Amended Annual Report (10-k/a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 2

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR FISCAL YEAR ENDED: August 31, 2018

OR

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number: 333-85072

DBMM GROUP

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

WWW.DBMMGROUP.COM

(Name of small business issuer in its charter)

Florida	59-3666743
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

747 Third Avenue, 2^nd FL., New York, NY 10017

(Address of principal executive offices)

(646) 722-2706

(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class		Name of exchange on which registered
None		None

Securities registered under Section 12(g) of the Exchange Act:

Title of each class		Name of exchange on which registered
Common Stock, par value $0.001 per share		OTC Electronic Bulletin Board

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

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. Yes☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrants most recently completed third fiscal quarter: on May 31, 2018: $932,148

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

Common Stock, par value $.001 per share: 745,718,631 Outstanding as of December 14, 2018

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (i) any annual report to security holders; (ii) any proxy or information statement; and (iii) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (the “Securities Act”). The listed documents should be clearly described for identification purposes (e.g. annual reports to security holders for fiscal year ended December 24, 1980).

None

Transitional Small Business Disclosure Format (Check one): Yes ☐ No ☒

Explanatory Note:

The purpose of Amendment No. 2 to our Annual Report on Form 10-K for the year ended August 31, 2018 (the "Form 10-K) originally filed with the U.S. Securities and Exchange Commission on December 14, 2018, and Amendment No. 1 filed on April 23, 2019 is to supersede Part II, Item 9A in its entirety.

No other changes have been made to the original Form 10-K/A, Amendment 1. This Form 10-K/A, Amendment No. 2 speaks as of the original filing date of the Form 10-K, including only the Amendments stated in 10-K/A, Amendment No. 1, and does not reflect events that may have occurred subsequent to the original filing date.

FORM 10-K
For the Fiscal Years Ended August 31, 2018, and 2017
TABLE OF CONTENTS
		Page
PART I

Item 1.	Description of Business	4
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	5
Item 2.	Description of Property	6
Item 3.	Legal Proceedings	6
Item 4.	Mine Safety Disclosures	6

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	8
Item 8.	Consolidated Financial Statements and Supplementary Data	21
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	22
Item 9A (T).	Controls and Procedures	22
Item 9B.	Other Information	-

PART III

Item 10.	Directors and Executive Officers of the Registrant	23
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions	26
Item 14.	Principal Accountant Fees and Services	26

PART IV

Item 15.	Exhibits	27

Signatures		28

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties, many of which are beyond our control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, risks related to the large amount of our outstanding term loans; history of net losses and accumulated deficits; reliance on third parties to market, sell and distribute our products; future capital requirements; competition and technical advances; dependence on the oil services market for pipe and well cleaners; ability to protect our patents and proprietary rights; reliance on a small number of customers for a significant percentage of our revenues; and other risks. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this Annual Report will in fact occur.

Item 1. Description of Business

General

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

On March 20, 2007, we entered into a Share Exchange Agreement (the “Agreement”) with Atlantic Network Holdings Limited, New Media Television (Europe) Limited (“NMTV”), and Certain Outside Stockholders to acquire all of the outstanding shares of NMTV. Atlantic Network Holdings Limited is a Guernsey company limited by shares and NMTV is a United Kingdom private company limited by shares. The transaction was subject to the fulfillment of certain conditions, including the satisfactory completion of the audit of NMTV’s financial statements for each of its past three fiscal years. The conditions of closing were not met by ANHL and the agreement was rescinded via 8-K/A on March 30, 2010.

DBMM entered into a Share Exchange Agreement (the “Exchange Agreement”), on March 31, 2010, with Cloud Channel Limited which was subsequently re-named as RTG Ventures (Europe) Limited in July 2010 (“RTG Ventures (Europe)”). Pursuant to the Exchange Agreement, the Company acquired 100% of the outstanding capital stock of RTG Ventures (Europe) from its stockholders for consideration consisting of Convertible Preferred Shares of RTG Ventures, Inc. according to the derivative valuation methodologies outlined in the Share Exchange Agreement of Stylar Limited, a/k/a Digital Clarity. RTG Ventures (Europe) has been valued 12 months forward “notionally” one year hence. An 8-K/A was filed in September 2010 containing audited financials of the acquisition of Stylar Limited which completed the transaction. Shareholders converted the preferred shares into common stock using the average share price of the 30 days preceding September 3, 2011 which provided a share price of $0.016083. The methodology provided a valuation of 4X net profit. All preferred stock was held by DBMM’s transfer agent for the 12-month period ending September 3, 2011. All voting shares were held by management.

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. Certain business lines were eliminated from the Business Plan immediately. In October 2011 the joint venture with iPayu was mutually withdrawn and in December 2011 the acquisition of Bitemark Ltd. was rescinded. The companies reverted to the same position each held prior to the contracts.

The rescission of the Bitemark Ltd. share purchase agreement was included as an exhibit to the filing for the 2011 fiscal year even though it constituted a subsequent event at the time.

As a further result of the review, the Company also agreed to strategically focus 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 positions the Company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most of the digital economy focusing on areas such as Search Page Engine Marketing (Google, Yahoo! & Bing), Social Media (Twitter, Facebook & LinkedIn) and Internet Strategy Planning including Design, Analytics and Mobile Marketing.

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On March 5, 2013, Digital Brand Media & Marketing Group, Inc. filed a Certificate of Amendment to its Articles of Incorporation to change its name from “RTG Ventures, Inc.” to “Digital Brand Media & Marketing Group, Inc.” In connection with the name change, the Company’s trading symbol changed from “RTGV” to “DBMM” (the “Symbol Change”). The Amendment was effective as of March 20, 2013. The Name Change and Symbol Change have been reflected in the Company’s ticker symbol as of April 8, 2013.

Also on March 5, 2013, Digital Brand Media & Marketing Group, Inc. received approval from the Financial Industry Regulatory Authority (FINRA) for its 100 to 1 reverse stock split.

On July 17, 2015 Digital Brand Media & Marketing Group, Inc. received approval from the Financial Industry Regulatory Authority (FINRA) for its 1,000 to 1 reverse split.

The aforementioned structural changes were market driven while operating in a difficult worldwide financial environment. The operating business is described below:

ABOUT OUR BRAND DIGITAL CLARITY

Digital Clarity is the trading brand for Stylar Limited, a wholly owned company of DBMM, through its office in London, England. The Company is a multi-service digital marketing agency which specializes in creating effective strategies and campaigns for clients across a range of vertical markets, working in three key areas:

● SearchEngine Marketing –for search engines like Google, Yahoo etc.

● WebDesign –building sites for web, mobile and tablet devices

● SocialMedia –planning and measuring social metrics digitally in order to diagnose strategy

DBMM Group can leverage its team’s experience in digital media and provide leading strategy, deployment and measurement to its core markets in many industry sectors, from creative to traditional corporate. Entertainment, Fashion and Sports industries, as well as Automotive, eCommerce, and Investment Banking as proven markets.

The Company is rolling out the services of both the technology and marketing services offering from its operating base in the UK with a plan to increase its presence into the larger markets in the US. namely Los Angeles and New York. The intent in fiscal year 2018 was to continue this strategy as cash infusion will immediate correlate to increased revenues. Growth is clearly a function of available capital. Fiscal year 2018 reflected the Company's continued progress by being awarded contracts for a number of new clients. The contract model strategy results in a full digital technology and marketing consultancy from design following an analysis of the client's analytics, then executing and stewarding the evolution of the model. The Company's mantra is "ROI is our DNA," the underlying focus for business development.

Employees

As of August 31, 2018, the Company had seven full-time employees.

Competition

There is strong competition in the digital marketing arena, though with the right level of investment and marketing, Digital Clarity has a confident outlook in using its experience to win new business in both local and international markets. DBMM has significant business relationships in place because it has a differentiating model.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2. DESCRIPTION OF PROPERTY

DBMM's Corporate address is 747 Third Avenue, 2nd Floor, New York, NY 10017. The operating headquarters is located in the UK as Stylar limited, trading as Digital Clarity. DC is on a month-to-month lease at $1,416, as it is evaluating larger quarters.

ITEM 3. LEGAL PROCEEDINGS

1.The Company was involved in a litigation, Asher Enterprises, Inc. v: Digital Brand Media & Marketing Group, Inc., Index No.600717/2014, in the Supreme Court of the State of New York, County of Nassau. The Plaintiff alleged $337,500 breach of contract principal and damages arising from an untimely periodic filing in 2013. On September 14, 2014 the Court declined to grant the plaintiff's application for default judgment and Linda Perry was removed as a defendant. The Court awarded judgment in favor of the Plaintiff on July 15, 2015 in the amount of $122,891.87, which did not include $25,000 paid in a subsequent settlement in February 2016.On June 18, 2018 the matter was settled between the parties with an Addendum to the Settlement Agreement, for a final payment of $65,000 which was paid in full on the same date. A Stipulation of Discontinuance was filed with the Court ending the litigation. A Satisfaction of Judgment through the Settlement Addendum was coincidently filed. The litigation is closed.

2. The U.S. Securities & Exchange Commission instituted an Administrative Proceeding, File No. 3-17990, on May 16, 2017 to revoke the Company's registration statement because of delinquent filings. A hearing was held on August 9, 2017 and the Initial Decision to revoke the registration was dated November 16, 2017. The order was subsequently remanded by order of the U.S. Supreme Court in December 2017. The Company responded to the Remand with evidence of mitigating circumstances under a Protective Order and filed all its delinquent filings: a Super 10-K for 2015-2016-2017 on May 31, 2018 and 10-Q's for 2018 1Q, 2Q on June 22, 2018 and 3Q on July 15, 2018, its due date.

On November 9, 2018 following agreement by the parties and stated in an order for the case to go forward based on the existing record with the exception of the aforementioned Initial Decision which has been vacated/withdrawn. A hearing is scheduled for January 15, 2019 during which both parties will make a thirty-minute oral presentation.

From time to time, the Company has become or may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties and an adverse result in those or other matters may arise from time to time that may harm its financial position, or our business and the outcome of these matters cannot be ultimately predicted.

ITEM 4. MINE SAFETY DISCLOSURES

N/A

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PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is currently listed for quotation on the OTC:PK under the symbol “DBMM”.

Per Share Market Price Data

The following table sets forth, for the fiscal quarters indicated, the high and low closing bid prices per share for our common stock, as reported by on PinkSheets.com. Such quotations reflect inter-dealer prices, without retail markup, markdown or commission and may not represent actual transactions.

Year Ended August 31, 2018:	High		Low
First Quarter	$	0.0002	$	0.0002
Second Quarter	$	0.0003	$	0.0003
Third Quarter	$	0.0015	$	0.0010
Fourth Quarter	$	0.0014	$	0.0006

Year Ended August 31, 2017:	High		Low
First Quarter	$	0.0002	$	0.0001
Second Quarter	$	0.0050	$	0.0001
Third Quarter	$	0.0029	$	0.0030
Fourth Quarter	$	0.0019	$	0.0001

The last reported sale price of the common stock on the OTC Electronic Bulletin Board on August 31, 2018 and August 31, 2017 were 0.0014 and 0.0019 per share respectively. As of August 31, 2018, and August 31,2017, there were 119 and 119 holders of record of our common stock respectively.

Dividends

We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.

Recent issuances of Unregistered Securities

Period	Class	Shares	Consideration	Use of Proceeds	Exemption from Registration
2018	Investors	- 0 -	- 0 -	N/A	§4 (a) (2)

ITEM 6. SELECTED FINANCIAL DATA

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.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Operations Overview/Outlook

The company is providing a document called the Creds Deck which provides a description to prospective clients of Digital Clarity’s value proposition. http://www.dbmmgroup.com/wp-content/uploads/2018/12/Digital-Clarity-Creds-Deck_DBMM_Nov2018.pdf

Operationally, fiscal year 2018 has been important in continuing the direction of the Company and steering it toward a scaled growth plan. The Company continued to focus on the positive, proven operating model and used that model to expand geographic reach with existing and new clients.

DBMM continues to build on its strengths. The company had strong relationships within the market and intends to build its business focus in a wide variety of industry verticals.

The heart of the business is the marketing consultancy. DBMM Group’s main business Digital Clarity, works in the area of Digital Marketing. Understanding each client and developing the model to individualize the outlook has been essential. This kind of close relationship with the client resulted in Digital Clarity being considered a close professional advisor.

Why Digital Experts are in demand

The world is changing, and technology is taking the lead. Today, everything is going digital -- entertainment, health, real estate, banking and even currencies. This is, however, understandable. In North America alone, 89% of the population are online (statitsa).

With everything turning to digital, it means companies are also jumping online to market their businesses. And to survive the challenges of digital marketing, brands need to keep up with the latest trends. Successfully reaching one’s target audience is no longer just putting out TV and print ads. These days, social media is the new arena of digital marketers, as 3.3 billion people are active social media users.

Notably, according to Forbes January 2018 data, 24% of the 5,700 global marketers who were surveyed revealed that social media has been an important part of their marketing for the past five years.

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

Relentless Digital Growth Positions Digital Clarity as a Leader

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

Search Engine Marketing

The number of people using internet search engines is increasing year on year and is almost unfathomable. Last year, 46.8% of the global population accessed the internet and by 2021 this figure is projected to grow to 53.7%.

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Digital Clarity helps companies ‘get found’ on search engines like Google. Using the above Market Share chart and the data from Internet live stats, we can see the number of daily searches on Google 3.5 billion, which equates to 1.2 trillion searches per year worldwide.

How machine learning is enhancing digital marketing strategy

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

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

Machine learning and Digital Marketing

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

Search Engine Optimization

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

Pay Per Click (PPC) Campaigns

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

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

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●	Get to grips with the metrics that are most valuable to your business

●	Understand obstacles that could get in the way of meeting your goals

●	Know the underlying performance drivers to make more strategic decisions

Content Marketing

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

The Growth of Digital Marketing & Consultancy Services

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

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

Digital Marketing Services

2018 continued to see 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 continue to encourage development in the digital marketing services sector. The marketing services product is labor intensive and thus the Company must jumpstart the growth by significant capital to grow simultaneously in multiple geographies.

The operating company remained cash flow positive through 2018 despite challenging situations in the parent company, the company outlook remained robust for the foreseeable future.

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Key Milestones

2018 continued neutral revenues due to external circumstances out of the companies control which placed enormous pressure on the operating business. Despite these circumstances, the client base is expanding in base number and the size of client serviced. Certain significant new clients representing a variety of industries were added to client roster. Many of these clients choose to operate under an NDA as our clients see DBMM as a competitive advantage. Under that disclaimer, we cannot share all clients’ names, but here are a few key clients representing diverse verticals, as follows:

1.

Recently the company has been hired by the prestigious organizational group, British Marine. British Marine are the membership body for nautical and sea faring craft and include Super and Luxury Yacht companies such as Sunseeker and Princess Yachts.

2.

Digital Clarity have been hired to audit Google Search and Analytics for British Marine’s top show, The London Boat Show and one of Europe’s largest events, The Southampton Boat Show. The company is in talk to act as digital advisor with British Marine for the Abu Dhabi Boat Show. These shows will fit into the circuit that incorporates Fort Lauderdale, Monaco and Cannes Boat & Yachting events.

3.

Digital Clarity are also working with sponsors and potential sponsors of a Formula 1 team that are in the top 5 racing teams in this prestigious and global sport.

4.

Chantico Global

Prestigious asset allocation advisors headquartered in Los Angeles, California, headed by CNBC TV Economist Gina Sanchez. Chantico has a Joint Venture Partnership with Oxford Economics in the UK servicing 1500 international corporations.

5.

Babcock Engineering

Defense contractor for the United Kingdom Ministry of Defense.

6.

Abbey Road Institute

Launch of division of world famous studious to train the musicians of the future.

Other examples are representative of the diversity of client base. DBMM's approach using a client's analytics and executing an individualized model to increase ROI as the prime objective, spans a wide range of industries.

Digital Clarity continues to expand into high end Real Estate and Luxury brands and is building a strong network on High Net-worth and Ultra High Net-worth Individuals

NOTABLE EVENTS - INDUSTRY AWARDS & RECOGNITION

Digital Clarity is an AWARD-WINNING Digital Marketing Services Business

In 2018 alone, the company has been shortlisted for the coveted UK Search Awards 2018 which will be announced early December 2018 while it has already won the Top Award of Gold at the Digital Impact Awards 2018.

The UK Search Awards have been celebrating the expertise, talent and achievements of the search industry for over half a decade and are regarded as the premiere celebration of SEO, PPC and content marketing in the UK. The awards attract hundreds of entries from the leading search and digital agencies from across the UK and to those based elsewhere around the globe who are delivering work for the UK market.

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The 2018 awards are hosted by Katherine Ryan, will feature the very best in SEO & PPC campaigns, software and the teams and individuals behind them.

All categories will be judged by an influential and respected international judging panel. The judging is a robust, credible and transparent two-step process, involving pre-scoring and a face to face panel discussion.

THE DIGITAL IMPACT AWARDS 2018

Now in its 9th year, the Digital Impact Awards are the UK’s largest celebration of digital work in corporate communications.

The Digital Impact Awards sets the industry-wide benchmark in digital stakeholder engagement. The event honors the best corporate digital communications work in Europe.

This award celebrates the campaigns that best exemplify their successes, obstacles or effectiveness through measurable data. The strongest entries feature proprietary evaluation systems, an effective use of existing systems or solid analysis of metrics.

The in-depth evaluation strategy used between Digital Clarity allowed the company to understand the user journey and quality of leads from first click through to final sale.

Andrew Thomas, publishing editor of Communicate magazine and founder of the Digital Impact Awards, says, “Last year was one of the most competitive of years in the history of the awards programme. Yet this year’s awards signified the leaps and bounds that digital communications are continuing to make across the professional plateau. The sheer quality and character of the evening’s winners exemplifies not only the homogeneity of today’s digital communications, but equally its importance.”

Digital Clarity Shortlisted for Ecommerce Awards for Excellence for ProCook

ProCook is the UK’s leading specialist cookware multi-channel retailer. With retail outlets in major towns and cities across the UK, the company also has a powerful online e-commerce presence.

ProCook has seen great growth in the last few years via PPC and SEO strategies and have been working with Digital Clarity over the past 8 years.

Results were staggering

●	PPC brand revenue uplift – 35%

●	PC non-brand revenue uplift – 36%

●	SEO revenue uplift – 51%

●	Shopping revenue uplift – 48%

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Digital Entrepreneur Awards - Digital Clarity Shortlisted for Digital Business of the Year 2017

Sponsored by UKFast, the Digital Entrepreneur awards are the only national awards ceremony that is dedicated to internet entrepreneurialism. The awards aim to celebrate entrepreneurs from startup level right through to large corporate companies.

“The awards celebrate not only the high-profile websites and leaders driving online commerce but the silent heroes who develop the systems that change the online landscape and shape our digital future.”

Digital Clarity Research Featured in Huffington Post

Digital Clarity looked into the perils of internet addiction, especially among the young and the effects it can have to both the individual as well as broader society.

The research was deemed worthy to be published in the Huffington Post, an online paper rum by Ariana Huffington and used by journalists worldwide as both a distribution point as well as an inspiration to feed into current events and stories. http://www.huffingtonpost.co.uk/2014/10/16/youths-controlled-internet-addiction_n_599_5068.html

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Key Differentiators in Choosing Digital Clarity

Why Digital Marketing is key requirement in any business

The UK Market

UK Digital Ad spend grew 15% year on year

Search is King

Source: Digital Ad spend report from IAB UK and PwC 2018

THE NEED FOR PROFESSIONAL CONSULTANCY & OPPORTUNITY FOR MASSIVE GROWTH

For the first time ever, four consultancies have cracked Ad Age's ranking of the 10 largest agency companies in the world. With combined revenue of $13.2 billion, the marketing services units of Accenture, PwC, IBM and Deloitte sit just below WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu. Last year, only two consultancies—Accenture Interactive and IBM iX—made the top 10. IBM iX was the first to break into the top 10.

Given the experience of the team, Digital Clarity’s advisory and consultancy is in demand. With the recent growth in these business areas, and the rise of consultancies, it is confirmation that Digital Clarity is headed in the right direction for growth.

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

Outlook of the global digital marketing spend

Technavio’s market research analyst predicts the global digital marketing spending market to grow steadily at a CAGR of around 9% during the forecast period.

One of the major factors influencing the growth of digital marketing is its ability to track and monitor the outcome of spending on digital marketing efforts. With the help of digital marketing platforms, the marketers can view their customer's response and measure the success of the marketing campaign in real-time, without conducting an expensive market research.

Much of this market’s growth can be attributed to the fact that these platforms are interactive for users. Since the customer engagement rate for these campaigns is relatively higher than other marketing strategies, they are rapidly being adopted by enterprises to increase their customer base. The ability of strategically planned interactive campaigns to effectively engage clients will result in the augmented adoption of digital platforms during the forecast period.

Type-based segmentation of the digital marketing spending market

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Search ads

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Display ads

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Social media

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Email marketing

In this market research, analysts have estimated the search ads segment to be the largest market segment during the forecast period. In 2015, this market segment accounted for more than 33% of the total market share and is envisaged to retain its hold over the market until 2020 owing to the ability of search ads to show results based on search engine queries and appropriate keywords.

Geographical segmentation of the digital marketing spending market

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Americas - North, Central and South America

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APAC - Asia Pacific and Japan

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EMEA - Europe, the Middle East and Africa

This segmentation analysis predicts the Americas to account for more than 45% of the total market share by 2020. In this region, the brands have a greater chance of monetizing their advertisements due to the availability of a broad base of the target audience. Factors such as the rapid shift toward online shopping will result in this market’s strong growth in the Americas.

Competitive landscape and key vendors

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

Growth Opportunities in the Market

In fiscal year 2019, the company will continue to take advantage of the global growth in Digital Marketing.

15

Annual growth trajectory positive, especially in active mobile social users, 39% penetration, up 5% from 2017.

Share of web traffic by device highly favors mobile at 52% (+4% year-on-year change), whilst Desktop remains in second place with only 43% of device share to all web pages, down by 3% year-on-year.

THE GROWTH OF DIGITAL GLOBALLY IN 2018

2018 has seen massive growth in the core areas of operation in which Digital Clarity operates, namely Social Media, Search Marketing, Analytics and Online Advertising.

●

The number of internet users worldwide in 2018 is 4.021 billion, up 7 percent year-on-year

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The number of social media users worldwide in 2018 is 3.196 billion, up 13 percent year-on-year

●

The number of mobile phone users in 2018 is 5.135 billion, up 4 percent year-on-year

16

The global increase in social media usage since January 2017 is 13%. Saudi Arabia has the largest year-on-year increase in social media users since January 2017 (32%), a 17% increase compared to the global average. Other countries with the largest social media usage increase includes India, Indonesia and Ghana as technology is improving and social media becomes easily accessible to more of the population.

WORLDWIDE E-COMMERCE GROWTH OPPORTUNITIES

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

Global Retail Ecommerce Sales Will Reach $4.5 Trillion by 2021

Cumulative data from Statista anticipates a 246.15% increase in worldwide ecommerce sales, from $1.3 trillion in 2014 to $4.5 trillion in 2021. That’s a nearly threefold lift in online revenue

Retail Ecommerce’s Global Spread

17

According to Business.com, the 10 largest ecommerce markets in the world are:

1. China: $672 billion

2. United States: $340 billion

3. United Kingdom: $99 billion

4. Japan: $79 billion

5. Germany: $73 billion

6. France: $43 billion

7. South Korea: $37 billion

8. Canada: $30 billion

9. Russia: $20 billion

10. Brazil: $19 billion

WORLD'S MOST VALUABLE BRAND

Amazon has officially replaced Google as the most valuable brand in the world, according to brand consultancy Brand Finance. Amazon's brand value is $150.8 billion, an increase of 42% from 2016, based on business performance and marketing investment. The second most valuable global brand is Apple, at $146.3billion. Google is third highest, with a $120.9 billion valuation. (Business Insider.com)

GROWTH IN INVESTOR AWARENESS AND OUTREACH.

Digital Brand Media & Marketing Group, Inc. will initiate a significant effort to raise positive awareness of DBMM's growth potential on a global basis. The strategic outreach is directed at investors around the world who understand the digital marketplace and its expanding influence on consumer decisions. DBMM will target new investors through a global digital and traditional integrated investor outreach campaign which will be run by Digital Clarity, with third parties, as required, for distribution. In all areas, the Company will act in the interests of all stakeholders.

In the full industry context of dramatic expansion of digital footprints, there has been no direct correlation between DBMM's revenues and its share price. Economic and industry analysts have opined that the industry multiple continues to grow to, in some cases, 25-30 times revenues. DBMM will expand its client and geographic scale, thus increasing revenues. There were matters outside of DBMM's control which caused growth to be in neutral. In 2018, after settling its litigation and filing a Super 10-K for 2015-2016-2017, the 3 Q's for 2018 and the 10-K for 2018, DBMM resumed its growth business plan. Now that the Company has capital infusion, 2018 and 2019 will follow the model of a growing client base and geographic reach until it achieves a TBD level of profitability/ this benchmark will replicate successful industry models in digital technology and marketing.

FINANCIAL OVERVIEW/OUTLOOK

DBMM has been honing its commercial model since the acquisition of Digital Clarity ("DC") in 2011 which has been cash-flow positive as an operating company since its acquisition. External events outside of DBMM's control has precluded the growth expected to this point, however, its margins continue in the 31-35% range and once the business reaches appropriate scale with assumed profitability and cross-over point, DBMM will be a very successful business for all its stakeholders.

The growth trajectory anticipated is expected during 2019. Once that occurs, the clients benefit immediately due to a wider range of resources; the shareholders will benefit as the market cap grows. The media market multiple far exceeds the "old" manufacturing multiples, as digital technology and marketing has become one of the fastest growing industries in the world today.

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

18

Coincidently, 2018 results are on a positive track. After over 2 years, DBMM was able to attract new investors to provide the financing required to complete all delinquent filings and to keep DBMM current in SEC reporting, The Company received a commitment for future working capital in order to grow the Company in key markets, with the intent to move to DBMM profitability. At that point, DBMM would not require future financing until it was ready to acquire 1-2 additional companies to complement and further develop the digital marketing business. The Company also settled its long-standing litigation with a toxic lender, with the settlement fully paid, thus closing the proceeding.

Going forward, there will be an emphasis on investor awareness, particularly in 2019. DBMM intends to make significant strides in aggressively widening its brand exposure using a variety of digital and social channels. There are investors around the globe who understand the digital marketplace and its increasing influence on consumer decisions. DBMM is targeting these new investors in the public market through a global digital and traditional, integrated campaign which will be run by Digital Clarity, with third parties, as required for distribution.

The expectations for 2019 is to put DBMM's hurdles behind it, and move ahead with a scaled, growth plan in multiple geographies to benefit all stakeholders, but particularly the shareholders.

Fiscal Year 2018

We had approximately $33,000 in cash and our working capital deficiency amounted to approximately $3.7 million at August 31, 2018.

During the year ended August 31, 2018, we used cash in our operating activities amounting to approximately $240,000. Our cash used in operating activities was comprised of our net loss of approximately $456,000 adjusted primarily for the following:

Change in fair value of derivative liability of $16,640;

Additionally, the following variations in operating assets and liabilities during the year ended August 31, 2018 impacted our cash used in operating activity:

In our accounts payable and accrued expenses, including accrued compensation, of approximately $260,000, resulting from a short fall in liquidity and capital resources.

During the year ended August 31, 2018, we generated cash from financing activities of $188,045 which primarily consists of the proceeds from demand notes payable of $135,000, officer loans $ 118,045, and payment made for loan payable of $65,000.

Fiscal Year 2017

We had approximately $55,000 in cash and our working capital deficiency amounted to approximately $3.3 million at August 31, 2017.

During the year ended August 31, 2017, we used cash in our operating activities amounting to approximately $29,000. Our cash used in operating activities was comprised of our net gain of approximately $560,000 adjusted primarily for the following:

Change in fair value of derivative liability of $776,858;

Amortization of debt discount of $32,083;

Additionally, the following variations in operating assets and liabilities during the year ended August 31, 2017 impacted our cash used in operating activity:

In our accounts payable and accrued expenses, including accrued compensation, of approximately $181,000, resulting from a short fall in liquidity and capital resources.

Going Concern

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

19

The Company has outstanding loans and convertible notes payable aggregating $1.4 million at August 31, 2018 and doesn’t have sufficient cash on hand to satisfy such obligations. However, during fiscal year 2018, loans of $193,323. were raised from the new loan arrangements. The Company also has a non-binding Commitment Letter from an investor of $250,000 which also includes a right of first refusal on additional capital raise up to $3 million which will contribute to satisfying such obligations and fund any potential cash flow deficiencies from operations for the foreseeable future.

Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

RESULTS OF OPERATIONS

Comparison of Results for the Years Ended August 31, 2018, and August 31, 2017

Consolidated Operating Results

	For the Years Ended August 31,						Increase/ (Decrease)			Increase/ -Decrease
	2018			2017			$ 2018 vs 2017			% 2018 vs 2017

SALES	$	536,501		$	486,369		$	50,132			10	%

COST OF SALES		428,548			311,028			117,520			38	%

GROSS PROFIT		107,953			175,341			(67,388	)		-38	%

COSTS AND EXPENSES
General and administrative		298,770			117,658			181,112			154	%
Compensation Expense		204,000			206,500			(2,500	)		-1	%
		502,770			324,158			178,612			55	%

TOTAL OPERATING EXPENSES		502,770			324,158			178,612			55	%

OPERATING (LOSS)		(394,817	)		(148,817	)		(246,000	)		165	%

OTHER (INCOME) EXPENSE
Interest expense		78,233			63,618			14,615			23	%
Gain/loss on derivative liability		(16,640	)		(776,858	)		(760,218	)		-98	%

TOTAL OTHER EXPENSE (INCOME)		61,593			(713,240	)		(774,833	)		NM

NET (LOSS) INCOME	$	(456,410	)	$	564,423		$	(1,020,833	)		NM

(NM): not meaningful

We currently generate revenue through our Pay-Per-Click Advertising, Search Engine Marketing, Search Engine Optimization Services, Web Design, Social Media, Digital analytics and Advisory Services.

20

For the year ended August 31, 2018 our primary sources of revenue are the Per-Click Advertising, Web Design, and Search Engine Optimization Services. These primary sources amounted to 69.6%, 3.9% and 14.8% of our revenues during the year ended August 31, 2017. Our secondary sources of revenue are our Social Media and Email Media. These secondary sources amounted to approximately 11.3% our revenues during fiscal 2017.

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.

The increase in our revenues during fiscal 2018, when compared to the prior year period, is primarily attributable to an increase in volume of transactions from Per-Click Advertising during fiscal 2018.

Cost of sales during fiscal 2018 and 2017 is correlated to our revenues for the respective periods.

The increase in general and administrative costs during fiscal 2018, when compared to 2017 is primarily due to an increase in legal and professional fees.

Interest expense, which include interest accrued on certain notes and loans, increase during fiscal 2018 is primarily attributable to the new loan payables, during fiscal 2018, when compared to the comparable prior year periods.

The decrease on derivative liabilities is primarily attributable due a decrease in the Company’s estimated volatility used in the assumptions to compute its fair value at August 31, 2018 when compared to August 31, 2017.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES 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 8. CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
	Page

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets as of August 31, 2018 and 2017	F-2

Consolidated Statements of Operations and Comprehensive Loss for the years ended August 31, 2018 and 2017	F-3

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended August 31, 2018 and 2017	F-4

Consolidated Statements of Cash Flows for the years ended August 31, 2018 and 2017	F-5

Notes to Consolidated Financial Statements	F-6

21

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Digital Brand Media & Marketing Group, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Digital Brand Media & Marketing Group, Inc. and subsidiaries (the "Company") as of August 31, 2018 and 2017, the related statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2018 and 2017 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has accumulated deficits and negative working capital. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion in accordance with the standards of the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Liggett & Webb P.A.

We have served as the Company’s auditor since 2017.

New York, NY

December 14, 2018

F-1

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	Years Ended August 31,
	2018			2017
ASSETS

CURRENT ASSETS
Cash	$	33,117		$	55,262
Accounts receivable, net		94,208			55,376
Prepaid expenses and other current assets		480			1,491
Total current assets		127,805			112,129

Property and equipment - net		2,021			3,805

TOTAL ASSETS	$	129,826		$	115,934

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	362,102		$	362,777
Accrued interest		333,431			255,198
Accrued compensation		1,070,156			882,643
Loans payable, net		440,000			370,000
Derivative liability		724,313			740,953
Officers loans payable		140,896			22,851
Convertible debentures, net		840,791			840,791
		3,911,689			3,475,213

STOCKHOLDERS' DEFICIT
Preferred stock, Series 1, par value .001; authorized 2,000,000 shares; 1,995,185, and 1,995,185 shares issued and outstanding		1,995			1,995
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 2,000,000,000 shares; 745,718,631, and 745,718,631, shares issued and outstanding		745,718			745,718
Additional paid in capital		9,274,044			9,274,044
Other comprehensive loss		8,865			(24,961	)
Accumulated deficit		(13,812,485	)		(13,356,075	)

TOTAL STOCKHOLDERS' DEFICIT	$	(3,781,863	)	$	(3,359,279	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	129,826		$	115,934

See Notes to Consolidated Financial Statements.

F-2

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Years Ended August 31,
	2018			2017

SALES	$	536,501		$	486,369

COST OF SALES		428,548			311,028

GROSS PROFIT		107,953			175,341

COSTS AND EXPENSES
Sales, general and administrative		502,770			324,158

TOTAL OPERATING EXPENSES		502,770			324,158

OPERATING (LOSS)		(394,817	)		(148,817	)

OTHER (INCOME) EXPENSE
Interest expense		78,233			63,618
Change in fair value of derivative liability		(16,640	)		(776,858	)
TOTAL OTHER (INCOME) EXPENSE		61,593			(713,240	)

NET (LOSS) INCOME	$	(456,410	)	$	564,423

OTHER COMPREHENSIVE (LOSS)
Foreign exchange translation		33,826			(314	)
COMPREHENSIVE (LOSS) INCOME	$	(422,584	)	$	564,109

NET LOSS PER SHARE
Basic and diluted	$	(0.001	)	$	0.001

WEIGHTED AVERAGE NUMBER OF SHARES
Basic and diluted		745,718,631			745,718,631

See Notes to Consolidated Financial Statements.

F-3

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED AUGUST 31, 2017 AND 2018

	Series 1				Series 2								Additional					Other			Total
	Preferred Stock				Preferred Stock				Common Stock				Paid in		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income (Loss)			Deficit
Balance, August 31, 2017		1,995,185	$	1,995		-	$	-		745,718,631	$	745,718	$	9,274,044	$	(13,920,498	)	$	(24,647	)	$	(3,923,388	)

Net income		-		-		-		-		-		-		-		564,423			-			564,423
Other Comprehensive Loss		-		-		-		-		-		-		-		-			(314	)		(314	)

Balance, August 31, 2017		1,995,185	$	1,995		-	$	-		745,718,631	$	745,718	$	9,274,044	$	(13,356,075	)	$	(24,961	)	$	(3,359,279	)

Net loss		-		-		-		-		-		-		-		(456,410	)		-			(456,410	)
Other Comprehensive Loss		-		-		-		-		-		-		-		-			33,826			33,826

Balance, August 31, 2018		1,995,185	$	1,995		-	$	-		745,718,631	$	745,718	$	9,274,044	$	(13,812,485	)	$	8,865		$	(3,781,863	)

See Notes to Consolidated Financial Statements.

F-4

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended August 31,			For the Year Ended August 31,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(456,410	)	$	564,423

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		546			216
Amortization of debt discount		-			32,083
Change in fair value of derivative liability		(16,640	)		(776,858	)

Changes in operating assets and liabilities:
Accounts receivable		(35,876	)		(12,184	)
Prepaid expenses and other current assets		1,010			28
Accounts payable and accrued expenses		(674	)		(23,723	)
Accrued interest		78,233			63,286
Accrued compensation		187,513			181,596

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(242,298	)		28,867

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(1,718	)		(660	)

NET CASH USED IN INVESTING ACTIVITIES		(1,718	)		(660	)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from loan payable		135,000			-
Proceeds from officers loans payable		118,045			22,851
Payment made for loan payable		(65,000	)		-

NET CASH PROVIDED BY FINANCING ACTIVITIES		188,045			22,851

NET (DECREASE) INCREASE IN CASH		(55,971	)		51,058

EFFECT OF VARIATION OF EXCHANGE RATE OF CASH HELD IN FOREIGN CURRENCY		33,826			(314	)

CASH - BEGINNING OF YEAR		55,262			4,518

CASH - END OF YEAR	$	33,117		$	55,262

Supplemental disclosures of cash flow information:

Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

See Notes to Consolidated Financial Statements.

F-5

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO 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.) (“The Company”) is an OTC:PK listed company. The Company was organized under the laws of the State of Florida on September 29, 1998.

The Company 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 positions the company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most of 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.

Following the acquisition of Digital Clarity in 2011 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.

Going Concern

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

The Company has outstanding loans and convertible notes payable aggregating $1.4 million at August 31, 2018 and doesn’t have sufficient cash on hand to satisfy such obligations. However, during fiscal year 2018, loans of $188,045 were raised from the new loan arrangements. The Company also has a non-binding Commitment Letter from an investor of $250,000 which also includes a right of first refusal on additional capital raise up to $3 million which will contribute to satisfying such obligations and fund any potential cash flow deficiencies from operations for the foreseeable future.

Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Stylar (DBA Digital Clarity). All significant inter-company transactions are eliminated.

F-6

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. The Company had no cash equivalents as of August 31, 2018 or 2017.

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. At August 31, 2018 and 2017, the Company recognized $ 0 and $21,797, respectively, as the allowance for doubtful accounts.

Property and Equipment

Property and equipment are 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.

Advertising Costs

Advertising costs, which are included in cost of sales and general and administrative expenses in the accompanying Statements of Operations, are expensed when incurred. Total advertising expenses for fiscal years 2018 and 2017 amounted to $13,972 and $7,838, respectively.

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 follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

F-7

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

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 the per share computations as of August 31, 2018 and 2017.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of August 31, 2018, 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 years ended August 31, 2018 and 2017, 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.

F-8

The Company did not have any Level 2 or Level 3 assets or liabilities as of August 31, 2018, and 2017, 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 August 31, 2018 and 2017 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 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 provide 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 notes 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 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 either 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.

F-9

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.

Customer Concentration

Three of the Company's customers accounted for approximately 88% and 79% of its revenues during fiscal 2018 and 2017, respectively.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASC 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASC is effective for fiscal years beginning after December 15, 2017, including interim reporting periods therein. The Company is currently evaluating the impact of the adoption of ASU 2016-12 on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either operating or financing, with such classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements and associated disclosures.

In August 2016, FASB issued accounting standards update ASU-2016-15, “Statement of Cash Flows” (Topic 230) – Classification of Certain Cash Receipts and Cash Payments”, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2018, and interim periods with fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU 2016-15 on the Company’s financial statements.

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

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	Estimated Life	2018			2017
Computer and office equipment	3 to 5 years	$	22,335		$	20,618
Less: Accumulated depreciation			(20,314	)		(16,813	)
		$	2,021		$	3,805

Depreciation expense amounted to $546 and $216, for the years ended August 31, 2018 and 2017 respectively.

F-10

NOTE 4 – LOANS PAYABLE

	August 31,
	2018		2017
Loans payable	$	440,000	$	370,000

The loans payables are due on demand, are unsecured, and are 6-12% interest bearing.

During fiscal year ended August 31, 2018 and 2017, the Company generated loan proceeds of $135,000 and $0, respectively.

NOTE 5 – CONVERTIBLE DEBENTURES

At August 31, 2018, and August 31, 2017 convertible debentures consisted of the following:

	August 31,
	2018		2017
Convertible notes payable	$	840,791	$	840,791
Unamortized debt discount		-		-
Total	$	840,791	$	840,791

The convertible notes payable mature through February 2017, and they bear interest at ranges between 6% and 15%. The convertible promissory notes are convertible at ratios varying between 45% and 50% 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 5-30 days prior to conversion. As of August 31, 2018, an aggregate of $840,791 of convertible promissory notes have matured and remain unpaid.

NOTE 6 – OFFICERS LOANS PAYABLE

	August 31,
	2018		2017
Officers loans payable	$	140,896	$	22,851

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

During fiscal year ended August 31, 2018 and 2017, the Company generated loan proceeds of $140,896 and $22,851, respectively.

NOTE 7 – DERIVATIVE LIABILITIES

The Company accounts for the embedded conversion features included in its convertible instruments as derivative liabilities. The aggregate fair value of derivative liabilities at August 31, 2018 and 2017 amounted to $ 724,313 and $740,953 respectively. At each measurement date, the fair value of the embedded conversion features was based on the lattice binomial method using the following assumptions:

	Years Ended August 31
	2018	2017
Effective Exercise price	0.0007 - 0.00112	0.0095–0.00152
Effective Market price	0.0014	0.0019
Volatility	55.96%	85%
Risk-free interest	2.46%	1.13%
Terms	365 days	365 days
Expected dividend rate	0%	0%

F-11

Changes in the derivative liabilities during the years ended August 31, 2018 and 2017 are as follows:

Balance at September 1, 2016	$	1,517,811
Embedded conversion features at issuance		-
Changes in fair value of derivative liabilities		(776,858	)
Balance, August 31, 2017	$	740,953

Balance at September 1, 2017	$	740,953
Embedded conversion features at issuance		-
Changes in fair value of derivative liabilities		(16,640	)
Balance, August 31, 2018	$	724,313

NOTE 8 – ACCRUED COMPENSATION

As of August 31, 2018, and 2017 the Company owes $1,070,156 and $882,643, respectively, in accrued compensation and expenses to certain directors/consultants. The amounts are non-interest bearing.

NOTE 9 – 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.

Common Stock

On March 5, 2013, Digital Brand Media & Marketing Group, Inc. received approval from the Financial Industry Regulatory Authority (FINRA) for its 100 to 1 reverse stock split. All shares have been retroactively adjusted to reflect the 1 to 100 reverse stock split.

The Company approved a 1,000 to 1 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. In addition, the authorized shares were reduced proportionately to 10,000,000 common shares.

The Authorized Shares were increased to 2,000,000,000 in April 4, 2016.

During the years ended August 31, 2018, and August 31, 2017, the Company issued 0, and 0 shares of its common stock, respectively.

NOTE 10 – EMPLOYMENT AND CONSULTING AGREEMENTS

In April 2010 a term sheet was agreed with Neil Gray as Chairman and Executive Director of the Company. The term was an initial three years, renewable annually beginning on September 1^st, the beginning of the fiscal year.

In September 2010 a term sheet was agreed with a Company Director, Linda Perry, for annual remuneration of $150,000 for her role as a consultant and as Executive Director for US interface to provide oversight regarding external regulatory reporting requirements. In addition, Ms. Perry is the lead executive for capital funding requirements and business development. The agreement had a rolling three-year term and was renewed in September 2013 and September 2016.

F-12

In April 2011 a term sheet was agreed with a Company Officer, Reggie James, where remuneration was split between his duties as Senior Vice President and Executive Director of DBMM and Digital Clarity. Mr. James was appointed Co-Chief Operating Officer during fiscal year 2013. In conjunction with his appointment to the Company’s Board of Directors, the agreement provides for a monthly compensation of $4,500.

In June 2012 a term sheet was agreed with a Company Officer, Steve Baughman, as Head of US Operations with a sign on bonus of 50,000 preferred shares, His compensation is performance-based, reflecting multiple projects and business development activities. Mr. Baughman was appointed Co-Chief Operating Officer during fiscal year 2013. The Company may award additional stock-based compensation, at its option.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Leases

DBMM's Corporate address is 747 Third Avenue, 2nd Floor, New York, NY 10017. The operating headquarters is located in the UK as Stylar limited, trading as Digital Clarity. DC is on a month-to-month lease at $1,416, as it is evaluating larger quarters.

Legal Proceedings

1.The Company was involved in a litigation, Asher Enterprises, Inc. v: Digital Brand Media & Marketing Group, Inc., Index No.600717/2014, in the Supreme Court of the State of New York, County of Nassau. The Plaintiff alleged $337,500 breach of contract principal and damages arising from an untimely periodic filing in 2013. On September 14, 2014 the Court declined to grant the plaintiff's application for default judgment and Linda Perry was removed as a defendant. The Court awarded judgment in favor of the Plaintiff on July 15, 2015 in the amount of $122,891.87, which did not include $25,000 paid in a subsequent settlement in February 2016.On June 18, 2018 the matter was settled between the parties with an Addendum to the Settlement Agreement, for a final payment of $65,000 which was paid in full on the same date. A Stipulation of Discontinuance was filed with the Court ending the litigation. A Satisfaction of Judgment through the Settlement Addendum was coincidently filed. The litigation is closed.

2. The U.S. Securities & Exchange Commission instituted an Administrative Proceeding, File No. 3-17990, on May 16, 2017 to revoke the Company's registration statement because of delinquent filings. A hearing was held on August 9, 2017 and the Initial Decision to revoke the registration was dated November 16, 2017. The order was subsequently remanded by order of the U.S. Supreme Court in December 2017. The Company responded to the Remand with evidence of mitigating circumstances under a Protective Order and filed all its delinquent filings: a Super 10-K for 2015-2016-2017 on May 31, 2018 and 10-Q's for 2018 1Q, 2Q on June 22, 2018 and 3Q on July 18, 2018.

On November 9, 2018 following agreement by the parties and stated in an order for the case to go forward based on the existing record with the exception of the aforementioned Initial Decision which has been vacated/withdrawn. A hearing is scheduled for January 15, 2019 during which both parties will make a thirty-minute oral presentation.

From time to time, the Company has become or may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties and an adverse result in those or other matters may arise from time to time that may harm its financial position, or our business and the outcome of these matters cannot be ultimately predicted.

NOTE 12 – INCOME TAXES

For the years ended August 31, 2018, and 2017, the benefit for income taxes differed from the amounts computed by applying the statutory federal income tax rate at which rate the tax benefits is expected to occur. The reconciliation is as follows:

	Years Ended August 31
	2018			2017
Benefit computed at statutory rate	$	96,000		$	157,000
State tax (benefit), net of federal affect		20,000			31,000
Permanent differences (primarily change in fair value of derivative liability)		(4,000	)		(188,000	)
Increase in valuation allowance		(112,000	)		-
Net income tax benefit	$	-		$	-

F-13

The Company has net operating loss carry-forward for income tax totaling purposes approximately $4.4 million at August 31, 2018 which expire at various times through 2038. A significant portion of these carry-forwards is subject to annual limitations due to “equity structure shifts” or “owner shifts” involving “five percent shareholders” (as defined in the Internal Revenue Code) which results in a more than fifty percent change in ownership.

The net deferral tax asset is as follows:

	Years Ended August 31
	2018			2017
Net operating loss carry-forward	$	1,107,000		$	1,043,000
Accrued compensation		271,000			130,000
Valuation allowance		(1,378,000	)		(1,173,000	)
Net deferred tax asset	$	-		$	-

The valuation allowance increased by $205,000 during fiscal year 2018.

NOTE 13 – FOREIGN OPERATIONS

As of August 31, 2018, all of our revenues and a majority of our assets are associated with subsidiaries located in the United Kingdom. Assets at August 31, 2018 and revenues for fiscal 2018 were as follows:

	United States		Great Britain		Total
Revenues	$	3,627	$	532,874	$	536,501
Total revenues	$	3,627	$	532,874	$	536,501
Identifiable assets at August 31, 2018	$	468	$	129,358	$	129,826

As of August 31, 2017, a majority of revenues and assets are associated with subsidiaries located in the United Kingdom. Assets and revenues for the year ended August 31, 2017, were as follows:

	United States			Great Britain		Total
Revenues	$	40,627		$	445,742	$	486,369
Total revenues	$	40,627		$	445,742	$	486,369
Identifiable assets at August 31, 2017	$	(16	)	$	115,950	$	115,934

NOTE 14 - SUBSEQUENT EVENTS

None.

F-14

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

There are not currently and have not been any disagreements between us and our accountants on any matter of accounting principles, practices or financial statement disclosure.

ITEM 9A. CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us 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 Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Act.

Based upon the evaluation, our Principal Executive Officer and Principal Financial Officer originally concluded that our disclosure controls and procedures were effective as of August 31, 2018. However, based on a re-evaluation of the effectiveness of our disclosure controls and procedures in connection with the preparation of this amendment to our Annual Report on Form 10-K, our Principal Executive Officer and Principal Financial Officer concluded that, for the reasons set forth under “Management’s Annual Report on Internal Control Over Financial Reporting” below, our disclosure controls and procedures were not effective as August 31, 2018. In addition, our Principal Executive Officer and Principal Financial Officer have also re-evaluated the conclusions regarding our disclosure controls and procedures for other prior periods and have concluded that our disclosure controls and procedures were not effective for the annual periods ended August 31, 2015, 2016 and 2017 for the same reason.

Notwithstanding the ineffective disclosure controls and procedures and the material weaknesses in our internal control over financial reporting described below, our management concluded that the consolidated financial statements included in this report fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in accordance with GAAP.

Management’s Annual Report on Internal Control Over Financial Reporting:

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting as defined in Rules 13 a-15(f) of the Exchange Act.

Our management conducted an evaluation of the effectiveness of its internal controls over financial reporting, as of August 31, 2018, based on the framework and criteria established in “Internal Control - Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the Internal Control-Integrated Framework (2013). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

Management believes that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

In our Annual Report on Form 10-K, originally filed on December 14, 2018 and subsequently amended, based on management’s evaluation under the framework in “Internal Control—Integrated Framework,” our Principal Executive Officer and Principal Financial Officer originally concluded that the Company’s internal control over financial reporting was effective as of August 31, 2018. In light of management’s failure to include an affirmative conclusion as to the effectiveness of our internal control over financial reporting as required under Item 308(a) of Regulation S-K in our Annual Reports on Form 10-K filed with the Commission for the year[s] ended August 31, 2018, our management has concluded that our internal control over financial reporting was not effective as of August 31, 2018.

This Annual Report on Form 10-K does not include an attestation report from our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to SEC rules that permit us to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Controls Over Financial Reporting:

There were no changes in our internal control over financial reporting during the quarter ended August 31, 2018 identified in connection with the evaluation thereof by our management, including our Principal Executive Officer and Principal Financial Officer, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation of Material Weakness:

As noted under “Management’s Annual Report on Internal Control Over Financial Reporting” above, we identified a material weakness in the preparation of the Forms 10-K for the fiscal years ended August 31, 2018, 2017, 2016 and 2015 as management’s reporting of the assessment of the effectiveness of our internal controls over financial reporting did not meet the requirement under item 308(a) of Regulation S-K. The Company believes that it has implemented procedures in the preparation and filing of Form 10-K that will remediate for future periods such material weakness in internal controls.

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PART III MANAGEMENT

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

The following table sets forth certain information, as of August 31, 2018, with respect to our directors and executive officers.

Directors serve until the next annual meeting of the stockholders; until their successors are elected or appointed and qualified, or until their prior resignation or removal. Officers serve for such terms as determined by our board of directors. Each officer holds office until such officer’s successor is elected or appointed and qualified or until such officer’s earlier resignation or removal. No family relationships exist between any of our present directors and officers.

Name	Position
Neil Gray	Chairman and Executive Director
Reggie James	Co-Chief Operating Officer, Senior Vice President and Executive Director
Linda Perry	Executive Director, Chair Nomination/Compensation and Audit Committees

The following is a brief account of the business experience of each of our Directors and Executive Officers:

Neil Gray Mr. Gray has served as Chairman and Executive Director of DBMM as of April 1, 2010. He is a career entrepreneur in various industries from real estate to commodities. He was a principal in a privately-held UK-based Healthcare group in the UK and EU. Other projects were developed in engineering, textiles and import/export in Africa, South America, Spain and the Black Sea. Early experience included participation on a think tank team assessing risk management for a UK insurance company.

Reggie James, As of April 1, 2011, Mr. Reggie James has served as Senior Vice President of Marketing and Communications and Executive Director. Mr. James also is the Managing Director of Digital Clarity. In 2013, he was appointed Co-Chief Operating Officer with Steve Baughman. Mr. James has been involved in the commercial element of the internet since its inception and has been instrumental in driving forward business models that are common place today.

Mr. James is the founder of Digital Clarity, a leading Digital Advertising Agency and a wholly owned business of DBMM. The company helps major brands and medium sized companies take advantage of 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. Mr. James launched the European division of a later VoIP technology company that became the first dot com to list on the Singapore Stock Exchange later acquired by Spice Communications. Subsequently, Spice was acquired by Idea Cellular, the 3rd largest mobile services operator in India. Mr. James is also the co-founder of an internet analytics technology software house as well as shareholder in an AIM listed marketing services company. AIM is the London Stock Exchange’s international market for smaller growing companies. Previously, Mr. James was involved with publishing groups VNU & Ziff-Davis where he launched titles such as Management Consultancy and IT Week. Prior to launching Digital Clarity, Mr. James was part of the global sales team at leading search company AltaVista where he managed global brands such as Compaq and Hewlett Packard (HP). AltaVista was acquired by Yahoo! Inc.

Linda Perry, Ms. Perry has served as Executive Director and Chair Nomination/Compensation and Audit Committees since April 1, 2010. She had served as our President, Chief Executive Officer, and a Director until March 31, 2010 (excepting the period from April 19, 2005 to April 24, 2006). She has had an extensive career in global and entrepreneurial businesses. Ms. Perry consults to several companies globally and is industry agnostic. While living in Europe, she was the senior advisor to the Board of Directors of The Balli Group, where her role was to integrate the acquisition of Klockner & Co. The acquisition resulted in the creation of the world’s largest steel, multi-metal, distribution, and trading company. Prior to that, she was appointed a director and a member of the Executive Committee of Churchill Insurance Group, Plc., a division of the Credit Suisse Group. The Company was re-organized and sold within the industry for £2.3 billion GBP. She was a senior executive at ExxonMobil Corporation holding general management positions with global responsibility in finance, marketing, and organization (described as corporate governance, management succession and executive compensation.) The latter role was under the aegis of the Board of Directors, entitled Compensation, Organization and Executive Development Committee/COED, of which she was a member. Ms. Perry holds an MBA from Harvard University. She has been a visiting lecturer/professor at IMD, Lausanne, Switzerland, INSEAD, Fontainebleau, France and the Stern School of Business at New York University throughout her career.

23

We believe that all our directors are qualified to serve on our board of directors based on their experience and the diversity of background.

Board Committees

We currently have standing committees on our Board of Directors. The audit committee and nomination /compensation committee are listed below.

Audit Committee

We have established an Audit Committee of the Board of Directors. The Audit Committee duties include a recommendation to our Board of Directors the engagement of independent auditors to audit our financial statements and to review our accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls.

Nomination/Compensation Committee

We have established a Nomination/Compensation Committee of the Board of Directors. The Nomination /Compensation Committee reviews and approves our total remuneration, including compensation of executive officers. The Nomination/Compensation Committee will also administer our stock option plans and recommend and approve grants of stock options under such plans.

Compensation of Directors

All directors are officers and their compensation are included on the summary compensation table (Item 11).

Compliance with Section 16(A) of the Exchange Act

Our common stock was registered pursuant to Section 12 of the Exchange Act during the fiscal years ended August 31, 2017 and 2018. Accordingly, our officers, directors and principal shareholders were subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act during each year.

Code of Ethics

On December 1, 2004 we adopted a Code of Ethics that applies to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Controller and to persons performing similar functions. A copy of our Code of Ethics was previously filed as an Exhibit to our annual report on Form 10-KSB for the year ended August 31, 2004. A copy of our Code of Ethics will be provided to any person requesting same without charge. To request a copy of our Code of Ethics please make written request to DBMM.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

None of our executive officers or employees received compensation in excess of $100,000 during the years ended August 31, 2018 or 2017, except as follows:

Name Principal Position	Fiscal Year Ended August 31,	$ Salary			$ Bonus		$ Other Compensation		$ Options/SAR’s		$ Restricted stock awards		$ LTIP Payouts		$ All other Compensation
Reggie James	2017	$	172,436	(1)		-		-		-		-		-		-
	2018	$	163,548	(2)		-		-		-		-		-		-

Linda Perry	2017	$	150,000	(3)		-		-		-		-		-		-
Executive Director	2018	$	150,000	(3)		-		-		-		-		-		-

24

(1)	For the fiscal year ending August 31, 2018, Mr. James earned $163,548 of which $109,548 has been paid to Reggie James. $54,000 remains unpaid.

(2)	For the fiscal year ending August 31, 2017, Mr. James earned $172,436 of which $57,589 has been paid to Reggie James/Fitch Montague McLennan Limited. Mr. James is the sole shareholder, officer and director of Fitch Montague McLennan Limited. $54,000 remains unpaid.

(3)	For the fiscal years ended August 31, 2018, and 2017, Ms. Perry earned $150,000 each year of which $0 has been paid, $300,000 remains unpaid.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

No stock appreciation rights were granted to the named executives during the fiscal years ended August 31, 2018 and 2017.

Long Term Incentive Plan Awards

No long-term incentive plan awards to the named executive officers during the fiscal years ended August 31, 2018 and 2017.

Employment Contracts, Termination of Employment, and Change-in-Control Arrangements

In April 2010 a term sheet was agreed with Neil Gray as Chairman and Executive Director of the Company. The term was an initial three years, renewable annually beginning on September 1^st, the beginning of the fiscal year.

In April 2011 a term sheet was agreed with a Company Officer, Reggie James, where remuneration was split between his duties as Senior Vice President and Executive Director of DBMM and Digital Clarity. Mr. James was appointed Co-Chief Operating Officer during fiscal year 2013.

In September 2010 a term sheet was agreed with a company officer, Linda Perry, for annual remuneration of $150,000 for her role as a consultant and as Executive Director for US interface to provide oversight for external regulatory reporting requirements. In addition, Ms. Perry is lead executive for capital funding requirements and business development.

In June 2012 a term sheet was agreed with a Company Officer, Steve Baughman, as Head, US Operations with a sign on bonus of 50,000 preferred shares, compensation is performance-based, reflecting multiple projects and business development activities. Mr. Baughman was appointed Co-Chief Operating Officer during fiscal year 2013.

Report on Repricing of Options/SARs

During the fiscal years ended August 31, 2018, and 2017 we did not adjust or amend the exercise price of any stock options or SARs.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of August 31, 2018 by, (i) each of our directors, (ii) each of our executive officers, and (iii) all of our directors and executive officers as a group. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on such date and all shares of our common stock issuable to such holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by such person at said date which are exercisable within 60 days of such date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.

25

Name of Beneficial Owner and/or Beneficially Own Shares of Restricted Common Stock percentage owned:

(1) Neil Gray*	30	0.00	%
(2) Reggie James*	7,982,328	1.07	%
(3) Steve Baughman*	10,457	0.10	%
(4) Linda Perry*	7,972,579	1.07	%
All Directors and Executive Officers as a Group (4 persons)	15,965,394

The officers as a group hold 1,970,185 Restricted Preferred Shares, under the designation terms of Preferred Stock-Series 1.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed to us by our principal accountants for services rendered during the fiscal years ended August 31, 2018, and 2017 are set forth in the table below:

		2018				2017
Audit Fees (1)		$	40,000			$	50,000

(1)

Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

Audit Related Fees. We incurred fees to our independent auditors of $-0- for audit related fees during fiscal years ended August 31, 2018, and 2017.

Tax and Other Fees. We incurred fees to our independent auditors of $-0- for tax and other fees during the fiscal years ended August 31, 2018, and 2017.

Audit Committee’s Pre-Approval Practice.

For fiscal years ended August 31, 2018 and 2017, the Audit Committee pre-approved all audit and permissible non-audit services provided by our independent auditors.

26

PART IV

ITEM 15. EXHIBITS

The following Exhibits are being filed with this Annual Report on Form 10-K:

Exhibit Number	Description
3.1(1)	Articles of Incorporation of the Registrant, as amended.
3.2(8)	By-laws of the Registrant, as amended.
10.3(4)	Share Exchange Agreement, dated March 20, 2007, by and among the Company, Atlantic Network Holdings Limited, New Media Television (Europe) Limited and the Outside Stockholders Listed on Exhibit A Thereto.
10.1(5)	Share Exchange Agreement, dated March 30, 2010, between Digital Brand Media & Marketing Group, Inc., and Cloud Channel Limited.
10.2(5)	Rescission Resolution of Share Exchange Agreement, dated March 20, 2007, by and among Digital Brand Media & Marketing Group, Inc., Atlantic Network Holdings Limited, the Outside Stockholders Listed on Exhibit A thereto and New Media Television (Europe) Limited.
10.3(5)	Share purchase Agreement between Cloud Channel Limited and Bitemark MC Limited.
10.4(5)	Share purchase Agreement between Cloud Channel Limited and Stylar Limited.
10.4(6)	Amendment to Share Exchange Agreement, dated March 31, 2010, between Digital Brand Media & Marketing Group, Inc., and Cloud Channel Limited.
10.5(6)	Amendment to Share Purchase Agreement between Cloud Channel Limited and Bitemark MC Limited.
10.6(6)	Amendment to Share Purchase Agreement between Cloud Channel Limited and Stylar Limited.
10.7(8)	Rescission Resolution of Share Exchange Agreement, dated March 31, 2010, between Digital Brand Media & Marketing Group, Inc. and Bitemark MC Limited
10.8(9)	Agreement to purchase LLC interests
10.9(10)	Amendment to agreement to purchase LLC interests
10.10(11)	Mutual Rescission and Release
14.1(3)	Code of Ethics
31.1*	Section 302 Certification of Executive Director
32.1*	Section 906 Certification of Executive Director
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Previously filed as an exhibit to the Company’s Registration Statement on Form SB-2 filed with the Commission on March 27, 2002.

(3) Previously filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the year ended August 31, 2004.

(4) Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Commission on March 21, 2007.

(5) Previously filed as an exhibit to the Company’s Current Report on Form 8-KA filed with the Commission on April 9, 2010.

(6) Previously filed as an exhibit to the Company’s Current Report on Form 8-KA filed with the Commission on July 15, 2010.

(8) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended August 31, 2011.

(9) Previously filed as an exhibit to the Company’s Current Report on Form 8-K Filed with the Commission on June 12, 2012.

(10) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended August 31, 2012.

(11) Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2013.

* Filed herewith

** Previously filed.

27

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, 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 30, 2019	By:	/s/ Linda Perry
		Principal Executive Officer Principal Financial Officer Executive Director

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: September 30, 2019

By:

/s/ Linda Perry

Principal Executive Officer

Principal Financial Officer

Executive Director

28

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