DIGITAL BRAND MEDIA & MARKETING : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q) – marketscreener.com

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.

15

——————————————————————————–

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

16

——————————————————————————–

SOURCES FROM: DELOITTE DIGITAL AND SALESFORCE 2020

[[Image Removed: dbmm20210531_10qimg001.jpg]]


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.

17

——————————————————————————–

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.

[[Image Removed: dbmm20210531_10qimg002.gif]]

18

——————————————————————————–

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

[[Image Removed: dbmm20210531_10qimg003.gif]]

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 and first quarter of 2021 has proved challenging

for Digital Marketing Services. When the pandemic hit in

March 2020

, 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 labor

intensive and thus the Company must jumpstart the growth by significant capital

to grow simultaneously in multiple geographies.

19

——————————————————————————–

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.

KEY MILESTONES

During the fiscal year 2020 ending

August 31,2020

and through the first quarter

of 2021 ending

May 31, 2021

, 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, BUT GROWTH EBBS SLIGHTLY DURING PANDEMIC

Total UK digital ad spend fell 5% between January-June 2020 with the market

reflecting the impact of the Covid-19 pandemic,” according to PWC and IAB

(retrospective) public reporting of advertising data.

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).

20

——————————————————————————–

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. During 2020 as Covid-19 emerged, Digital Clarity began

to evolve their consultancy to take advantage of the increasing demand by

corporations to digitally 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.

[[Image Removed: dbmm20210531_10qimg004.gif]]

21

——————————————————————————–

THE IMPORTANCE OF STRATEGIC CONSULTANCY IN 2021 AND BEYOND

Digital Clarity is dedicated to helping its clients align their business

objectives and utilize digital marketing to acquire and retain customers.


The company’s marketing consultancy process is centered 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

prioritize 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

GLOBAL AD SPEND CONTINUES

[[Image Removed: dbmm20210531_10qimg005.gif]]

22

——————————————————————————–

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.

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.

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.

23

——————————————————————————–

[[Image Removed: dbmm20210531_10qimg006.jpg]]

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

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.

24

——————————————————————————–

GLOBAL RETAIL ECOMMERCE SALES WILL REACH $4.5 TRILLION BY 2021

[[Image Removed: dbmm20210531_10qimg007.gif]]

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.

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.

25

——————————————————————————–

[[Image Removed: dbmm20210531_10qimg008.gif]]

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.

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.

26

——————————————————————————–

[[Image Removed: dbmm20210531_10qimg009.gif]]


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.

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.

27

——————————————————————————–

[[Image Removed: dbmm20210531_10qimg010.gif]]

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

28

——————————————————————————–

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 to be determined

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 Company growth plan was first deferred until Brexit was passed and executed

with the EU, which it appears to have been done recently, but remaining

challenging and frustrating is the open SEC Matter, superimposed by a global

pandemic beginning in

March 2020

. There is now a vaccine which is rolling out,

and hopefully should eventually normalize the

SEC

which has been operating

remotely. Once a Final Order has been issued, the growth plan will recommence.

Clients and shareholders will benefit as the market cap grows acknowledging that

digital technology and marketing continues to be one of the fastest growing

industries in the world, even amidst the pandemic.

Once the growth trajectory 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.


The good news is DBMM’s standing in the sector is strong because Digital Clarity

as a brand is positive, particularly for its size. 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 during the fiscal year 2020 and through the third quarter of 2021,

revenues 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 operating unit has successfully received

UK

government relief during the

last fiscal year and anticipates additional relief during 2021. The business is

undergoing some real pain during Covid-19, as their clients and new client

development had to undergo re-modeling to adjust to an evolving retail business,

with an accelerating need to expand the online expansion and often the timing is

not in sync. The elephant generally cannot dance without a lot of

reorganization, especially not this fast. There has been revenue erosion while

the landscape is in this uncertainty. The

UK

Prime Minister locked down the

country beginning in

January 2021

, which only exacerbates the need for clients

to evolve its digital footprint with speed and unplanned risk inherent in that

approach. The risk adverse gradual evolution was preferred by the vast majority

of business, now has no choice. Long term that is a positive development for

Digital Clarity, but short term has impacted revenues negatively.

29

——————————————————————————–


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 remain 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.

NINE-MONTH PERIOD ENDED MAY 31, 2021

We had approximately $20,000 in cash and our working capital deficiency amounted

to approximately $5.7 million at May 31, 2021.

During the nine-month period ended May 31, 2021, we used cash in our operating

activities amounting to approximately $321,000. Our cash used in operating

activities was comprised of our net loss of approximately $530,000 adjusted

primarily for the following:


Accounts payable, accrued expenses, accrued interest, and accrued compensation,

of approximately

$284,000

, resulting from a short fall in liquidity and capital

resources.

Additionally, the following variations in operating assets and liabilities

during the nine-month period ended May 31, 2021 impacted our cash used in

operating activity:

We generated cash from financing activities of $306,246 which primarily consists

of the proceeds from notes payable.

NINE-MONTH PERIOD ENDED MAY 31, 2020

We had approximately $74,000 in cash and our working capital deficiency amounted

to approximately $4.7 million at May 31, 2020.


During the nine-month period ended

May 31, 2020

, we used cash in our operating

activities amounting to approximately

$192,000

. Our cash used in operating

activities was comprised of our net loss from continuing operations of

$458,440

adjusted for the following:

Nonrecurring gain in extinguishment of debt of $ 192,977

Additionally, the following variations in operating assets and liabilities

impacted our cash used in operating activity:


Accounts payable, accrued expenses, accrued interest, and accrued compensation,

of approximately

$283,000

, resulting from a short fall in liquidity and capital

resources.

During the nine-month period ended May 31, 2020, we generated cash from

financing activities of $307.228, which consist of the proceeds from the

issuance of loan payables.

30

——————————————————————————–


RESULTS OF OPERATIONS

Unaudited Consolidated Operating Results

For the Three Months Ended For the Nine Months Ended

Increase/ Increase/ Increase/ Increase/

May 31, May 31, (Decrease) Decrease May 31, May 31, (Decrease) Decrease

2021 2020 $ % 2021 2020 $ %

SALES $ 45,456 $ 82,001 $ (36,545 ) -45 % $ 120,538 $ 322,801 $ 322,801


100 %

COST OF SALES 50,417 47,241 3,176 7 %

150,156 240,578 (90,422 ) -38 %

GROSS PROFIT (4,961) 34,760 (39,721 ) NM % (29,618 ) 82,223 (111,841 ) NM %


COSTS AND

EXPENSES

Sales, general

and

administrative 138,079 92,860 45,219 49 %

377,173 345,249 31,924 9 %

Gain on

extinguishment

of debt – – – 0 % – (192,977 ) (192,977 ) 100 %

TOTAL

OPERATING

(GAIN)

EXPENSES 138,079 92,860 45,219 49 % 377,173 152,272 (161,053 ) 109 %

OPERATING GAIN

(LOSS) (143,040 ) (58,100 ) 84,940 146 % (406,791 ) (70,049 ) 336,742 NM

OTHER (INCOME)

EXPENSE

Interest

expense 54,315 78,411 (24,096 ) -31 % 192,274 257,147 (64,873 ) -25 %

Other Income – (12,577 ) 12,577 -100 % – (12,577 ) 12,577 -100 %

Change in fair

value of

derivative

liability (3,309 ) (4,593 ) (7,902 ) NM (68,864 ) (9,491 ) 59,373 NM

TOTAL OTHER

EXPENSE (51,006 ) 70,427 19,421 28 %

123,410 235,079 (111,669 ) -48 %


NET LOSS

$ (194,046 ) $ (128,527 ) $ 65,519

-51 %

$ (530,201 ) $ (305,128 ) $ 225,073

74 %

(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 three- and nine-month period ended

May 31, 2021

our primary sources of

revenue are the Web design and advisory services,

Per-Click Advertising

, and

Social Media. These primary sources amounted to 57%, 32%, 10% of our revenues

during the three-month period ended

May 31, 2021

.

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 the three and nine-month period ended

May

31, 2021

, 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.

During the nine-month period ended

May 31, 2021

, our cost of sales decreased due

to reduction in compensation commensurate with our decreased revenues when

compared to the prior period. During the three-month period ended

May 31, 2021

,

our cost of sales were consistent with the prior period.

The sales, general and administrative expenses during the nine-month period

ended May 31, 2021 were consistent when compared to the prior period. Such

expenses increased during the three-month period ended May 31, 2021 when

compared to the prior quarter due to increased business development activities.

31

——————————————————————————–


Gain on extinguishment of debt decreased during the nine-month period ended

May

31, 2021

, when compared to the comparable prior period. The decrease is

attributable to an analysis of certain liabilities based on initial assessments

performed by the Company during such period which deemed them extinguished

pursuant to statute of limitations. Such analysis was not performed in the

comparable current period.

Interest expense, which include interest accrued on certain notes and loans,

decreased during the three and nine-month period ended

May 31, 2021

primarily

attributable to the issuance in the comparable prior periods of more loan

payables with additional considerations.

The increase on derivative liabilities during the nine-month period ended

May

31, 2021

is primarily attributable to a decrease in the Company’s estimated

volatility used in the assumptions to compute its fair value at

May 31, 2021

when compared to

May 31, 2020

32

——————————————————————————–

© Edgar Online, source Glimpses