DBMM Shareholders Update – November 8, 2021

DBMM Shareholders Update – November 8, 2021

The Management of Digital Brand Media & Marketing Group, Inc. (“DBMM” and “the Company”) is pleased to announce that the Company has filed the requisite 10-K for the fiscal year ending August 31, 2021, last Friday, November 5, 2021. The filing was 25 days before the due date of November 30, 2021 fulfilling an intent we shared in the Shareholders Update of October 25, 2021. One more step closer to the Company’s return to normal trading and normal business.

That objective has been reinforced by the strong support shown by DBMM’s long term investors who have provided the financial support from curing the delayed filings to make certain we are able to file on time or early as an ongoing show of the Company’s intent to always meet its SEC reporting requirements. It is equally important to ensure that our shareholders and investors are in receipt of accurate and timely information.

The Company, through their investors, have the present ability to move forward to return to its 2018 revenues of $546,501, and move forward to grow the business for the benefit of its shareholders. Having received a Dismissal of the Administrative Proceeding on November 12, 2019, the Company’s expectation was that the mitigating circumstances of the AP regarding late filings were behind them, so the Company could finally move ahead and execute its plan. Shareholders are encouraged to take the time to read the Financial Overview in the Management Discussion and Analysis (MD&A, pgs. 17-18) .

Instead, delay after delay has dogged the Company from the SEC Matter delayed by an 18-month pandemic lockdown to Brexit concerns and finally, full circle to the SEC Matter which has caused damage to the Company’s operations. The Company has awaited a large capital infusion which will occur after the SEC Matter is concluded by a Final Order confirming the Dismissal by the Commission.

At this point in time, the OTC regulations regarding timely SEC reporting have largely been delegated by the SEC to OTC Markets. DBMM is following the SEC/OTC Markets regulations following designation of Pink Current in order to remove the CE after FINRA brokerage application clearance. The 10-K and its predecessor reports are part of the process and that step has been completed.

For any public company, the purpose of the 10-K annual report is to provide transparency and information to investors, analysts and regulators, with focus on five (5) main categories:

  1. Description of the Business
  2. Legal Proceedings
  3. Financial Data (Selected)
  4. Management’s Discussion and Analysis of Financial Condition
  5. Financial Statements and Supplementary Data

Since the Dismissal of the Administrative Proceeding regarding delayed filings, two additional (2) 10-K’s have been filed and are available in Edgar, and four (4) 10-K’s since the delinquencies were cured in July, 2018.

Since some of the Company’s investors are new, the management is highlighting accurate information regarding the context with the preceding background, in order to illustrate the positive actions, the Company has Initiated, despite temporarily reduced revenues.

The positive, strategic specifics below have been extracted from the 2021 10-K which means they are documented, audited and verified:

  1. $169,937 (2021) + $57,802 (2020) = $227,739 Gain on extinguishment of debt. (MD&A, pg 18, Note 4 Loans Payable, Note 5 CDs. Pg. F-11)
  2. Reduction in Derivative Liabilities from $772,732 to $506,360. Change in Fair Value of $9,170. (Note 7, pg. F-12)
  3. $258,146 of Paid in Capital (pg. F-2)
  4. $249,800 Canceled Convertible Debentures modified to non-interest loan (Ibid, Item 1)
  5. $5.9million “net operating loss carry-forward for income tax purposes“ (Note 12-Income Taxes , pg. F-13)

DBMM’s last Convertible Debenture was issued in 2015 and Management resolved thereafter that they would not issue any in the future. Currently, the Company is diligently modifying debt by removing Convertible Debentures and their Derivative Liabilities by mutual agreement, and in the 10-K 2021 cases as no interest loans. Furthermore, these supportive institutions have also waived/cancelled all past interest due with past CD’s .

Those positive actions are representative and further indication of long-term support by investors. They want to be part of the future growth proposition by being examples of risk/reward investors. Negotiations with other CD holders are continuing and will be reflected in future filings as they conclude.

The debt modification follows the first wave of new investors to support the Company through the cure of late filings through compliance in requisite SEC filings until the matter is finally concluded. Then, the growth phase will begin as was intended well before the external mitigating circumstances over which the Company has been vigorously defending itself. Incrementally, albeit painfully slow, we are successfully gaining ground. Next is the removal of the CE which will return the Company to normal trading and normal business.

Four important factors supported by the 10-K:

  1. The industry of digital marketing and company transformation is gaining market share year-on-year
  2. DBMM is a small company, and its brand Digital Clarity an award-winning leader with a competitive advantage going forward
  3. The Company is recovering from external mitigating events
  4. Long-term investors are present strategically and with resources

The next action item will be the 15c2-11, which has been expedited by the Company filing the 10-K almost a month in advance of the due date. Now it is in the public domain and fulfils the ongoing information requirement.

DBMM is moving forward incrementally with strong investors and prudent strategy as the Company returns to normal business and normal trading.

DBMM Management

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.