That comes after the deal with Sundry was revised, with a significantly lower cash price at $5 million, plus another $7 million in cash or equity at Sundry’s option, as well as another $20 million in equity. That compares to a previous price tag of $34 million in cash and $7.5 million in stock for Sundry.
Digital Brands said it has “received several options for debt financing” to cover the acquisition. It expects the deal to close in the third quarter.
In May, Digital Brands reported Q1 revenue had grown more than eightfold year over year to $3.4 million, much of that due to acquisitions, while its net losses increased two and a half times over.
The company said that Sundry’s revenue is growing and hit $22.8 million in 2021, and the acquisition would immediately add to its EBITDA when closed.
Digital Brands disclosed earlier this month that it had received a delisting warning from Nasdaq after its stock traded below $1 a share for 30 consecutive days in violation of the stock market’s requirements. The company said it would “closely monitor” its stock price and consider all options to remedy the price deficiency.