Digital Brand Media & Marketing Group, Inc. (Form: 10-Q, Received: 07/16/2013 06:01:06)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: May 31, 2013

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

For the transition period from ________ to ________

Commission file number: 333-85072

Digital Brand Media & Marketing Group, Inc.

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



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

747 Third Avenue

New York, NY 10017

(Address of principal executive offices)

(646) 722-2706

(Issuer's telephone number, including area code)

c/o David E. Price, Esq.

1915 I Street Northwest 5 ^th FL

Washington, DC 20006-2107

(Former name or former address, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the past 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 [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, or non-accelerated filer.

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

Indicate by check mark whether the registrant has filed all the documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 35,842,074 shares of Common Stock, par value $.001 per share, as of July 10, 2013.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X].

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(Unaudited)

INDEX




	Page No
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Financial Statements (Unaudited)	3
Balance Sheets	3
Statements of Operations	4
Statement of Stockholders' Deficit	5
Statements of Cash Flows	6
Notes to Unaudited Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4T. Controls and Procedures	23

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	24
Item 3. Defaults Upon Senior Securities	24
Item 4. Submission of Matters to a Vote of Security Holders	24
Item 5. Other Information	24
Item 6. Exhibits	24
SIGNATURES	25
2



DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	May 31,	August 31,
	2013	2012
	(UNAUDITED)
ASSETS

CURRENT ASSETS
Cash	$ 30,190	$ 78,131
Accounts receivable	65,242	61,444
Total current assets	95,432	139,575

Property and equipment - net	2,607	4,287

TOTAL ASSETS	$ 98,039	$ 143,862

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$ 344,353	$ 294,138
Accrued salaries	803,469	716,475
Loans payable	544,000	269,500
Derivative liability	126,213	112,828
Convertible debentures, net	242,218	250,642

TOTAL CURRENT LIABILITIES	2,060,253	1,643,583

STOCKHOLDERS' DEFICIT

Preferred stock, Series 1, par value .001; authorized 2,000,000
shares; 935,402 and 955,888 shares issued and outstanding	935	955
Preferred stock, Series 2, par value .001; authorized 2,000,000
shares; -0- and 2,000,000 shares issued and outstanding	-	2,000
Common stock, par value .001; authorized 1,000,000,000
shares; 35,842,074 and 7,500,000 shares issued and outstanding	35,842	7,500
Additional paid in capital	8,632,261	8,698,712
Other comprehensive loss	(5,326)	(3,441)
Accumulated deficit	(10,625,926)	(10,205,447)

TOTAL STOCKHOLDERS' DEFICIT	(1,962,214)	(1,499,721)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 98,039	$ 143,862

See Notes to Unaudited Consolidated Financial Statements

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months ended May 31,

Nine Months ended May 31,

2013

2012

2013

2012

SALES

$         105,893

$        118,098

$        329,772

$      332,220

COST OF SALES

             53,062

              62,798

180,076

        221,866

GROSS PROFIT

             52,831

             55,300

             149,696

          110,354

COSTS AND EXPENSES

General and administrative

             35,593

            69,649

153,076

192,505

Payroll

51,000

            73,208

         180,600

         191,104

Legal and professional fees

             (156,054)

            54,341

          (195)

155,000

Amortization and depreciation

             71,216

            66,850

          173,065

205,961

TOTAL OPERATING EXPENSES

           1,755

         264,048

506,546

744,570

OPERATING LOSS

51,076

       (208,748)

        (356,850)

       (634,216)

OTHER INCOME (EXPENSE)

Interest expense

           (92,190)

          (16,474)

          (128,395)

        (49,029)

Gain (loss) on foreign currency translation

                     -

                      -

                   -

               637

Gain (loss) on derivative liability

        174,189

        (27,986)

        31,615

      (213,323)

Gain on settlement of debt

                    -

                    -

            33,151

                 -

Other Interest - Modification Expense

                    -

(106,196)

                    -

        (162,196)

TOTAL OTHER INCOME (EXPENSE)

         81,999

        (150,656)

         (63,629)

      (423,911)

NET INCOME (LOSS)

$         133,075

$     (359,404)

$      (420,479)

$  (1,058,127)

OTHER COMPREHENSIVE INCOME

Foreign exchange translation

             (662)

               (342)

            (1,885)

          (1,828)

COMPREHENSIVE INCOME (LOSS)

$         132,413

$     (359,746)

$     (422,364)

$  (1,059,955)

NET LOSS PER SHARE

   Basic and diluted

$              0.02

$           (0.06)

$           (0.05)

$         (0.28)

WEIGHTED AVERAGE NUMBER OF SHARES

   Basic and diluted

        7,855,800

      6,251,492

       7,855,800

     3,777,604

See Notes to Unaudited Consolidated Financial Statements

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited)

		Series 1		Series 2				Additional Paid in Capital	Accumulated Deficit Total	Other Comprehensive Income(Loss)		Total Stockholders' Deficit
		Preferred Stock		Preferred Stock		Common Stock
		Shares	Amount	Shares	Amount	Shares	Amount
Balance, August 31, 2011		263,772	$ 264	-	-	1,976,903	$ 1,977	$ 7,275,786	$ (8,935,014)	$ (2,048)	$ (1,659,035)

Shares issued for services						65,000	65	58,435			58,500
Common stock issued in connection with convertible debt						3,797,719	3,798	246,701			250,499
Common stock issued for accrued interest						119,234	119	8,001			8,120
Interest related to modification of conversion price of debt								172,696			172,696
Common stock issued in connection with loan payable						1,489,375	1,489	227,010			228,499
Common stock issued in connection with conversion of preferred shares		(97,596)	(98)			51,769	52	46			-
Capital Contribution								95,000			95,000
Preferred shares issued for conversion of accrued salary		268,367	268					228,661			228,929
Preferred shares issued to officers		521,345	521					32,018			32,539
Beneficial conversion feature in connection with convertible debt								136,560			136,560
Preferred shares issued for compensation				2,000,000	2,000			217,798			219,798
Other Comprehensive Loss

Net loss								-	(1,270,433)		(1,270,433)
Other Comprehensive Loss										(1,393)	(1,393)
Subtotal											(1,271,826)

Balance, August 31, 2012		955,888	955	2,000,000	2,000	7,500,000	7,500	8,698,712	(10,205,447)	(3,441)	(1,499,721)

Common stock issued in connection with convertible debt						2,027,975	2,028	67,368			69,396
Preferred shares issued for conversion of accounts payable		41,995	42					2,631			2,673
Preferred shares issued to officers		433,637	434					27,166			27,600
Cancellation of preferred shares issued for compensation				(2,000,000)	(2,000)			(217,798)			(219,798)
Common stock issued in connection with conversion of preferred shares		(496,118)	(496)			26,314,099	26,314	(25,818)			-
Beneficial conversion feature in connection with convertible debt								80,000			80,000

Net loss								-	(420,479)		(420,479)
Other Comprehensive Loss										(1,885)	(1,885)
Subtotal											(422,364)

Balance, May 31, 2013	935,402		$ 935	-	$ -	35,842,074	$ 35,842	$ 8,632,261	$ (10,625,926)	$ (5,325)	$ (1,962,214)

See Notes to Unaudited Consolidated Financial Statements

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28,

2013

2012

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$          (420,479)

$            (1,058,127)

Adjustments to reconcile net loss to net cash used in operating activities:

  Fair value of shares issued for services

-

                      58,500

  Fair value of preferred shares issued for bonus

27,600

32,539

  Fair value of common stock issued for interest

-

8,120

  Depreciation

2,098

1,496

  Amortization of debt discount

170,967

                    204,356

  Change in fair value of derivative liability

(31,615)

                    213,323

  Additional compensation for debt restructuring

70,430

-

  Reversal of preferred shares cancelled

(219,798)

-

  Gain on settlement of debt

(33,151)

-

  Bad debt expense

-

                      (24,816)

  Interest related to modification of conversion price of debt

-

                      162,196

Changes in operating assets and liabilities:

  Accounts receivable

(3,796)

7,055

  Accrued salaries

86,994

                      54,311

  Accounts payable and accrued expenses

90,690

(12,965)

NET CASH USED IN OPERATING ACTIVITIES

(260,060)

                  (354,012)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets

(417)

(2,174)

NET CASH USED IN INVESTING ACTIVITIES

(417)

                                (2,174)

CASH FLOWS FROM FINANCING ACTIVITIES

  Proceeds from convertible notes payable

125,000

128,454

  Proceeds from loans payable

104,500

43,000

  Payments made for loans payable

(15,000)

-

  Payments made for convertible notes payable

                           -

(13,625)

  Capital contribution

                           -

167,000

NET CASH PROVIDED BY FINANCING ACTIVITIES

214,500

324,829

NET DECREASE IN CASH

(45,977)

(31,357)

EFFECT OF VARIATION OF EXCHANGE RATE OF CASH HELD IN FOREIGN CURRENCY

(1,964)

(1,828)

CASH - BEGINNING OF PERIOD

78,131

62,111

CASH - END OF PERIOD

$            30,190

$                28,926

Supplemental disclosures of cash flow information:

  Cash paid for interest

$              2,000

$                  6,510

Non-cash investing and financing activities:

Debt contributed to capital

$                   -

$                30,500

Conversion of convertible notes payable into common stock

$            69,396

$              224,036

Restructuring of convertible debt

$          110,000

$                       -

Assignment of officer salary to loan holder

$                   -

$              150,000

Assignment of loan payable to loan holder

$                   -

$              100,000

Conversion of loans payable into common stock

$                   -

$              202,000

Conversion of accrued salaries into preferred stock

$              2,673

$              228,929

Debt discount associated with convertible debt

$            80,000

$                63,764

See Notes to Unaudited Consolidated Financial Statements

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN

Nature of Business and History of the Company

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

In 2006, the Company identified a business in digital technology, social media marketing and online global payment systems in the UK which lent itself to both organic growth and growth by acquisition. From that time, we had been evolving the Business Plan to maximize the opportunities and minimize the risks inherent in a challenging economic environment. Initially, all of these efforts were conducted under the contractual requirements of a Share Exchange Agreement. On March 20, 2007, we entered into a Share Exchange Agreement (the "Agreement") with Atlantic Network Holdings Limited ("ANHL"), New Media Television (Europe) Limited ("NMTV"), and Certain Outside Stockholders to acquire all of the outstanding shares of NMTV. ANHL was 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 filing by the Company of all reports required to be filed by it under the Exchange Act and the satisfactory completion of the audit of ANHL/NMTV's financial statements for each of its past three fiscal years. The conditions of closing were not met by ANHL/NMTV et al and the agreement was rescinded via 8-K/A on March 30, 2010.

Digital Brand Media & Marketing Group, Inc. (f/k/a RTG Ventures, Inc.) (the “Company”) 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 Digital Brand Media & Marketing Group, Inc. (f/k/a 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 were able to convert the preferred shares into common stock using the average share price of the 30 days preceding September 3, 2011 which provides a share price of $0.016083. The methodology provides for a valuation of 4X net profit. All preferred stock was held by Digital Brand Media & Marketing Group's transfer agent for the 12 month period ending September 3, 2011. All voting shares are held by management.

In August, 2009, Digital Brand Media & Marketing Group, Inc. (f/k/a RTG Ventures, Inc.) signed a Letter of Intent with International Financial Systems Ltd. (IFS) a private company, to include iPayu, which became a joint venture with RTG Ventures (Europe) Ltd in April, 2010.

Subsequent to the close of the fiscal year 2011 following substantial investment, the Company conducted a structural review of its total product and services offering. The review was carried out by the Board of Directors. The result was to bring technology development being outsourced directly into the Company to steward on a daily basis and any activities which were not revenue generating in the near term were eliminated. It was unanimously agreed that the company would adopt a lean approach that focused on the relationships and partnerships built up over the year in the music arena as well as build on the early stage development of its CloudChannel product by bringing the technology in-house following product development disappointments of the technology being developed in Ukraine. Within this shift, it was agreed that a new, more appropriate name be given to the services and technology offered by Digital Brand Media & Marketing Group, Inc. that reflected the change and would allow the building of brand value in its own right. Pulse Station reflected that change.

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.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As a further result of the review, the Company has 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 work force augmented to the technology offering would position the company in a strong, forward looking structure. Digital Clarity operates in the growing area of digital marketing that helps companies make the most the digital economy focusing on areas such as Search Engine Marketing (Google, Yahoo! & Bing), Social Media (Twitter, Facebook & LinkedIn) and Internet Strategy Planning including Design, Analytics and Mobile Marketing.

During the last quarter of fiscal 2012, the Company entered into an agreement with BrandEntertain. Digital Brand Media & Marketing Group, Inc. (f/k/a RTG Ventures, Inc.) and Brand Entertain have agreed to restructure their agreement retroactively to June 11, 2012. BrandEntertain is a partnership and there were certain issues with partnership financials which suggested the business combination be construed as a collaboration/cooperative venture, rather than an acquisition. Upon analysis, one year following the initial transaction, the agreement was rescinded.

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.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis. The Company has an accumulated deficit of approximately $10,626,000 and a negative working capital at May 31, 2013 of approximately $1,965,000. The Company has incurred a net loss of approximately $420,000 for the nine months ended May 31, 2013. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future. Management plans to continue to provide for its capital requirements by seeking long term financing which may be in the form of additional equity securities and debt. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

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

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

The accompanying unaudited consolidated financial statements have been prepared, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. You should read these interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2012.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

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

Cash and Cash Equivalents

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

Accounts Receivable and Allowance for Doubtful Accounts

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

The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At May 31, 2013 and August 31, 2012, the Company recognized $0 and $0 as allowance for doubtful accounts, respectively.

Property and Equipment

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

Revenue Recognition

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

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

Use of Estimates

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

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform with the current period presentation.

Income Taxes

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

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

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 May 31, 2013 and 2012.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of May 31, 2013, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

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

During the nine months ended May 31, 2013, 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., Black Scholes), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate.

Fair Value of Financial Instruments

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

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



Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities



Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data



Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The Company did not have any Level 2 or Level 3 assets or liabilities as of May 31, 2013, with the exception of its convertible notes payable and derivative liability. The carrying amounts of these liabilities at May 31, 2013 approximate their respective fair value based on the Company’s incremental borrowing rate.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments (continued)

Cash is considered to be highly liquid and easily tradable as of May 31, 2013 and therefore classified as Level 1 within our fair value hierarchy.

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

Convertible Instruments

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

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

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible 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.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation

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

Business Combinations

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

Recently Issued Accounting Pronouncements

A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date. We regularly review all new pronouncements that have been issued since the filing of our Form 10-Q for the quarter ended May 31, 2013 to determine their impact, if any, on our financial statements. The Company does not expect the adoption of any of these standards to have a material impact once adopted.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

		May 31,			August 31,
	Estimated life	2013			2012
Computer and office equipment	3 to 5 years	$	8,796		$ 8,379
Less: Accumulated depreciation			(6,189	)	(4,092)
		$	2,607		$ 4,287

Depreciation expense amounted to $2,098 and $1,496 for the quarters ended May 31, 2013 and 2012 respectively.

NOTE 4 - LOANS PAYABLE

	May 31,		August 31,
	2013		2012
Loans payable	$	554,000	$	269,500

In July 2010 an officer of the Company sold $140,000 of debt to a shareholder. The debt was due on demand and bears no interest.

During the year ended August 31, 2011 a shareholder loaned the Company $30,500. The debt is due on demand and bears no interest. The loan was assumed by an officer of the Company and simultaneously contributed to capital.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

During the year ended August 31, 2011 an officer of the Company sold $450,000 of debt to the same shareholder. The debt is due on demand and bears no interest. During the year ended August 31, 2011, the Company issued approximately 308,177 shares as partial payment of the loan valued at $434,392, in which $367,500 related to the principal portion and $66,892 was recorded as a loss on debt settlement. The balance remaining to the shareholder is $253,000 as of August 31, 2011.

During the year ended August 31, 2012, $30,500 of the loan payable was assumed by an officer and $100,000 was assigned to a nonaffiliated third party. In addition this shareholder purchased $150,000 of debt that was owed to an officer of the Company and funded the Company $225,500. As of August 31, 2012, the Company has issued 1,489,375common shares as a partial repayment of the debt amounting to $228,500 and made cash payments of $10,000. The balance remaining amounted to $269,500 which is due on demand and bears no interest.

During the nine months ended May 31, 2013 a shareholder loaned the Company $104,500. The debt is due on demand and bears no interest. On April 30, 2013, the Company repaid $10,000 of principal and $2,000 of interest relating to the outstanding loans.

During the nine months ended May 31, 2013, the Company and an issuer of two convertible debentures totaling $110,000 and accrued interest of $4,570 restructured the convertible notes to a non-convertible loan totaling $185,000. The Company recorded the additional $70,430 as interest expense. On May 16, 2013, the Company repaid $5,000 relating to this loan.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

At May 31, 2013 and August 31, 2012 convertible debentures consisted of the following:

		May 31, 2013		August 31, 2012
	(Unaudited)
Convertible notes payable	$	333,957	$	388,351
Unamortized debt discount		(91,739)		(137,709)
Total	$	242,218	$	250,642

In March, 2010, the Company issued a convertible debenture in the amount of $25,000 at 0% interest. The note matured in September 2010 and was convertible into shares of the Company’s common stock at $.01 per share.

In March 2011, the Company received $81,653 from a non-affiliated third party in the form of a convertible debenture at 0% interest and is due on demand. This note is convertible into approximately 80,000 shares of common stock.

Effective September 1, 2010 the Company adopted (FASB ASC 815-40-15-5) ("ASC 815") " Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock " which outlines new guidance for being indexed to an entity's own stock and the resulting liability or equity classification based on that conclusion. The adoption of ASC 815 affects the accounting for convertible instruments with provisions that protect holders from declines in the stock price ("down - round" provisions).

In March, April, May and July 2011, the Company entered into agreements with a third party non-affiliate to four 8% interest bearing convertible debentures for $203,000 due in nine months (“The 8% Convertible Notes”), with the conversion features commencing 6 months after the loan issuance date. The loans are convertible at an average share price computed on the 30 days prior to conversion. In connection with these debentures, the Company recorded a $207,705 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note was converted or repaid. As of August 31, 2012 these notes have been converted into 2,663,719 shares of common stock which were sold into the public market under Rule 144 completed April 2012. The Company has recorded amortization expense amounting to $100,533 for the year ended August 31, 2012.

During the year ended August 31, 2012, the Company entered into convertible loans with third party non-affiliates in which $100,000 of debt was assigned from a shareholder and $248,156 was received in cash. These loans bear interest ranging from 0% - 15% and mature in one year or less. They are convertible in six months or less at a discount based on average share prices ranging between 10 and 30 days. As a result the Company recorded $300,758 in debt discount related to the beneficial conversion feature. In connection with these debentures, the Company has recorded amortization expense amounting to $263,585 for the years ended August 31, 2012 with $137,709 net discount balance remaining. As of August 31, 2012, $250,500 of debt was converted into 3,797,719 shares of common stock and $29,625 has been paid in cash. As of August 31, 2012, the balance of the Company’s convertible debt amounts to $250,642, net of discount.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – CONVERTIBLE NOTES PAYABLE (continued)

During the nine months ended May 31, 2013, the Company entered into convertible loans with third party non-affiliates in which $125,000 was received in cash. These loans bear interest ranging from 5% - 12% and mature in one year or less. They are convertible in one year or less at a discount based on average share prices ranging between 10 and 30 days. As a result, the Company recorded $125,000 in debt discount related to the beneficial conversion feature in connection with these debentures, $45,000 of which was initially recorded as a derivative liability due to the variable convertible terms and $80,000 was recorded in additional paid in capital. During the nine months ended May 31, 2013, the Company has recorded amortization expense amounting to $170,967 for the nine months ended May 31, 2013 with $91,739 net discount balance remaining. As of May 31, 2013, the balance of the Company’s convertible debt amounts to $242,218, net of discount.

NOTE 6 - DERIVATIVE LIABILITIES

The Company accounts for the embedded conversion features included in its convertible instruments. The aggregate fair value of derivative liabilities at May 31, 2013 and August 31, 2012 amounted to $126,213 and $112,828, respectively. In addition, for the nine months ended May 31, 2013 and 2012, the Company has recorded a gain (loss) related to the change in fair value of the derivative liability amounting to $31,615 and $(213,323), respectively. At each measurement date, the fair value of the embedded conversion features was based on the binomial and the Black Scholes method, respectively.

NOTE 7 – ACCRUED PAYROLL

As of May 31, 2013 and August 31, 2012 the Company owes $803,469 and $716,475 respectively, in accrued salary to its employees. The amounts are non-interest bearing.

During the year ended August 2012, the Company and an officer agreed to end accruing the officer’s salary as of August 31, 2011. The officer was issued 268,367 shares of preferred stock to satisfy the accrued salary balance through August 31, 2011. The issuance of preferred stock may, if mutually agreed, continue annually in each fiscal year.

NOTE 8 - COMMON STOCK AND PREFERRED STOCK

In September, 2011, 65,000 shares of common stock were valued at $58,500 to consultants under the terms of the agreements for services.

In January 2012, 268,367 shares of preferred stock were issued to satisfy $228,929 in accrued salary due to an officer of the Company.

In January 2012, 471,345 shares of preferred stock were issued to three officers of the Company in connection with compensation.

In March 2012, 97,596 shares of preferred stock were converted into 51,769 shares of common stock for the minority shareholders pursuant to the share exchange agreement with Stylar Limited a/k/a Digital Clarity.

In May 2012, the Company announced the appointment of an executive officer as Head, US Operations and issued him 50,000 shares of preferred stock as a sign on bonus.

During the year ended August 31, 2012, 3,797,719 shares of common stock were issued to satisfy approximately $250,499 of convertible notes payable and 119,215 shares of common stock were issued to satisfy $8,120 in accrued interest.

During the year ended August 31, 2012, 1,489,375 shares of common stock were issued to satisfy $228,499 of loans payable. These conversions resulted in a modification expense of $172,694.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - COMMON STOCK AND PREFERRED STOCK

In November 2012, 41,995 shares of preferred stock were issued for an accrual to satisfy a debt of $35,824.

In November 2012, 433,637 shares of preferred stock were issued to four officers of the Company in connection with compensation.

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 100 to 1 reverse stock split.

In April 2013, 496,118 shares of series 1 preferred stock were converted into 26,314,099 shares of restricted common stock by an officer of the Company.

As of May 31, 2013 there are 2,000,000 shares authorized of $.001 par value series 1 preferred stock, of which 935,402 were outstanding.

As of May 31, 2013 there are 2,000,000 shares authorized of $.001 par value series 2 preferred stock, of which 0 were outstanding.

As of May 31, 2013 there are 1,000,000,000 shares authorized of $.001 par value common stock, of which 35,842,074 were issued and outstanding.

During the nine months ended May 31, 2013, 2,027,995 shares of restricted common stock were issued to satisfy $69,396 of loans payable.

During the nine months ended May 31, 2013, 2,000,000 Preferred Shares-Series 2 were cancelled as a result of the termination of the arrangement with BrandEntertain. As a result the consideration associated with the transaction totaling $219,798 was reversed and reflected in the statement of operations as a reduction to consulting expense.

NOTE 9 – CAPITAL CONTRIBUTION

During the year ended August, 2011 an officer of the Company made contributions of $190,000 to assist with Company accounts payable and various professional fees. These contributed funds are considered paid in capital.

During the year ended August, 2012 an officer of the Company made contributions of $95,000 to assist with Company accounts payable and various professional fees. These contributed funds are considered paid in capital.

NOTE 10 - EMPLOYMENT AND CONSULTING AGREEMENTS

In April, 2010 a term sheet was agreed with a Company officer for annual remuneration of £100,000 ($160,000) for the Chairman and Director of the Company, Mr. Neil Gray. Mr. Gray may receive a bonus totaling 50-75% of his base salary after certain Company performance objectives are achieved following the first year of operation. In 2010, Mr. Gray as a sign on bonus received 3.0 million restricted shares. The term sheet is ongoing and renewable on an annual basis with accruals ceasing as of August 31, 2011. The issuance of preferred stock may, if mutually agreed continue annually in each fiscal year. Mr. Grey's term sheet was renewed on September 1, 2012.

In September 2010 a term sheet was agreed with a company officer for annual remuneration of $150,000 with Ms. Linda Perry for her role as a consultant and as Executive Director for US interface/oversight regarding external regulatory reporting requirements. In addition, she is lead executive for capital funding requirements and business development. The term sheet is ongoing and renewable on an annual basis. Ms. Perry's term sheet was renewed on September 1, 2012.

In April, 2011 a term sheet was agreed with a Company officer, Mr. Reggie James, where remuneration was split between his duties as Co-Chief Operating Officer, Senior Vice President and Executive Director of Digital Brand Media and Marketing Group, Inc. and Managing Director of Digital Clarity. The term sheet is ongoing and renewable on an annual basis. Mr. James's term sheet was renewed on September 1, 2012.

In June 2012, a term sheet was agreed with the Steven Baughman, Co-Chief Operating Officer and Head, US Operations with a sign on bonus of 50,000 preferred shares, further compensation is performance reflecting multiple projects and business development activities.

DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Item 2. Management's Discussion and Analysis or Plan 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" on page 1. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. This discussion also should be read in conjunction with the notes to our consolidated financial statements contained in Item 8. "Financial Statements and Supplementary Data," of this Report.

Background

Digital Brand Media & Marketing Group, Inc. (f/k/a RTG Ventures, Inc.) (the “Company”) is an OTC:QB listed company. Subsequent to the close of the fiscal year 2011 following substantial investment, the Company conducted a structural review of its total product and services offering. The review was carried out by the Board of Directors. The result was to bring technology development being outsourced directly into the Company to steward on a daily basis and any activities which were not revenue generating in the near term were eliminated. It was unanimously agreed that the company would adopt a lean approach that focused on the relationships and partnerships built up over the year in the music arena as well as build on the early stage development of its CloudChannel product by bringing the technology in-house following product development disappointments of the technology being developed in Ukraine. Within this shift, it was agreed that a new, more appropriate name be given to the services and technology offered by the Company that reflected the change and would allow the building of brand value in its own right. Pulse Station reflected that change.

Operations Overview/Outlook

Operationally, 2012 was important in evaluating the direction of the company and steering it toward a sustainable growth plan that will center on technology and digital marketing in 2013, as described below:

Music & Entertainment Solutions

Digital Brand Media & Marketing Group, Inc. is taking its strengths including its relationships to build its business focus on music and entertainment. The Company, under very competitive global market conditions and growing development needs, continued to identify partnership opportunities using its platform, Pulse Station, and conducted a robust review of performance with excellent results.

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

In fiscal year 2013, the Company has taken the positive results of the last year and used that model to expand geographic reach with existing and new partners.

Digital Marketing Services

2012 saw a massive growth in the adoption of Social Media as a communication, marketing and engagement avenue. Through Stylar, Digital Brand Media & Marketing Group’s wholly owned digital marketing agency brand, Digital Clarity, it was clear that the direction, talent and growth of the company is in its human capital and outside relationships.

The clear opportunity is at the foundation of the company, namely the need to expedite and encourage development in the digital marketing services sector. The Company must jumpstart the growth by significant capital infusion in fiscal year 2013 to grow simultaneously in multiple geographies.

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

Key Milestones

During the latter part of 2012, Digital Clarity continued to make inroads into established and emerging markets. As part of this push, that was greatly enhanced and supported by a newly created Head of US Operations, Steven Baughman, the company won a major deal with a US based entertainment group. The group was seeking a seasoned agency that could fulfill its complex specifications and grow with its aggressive expansion plans throughout the US and beyond. Digital Clarity was awarded the contract, removing the competitors to win the design and development of the new website centered on an intelligent design as well as a strong understanding and execution of social media integration.

Further to that success, Digital Clarity has also been in deep negotiation with a Luxury Brand Group that takes established and well known global high-end fashion brands into the rapidly growing Middle East market.

Digital Clarity is working with the group due to the agency’s ability to leverage on contacts within the region and the ability to deliver tangible strategy. The Middle East remains an important market for the company. These two initiatives are examples of the Company’s development activities which will serve as models for the 2013 fiscal year.

Key Differentiators

2012 was about establishing strong foundations, streamlining operations and assessing activities on a cost benefit basis. 2013 is about growth and outreach.

As the internet and mobile arena continues to mature, the need to make sense of and manage companies through this often complex market is clearly an area of massive growth. The company is confident that the talent and experience within the digital marketing team is poised for a major springboard in fiscal 2013, but must be expanded significantly in order to support the global reach intended.

Experience

The company has reach and experience across a large number of vertical markets including: Automotive, Retail, Travel, Finance, Property, Recruitment, Advertising, Entertainment/Sports, B2B, Start-ups to name a few.

Relationships and Industry Contacts

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

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

Team Expertise

PPC campaign experience especially Google AdWords existed

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

Website design and development based on results driven design and planning Brand consultancy.

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

Sales and account management experience from multi-disciplined backgrounds

Evolution and Flexibility

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

Creative, Individualized Solutions and Customer Service

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

Growth opportunities in the Market

As the use of web mobile sites and applications grow, so do the complexities and challenges of using these sites and platforms commercially. Digital Clarity directs business through the maze of an often confusing and sophisticated set of barriers, to create a clear path for the customer to our client’s product or service. As this market matures, the need for companies to rely on the services from Digital Clarity can only grow. Here we look at some of the growth areas in Digital Clarity ’ s arsenal.

Growth & Opportunities in Design

§ 644,275,754 – number of active web pages 1st QTR 2012 - NetCraft

§ 6million domain added in first QTR 2012 - Verisign

§ By 2015, Mobile Internet Usage Will Increase by Factor of 26 - CISCO

§ 665million media tablets in use worldwide By end of 2016 - Gartner Group

Growth & Opportunities in Search

§ The North American Search industry will grow from $19.3 bn in 2011 to $26.8bn in 2013 - SEMPO

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

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

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

§ 2million search queries are made on Google, every minute - Google

§ Growth in Corporate Search - 50% of Fortune 100 Companies have a Google+ Account

Growth & Opportunities in Social Media

§ Fortune Global 100 companies have more accounts on each platform than ever before with an average:

§ 10.1 Twitter accounts

§ 10.4 Facebook pages

§ 8.1 YouTube channels

§ 2.6 Google Plus pages

§ 2.0 Pinterest accounts

§ Seventy-four percent of companies studied have a Facebook page.

§ Ninety-three percent of corporate Facebook pages are updated weekly.

§ Forty-eight percent of companies are now on Google Plus.

§ Twenty-five percent of companies have Pinterest accounts.

§ Each corporate Facebook page has an average of 6,101 people talking about it.

The need for Digital Brand Media & Marketing Group, Inc. to reach Global Markets

It is clear that the economy continues its slow recovery from the global effect of market forces which impact on all areas of commerce and trade. As the markets remain volatile, the opportunities for a company like Digital Brand Media & Marketing Group, Inc. to approach new business with its proven track record increase. The core markets remain US and English speaking European markets. Emerging markets are a target for the remainder of 2013. We already have identified a partner in the Middle East and are actively developing a significant client. In addition, BRIC countries (Brazil, Russia, India and China) would be the next targets from the emerging markets.

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

The US remains at the center of the entertainment, technology and digital industries and as such the emphasis looking forward and building on the recent success in the last quarter of the 2012 calendar year means that Digital Brand Media & Marketing Group, Inc. and its agency Digital Clarity are perfectly positioned to spring board into this market using the successful models established this past year.

Currently, negotiations are taking place to extend relationships with collaborative partners that have clients in the entertainment and media sectors that can leverage Digital Clarity’s experience in the digital and social space.

With the appointment of Steven Baughman as Head of US Operations in June 2012, we are establishing a strong digital marketing presence in the Los Angeles area to cover the music and entertainment market and then plan to do the same later in 2013 in New York. We intended to establish the satellite office during the 2013 fiscal year but didn’t have the bandwidth to do so and develop our client base as well. As California remains a key regional base from which to build and expand relationships, the need to have a New York satellite office is equally important to serve and build relationships the largest advertising market in the US.

Europe

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

Middle East

The Middle East is a fertile market for heritage based US and European brands looking for entry into this lucrative market. The fastest area for growth in this sector is to leverage on the luxury arena. Digital Clarity is already in discussions with a number of different luxury groups each with different brands within the group.

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

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

Areas supporting growth in the Middle East

§ Leverage of trade shows – e.g. MEE in November in Dubai – World Travel & Luxury Goods

§ 214,000 Chinese tourists visited Dubai in 2011, a 50% increase from the previous year.

§ 25 % of luxury goods sold in the Mall of the Emirates were bought by Chinese tourists 2011

§ A recent survey by Chalhoub Group revealed that 70% of survey respondents shopped with friends and 40% with sisters and mothers. The survey found that having the right logo and fashion brand displayed on handbags or clothes is particularly important. For example, up to 90% of people surveyed in Riyadh, Saudi Arabia, believed it was important to have a prestigious logo displayed on their clothing or accessories.

Key differentiators

Artist Collaboration with the head of US Operations, Steven Baughman is an area that will see exponential growth in the coming 12 months and beyond. Artists and brands that look to leverage their celebrity status will look to companies such as Digital Clarity to help drive and develop their brand in the growing and complex arena of social media.

Financial Overview/Outlook
The third quarter of the 2013 fiscal year continued the Company realignment from the previous year. Cost of sales decreased further while revenues continue to increase.

In addition, by the end of the fiscal year 2012 and continuing through the third quarter of 2013, all debt is in the hands of friendly lenders who have shown their support to the Company.

Going forward, Digital Brand Media & Marketing Group, Inc. intends to embark on a significant capital raise to allow the Company to scale up geographically and maximize our global reach through partnered relationships. This strategy is the most efficient and effective path to grow Digital Brand Media & Marketing Group, Inc. quickly into multiple revenue streams. We have proven the model in the last year. Our marketing services' offering is a labor intensive endeavor, wherein human capital is a key differentiator of knowledge and/or relationships.

The Board of Directors sees the remainder of fiscal 2013 as poised for growth on multiple fronts. With capital infusion, which will allow us to bring in new clients, grow existing successful clients and service them accordingly, coupled with an offer of a deferred tax asset to attract partners with significant revenue and expansion patterns, we will have a model in place which will be sustainable.

Off-Balance Sheet Arrangements

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

Recently Issued Accounting Pronouncements

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

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform with the current period presentation.

Significant and Critical Accounting Policies

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

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

LIQUIDITY AND CAPITAL RESOURCES

After the Board’s strategic review post-2011 fiscal year, we have migrated the technology in-house and are concentrating on activities which will grow Digital Clarity organically and by acquisition. We spent fiscal year 2012 establishing a client model for existing and new customers which can be exported geographically.

NINE MONTHS ENDED MAY 31, 2013

We had $30,190 cash at May 31, 2013. Our working capital deficit amounted to approximately $1.965 million at May 31, 2013.

During the nine months ended May 31, 2013, we used cash in our operating activities amounting to approximately $260,060. Our cash used in operating activities was comprised of our net loss from continuing operations of approximately $420,479 adjusted for the following:




	·	Fair value of preferred shares issued for bonus of $27,600;
	·	Change in fair value of derivative liability of $(31,615);
	·	Amortization of debt discount of $170,967;
	·	Additional compensation for debt restructuring of $70,430;
	·	Reversal of preferred shares cancelled of $(219,798);
	·	Gain on settlement of debt of $33,151;
	·	Depreciation of $2,098;

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




	·	An increase in our accounts payable and accrued expenses of approximately $91,000, resulting from slower payment processing due to our financial condition.
	·	An increase in our accrued salaries of approximately $87,000, which is a significant decrease as compared to the third quarter in fiscal 2012.
	·	A decrease in our accounts receivable of approximately $4,000 resulting from slower collections.

During the nine months ended May 31, 2013, we generated cash from financing activities of $229,500, which consist of the proceeds from convertible notes payable and loans payable. In addition we made payments for loans payable of $15,000.

NINE MONTHS ENDED MAY 31, 2012

We had $28,926 cash at May 31, 2012. Our working capital deficit amounted to approximately $1,740,000 at May 31, 2012.

During the nine months ended May 31, 2012, we used cash in our operating activities amounting to approximately $ 354,000. Our cash used in operating activities was comprised of our net loss from continuing operations of approximately $1,058,000 adjusted for the following:


	·	Fair value of shares issued of $99,159;
	·	Loss on derivative liability of $213,323;
	·	Amortization of debt discount of $204,356;
	·	Interest related to modification of conversion price of debt of $162,196;
	·	Bad debt expense of $24,816;
	·	Depreciation of $1,496;

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


	·	A decrease in our accounts payable and accrued expenses of approximately $13,000, resulting from management ’ s efforts to decrease (professional fees) and pay vendors on a timely basis.
	·	An increase in our accrued salaries of approximately $54,000, resulting from management ’ s efforts to lower salaries as well as a decrease in the number of employees including an officer of the Company. The Company has also adjusted its salary related to the elimination of an accrual of an officer of the Company.
	·	An increase in our accounts receivable of $7,055 resulting from slower collections.

During the nine months ended May 31, 2012, we generated cash from financing activities of approximately $325,000, which consist of the proceeds from capital contributions, loans payable and convertible notes payable less a payment of debt made totaling $13,625.

RESULTS OF OPERATIONS

Comparison of the Results for the Nine Months Ended May 31, 2013 and 2012

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

Revenue for the nine months ended May 31, 2013 and 2012 was approximately $330,000 and $332,000, respectively. For the nine months ended May 31, 2013 our primary sources of revenue are the Per-Click Web Design, and Search Engine Optimization Services. These primary sources amounted to greater than 85% of our revenues. Our secondary sources of revenue are our Social Media and Email Media. These secondary sources amounted to approximately 15% of our revenues.

For the nine months ended May 31, 2012 our primary sources of revenue are the Per-Click Advertising, and Search Engine Optimization Services. These primary sources amounted to greater than 74% of our revenues. Our secondary sources of revenue are our Social Media and Web Design. These secondary sources amounted to approximately 26% of our revenues. For the nine months ended May 31, 2011 our primary sources of revenue were the Per-Click Advertising, and Search Engine Optimization Services.

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.

Cost of sales for the nine months ended May 31, 2013 and 2012 was approximately $180,000 and $222,000, respectively. For the nine months ended May 31, 2013, cost of sales included advertising, salaries and media spend. This resulted in a gross profit of approximately $150,000 for the nine months ended May 31, 2013.

For the nine months ended May 31, 2012, cost of sales included advertising, salaries and media spend. This resulted in a gross profit of approximately $110,000 for the nine months ended May 31, 2012.

General and administrative costs decreased 20% to approximately $153,000 from approximately $193,000 for the nine months ended May 31, 2013 and 2012, respectively. This is primarily attributable to the streamlining of overhead resulting in a decrease in expenditures.

Payroll decreased for the nine months ended May 31, 2013 by 5% to approximately $11,000 as a result of the Company’s decrease in the number of employees. The Company has also adjusted its salary related to the elimination of an accrual of an officer of the Company.

Professional fees (which include accounting/auditing, consulting and legal fees) decreased by approximately $155,000 for the nine months ended May 31, 2013. This decrease is primarily attributable to the termination of the arrangement with BrandEntertain and cancellation of 2,000,000 series 2 preferred shares. As a result of this cancellation, the Company reversed the consideration reserved totaling $219,798 relating to this transaction which is reflected in the statement of operations as a reduction to consulting expense.

Amortization and depreciation for the nine months ended May 31, 2013 and 2012 was approximately $173,000 and $206,000 respectively. The decrease is due to the full amortization of debt discount associated with existing notes, the conversion of existing notes as well as a decrease in the number of new convertible notes.

Interest expense for the nine months ended May 31, 2013 and 2012 was approximately $128,000 and $49,000 respectively. The increase of approximately $79,000 is primarily related to interest of $70,430 recorded in relation to two convertible debentures restructured to a non-convertible loan.

Gain (loss) on derivative liability totaled approximately $32,000 and $(213,000) for the nine months ended May 31, 2013 and 2012, respectively and was due to the calculation of a derivative liability associated with the issuance of convertible note payables issued in 2013 and 2012 as well as the reversal of derivative liabilities relating to the restructuring of convertible notes to a loan payable (non-convertible).

Other interest – modification expense totaled approximately $0 and $162,000 for the nine months ended May 31, 2013 and 2012, respectively and was due to the price modification associated with the calculation of convertible shares issued associated with the convertible note payables issued in 2012.

Comparison of the Results for the Three Months Ended May 31, 2013 and 2012

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

Revenue for the three months ended May 31, 2013 and 2012 was approximately $106,000 and $118,000, respectively. For the three months ended May 31, 2013 our primary sources of revenue are the Per-Click Advertising, Web Design and Search Engine Optimization Services. These primary sources amounted to greater than 90% of our revenues. Our secondary sources of revenue are our Social Media and Email Media. These secondary sources amounted to approximately 10% of our revenues.

For the three months ended May 31, 2012 our primary sources of revenue are the Per-Click Advertising, and Search Engine Optimization Services. These primary sources amounted to greater than 58% of our revenues. Our secondary sources of revenue are our Social Media and Web Design. These secondary sources amounted to approximately 30% of our revenues.

Cost of sales for the three months ended May 31, 2013 and 2012 was approximately $53,000 and $63,000, respectively. For the three months ended May 31, 2013, cost of sales included advertising, salaries and media spend. This resulted in a gross profit of approximately $53,000 for the three months ended May 31, 2013.

General and administrative costs decreased 49% to approximately $36,000 from approximately $70,000 for the three months ended May 31, 2013 and 2012, respectively. This is primarily attributable to the streamlining of overhead resulting in a decrease in expenditures.

Payroll decreased for the three months ended May 31, 2013 by 30% to approximately $51,000 as a result of the Company’s decrease in the number of employees. The Company has also adjusted its salary related to the elimination of an accrual of an officer of the Company.

Professional fees (which include accounting/auditing, consulting and legal fees) decreased by approximately $210,000 for the three months ended May 31, 2013. This decrease is primarily attributable to the termination of the arrangement with BrandEntertain and cancellation of 2,000,000 series 2 preferred shares. As a result of this cancellation, the Company reversed the consideration totaling $219,798 relating to this transaction which is reflected in the statement of operations as a reduction to consulting expense.

Amortization and depreciation for the three months ended May 31, 2013 and 2012 was approximately $71,000 and $67,000 respectively. The increase is due to an additional $125,000 debt discount recorded in 2013.

Interest expense for the three months ended May 31, 2013 and 2012 was approximately $92,000 and $16,000 respectively. An increase of approximately $76,000 is primarily related to interest of $70,430 recorded in relation to two convertible debentures restructured to a non-convertible loan.

Gain (loss) on derivative liability totaled approximately $174,000 and $(28,000) for the three months ended May 31, 2013 and 2012, respectively and was due to the calculation of a derivative liability associated with the issuance of convertible note payables issued in 2013 and 2012.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

Item 4T. CONTROLS AND PROCEDURES

As of the end of the period covered by this quarterly report, our management evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation, our management concluded that, as of May 31, 2013, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls

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

Internal Controls

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

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

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

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits




31.1	Executive Director - Rule 13a-14(a) Certification
32.1	Executive Director - Sarbanes-Oxley Act Section 906 Certification
10.10	Mutual Rescission and Release
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

SIGNATURES

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




		DIGITAL BRAND MEDIA & MARKETING GROUP, INC.

Date: July 15, 2013		By: /s/ Linda Perry
		Linda Perry Executive Director

[DBMMRELEASEEXECUTED_CORDE001.JPG]

shall have any further obligations to each other pursuant to or arising directly or

indirectly from the Underlying Agreement or from any other agreement and

understanding whether written or oral relating to the subject matter thereof.

2. MUTUAL RELEASES

Except for the respective obligations of the Parties under this Agreement or as

otherwise set f01th above, each party (for itself, himself or herself and on behalf of its,

h is or her successors and assigns) hereby releases, rem ises and forever discharges the

other Parties (and all predecessors, successors and assigns of the other Parties, and the

respective directors, officers, employees, owners, agents and representatives of the

other party and its predecessors, successors and assigns) of and from any and all

actions, causes of action, suits, clai ms, demands, agreements, debts, liabi li ties and

obligations of any nature, fixed or contingent, known or unknown, whether at law or in

equity, by reason of any event, occurrence, circumstances or matter of any nature with

respect to the Underlying Agreement (collectively, the "Claims").

3. WATVER OF CALIFORNIA CIVIL CODE SECTION 1542

The Parties hereby acknowledge the ir familiarity with the prov isions of Section 1542 of

the California Civi l Code, and hereby expressly waive any and all rights or benefits

they have or may have thereunder, or under any other federal or state statutory rights or

rules, or principles of common law or equity, or those of any jurisdiction , government,

or political subdivis ion, similar to Section 1542 ("Similar Provision"). Thus, no party

to the Agreement may invoke the benefits of Section 1542 or any Similar Provision in

order to prosecute or assert in any manner a ny Claims that are released under this

Agreement. Section 1542 ofthe California Civil Code provides:

"A general release does not extend to claims which th e

cre di tor does not know or suspect to exist in his favor at

the time of executing the release, which if k nown by him

must have materially affected his settlement with the

debtor ."

The Parties to the Agreement hereby expressly and knowingl y acknowledge that they

may hereafter discover claims or facts in addition to or different from those which they

know or believe to exist with respect to the subject matter hereof which, if known or

suspected at the time of executing the Agreement, may have materially affected the

Agreement. Nevertheless, each party to the Agreement affirms its intention to hereby

fully, final ly and forever settle and release all disputes and differences, known or

unknown, suspected or unsuspected, and whether or not concealed or hidden, incl uding

the rights s pecified in California Civil Code Section 1542 or any Similar Provision.

RTG/BrandEntertalll Settlement & Release

812002.5

4. PUBLICITY RESTRICTIONS

No Party shall authorize, circulate, publi sh or otherwise disseminate any news articles

or other pub!ici ty of any kind related to this Agreement or the Underlying Agreement or

the serv ices rendered by any Party to any other Party unless the sa me is first approved

by the Parties in writing, nor disparage in any manner intended or likely to be harmful

to any other Party or each Party's business, including any officer, director or advisor to

a Party in relation to the Party's services under the Underlying Agreement. DBMM

shall be permitted to disclose a mutuall y agreed to press release announci ng this

Agreement for compliance with securities regulations applicable to the DBMM.

5. REPRESENTATIONS AND WARRANTIES

Each of the Parties to this Agreement represen ts and warrants that it, he or she has full

power and authority to enter into this agreement for themselves or for the Party they

represent.

6. SEVERABILITY

The terms of the Agreement shall be severable. The invalidity or unenforceabil ity of

one or more of the terms contained in the Agreement shall not affect any other terms of

the Agreement.

7. HEADINGS

Headings are used in the Agreement for convenience only and do not have any force or

effect in the interpretation or construction of the Agreement.

8. ASSIGNMENT

Each Party represents and warrants that i t has not assigned all or any portion of any

claim pertaining to the Clai ms, as the case may be, or any interest i n any Party

(i ncluding shares of DBMM) to any person or entity. If any claims are made by any

third persons or entities based upon the purported assignment or a ny such liens, shares

or claims are asserted in connection with the Claims, then the Pa rty who has breached

or allegedly breached its representation or warranty contained herein agrees to

indemnify a nd hold harmless the other Party or Parties from any said claims being

made.

9. GOVERNING LAW

The Agreement shall be subject to, governed by, and construed in accordance with the

laws of the State of California.

10. ATTORNEYS' FEES AND COSTS TO ENFORCE AGREEMENT

If any legal action or proceeding is brought arising out of, or connected with the

Agreement, the prevailing party or parties shall be entitled to recover, in addition to any

RTG/BrandEntertain Settlement & Release

812002.5

other relief to which such party ma y be entitled, reasonable attorneys' fees and costs

incurred in s uch action or proceeding.

II. BINDING EFFECT

The Agreement a nd all covenants and releases set forth herein shall be binding upon

and shall inure to the benefit of the respective Parties hereto, their legal s uccessors,

heirs, assigns, partners, representatives, parent and subs idiary com panies, agents,

attorneys, officers, em ployees, directors and shareho lders. Each party to the Agreement

acknowledges that it has had the benefit of advice of comp etent legal counsel with

respect to the decision to enter into the Agreemen t.

12. ENTIRE UNDERSTANDING

The Agreement contains the entire agreement and un derstanding between the Parties,

and supersedes a nd replaces any and al l prior written or oral negotiations, proposed

agreements or agreements. Each Party acknowledges that no other party, or any agent

or attorney of any party, has made any promi se, representat ion or warranty w hatsoever,

express or impli ed , not contained in the Agreement to induce any party to s ign the

Agreement, a nd each party acknowledges that it has not executed the Agreement in

reliance on any such promise, representation or warranty.

13. AMENDMENT TO AGREEMENT

Any amendm ent to the Agreement must be in writing and signed by duly authorized

representatives of the Parties hereto and state the intent of the Parties to amend the

Agreement.

[Signature Page to Follow]

RTG/BrandEntertain Settlement & Release

812002.5

14. EXECUTION AND COUNT ERPARTS

The Agreement may be executed in one or more counterparts, each of which shall be

deemed an origi nal agreement. All count erparts of any such doc um ent together shall

constitute one and the same instrument.

The Parties may exchange executed

count erparts of the Agreement by fax or e-mail (in pdf form), and a faxed o re -m a iled

copy of a signature shall be as valid and binding as an original signa ture.

DIGITAL BRAND MEDIA &

MARKETING GROUP, INC.

FIKIA RTG VENTURES, INC.

BRANDENTERTAIN

By:

_ _

Name: Linda Perry

Nam [DBMMRELEASEEXECUTED_CORDE003.GIF] e: Cord Pereira

Title: Executive Director

Title: Partner

Date:

Date: May 31, 2013

By:_

_ _ _

Name: Jeffrey Wattenberg

Ti tle: Partner

Date:

Name: Jeffrey Wattenberg

Date:

Nam [DBMMRELEASEEXECUTED_CORDE003.GIF] e: Cord Pereira

Date: M ay 3 1, 2 013

RTG/BrandEntcrtain Settlement & Release

812002.5

Exhibit 31.1

CERTIFICATION OF EXECUTIVE DIRECTOR

UNDER SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Linda Perry, Executive Director, of Digital Brand Media & Marketing Group, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Digital Brand Media & Marketing Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: July 15, 2013	By:	/s/ Linda Perry
	Name:	Linda Perry
	Title:	Executive Director

Exhibit 32.1

CERTIFICATION OF EXECUTIE DIRECTOR

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digital Brand Media & Marketing Group, Inc. (the “Company”) on Form 10-Q for the period ending May 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Linda Perry, Executive Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: July 13, 2013	/s/ Linda Perry
	Linda Perry
	Executive Director


DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	Three Months ended May 31,		Nine Months ended May 31,
	2013	2012	2013	2012

SALES	$ 105,893	$ 118,098	$ 329,772	$ 332,220

COST OF SALES	53,062	62,798	180,076	221,866

GROSS PROFIT	52,831	55,300	149,696	110,354

COSTS AND EXPENSES
General and administrative	35,593	69,649	153,076	192,505
Payroll	51,000	73,208	180,600	191,104
Legal and professional fees	(156,054)	54,341	(195)	155,000
Amortization and depreciation	71,216	66,850	173,065	205,961

TOTAL OPERATING EXPENSES	1,755	264,048	506,546	744,570

OPERATING LOSS	51,076	(208,748)	(356,850)	(634,216)

OTHER INCOME (EXPENSE)
Interest expense	(92,190)	(16,474)	(128,395)	(49,029)
Gain (loss) on foreign currency translation	-	-	-	637
Gain (loss) on derivative liability	174,189	(27,986)	31,615	(213,323)
Gain on settlement of debt	-	-	33,151	-
Other Interest - Modification Expense	-	(106,196)	-	(162,196)
TOTAL OTHER INCOME (EXPENSE)	81,999	(150,656)	(63,629)	(423,911)

NET INCOME (LOSS)	$ 133,075	$ (359,404)	$ (420,479)	$ (1,058,127)

OTHER COMPREHENSIVE INCOME
Foreign exchange translation	(662)	(342)	(1,885)	(1,828)
COMPREHENSIVE INCOME (LOSS)	$ 132,413	$ (359,746)	$ (422,364)	$ (1,059,955)

NET LOSS PER SHARE
Basic and diluted	$ 0.02	$ (0.06)	$ (0.05)	$ (0.28)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and diluted	7,855,800	6,251,492	7,855,800	3,777,604

See Notes to Unaudited Consolidated Financial Statements

DIGITAL BRAND MEDIA & MARKETING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	Nine Months Ended February 28,
	2013	2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (420,479)	$ (1,058,127)

Adjustments to reconcile net loss to net cash used in operating activities:
Fair value of shares issued for services	-	58,500
Fair value of preferred shares issued for bonus	27,600	32,539
Fair value of common stock issued for interest	-	8,120
Depreciation	2,098	1,496
Amortization of debt discount	170,967	204,356
Change in fair value of derivative liability	(31,615)	213,323
Additional compensation for debt restructuring	70,430	-
Reversal of preferred shares cancelled	(219,798)	-
Gain on settlement of debt	(33,151)	-
Bad debt expense	-	(24,816)
Interest related to modification of conversion price of debt	-	162,196
Changes in operating assets and liabilities:
Accounts receivable	(3,796)	7,055
Accrued salaries	86,994	54,311
Accounts payable and accrued expenses	90,690	(12,965)
NET CASH USED IN OPERATING ACTIVITIES	(260,060)	(354,012)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets	(417)	(2,174)
NET CASH USED IN INVESTING ACTIVITIES	(417)	(2,174)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable	125,000	128,454
Proceeds from loans payable	104,500	43,000
Payments made for loans payable	(15,000)	-
Payments made for convertible notes payable	-	(13,625)
Capital contribution	-	167,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	214,500	324,829

NET DECREASE IN CASH	(45,977)	(31,357)

EFFECT OF VARIATION OF EXCHANGE RATE OF CASH HELD IN FOREIGN CURRENCY	(1,964)	(1,828)

CASH - BEGINNING OF PERIOD	78,131	62,111

CASH - END OF PERIOD	$ 30,190	$ 28,926
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 2,000	$ 6,510

Non-cash investing and financing activities:
Debt contributed to capital	$ -	$ 30,500
Conversion of convertible notes payable into common stock	$ 69,396	$ 224,036
Restructuring of convertible debt	$ 110,000	$ -
Assignment of officer salary to loan holder	$ -	$ 150,000
Assignment of loan payable to loan holder	$ -	$ 100,000
Conversion of loans payable into common stock	$ -	$ 202,000
Conversion of accrued salaries into preferred stock	$ 2,673	$ 228,929
Debt discount associated with convertible debt	$ 80,000	$ 63,764

See Notes to Unaudited Consolidated Financial Statements