Digital Brand Media and Marketing Group Inc (DBMM)

[Poo28]

Really important to understand the SEC and PCAOB regulations and instructions underlying the 10-Q and 10-K filings.

Certain items like "NET LOSS" is irrelevant as is paper loss and can vary significantly depending on the volatility of pps and derivative liabilities.

The Update of  April 13th had a whole section on Reduction in Aged Debt and Derivative Liabilities which, once CDs are removed will be $-0- for DL. See below 

Is misleading to infer that data which fluctuates dramatically quarter to quarter is strategically relevant for shareholders.

Shareholders know. that is why there is comparisons in the filings.

https://www.dbmmgroup.com/shareholder-update-april-13-2023/

When reviewing the aforementioned 2Q2023 10-Q filing, with emphasis on the MD&A, a few highlights and comments:

Revenues–    Improvement of 74% over same period 2022, and 27% for 6-month period.–    The Company sees a positive, demonstrated business outlook which will increase revenues based on the step-by-step approach implemented and shared in earlier Updates.

Reduction in Aged Debt–    Following strategy of removing one lender holding aged Convertible Debentures at a time via settlement, certain CDs have been canceled, along with interest and derivative liabilities, which have been removed in all relative portions of the Financial Statements. This quarter, 7.5 million shares were issued to remove the aged debt and the Lender permanently.–    Because the 2Q2023 had highly volatile pps, it is important to explain aspects of DL which are really in the weeds and were intended to illustrate a worst-case scenario for Convertible Debentures conversion, exacerbated by volatility in pps

Derivative Liabilities–    In filing, read sections entitled “Derivative Liabilities,” “Fair Value of Financial Instruments” and “Convertible Instruments” (pgs 9-10). The reporting guidelines were established by the SEC in 1997, and were made more rigorous after the Enron debacle. DLs are required inclusions in 10-Ks and 10-Qs irrespective of whether they apply, as is the case with DBMM as a fully reporting company.–    DBMM is settling each aged Convertible Debenture to the benefit of the Company, so the terms of the CDs are irrelevant and canceled. Yet, the pps volatility still must be calculated and carried as a liability, which generates a paper loss until the liability is canceled.–    Ultimately, as CDs are settled and canceled, DBMM will have no DLs and the liability will be 0, instead of wildly fluctuating every quarter and negatively impacting the balance sheet, and generating a net loss which is nothing more than a paper loss which never materializes.–    DLs have been confusing in the past, so particularly in the 2Q when the pps had significant volatility, we wanted to define the requirement and explain why DBMM is an anomaly. The Company looks forward to all aged debt being extinguished as a priority, as it has since 2020. DBMM management has found this situation very frustrating and worthy of explanation.