SOURCE: Digital Brand Media & Marketing Group, Inc.

Digital Brand Media & Marketing Group, Inc.

February 11, 2016 12:16 ET

DBMM's Positive Outlook for 2016 -- and the Reasons Why

NEW YORK, NY and LOS ANGELES, CA and LONDON, UNITED KINGDOM--(Marketwired - Feb 11, 2016) - Digital Brand Media & Marketing Group, Inc. (OTC PINK: DBMM) updated its positive forecast for 2016 to bring prospective new investors and supporters up to date.

Reggie James, Co-Chief Operating Officer and Senior Vice-President Marketing & Communications, commented: "As mentioned in an earlier PR, the growth of the Company has been vertical, and was engaging in a long-term capital raise to match its talent and infrastructure growth requirements. In the interim, DBMM has had significant meetings in the first 6 weeks of the year and intends to conclude substantial deals in early March 2016, both in the US and in Europe."

James added: "In short, the fragmented nature of the worldwide stock exchanges are accentuating deal flow into growing sectors like digital technology and marketing. Recent reports (http://goo.gl/r4Cyog) illustrate unprecedented M & A activity. The investment trajectory allows DBMM to move forward in its discussions with mezzanine financing sources and high net worth individuals who express their focus on exponential growth industries. DBMM now fits their criteria and it is a major game changer to move away from equity financing to a much more sophisticated avenue for growth capital. The current industry activity reinforces the DBMM strategy articulated last Fall."

James went on: "The Company will roll out its investor outreach to Europe and Asia coincident with the filings of the 2015 10-K and 1Q2016 10-Q, implement its capital raise to grow the Digital Clarity brand, as well as locking down a mutually beneficial acquisition."

In conclusion, the establishment of a sustainable, high ROI company takes patience, but DBMM's results stand on its own merits and compare well with other companies in the sector. DBMM's continued high performance in transforming clients' digital footprint has gained momentum and interest. It is differentiating, it is strategic, it increases ROI. In many ways it is disruptive, a 21st century requirement and thus a very good thing.

DBMM thought it may be useful to summarize a fact package for ready reference below, covering the status of DBMM -- the public company. It provides background and rationale to offset and address some rampant misinformation:

The microcap market is an unusual exchange with very specific and evolving regulations from a variety of regulatory and best practice sources. DBMM is a transparent structure, but the specifics of the underlying requirements are often misunderstood. In the past, as DBMM was pivoting to identify the business model which would ultimately provide the greatest ROI, it relied on lenders with debt-to-equity contractual arrangements. The contracts had varying terms with 6-24 months being the time range. Following the 2008 worldwide financial recession, actually a crisis, there were virtually no avenues for funding available for funding micro and small cap companies, unless you were a Fortune 500 Company with significant assets to collateralize. Like many others, DBMM had to develop under very adverse conditions. DBMM is eliminating that debt, which has very positive implications for the balance sheet.

That environment is now behind DBMM and been replaced with good news and made progress with major accomplishments, as follows:

1) Since 2014, the model for growth has been honed and tested. The result is margins of 35-55%.

2) The revenues for fiscal year 2015 grew quarter on quarter and positioned the Company to forecast a growth trajectory for 2016 and beyond based on the industry multiple of 25-30 X revenues. DBMM's valuation on that basis should be $12.5-15 million.

3) The client base has grown considerably. In addition, there are new clients in the pipeline which will be integrated as infrastructure expansion permits. DBMM is attracting major brands, and that is serving the Company well.

4) The Company is in the right place, at the right time, with the right product.

The business is on track, but there has been a lack of acknowledgement by the market, and that is a hurdle. This is why the Company is determined to include all events and actions in the 10-K filing, irrespective of timelines, coincident with the 10-K in order to capture all the positive material events from the 1Q2016 timeframe. This decision follows the pattern established in earlier years, but is particularly important this year because of the revenue increase coupled with the elimination of certain debt and associated derivative liability and interest.

By way of background, here are extracts from the last 2 Press Releases so the strategy being implemented is clear.

Extract from October 30, 2015 press release:

"......The 10-K Annual Audit is being prepared. Part of the process is to test whether the Company has sufficient authorized shares reserved for its outstanding debt, as well as provide sufficient support for organic growth and acquisition(s). Accordingly, the Company has raised its Authorized Shares to 200 Million, 2% of its previous AS. There is major expansion underway enabled by strong operating performance in 2015. Our new clients and those in the pipeline have made way for real progress. We look forward to 2016."

Extract from December 22, 2015 press release:

"To position the capital raise properly, the 10-K being prepared will reduce all of the debt which has been eliminated thus far, as well as the extinguishment of derivative liabilities and interest expense being carried on the balance sheet. The aged debt removed in 1Q2016 will be included in the 10-K and is one of the upsides of the delay associated with the filing. The 10-K is audited and that document will serve us well in the aforementioned discussions... DBMM expects it to be the most positive and best forward-looking 10-K to date."

The required calculation of reserve for outstanding debt described in the Oct 30th PR utilized a pps of $.0048. When the reserve was tracked again in early January and again in early February suggested the AS was not sufficient for the full fiscal year. Based on a current pps which has eroded, it is necessary to increase the Authorized Shares to 500 million. Even though significant debt, derivative liability and interest has been eliminated, the trading patterns have eroded the pps, and the audit process requires the reserve calculation. However, the increase results in an AS which is only 5% of the pre-reverse AS for the fiscal year 2016. The re-calculation must be done in advance of the 10-K filing. There is full transparency in place, and the transfer agent provides the outstanding shares whenever queried.

The summary provided herein is to reinforce the fact that the short-term debt incurred is being eliminated, and the Company's intent is to shift to a much more advantageous and attractive form of capital funding, and that arrangement is in process.

DBMM looks forward to continuing its growth pattern and a very exciting 2016.

About Digital Brand Media & Marketing Group, Inc. (DBMM):

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.

Safe Harbor Provisions:

The foregoing contains certain predictive statements that relate to future events or future business and financial performance. Such statements can only be predictions, and the actual events or results may differ from those discussed due to, among other things, those risks described in DBMM's reports filed with the SEC. Opinions expressed herein are subject to change without notice. This document is published solely for information purposes, and is not to be construed as an offer to sell or the solicitation of an offer to buy any securities in any state. Past performance does not guarantee future performance. Additional information is available upon request.

Contact Information

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