10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: May 31, 2015

TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from ________ to ________

Commission file number: 333-85072

DBMM GROUP

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

WWW.DBMMGROUP.COM

(Exact name of small business issuer as specified in its charter)

747 Third Avenue, New York, NY 10017

(Address of principal executive offices)

Florida

State of incorporation

59-3666743

IRS Employer Identification No.

(646) 722-2706

(Issuer's telephone number, including area code)

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

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

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

Large Accelerated Filer         o	Accelerated Filer                         o
Non-Accelerated Filer            o	Smaller Reporting Company      X

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

Yes o             No X

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date:

Date	Shares Outstanding
September 23, 2015	4,414,975

INDEX

	Page No
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Consolidated Financial Statements (Unaudited)
Balance Sheets	F-1
Statements of Operations	F-2
Statements of Cash Flows	F-3
Notes to Unaudited  Consolidated Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Submission of Matters to a Vote of Security Holders	22
Item 5. Other Information	22
Item 6. Exhibits	22
SIGNATURES	22

Page 2

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
		May 31, 2015	August 31, 2014
		(Unaudited)
ASSETS
CURRENT ASSETS
	Cash	$ 34,185	$ 52,747
	Accounts receivable, net	80,175	74,511
	Prepaid expenses and other current assets	1,363	1,481
	Total current assets	115,723	128,739
	Property and equipment - net	5,934	6,223
TOTAL ASSETS		$         121,657	$ 134,962
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable and accrued expenses	$ 416,275	$ 377,765
	Accrued interest	121,533	65,152
	Accrued compensation	582,713	470,640
	Loans payable	290,800	218,300
	Derivative liability	356,009	305,207
	Convertible debentures, net	828,693	552,063
TOTAL CURRENT LIABILITIES		$ 2,596,023	$ 1,989,127
STOCKHOLDERS' DEFICIT
	Preferred stock, Series 1, par value .001; authorized 2,000,000
	shares; 1,970,185 and 870,185 shares issued and outstanding	1,970	870
	Preferred stock, Series 2, par value .001; authorized 2,000,000
	shares; 0 and 0 shares issued and outstanding	-	-
	Common stock, par value .001; authorized 10,000,000 shares; 4,414,975 and 3,613,791 shares issued and outstanding	4,415	3,614
	Additional paid in capital	9,760,175	9,724,799
	Other comprehensive loss	3,579	(12,796)
	Accumulated deficit	(12,244,505)	(11,570,652)
TOTAL STOCKHOLDERS' DEFICIT		(2,474,366)	(1,854,165)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$ 121,657	$ 134,962
See Notes to Unaudited Consolidated Financial Statements

F-1

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
		For the Three Months Ended May 31,		For the Nine Months Ended May 31,
		Unaudited
		2015	2014	2015	2014
SALES		$ 111,192	79,902	$ 368,384	292,341
COST OF SALES		78,237	47,561	242,862	152,103
GROSS PROFIT		32,955	32,341	125,522	140,238
COSTS AND EXPENSES
	General and administrative	41,605	64,792	178,580	165,507
	Compensation expense	51,000	89,999	171,000	379,627
	Legal and professional fees	64,901	76,886	196,369	200,572
TOTAL OPERATING EXPENSES		157,506	231,677	545,949	745,706
OPERATING LOSS		(124,551)	(199,336)	(420,427)	(605,468)
OTHER INCOME (EXPENSE)
	Interest expense	(65,647)	(147,129)	(261,623)	(542,698)
	Gain/ Loss on derivative liability	(6,593)	591,106	8,198	122,400
					-
TOTAL OTHER INCOME (EXPENSE)		(72,240)	443,977	(253,425)	(420,298)
NET INCOME  (LOSS)		(196,791)	244,641	(673,852)	(1,025,766)
OTHER COMPREHENSIVE LOSS
	Foreign exchange translation	58	(1,271)	16,375	(2,175)
COMPREHENSIVE LOSS		$ (196,733)	$ 243,370	$ (657,477)	$ (1,027,941)
NET LOSS PER SHARE
	Basic and diluted	(0.05)	0.19	(0.16)	(1.64)
WEIGHTED AVERAGE NUMBER OF SHARES
	Basic and diluted	3,731,085	1,294,236	4,124,203	625,407
See Notes to Unaudited Consolidated Financial Statements

F-2

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Nine Months  Ended May 31,
	(Unaudited)
		2015	2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$ (673,852)	$ (1,025,766)
Adjustments to reconcile net loss to net cash used in
operating activities:
Fair value of preferred shares issued for services		5,834	-
Fair value of preferred shares issued for bonus		-	144,985
Fair value of shares of common stock-interest		-	72,480
Interested related to modification of conversion price of debt
Depreciation		2,447	1,398
Amortization of debt discount		195,688	417,592
Change in fair value of derivative liability		(8,198)	(122,400)
Changes in operating assets and liabilities:
Accounts receivable		(5,666)	(5,171)
Prepaid expenses and other current assets		118	4,860
Accounts payable and accrued expenses		71,963	73,765
Accrued interest		60,766	-
Accrued compensation		112,073	141,395
NET CASH USED IN OPERATING ACTIVITIES		(238,827)	(296,862)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(2,158)	(493)
NET CASH USED IN INVESTING ACTIVITIES		(2,158)	(493)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		-	(23,150)
Proceeds from convertible debentures		160,000	149,000
Principal repayments of loan payable		-	(40,000)
Proceeds from loan payable		79,500	252,600
NET CASH PROVIDED BY FINANCING ACTIVITIES		239,500	338,450
NET INCREASE (DECREASE) IN CASH		(1,485)	41,095
EFFECT OF VARIATION OF EXCHANGE RATE OF CASH
HELD IN FOREIGN CURRENCY		(17,077)	(2,175)
CASH - BEGINNING OF PERIOD		52,747	18,015
CASH - END OF PERIOD		$ 34,185	$ 56,935
Supplemental disclosures of cash flow information:
Cash paid for interest		$ -	$ -
Non-cash investing and financing activities:
Conversion of convertible notes payable into common stock		$ -	$ 399,228
Assignment/Modification of notes payable to convertible notes payable		$ -	$ 450,300
Debt discount associated with derivative liability		$ -	$ 247,000
Debt discount associated with convertible debt		$ -	$ 274,650
Embedded conversion features		$ -	$ -
Conversion of loan payable into common stock		$ 7,000	$ -
Beneficial conversion feature		$ -	$ -
Conversion of Series 1 preferred stock into common stock		$ 110	$ -
Conversion of accrued interest and fees to common stock		$ 2,200	$ -
Conversion of preferred stock to common stock		$ -	$ 26,956
See Notes to Unaudited Consolidated Financial Statements

F-3

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN

Nature of Business and History of the Company

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

The Company also strategically focuses on developing the business of its wholly owned and revenue generating online marketing services company, Digital Clarity. With deep DNA in its operating market, blending the services of an experienced professional workforce leveraging a technology offering would position the company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most the digital economy focusing on areas such as Search Engine Marketing (Google, Yahoo! & Bing), Social Media (Twitter, Facebook & LinkedIn) and Internet Strategy Planning including Design, Analytics and Mobile Marketing.

From 2013-2015 the Company has been honing its business model to be the differentiating service provider in digital marketing space to its clients and prospective business as DBMM grows into one of the leaders in the industry going forward.

Today, DBMM Group crafts, designs and executes digital marketing strategies across multiple ad platforms and social media networks for a broad array of clients to help each of them establish a uniform brand identity across the digital universe. The product offering is a unique value proposition of intelligent analytics provided by an experienced digital marketing and technology team. Therefore DBMM Group is a blend of data, strategy and creative execution.

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

The Authorized Shares have been reduced by an equal proportion to 10,000,000.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis. The Company has an accumulated deficit of approximately $12.2 million and a working capital deficiency at May 31, 2015 of approximately $2.5 million. The Company has incurred a net loss of approximately $670,000, and used cash in operation of $239,000 for the nine-months ended May 31, 2015. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future. Management plans to continue to provide for its capital requirements by seeking long term financing which may be in the form of additional equity securities and debt. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

Basis of Presentation

The interim consolidated financial statements of Digital Brand Media & Marketing Group, Inc. (“we,” “us,” “our,” “DBMM” or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring adjustments) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, availability of capital resources, the timing of acquisitions, and the sensitivity of our business to economic conditions.

The accompanying unaudited consolidated financial statements have been prepared, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. You should read these interim financial statements in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the year ended August 31, 2014.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary RTG Ventures (Europe), Ltd. All significant inter-company transactions are eliminated.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash in banks. The Company considers cash equivalents to include all highly liquid investments with original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are presented net of allowance for doubtful accounts.

The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. The Company did not recognize an allowance for doubtful accounts as of November 30 and August 31, 2014, respectively.

Page 6

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets (primarily three to five years).

Revenue Recognition

The Company follows the guidance of ASC Topic 605, formerly, SAB 104 for revenue recognition. In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Revenues from services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collectability is probable.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

Earnings (loss) per common share

The Company utilizes the guidance per FASB Codification “ASC 260 "Earnings Per Share". Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding, is not presented separately as it is anti-dilutive. Such securities have been excluded from per share computations as of May 31, 2015 and 2014.  The anti-dilutive securities amounted to 5,879,736 and 60,608 as of May 31, 2015 and August 31, 2014.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of May 31, 2015, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

During the nine-month period ended May 31, 2015 and 2014, the Company had notes payable outstanding in which the conversion rate was variable and undeterminable. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance at every balance sheet thereafter and in determining which valuation is most appropriate for the instrument (e.g., Binomial method), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate.

Fair Value of Financial Instruments

Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Level 2

Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The Company did not have any Level 2 or Level 3 assets or liabilities as of May 31, 2015, with the exception of its derivative liability which are valued based on Level 3 inputs.

Cash is considered to be highly liquid and easily tradable as of May 31, 2015 and therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Page 7

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”.

Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments.

These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.  Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of “Conventional Convertible Debt Instrument”.

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to Convertible Debentures for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Stock Based Compensation

We account for the grant of stock options and restricted stock awards to employees in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation.

Foreign Currency Translation

Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using both the exchange rate in effect at the balance sheet date or historical rate, as applicable. Results of operations are translated using the average exchange rates prevailing throughout the year. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive loss), while gains and losses resulting from foreign currency transactions are included in operations.

Business Combinations

In accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may require an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance.

Recently Issued Accounting Pronouncements

A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date. We regularly review all new pronouncements that have been issued since the filing of our Form 10-K for the nine-month period ended May 31, 2015 to determine their impact, if any, on our financial statements. The Company does not expect the adoption of any of these standards to have a material impact once adopted.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	May 31, 2015	August 31, 2014
	(Unaudited)	(Audited)
Estimated life:        3 to 5 years	$ 17,620	$ 15,462
Computer and office equipment	(11,686)	(9,239)
Less: Accumulated depreciation	$ 5,934	$ 6,223

Depreciation expense amounted to $ 2,447 and $1,398 for the nine-month periods ended May 31, 2015 and 2014, respectively.

NOTE 4 - LOANS PAYABLE

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$ 290,800	$ $218,300

The loans payable are due on demand, are unsecured, and are non-interest bearing.  

During the nine-month period ended May 31, 2015 and 2014, the Company modified terms with existing or new lenders for loans payable aggregating $0 and $450,300, respectively.  Substantially all modifications consist in adding conversion terms to such notes.

During the nine-month period ended May 31, 2015, the Company issued 200,000 shares of its common stock, to satisfy principal obligations aggregating $7,000.

During the nine-month period ended May 31, 2015 and 2014, the Company received loan proceeds of $79,500 and $252,600, respectively.

Page 8

NOTE 5 – CONVERTIBLE DEBENTURES

At May 31, 2015 and August 31, 2014 convertible debentures consisted of the following:

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$ 828,693	$ 688,751
Unamortized debt discount	(0)	(136,688)
Total	$ 828,693	$ 552,063

The Convertible Debentures mature through May 2015, some of which are payable on demand and bear interest at ranges between 6% and 15%.  The convertible debentures are convertible at ratios varying between 50 and 55% of the closing price at the date of conversion through, at its most favorable terms for the holders, the average of the three lowest closing bids for a period of 5 days prior to conversion.  As of May 31, 2015, an aggregate of $515,743 of convertible debenture have matured.

During the nine-month period ended May 31, 2015 and 2014, the Company modified terms with existing or new lenders for loans payable aggregating $0 and $450,300, respectively.  Substantially all modifications consist in adding conversion terms to such convertibles debenture.

During the nine-month period ended May 31, 2015 and 2014, the Company issued 700,205 and 1,541,716 shares of its common stock, respectively, to satisfy its obligations pursuant to the original terms of the underlying debt agreements under principal repayments aggregating $27,207 and $401,229, respectively. Additionally, the Company issued 100,979 shares of its common stock to satisfy interest pursuant to certain convertible debentures during the nine-month period ended May 31, 2015.  The fair value of the shares of common stock amounted to $4,236 during such period and has been recorded as interest expense.

During the nine-month period ended May 31, 2015 and 2014, the Company generated proceeds of $160,000 and $149,000, respectively, from the issuance of convertible promissory notes payable.

NOTE 6 - DERIVATIVE LIABILITIES

Changes in the derivative liabilities during the nine-month periods ended May 31, 2015 and 2014 are as follows:

Balance at August 31, 2014	$305,207
Embedded conversion features at issuance	59,000
Changes in fair value of derivative liabilities	(8,198)
Balance, May 31, 2015	$356,009

NOTE 7 – COMMON STOCK AND PREFERRED STOCK

Preferred Stock- Series 1 and 2

The designation of the Preferred Stock- Series 1 is as follows:  Authorized 2,000,000 shares, par value of $0.001.  One share of the Company’s Preferred Stock- Series is convertible into 53.04 shares of the Company’s common stock, at the holder’s option and with the Company’s acquiescence, and has three votes per share.  

The designation of the Preferred Stock- Series 2 is as follows:  Authorized 2,000,000 shares, par value of $0.001.  One share of the Company’s Preferred Stock- Series is convertible into one share of the Company’s common stock, at the holder’s option and with the Company’s acquiescence, and has no voting rights.  

In October 2013, 385,000 shares of Preferred Stock-Series 1 Designation were issued to three officers of the Company. These shares are valued at $144,985, based on the trading price of the common shares into which the preferred shares are convertible. This amount was recorded as compensation expense.

In October 2014, 1,100,000 shares of Preferred Stock Series 1 Designation were issued to three officers of the Company. These shares are convertible at a ratio of 1 preferred share to 53.04 common shares. These shares are valued at $5,834 based on the trading price of the common shares of $0.0001 into which the preferred shares are convertible. This amount was recorded as compensation expense.

Common Stock

During July 2014, the Company increased its number of authorized shares of common stock to 10,000,000,000. Its preferred stock remains at 4,000,000, authorized shares both with $0.001 par value.

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

During the nine-month ended May 31, 2015, and 2014, the Company issued 700,205 and 1,541,716 shares, respectively, of its common stock to satisfy its obligations under conversion features of convertible debt aggregating $27,207 and $401,229, respectively.  Additionally, the Company issued 100,979 shares of its common stock to satisfy interest pursuant to certain convertible promissory notes.  The fair value of the shares of common stock amounted to $4,236, which has been recorded as interest expense.

NOTE 8 - FOREIGN OPERATIONS

As of March 31, 2015, all of our revenues and a majority of our assets are associated with subsidiaries located in the United Kingdom. Assets at May 31, 2015 and revenues for the nine-month period ended May 31, 2015 were as follows:

	United States	Great Britain	Total
Revenues	$ -	$ 368,384	$ 257,192
Total revenues	$ -	$ 368,384	$ 257,192
Identifiable assets at May 31, 2015	$ 691	$ 120,966	$ 121,657

As of August 31, 2014, all of our revenues and a majority of our assets are associated with subsidiaries located in the United Kingdom. Assets at August 31, 2014 and revenues for the year ended August 31, 2014 were as follows:

	United States	Great Britain	Total
Revenues	$ -	$ 417,607	$ 417,607
Total revenues	$ -	$ 417,607	$ 417,607
Identifiable assets at August 31, 2014	$ 4,564	$ 130,398	$ 134,962

NOTE 9 – SUBSEQUENT EVENTS

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

The Authorized Shares have been reduced by an equal proportion to 10,000,000.

Page 9

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

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

Background

DBMM is an OTCPK listed company. Subsequent to the close of the fiscal year 2011 following substantial investment, the Company conducted a structural review of its total product and services offering. The review was carried out by the Board of Directors. The result was to bring technology development being outsourced directly into the Company to steward on a daily basis and any activities which were not revenue generating in the near term were eliminated. It was unanimously agreed that the company would adopt a lean approach that focused on the relationships and partnerships. To that end, the Company has added significant partnerships through Letters of Intent, Joint Ventures and various collaborative structures involving revenue sharing arrangements.

Operations Overview/Outlook

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

Entertainment/Fashion/Sports/Automotive/Ecommerce Solutions

DBMM is taking its strengths including its relationships to build its business focus on a wide array of industries. The Company, under very competitive global market conditions and growing development needs, continues to identify partnership opportunities. Utilizing successful models with existing clients, the outlook remains strong for the future.

The heart of the business is the marketing consultancy. Understanding each client and developing the model to individualize the outlook has been essential. This kind of close relationship with the client resulted in Digital Clarity being considered a close professional advisor.

In fiscal year 2015, the Company will continue to focus on the positive results of the last year and use that model to expand geographic reach with existing and new partners.

Digital Marketing Services

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

The clear opportunity is at the foundation of the Company, namely the need to expedite and 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 infusion in fiscal year 2015 to grow simultaneously in multiple geographies.

As a foundation, the financial review showed that Digital Clarity continued to be revenue generating and remained cash flow positive.

Key Milestones

DBMM has established a strong foundation to make inroads into established and emerging markets. In the latter part of 2014, American Green (OTC:PK:ERBB) became a new client as a market leader as one of the fastest-growing companies in the marijuana industry.

American Green was the first publicly-traded company medical marijuana dispensary brand in the world and currently has over 50,000 shareholders. It is now embarking on the strategy to become a major participant in the expanding medical and adult use cannabis market on a national scale.

American Green continues to offer retailing, branding and cultivating strategies in conjunction with its ongoing business with various licensed medical marijuana medical and retail dispensaries. The company has consulted with dispensary operators in California, Colorado, Washington and Arizona. Being located in Arizona, a very effectively regulated medical marijuana (MMJ) market, American Green is focusing on providing goods and services that operators of licensed non-profit MMJ dispensaries in regulated environments require. This strategy will allow American Green to further penetrate the market and to leverage its existing brands, products and services. As a result, the ZaZZZ™ network is being adapted to sell non MMJ products to customers of MMJ dispensaries; lines of non-MMJ, hemp-based products are in development; online communities, products and services are being created; and consulting opportunities involving compliance, business development and financial services have been identified.

American Green Clothing: The Company is currently selling clothing and accessories under the American Green brand. The Company is working toward developing a full line of clothing and accessories under the American Green brand for traditional brick and mortar sales, as well as through ZaZZZ™ and MMJ dispensary networks. All products are available through web-based purchase at www.AmericanGreen.com.

Another example is 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.

Tutti Dynamics developed an interactive media player that enables audiences to engage with the world's masters in the arts and sciences. Tutti represents the future of next-generation media. More information about Tutti's immersive media player can be found at www.tuttidynamics.com.

In 2013, DBMM identified a collaboration with Video Media Holdings, Inc. (VMS) to become its reseller in Europe with other revenue streams being explored as well. The value proposition for VMS strengthens DBMM's offering to its clients. VMS Holdings, Inc. develops a mobile application for sharing videos. Its mobile application allows companies and users to send and receive video content to and from a mobile phone; subscribe for a favorite celebrity, actor, TV channel, or team and get video updates; and create your own channel and become a broadcaster, as well as serves as a tool for mobile marketing and sales. The company's mobile application is available for Android, BlackBerry, iPhone, and Symbian devices. It distributes its mobile application through distributors, and mobile device and application stores in Africa, Europe, Asia, North America, and South Africa. It serves mobile operators and media companies, government organizations and law enforcement agencies, premium content providers and retailers, sports clubs, and celebrities worldwide.

DBMM finalized an agreement with New York based digital marketing automation platform, BRANDmini LLC, to strategically broaden BRANDmini's delivery of its Saas (Software as a Service) application; primarily looking after those larger clients seeking to leverage a more bespoke digital marketing service abroad. BRANDmini is a transactional marketing automation platform for creating, serving, and measuring marketing campaigns across multiple online channels and mobile devices. Our platform is integrated with leading ad networks, publishers, mobile platforms and social sites. BRANDmini's innovative In-Page technology empowers brands to engage and transact with consumers while they are browsing. Now anyone can build branded transactional ads, gadgets, social landing pages and run campaigns anywhere your customers are.

These client relationships illustrate the execution of DBMM's strategic direction which strengthens then the Company through its revenue-sharing strategic alliances resulting in additional revenue streams.

Many clients such as Mercedes Benz, UK, Wharfside and Duvet & Pillow Warehouse have experienced increases in revenue and increases in conversion as a result of Digital Clarity's strategic direction. These case studies are excellent resources for new clients and illustrate the mantra of "ROI is our DNA".

“DBMM’s Digital Clarity Selected to Conduct Survey” – Results Reported by BBC & Huffington Post Huffington Post Article Entitled: “Internet Addiction Disorder – Yes, It’s a Real Thing.” (http://huff.to/1rSyzSX)

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INDUSTRY AWARD

Digital Clarity Named in Top Ten Best Social Media Marketing Firms in the UK for 3^rd Year (http://Topseos.com/uk/best-social-media-marketing-companies)

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

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

Key Differentiators

DBMM has established a strong foundation by continuing to streamline operations and assessing activities on a cost benefit basis while developing new client relationships and revenue streams to be a differentiating digital marketing and technology provider. This focus has allowed the Company to enhance brand value for its clients. 2015 will continue to be about growth and outreach utilizing five key differentiators:

1. Brand enhancement

2. Search

–PPC

–SEO

3. Design

4. Social media

5. Analytics

1.  STRENGTHS: BRAND ENHANCEMENT 

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

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

CORE AREAS:

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2.  STRENGTHS: SEARCH:

– PPC

Definition:

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

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

The major platforms used for PPC are:

·

Google AdWords (Global)

·

Microsoft Bing (Yahoo & Bing)

·

Yandex (Russia)

·

Baidu (China)

·

AdWords Audit

Key Areas of Service:

·

Budget Management

·

Keyword Research

·

Conversion Rate Optimization

·

Bid Optimization

·

Dedicated PPC Management

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

·

Strategy. By understanding your business, demographics and audience, Digital Clarity can help to make sure that campaigns hit the ground running from day one.

·

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

·

Optimization. Digital Clarity rigorously interrogates and checks our client accounts to ensure optimal performance, with regular reviews of all aspects of your campaigns.

·

Reporting. By defining and explaining the numbers of your account, Digital Clarity provides the information needed to steer things in the right direction for business.

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2.  STRENGTHS: SEARCH:

– SEO

Definition:

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

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

·

Onsite Technical Audit

·

Quality Content Creation

·

Meta, Tags & Technical Optimization

·

Website Structure

·

Use of Optimum Keywords

·

Link Building & Referrals

·

Social Media Integration

Search Algorithms

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

SEO Can Deliver Results for Business

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

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3.  STRENGTHS: DESIGN:

Definition:

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

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

Web Design Services:

·

e-Commerce

·

Device Compatibility

·

Web Development

·

Mobile Compatibility

·

Process & Planning

·

Content Management System (CMS)

·

Version Control

Changes in the Last Few Years

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

Digital Clarity’s Unique Proposition

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

4.  STRENGTHS: SOCIAL MEDIA:

Definition

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

·

Social Media Audit

·

Content Creation

·

Social Media Management

·

Social Media Set Up

·     Reporting

·

Blog Writing

·

Content Strategy

·

Reputation Management

·

Social Media Advertising

The Need for Social

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

Digital Clarity’s Proposition

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

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

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The Market for Growth in Social 

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

·

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

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

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

The market is expanding with the introduction of paid ad units at Pinterest and Instagram.

5. STRENGTHS: ANALYTICS

Definition:

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

·

Google Analytics

·

Goal Setting

·

Tag Management

·

3rd Party Analytics

·

Funnel Planning

·

Attribution Modelling

·

Path Analysis

·

Link Testing

Why Analytics Are Important

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

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Digital Clarity’s Unique Proposition

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

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

Source:

SEMPO State of Search Report 2014

As the internet and mobile arena continues to mature, the need to make sense of and manage companies through this often complex market is clearly an area of massive growth. The company is confident that the talent and experience within the digital marketing team is poised for a major springboard in 2015, but must be expanded significantly in order to support the global reach intended.

Artist Collaboration, driven by Co-Chief Operating Officer and Head, US Operations, Steve Baughman, is an area that will see exponential growth in the coming 12 months and beyond. Artists and brands that look to leverage their celebrity status will look to companies such as Digital Clarity to help drive and develop their brand in the growing and complex arena of social media.

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Market Reach

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

Relationships and Industry Contacts

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

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

TEAM EXPERTISE

COMPANY KEY ASSETS

Examples:

·

PPC campaign experience especially Google AdWords existed

·

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

·

Website design and development based on results driven design and planning

·

Brand consultancy

·

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

·

Sales and account management experience from multi-disciplined backgrounds

Evolution and Flexibility

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

Creative, Individualized Solutions and Customer Service

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

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Growth Opportunities in the Market

As the use of web mobile sites and applications grow, so do the complexities and challenges of using these sites and platforms commercially. Digital Clarity directs business through the maze of an often confusing and sophisticated set of barriers, to create a clear path for the customer to our client’s product or service. As this market matures, the need for companies to rely on the services from Digital Clarity can only grow. Specifically, B2B relationships represent 69% of all U.S. e-commerce transactions (Forrester 2013). Here we look at some of the growth areas in Digital Clarity’s arsenal integrating the key trends for 2015:

1. More Mobile

2. More Social

3. More Informed

4. More Experiential

5. More Real-Time

6. More Global

7. More Multichannel

These trends translate to being “always on.”

Growth & Opportunities in Search

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

·

The North American Search industry grew from $19 billion in 2011 to $27 billion in 2013 – SEMPO

·

Revenue from Localized Mobile Ads to Reach $5.8 Billion in U.S. by 2016 – BIA/Kelsey

·

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

·

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

·

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

·

Growth in Corporate Search – 50% of Fortune 100 Companies have a Google Plus Account

Growth & Opportunities in Social Media

“Social Media is a great platform for ‘getting the word out’ and generating leads. Active listening and data analytics can help companies find out what customers want, not just from products or services, but also in terms of an ongoing relationship.”

– Cap Gemini 2014 – “Generation Connected”

The algorithms developed by Digital Clarity include all social media platforms as they develop, and technology partners coupled with the client’s analytics provide ROI positive results within a quarter.

Social media platforms have more user accounts than ever before:

·

284 million Twitter accounts

·

1.35 billion Facebook accounts

·

70 million Pinterest accounts

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The need for DBMM to reach Global Markets

In 2015, it is expected that the U.S. economy will continue its recovery while the global economy is lagging behind. As the markets remain volatile, the opportunity for a company like DBMM to approach new business with its proven track record increases. The core markets remain US and English speaking European markets. Emerging markets are a target for 2015. BRIC countries (Brazil, Russia, India and China) will be key targets from the emerging markets.

Internet usage is poised for explosive growth across Asia, driving massive consumer demand for digital content and services. The biggest challenge for businesses hoping to meet this demand is how to make money while creating low-cost content. According to McKinsey & Co, India and China are driving an emerging digital revolution via new mobile devices.

The Company intends to further extend its services in the Middle Eastern market initially then review the successes using a lean methodology and continuous improvement along the way, and then roll out to the BRIC markets.

US

The US remains the center of the entertainment, technology and digital industries and as such the emphasis looking forward to 2015 and building on the recent success in the last quarter of the 2014 calendar year means that DBMM and its agency Digital Clarity are perfectly positioned to spring board into this market using the successful models established over the last two years.

The digital market continues to be focused on London, New York and Los Angeles; therefore, DBMM’s same triangle of London/New York/LA is strategically sound. We are establishing a strong digital marketing presence in the Los Angeles area to cover the entertainment and music market and then plan to have the same model in New York. Our corporate offices are located in New York, however Los Angeles remains a key regional base from which to build and expand relationships, while a New York presence is equally important to serve and build relationships in the largest advertising market in the US.

The Asian-American Market - An Unusually Attractive Opportunity

·

Fast Growing: -Current Population - 13+ Million - 49% population growth 1990-2000; 29% growth 2000-2008. More Asians are emigrating to the U.S. than any other ethnic group.

·

Educated & Affluent: -44% holding BA degree - vs. 28% of Non-Hispanic Whites -Median HH income almost $10K greater than Non-Hispanic Whites

·

Geographically Concentrated: -More than 50% reside in 3 states alone: CA, NY, and TX.

·

Money to Spend: $509 billion in annual purchasing power.

·

Entrepreneurial and Driven -Own and operate 1.1 million business nationally, generating $343 billion in annual revenue.

·

Cost Efficient Reach -Almost 1,000 targeted media outlets reaching Asians nationally, with lowest CPMs of all consumer segments.

Europe

As the current operations base of the digital marketing agency is in London England, it is perfectly placed to reach out to the broader European market to replicate the Company’s model in the stronger economies in this region. As with the relationships mentioned in the US, opportunities were advanced with US partners to leverage Digital Clarity’s reach in this region and help take established US agencies into the European region.

2014 saw new clients emerge from Europe, as well as expansion of global reach of new U.S. clients.

In 2013, the execution of this aspect of the business plan is illustrated by the agreements with VMS and Brandmini to represent them outside the United States, initially in Europe.

Middle East

The Middle East is a fertile market for heritage based US and European brands looking for entry into this lucrative market. The fastest area for growth in this sector is to leverage on the luxury arena. Digital Clarity has developed new business in a number of different luxury brands.

Given the complexity of the region as well as the enormous potential, it is important that Digital Clarity aligns itself with established players in local markets. With this in mind, Digital Clarity will look to collaborate with some digital agency partners where there is already a relationship and  create a strategy that allows  the company to look at the breakdown of current digital competence of these brands focusing on various touch points such as tablets, sites, mobile & social reach in the Middle East.

Our value proposition is very much about creating digital penetration of the Middle Eastern market for a particular group and how those brands would be positioned to create brand value – a byproduct of which would be sales.

Support for growth in the Middle East

Worldwide luxury goods continues double-digit annual growth; global market now tops €200 billion

·     Dubai commands around 30 per cent of Middle East luxury market and around 60 per cent of the UAE’s luxury market

·

The Dubai Mall accounts for around 50 per cent of Dubai’s luxury purchases

·

Each year, more “HENRYs”(High Earnings, Not Rich Yet) become potential customers, with ten times as many HENRYs as ultra-affluent individuals

·

The rise of the middle class in emerging countries is polarizing the competitive arena, becoming a “new baby-boom sized generation” for luxury brands to target.

Financial Overview/Outlook

DBMM began the 2015 fiscal year with significant challenges, all of which were addressed and became a strong foundation for future growth. The focus remains on the growth of digital marketing services and technology driven through Digital Clarity. DBMM is a marketing services company which is labor intensive in order to provide a differentiating product to its clients. As such, it is imperative to raise a significant amount of capital to hire professionals who can deliver profit to the Company within a quarter. The proven model carried in our financials is each new hire/client averages a margin of 35%-55%, straight line and simple. On that basis, our target is to recruit 10-20 new staff to represent a critical mass and scale up our revenues proportionately. We have begun that trajectory upward in the 1Q 2015.

Digital Clarity has a differentiating approach to its products and services by providing brand enhancement and increased ROI through a strategic alignment with its clients from content design through execution and stewardship. By providing a 360-degree product, we reinforce the relationship with the clients and become key advisors – a seat at the table, as it were. That translates to a consistent 35-55% margin and long-term clients.

However, the weakened share price remains a challenge to the Company. On that basis, in the last two years having revenues of approximately $400,000 to $500,000 would suggest a conservative market multiple of x10-x16, the latter being the manufacturing average, the market cap of DBMM should be a minimum of $5,000,000. The multiples for media tend to be at the higher end of the spectrum; therefore, compared to other companies in this sector, DBMM is significantly undervalued. The issue will be addressed as a priority early in the 2015 fiscal year as it continues to be challenge.

In summary, DBMM’s financing efforts have always been in short term, small amounts of working capital. That is changing in 2015. Going forward, DBMM intends to embark on a significant capital raise to allow the Company to scale up geographically and maximize our global reach through strategic relationships. This model is the most efficient and effective path to grow DBMM quickly into multiple revenue streams. We have proven the model in the last two years. Our marketing services’ offering is a labor intensive endeavor, wherein human capital is a key differentiator of knowledge and/or relationships. What we have discussed here is organic growth which will be conducted in conjunction with concluding an acquisition in the digital technology/marketing services sector.

After a very difficult year, fraught with challenges and hurdles, we see 2015 as poised for growth on multiple fronts. With capital infusion, which will allow us to bring in new clients, grow existing successful clients and service them accordingly, coupled with an offer of a deferred tax asset to attract partners with significant revenue and expansion patterns, we will have a model in place which will be sustainable.

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Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recently Issued Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, could have a material effect on the accompanying financial statements.

Significant and Critical Accounting Policies

Our discussion of the financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities at the date of the financial statements. Management regularly reviews its estimates and assumptions, which are based on historical factors and other factors that are believed to be relevant under the circumstances. Actual results may differ from these estimates under different assumptions, estimates or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. See “Notes to Consolidated Financial Statements” for additional disclosure of the application of these and other accounting policies

LIQUIDITY AND CAPITAL RESOURCES   

We are concentrating on activities which will grow Digital Clarity organically and by acquisition. We have spent the last two fiscal years establishing a client model for existing and new customers which can be exported geographically.

NINE-MONTH PERIOD ENDED MAY 31, 2015

We had approximately $35,000 in cash and our working capital deficiency amounted to approximately $2.5 million at May 31, 2015.

During the nine-month period ended May 31, 2015, we used cash in our operating activities amounting to approximately $238,000. Our cash used in operating activities was comprised of our net loss from continuing operations of approximately $674,000 adjusted for the following:

·

Additionally, the following variations in operating assets and liabilities impacted our cash used in operating activity:

·

An increase in our accounts payable and accrued expenses of approximately $72,000

·

An increase in our accrued salaries of approximately $112,000

During the quarter ended May 31, 2015, we generated cash from financing activities of $239,500, which consist of the proceeds from the issuance of loan payables.

NINE-MONTH PERIOD ENDED MAY 31, 2014

We had approximately $57,000 in cash and our working capital deficiency amounted to approximately $2.2 million at May 31, 2014.

During the nine-month period ended February 28, 2014, we used cash in our operating activities amounting to approximately $297,000. Our cash used in operating activities was comprised of our net loss from continuing operations of approximately $1 million adjusted for the following:

·

Fair value of preferred shares issued of $144,985

·

Change in fair value of derivative liability of $122,400

·

Amortization of debt discount of $417,592

Additionally, the following variations in operating assets and liabilities impacted our cash used in operating activity:

·

An increase in our accounts payable and accrued expenses of approximately $215,000, resulting from slower payment processing due to our financial condition

·

An increase in accounts receivables of approximately $42,000, primarily due to timing of certain revenues during the quarter ended February 28, 2014

During the nine-month period ended February 28, 2014, we generated cash from financing activities of $338,450, which primarily consists of the proceeds from the issuance of loans and convertible debt aggregating $401,600 offset by principal repayments of loans payable of $40,000 and payment of the bank overdraft of approximately $23,000.

RESULTS OF OPERATIONS

Comparison of the Results for the Three-month periods Ended May 31, 2015 and 2014

Unaudited Consolidated Operating Results
	For the Three Months  Ended May 31,				For the Nine Months  Ended May 31,
			Increase/	Increase/			Increase/	Increase/
			(Decrease)	Decrease			(Decrease)	Decrease
			$	%			$	%
	2015	2014	2015 vs 2014	2015 vs 2014	2015	2014	2015 vs 2014	2015 vs 2014
SALES	$       111,192	$         79,902	$          31,290	39%	$       368,384	$       292,341	$          76,043	26%
COST OF SALES	78,237	47,561	30,676	64%	242,862	152,103	90,759	60%
					-	-
GROSS PROFIT	32,955	32,341	614	2%	125,522	140,238	(14,716)	-10%
					-	-
COSTS AND EXPENSES					-	-
General and administrative	41,605	64,792	(23,187)	-36%	178,580	165,507	13,073	8%
Compensation Expense	51,000	89,999	(38,999)	-43%	171,000	379,627	(208,627)	-55%
Legal and professional fees	64,901	76,886	(11,985)	-16%	196,369	200,572	(4,203)	NM
TOTAL OPERATING EXPENSES	157,506	231,677	(74,171)	-32%	545,949	745,706	(199,757)	-27%
					-	-
OPERATING LOSS	(124,551)	(199,336)	(74,785)	-38%	(420,427)	(605,468)	(185,041)	-31%
					-	-
OTHER INCOME (EXPENSE)					-	-
Interest expense	(65,647)	(147,129)	(81,482)	-55%	(261,623)	(542,698)	(281,075)	-52%
Gain (Loss) on derivative liability	(6,593)	591,106	597,699	NM	8,198	122,400	114,202	NM
TOTAL OTHER INCOME (EXPENSE)	$       (72,240)	$       443,977	$        516,217	NM	$     (253,425)	$     (420,298)	$      (166,873)	NM
					-	-
NET LOSS	$     (196,791)	$       244,641	$        441,432	NM	$     (673,852)	$  (1,025,766)	$      (351,914)	NM
NM: Not meaningful

Page 20

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, 2015 our primary sources of revenue are the Per-Click Advertising, Web Design and Search Engine Optimization Services. These primary sources amounted to 93% and 96% of our revenues during the three and nine-month period ended May 31, 2015. Our secondary sources of revenue are our Social Media and Email Media. These secondary sources amounted to approximately 3% of our revenues.  

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

During the three and nine-month periods ended May 31, 2015, our revenues increased when compared to the prior year period primarily as a result of increased sales related to Per-Click Advertising.

During the three and nine-month period ended May 31, 2015, our cost of sales increased primarily from increases in media purchases.

The decrease in general and administrative during the three-month periods ended May 31, 2015 is primarily due to an decrease in travel expenses during the third quarter of fiscal 2015, when compared to the third quarter of fiscal 2014. During the nine-month period ended May 31, 2015 the increase of general and administrative is due to the increase in travel on the first two quarters, when compared to the nine-month period of fiscal 2014.

The decrease in compensation expenses during the three and nine-month period ended May 31, 2015 is primarily attributable to a grant of preferred shares to certain of its officers which occurred during the first quarter of fiscal 2014 and which amounted to $144,985.

The legal and professional fees during three and nine-month period ended May 31, 2015 when compared to the comparable prior year periods decrease primarily due to decreased services provided by professionals in connection with the Company’s filings during the third quarter of fiscal 2015.

Interest expense, which include interest accrued on certain notes, as well as amortization of debt discount and the fair value of shares issued pursuant to reset provisions of certain convertible promissory notes, decrease during the three-month period and nine-month period ended May 31, 2015 is primarily attributable to the amortization of debt discount which was lower during the three and nine-month periods ended May 31, 2015, when compared to the comparable prior year periods.  The decrease in amortization debt discount is primarily due to the lesser issuance of convertible debt with beneficial conversion features and embedded conversion features during the three and nine-month period ended May 31, 2015 than the prior year comparable periods.

The gain or loss on derivative liabilities is primarily attributable to a change in fair value of derivative liabilities between measurement dates.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

Item 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this quarterly report, our management evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation, our management concluded that, as of May 31, 2015, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls

We maintain controls and procedures designed to ensure that we are able to collect the information that is required to be disclosed in the reports we file with the Securities and Exchange Commission (the "SEC") and to process, summarize and disclose this information within the time period specified in the rules of the SEC. Our management is responsible for establishing, maintaining and enhancing these procedures. Management is also responsible, as required by the rules established by the SEC, for the evaluation of the effectiveness of these procedures.

Internal Controls

We maintain a system of internal controls designed to provide reasonable assurance that transactions are executed in accordance with management's general or specific authorization; transactions are recorded as necessary to permit preparation of financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") and maintain accountability for assets. Access to assets is permitted only in accordance with management's general or specific authorization.

In conclusion, the disclosure and procedure controls provide for reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes.  

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in a litigation, Asher Enterprises, Inc. v. Digital Brand Media & Marketing Group, Inc. and Linda Perry, Index No. 600717/2014, in the Supreme Court of the State of New York, sitting in the County of Nassau. The Plaintiff alleges $337,500 in damages based on breach of contract allegations arising from the Company’s untimely periodic filings in December 2013. On September 18, 2014, the Court declined to grant the plaintiff’s application for default judgment.  The cross-motion for the Company was granted and the lender was directed to file a verified answer in the form submitted within 20 days.  The Company plans on vigorously defending the litigation.

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.

Page 21

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

Period	Class	Shares	Consideration	Use of Proceeds	Exemption from Registration
2014-2015 Q3	Investors	100,000	$4,500	Reduction of Outstanding Debt	§4 (a) (2)

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

             Exhibits

                 31.1     Executive Director - Rule 13a-14(a) Certification

                 32.1     Executive Director - Sarbanes-Oxley Act Section 906 Certification

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

Date: September 23, 2015

By: /s/ Linda Perry

Linda Perry

Executive Director

Page 22

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Basis of Presentation

9 Months Ended

May. 31, 2015

Notes

Basis of Presentation

Basis of Presentation

The interim consolidated financial statements of Digital Brand Media & Marketing Group, Inc. (“we,” “us,” “our,” “DBMM” or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring adjustments) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, availability of capital resources, the timing of acquisitions, and the sensitivity of our business to economic conditions.

The accompanying unaudited consolidated financial statements have been prepared, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. You should read these interim financial statements in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the year ended August 31, 2014.

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Cash and Cash Equivalents

9 Months Ended

May. 31, 2015

Notes

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash in banks. The Company considers cash equivalents to include all highly liquid investments with original maturities of three months or less to be cash equivalents.

XML

Property and Equipment: Schedule of Property, Plant and Equipment (Details) - USD ($)	May. 31, 2015	Aug. 31, 2014
Details
Property, Plant and Equipment, Gross	$ 17,620	$ 15,462
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	11,686	9,239
Property, Plant and Equipment, Net, Total	$ 5,934	$ 6,223

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Debt Disclosures: Convertible Debt (Tables)

9 Months Ended

May. 31, 2015

Tables/Schedules

Convertible Debt

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$              828,693	$        688,751
Unamortized debt discount	(0)	(136,688)
Total	$              828,693	$        552,063

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Basis of Consolidation

9 Months Ended

May. 31, 2015

Notes

Basis of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary RTG Ventures (Europe), Ltd. All significant inter-company transactions are eliminated.

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BALANCE SHEETS - USD ($)	May. 31, 2015	Aug. 31, 2014
CURRENT ASSETS:
Cash	$ 34,185	$ 52,747
Accounts receivable	80,175	74,511
Prepaid expenses and other current assets	1,363	1,481
TOTAL CURRENT ASSETS	115,723	128,739
Property and equipment - net	5,934	6,223
TOTAL ASSETS	121,657	134,962
CURRENT LIABILITIES:
Accounts payable and accrued expenses	537,808	442,917
Accrued salaries	582,713	470,640
Loan payable	290,800	218,300
Derivative liability	356,009	305,207
Convertible debentures	828,693	552,063
TOTAL CURRENT LIABILITIES	2,596,023	1,989,127
Liabilities	2,596,023	1,989,127
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, Series 1	1,970	870
Common Stock	4,415	3,614
Additional paid-in capital	9,760,175	9,724,799
Other comprehensive loss	3,579	(12,796)
Accumulated deficit	(12,244,505)	(11,570,652)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	(2,474,366)	(1,854,165)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 121,657	$ 134,962

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Nature of Business and History of The Company

9 Months Ended

May. 31, 2015

Notes

Nature of Business and History of The Company

Nature of Business and History of the Company

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

The Company also strategically focuses on developing the business of its wholly owned and revenue generating online marketing services company, Digital Clarity. With deep DNA in its operating market, blending the services of an experienced professional workforce leveraging a technology offering would position the company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most the digital economy focusing on areas such as Search Engine Marketing (Google, Yahoo! & Bing), Social Media (Twitter, Facebook & LinkedIn) and Internet Strategy Planning including Design, Analytics and Mobile Marketing.

From 2013-2015 the Company has been honing its business model to be the differentiating service provider in digital marketing space to its clients and prospective business as DBMM grows into one of the leaders in the industry going forward.

Today, DBMM Group crafts, designs and executes digital marketing strategies across multiple ad platforms and social media networks for a broad array of clients to help each of them establish a uniform brand identity across the digital universe. The product offering is a unique value proposition of intelligent analytics provided by an experienced digital marketing and technology team. Therefore DBMM Group is a blend of data, strategy and creative execution.

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

The Authorized Shares have been reduced by an equal proportion to 10,000,000.

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Debt Disclosures

9 Months Ended

May. 31, 2015

Notes

Debt Disclosures

LOANS PAYABLE

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$              290,800	$      $218,300

The loans payable are due on demand, are unsecured, and are non-interest bearing.

During the nine-month period ended May 31, 2015 and 2014, the Company modified terms with existing or new lenders for loans payable aggregating $0 and $450,300, respectively.  Substantially all modifications consist in adding conversion terms to such notes.

During the nine-month period ended May 31, 2015, the Company issued 200,000 shares of its common stock, to satisfy principal obligations aggregating $7,000.

During the nine-month period ended May 31, 2015 and 2014, the Company received loan proceeds of $79,500 and $252,600, respectively.

CONVERTIBLE DEBENTURES

At May 31, 2015 and August 31, 2014 convertible debentures consisted of the following:

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$              828,693	$        688,751
Unamortized debt discount	(0)	(136,688)
Total	$              828,693	$        552,063

The Convertible Debentures mature through May 2015, some of which are payable on demand and bear interest at ranges between 6% and 15%.  The convertible debentures are convertible at ratios varying between 50 and 55% of the closing price at the date of conversion through, at its most favorable terms for the holders, the average of the three lowest closing bids for a period of 5 days prior to conversion.  As of May 31, 2015, an aggregate of $515,743 of convertible debenture have matured.

During the nine-month period ended May 31, 2015 and 2014, the Company modified terms with existing or new lenders for loans payable aggregating $0 and $450,300, respectively.  Substantially all modifications consist in adding conversion terms to such convertibles debenture.

During the nine-month period ended May 31, 2015 and 2014, the Company issued 700,205 and 1,541,716 shares of its common stock, respectively, to satisfy its obligations pursuant to the original terms of the underlying debt agreements under principal repayments aggregating $27,207 and $401,229, respectively. Additionally, the Company issued 100,979 shares of its common stock to satisfy interest pursuant to certain convertible debentures during the nine-month period ended May 31, 2015.  The fair value of the shares of common stock amounted to $4,236 during such period and has been recorded as interest expense.

During the nine-month period ended May 31, 2015 and 2014, the Company generated proceeds of $160,000 and $149,000, respectively, from the issuance of convertible promissory notes payable.

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Foreign Operations

9 Months Ended

May. 31, 2015

Notes

Foreign Operations

FOREIGN OPERATIONS

As of March 31, 2015, all of our revenues and a majority of our assets are associated with subsidiaries located in the United Kingdom. Assets at May 31, 2015 and revenues for the nine-month period ended May 31, 2015 were as follows:

	United States	Great Britain	Total
Revenues	$                     -	$            368,384	$             257,192
Total revenues	$                     -	$            368,384	$             257,192
Identifiable assets at May 31, 2015	$                 691	$            120,966	$             121,657

As of August 31, 2014, all of our revenues and a majority of our assets are associated with subsidiaries located in the United Kingdom. Assets at August 31, 2014 and revenues for the year ended August 31, 2014 were as follows:

	United States	Great Britain	Total
Revenues	$                  -	$          417,607	$             417,607
Total revenues	$                  -	$          417,607	$             417,607
Identifiable assets at August 31, 2014	$           4,564	$          130,398	$             134,962

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Going Concern

9 Months Ended

May. 31, 2015

Notes

Going Concern

Going Concern

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis. The Company has an accumulated deficit of approximately $12.2 million and a working capital deficiency at May 31, 2015 of approximately $2.5 million. The Company has incurred a net loss of approximately $670,000, and used cash in operation of $239,000 for the nine-months ended May 31, 2015. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future. Management plans to continue to provide for its capital requirements by seeking long term financing which may be in the form of additional equity securities and debt. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) - USD ($)	May. 31, 2015	Aug. 31, 2014
Balance Sheet (Parenthetical)
Property and equipment - net	$ 5,934	$ 6,223
Convertible debentures	828,693	552,063
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, authorized	10,000,000	10,000,000
Common Stock, issued	4,414,975	3,613,791
Common Stock, outstanding	4,414,975	3,613,791
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, authorized	4,000,000	4,000,000
Preferred 1 Stock, par value	$ 0.001	$ 0.001
Preferred 1 Stock, designated	2,000,000	2,000,000
Preferred 1 Stock, issued	1,970,185	870,185
Preferred 1 Stock, outstanding	1,970,185	870,185
Preferred 2 Stock, par value	$ 0.001	$ 0.001
Preferred 2 Stock, designated	2,000,000	2,000,000
Preferred 2 Stock, issued	0	0
Preferred 2 Stock, outstanding	0	0

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Derivative Liabilities

9 Months Ended

May. 31, 2015

Notes

Derivative Liabilities

DERIVATIVE LIABILITIES

The Company assessed the classification of its derivative financial instruments as of May 31, 2015, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

During the nine-month period ended May 31, 2015 and 2014, the Company had notes payable outstanding in which the conversion rate was variable and undeterminable. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance at every balance sheet thereafter and in determining which valuation is most appropriate for the instrument (e.g., Binomial method), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate.

Changes in the derivative liabilities during the nine-month periods ended May 31, 2015 and 2014 are as follows:

Balance at August 31, 2014	$305,207
Embedded conversion features at issuance	59,000
Changes in fair value of derivative liabilities	(8,198)
Balance, May 31, 2015	$356,009

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Document and Entity Information - USD ($)	9 Months Ended
	May. 31, 2015	Feb. 28, 2015
Document and Entity Information:
Entity Registrant Name	Digital Brand Media & Marketing Group, Inc.
Document Type	10-Q
Document Period End Date	May 31, 2015
Amendment Flag	false
Entity Central Index Key	0001127475
Current Fiscal Year End Date	--08-31
Entity Common Stock, Shares Outstanding	4,414,975
Entity Public Float		$ 44,150
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	dbmm

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Stock Based Compensation

9 Months Ended

May. 31, 2015

Notes

Stock Based Compensation

Stock Based Compensation

We account for the grant of stock options and restricted stock awards to employees in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation.

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STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	May. 31, 2015	May. 31, 2014	May. 31, 2015	May. 31, 2014
Income Statement
SALES	$ 111,192	$ 79,902	$ 368,384	$ 292,341
COST OF SALES	78,237	47,561	242,862	152,103
GROSS PROFIT	32,955	32,341	125,522	140,238
COSTS AND EXPENSES:
General and administrative	41,605	64,792	178,580	165,507
Compensation Expense	51,000	89,999	171,000	379,627
Legal and professional fees	64,901	76,886	196,369	200,572
TOTAL OPERATING EXPENSES	157,506	231,677	545,949	745,706
OPERATING INCOME (LOSS)	(124,551)	(199,336)	(420,427)	(605,468)
INTEREST EXPENSE	(65,647)	(147,129)	(261,623)	(542,698)
CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY	(6,593)	591,106	8,198	122,400
TOTAL OTHER (INCOME) EXPENSE	(72,240)	443,977	(253,425)	(420,298)
NET INCOME (LOSS)	(196,791)	244,641	(678,852)	(1,025,766)
OTHER COMPREHENSIVE INCOME
Foreign exchange translation expense	58	(1,271)	16,375	(2,175)
COMPREHENSIVE INCOME (LOSS)	$ (196,733)	$ 243,370	$ (657,477)	$ (1,027,941)
BASIC AND DILUTED - LOSS PER SHARE	$ (0.05)	$ 0.19	$ (0.16)	$ (1.64)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and Diluted	3,731,085	1,294,236	4,124,203	625,407

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Property and Equipment

9 Months Ended

May. 31, 2015

Notes

Property and Equipment

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets (primarily three to five years).

Property and equipment consisted of the following:

	May 31, 2015	August 31, 2014
	(Unaudited)	(Audited)
Estimated life:        3 to 5 years	$                17,620	$          15,462
Computer and office equipment	(11,686)	(9,239)
Less: Accumulated depreciation	$                 5,934	$           6,223

Depreciation expense amounted to $ 2,447 and $1,398 for the nine-month periods ended May 31, 2015 and 2014, respectively.

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Revenue Recognition

9 Months Ended

May. 31, 2015

Notes

Revenue Recognition

Revenue Recognition

The Company follows the guidance of ASC Topic 605, formerly, SAB 104 for revenue recognition. In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Revenues from services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collectability is probable.

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Common Stock and Preferred Stock Issuances

9 Months Ended

May. 31, 2015

Notes

Common Stock and Preferred Stock Issuances

COMMON STOCK AND PREFERRED STOCK

Preferred Stock- Series 1 and 2

The designation of the Preferred Stock- Series 1 is as follows:  Authorized 2,000,000 shares, par value of $0.001.  One share of the Company’s Preferred Stock- Series is convertible into 53.04 shares of the Company’s common stock, at the holder’s option and with the Company’s acquiescence, and has three votes per share.  

The designation of the Preferred Stock- Series 2 is as follows:  Authorized 2,000,000 shares, par value of $0.001.  One share of the Company’s Preferred Stock- Series is convertible into one share of the Company’s common stock, at the holder’s option and with the Company’s acquiescence, and has no voting rights.  

In October 2013, 385,000 shares of Preferred Stock-Series 1 Designation were issued to three officers of the Company. These shares are valued at $144,985, based on the trading price of the common shares into which the preferred shares are convertible. This amount was recorded as compensation expense.

In October 2014, 1,100,000 shares of Preferred Stock Series 1 Designation were issued to three officers of the Company. These shares are convertible at a ratio of 1 preferred share to 53.04 common shares. These shares are valued at $5,834 based on the trading price of the common shares of $0.0001 into which the preferred shares are convertible. This amount was recorded as compensation expense.

Common Stock

During July 2014, the Company increased its number of authorized shares of common stock to 10,000,000,000. Its preferred stock remains at 4,000,000, authorized shares both with $0.001 par value.

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

During the nine-month ended May 31, 2015, and 2014, the Company issued 700,205 and 1,541,716 shares, respectively, of its common stock to satisfy its obligations under conversion features of convertible debt aggregating $27,207 and $401,229, respectively.  Additionally, the Company issued 100,979 shares of its common stock to satisfy interest pursuant to certain convertible promissory notes.  The fair value of the shares of common stock amounted to $4,236, which has been recorded as interest expense.

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Foreign Currency Translation

9 Months Ended

May. 31, 2015

Notes

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using both the exchange rate in effect at the balance sheet date or historical rate, as applicable. Results of operations are translated using the average exchange rates prevailing throughout the year. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive loss), while gains and losses resulting from foreign currency transactions are included in operations.

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Earnings (loss) Per Common Share

9 Months Ended

May. 31, 2015

Notes

Earnings (loss) Per Common Share

Earnings (loss) per common share

The Company utilizes the guidance per FASB Codification “ASC 260 "Earnings Per Share". Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding, is not presented separately as it is anti-dilutive. Such securities have been excluded from per share computations as of May 31, 2015 and 2014.  The anti-dilutive securities amounted to 5,879,736 and 60,608 as of May 31, 2015 and August 31, 2014.

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Use of Estimates

9 Months Ended

May. 31, 2015

Notes

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Income Taxes

9 Months Ended

May. 31, 2015

Notes

Income Taxes

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

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Fair Value of Financial Instruments

9 Months Ended

May. 31, 2015

Notes

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Level 2

Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The Company did not have any Level 2 or Level 3 assets or liabilities as of May 31, 2015, with the exception of its derivative liability which are valued based on Level 3 inputs.

Cash is considered to be highly liquid and easily tradable as of May 31, 2015 and therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”.

Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments.

These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.  Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of “Conventional Convertible Debt Instrument”.

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to Convertible Debentures for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

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Recently Issued Accounting Pronouncements

9 Months Ended

May. 31, 2015

Notes

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date. We regularly review all new pronouncements that have been issued since the filing of our Form 10-K for the nine-month period ended May 31, 2015 to determine their impact, if any, on our financial statements. The Company does not expect the adoption of any of these standards to have a material impact once adopted.

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Subsequent Events

9 Months Ended

May. 31, 2015

Notes

Subsequent Events

SUBSEQUENT EVENTS

The Company approved a 1 to 1,000 Reverse Split of its shares of common stock, effective July 17, 2015. All reference to Common Stock shares and per share amounts have been retroactively restated to effect the reverse stock split as if the transaction had taken place as of the beginning of the earliest period presented.

The Authorized Shares have been reduced by an equal proportion to 10,000,000.

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	May. 31, 2015	May. 31, 2014
Statement of Cash Flows
Net loss	$ (673,852)	$ (1,025,766)
Fair value of preferred shares issued for compensation	5,834	144,985
Fair value of shares issued for interest		72,480
Depreciation	2,447	1,398
Amortization of debt discount	195,688	417,592
Change in fair value of derivative liability	(8,198)	(122,400)
Accounts receivable	(5,666)	(5,171)
Prepaid expenses and other current assets	118	4,860
Accrued salaries	112,073	151,395
Accrued interest	60,766
Accounts payable and accrued expenses	71,963	73,765
Net cash used in operating activities	(238,827)	(296,862)
Purchase of fixed assets	(2,158)	(493)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	(2,158)	(493)
Bank overdraft		(23,150)
Proceeds from convertible notes payable	160,000	149,000
Proceeds from loans payable	79,500	252,600
Payments made for loans payable		(40,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	239,500	338,450
NET INCREASE (DECREASE) IN CASH	(1,485)	41,095
EFFECT OF VARIATION OF EXCHANGE RATE OF CASH HELD IN FOREIGN CURRENCY	(17,077)	(2,175)
Cash and Cash Equivalents, Period Increase (Decrease)	(18,562)	38,920
CASH - BEGINNING OF PERIOD	52,747	18,015
CASH - END OF PERIOD	34,185	56,935
Stock issued in connection with conversion of debentures - value		399,228
Conversion of preferred stock into common stock	110	26,956
Conversion of notes payable into common stock	7,000
Conversion of interest expense into convertible notes payable	$ 2,200
Debt discount associated with derivative liability		247,000
Debt discount associated with convertible debt		274,650
Conversion of notes payable into convertible debt		$ 450,300

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Accounts Receivable and Allowance For Doubtful Accounts

9 Months Ended

May. 31, 2015

Notes

Accounts Receivable and Allowance For Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are presented net of allowance for doubtful accounts.

The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. The Company did not recognize an allowance for doubtful accounts as of November 30 and August 31, 2014, respectively.

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Debt Disclosures: Schedule of Loans Payable (Tables)

9 Months Ended

May. 31, 2015

Tables/Schedules

Schedule of Loans Payable

	May 31, 2015	August 31, 2014
	(Unaudited)
Loans payable	$              290,800	$      $218,300

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Business Combinations

9 Months Ended

May. 31, 2015

Notes

Business Combinations

Business Combinations

In accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may require an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance.