Digital Brands says ‘significant progress’ made ‘cleaning up our balance sheet’

Digital Brands (DBGI) provided an update to its shareholders regarding recent activities and future initiatives for growth, stating that the company “has made notable progress since May of 2024 in improving its financial condition, including through the elimination of $5.2M in convertible notes, other debt, and aged accounts payable.” The company added: “Due to the elimination of interest expense from the above, we believe the company’s interest expense will decline by approximately $2.7M a year from an estimated $3.1M in fiscal year 2024 to an estimated $420,000 in fiscal year 2025. This should result in a net benefit of approximately $2.7M in fiscal year 2025 to net income and cash flow.” “We have made significant progress in cleaning up our balance sheet, which should result in significantly lower interest expense and increased cash flow. Additionally, the company has worked through over $42M in shareholder equity and net income overhang related to goodwill amortization and interest expense from our previous acquisitions, which should only be $2.5M over the next two years. With these items behind us, we are aiming to pursue marketing initiatives to improve our performance for our shareholders,” said Hil Davis, Chief Executive Officer of Digital Brands.