Digital Brands : Material Agreement - Form 8-K

Item 1.01. Entry into a Material Definitive Agreement.

On December 27, 2023, Digital Brands Group, Inc. (the "Company") entered into the At The Market Offering Agreement (the "Agreement") by and between the Company and H.C. Wainwright & Co., LLC (the "Manager") acting as sales agent or principal. Pursuant to the prospectus supplement and accompanying base prospectus relating to the offering of the Shares (as defined herein), and under terms of the Agreement and the prospectus supplement and the accompanying base prospectus, filed on December 27, 2023, the Company may, from time to time, in transactions that are deemed to be "at the market" offerings as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act"), issue and sell through or to the Manager, up to a maximum aggregate amount of $1,806,907 of shares of the Company's common stock, par value $0.0001 per share (the "Shares"). The issuance and sale of the Shares to or through the Manager from time to time will be effected pursuant to the Company's effective shelf registration statement on Form S-3, as amended (File No. 333-266486), which was declared effective by the Securities and Exchange Commission (the "SEC") on September 9, 2022 (the "Registration Statement"), and the related prospectus supplement and accompanying base prospectus relating to the offering of the Shares.

Pursuant to the terms of the Agreement, the Company may issue and sell the Shares from time to time through or to the Manager, acting as sales agent and/or principal, from time to time during the terms of the Agreement and on the terms set forth in the Agreement, and the Manager agrees to use its commercially reasonable efforts to sell, the Shares on the following terms: (i) the Shares will be sold on a daily basis or otherwise as agreed to by the Company and the Manager on any day that (A) is a day on which the Nasdaq Capital Market is open for trading, (B) the Company has instructed the Manager to make such sales, and (C) the Company has satisfied its obligations as set forth in the Agreement. The Company will designate the maximum amount of the Shares to be sold by the Manager daily (subject to the limitations set forth in the Agreement) and the minimum price per Share at which such Shares may be sold. The offering of the Shares pursuant to the prospectus supplement and the accompanying base prospectus will terminate upon the earlier of (i) the sale of the Shares pursuant to such prospectus supplement and accompanying base prospectus having an aggregate sales price of $1,806,907, and (ii) the termination by the Company or the Manager of the Agreement pursuant to its terms.

The Manager may sell Shares by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415 under the Securities Act. The Manager may also sell Shares in privately negotiated transactions, with the Company's prior written approval, if so provided in the "Plan of Distribution" section of the prospectus supplement or in a new prospectus supplement disclosing the terms of such privately negotiated transaction.

Unless otherwise agreed between the Company and the Manager, settlement for sales of the Shares will occur on the second trading day (and on and after May 28, 2024 (or such later date on which the SEC's final rule with respect to the shortening of the securities transaction settlement cycle becomes effective), on the first trading day or any such other settlement cycle as may be in effect pursuant to Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, from time to time) following the date on which any sales are made. Sales of the Shares will be settled through the facilities of The Depository Trust Company or by such other means as the Company and the Manager may agree. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.

The Company will pay the Manager a cash commission of 3.0% of the gross sales price of the Shares sold by the Manager pursuant to the Agreement; provided, however, that such compensation will not apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed upon at the relevant applicable time and pursuant to a separate agreement the Company will enter into with the Manager setting forth the applicable terms. Pursuant to the terms of the Agreement, the Company also agreed to reimburse the Manager for reasonable fees and expenses of the Manager's counsel, not to exceed $50,000, and additional amounts for due diligence update sessions conducted pursuant to the Agreement, including in connection with each such date the Company files its Quarterly Reports on Form 10-Q or its Annual Report on Form 10-K, as applicable.