended and restated certificate of incorporation. This choice of forum
provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or
any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively,
if a court were to find this choice of forum provision in our sixth amended and restated certificate of incorporation to be inapplicable
or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. Additional
costs associated with resolving an action in other jurisdictions could materially adversely affect our business, financial condition
and results of operations
Limitations
on Directors’ Liability and Indemnification
Our
sixth amended and restated certificate of incorporation provides that our directors will not be personally liable to us or our stockholders
for monetary damages for breach of their fiduciary duties as directors, except liability for any of the following:
|
● |
any
breach of their duty of loyalty to the corporation or its stockholders; |
|
● |
acts
or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
|
● |
payments
of dividends or approval of stock repurchases or redemptions that are prohibited by Delaware law; or |
|
● |
any
transaction from which the director derived an improper personal benefit. |
This
limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability
of equitable remedies such as injunctive relief or rescission.
Our
sixth amended and restated certificate of incorporation provides that we shall indemnify our directors, officers, employees and other
agents to the fullest extent permitted by law, and our amended and restated bylaws provide that we shall indemnify our directors and
officers, and may indemnify our employees and other agents, to the fullest extent permitted by law. We believe that indemnification under
our bylaws covers at least negligence and gross negligence on the part of indemnified parties. Our bylaws also permit us to secure insurance
on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless
of whether Delaware law would permit indemnification.
We
have entered into agreements to indemnify our directors and executive officers, in addition to the indemnification provided for in our
sixth amended and restated certificate of incorporation and bylaws. These agreements, among other things, provide for indemnification
of our directors and officers for expenses, judgments, fines, penalties and settlement amounts incurred by any such person in any action
or proceeding arising out of such person’s services as a director or officer or at our request.
We
believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.
There is no pending litigation or proceeding involving any of our directors, officers, employees or agents. We are not aware of any pending
or threatened litigation or proceeding that might result in a claim for indemnification by a director, officer, employee or agent.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon for us by Anthony, Linder & Cacomanolis, PLLC, 1700 Palm
Beach Lakes Blvd., Suite 820, West Palm Beach, Florida 33401.
EXPERTS
The
consolidated financial statements for the year ended December 31, 2022 and 2023, appearing in the Digital Brands Group, Inc.’s
Annual Report on Form 10-K/A filed on June 3, 2024, for the year ended December 31, 2023, have been audited by dbbmckennon (with respect
to the year ended December 31, 2022) and Macias, Gini and O’Connell LLP (with respect to the year ended December 31, 2023), respectively,
independent registered public accounting firms, as set forth in their report thereon, included therein, and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
are a public company and file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings
are available to the public at the SEC’s website at http://www.sec.gov, and on our website at https://www.digitalbrandsgroup.co/.
The information contained on our website is not included or incorporated by reference into this prospectus. In addition, our Common Stock
and Class A Warrants are listed for trading on The Nasdaq Capital Market under the symbols “DBGI” and “DBGIW,”
respectively.
This
prospectus is only part of a Registration Statement on Form S-3 that we have filed with the SEC under the Securities Act, and therefore
omits certain information contained in the Registration Statement. We have also filed exhibits and schedules with the Registration Statement
that are excluded from this prospectus, and you should refer to the applicable exhibit or schedule for a complete description of any
statement referring to any contract or other document. You may obtain a copy from the SEC’s website or our website.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC’s rules allow us to incorporate by reference information into this prospectus. This means that we can disclose important information
to you by referring you to another document. Any information referred to in this way is considered part of this prospectus from the date
we file that document. Any reports filed by us with the SEC after the date of this prospectus and before the date that the offering of
the securities by means of this prospectus is terminated will automatically update and, where applicable, supersede any information contained
in this prospectus or incorporated by reference in this prospectus.
We
incorporate by reference into this prospectus the following documents or information filed with the SEC (other than, in each case, documents
or information deemed to have been furnished and not filed in accordance with SEC rules):
|
● |
Our
Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 15, 2024 (File No. 001-40400), as amended
by Form 10-K/A (Amendment No. 1) for the year ended December 31, 2023, filed with the SEC on June 3, 2024 (File No. 001-40400); |
|
|
|
|
● |
Our
Quarterly Reports on Form
10-Q for the period ended March 31, 2024 and June 30, 2024, filed with the SEC on May 20, 2024 and August 19, 2024
respectively (File No. 001-40400); |
|
|
|
|
● |
Our
Current Reports on Form 8-K filed with the SEC on April 25, 2024, May 3, 2024, May 7, 2024, May 21, 2024, May 29, 2024, and June 7, 2024 (in each case, excluding Items 2.02 and 7.01 on Form 8-K and Item 9.01 related thereto); and |
|
|
|
|
● |
The
description of our securities contained in our Registration Statement on Form 8-A filed on May 11, 2021 (File No. 001-40400), pursuant
to Section 12(b) of the Exchange Act, and any amendment or report filed with the SEC for purposes of updating such description. |
Additionally,
all documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after (i) the date of the initial
registration statement and prior to effectiveness of the registration statement, and (ii) the date of this prospectus and before the
termination or completion of this offering, shall be deemed to be incorporated by reference into this prospectus from the respective
dates of filing of such documents, except that we do not incorporate any document or portion of a document that is “furnished”
to the SEC, but not deemed “filed.” Any information that we subsequently file with the SEC that is incorporated by reference
as described above will automatically update and supersede any previous information that is part of this prospectus.
We
will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written
or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus
excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You may request a
copy of those filings at no cost by writing or telephoning our company at the following address and telephone number:
Digital
Brands Group, Inc.
Attention:
Chief Financial Officer
1400
Lavaca Street
Austin,
TX 78701
(209)
651-0172
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The following
table sets forth the estimated expenses (except for the SEC filing fee) to be borne by the registrant in
connection with the issuance and distribution of the shares of common stock being registered hereby.
Item | |
Amount* | |
SEC Filing
Fee | |
$ | 1,961 | |
Legal Fees and Expenses | |
$ | 40,000* | |
Accounting Fees and
Expenses | |
$ | 20,000* | |
Miscellaneous Fees and Expenses | |
$ | 2,039* | |
Total | |
$ | 64,000* | |
*
Estimated expenses.
*
Fees and expenses (other than the SEC registration fee to be paid upon filing of this registration statement) will depend on the securities
offered, the number of issuances and the nature of the offerings, and cannot be estimated at this time.
Item
15. Indemnification of Directors and Officers
Set
forth below is a description of certain provisions of the amended and restated certificate of incorporation, as amended, and by-laws
of the Company and the General Corporation Law of the State of Delaware (“DGCL”), as such provisions relate to the indemnification
of the directors and officers of the registrant. This description is intended only as a summary and is qualified in its entirety by reference
to the restated certificate of incorporation, as amended, the by-laws and the DGCL.
Section
145 of the DGCL provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses,
including attorneys’ fees, judgments, fines and amounts paid in settlement in connection with specified actions, suits and proceedings
whether civil, criminal, administrative, or investigative, other than a derivative action by or in the right of the corporation, if they
acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable
in the case of derivative actions, except that indemnification extends only to expenses, including attorneys’ fees, incurred in
connection with the defense or settlement of such action and the statute requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation’s certificate of incorporation, as amended, by-laws, disinterested director
vote, stockholder vote, agreement, or otherwise.
As
permitted by the DGCL, the Company’s amended and restated certificate of incorporation, as amended, provides that directors will
not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability:
|
● |
for
any breach of the director’s duty of loyalty to the Company or its stockholders, |
|
|
|
|
● |
for
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, |
|
|
|
|
● |
under
Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions),
or |
|
|
|
|
● |
for
any transaction from which the director derived any improper personal benefit. |
If
the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability
of the registrant’s directors shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Article
VII of the by-laws provides that the Company shall indemnify any person who was or is a party or who was or is threatened to be made
a party to any action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative or legislative hearing, investigation
or any other threatened, pending or completed proceeding, whether brought by or in the right of the corporation or otherwise, including
any and all appeals, whether of a civil, criminal, administrative, legislative, investigative or other nature (hereinafter a “proceeding”)
by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines, liabilities, losses, and amounts paid in settlement actually and
reasonably incurred by him in connection with such proceeding to the fullest extent authorized by the DGCL as the same exists or may
hereafter be amended.
Article
VII of the by-laws further provides that, except with respect to a proceeding to enforce rights to indemnification or advancement of
expenses under Article VII, the Company shall be required to indemnify a person under this Article VII in connection with a proceeding
(or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors.
Article
VII of the by-laws further provides that the Company may purchase and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the registrant. The Company has purchased directors’ and officers’ liability insurance covering
many of the possible actions and omissions of persons acting or failing to act in such capacities.
Article
VII of the by-laws also provides that the Company shall have the power to enter into indemnification agreements with any director, officer,
employee or agent of the Registrant in furtherance of the provisions of Article VII.
Item
16. Exhibits
Exhibits
Exhibit
Number |
|
Description
|
2.1
|
|
Membership Interest Purchase Agreement dated October 14, 2020 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc.) (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
2.2
|
|
First Amendment to Membership Interest Purchase Agreement dated December 31, 2020 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.2 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
2.3
|
|
Agreement and Plan of Merger with Bailey 44, LLC dated February 12, 2020 among Bailey 44, LLC, Norwest Venture Partners XI, and Norwest Venture Partners XII, LP and Digital Brands Group (formerly known as Denim.LA, Inc) (incorporated by reference to Exhibit 2.3 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
2.4
|
|
Second Amendment to Membership Interest Purchase Agreement Dated May 10, 2021 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim. LA, Inc.) (incorporated by reference to Exhibit 2.4 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
2.5
|
|
Membership Interest Purchase Agreement, dated August 30, 2021, by and between Moise Emquies and Digital Brands Group, Inc. (incorporated by reference to Exhibit 2.5 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
2.6
|
|
Membership Interest Purchase Agreement, dated January 18, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies, Sunnyside, LLC, and George Levy as the Sellers’ representative (incorporated by reference to Exhibit 1.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 20, 2022). |
2.7
|
|
Amended and Restated Membership Interest Purchase Agreement, dated June 17, 2022, by and among Digital Brands Group, Inc. and Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on June 23, 2022). |
2.8
|
|
Second Amended and Restated Membership Interest Purchase Agreement, dated October 13, 2022, by and among Digital Brands Group, Inc. and Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (incorporated by reference to Exhibit 2.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022). |
3.1
|
|
Sixth Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.3 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
3.2
|
|
Certificate of Designation of Series A Preferred Stock, dated August 31, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2022). |
3.3
|
|
Certificate of Designation of Series A Convertible Preferred Stock, dated September 29, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022). |
3.4
|
|
Certificate of Correction of Series A Convertible Preferred Stock, dated October 3, 2022 (incorporated by reference to Exhibit 3.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022). |
Exhibit
Number |
|
Description
|
3.5
|
|
Certificate of Amendment of Certificate of Incorporation of Digital Brands Group, Inc. dated October 13, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022). |
3.6
|
|
Certificate of Amendment of Certificate of Incorporation of Digital Brands Group, Inc. dated October 21, 2022 (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 26, 2022). |
3.7 |
|
Amended and Restated Bylaws of Registrant (incorporated by reference to Exhibit 3.5 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
3.8 |
|
Amendment No. 1 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 12, 2022). |
3.9 |
|
Amendment No. 2 to the Amended and Restated Bylaws of Digital Brands Group, Inc., as amended (incorporated by reference to Exhibit 3.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2022). |
4.1 |
|
Form
of Common Stock Certificate (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Registration Statement
on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
4.2 |
|
Warrant
Agency Agreement, including Form of Warrant Certificate (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s
Form 8-K filed with the SEC on May 18, 2021). |
4.3 |
|
Representative’s
Warrant Agreement (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May
18, 2021). |
4.4 |
|
Form
of Lender’s Warrants (incorporated by reference to Exhibit 4.4 of Digital Brands Group Inc.’s Registration Statement
on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
4.5 |
|
Form
of Promissory Note, dated July 22, 2022, by Digital Brands Group, Inc. in favor each Investor (incorporated by reference to Exhibit
10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022). |
4.6 |
|
Form
of Warrant, dated July 22, 2022, by Digital Brands Group, Inc. in favor each Investor (incorporated by reference to Exhibit 10.3
of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022). |
4.7 |
|
Form
of Promissory Note, dated July 28, 2022, by Digital Brands Group, Inc. in favor the New Investor (incorporated by reference to Exhibit
10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022). |
4.8 |
|
Form
of Warrant, dated July 28, 2022, by Digital Brands Group, Inc. in favor the New Investor (incorporated by reference to Exhibit 10.3
of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022). |
4.9 |
|
Form
of Promissory Notes issued to each of the Sellers, Jenny Murphy and Elodie Crichi (incorporated by reference to Exhibit 10.1 of Digital
Brands Group Inc.’s Form 8-K filed with the SEC on October 18, 2022). |
4.10 |
|
Registration
Rights Agreement, dated August 30, 2021, by and between Digital Brands Group, Inc. and Moise Emquies (incorporated by reference to
Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021). |
4.11 |
|
Registration
Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC (Note) (incorporated by
reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021). |
4.12 |
|
Registration
Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC (ELOC) (incorporated by
reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 31, 2021). |
4.13 |
|
Joinder
and Amendment to Registration Rights Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC
and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form
8-K filed with the SEC on October 6, 2021). |
4.14 |
|
Amendment
to Registration Rights Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire
Global Opportunities Fund, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with
the SEC on November 19, 2021). |
4.15 |
|
Registration
Rights Agreement, dated April 8, 2022, by and among Digital Brands Group, Inc. and certain Investors (incorporated by reference to
Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 12, 2022). |
4.16 |
|
Registration
Rights Agreement, dated July 22, 2022, by and among Digital Brands Group, Inc. and certain Investors (incorporated by reference to
Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on July 27, 2022). |
4.17 |
|
Registration
Rights Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc. and the Investor (incorporated by reference to
Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022). |
4.18 |
|
Underwriter’s
Warrants issued to Alexander Capital L.P. on May 5, 2022 (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s
Form 8-K filed with the SEC on May 10, 2022) |
4.19 |
|
Underwriter’s
Warrants issued to Revere Securities, LLC (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K
filed with the SEC on May 10, 2022) |
Exhibit
Number |
|
Description
|
4.20 |
|
Form
of Class B Warrant (incorporated by reference to Exhibit 4.27 to the Registrant’s Registration Statement on Form S-1/A, filed
with the SEC on November 29, 2022 (File no. 333-268213)). |
4.21 |
|
Form
of Class C Warrant (incorporated by reference to Exhibit 4.28 to the Registrant’s Registration Statement on Form S-1/A, filed
with the SEC on November 29, 2022 (File no. 333-268213)). |
4.22 |
|
Form
of Pre-Funded Warrant (incorporated by reference to Exhibit 4.29 to the Registrant’s Registration Statement on Form S-1/A,
filed with the SEC on November 29, 2022 (File no. 333-268213)). |
4.23 |
|
Form
of Placement Agent Warrant (incorporated by reference to Exhibit 4.30 to the Registrant’s Registration Statement on Form S-1/A,
filed with the SEC on November 29, 2022 (File no. 333-268213)). |
4.24 |
|
Registration
Rights Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc. and the Investors (incorporated by reference to
Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023). |
4.25 |
|
Registration
Rights Agreement, dated December 30, 2022, by and among Digital Brands Group, Inc. and Moise Emquies, George Levy, Matthieu Leblan
and Carol Ann Emquies (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC
on January 4, 2023). |
4.26 |
|
Form
of Common Warrant (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January
11, 2023). |
4.27 |
|
Form
of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC
on January 11, 2023). |
4.28 |
|
Form
of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of Digital Brands Group Inc.’s Form 8-K filed with the
SEC on January 11, 2023). |
4.29 |
|
Form
of Series A-1 Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Form
8-K filed with the SEC on May 7, 2024). |
4.30 |
|
Form
of Series B-1 Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of Digital Brands Group Inc.’s Form
8-K filed with the SEC on May 7, 2024). |
4.31 |
|
Form
of Placement Agent Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.3 of Digital Brands Group Inc.’s
Form 8-K filed with the SEC on May 7, 2024). |
5.1* |
|
Legal Opinion of Anthony, Linder & Cacomanolis, PLLC. |
10.1 |
|
Form of Indemnification Agreement between the Registrant and each of its directors and officers (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.2 |
|
Form of Option Agreement with each of John “Hil” Davis, Laura Dowling and Reid Yeoman (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.3 |
|
Form of Board of Directors Agreement, entered into by each of the Director Nominees (incorporated by reference to Exhibit 10.4 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.4 |
|
Consulting Agreement dated as of April 8, 2021 between Alchemy Advisory LLC and Digital Brands Group, Inc. (incorporated by reference to Exhibit 10.6 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.5 |
|
2013 Stock Plan (incorporated by reference to Exhibit 10.7 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.6 |
|
Promissory Note, dated April 10, 2020, between Digital Brands Group (formally known as Denim.LA, Inc.) and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.16 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.7 |
|
Loan dated June 25, 2020, between Digital Brands Group and The Small Business Administration, an Agency of the U.S. Government (incorporated by reference to Exhibit 10.17 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.8 |
|
Promissory Note, dated April 5, 2020, between JPMorgan Chase Bank, N.A. and Bailey 44, LLC (incorporated by reference to Exhibit 10.18 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.9 |
|
Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 27, 2016 (incorporated by reference to Exhibit 10.23 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.10 |
|
Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 16, 2018 (incorporated by reference to Exhibit 10.24 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.11 |
|
Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated January 17, 2013 (incorporated by reference to Exhibit 10.25 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.12 |
|
Amendment to Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated February 20, 2018 (incorporated by reference to Exhibit 10.26 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.13 |
|
Secured Promissory Note to Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP of Bailey 44, LLC (incorporated by reference to Exhibit 10.28 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.14 |
|
Securities Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC (incorporated by reference to Exhibit 10.31 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
Exhibit
Number |
|
Description
|
10.15 |
|
Senior Secured Convertible Promissory Note, dated August 27, 2021, by Digital Brands Group, Inc. in favor of Oasis Capital, LLC (incorporated by reference to Exhibit 10.32 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.16 |
|
Equity Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC (incorporated by reference to Exhibit 10.33 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.17 |
|
Amended and Restated Securities Purchase Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.34 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.18 |
|
Senior Secured Convertible Promissory Note, dated October 1, 2021, by Digital Brands Group, Inc. in favor of FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.35 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.19 |
|
Security Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC (incorporated by reference to Exhibit 10.36 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.20 |
|
Joinder and Amendment to Security Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.37 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.21 |
|
Securities Purchase Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.40 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.22 |
|
Senior Secured Convertible Promissory Note, dated November 16, 2021, by Digital Brands Group, Inc. in favor of FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.41 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.23 |
|
Waiver by FirstFire Global Opportunities Fund, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.42 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.24 |
|
Waiver by Oasis Capital, LLC, dated November 16, 2021 (incorporated by reference to Exhibit 10.43 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333-261865), filed with the SEC on January 6, 2022). |
10.25 |
|
Registration Rights Agreement, dated April 8, 2022, by among Digital Brands Group, Inc. and the Investors (incorporated by reference to Exhibit 4.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022). |
10.26 |
|
Securities Purchase Agreement, dated April 8, 2022, by among Digital Brands Group, Inc. and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022). |
10.27 |
|
Form of Warrant, dated April 8, 2022, by Digital Brands Group, Inc. in favor of the Investors (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Current Report on Form 8-K, filed with the SEC on April 12, 2022). |
10.28+ |
|
Agreement for the Purchase and Sale of Future Receipts, dated March 21, 2022, between Digital Brands Group, Inc. and Advantage Platform Services Inc. d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.45 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333- 264347), filed with the SEC on May 5, 2022). |
10.29+ |
|
Agreement for the Purchase and Sale of Future Receipts, dated March 29, 2022, between Digital Brands Group, Inc. and Advantage Platform Services Inc. d/b/a Advantage Capital Funding (incorporated by reference to Exhibit 10.46 of Digital Brands Group Inc.’s Registration Statement on Form S-1/A (Reg. No. 333- 264347), filed with the SEC on May 5, 2022). |
10.30 |
|
First Amendment to Securities Purchase Agreement, dated July 28, 2022, by and among Digital Brands Group, Inc. and certain Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on August 2, 2022). |
10.31 |
|
Securities Purchase Agreement, dated September 29, 2022, by and among Digital Brands Group, Inc. and the investor thereto (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on October 5, 2022). |
10.32 |
|
Form of Securities Purchase Agreement, by and between Digital Brands Group, Inc. and the purchasers party thereto (incorporated by reference to Exhibit 10.38 to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on November 29, 2022 (File no. 333-268213)). |
10.33 |
|
Securities Purchase Agreement, dated December 29, 2022, by and among Digital Brands Group, Inc. and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023). |
10.34 |
|
Form of Promissory Note, dated December 29, 2022, by Digital Brands Group, Inc. in favor each Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023). |
10.35 |
|
Form of Securities Purchase Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023). |
10.36 |
|
Form of Registration Rights Agreement, dated as of January 11, 2023, by and among the Company and the purchasers party thereto (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 11, 2023). |
10.37 |
|
Form of Warrant, dated December 29, 2022, by Digital Brands Group, Inc. in favor each Investor (incorporated by reference to Exhibit 10.3 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on January 4, 2023). |
10.38 |
|
Form of Securities Purchase Agreement, dated April 7, 2023, by and among Digital Brands Group, Inc. and the Investors (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023). |
10.39 |
|
Form of Promissory Note, dated April 7, 2023, by Digital Brands Group, Inc. in favor each Investor (incorporated by reference to Exhibit 10.2 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on April 13, 2023). |
10.40 |
|
30%
OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc. in favor of Erinn Thomas-Mackey (incorporated
by reference to Exhibit 10.40 of Digital Brands Group Inc.’s Form 10-K filed with the SEC on April 15, 2024).
|
10.41 |
|
30%
OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc. in favor of Gary Carr (incorporated by reference
to Exhibit 10.41 of Digital Brands Group Inc.’s Form 10-K filed with the SEC on April 15, 2024). |
10.42 |
|
30%
OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc. in favor of Mohsen Khorassani (incorporated by
reference to Exhibit 10.42 of Digital Brands Group Inc.’s Form 10-K filed with the SEC on April 15, 2024). |
10.43 |
|
30%
OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc. in favor of 622 Capital, LLC (incorporated by
reference to Exhibit 10.43 of Digital Brands Group Inc.’s Form 10-K filed with the SEC on April 15, 2024). |
10.44 |
|
30%
OID Promissory Note, dated October 1, 2023, issued by Digital Brands Group, Inc. in favor of Dragon Dynamic Catalytic Bridge Sac
Fund (incorporated by reference to Exhibit 10.44 of Digital Brands Group Inc.’s Form 10-K filed with the SEC on April 15,
2024). |
10.45 |
|
Convertible
Promissory Note, dated as of April 30, 2024, by and between Digital Brands Group, Inc. and Target Capital 1 LLC (incorporated
by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 3, 2024). |
10.46 |
|
Form
of Inducement Offer to Exercise Common Stock Purchase Warrants, dated as of May 3, 2024 (incorporated by reference to Exhibit
10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC on May 7, 2024). |
10.47 |
|
Form
of Settlement Agreement (incorporated by reference to Exhibit 10.1 of Digital Brands Group Inc.’s Form 8-K filed with the SEC
on May 29, 2024). |
23.1* |
|
Consent of Macias Gini & O’Connell LLP. |
23.2*
|
|
Consent of dbbmckennon. |
|
23.3*
|
|
Consent of Anthony, Linder & Cacomanolis, PLLC (included in Exhibit 5.1). |
|
24.1**
|
|
Power of Attorney (contained on the signature page of Registrant’s Form S-1 filed with the SEC on September 18, 2023). |
|
107**
|
|
Filing Fee Table |
|
*
Filed herewith.
** Previously filed.
Item
17. Undertakings
(a) |
The
undersigned registrant hereby undertakes: |
|
(1) |
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
|
(i) |
To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
|
|
|
|
(ii) |
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
|
|
|
|
(iii) |
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the registration statement. |
|
(2) |
That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
|
|
|
|
(3) |
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering. |
|
|
|
|
(4) |
That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
|
(i) |
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration statement; and |
|
|
|
|
(ii) |
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
|
(b) |
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof. |
|
|
(c)
|
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on this 20th day of August, 2024.
|
Digital
Brands Group, Inc. |
|
|
|
|
By: |
/s/
John Hilburn Davis IV |
|
|
John
Hilburn Davis IV |
|
|
Chief
Executive Officer |
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
and on the dates indicated:
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
John Hilburn David IV |
|
Chairman
and Chief Executive Officer and Director |
|
August
20, 2024 |
John
Hilburn David IV |
|
(Principal
Executive Officer) |
|
|
|
|
|
|
|
* |
|
Chief
Financial Officer |
|
August
20, 2024 |
Reid
Yeoman |
|
(Principal
Accounting and Financial Officer) |
|
|
|
|
|
|
|
* |
|
Director
|
|
August
20, 2024 |
Mark
T. Lynn |
|
|
|
|
|
|
|
|
|
* |
|
Director
|
|
August
20, 2024 |
Trevor
Pettennude |
|
|
|
|
|
|
|
|
|
* |
|
Director
|
|
August
20, 2024 |
Jameeka
Aaron Green |
|
|
|
|
|
|
|
|
|
* |
|
Director
|
|
August
20, 2024 |
Huong
“Lucy” Doan |
|
|
|
|
By: |
/s/
John Hilburn David IV |
|
|
John
Hilburn David IV |
|
|
Attorney-in-fact* |
|
Exhibit
5.1
LAURA
ANTHONY, ESQ.
CRAIG
D. LINDER, ESQ.*
JOHN
CACOMANOLIS, ESQ.**
Associates
and OF COUNSEL:
CHAD
FRIEND, ESQ., LLM
MICHAEL
R. GEROE, ESQ., CIPP/US***
JESSICA
HAGGARD, ESQ. ****
christopher
t. hines *****
PETER
P. LINDLEY, ESQ., CPA, MBA
JOHN
LOWY, ESQ.******
STUART
REED, ESQ.
LAZARUS
ROTHSTEIN, ESQ.
SVETLANA
ROVENSKAYA, ESQ.*******
HARRIS
TULCHIN, ESQ. ******** |
WWW.ALCLAW.COM
WWW.SECURITIESLAWBLOG.COM
DIRECT
E-MAIL: LANTHONY@ALCLAW.COM
|
*licensed
in CA, FL and NY
**licensed
in FL and NY
***licensed
in CA, DC, MO and NY
****licensed
in Missouri
*****licensed
in CA and DC
******licensed
in NY and NJ
*******licensed
in NY and NJ
********licensed
in CA and HI (inactive in HI)
August
20, 2024
Digital
Brands Group, Inc.
1400
Lavaca Street
Austin,
TX 78701
Re:
Digital Brands Group, Inc. – Post-Effective Amendment No. 1 to Form S-1 on Form S-3 (333- 274563)
Gentlemen:
We
have acted as counsel to Digital Brands Group, Inc., a Delaware corporation (the “Company”), in connection with the Company’s
Post-Effective Amendment No. 1 to Form S-1 on Form S-3 (333- 274563), as publicly filed with the Securities and Exchange Commission (the
“Commission”) on August 20, 2024 (the “Registration Statement”), with respect to the relating to (a) the
issuance of shares of the Company’s common stock, par value $0.086 per share (“Common Stock”), upon the exercise of
warrants issued by the Company, and (b) the resale of shares of Common Stock issued by the Company and held by a securityholder of the
Company, as follows:
(i) |
the
issuance of up to 649,000 shares (the “Warrant Shares” or “Securities”) of Common Stock upon the exercise
of outstanding Series A and Series B Warrants to purchase Common Stock, having an exercise price of $3.13 per share (the “Warrants”)
issued on or around September 5, 2023, pursuant to that certain securities purchase agreement, dated on or around August 31, 2023
(the “Agreement”) by and among the Company and the investor thereunder, and amended pursuant to that certain inducement
agreement dated on or around May 3, 2024, as well as the exercise of the outstanding warrants to purchase Common Stock, having an
exercise price of $12.1625 per share (the “Wainwright Warrants”) issued on or around September 5, 2023, in connection
with that certain Agreement. |
In
our capacity as counsel to the Company, we have examined originals or copies, certified or otherwise identified to our satisfaction,
of: (i) the Registration Statement; (ii) the prospectus of the Company (the “Prospectus”) included in the Registration Statement;
(iii) the form of Warrants and Wainwright Warrants issued in connection with the Inducement Agreement; and (iv) such corporate documents
and records of the Company and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis
for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness
of all signatures and the legal competence or capacity of persons or entities to complete the execution of documents. As to various questions
of fact which are material to the opinions hereinafter expressed, we have relied upon statements or certificates of public officials,
directors of the Company and others.
We
have further assumed for the purposes of this opinion, without investigation, (i) the genuineness of all signatures on all agreements,
instruments, corporate records, certificates and other documents submitted to us; (ii) the legal capacity, competency and authority of
all persons or entities executing all agreements, instruments, corporate records, certificates and other documents submitted to us; (iii)
the authenticity and completeness of all agreements, instruments, corporate records, certificates and other documents submitted to us
as originals; (iv) that all agreements, instruments, corporate records, certificates and other documents submitted to us as certified,
electronic, facsimile, conformed, photostatic or other copies conform to the originals thereof, and that such originals are authentic
and complete; (v) the due authorization, execution and delivery of all agreements, instruments, corporate records, certificates and other
documents by all parties thereto (other than the Company); (vi) that no documents submitted to us have been amended or terminated orally
or in writing, except as has been disclosed to us in writing; (vii) that the Inducement Agreement, Warrants, and Wainwright Warrants
are the valid and binding obligation of each of the parties thereto, enforceable against such parties in accordance with its terms; (viii)
that the statements contained in the certificates and comparable documents of public officials, officers and representatives of the Company
and other persons on which we have relied for the purposes of this opinion letter are true and correct on and as of the date hereof;
(ix) that at or prior to the time of the delivery of any of the Warrant Shares, the Registration Statement will have been declared effective
under the Securities Act; (x) that the Company is in good standing in the jurisdiction of its formation and (xi) all Warrant Shares will
be issued in compliance with applicable U.S. federal and state securities and other laws. As to all questions of fact material to this
opinion letter and as to the materiality of any fact or other matter referred to herein, we have relied (without independent investigation
or verification) upon representations and certificates or comparable documents of officers and representatives of the Company.
Based
upon and subject to the foregoing, and having regard for such other legal considerations which we deem relevant, we are of the opinion
that under the laws of the State of Delaware:
1.
The Warrant Shares have been duly authorized and, when issued in accordance with the terms of the Warrants, Wainwright Warrants, and
the Inducement Agreement, will be validly issued, fully paid and nonassessable.
With
regard to opinion paragraph 1: (i) our opinion is subject to the qualification that the availability of specific performance, an injunction
or other equitable remedies is subject to the discretion of the court before which the request is brought; (ii) we express no opinion
as to any provision of the Warrants or Wainwright Warrants, that (a) provides for liquidated damages, buy-in damages, monetary penalties,
prepayment or make-whole payments or other economic remedies to the extent such provisions may constitute unlawful penalties, (b) relates
to advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes
of limitations, trial by jury, or procedural rights, (c) restricts non-written modifications and waivers, (d) provides for the payment
of legal and other professional fees where such payment is contrary to law or public policy, (e) relates to exclusivity, election or
accumulation of rights or remedies, (f) authorizes or validates conclusive or discretionary determinations, or (g) provides that provisions
of the Warrants or Wainwright Warrants are severable to the extent an essential part of the agreed exchange is determined to be invalid
and unenforceable; and (iii) we express no opinion as to whether a state court outside of the State of New York or a federal court of
the United States would give effect to the choice of New York law provided for in the Warrants or Wainwright Warrants.
Without
limiting any of the other limitations, exceptions, assumptions and qualifications stated elsewhere herein, we express no opinion with
regard to the applicability or effect of the laws of any jurisdiction other than the laws of the State of New York and the General Corporation
Law of the State of Delaware as in effect on the date hereof. We are not rendering any opinion as to compliance with any federal or state
antifraud law, rule or regulation relating to securities, or to the sale or issuance thereof.
This
opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is not
explicitly stated herein from any matter addressed in this opinion letter. This opinion letter is rendered solely in connection with
the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions
of the Securities Act solely for such purpose. This opinion letter is rendered as of the date hereof, and we assume no obligation to
advise you or any other person with regard to any change after the date hereof in the circumstances or the law that may bear on the matters
set forth herein even if the change may affect the legal analysis or a legal conclusion or other matters in this opinion letter.
We
hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our firm in
the Prospectus under the heading “Legal Matters.” In giving such consent, we do not hereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder.
Sincerely
yours,
/s/
Laura E. Anthony |
|
Laura
E. Anthony, |
|
For
the Firm |
|
1700
PALM BEACH LAKES BLVD., SUITE 820 ● WEST
PALM BEACH, FLORIDA ● 33401 ● PHONE: 561-514-0936 ●
FAX 561-514-0832
Exhibit
23.1
Consent
of Independent Registered Public Accounting Firm
Digital
Brands Group, Inc.
Austin,
Texas
We
hereby consent to the incorporation by reference in this Post-Effective Amendment No. 1 to Form S-1 on Form S-3 (File No. 333-274563)
(the “Post-Effective Amendment No. 1”) to be filed on or about August 20, 2024 of our report dated April 15, 2024,
with respect to the consolidated balance sheet of Digital Brands Group, Inc. (the “Company”)
as of December 31, 2023, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows
for the year then ended, which appears in the Amendment No. 1 to the Annual Report on Form 10-K/A of the Company for the year
ended December 31, 2023, which was filed on June 3, 2024. Our report includes an explanatory paragraph regarding substantial doubt about
the Company’s ability to continue as a going concern. We also consent to the reference to our Firm under the caption “Experts”
in this Post-Effective Amendment No. 1.
/s/
Macias, Gini and O’Connell LLP
Irvine,
California
August
20, 2024
Exhibit
23.2
Consent
of Independent Registered Public Accounting Firm
We
hereby consent to the incorporation by reference in this Post-Effective Amendment No. 1 to Form S-1 on Form S-3 (File No. 333-274563)
(the “Post-Effective Amendment No. 1”) of our report dated April 17, 2023, except for
the effects of the stock split and discontinued operations as described in Note 1, for which the date is August 24, 2023, with
respect to the consolidated balances sheet of the Company as of December 31, 2022, and the related consolidated statements of operations,
stockholders’ equity, and cash flows for the years then ended, which appears in the Amendment No. 1 to the Annual Report
on Form 10-K/A of the Company for the year ended December 31, 2023, which was filed on June 3, 2024. Our report includes an explanatory
paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. We also consent to the reference
to our Firm under the caption “Experts” in this Post-Effective Amendment No. 1.
/s/
dbbmckennon (Firm No. 3501)
Newport
Beach, California
August
20, 2024
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