SHAREHOLDER’S UPDATE —JUNE 21, 2022
Since filing the 2Q2022 10-Q on April 12, 2022, Digital Brand Media & Marketing Group, Inc.’s (the “Company” and “DBMM”) wanted to update shareholders as the mid-year approaches. Once the 3Q 2022 is filed in Edgar by July 14, 2022, the Company will issue another Shareholder’s Update and highlight noteworthy aspects of the report.
The operating business, the Company’s ‘brand,’ Digital Clarity (DC) continues to make positive, incremental, commercial shifts caused by the post-pandemic adjustments, supply chain disruptions and the overriding global inflation affecting current and potential clients. There are many opportunities surfacing, but the industry is changing dramatically.
Speaking about the business environment, Reggie James, the Founder and Managing Director of DC and the Chief Operating Officer and Director of DBMM said, “We are increasingly positive that our model of Board-directed strategic, advisory services in an environment which has become fragmented with complex, often complicated, marketing options and new platforms, is the way forward, as brands look for trusted partners with experience during these altered times. While the digital landscape is essential to every successful company, a narrative which differentiates each Company and directs it toward a competitive advantage, evolves.
James added, “We are currently far along in discussions with an existing US-based client for whom DC would act as the European marketing channel support partner.” James continued, “If developments thus far follow their natural progression, this model represents the next stage of development and a very exciting step on the Company’s journey.”
Additionally, James continued, “DC is also in early-stage talks with a DBMM (new since 2018) long-term investor who is a principal, and European partner in a global insurance venture where specialized marketing services and support are required. Details of this exciting new venture will be outlined in more detail in future Shareholder’s Updates. This is an important initiative as DC will have ‘a place at the table’ as the key, subject matter expert relating to strategic marketing and execution.
Finally, it has been extremely disappointing that the SEC Administrative Proceeding remains open and whose decision has been extended for the third time to September 6, 2022. Yet it is not surprising, as the PFR is with a new Commission Chair and new Commissioners, two of the five were just named last week.
It has been enormously damaging to DBMM in both time, money and all resources when the Company more than proved its mitigating circumstances with the long-tenured ALJ, who acknowledged the evidence by issuing a Dismissal of the Case on November 12, 2019.
The Company had articulated that that the PFR was an overreach based on incorrect material facts and has so stated in its Counsel’s Brief to the Commission in March, 2021, and in the public record – link
That being the case, the Company has taken an incremental approach to returning to normal business and normal trading and been successful with each step. It is awaiting the review by FINRA of the 15c2-11 application submitted by its sponsoring broker and the conclusion understanding the workload of the process. The next step will then be very clear. All of the options along the way has been in collaboration in with Company’s Counsel, highly experienced and successful in SEC Litigation. Since the Company filed its Super 10-K in May, 2018, and the Dismissal became the Standing Order in November, 2019, DBMM has filed 16 and 6 10-Ks and 10-Qs, respectively, soon to be increased by 1 for 3Q2022.
The Company thanks its shareholders for its support along the way, as there is simply no excuse for the protracted delay, and overreach by a division of the Commission has been noted by many. Suffice to say, the Company has voraciously defended itself and its long-term investors have provided the support to prove and reinforce its position. That has also been noted and also reinforced as important and one of the reasons they came on board. It is time to conclude the matter and put it behind us, while we finally can grow the business around DC and identify an acquisition after a certain TBD point in growth. The future is very attractive for both the Company and its shareholders, with new revenue streams surfacing as described above. The priority remains the removal of the CE icon, long overdue, but 211 clearance first!
Expect another Update around the 3Q2022 filing, or should any material event occur in the interim. We are partners, after all.
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.