Digital Brands Group, Inc. 8-K

What Happened

• Digital Brands Group, Inc. announced on March 12, 2026 that it entered a three‑year Consulting Agreement with Athlete Capital Sports LLC to provide services related to The Pennsylvania State University’s name, image and likeness (NIL) program for student‑athletes. The Agreement runs from March 12, 2026 through March 12, 2029.
• As partial consideration, the Company agreed to issue shares equal to a $3.0 million consulting fee divided by the lower of (a) the five‑day VWAP immediately preceding the Share Delivery Date or (b) the prior day’s closing price. The Share Delivery Date is April 11, 2026. The agreement includes a make‑whole guarantee to protect the dollar value of the shares for a specified period and requires the Company to file a resale registration statement by April 26, 2026.

Key Details

• Consulting fee: $3,000,000 to be paid in common stock based on VWAP/closing price (Share Delivery Date: April 11, 2026).
• Term: 3 years (March 12, 2026 – March 12, 2029).
• Make‑whole provision: guarantees total dollar value of the issued shares from April 11, 2026 until the later of (i) 15 months after the Effective Date or (ii) six months after the resale registration is declared effective.
• Additional commitments: Company and Athlete Capital Sports agreed to enter a separate arrangement for the Company to invest $500,000 per year for three years ($1.5M total) into University student‑athlete funds as directed by Athlete Capital Sports.
• Governance note: Athlete Capital Sports appointed DBGI CEO John Hilburn Davis IV as its proxy and attorney‑in‑fact for voting all Shares it holds under the Agreement.
• Reporting: The filing includes disclosure under Item 3.02 regarding unregistered sales of equity securities and the Consulting Agreement is filed as Exhibit 10.1.

Why It Matters

• Potential dilution: the $3M fee will be paid in newly issued common stock, so the number of new shares depends on market price at the Share Delivery Date and could increase the company’s outstanding shares materially.
• Liquidity and resale: the Company will file a resale registration statement (due by April 26, 2026) to enable resale of the shares; until registration is effective the counterparty’s ability to sell may be limited but the make‑whole cash provision shifts some value risk onto the Company.
• Governance and strategy: the counterparty’s voting proxy to the CEO and the Company’s multi‑year NIL engagement and student‑athlete funding commitment could influence investor perceptions of corporate strategy, capital allocation, and related‑party arrangements.