Digital Brand Media & Marketing Group, Inc. - Annual Report: 2017 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR FISCAL YEARS ENDED: August 31, 2017, August 31, 2016, and August 31, 2015

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 333-85072

DBMM GROUP

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

WWW.DBMMGROUP.COM

(Name of small business issuer in its charter)

747 Third Avenue, 2^nd FL., New York, NY 10017

(Address of principal executive offices)

(646) 722-2706

(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act:

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [  ]  No [X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

  Yes [  ]  No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                        Yes  [___]  No [_X__ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes [  ] No [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.4.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ] No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      

Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter: on February 28, 2017: $1,835,083

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (i) any annual report to security holders; (ii) any proxy or information statement; and (iii) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (the “Securities Act”). The listed documents should be clearly described for identification purposes (e.g. annual reports to security holders for fiscal year ended December 24, 1980).

None

Transitional Small Business Disclosure Format (Check one):  Yes  ___  No  X.

 

 

 

 

 

 

 

 

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PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties, many of which are beyond our control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, risks related to the large amount of our outstanding term loans; history of net losses and accumulated deficits; reliance on third parties to market, sell and distribute our products; future capital requirements; competition and technical advances; dependence on the oil services market for pipe and well cleaners; ability to protect our patents and proprietary rights; reliance on a small number of customers for a significant percentage of our revenues; and other risks. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this Annual Report will in fact occur.

This annual report on Form 10-K is a    comprehensive    filing for the fiscal years ended August 30, 2017, 2016 and 2015. It is being filed by us in order to become current in our filing obligations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This is our first periodic filing since the 3rd quarter ended May 31, 2015.

This annual report should be read together and in connection with the other reports filed by us with the SEC. In the interest of complete and accurate disclosure, we have included current information in this annual report for all material events and developments that have taken place since May 31, 2015 through the date of filing of this annual report with the SEC.

Item 1. Description of Business

General

Digital Brand Media & Marketing Group, Inc. (“we”, “us”, “our”, “DBMM”, “DBMM Group”, the “Company”) f/k/a RTG Ventures, Inc. (“RTG”) is an OTC:PK listed company. The Company was organized under the laws of the State of Florida on September 29, 1998.

On March 20, 2007, we entered into a Share Exchange Agreement (the “Agreement”) with Atlantic Network Holdings Limited, New Media Television (Europe) Limited (“NMTV”), and Certain Outside Stockholders to acquire all of the outstanding shares of NMTV. Atlantic Network Holdings Limited is a Guernsey company limited by shares and NMTV is a United Kingdom private company limited by shares. The transaction was subject to the fulfillment of certain conditions, including the satisfactory completion of the audit of NMTV’s financial statements for each of its past three fiscal years.  The conditions of closing were not met by ANHL and the agreement was rescinded via 8-K/A on March 30, 2010.

DBMM entered into a Share Exchange Agreement (the “Exchange Agreement”), on March 31, 2010, with Cloud Channel Limited which was subsequently re-named as RTG Ventures (Europe) Limited in July 2010 (“RTG Ventures (Europe)”). Pursuant to the Exchange Agreement, the Company acquired 100% of the outstanding capital stock of RTG Ventures (Europe) from its stockholders for consideration consisting of Convertible Preferred Shares of RTG Ventures, Inc. according to the derivative valuation methodologies outlined in the Share Exchange Agreement of Stylar Limited, a/k/a Digital Clarity. RTG Ventures (Europe) has been valued 12 months forward “notionally” one year hence. An 8-K/A was filed in September 2010 containing audited financials of the acquisition of Stylar Limited which completed the transaction. Shareholders converted the preferred shares into common stock using the average share price of the 30

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days preceding September 3, 2011 which provided a share price of $0.016083. The methodology provided a valuation of 4X net profit. All preferred stock was held by DBMM’s transfer agent for the 12-month period ending September 3, 2011. All voting shares were held by management.

Subsequent to the close of the fiscal year 2011 following substantial investment, the Company conducted a structural review of its total product and services offering. The review was carried out by the Board of Directors. The result was to bring technology development being outsourced directly into the Company to steward on a daily basis and any activities which were not revenue generating in the near term were eliminated. Certain business lines were eliminated from the Business Plan immediately. In October 2011 the joint venture with iPayu was mutually withdrawn and in December 2011 the acquisition of Bitemark Ltd. was rescinded. The companies reverted to the same position each held prior to the contracts.

The rescission of the Bitemark Ltd. share purchase agreement was included as an exhibit to the filing for the 2011 fiscal year even though it constituted a subsequent event at the time.

As a further result of the review, the Company also agreed to strategically focus on developing the business of its wholly owned and revenue generating online marketing services company, Digital Clarity. With deep DNA in its operating market, blending the services of an experienced professional workforce, leveraging a technology offering positions the Company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most of the digital economy focusing on areas such as Search Page Engine Marketing (Google, Yahoo! & Bing),

Social Media (Twitter, Facebook & LinkedIn) and Internet Strategy Planning including Design, Analytics and Mobile Marketing.

On March 5, 2013, Digital Brand Media & Marketing Group, Inc. filed a Certificate of Amendment to its Articles of Incorporation to change its name from “RTG Ventures, Inc.” to “Digital Brand Media & Marketing Group, Inc.” In connection with the name change, the Company’s trading symbol changed from “RTGV” to “DBMM” (the “Symbol Change”). The Amendment was effective as of March 20, 2013. The Name Change and Symbol Change have been reflected in the Company’s ticker symbol as of April 8, 2013.

Also on March 5, 2013, Digital Brand Media & Marketing Group, Inc. received approval from the Financial Industry Regulatory Authority (FINRA) for its 100 to 1 reverse stock split.

On July 17, 2015 Digital Brand Media & Marketing Group, Inc. received approval from the Financial Industry Regulatory Authority (FINRA) for its 1,000 to 1 reverse split.

Digital Clarity is a trading brand for Stylar Limited, a wholly owned company of DBMM, through its office in London, England.  The Company is a multi-service digital marketing agency which specializes in creating effective strategies and campaigns for clients across a range of vertical markets, working in three key areas:

•SearchEngine Marketing –for search engines like Google, Yahoo etc.

•WebDesign –building sites for web, mobile and tablet devices

•SocialMedia –planning and measuring social metrics digitally in order to diagnose strategy

DBMM Group can leverage its team’s experience in digital media and provide leading strategy, deployment and measurement to its core markets in many industry sectors, from creative to traditional

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corporate. Entertainment, Fashion and Sports industries, as well as Automotive, Ecommerce, and Investment Banking are proven markets.

The Company is rolling out the services of both the technology and marketing service offering of the business from its current operating base in the UK into larger markets in the United States, namely Los Angeles and New York. The intent in fiscal year 2018 is to continue to grow into many geographic areas in order to grow the company’s revenues with cash infusion – growth is totally a function of capital.

Fiscal years 2015- 2017 reflected the Company’s continued progress by being awarded contracts for a number of new clients in the search marketing sector. One of the successful contract models for Digital Clarity strategizes as a full digital marketing and technology consultancy from design following analysis of client’s analytics, then executing and stewarding the evolution of the model. The Company’s mantra is, “ROI is our DNA,” and continues its business development by leveraging those relationships.

Sales and Marketing

Our sales team focuses on adding new advertisers to our business, while our business development and partnership initiatives focuses on adding new reseller partnerships, selectively adding new distribution partnerships and servicing existing partnerships. Our marketing department focuses on promoting our services through online customer acquisition, affiliate relationships, press coverage, strategic marketing campaigns and industry exposure. Advertising and promotion of our services is broken into four main categories: direct sales, reseller partnerships, online acquisition, and referral agreements. The Directors also take an active role in business development. Consumer products advertisers will spend $5.97 billion on digital advertising in 2016, and 18.2% gain from 2015 that will see this sector account for 8.7% of total US digital ad spending for the year.

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Research and Development

The Company has a strong forward-looking focus in building out a robust and lean platform that will provide revenue generation through the business model described.

There is a current need for investment in building out the development team and creating a proprietary infrastructure to scale and evolve the technology platform and to market to end users. The prudent. DBMM model includes industry digital technology integrated with social media platforms, both constantly evolving. Digital Clarity integrates this changing dynamic into its algorithms. DBMM uses others research, but without expending its own resources. It is a perfect collaboration.

Employees

As of August 31, 2017, the Company had eight full-time employees.

Competition

There is strong competition in the digital marketing arena, though with the right level of investment and marketing, Digital Clarity has a confident outlook in using its experience to win new business in both local and international markets. DBMM has significant business relationships in place because it has a differentiating model.

DBMM Group’s Current Markets

•Entertainment/Fashion/Sports/Automotive/Ecommerce/Technology/Investments/Investment Banking/Retail Solutions

•Digital Marketing Strategic Consulting Services

•Due Diligence of Companies Digital Landscape

THE GROWTH OF SOCIAL TECHNOLOGY AND SEARCH

THE MARKET ENVIRONMENT –SEARCH

Businesses now spend 37% of total marketing budget on paid search

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Digital Marketing Services

Digital Clarity is a specialist Digital Marketing Agency that has been at the forefront of online marketing. The company is a multi-service digital marketing agency who specializes in creating effective strategies and campaigns for clients and agencies across a wide range of verticals.

Specializing in Search Engine Marketing, Web Design, Social Media including Digital Analysis, the company works with both major brands and medium-sized companies to help leverage online brand presence and new customer acquisition strategy.  Digital Clarity also delivers consultancy and strategy planning for both client companies and advertising agency partners.

DBMM Profile:

•Revenue Generating Company

•Cash Flow Positive

•Experienced Team

•Strong Client Base

•Centers of Excellence Today –US & Europe

•Future Geographic Reach –UAE & Asia

•Reach to Celebrity & A-List Performers

•Established Relationships with Media Groups like Google

•Poised for the Growth in Digital Marketing & Advertising

Services Offered by Digital Clarity continue to grow with client relationships. Led by the Head of US Operations, Steve Baughman, the Company has begun to leverage with an objective to potentially integrate his music and entertainment contacts to help build on its existing service offering.

Pay per Click Advertising (PPC)

Pay per click (PPC) (also called Cost per click) is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher (typically a website owner) when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. PPC “display” advertisements are shown on web sites with related content that have agreed to show ads.

Search Engine Optimization (SEO)

Search engine optimization (SEO) is the process of improving the visibility of a website or a web page in search engines via the “natural” or un-paid (“organic” or “algorithmic”) search results. In general, the earlier (or higher ranked on the search results page), and more frequently a site appears in the search results list, the more visitors it will receive from the search engine’s users. SEO may target different kinds of search, including image search, local search, video search, academic search, news search and industry-specific vertical search engines.

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Leading internet authority, Jayson DeMers, founder & CEO of AudienceBloom, a Seattle-based content marketing & social media agency said recently, " The SEO industry is worth $65 billion; will it ever stop growing?".

What’s more, is that research company Borell Associates is predicting that the SEO industry will continue to grow to an estimated $72 billion by 2018 and $79 billion by 2020.

Mobile ad revenues were $8.2 billion or just under +30%. Most significantly, the lion’s share of this unprecedented growth was driven by Paid Search.

Digital Clarity has made considerable inroads in both Search and Social Media. The growth in expectations, by users and well as how Google ranks, means UEO or user experience optimization has become almost synonymous with SEO. Google has started to show clear favoritism towards sites with fast load times, mobile optimization, and indications that users are enjoying their overall experience.

Analytics

The measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web usage.

Email Marketing

Description: Email marketing is a form of direct marketing which uses email as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing.

SMS Marketing

Users of an SMS service can exchange text messages either from mobile to mobile or through a specialist internet website to a handset about anything from promotional offers, to general information regarding a product or service. Messages are usually sent using a short code system. Short codes are around 5 or 6 digits in length and work by asking customers to text a certain keyword to a specific code. E.g. ‘Text WIN to 84841”.

Web Design & Development

To lead a highly competitive environment, the process of planning and creating a website requires both art and technology prowess. Text, images, digital media and interactive elements are used by Digital Clarity’s designers to produce the page seen on the web browser.  As a whole, the process of web design can include conceptualization, planning, producing, post-production, research, and advertising. The site itself can be divided into pages. The site is navigated by using hyperlinks; commonly these are blue and underlined but can be made to look like anything the client wishes.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2. DESCRIPTION OF PROPERTY

DBMM’s corporate address is 747 Third Avenue, 2^nd Floor, New York, NY 10017. The Company has an annual renewable lease. In April 2012, Stylar Limited (a//k/a Digital Clarity) entered into a 5-year lease. Under the terms of the current lease the annual base rent was approximately $17,000. This office is located in the UK.  The lease is currently on a month-to-month term for monthly rent of $1,416.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in a litigation, Asher Enterprises, Inc. v. Digital Brand Media & Marketing Group, Inc. and Linda Perry, Index No. 600717/2014, in the Supreme Court of the State of New York, sitting in the County of Nassau. The Plaintiff alleges $337,500 in damages based on breach of contract allegations arising from the Company’s untimely periodic filings in December 2013. On September 18, 2014, the Court declined to grant the plaintiff’s application for default judgment and Linda Perry was removed as a defendant. The Court awarded judgment in favor of the Plaintiff on July 15, 2015 in the amount of $122,801.87, which does not include $25,000 paid in settlement efforts.  On February 22, 2016 a Settlement Agreement was signed by the parties for a total of $85,000 to Asher Enterprises.  Thereafter, the litigation continues.

From time to time, the Company has become or may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business.  The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position, or our business and the outcome of these matters cannot be ultimately predicted.

ITEM 4. MINE SAFETY DISCLOSURES

N/A

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PART II

ITEM 5.

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is currently listed for quotation on the OTC:PK under the symbol “DBMM”.

Per Share Market Price Data

The following table sets forth, for the fiscal quarters indicated, the high and low closing bid prices per share for our common stock, as reported by on PinkSheets.com. Such quotations reflect inter-dealer prices, without retail markup, markdown or commission and may not represent actual transactions.

The last reported sale price of the common stock on the OTC Electronic Bulletin Board on August 31, 2017. August 31, 2016 and August 31, 2015 were $0.0019, $0.0001 and $0.026 per share respectively. As of August 31,2017, August 31,2016 and August 31,2015, there were 119, 119 and 118 holders of record of our common stock respectively.

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Dividends

We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.

Recent issuances of Unregistered Securities

ITEM 6. SELECTED FINANCIAL DATA

As a “smaller reporting company”, as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Readers are cautioned that certain statements contained herein are forward-looking statements and should be read in conjunction with our disclosures under the heading "Forward-Looking Statements" above. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. This discussion also should be read in conjunction with the notes to our consolidated financial statements contained in Item 8. "Financial Statements and Supplementary Data" of this Report.

Operations Overview/Outlook

Operationally, 2015-2017 has been important in continuing the direction of the Company and steering it toward a scaled growth plan. The model developed in fiscal 2014 has been reinforced and is differentiating to clients, therefore, the model will continue into fiscal 2018, and beyond.

Entertainment/Fashion/Sports/Automotive/Ecommerce/ Investment Banking Solutions

DBMM continues to build on its strengths. The company had strong relationships within the market and intends to build its business focus in a wide variety of industry verticals.

The heart of the business is the marketing consultancy. DBMM Group’s main business Digital Clarity, works in the area of Digital Marketing. Understanding each client and developing the model to individualize the outlook has been essential. This kind of close relationship with the client resulted in Digital Clarity being considered a close professional advisor.

In fiscal year 2018, the Company will continue to focus on the positive, proven operating model and use that model to expand geographic reach with existing and new clients.

 

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Digital Marketing Services

2018 will continue to see exponential growth in the adoption of Social Media as communication, marketing and engagement avenues. An acceptance of change is driving revenue. The future growth in mobile search is one of the fastest growing ancillary businesses. It was clear that the direction, talent and growth of the Company is in its human capital and outside relationships which must be proactive in order to differentiate itself from competition

The clear opportunity is at the foundation of the Company, namely the need to expedite and continue to encourage development in the digital marketing services sector. The marketing services product is labor intensive and thus the Company must jumpstart the growth by significant capital to grow simultaneously in multiple geographies.

As a foundation, the 2015 fiscal year financial review showed that Digital Clarity increased its revenues by 23%, and the operating company remained cash flow positive through 2017 despite challenging situations in the parent company, the company outlook is robust for the foreseeable future.  

Key Milestones

2017 has been a very significant year in its increasing revenues quarter to quarter during the fiscal year. The client base is expanding in base number and the size of client serviced. Certain new significant clients representing a variety of industries were added to client roster. The Company’s clients tend to operate with a NDA, as our clients see us a competitive advantage. Accordingly, we cannot share all clients’ brands or company names.

Recently the company has been hired by the prestigious organizational group, British Marine. British Marine are the membership body for nautical and sea faring craft and include Super and Luxury Yacht companies such as Sunseeker and Princess Yachts.

Digital Clarity have been hired to audit Google Search and Analytics for British Marine’s top show, The London Boat Show and one of Europe’s largest events, The Southampton Boat Show. The company is in talk to act as digital advisor with British Marine for the Abu Dhabi Boat Show. These shows will fit into the circuit that incorporates Fort Lauderdale, Monaco and Cannes Boat & Yachting events.  

Digital Clarity are also working with sponsors and potential sponsors of a Formula 1 team that are in the top 5 racing teams in this prestigious and global sport.

Other examples are representative of the diversity of client base, DBMM's approach using a client's analytics, and executing an individualized model to increase ROI as the prime objective, span a wide range of industries.

Digital Clarity continues to expand into high end Real Estate and Luxury brands and is building a strong network on High Net-worth and Ultra High Net-worth Individuals  

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NOTABLE EVENTS - INDUSTRY AWARDS & RECOGNITION

Digital Clarity Named in Top Ten Best Social Media Marketing Firms in the UK for 6^th Year (http://Topseos.com/uk/best-social-media-marketing-companies)

“Topseos.co.uk, an independent research firm, revealed the listing of the top 10 best social media marketing agencies in the UK based on their strength and competitive advantage. Social media marketing companies are put through a methodical analysis to ensure the rankings contain the absolute best companies the search marketing industry has to offer. Their criteria include timeliness, brand management, consultation, methodology and reach.

Based in these criteria, Digital Clarity was awarded a spot in the top 10. The process for researching and declaring social media marketing agencies in the UK is based on the use of a set of analysis criteria and learning more about their solutions and their communications with their customers through references. The topsesos.com independent analysis team communicated directly with the clients in order to inquire about the solutions and achievement from the client’s perspective.

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Digital Clarity Team Member shortlisted for top player in Under 25 UK Search Awards

The UK Search Awards have been celebrating the expertise, talent and achievements of the search industry for over half a decade and are regarded as the premiere celebration of SEO, PPC and content marketing in the UK.

The awards attract hundreds of entries from the leading search and digital agencies from across the UK and to those based elsewhere around the globe who are delivering work for the UK market.  

The team member works with a range of PPC, SEO, Analytics and Social campaigns, with a specialist flair for Shopping campaigns.  She works across a wide range of businesses from not for profit, ecommerce and B2B, adapting her approach and strategy to each specific client. One of her key strengths includes having the passion to learn the ins and outs of client’s industries, learning the market, competitors and their business models to insure every section of a campaign is on point and delivers results.

In the judging sessions the Young Search Professional category was said to be highly competitive and a tough one to judge.

The category and shortlist is a testament to Digital Clarity’s commitment to training and personal development.

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Digital Clarity Shortlisted for Ecommerce Awards for Excellence for ProCook

ProCook is the UK’s leading specialist cookware multi-channel retailer. With retail outlets in major towns and cities across the UK, the company also has a powerful online e-commerce presence.

ProCook has seen great growth in the last few years via PPC and SEO strategies and have been working with Digital Clarity over the past 8 years.

Results were staggering

PPC brand revenue uplift – 35%

PPC non-brand revenue uplift – 36%

SEO revenue uplift – 51%

Shopping revenue uplift – 48%

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Digital Entrepreneur Awards - Digital Clarity Shortlisted for Digital Business of the Year 2017

Sponsored by UKFast, the Digital Entrepreneur awards are the only national awards ceremony that is dedicated to internet entrepreneurialism. The awards aim to celebrate entrepreneurs from startup level right through to large corporate companies.

“The awards celebrate not only the high-profile websites and leaders driving online commerce but the silent heroes who develop the systems that change the online landscape and shape our digital future.”

Digital Clarity Research Featured in Huffington Post

Digital Clarity looked into the perils of internet addiction, especially among the young and the effects it can have to both the individual as well as broader society.

The research was deemed worthy to be published in the Huffington Post, an online paper rum by Ariana Huffington and used by journalists worldwide as both a distribution point as well as an inspiration to feed into current events and stories.

http://www.huffingtonpost.co.uk/2014/10/16/youths-controlled-internet-addiction_n_5995068.html

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Key Differentiators

2015-2017 has been about strengthening foundations by continuing to streamline while developing new client relationships and revenue streams as a differentiating digital marketing and technology provider. This focus has allowed the Company to enhance brand value for its clients. 2018 will continue to be about growth and outreach utilizing five key differentiators:

1.Brand enhancement

2.Search

–PPC

–SEO

3.Design

4.Social media

5.Analytics

1. STRENGTHS: BRAND ENHANCEMENT

Digital Clarity is an evolving Strategic Brand Consultancy that crafts, designs and executes digital marketing strategies across multiple ad platforms and social media networks for a broad array of clients to help each of them establish a uniform brand identity across the digital universe.

As the online world becomes increasingly sophisticated and complex, Digital Clarity concentrates on core areas that help business navigate through an often-confusing mosaic choice of systems and platforms. Focusing on the areas of Search, Social Media and Design, all of Digital Clarity work is underpinned by a unique understanding of Analytics. This aspect is often a missed piece of the jigsaw that makes up the digital marketing mix. The five differentiators, presented to clients as an integrated model, result in being selected over competition in the majority of presentations.

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2. STRENGTHS: SEARCH:

– PPC

Definition:

PPC stands for Pay-per-Click Advertising. It is an abbreviation for a number of search advertising platforms, of which the mostly widely used is Google AdWords. PPC is one of the most effective online marketing services available, generating instant activity and instant results for new or existing websites.

The real beauty of PPC is that you only pay for an ad when a potential customer clicks on it, meaning you can bring people to your site for mere pennies while ensuring your traffic is relevant and targeted at people who are looking for your service or product. Additionally, PPC is highly measurable and can be closely monitored, allowing your business to keep a close eye on return-on-investment (ROI).

The major platforms used for PPC are:

Google AdWords (Global)

Microsoft Bing

Yandex (Russia)

Baidu (China)

AdWords Audit

Key Areas of Service:

Budget Management

Keyword Research

Conversion Rate Optimization

Bid Optimization

Dedicated PPC Management

As an elite consultancy, Digital Clarity has extensive experience in PPC management and implementation ranging from small independent businesses with one or two ad campaigns to multi-national ecommerce websites which utilize hundreds of ads and thousands of keywords. Whatever the nature and size of the account, Digital Clarity understands the importance of utilizing a programmatic, well-defined approach:

•Strategy.

By understanding the business, demographics and audience, Digital Clarity makes sure that campaigns hit the ground running from day one.

•Implementation.

Digital Clarity uses experience to put in place the best structure, keywords, ad copy and bidding strategies to maximize the effectiveness of your account.

 

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•Optimization.

Digital Clarity rigorously interrogates and checks client accounts to ensure optimal performance, with regular reviews of all aspects of each campaign.

•Reporting.

By defining and explaining the numbers of each account, Digital Clarity provides the information needed to steer things in the right direction for each client’s business.

PPC AUDIT

From selecting the right keywords, to the settings and structure. It is important that we allow time to research and refine the account in order to save on wasted spend as well as increasing conversions.

This audit would cover Google and Bing account setup.

KEYWORD RESEARCH

AD AUDIT AND OPTIMISE - INCLUDING AD EXTENSIONS

BUDGET AND BIDDING STRATEGIES FOR THE TARGET AUDIENCE

DEVICE & LOCATION STRATEGIES

REMARKETING LISTS & STRATEGY

PPC STRATEGY

Digital Clarity’s unique PPC strategy affords the opportunity to test and change things based on results. Testing ads, optimizing keywords and enhancing the ways to target the right audience are just a few areas which will be covered.

Weekly updates and monthly reporting will be provided to identify areas of improvement and things which need to be optimized further.

KEYWORD REFINEMENT & SEARCH QUERY

AD COPY TESTING

LOCATION MANAGEMENT AND KEYWORD TESTING

BUDGET ALLOCATION & CONTINUED CPC AND KEYWORD BID STRATEGIES FOR ROI

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2. STRENGTHS: SEARCH:

– SEO

Definition:

When customers look for service on Google or another search engine, they might find a client company’s business – or they might find a competitor. SEO (Search Engine Optimization) is the process by which you can help ensure that your site appears first in the rankings. These rankings are determined by the search engine’s algorithms: programs which trawl the internet indexing details about each site, in order to deliver relevant results when people search. If your website does not perform well according to the algorithm’s criteria, your rank will be lower, and people will not be able to find your site; this is what makes partnering with the right SEO agency such a crucial part of your digital marketing activity.

Digital Clarity is at the vanguard of this sector, having implemented countless SEO plans for a broad array of clients in a number of different industries. These plans included:

Onsite Technical Audit

Quality Content Creation

Meta, Tags & Technical Optimization

Website Structure

Use of Optimum Keywords

Link Building & Referrals

Social Media Integration

Search Algorithms

SEO strategy is changing all the time, and the rate of change continues to increase dramatically in the last 12-18 months. Changes to the Google algorithm in particular have shifted the landscape of search optimization, including named updates such as Penguin, Panda, and Hummingbird. These changes can have huge consequences: well-performing sites can lose visibility and poor performers can gain it, literally overnight. It is therefore absolutely essentially that a website’s SEO is closely curated and managed, making sure one is always ahead of the curve.

SEO Can Deliver Results for Business

By applying website optimization to your site for better search engine performance, you will gain more traffic and brand recognition as more and more people are able to find you online. This in turn allows more sales and conversions, leading to higher profits and better return on your digital investment. Contact our team today to find out how we can improve your performance.

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Growth of Mobile in Search (PPC & SEO)

Mobile devices are used more than traditional computers for web browsing, as smartphone and tablet use overtook desktop for the first time, October figures show.

Mobile web browsing has been steadily growing since 2009, while the desktop’s share of web traffic has steadily decreased. In October 2015, the two crossed over, with global mobile and tablet browsing accounting for 51.3% versus the desktop’s 48.7%, according to the latest data from web analytics firm StatCounter.

Growth of Mobile Search Compared to Desktop

Google Dominates Search

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3. STRENGTHS: DESIGN:

Definition:

Web design encompasses many different skills and disciplines in the production and maintenance of websites.

A site can be the most functional, user-friendly and search-optimized in the world; if people don't like the look of it, they will bounce off your page and never come back.  Making sure a site looks good and that it reflects your brand company identity is the difference between success and failure, and having a good web design agency on your side is more important than ever.

Web Design Services:

e-Commerce

Device Compatibility

Web Development

Mobile Compatibility

Process & Planning

Content Management System (CMS)

Version Control

Changes in the Last Few Years

With 43% growth in mobile devices and tablets, the game has changed. It’s no longer enough for a site to look great on a PC; it has to be able to scale from a widescreen view of a modern flat screen monitor to the narrow portrait of an Android mobile screen; it has to spin and rotate with the movements of an iPad. This aspect of website design is called ‘responsiveness,’ and in the last few years has gone from being ‘nice to have’ to absolutely essential, necessitating a complete website redesign in many cases. Digital Clarity have years of experience in building functional, beautiful websites which work across all devices.

Digital Clarity’s Unique Proposition

Specialist creative agencies are great at making things pretty and applying their own methodologies and ideas to client websites, both creatively and financial, and operating analytics. Digital Clarity takes a different approach: combining a client’s ideas, vision and brand identity with our experience and expertise to produce sites which perfectly blend form and functionality. Additionally, Digital Clarity does not design in a bubble; the sites built integrate seamlessly with PPC campaigns, SEO activity, and are fully optimized to perform as part of a greater whole. Digital Clarity does not just build websites; the company’s role as a website design agency is part of an integrated approach which will help achieve the overall business goal.

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4. STRENGTHS: SOCIAL MEDIA:

Definition

Social media refers to sites where users interact with each other on a large scale, including Facebook, Twitter, LinkedIn, Pinterest, Imgur, Tumblr and many others. Begun as a social phenomenon, the growth in use of social media sites over the past decade has made it impossible to ignore for any brand or business.

Social Media Audit

Content Creation

Social Media Management

Social Media Set Up

Reporting

Blog Writing

Content Strategy

Reputation Management

Social Media Advertising

The Need for Social

Social media can help achieve business goals by allowing greater engagement with the customer base, audience and stakeholders. A company doesn’t just need a brand anymore: it needs a face, a voice, and maybe even a heart. As well as being a central component of how customers see a company. It can also yield other opportunities: Promotions, customer feedback, and even just having a little fun can all be used to bring you closer to your clients and users, informing strategy, guiding your product offering and in the long term, increasing sales and profits.

1. Online adults aged 18-34 are most likely follow a brand via social networking (95%). (Source: MarketingSherpa)  

2. 71% of consumers who have had a good social media service experience with a brand are likely to recommend it to others. (Source: Ambassador)

3. 2.56 billion global mobile social media users, equaling 34% penetration; globally with 1 million new active mobile social users added every day (Source: We Are Social).  

4. 96% of the people that discuss brands online do not follow those brands’ owned profiles. (Source: Brandwatch)  

5. Visual content is more than 40 times more likely to get shared on social media than other types of content. (Source: HubSpot)

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Digital Clarity’s Value Proposition

As a Digital Marketing and Technology Agency, Digital Clarity has been helping brands manage their social presence since before ‘social media’ had been coined as a phrase. Using our integrated methodology, we will incorporate a social presence as part of an overall offering, utilizing the platforms which are most appropriate to each business in the best possible way. Whether you need from-scratch implementation, or just want a social media audit to benchmark your activity, Digital Clarity have the expertise to deliver the results you need.

Digital Clarity have a strong track record of increasing membership numbers, creating deeper engagement, and measuring the success of your activity to help inform social media marketing strategy and guide development.

Number of social media users worldwide from 2010 to 2021 (in billions)

The Market for Growth in Social

Digital Clarity incorporate Social Media strategy wherever possible. There is continued opportunities to grow business via social networks and social analytics.

Social-media advertising spend will grow rapidly through 2018. It’s up 40year and will top $8.5 billion, growing to nearly $14 billion in 2018, a five-year compound annual growth rate (CAGR) of 18%.

• Social media ad spend has reached the mobile-tipping point.  Spending on mobile social-media ads, including mobile app-install ads, will surpass non-mobile spend by the end of this year in the US.  In 2018, two-thirds of social-media ad spend will go to mobile, creating a $9.1 billion social-media market.

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Mobile app-install ads and programmatic buying are also growth drivers. Analyses suggest that mobile app-install ads could account for anywhere from one-quarter to more than one-half of Facebook’s mobile ad revenues.

Social programmatic ad platforms are also growth engines. Spending on FBX, Facebook’s programmatic platform, increased by 150% year-over-year globally.

Prices are increasing as performance and targeting improve, even as ad loads stay steady on the established platforms. Facebook, for example, is not likely to increase the amount of in-feed native ads an average user will see.

5. STRENGTHS: ANALYTICS

Definition:

Analytics is the act of analyzing data from your website, marketing campaigns and user activity. It can include everything from what time of day people are most likely to click on your PPC ads, right down to how long users are spending on individual pages on your site. Analytics can help you locate problems, find areas for improvement, form projections for the future and help you get the best out of your marketing budget.

Google Analytics

Goal Setting

Tag Management

3rd Party Analytics

Funnel Planning

Attribution Modelling

Path Analysis

Link Testing

Why Analytics Are Important

Knowing how to identify trends and interrogate data is of paramount importance to any marketing department. Analytics gives you answers to some of the most important questions you should be asking about your campaigns, maximizing effectiveness when things go well and providing solutions when things go wrong. Without this information, what appears to be a successful campaign could be failing to achieve its full potential, and there may be critical problems of which many companies may not be aware.

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Digital Clarity’s Unique Proposition

What really sets Digital Clarity apart is the company’s ability to translate numbers into action. Analytics is extremely important, but for many, it is difficult to draw meaningful conclusions from the data, or to know how to act on the knowledge gained from this analysis. Online marketing is a sea of numbers, data and statistics; Digital Clarity turns this information into actionable insights for business.

Digital Clarity’s knowledge of analytics methodologies puts us at the forefront of our industry. We can use this experience to help guide strategy and deliver action points with recommendations, rather than just presenting you with meaningless statistics. With this knowledge in hand, you can implement solutions which will help you get the most out of your online presence. Digital Clarity also offers Google Analytics training to help businesses get the most out of this powerful tool independently.

As the internet and mobile arena continues to mature, the need to make sense of and manage companies through this often-complex market is clearly an area of massive growth. The Company is confident that the talent and experience within the digital marketing team is poised for a major springboard in 2018, but must be expanded significantly in order to support the global reach intended.

Artist Collaboration, through experts with existing relationships, will be exploited in the longer term after the Company integrates many of the new clients in the pipeline. As a strategic advantage, artists and brands will leverage their celebrity status through consultancies such as Digital Clarity to enhance and drive their brand in the complex arena of social media.

Market Reach

The Company has reach and experience across a large number of vertical markets including, but not limited to: Entertainment/Fashion/Sports/Automotive/Ecommerce.

Relationships and Industry Contacts

The team at Digital Clarity have professional and personal contacts, including some long-term relationships, at companies such as Google, Microsoft and Facebook, often being invited to attend strategic market briefings and insights. The resultant collaboration is invaluable.

Partnerships, strategic alliances and agency management have allowed Digital Clarity to work on some of the biggest brands, sitting behind the agencies as a support and resource to deliver very high quality service and results to their clients.

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TEAM EXPERTISE

COMPANY KEY ASSETS

Examples:

PPC campaign experience especially Google AdWords existed

SEO evolution from aggressive link building and onsite SEO through to strategic marketing and integration of inbound marketing

Website design and development based on results driven design and planning

Brand consultancy

Social media management and advertising. Several clients have been “won” directly via Digital Clarity’s internal social media strategy

Sales and account management experience from multi-disciplined backgrounds

Evolution and Flexibility

The market is continually changing. Digital Clarity has always remained ahead of the curve and given their clients peace of mind by remaining a true strategic partner.

Creative, Individualized Solutions and Customer Service

Case Studies and testimonials reflect the client-centric approach of Digital Clarity. Being selected over larger more established firms, support that we provide the client with skills that are differentiating. The Digital Clarity Brand is being established positively.

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Growth Opportunities in the Market

As the use of web mobile sites and applications grow, so do the complexities and challenges of using these sites and platforms commercially. Digital Clarity directs business through the maze of an often confusing and sophisticated set of barriers, to create a clear path for the customer to our client’s product or service. As this market matures, the need for companies to rely on the services from Digital Clarity can only grow.  Here we look at some of the growth areas in Digital Clarity’s arsenal integrating the key trends going forward:

1.  More Mobile

2.  More Social

3.  More Informed

4.  More Experiential

5.  More Real-Time

6.  More Global

7.  More Multichannel

These trends translate to being “always on.”

Growth & Opportunities in Search

Search remains the foundation of digital marketing. Businesses now spend 24% of total marketing budget on paid search by 2017.

US digital ad spending will approach $85 billion – Interactive Advertising Bureau.

U.S. search spend grew by 11 percent Year over Year, while ROI improved by 26 percent – Adobe

72% of Consumers Want Mobile-Friendly Sites – Google Research

2 million search queries are made on Google, every minute – Google

Growth in Corporate Search – All Fortune 100 Companies have a Google Plus Account

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Growth & Opportunities in Social Media

Number of social network users worldwide from 2010 to 2018 (in billions)

INSTAGRAM GROWTH

Instagram has seen a phenomenal growth rate, much to the detriment of Twitter. Both remain powerful though Instagram’s video and photographic social channel is far outpacing twitter.

Top brands on Instagram are seeing a per-follower engagement rate of 4.21% which is 58 times higher than on Facebook and 120 times higher than on Twitter (Source: Hootsuite)

Instagram has become a powerful platform for marketers and its potential cannot be overlooked any longer.

Media brands are the most active whereas business services, financial services, and fast moving consumer goods have the lowest percentage of brands represented on Instagram. (Source: Simply Measured)

Also, the increase in business activity on Instagram the brand posting frequency is becoming more normalized and standardized to highlight the increase in a more measurable approach.

90% of Instagram users are younger than 35 (Source: Science Daily)

Instagram has become the social media network for targeting millennials. 32% of teenagers consider Instagram to be the most important social network. Female internet users are more likely to use Instagram than men, at 38% vs. 26%.

Products were the top content types for the top 200 global brands in terms of engagement, at 60% in 2017 beating lifestyle category by over 20%. (Source: Hootsuite)

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This is great news for marketers since people who follow brands on Instagram are aware and accept the fact that they’re going to be exposed to products.

Posts tagged with another user (56%) or location (79%) have significantly higher engagement rates (Source: Simply Measured)

GROWTH OPPORTUNITIES IN LONDON & THE UK MARKET

Digital Clarity’s presence in the UK provides an excellent springboard into mainland Europe as London remains the gateway into both Northern and Southern European markets.

From the recent Internet Advertising Bureau (IAB) and (Price Waterhouse Coopers) PwC Report:

At half year, the total UK digital advertising market is worth £5.56bn, up 13.8% y-o-y

Mobile is driving almost all growth in the market

At £2.37bn, mobile now makes up 43% of all digital

Mobile is accounting for 57% of all digital display advertising

Online video has overtaken banners as the largest display format, up 46% year-on-year

Outstream is now the largest video format, at 52% of all online video

Social revenue is now over £1 billion

WORLDWIDE E-COMMERCE GROWTH OPPORTUNITIES FOR DIGITAL CLARITY

In 2016, retail e-commerce sales worldwide amounted to $1.86 trillion and e-retail revenues are projected to grow to $4.48 trillion by 2021. China overtook the online the US-Market as the world’s largest online market in 2015. Online shopping is one of the most popular online activities worldwide, Goldman Sachs expects on-line shopping retail sales in China to grow at an annual average of 23% over the next 4 years, topping $1.7 trillion by 2020, but the usage varies by region - in 2016, an estimated 19% of all retail sales in China occurred via internet but in Japan the share was only 6.7%. Desktop PCs are still the most popular device for placing online shopping orders, but mobile devices, especially smartphones, are catching up. Fast.

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Worldwide Retail Ecommerce Sales Will Reach $2.8 Trillion in 2018.

Double-digit growth will continue through 2020, when sales will top $4 trillion. Retail ecommerce sales—which include products and services (barring travel, restaurant and event ticket sales) ordered via the internet over any device—will reach $1.915 trillion in 2016, accounting for 8.7% of total retail spending worldwide. While the pace of growth for overall retail sales is subdued, the digital portion of sales continues to expand rapidly, with a 23.7% growth rate for 2016.

eMarketer expects retail ecommerce sales will increase to $4.058 trillion in 2020, making up 14.6% of total retail spending that year.

Global Retail Ecommerce Sales Will Reach $4.5 Trillion by 2021

Cumulative data from Statista anticipates a 246.15% increase in worldwide ecommerce sales, from $1.3 trillion in 2014 to $4.5 trillion in 2021. That’s a nearly threefold lift in online revenue.

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Global B2B Ecommerce Sales Dominate B2C

In 2017, B2C ecommerce sales exceeded $2.3 trillion worldwide. B2B ecommerce, on the other hand, will reach $77 trillion. Those two data points represent a 234.78% difference in market size.

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Retail Ecommerce’s Global Spread Makes International Sales Non-Negotiable

According to Business.com, the 10 largest ecommerce markets in the world are:

China: $672 billion

United States: $340 billion

United Kingdom: $99 billion

Japan: $79 billion

Germany: $73 billion

France: $43 billion

South Korea: $37 billion

Canada: $30 billion

Russia: $20 billion

Brazil: $19 billion

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THE NEED FOR PROFESIONAL CONSULTANCY & OPPORTUNITY FOR MASSIVE GROWTH

For the first time ever, four consultancies have cracked Ad Age's ranking of the 10 largest agency companies in the world. With combined revenue of $13.2 billion, the marketing services units of Accenture, PwC, IBM and Deloitte sit just below WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu. Last year, only two consultancies—Accenture Interactive and IBM iX—made the top 10. IBM iX was the first to break into the top 10.

Given the experience of the team, Digital Clarity’s advisory and consultancy is in demand. With the recent growth in these business areas, and the rise of consultancies, it is confirmation that Digital Clarity is headed in the right direction for growth.

Digital advertising spending worldwide from 2017 to 2020 (in billion U.S. dollars)

Digital advertising is expected to grow to $335.5 billion by 2020.

In 2016, Facebook earned 79.38 billion U.S. dollars in digital revenue through online advertising. During the same period of time, search market leader Google generated 79.38 billion U.S. dollars through digital advertising channels.

A ranking of the ten most valuable U.S.-based internet companies by market capitalization. As of August 2017, Alphabet's market capitalization was 645 billion U.S. dollars. Third-ranked retail platform Amazon had a market cap of 471.7 billion U.S. dollars.

Internet companies generate their revenue through various means. Google, for instance, makes use of its advertisement services such as Google AdWords – which takes advantage of Google searches and appear as small advertisements next to search results – and Google AdSense which generates advertisements based on a user’s search history and location, among others. Advertisements based on AdSense appear all across Google-owned sites including YouTube and Google Finance. The online company also profits from the development of Android OS, licensing and mobile apps as well as the recent development of hardware such as the Nexus mobile device series and Google Glass.  In 2015, Google’s total revenue amounted to $74.54 billion and in 2017 exceeded $85 billion. Schematic technology following compares the major internet companies:

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MAJOR INTERNET COMPANIES SPEND

Social network Facebook is ranked second. It is the leading social network worldwide and has successfully managed to take advantage of the increasingly mobile online environment. In 2015, mobile accounted for 77 percent of Facebook's advertising revenues and is projected to amount to more than 60 billion U.S. dollars in 2021.

Amazon.com, the third largest U.S. internet company based on its market capitalization, generates in profit from its position as the world’s largest online retailer; in 2017, the company’s net revenue was of some $107.01 billion.

Despite operating internationally, Amazon generates the majority of its revenues in the United States and Canada. In 2014, Amazon’s North American net revenue was of close to $63.71 billion, with the majority of the revenue coming from electronics’ sales. Media sales (which include services such as Amazon Instant Video) amounted to some $12.48 billion.

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The Growth of the Marketing Led Companies in Market Capitalization

Revenue in the "Social Media Advertising" segment amounts to $32 billion in 2017.

Revenue is expected to show an annual growth rate (CAGR 2017-2021) of 10.9 % resulting in a market volume of $48,917m in 2021.

The average revenue per Internet user currently amounts to $11.45.

The revenue in the "Social Media Advertising" segment currently corresponds to 0.05 % of the country's GDP.

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WORLD'S MOST VALUABLE BRAND

Amazon has officially replaced Google as the most valuable brand in the world, according to brand consultancy Brand Finance. Amazon's brand value is $150.8 billion, an increase of 42% from 2016, based on business performance and marketing investment. The second most valuable global brand is Apple, at $146.3billion. Google is third highest, with a $120.9 billion valuation. (Business Insider.com)

GROWTH IN INVESTOR AWARENESS AND OUTREACH.

Digital Brand Media & Marketing Group, Inc. is initiating a significant effort to raise investor awareness on a global basis. The strategic outreach is directed at investors around the world who understand the digital marketplace and its expanding influence on consumer decisions. DBMM is targeting these new investors through a global digital and traditional integrated investor outreach campaign which will be run by Digital Clarity, with third parties, as required for distribution.

In the full industry context of dramatic expansion of digital footprints, there has been no direct correlation between DBMM's (increasing) revenues and its pps. Economic and industry analysts state the multiple for digital media has continued to grow to 25-30 times revenues. DBMM is in a long-term growth pattern both in scale and in revenues, begun in 2014. This has been a frustrating situation for DBMM and we look forward to large scale expansion which will address the issue directly and the pps will respond accordingly-very positively.

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FINANCIAL OVERVIEW/OUTLOOK

DBMM has been honing its commercial model since the acquisition of Digital Clarity ("DC") in 2011which has been cash-flow positive as an operating company since its acquisition. However, the incremental, significant cost of being a fully reporting company to the SEC, must be absorbed annually which is a long-term strategic decision as to the benefit of being a public company. Going forward, as the Company is scaling up, it obviously will take growth capital to expand proportionately. The good news is that the business had a turning point during 2015, when its revenues increased quarter-over-quarter to a 23% increase for the fiscal year. The increases have been re-invested into the business, thus increasing the cost of sales in the short term until the optimum cross-over point is reached. The Company continued to grow the scale in fiscal years 2015-2017 focusing on the digital marketing global triangle of London, New York and Los Angeles. This was in spite of being frugal.  Its margins continue in the range of 31-36%, and once the business reaches appropriate scale with assumed profitability and cross-over point, DBMM will become a very successful business for all its stakeholders.

The clients benefit immediately; the shareholders will benefit as the market cap grows. The media market multiple which far exceeds the manufacturing cap multiples, as digital marketing technology has become one of the fastest growing industries in the world today.

The business has been sound from the acquisition of DC, and the Company has been proving incrementally, but not nearly at pace the management would like because of the non-operating hurdles faced since the Company was required to re-audit in 2013, and the litigation there after, though no fault of DBMM.

Regarding DBMM’s place in the sector, it is strong. The industry environment continues to grow exponentially and the future of digital marketing as an essential strategy for any consumer-facing business is essential. DBMM’s has been honing its business model since the acquisition of its brand and is an industry leader for its size. DBMM’s increasing client base, coupled with decreasing debt and expenses, positions the Company as intended, thus attracting mezzanine financing.

For context, Benjamin Graham, a British-born investor who inspired Warren Buffet, repeated endlessly his colleagues said: “In the short term, the stock market is a voting machine. In the long run it’s a weighing machine that measures a Company’s true value.”

In terms of state of play, DBMM’s issues have always been public company hurdles, e. g. the cost of maintaining a public company, the cost of capital during the Great Financial Recession, when the only funding available was toxic and the micro-cap environment in general. No matter how high the positive margins, it was nearly impossible to stay ahead of the cost of capital. Then superimpose the only litigation the Company has had, and the actions required to pushback. Coincidently, DBMM has worked diligently to put toxic lending in the rear-view mirror, engage mezzanine financing at “normal” market rates, to be repaid out of increasing revenues, not equity.

Going forward, there will be an emphasis on investor awareness during fiscal years 2018 and 2019. DBMM is taking significant action to aggressively widen its brand exposure using a variety of digital and social channels. There are investors around the globe who understand the digital marketplace and its growing influence on consumer decisions. DBMM is targeting these new investors through a global digital and traditional integrated campaign which will be run by Digital Clarity, with third parties, as required for distribution.

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The world is evolving rapidly in how goods are purchased. The 21st Century consumer-oriented corporations are asset-light, idea-intensive sectors. Information is gathered digitally through sharing via digital technology platforms and social networks. The analytics and creative focus of Digital Clarity gives it a differentiation available to its clients as it individually designs an increase in ROI for those same clients. DC has earned a place at the table of professional advisors giving its clients strategic advantage which is measured and formidable. Orders are configured on-line after viewing goods in brick and mortar retail stores, then ordered on -line, increasingly via mobile devices. Tesla is a perfect example of disintermediation. "It doesn't have any dealerships. Customers can configure and order a car on-line, and test drive cars at company-owned showrooms."

DBMM delivers its value proposition as a labor-intensive endeavor, with human capital of knowledge and execution as differentiators. The Company will continue to scale up, and grow organically, while identifying acquisitions to grow client base and internal talent concurrently. A capital raise is underway for long-term capital needs to grow organically and by acquisition(s). The pace of growth of governed solely by available capital.

For several years, DBMM has had revenues which were never acknowledged in its market cap. The Company has always been grossly undervalued when compared to its audited revenues contained in its financial statements. DBMM’s business model is sound and will continue. Growth is only a function of capital infusion.

Fiscal Year 2017

We had approximately $55,000 in cash and our working capital deficiency amounted to approximately $3.3 million at August 31, 2017.

During the year ended August 31, 2017, we used cash in our operating activities amounting to approximately $28,000. Our cash used in operating activities was comprised of our net gain of approximately $560,000 adjusted primarily for the following:

Change in fair value of derivative liability of $776,858;

Amortization of debt discount of $32,083;

Additionally, the following variations in operating assets and liabilities during the year ended August 31, 2017 impacted our cash used in operating activity:

In our accounts payable and accrued expenses, including accrued compensation, of approximately $181,000, resulting from a short fall in liquidity and capital resources.

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Fiscal Year 2016

We had approximately $4,000 in cash and our working capital deficiency amounted to approximately $3.9 million at August 31, 2016.

During the year ended August 31, 2016, we used cash in our operating activities amounting to approximately $120,000. Our cash used in operating activities was comprised of our net loss of approximately $1,600,000 adjusted primarily for the following:

Fair value of preferred shares issued for services of $5,170;

Change in fair value of derivative liability of $1,007,007;

Amortization of debt discount of $69,500;

Additionally, the following variations in operating assets and liabilities during the year ended August 31, 2016 impacted our cash used in operating activity:

In our accounts payable and accrued expenses, including accrued compensation, of approximately $182,000, resulting from a short fall in liquidity and capital resources.

During the year ended August 31, 2016, we generated cash from financing activities of $120,500 which primarily consists of the proceeds from the issuance of loans and convertible debt aggregating $50,000, and proceeds from demand notes payable of $70,500.

Fiscal Year 2015

We had approximately $28,000 in cash and our working capital deficiency amounted to approximately $2.5 million at August 31, 2015.

During the year ended August 31, 2015, we used cash in our operating activities amounting to approximately $301,000. Our cash used in operating activities was comprised of our net loss of approximately $738,000 adjusted primarily for the following:

Fair value of preferred shares issued for services of $1,100;

Change in fair value of derivative liability of $47,800;

Amortization of debt discount of $270,666;

Additionally, the following variations in operating assets and liabilities during the year ended August 31, 2015 impacted our cash used in operating activity:

In our accounts payable and accrued expenses, including accrued compensation, of approximately $165,000, resulting from a short fall in liquidity and capital resources.

During the year ended August 31, 2015, we generated cash from financing activities of $269,500 which consists of the proceeds from the issuance of loans and convertible debt.

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Going Concern

The Company has outstanding loans and convertible notes payable aggregating $1.2 million at August 31, 2017and doesn’t have sufficient cash on hand to satisfy such obligations.  Subsequent to August 31, 2017, the Company has raised $192,000 from the issuance of new loan agreements.  The Company has received a non-binding commitment letter from an investor of $250,000 (plus a right of first refusal on additiona equity raise up to $3.0 million which will contribute to satisfying such obligations and fund any potential cash flow deficiencies from operations for the foreseeable future.

Accordingly, the accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

RESULTS OF OPERATIONS

Comparison of Results for the Years Ended August 31, 2017, August 31, 2016 and August 31, 2015

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We currently generate revenue through our Pay-Per-Click Advertising, Search Engine Marketing, Search Engine Optimization Services, Web Design, Social Media, Digital analytics and Advisory Services.

For the year ended August 31, 2017 our primary sources of revenue are the Per-Click Advertising, Web Design, and Search Engine Optimization Services. These primary sources amounted to 54%, 9% and 15% of our revenues during the year ended August 31, 2017. Our secondary sources of revenue are our Social Media and Email Media. These secondary sources amounted to approximately 22% our revenues during fiscal 2017.

We recognize revenue upon the completion of our performance obligation, provided that: (1) evidence of an arrangement exists; (2) the arrangement fee is fixed and determinable; and (3) collection is reasonably assured.

The increase in our revenues during fiscal 2017, when compared to the prior year period, is primarily attributable to an increase in volume of transactions from Search Engine Optimization, and Web Design Services during fiscal 2017.

Cost of sales during fiscal 2017 and 2016 is correlated to our revenues for the respective periods.

The decrease in general and administrative costs during fiscal 2017, when compared to 2015 is primarily due to a decrease in legal and professional fees.    

Interest expense, which include interest accrued on certain notes, as well as amortization of debt discount and the fair value of shares issued pursuant to embedded conversion features of certain convertible promissory notes, decrease during fiscal 2017 is primarily attributable to the amortization of debt discount which decrease, during fiscal 2017, when compared to the comparable prior year periods. The decrease in amortization of debt discount is primarily due to the issuance of a larger amount of convertible debt with beneficial conversion features and embedded conversion features during fiscal 2016 than 2017.

Gain on extinguishment of accrued compensation decreased during fiscal 2017 when compared to the prior years is primarily due to a non-recurring gain during fiscal 2016 and a lesser amount during fiscal 2017.

The increase on derivative liabilities is primarily attributable due a decrease in the Company’s estimated volatility use in the assumptions to compute its fair value at August 31, 2017 when compared to August 31, 2016.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company”, as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.

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ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS

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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

To the Board of Directors and Shareholders of

Digital Brand Media & Marketing Group, Inc. and Subsidiaries

  

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Digital Brand Media & Marketing Group, Inc. and subsidiaries (the "Company") as of August 31, 2017, 2016 and 2015, the related statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2017, 2016 and 2015, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has accumulated deficits and negative working capital.  This raises substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion in accordance with the standards of the PCAOB.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

        /s/ Liggett & Webb P.A.

 

  

We have served as the Company’s auditor since 2017.

 

New York, NY

May 29, 2018

 

 

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