DBMM 10-K & 10-Q changes, risk factors and insider trading

Fiscal year 2025 represented a year of disciplined restructuring, renewal, and investment for DBMM, as the Company continued to strengthen its foundation for sustainable growth through its operating division, Digital Clarity (DC).

Throughout 2024 and 2025, the Company operated in a macroeconomic environment marked by inflationary pressure, cost rationalization, and longer enterprise sales cycles. Despite these headwinds, DBMM maintained a stable operating posture while strategically investing in its long-term growth engine: the Digital Clarity Intelligence Engine (DCIE) its proprietary AI platform that underpins future scalability and recurring revenue potential.

Management’s focus during the fiscal year was threefold:

The Company continues to prioritize strategic growth over short-term revenue volatility, believing this disciplined approach will yield stronger margins, higher-quality earnings, and greater shareholder value over time.

Management believes DBMM has now completed the foundational phase of its transformation and is entering a growth and commercialization cycle. The following themes define its forward-looking strategy for FY2026–2027:

The Company expects modest revenue growth in run-up to Q1 FY2026, accelerating in FY2026 as the DCIE platform reaches commercialization and as enterprise demand for AI-driven GTM transformation increases.

The global marketing and consulting industry entered 2025 with heightened caution. According to PwC’s Global CEO Survey (2024), 45% of CEOs cited economic uncertainty and cost inflation as key inhibitors of growth investments. Gartner’s CMO Spend Survey (2024) further noted that marketing budgets fell to 7.7% of total company revenue, down from 9.1% in 2023 — one of the sharpest contractions since the pandemic period.

This environment materially affected procurement cycles, leading to delayed decisions and budget compression, especially in mid-market technology sectors. However, amid this slowdown, management identified a crucial structural shift: organizations are not abandoning digital transformation — they are refocusing it around AI and efficiency.

Digital Clarity’s Strategic Response

Rather than compete for shrinking tactical budgets, Digital Clarity repositioned itself to:

In summary, 2025 was a transitional yet constructive year for DBMM. While global economic conditions remained challenging, the Company used the period to invest strategically in AI capability, refine its service model, and position itself for high-margin growth.

Management believes that DBMM’s transformation is timely, deliberate, and sustainable, aligning with long-term trends reshaping how enterprises approach marketing, sales, and revenue operations in an AI-dominated landscape.

The Pivot to AI-Augmented Consulting

Today, DC’s differentiation lies in its ability to blend consulting rigor with AI-powered execution. Its current portfolio integrates third-party AI tools while developing its proprietary system, the Digital Clarity Intelligence Engine (DCIE), that will eventually serve as both an internal operating core and a client-facing product.

This evolution mirrors macro trends across the global marketing and consulting industries:

Digital Clarity is strategically positioned at this intersection: where consulting meets machine intelligence.

The current digital environment, characterized by fragmented consumer journeys, rising customer expectations for personalization, and intensified competition, demands a strategic pivot away from traditional, manual marketing methodologies. Artificial Intelligence (AI) is no longer a future-looking experiment; it is the foundational technology that is redefining marketing efficiency, precision, and return on investment (ROI). For us to maintain and accelerate our competitive advantage, the aggressive adaptation of AI into our core marketing strategy is not optional, it is a critical imperative.

THE DIGITAL CLARITY INTELLIGENCE ENGINE: PROPRIETARY TECHNOLOGY AS COMPETITIVE ADVANTAGE

Central to this transformation is the Digital Clarity Intelligence Engine (DCIE), our proprietary AI-driven technology platform currently nearing completion and moving into pilot deployment with select clients. The DCIE represents substantial development investment and positions Digital Clarity with a defensible competitive advantage in a rapidly evolving market.

The DCIE is an integrated suite of sophisticated modules designed specifically for the complexities of B2B technology marketing and go-to-market execution:

The Insight Engine Optimisation (IEO) module leverages machine learning to provide deep insights into market trends, customer behavior, and competitive landscapes, enabling data-driven decisions that traditional analytics tools cannot deliver.

The Strategic Navigator Suite (SNS) streamlines strategy development through sector-specific diagnostics, workflow automation, and scenario planning, transforming strategy formulation into a repeatable, scalable methodology enhanced by AI while retaining essential human judgment.

The Data Qualification & Alignment Framework (DQAF) ensures that data used in strategy development is accurate, relevant, and aligned with client objectives, addressing the critical challenge of unreliable or skewed data that undermines many AI implementations.

The Market Adaptation and Prediction Engine (MAPE) uses AI-powered predictive analytics to forecast market shifts and identify emerging opportunities, enabling clients to adapt strategies proactively rather than reactively.

The Digital Transformation Facilitator (DTF) supports companies through comprehensive digital transformation journeys, integrating digital marketing strategies with broader business objectives and facilitating seamless transformation efforts aligned with future digital landscapes.

The Collaborative Innovation Platform (CIP) integrates insights from clients, consultants, and external experts to support ideation, development, and implementation of innovative strategies, leveraging collective intelligence across stakeholder groups.

Importantly, the DCIE operates on both public large language models (including Anthropic’s Claude, OpenAI’s GPT, and Google’s Gemini) and private LLMs that maintain complete security for sensitive internal company data.

This hybrid architecture provides cutting-edge AI capabilities while ensuring proprietary information never leaves secure client environments, addressing the data privacy and security concerns that inhibit AI adoption at many enterprises.

The DCIE technology stack represents significant standalone value for DBMM. As proprietary software with immediate commercial application across a large addressable market, the DCIE can be licensed, white-labeled for strategic partners, or scaled across customer segments beyond our current direct client base, creating multiple potential revenue streams and enhancing shareholder value independent of our consulting services.

THE INVESTMENT INTELLIGENCE PLATFORM: EXPANDING THE ADDRESSABLE MARKET

On top of the above, Digital Clarity is developing the Digital Clarity Investment Intelligence Platform (DCIIP), a specialized offering for venture capital firms, private equity investors, and their portfolio companies.

DCIIP provides comprehensive pre-investment and post-investment go-to-market audit capabilities that enable investors to de-risk investments by identifying GTM weaknesses, competitive vulnerabilities, and growth opportunities before capital is committed. For portfolio companies, DCIIP conducts systematic assessments that reveal gaps between current GTM capabilities and the requirements for achieving targeted growth, then prescribes specific, actionable improvements.

This addresses a critical need in the investment community. While investors scrutinize financial metrics, technology assets, and market opportunity with sophisticated diligence processes, go-to-market capability often receives superficial evaluation despite being the determining factor in whether a promising company captures its market opportunity. DCIIP brings the same analytical rigor to GTM assessment that investors apply to financial and technical due diligence.

Early discussions with independent investment firms have validated demand for this capability, and we anticipate DCIIP contributing meaningfully to revenue growth as we formalize partnerships throughout fiscal 2026 and beyond.

STRATEGIC IMPACT

Once fully deployed, DCIE will:

Management believes DCIE will become the centerpiece of DBMM’s future valuation, unlocking an inflection point where the Company transitions from service-driven to technology-driven growth.

MARKET ALIGNMENT

Industry analysts such as IDC and Gartner predict that by 2028, AI-enabled revenue intelligence platforms will represent a $40–$50 billion market segment, growing at over 25% CAGR. DBMM’s early move into this space positions it as a first mover among smaller, public companies with a focused GTM niche.

DCIE embodies DBMM’s future: a convergence of strategic consultancy and proprietary software that scales insight, execution, and value creation.

DEMONSTRATED CLIENT SUCCESS

Digital Clarity’s client roster has included marquee B2B technology brands: Adobe Workfront, Xerox, Aurigo, Atos, Business Optix, Revo, Britannic Technologies, Bentley Systems, Kahua, Text Anywhere, and Synergy Sky.

These relationships have generated documented outcomes: 60% growth in annual recurring revenue for Kahua, 85% year-over-year growth for Bentley Systems, 44% sales growth for Text Anywhere, and 48% increase in enterprise sales for Adobe Workfront.

These results validate our strategic methodology and suggest that combining proven frameworks with DCIE technology enhancement will deliver even more compelling outcomes.

By moving up the value chain from execution vendor to strategic partner, Digital Clarity addresses the most critical pain points faced by modern businesses: complex, elongated sales cycles, geopolitical and socio-economic market noise, and the pervasive challenge of maintaining meaningful growth velocity.

This pivot positions DBMM not merely for incremental revenue growth, but for exponential value creation built on high-margin, advisory, and proprietary technology services designed for the future of commerce. According to trusted market data, the global market for AI consulting services, which is our new primary vertical, is projected for substantial growth through 2030, reinforcing the timeliness and massive potential of our strategic shift.

Digital Clarity remains at the forefront of driving marketing change and growth and creating lasting value for its clients based on a strong foundation for all stakeholders.

The market has spoken: the global AI in marketing industry is projected to reach over $107.5 billion by 2028, growing at a Compound Annual Growth Rate (CAGR) of approximately 36.6% (SEO.com). Our commitment to integrating and scaling AI across our marketing stack is therefore a non-negotiable step to capture efficiency gains, meet sophisticated customer demands, and ensure our long-term relevance and growth in an irrevocably altered digital world. We view this adaptation not as an expense, but as the essential investment in our future competitive infrastructure.

Artificial Intelligence (AI) is no longer an experimental tool—it is rapidly becoming the core operating system of modern commerce.

For marketing and go-to-market (GTM) functions, AI now defines competitiveness, efficiency, and long-term enterprise value.

Macro Context

Note: The first quarter proceeded broadly in line with the trajectory set out above. DCIE moved from development into commercial availability, and early client conversations progressed from demonstration to scoped engagement discussions. Traditional consulting engagements continued to provide baseline revenue while the Company’s higher-value, DCIE-enabled offering was introduced to the market.

Note: The second quarter reflected a period of deliberate, structured investment in the Company’s pivoted offering, with revenues at virtual parity with the prior period. Pipeline development continued across consulting and DCIE-enabled engagements, with several opportunities progressing through evaluation toward contract. During the quarter, an established client relationship entered a strategic pause in preparation for a broader, more substantive agreement, which was concluded in the third quarter.

Note: The third quarter delivered the first tangible conversion of the Company’s transformation into contracted business. The Company’s agreement with Xamun was reconstituted and expanded, converting the relationship from project-based delivery into an ongoing advisory mandate of broader scope. The quarter also marked the recommencement of geographic expansion beyond the United Kingdom, with active client engagements now extending to the United States and, through an ongoing engagement with an R&D tax advisory firm operating across the UK, UAE and Cyprus.

Note: The fourth quarter is in progress at the date of this filing. Activity is concentrated on execution of contracted engagements, conversion of advanced-stage pipeline, and preparation for fiscal 2027.

The foregoing notes reflect management’s discussion of actual events and engagements in execution as of the date of this filing and are made under the Safe Harbor Provisions applicable to forward-looking statements.

EBITDA Pathway: our goal is to achieve sustained profitability and positive cash flows from operating activities. We target EBITDA breakeven in fiscal 2027.

NINE MONTH PERIOD ENDED MAY 31, 2025

We had $20,000 in cash and our working capital deficiency amounted to approximately $7.8 million at May 31, 2025.

During the nine-month period ended May 31, 2025, we used cash in our operating activities amounting to $409,000. Our cash used in operating activities was comprised of our net loss of $398,000 adjusted primarily for the following:

Gain on derecognition of liabilities of $459,000 offset by an increase of accounts payable, accrued expenses, accrued interest, and accrued compensation, of approximately $465,000, resulting from a short fall in liquidity and capital resources.

We generated cash from financing activities of $379,000 which primarily consists of the proceeds from the issuance of notes payable.

The decrease in gain on derecognition of liabilities is primarily attributable to a nonrecurring gain on derecognition of liabilities during the second quarter of 2025.