DBMM SHAREHOLDERS UPDATE-MARCH 31, 2018
Digital Brand Media & Marketing Group, Inc.(DBMM Management updated its shareholders on November 18, 2017 in order to provide a summary of its position and clarify facts and strategy. That Update remains absolutely accurate and shareholders are encouraged to re-read as it is factual and represents the Action Plan which is being implemented. Included in the Update was the statement, “DBMM is preparing its requisite financial reports to file a Super 10-K for 2015-2016-2017 and will file through its professional advisors. That included the preparation of the “Audit Support Packages, “and the Consolidated Audit following that task.
A subsequent Update was issued on January 8, 2018 to confirm that the Company had filed its response to the Administrative Law Judge’s(ALJ) Initial Decision on November 16, 2017. Following the ID, there was an action in the Supreme Court of the US (SCOTUS) which broadened the review and evidence in over 100 cases of Delinquent Filings. Therefore, in the extended response to address the SCOTUS case, the ALJ will follow the process as stated:
“Determine, based on such reconsideration, whether to ratify or revise in any respect, all prior actions taken by an Administrative Law Judge in the proceeding;….and issue an Order stating the ALJ has completed the reconsideration ordered above and setting forth a determination regarding ratification.” Commission Order- https://www.sec.gov/litigation/opinions/2017/33-10440.pdf
In DBMM’s response, the Company “requested leave to make an offer of proof regarding its effort to become current in its reporting obligations under the Securities Exchange Act of 1934. Digital Brand also sought confidential protection for account numbers and active financial accounts” among other specific evidence it deemed appropriate. The Protective Order was granted on January 26, 2018/Release No. 5543.
DBMM provided the requisite evidence under the Protective Order/Confidential Cover on February 6, 2018. The ALJ acknowledged receipt and extended the deadline for his Order to April 20, 2018/Release 5594
At this point, coincidently, DBMM is focused on the completion of the Super 10-K for 2015-2016-2017, and provide a few observations about the project:
- Newly appointed independent Auditor via 8-K on October 16, 2017 http://www.lvwcpa.com/
- Labor intensive, chronological task. Each audit year must be concluded in its entirety in order to establish an audited trial balance to continue onto the next year.
- SEC “estimated average burden hours per response” for a 10-K is 2,391.73 hours. https://www.sec.gov/files/form10-k.pdf The timeframe varies by company, but when completing 3 years in one document, the task is daunting.
- Audit Support Packages were developed and provided by DBMM Accountant/Advisor and is intermediary with the Auditor throughout the audit period.
- New/current Auditor Review of Work papers of Predecessor Auditor for the 2014 Audit completed in advance of beginning the Consolidated Audit, as required.
- DBMM’s operating and technology arm , Digital Clarity/Stylar, is located in the UK which slows down the audit process from currency fluctuations to clients roster located in disparate geographies which varies year on year. The audit requires more time and deliberation as auditor is completing a mammoth undertaking in the production of a Super 10-K for 2015-2016-2017, while familiarizing itself with a new client. In a word, the first Audit is always painstaking, but the power of audited financial data is worth the effort.
- The fact that year-end closings and tax season has been the calendar period for the task in hand. That is simply a fact and the impact cannot be minimized. Obviously, DBMM’s A-List professional advisors have many other clients and they must balance their resources as well.
- Nevertheless, DBMM is in the “final stretch” and DBMM Management is very positive about the Draft thus far. It will reinforce all of the positive statements about DBMM’s clients, outlook and growth stated during the last 2 years.
- In the midst of the public company hurdles, misinformation, interference by adversaries, naysayers and overall incorrect speculation, DBMM looks forward to filing its Super 10-K for 2015-2016-2017, with a great deal of pride, despite obstacles encountered since the genesis SEC re-audit requirement and coincident bad faith litigation by a bad actor.
- DBMM Management had hoped the Super 10-K would be completed by first quarter 2018, but the tax season intervened, among other items mentioned above, the Audit remains in process. We are very much in the weeds, moving ahead, but DBMM is not in control of the task which has many moving parts. Everyone is working very hard, as a priority, and it will be concluded when it is concluded.
- Once Super 10-K is filed, the Company and its professional advisors will immediately prepare the 10-Q for 1Q-2Q 2018 and had committed to that action.
On a related subject, but equally positive, DBMM filed its 2018 Annual Report with its registered State of Florida on March 13, 2018. The Company requested and received A Certificate of Good Standing certifying DBMM share structure and management. The Annual Report is available, as always, on sunbiz.org.
Lastly, DBMM Management began the Update suggesting that shareholders re-read the November 18,2017 Update to reinforce that we stand by all the statements made–and double down–that we are almost there. Going forward, the Super 10-K will serve the Company well as an audited document reinforcing an upward trajectory in the business model which also continues to serve us well. Growth will be a function of capital with previous hurdles eliminated.
DBMM, through its brand Digital Clarity, will continue to perform on behalf of its shareholders, and the Super 10-K will speak for itself. Please be patient, it won’t be much longer.
SAFE HARBOR PROVISIONS
The foregoing contains certain predictive statements that relate to future events or future business and financial performance. Such statements can only be predictions, and the actual events or results may differ from those discussed due to, among other things, those risks described in DBMM’s reports filed with the SEC. Opinions expressed herein are subject to change without notice. This document is published solely for information purposes, and is not to be construed as an offer to sell or the solicitation of an offer to buy any securities in any state. Past performance does not guarantee future performance. Additional information is available upon request.