DIGITAL BRAND MEDIA & MARKETING : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)


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


The Company developed a document called the Creds Deck which provides a
description to prospective clients of Digital Clarity’s value proposition
http://www.dbmmgroup.com/wp-content/uploads/2020/11/Digital-Clarity-Creds-Deck_DB64F.pdf.

Coronavirus lockdown has halted many business processes starting from
manufacturing, supply chain to logistics, and marketing. Digital Clarity is no
exception, and the negative impact is measurable.

Some businesses have closed or paused their digital marketing activities
temporarily, because of this uncertainty. That mindset results in drastically
decreased online traffic, sales, engagement, conversation, and pushed down
search ranking.




Digital marketing is not a quick-fix solution to gain momentum. Therefore, it
does not give companies visibility overnight. Many companies using digital
marketing techniques such as search engine optimization (SEO) or social media
marketing, are already aware that implementations take three to four months'
time to achieve positive results. Our company mantra remains, "ROI is our DNA."



This means that although there has been a slowdown in existing business and new
business development has also slowed considerably there is a need for
reinforcement of the digital values proposition to bring or maintain a company's
brand front and center.



Operationally, fiscal year 2020 has been important in continuing the direction
of the Company and steering it toward a scaled growth plan which has been in
neutral while the Company addressed certain external challenges beyond its
control. This has also been impacted by the worldwide pandemic of Covid-19.
Nevertheless, The Company continued to focus on the positive, proven operating
model and used that model to a certain maintain of existing clients and through
its digital infrastructure, is perfectly placed to expand geographic reach to
new clients in 2021.



Through a turbulent 2020 to date, DBMM continues to build on its strengths. Like
the rest of the world, the effect of Covid-19 and the Pandemic that still
persists are a paramount concern, the Company has strong relationships within
the market will continue to extend its business focus to a wide variety of
industry verticals.



The heart of the business is its 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 and is differentiating and is its competitive advantage. This kind of
close relationship with its clients resulted in Digital Clarity being considered
a close professional and trusted advisor.



Why Digital Experts are in demand




The world is changing, and technology is taking the lead. Today, everything is
going digital -- entertainment, health, real estate, banking and even
currencies. This is, however, understandable. In North America alone, 95% of the
population are online (statista).



With everything turning to digital, it means companies are also jumping online
to market their businesses. And to survive the challenges of digital marketing,
brands need to keep up with the latest trends. Successfully reaching one's
target audience is no longer just putting out TV and print ads. These days,
social media is the new arena of digital marketers, with Statista claiming 4.6
billion people are active social media users as of October 2020.



To keep up with the ever-changing scene, digital marketing experts need to stay
in step with the evolving tech trends. Social media marketing companies like
ours work tirelessly to research consumers and what makes them engage with
brands. We try to find the best online solutions that will cater to our clients'
end-users' queries in the easiest and most cost-efficient way possible -- be it
by developing new technology or adapting to trends.



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Relentless Digital Growth Positions Digital Clarity as a Leader




The need for seasoned expertise and insight is in huge demand. Digital Clarity's
strength, heritage and reach in the digital marketing puts the DBMM brand in an
excellent position for investment and growth. Digital Clarity's strength in
Search Engine Marketing, Analytics and Social Media means that the Company is
ready to feed on that demand and leapfrog into a powerful revenue focused
vehicle.



Shoppers STILL Use a Mix of Digital Touchpoints DURING COVID-19 along the Buying
Journey

? In the discovery and evaluation part of the journey, search engines, social

media feeds, and influencers are popular ways for shoppers to get product

inspiration outside a brand’s properties.

? In the buying part of the journey, there are new types of purchase points

emerge. Mobile wallets are behind e-mail as a place to make purchases. And 14%

    of shoppers are making purchases through social media



Customers Still Face Silos Across Channels – THE DIGITAL LANDCAPE THROUGH THE
PANDEMIC

? Customers are accessing multiple touchpoints during a purchase but there is a

    significant disconnect within companies.


  ? 75% of consumers expect consistent interactions across all departments.

? However, 58% say that they feel like they’re communicating with separate

departments and not one company.

? And when it comes to service issues, 70% of customers expect all of the reps

    to have the same information about them, but 64% say that they have to
    re-explain issues.



Digital Sales Are Becoming More Active Than Holiday Period

? In today’s environment, unified channels and customer service are more

important than ever, as non-essential businesses closed their doors to help

slow the spread of Covid-19. This meant that retailers and shoppers alike had

    to pivot overnight to a digital-only reality.


  ? Digital sales growth by 18% in Q1 2020 compared to Q1 2019

? We see traffic growth by 13% in Q1 2020 compared to Q1 2019. – Desktop and

Social Surge in Traffic – In addition to the rise in digital commerce and

traffic, there are two more unusual trends.

? The first relates to desktop traffic. In Q1 2019, desktop traffic declined by

9%, but grew by 9% in Q1 2020. With people stuck inside and not on the move,

there’s a pronounced switch to desktop traffic and purchases.

? Another trend is that traffic from social media has grown quickly. In Q1 2019,

the share of traffic coming from social media was 6%. This jumped to 8% for Q1

    2020.



Verticals Experience Different Order Growth – the surge in digital commerce is
not evenly distributed



  ? Home related goods clearly saw astonishing growth, up 70% in Q1 2020.

? Learning and active apparel experienced growth over 35% in digital orders in

Q1 2020.

? However, luxury and general apparel only grew around 10% in Q1 2020, which is

    lower than their Q1 2019 performances.



Areas that Digital Clarity excel are areas that need to be considered today

? Market from Home – Deploy campaigns quickly from home, collaborate across

teams and keep marketers engaged with apps

? Engage Customers with Empathy – Listening to customers, use real-time data to

better understand their current situation and needs

? Personalize Digital Communications – Accelerate digital channel adoptions,

deliver the right message, to the right person, at the right time

? Optimize Budget Spends – Digital Clarity unify marketing performance and make

    real-time decisions to minimize the negative impact



Sources From: Deloitte Digital and Salesforce 2020




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Among, its range of services, Digital Clarity help companies 'get found' on
search engines like Google. The Market Share chart from Statista, we can see
that Google has the lion's share of the search market worldwide. As a Google
Premier Partner, Digital Clarity are well placed to advise, consult and grow
companies, in 2021 and beyond.



From Google's parent Alphabet's latest results, In the third quarter of 2020,
Google's revenue amounted to 46.02 billion U.S. dollars, up from 37.99 billion
U.S. dollars in the preceding quarter. Google's main revenue source is
advertising through Google sites and its network.



How machine learning is enhancing digital marketing strategy




Digital Clarity applies strategy to algorithmic based machine learning tools.
The launch of Google's new machine learning tool, RankBrain which contributes to
search engine results, left many people wondering what impact machine learning
would have in the realm of Search Engine Optimization (SEO).



With the tech industry going crazy for all things Artificial Intelligence (AI),
Natural Language Processing (NLP), machine learning, and chatbots - companies
like Digital Clarity help brands make sense of this ever-changing landscape.



Machine learning and Digital Marketing




Because machine learning is being used to solve a huge set of diverse problems
with the help of data, channels, content, and context, as marketers, Digital
Clarity stands to benefit from this information and phenomenon as a whole. But,
as the information we gather grows, digital marketing as we know it is set to
change. Digital Clarity will be at the forefront of this change.



Search Engine Optimization



From an SEO point of view, keywords could become less important. Search engines
receive more revenue for ads when they provide users with higher quality
content. As a result, the algorithm they use needs to be more focused on
providing each user with content that will serve a specific purpose, rather than
be packed with the right keyword density. Therefore, the need to start thinking
about the quality of your content as a ranking factor on search engines. This is
where Digital Clarity come and help shape content 'in the right way' to help it
get found.



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Pay Per Click (PPC) Campaigns


With Google launching new “smart” features such as Google Smart Bidding, Smart
Display Campaigns, and In-Market Audience to help businesses maximize
conversions, it is clear that the future of PPC lies in machine learning.

To become more strategic and take PPC campaigns to the next level for its
clients, Digital Clarity:

? Get to grips with the metrics that are most valuable to your business
? Understand obstacles that could get in the way of meeting your goals
? Know the underlying performance drivers to make more strategic decisions




Search - overall



Search makes up half (52%) of this, increasing on par at 15% to £3.3bn, next is
non-video display at £1.33bn (+9%), then video display £967m (40%). Classifieds
remains at £726m and other remained at £41m.



Digital Clarity embrace Google‘s Machine Learning marketing suite




Machine learning and AI have grown at a rapid pace and are an integral part of
day to day search advertising management and planning. Though machine learning
has been an integral part of the ad world, what has been more significant has
been the addition of Artificial Intelligence or AI. According to a recent report
in The Harvard Business Review by Deloitte, AI in Digital Marketing is not just
getting bigger, it's getting far more persuasive



MIT researchers recently unveiled a chip that can perform inference using neural
network computations three to seven times faster than previous chips, and with
up to 95 percent less power consumption. Dozens of companies working on new
generations of AI chips-for use both in and outside of data centers-are
attracting significant investment. These companies raised more than $1.5 billion
in funding last year, nearly twice the amount they raised the year before.



According to Gartner, 80% of emerging technologies will have AI foundations by
2021 and beyond.

Digital Clarity perfectly positioned for the future

According to Gartner’s Digital Business Acceleration report: Where to Focus Now,
Enterprises have the intention of becoming more digital due to COVID-19.


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Content Marketing



Although still extremely important, the internet has become inundated with too
much content. There is consensus among companies that in order to succeed,
brands need to be creating content that is valuable to readers. To do this, you
need to understand consumer trends, data and engagement. Machine learning tools
alongside Digital Clarity's strategic approach allows its clients to reduce the
amount of time spent tracking data, as well as better decipher that data to
create actionable tasks that will lead to success.





The Growth of Digital Marketing & Consultancy Services

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The skill set historically owned by agencies offering disciplines such as UX,
design, creativity, customer-centric data analytics and customer engagement is
now being immersed with large consultancy businesses whose traditional bread and
butter was Digital Transformation.



Accenture, Deloitte, IBM, KPMG, McKinsey and PricewaterhouseCoopers rank among
the most aggressive players in acquiring and partnering with agencies such as
Digital Clarity. They present not only an opportunity for Digital Clarity but
also a prospective exit and investment opportunity.



Digital Clarity have continued to develop their Digital Consulting and Strategy
Planning offering. The forward looking program is to be a recognized leader in
this field and fulfill companies seeking Digital Transformation for their
originations.



Digital Marketing Services



There is no denying that 2020 has proved challenging for Digital Marketing
Services. When the pandemic hit in March, many companies' long-term plans and
strategies were thrown out the window, as everyone from the frontlines to the
C-suite shifted into fire-fighting mode. Many worked around the clock by
leveraging remote technology.



Most businesses, except for those engaged in essentials, have been at a
standstill and enterprises are cutting back on costs. The axe falls on
marketing. The virus has brought most scheduled digital marketing plans to a
grinding halt or slowed them down. The impact is felt in digital marketing, with
predicted patterns now appearing skewed.



During the main part of the lock-down., Google announced $800 million in funding
and grants for businesses advertisers. It has on offer $ 340 million in credits
for active advertisers. 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 labour
intensive and thus the Company must jumpstart the growth by significant capital
to grow simultaneously in multiple geographies.



The Company’s outlook remains robust for 2021 and the foreseeable future,
particularly as businesses adjust and redirect their retail business to online
digital marketing in the COVID Post COVID world.




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Key Milestones


2020 revenues decreased due to external circumstances out of the company’s
control which placed enormous pressure on the operating business.




Despite these circumstances, the client base is expanding in base number and the
size of client serviced. At any point in time, our clients represent a variety
of industries. Many of these clients choose to operate under an NDA as our
clients see DBMM as a competitive advantage. Under that disclaimer, we cannot
share all clients' names, but here are a few key clients representing diverse
verticals, as follows:


1. Digital Clarity shortlisted for prestigious UK Search Awards in the hotly

contested ‘Best Use of Search’ along with client Bentley SYNCHRO, a global

construction project management software company that supports the

professional needs of those responsible for creating and managing the world’s

     infrastructure.



2. Synergy SKY, a Norwegian based company that develops and markets software

platforms to manage all meetings and video conferences, announce online

     marketing partnership with Digital Clarity.



3. Digital Clarity release SEO Guides for business during Covid-19 Pandemic. The

company has a long history with Google search both paid and organic, with

     these guides specifically focusing on three core areas:




  ? The Importance of a Strong Internal Linking Strategy


  ? How to Get to the Top of Google


  ? How Much Does SEO Cost?



4. The Luxury Property Show partners with Digital Clarity. The Luxury Property

Show at Olympia London and is the only event in Europe dedicated to luxury

     and high-value property aimed at High net Worth Individuals.



5. Ad World Masters, a worldwide ranking of agencies based on state-of-the-art

scoring algorithms, has named its top agencies for 2019 – worldwide. Digital

Clarity has won a Silver award for the United Kingdom. Ad World Masters

Agency of the Year highlights the best agencies around the world, based on

     its underlying technology and unique data.



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, spans a wide range of industries.

Digital Clarity’s services are in demand and the company is pursuing
opportunities in Formula 1, Aviation and high-end marketing for Luxury Brands.

Core industry verticals for Digital Clarity include: Managed Service Providers,
Unified Communication Companies and discretionary advice for professional
service providers.

SEARCH REMAINS KEY IN UK AS GROWTH CONTINUES INTO 2020 AND BEYOND

Total UK digital ad spend was up 13% year on year in the first six months of
2019, according to IAB UK’s half year Adspend update.

Conducted with PwC, the analysis shows that Display (video) and Search were the
biggest drivers of growth between January and June 2019 – up 27% and 13%
respectively.

Search now accounts for £3.7 billion of total H1 digital ad spend, while
combined Display (video and non-video) is worth £2.8 billion, a 17% annual
uplift. Non-video remains the largest Display format (up 8% YoY to £1.45
billion), but video formats are growing fast (up 27% to £1.32 billion).




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THE NEED FOR PROFESSIONAL CONSULTANCY & OPPORTUNITY FOR MASSIVE GROWTH




Four consultancies lead 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.


THE GROWTH OF DIGITAL TRANSFORMATION WORLDWIDE




The global digital transformation market size was valued at USD 284.38 billion
in 2019 and is expected to expand at a compound annual growth rate (CAGR) of
22.5% from 2020 to 2027. Digital Clarity have over 2020, developed a consulting
process to take advantage of the demand by corporations to digital transform
their organization for 2021 and beyond.



Growing demand for the adoption of the Internet of Things (IoT) across
industries is promoting the introduction of connected and data-rich solutions.
These solutions are capable of embedding intelligence into business operations
to facilitate better and more effective customer engagements. Growing usage of
smartphones, mobile devices, and applications is promoting digitization.



Digital transformation supports organizations in mitigating risks and handling
disruption such as marketplace fluctuation, corporate restructuring, and
geopolitical environment that are unanticipated, and can lead to unpredictable
results.




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The importance of Strategic Consultancy in 2021 and beyond

Digital Clarity is dedicated to helping its clients align their business
objectives and utilise digital marketing to acquire and retain customers.




The company's marketing consultancy process is centred around a brands business
objective. The approach is consultative and leverage's years of expertise within
the digital marketplace and across a wide range of industry sectors.



Alongside helping companies understand their ‘why’, the company also helps shape
a robust and measured strategy to achieve business objectives.




Over the years, Digital Clarity has identified that all too often clients are
unclear why, how and where to invest their budgets to get the best return. In
response, the company has developed a Strategic Consultancy service helps
prioritise investment and resources to achieve the given goals.



Digital Clarity has created a unique Diagnosis Workshop that helps brands
identify needs as well as assess the opportunity available. The core focus is to
help reduce wastage and increase results.




Areas of focus include:



  ? Cost analysis


  ? Audit current channels


  ? Digital strategy planning


  ? ROI projection planning


  ? Digital consulting & training





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GLOBAL AD SPEND CONTINUES

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Competitive landscape



Digital advertising is the fastest-growing segment of the global market for
advertising spending. The increasing use of smartphones and the availability of
cheap internet services are the two major factors propelling the growth
prospects for this market. More than 30% of the companies are planning to spend
around 75% of their advertising expenditures on digital marketing within the
next five years.



"U. S. Marketers are expected to spend $110.1 billion on digital ads this year,
or 51% of the $214.6 billion total U.S. advertising spending forecast, excluding
political ads. Newspapers, radio, magazines, and local television now account
for just 21% of the U.S. ad market." From The Wall Street Journal

DIGITAL CLARITY HAS A COMPETITIVE ADVANTAGE




Digital Clarity operate in a highly commoditized market but have over the years
build a stellar reputation that makes it different from its competitors. Some of
these areas include:



  1. Our DNA is Strategically Driven

We believe the path to successful customer acquisition lies in understanding a
client’s business – not just running a campaign. We seek to help clients
understand that success has to be objective and measurable.



  2. We are Business Led

Digital marketing is not a cost but an asset. Not a line in a spreadsheet but an
emotive force that if done right, will bring real business change and growth.




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  3. We are Digital Thinkers

Marketing has to be at the heart of the business. Delivering real innovation in
digital marketing requires not just knowledge but authority and bravery. We
think digital. We drive results.



  4. Our goal is to deliver Digital Performance

We help our clients to understand their goals and objectives, using digital
marketing to drive new business opportunities and retain their current
customers.

In April 2020, HIS Markit, research firm, reported: “Each dollar that companies
spent on advertising in the United States last year, led to $9 in sales.

THE GROWTH OF SOCIAL MEDIA E-COMMERCE




Enabling consumers to finalize a purchase while remaining within social apps has
been a goal for social platforms for some time now. Social commerce is seen to
have the potential to be a major revenue generator and an important way to
diversify revenue streams beyond advertising. Across Asia, networks like WeChat
and Line have successfully facilitated commerce via their platforms, allowing
consumers to carry out a range of commerce activities from booking taxis to
paying for restaurant bills or items in-store.



But social commerce has been a tough sell in many Western markets. Online
consumer habits here can be difficult to change, especially when it comes to the
potentially sensitive information involved in financial transactions. Social
media can play a big role in the purchase journey right up to the point of
purchase, but the appetite to complete a final purchase within the platform
remains low. Most will move to retail sites. These benefits must be
intrinsically social or deeply embedded with payment systems, and must be
grounded in consumer-engagement strategies, in order for social commerce to
achieve the roaring success seen in APAC.



The prospect of using "buy" buttons on social media in the U.S. has not quite
gained traction. The growing role of social networks as a way of researching
products does, however, provide social video with a strong value-proposition in
The Social Path to Purchase % who say they do the following furthering the
social commerce agenda in this market. In the U.S.

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The expectation is that US ecommerce sales will surge 35.8% to $190.47 billion,
offsetting brick and mortar declines in 2020 holiday season.

Source: emarketer.com



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WORLDWIDE E-COMMERCE GROWTH OPPORTUNITIES




Retail e-commerce sales worldwide continue to grow exponentially year on year
and projected to grow to $4.5 trillion by 2021. Online shopping is one of the
most popular online activities worldwide, Goldman Sachs expects on-line shopping
retail sales in China to grow to $1.7 trillion by 2020. Usage varies by region.



Global Retail Ecommerce Sales Will Reach $4.5 Trillion by 2021

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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 eCommerce retail sales to hit $4.9 trillion by 2021




New studies projected that the worldwide retail eCommerce sales will reach a new
high by 2021. Ecommerce businesses should anticipate a 265% growth rate, from
$1.3 trillion in 2014 to $4.9 trillion in 2021. This shows a future of steady
upward trend with no signs of decline



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But, what’s even more significant is that global eCommerce sales have been
steadily eroding the worldwide retail market. In fact, by 2021, it will account
for 17.5% of the total global retail sales.




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Omnichannel shopping will become more prevalent




As the lines blur between the physical and digital environment, multiple
channels will become more prevalent in customers' path to purchase. This is
evidenced by 73% of customers using multiple channels during their shopping
journey. What it means for eCommerce is to understand how their customers buy,
which marketing channels do they engage with, and their motivations and main
drivers to purchase. In the simplest sense, omnichannel shopping means decoding
what, where, when, why, and how people are purchasing the products you sell on a
particular channel.


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Every single touchpoint is important because it puts every single piece of the
puzzle into a whole story. Knowing your customers' touch points before they
purchase will better inform your brand of how to promote your products and
allocate your marketing budget. More and more people are doing their shopping on
social media platforms. With the improvement of social media's selling
capabilities, social media platforms are more than just advertising channels.
People can now conveniently and quickly purchase products on their chosen social
media platform.



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B2B eCommerce is a bigger giant

B2B (business-to-business) eCommerce is the online selling and marketing of
products from one business to another. And when compared to the B2C
(business-to-consumer) eCommerce industry, B2B eCommerce is projected to be two
times higher than B2C by 2020.

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In the US alone, B2B eCommerce sales will hit 1.184 trillion dollars by 2021.




The predominance of B2B ecommerce means that B2B businesses must improve and
simplify their shopping journey, channeling the B2C ordering experience. The B2B
shopping experience is a lot more complicated than that of a B2C buyer.



Because of the nature of the transaction, B2B buyers usually need to go through
various steps, including sales representative interaction, negotiations, and
approvals before they can make a successful purchase. In short, B2B eCommerce
businesses must adapt to a more seamless transaction building advanced
functionality quote management, price negotiation, easy ordering, order and
inventory management for the B2B market.



According to Forbes Magazine in 2020 the largest ecommerce markets are:




1  China:          $672 billion
2  United States:  $340 billion
3  United Kingdom: $99 billion
4  Japan:          $79 billion
5  Germany:        $73 billion
6  France:         $43 billion
7  South Korea:    $37 billion
8  Canada:         $30 billion
9  Russia          $20 billion
10 Brazil          $19 billion




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GROWTH IN INVESTOR AWARENESS AND OUTREACH.




During 2021, Digital Brand Media & Marketing Group, Inc. will initiate a
significant effort to raise positive awareness of DBMM's growth potential on a
global basis. The Company had to defer its 2020 plans until certain SEC Matters
regarding the delinquent filings brought current in July 2018, remain open. The
global pandemic made it impossible to initiate any Investor Awareness Programme.



Hopefully in 2021 the strategic outreach will be directed at investors around
the world who understand the digital marketplace and its expanding influence on
consumer decisions. DBMM will target 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 all areas, the
Company will act in the interests of all stakeholders.



In the full industry context of dramatic expansion of digital footprints, there
has been no direct correlation between DBMM's revenues and its share price.
Economic and industry analysts have opined that the industry multiple continues
to grow to, in some cases, 25-30 times revenues. DBMM will expand its client and
geographic scale, thus increasing revenues. There were matters outside of DBMM's
control which caused growth to be in neutral, and in 2020 the pandemic threw all
planning into disarray. With capital infusion, 2021 will follow the model of a
growing client base and geographic reach until it achieves a TBD level of
profitability. This benchmark will replicate successful industry models in
digital technology and marketing.



FINANCIAL OVERVIEW/OUTLOOK



DBMM has been honing its commercial model since the acquisition of Digital
Clarity ("DC") in 2011 which has been cash-flow positive as an operating company
since its acquisition. External events outside of DBMM's control has precluded
the growth expected to this point, however, its margins will continue to be
strong on an annual basis, and once the business reaches appropriate scale with
assumed profitability and cross-over point, DBMM trajectory suggests a resultant
very successful business for all of its stakeholders.



The growth trajectory anticipated is expected during 2020. Once that occurs, the
clients benefit immediately due to a wider range of resources; the shareholders
will benefit as the market cap grows. The media market multiple far exceeds the
"old" manufacturing multiples, as digital technology and marketing has become
one of the fastest growing industries in the world today.



DBMM's place in the sector is strong. The industry environment continues to grow
exponentially and the future of digital marketing as an essential strategy for
any consumer-facing business has been proven over-and-over as certain retail
businesses are forced to close their doors for lack of or an ineffective digital
presence. DBMM's brand, Digital Clarity, increases its valuation with client
case studies and industry awards resulting in its being considered a leader in
the sector for its size. DBMM's increasing client base, coupled with decreasing
certain kind of debt and expenses, positions the Company to attract mezzanine
financing, something sought after by many and achieved by few.



Coincidently, 2020 results have slowed down temporarily due to Brexit unease in
the UK and clients concern about trade issues with or without the European
Union. So in the midst of the uncertainty caused by the Brexit slowdown, the
COVID -19 global outbreak has caused further slowdown as clients paused and
business development much different during an initial lockdown , then lifted
only to be reinstated on November 5, 2020. That only made the uncertainty
further exacerbated, while clients need to extend or double down on their
digital footprint as the industry has become essential during the pandemic.
Nevertheless, Digital Clarity is revising its model to adjust to changing
circumstances, when client revenues are paused or delayed.



The Company received a commitment for future working capital in order to grow
the Company in key markets, with the intent to move to DBMM profitability
following a return to normal trading. At that point, DBMM would not require
future financing until it was ready to acquire 1-2 additional companies to
complement and further develop the digital marketing business. Growth capital
will increase as the client base re-balanced and expands in size and scope.



Going forward, there will be an emphasis on investor awareness as soon as the
SEC dismissal has been affirmed by the full commission. DBMM has been current in
its filings since July 2018 and is encouraged by the outlook after normal
trading has recommenced. DBMM intends to make significant strides in
aggressively widening its brand exposure using a variety of digital and social
channels. There are investors around the globe who understand the digital
marketplace and its increasing influence on consumer decisions. DBMM will be
targeting these new investors in the public market through a global digital and
traditional, integrated campaign which will be run by Digital Clarity, with
third parties, as required for distribution.



The expectations for fiscal year 2021 remains to return to normal trading
following affirmance of the dismissal by the full commission. The Company
intends to move ahead thereafter to the scaled, growth plan in multiple
geographies to benefit all stakeholders, being mindful of the impact of the
global pandemic.




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Fiscal Year 2020


We had approximately $34,000 in cash and our working capital deficiency amounted
to approximately $5.1 million at August 31, 2020.




During the year ended August 31, 2020, we used cash in our operating activities
amounting to approximately $276,000. Our cash used in operating activities was
comprised of our net loss of approximately $656,000 adjusted primarily for the
following:


Additionally, the following variations in operating assets and liabilities
during the year ended August 31, 2020 impacted our cash used in operating
activity:




Accounts payable, accrued expenses, accrued interest, and accrued compensation,
of approximately $342,000, resulting from a short fall in liquidity and capital
resources, offset by a non-recurring gain on extinguishment of debt.



During the year ended August 31, 2020, we generated cash from financing
activities of $280,638 which primarily consists of the proceeds from demand
notes payable of $347,728, offset by repayments and officer loans of $ 67,090.




Fiscal Year 2019



We had approximately $17,000 in cash and our working capital deficiency amounted
to approximately $4.4 million at August 31, 2019.




During the year ended August 31, 2019, we used cash in our operating activities
amounting to approximately $247,000. Our cash used in operating activities was
comprised of our net loss of approximately $676,000 adjusted primarily for the
following:


Change in fair value of derivative liability of $48,419.

Additionally, the following variations in operating assets and liabilities
during the year ended August 31, 2019 impacted our cash used in operating
activity:




In our accounts payable and accrued expenses, including accrued compensation, of
approximately $334,000, resulting from a short fall in liquidity and capital
resources.


During the year ended August 31, 2019, we generated cash from financing
activities of $232,958 which primarily consists of the proceeds from demand
notes payable of $231,424.



Going Concern


The accompanying consolidated financial statements have been prepared on a going
concern basis. The financial statements do not reflect any adjustments that
might result if The Company is unable to continue as a going concern.




The Company has outstanding loans and convertible notes payable aggregating $1.9
million at August 31, 2020 and doesn't have sufficient cash on hand to satisfy
such obligations. The preceding raise substantial doubt about the ability of the
Company to continue as a going concern. However, during fiscal year 2020, loans
of $282,342. were raised from the new loan arrangements. The Company also has a
non-binding Commitment Letter from an investor of $250,000 which also includes a
right of first refusal on additional capital raise up to $3 million which will
contribute to satisfying such obligations and fund any potential cash flow
deficiencies from operations for the foreseeable future.



Accordingly, the accompanying consolidated 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.



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RESULTS OF OPERATIONS



Comparison of Results for the Years Ended August 31, 2020, and August 31, 2019



                                                      Consolidated Operating Results

                                                      For the Years Ended August 31,
                                                                      Increase/            Increase/
                                                                      (Decrease)           (Decrease)
                                      2020            2019          $ 2020 vs 2019       % 2020 vs 2019

SALES                              $   268,957$   415,662$       (146,705 )                -35 %

COST OF SALES                          241,665         382,792             (141,127 )                -37 %
GROSS PROFIT                            27,292          32,870               (5,578 )                -17 %

COSTS AND EXPENSES
 Sales, general and
administrative                         434,164         516,942              (82,778 )                -16 %
TOTAL OPERATING EXPENSES               434,164         516,942              (82,778 )                -16 %

OPERATING LOSS                        (406,872 )      (484,072 )             77,200                  -16 %

OTHER (INCOME) EXPENSE

 Interest expense                      270,698         143,971              126,727                   88 %
 Other income                          (12,728 )             -              (12,728 )                 NM
 Gain on extinguishment of debt        (10,000 )             -              (10,000 )                 NM
 Change in fair value of
derivative liability                       944          48,419              (47,475 )                -98 %
TOTAL OTHER EXPENSE                    248,914         192,390               56,524                   29 %

NET LOSS                           $  (655,786 )$  (676,462 )$        (20,676 )                 -3 %




NM: not meaningful


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, 2020 our primary sources of revenue are the
Per-Click Advertising, Web Design, and Social Media. These primary sources
amounted to 72.24%, 6.86% and 10.12% of our revenues during the year ended
August 31, 2020.




Revenue is recognized upon transfer of control of promised or services to
customers in an amount that reflects the consideration the Company expect to
receive in exchange for those services. The Company enter into contracts that
can include various combinations of services, which are generally capable of
being distinct and accounted for as separate performance obligations. Revenue is
recognized net of any taxes collected from customers, which are subsequently
remitted to governmental authorities.



The decrease in our revenues during fiscal 2020, when compared to the prior
year, is due to Brexit unease in the UK and clients concern about trade issues
with or without the European Union, and the uncertainty associated with COVID-19
and its impact on Digital Clarity's clients.



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Cost of sales during fiscal 2020 decreased primarily from the receipt of an UK
tax credit, and to a lesser extent, reduction in personal payroll.is correlated
to our revenues for the respective period.



The decrease in general and administrative costs during fiscal 2020, when
compared to the prior year, primarily as a result of decreased in professional
fees and travel expenses due to COVID-19.




Interest expense, which include interest accrued on certain notes and loans,
increased during fiscal 2020, due to an additional consideration to satisfy its
obligations under certain unsecured loans payable when compared to the prior
year.


Other income, which include a non-recurring COVID-19 grant from the UK
Government to support small businesses during the fiscal 2020. Which did not
occur in 2019




Gain on extinguishment of debt increased during fiscal 2020, when compared to
the prior year. The increase is attributable to a non-recurring analysis of
certain liabilities performed by the Company during such period which deemed
them extinguished pursuant to statute of limitations.



The decrease on derivative liabilities is primarily attributable to an increase
in the Company's estimated volatility used in the assumptions to compute its
fair value at August 31, 2019 when compared to prior year, while the main
assumptions in computing the derivative liabilities did not vary significantly
between fiscal 2020 and 2019.

© Edgar Online, source Glimpses



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