SHAREHOLDER UPDATE — NOVEMBER 29, 2024
DBMM 10-K UPDATE OF 2024 FISCAL YEAR
Digital Brand Media & Marketing Group, Inc. (“The Company” and “DBMM”), and its brand, Digital Clarity (“DC”) filed its 10-K with the Securities & Exchange Commission via EDGAR today and, as part of best practice adopted by the company, have coincidently issued this update providing facts, data and information all in context, to put all stakeholders on the same page. Public audited reports are the best source of accurate metrics and the Shareholder Updates provide clarification and context. All interference from non-credentialed sources should be ignored as directed in the SEC Financial Disclosure regulations.
Progress from an unprecedented total win by DBMM’s Final Order of Dismissal at the end of the previous fiscal year and acknowledgment of all mitigating circumstances the Company stated when earlier filings were delayed and subsequently cured, were the untethered foundation for a return to normal business.
That result was positive, but also required a business model reassessment as the 2024 fiscal year exhibited an increasing pressure on the digital industry to evolve by utilizing tools being developed. DBMM and its operating unit DC were required to test what was becoming an increasingly commoditized marketing environment in which DC had a competitive advantage and in order to achieve full management consultancy, pivoted, as the Management has shared throughout the fiscal year.
In order to focus on the facts in a transparent, pragmatic, and integrated way, the company has distilled the 10-K and broken the update into digestible chunks to allow shareholders to read, and save for future reference and comparison, as the Company has pivoted its business model during fiscal year, while executing its growth blueprint with a concentrated emphasis on the US.
Following a period marked by both unprecedented challenges the Company encourages all investors, shareholders, and stakeholders to read the 10-K and reflect again, on the journey that a small company like DBMM has been on. The Shareholder Update will address the 10-K by various segments. The Company’s service providers, from independent accountants to attorneys to advisors, are licensed, credentialed and transparent. All data is factual, audited and provided as required by regulatory instructions. The parameters are established by the regulatory experts instructions. An important caveat is point in time which is not hard data, it is a point in time context with can change dramatically from quarter to quarter.
Going forward, all resources in time and capital will concentrate on sustainable growth of clients and revenues using new processes and tools which are now available. The Management is confident that the future is bright and growth has always been a function of capital and removal of mitigating circumstances, both positively achieved. Funding into the Company is secure and proven.
OPERATIONS MD&A
The Company encourages its shareholders to read through the industry environment text which has been revised extensively to reflect the rapidity with which the digital, post-pandemic environment, is developing new tools to market virtually all products. As businesses navigate the challenges of an increasingly competitive global marketplace, adopting innovative technologies has become essential. Artificial Intelligence (AI) is rapidly proving to be a transformative tool for optimizing marketing and sales strategies. AI has an enormous number of applications and moving parts, a complicated choice to apply to individualized templates for clients to achieve an optimum ROI.
By 2025, AI is expected to shift from being a competitive advantage to a fundamental requirement for businesses aiming to thrive in the fast-evolving digital economy.
While the changing business landscape has improved in many aspects, the economic and geopolitical environment will continue to be unstable. Digital Clarity has proactively adapted its approach, focusing on strategic areas and it is gaining support with AI methodology. Like algorithmic trading for marketing.
Building on DC’s increasing expertise in the B2B space, particularly within the SaaS and Tech sectors, DC has successfully realigned its consultancy model with a strong emphasis on AI-driven solutions. This pivot enables the company to deliver revenue-focused marketing leadership while minimizing investment in less targeted channels. These efforts ensure that Digital Clarity remains at the forefront of the industry for its size.
Reggie James, the Founder and Managing Director of Digital Clarity and the Chief Operating Officer of DBMM, said, “The marketing and sales landscape, like Digital Clarity, is on the brink of transformation, driven by the rise of AI. Its total, multi-faceted ability to deliver personalized experiences, automate key processes, and optimize performance is positioning it as a cornerstone of successful business strategies for 2025. Companies that delay AI adoption risk falling behind in a marketplace defined by agility and innovation.”
Why B2B is the Right Market at the Right Time
DC identified a major gap in the digital marketing sector following the Dismissal and as it grew during the 2024 fiscal year. Large portions of the B2B market, especially in the technology, software, and SaaS industries, were underserved. DC’s analysis determined that many companies lacked the strategic planning, actionable advice, and innovative approaches needed to drive sales growth and elevate their brand positioning. That is DC’s new entry point to target certain-size and sector companies. Development, integration and drilling down individually in the beta testing and then clients is a labor-intensive endeavor to be sustainable.
This discovery led DC to refine its model, focusing on B2B marketing individualized solutions. This shift will allow the Company to navigate various volatile conditions and finally look forward to position itself for long-term success in 2025 and beyond.
Today, some of the world’s most profitable companies are B2B organizations, benefiting from a shift in priorities and approaches. Insights show:
- Rising Marketing Budgets – Businesses are increasing investments in marketing to capture emerging opportunities.
- Excitement Around Generative AI – Technologies like AI are sparking new ways to engage customers and drive innovation.
- Evolving Skillsets – Creative and technical expertise are adapting to meet the demands of modern B2B marketing.
James went on, “From its inception, Digital Clarity has been at the forefront of marketing innovation, empowering businesses to navigate the complexities of the digital landscape and drive sales through effective strategies. From the early days of search engine marketing to the rise of social media, the team at Digital Clarity has consistently embraced cutting-edge technologies to deliver meaningful results for their clients. The philosophy is simple: nothing happens until a sale takes place, and most sales are driven by effective marketing.”
He added, “Today, as we enter the era of AI, the need for strategic marketing expertise is more crucial than ever. While AI presents incredible opportunities for automation, personalization, and data analysis, it also introduces new complexities that businesses must address. This is where DC’s extensive experience and forward-thinking approach come into play, helping companies make sense of data, AI tools, and the right strategies to integrate them into their marketing efforts. This is the seat at the table which must be retained to win industry awards and to ‘nail down’ competitive advantage”
Strong Outlook
2025 will be the year that DBMM will be able to shake off its shackles and shine. With capital infusion that will come from LTIs the only trajectory will be up. As shared during last fiscal year, the full execution of management’s blueprint, coupled with the pivot to AI and business development in new territories, the results for 2025 will reward those who invested in the vision.
Expanding Thought Leadership Across US Business Podcasts
- Reggie James has been invited to share his insights on marketing, technology, and AI as a guest on several high-profile US-based podcasts, including Blaine Bartlett, James Golden, and Steve Preda. These appearances have not only positioned RJ as a thought leader but also strengthened Digital Clarity’s footprint in the US market, building a reputation as a go-to expert in digital marketing and creating a competitive edge.
Highlights
2024 saw new communication channels emerge and become established into the mainstream. Again, DC was involved in Investor conferences and some major business podcasts. Here are some highlights:
- DBMM’s DC was honored to present at the AI & Technology Virtual Investor Conference hosted by OTC Markets (OTCM) on October 31, 2024. Among the lineup of QX and QB platform companies, DC stood out as the sole Pink Current presenter, underscoring DBMM’s ambition to uplist in the next fiscal year. The event served as a launchpad for fostering relationships among innovative presenters, solidifying Digital Clarity’s position in the AI and technology space.
- Reggie James (RJ) was an invited guest on the well-regarded podcast Office Hours with David Meltzer. Meltzer, Co-founder of Sports 1 Marketing and former CEO of the iconic Leigh Steinberg sports and entertainment agency, hosts one of the world’s top 25 business podcasts. RJ’s appearance highlighted his decades of expertise and DC leadership in AI and digital marketing.
Reggie James concluded, “This sets a benchmark for 2025 and we will be doing more of this activity to bring new eyes and ears to both Digital Clarity for new business acquisition, but also raise the profile of DBMM as an attractive, long-term investment opportunity.”
FINANCIAL STATEMENTS MD&A
REVENUES
Extract from MD &A 10-K 2024
“Our evolution to a full-service, dynamic digital marketing management consultancy with many moving parts, including third-party strategic alliances and representation spanning US geographies is ongoing. This is a dramatic change from Digital Clarity’s early business. Pay-per-click and search engine optimization service business has been fully commoditized and is no longer part of DC’s offering. Going forward among other things, the costs of a full management consultancy provide much higher revenues for longer contracted periods, but entail a longer cash conversion cycle. Likewise, the AI projects will be highly remunerative as development of innovative products provide for the maintenance of DC’s competitive advantage.“
In that context, 2024 fiscal year has been a tumultuous year for DBMM . While removing all hurdles in place with a Final Order of Dismissal, the foundations had to be totally revised as a full Management Consultancy, and the blueprint for execution put in place . But overlay the foundation with all the external industry, economic and geopolitical conditions in place with internal situations with client’s being merged into larger entities in two (2) major situations, while we had initiated growth plans into the US. Highly complex with many moving parts for a Company of DC’s size. The pivot to A1 and the new world was taking place at the same time as the client mix was changing.
Interesting event is one of the client’s is on its way back but as the larger entity. We thought this might occur and it is. All is negotiating stage, but very positive.
The revenues for 2025 are expected to be the highest in the public company history. DBMM as a full management consultancy utilizing AI tools, some of which will be proprietary to DBMM/DC as unique and sought after in the space. New clients, new revenues, new offerings equals new, expanded revenues — by a multiple. Competitive advantage will lead the industry for its size and be sought after as DBMM staffing, expertise and value offering will be the full offering and spun out to relationships established before and during the 2024 fiscal year.
SUPPORT FOR REVENUES OUTLOOK
Businesses are navigating a landscape that demands resilience, adaptability, and strategic foresight. Investing in the foundations of future growth is a strategic imperative.LTI’s see as steps into the ultimate goal of Uplisting, first to QB on way to NASDAQ.
Investing in people will be a cornerstone of success in 2025, driving innovation and advancing organizational goals. Research consistently shows that companies prioritizing workforce development cultivate a culture of continuous learning and adaptability, creating an environment where sustained growth and innovation thrive. Clients see this as positive reinforcement to Team Support to ‘handhold‘ and ensure execution and increased ROI.
Now is the time to act decisively, investing strategically to secure long-term success. Forward-thinking businesses understand that investment isn’t a one-time effort but an ongoing commitment to innovation and continuous improvement. As a future-focused company, DBMM embraces this philosophy, viewing growth as a dynamic process built on strong, evolving foundations designed to adapt and thrive in a changing marketplace.
EBITDA (pg 24)
This is a better measurement of point in time, while still including Derivative Liabilities which is only in place while Convertible Debentures are carried on the Balance Sheet. The Net Loss component is highly weighted by Derivative Liabilities and volatility of share price.
In EBIDA terms, the paper loss is ($58,560). Much more realistic which can turn positive in a quarter.
NET LOSS
There was no removal of aged debt since the 2023 fiscal year which would have removed a proportion of derivative liabilities and all ancillary liabilities as required by Sarbanes Oxley regulations when Convertible Liabilities exist, even though will be ultimately canceled and removed by Settlement, following past practice since 2020.
DERECOGNITION OF LIABILITIES
Following past practice , after collaborative discussions with the SEC and the PCAOB the Company removed $158,287 from various liabilities dating back over a decade.
As aged debt is removed, as done since 2020, a wide swath of liabilities will be moved. The negative knock on effect is substantial and when removed, can be dramatic.
TAX CARRY FORWARD
The Company has a tax carry forward advantage of $8.1 million for 2024. This is an advantage when negotiating acquisitions or financial weighting of strategic alliances or partnerships.
US/UK OPERATIONS
The Company will continue to focus on the US in a determined manner. Depressed revenues have an almost equal split in revenues. Entries into US markets should increase revenues in future reports.
MOVING FORWARD
The year 2024 has been a pivotal one for DBMM. Despite revenue pressures, the company has demonstrated resilience and strength, setting the stage for a dynamic and robust 2025. Feedback and external relationships forged have reinforced DBMM/DC outlook for fiscal year 2025.
As 2025 unfolds, DBMM is executing plans for organic growth, forging strategic partnerships, and identifying acquisition opportunities. With a focus on delivering value to shareholders, DBMM is poised to expand its client base and capture new opportunities in an ever-evolving business environment. The achievements are step by step and, as always, documented through quarterly filings, providing transparency and confidence in the company’s upward trajectory. DBMM is step by step achieving substantial growth in US and global clients and revenues which exceed any past levels and grow annually thereafter.
Once again, the Management extends heartfelt thanks to all stakeholders, shareholders—long-term investors and new shareholders alike—for their continued confidence and trust. DBMM is committed to rewarding this loyalty by driving significant shareholder value as it advances with impact and purpose into 2025. DBMM is externally and internally positioned for success.
Linda Perry and Reggie James
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.