Digital Brands Group, Inc. filed a Form 8-K on November 2, 2026, reporting that it received a written notice of default on October 29, 2026, from Shakawe Capital LLC regarding an unsecured convertible promissory note with a principal amount of $3,529,412.

Key Highlights

  • Default notice received: Shakawe Capital LLC notified Digital Brands Group on October 29, 2026, of alleged Events of Default under the note issued July 23, 2026.
  • Missed payment: The holder alleged the company failed to make a scheduled partial payment of $1,000,000 that was due on October 23, 2026.
  • Registration statement failure: The holder also alleged the company failed to file a registration statement by the required Filing Date of August 7, 2026.
  • Mandatory Default Amount: According to the filing, the note is asserted to be immediately due and payable at 120% of outstanding principal, accrued interest, and other amounts owing, plus additional amounts including liquidated damages.
  • Default interest rate: The note bears default interest of 20% per annum on amounts not paid when due, according to the filing.
  • Legal proceedings threatened: The notice states the holder intended to engage counsel and commence legal proceedings unless it received an acceptable extension proposal by the end of October 29, 2026.
  • Company disputes: According to the filing, the company "disputes certain of the assertions in the Notice and is evaluating potential resolution alternatives."

Shakawe Capital Asserts Immediate Acceleration of Digital Brands Group Note

According to the Form 8-K filed with the SEC, Digital Brands Group, Inc. (NASDAQ:DBGI) received a written notice of default from Shakawe Capital LLC on October 29, 2026. The notice relates to an unsecured convertible promissory note in the principal amount of $3,529,412, originally issued on July 23, 2026, under a Securities Purchase Agreement of the same date. The company had previously disclosed the note's issuance in a Current Report on Form 8-K filed July 24, 2026.

The filing states that Shakawe Capital asserted two Events of Default: the company's alleged failure to make a $1,000,000 partial payment due October 23, 2026, and its alleged failure to file a registration statement by August 7, 2026, as required under the Registration Rights Agreement. Pursuant to Sections 2.1 and 2.2 of the note, the holder asserted the note is immediately due at the Mandatory Default Amount, equal to 120% of outstanding principal, accrued interest, and other amounts, plus liquidated damages. During an Event of Default, the filing discloses, the holder may convert the note at a default conversion price equal to the greater of 90% of the lowest closing price in the prior five trading days and the floor price, subject to beneficial ownership limitations and the Nasdaq 19.99% cap.

The filing notes that "no cure period" exists under the note and that the default was stated to be effective immediately. The company disclosed it disputes certain assertions and is evaluating resolution alternatives, including a consensual resolution or extension with the holder. The filing cautions that "an acceleration of the Note, or any legal proceedings commenced by the Holder, could have a material adverse effect on the Company's liquidity, financial condition and results of operations." The filing was signed by John Hilburn Davis IV, President and Chief Executive Officer, dated October 30, 2026.

What Was Disclosed

Digital Brands Group disclosed receipt of a default notice from Shakawe Capital LLC on October 29, 2026, covering a $3,529,412 convertible note, citing a missed $1,000,000 payment and a late registration statement filing, with the company disputing certain assertions and exploring resolution options.