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Digital Brands Group, Inc. has submitted its 10-Q filing for the quarterly period ended September 30, 2024.
The filing includes financial statements for the quarter, showing a decrease in net revenues to $2,440,801 from $3,257,332 in the same quarter the previous year. The decrease is attributed to a delay in wholesale shipments and lower ecommerce revenues.
Cost of net revenues for the quarter was $1,319,214, compared to $1,554,044 in the same quarter of the previous year, resulting in a gross profit of $1,121,587, down from $1,703,288.
Operating expenses decreased to $3,865,752 from $5,125,450, primarily due to cost-cutting measures and synergies from the Sundry acquisition.
The company reported a net loss from continuing operations of $3,541,237, compared to a loss of $5,435,994 in the previous year.
Cash used in operating activities was $3,293,269, a decrease from $6,457,639 in the previous year, attributed to non-cash charges.
Digital Brands Group had a working capital deficit of $16,044,544 as of September 30, 2024, raising substantial doubt about the company's ability to continue as a going concern.
The filing also details various financial agreements, including convertible promissory notes and merchant advances.
Digital Brands Group's management is focused on expanding its customer base and optimizing its omnichannel strategy, while addressing supply chain disruptions and substantial indebtedness.
The company is involved in several legal proceedings related to trade payables and other claims, which are not expected to have a material adverse effect on its financial condition.
Digital Brands Group continues to implement remediation efforts to address material weaknesses in its internal controls over financial reporting.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Digital Brands Group Inc. quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.