Quarterly Report for Quarter Ending November 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

The Company developed a document called the Creds Deck which provides a description to prospective clients of Digital Clarity's value proposition - https://www.dbmmgroup.com/wp-content/uploads/2024/03/DBMM_Creds_Deck_2024_2.pdf.

Our return to normal business in the fourth quarter of 2024 faced challenges as the world shifted and attempted to stabilize a post-COVID environment with mounting inflation. 2024 was focused on a measured return to normalcy as businesses have faced enormous challenges over the past few years, and DBMM's operating business Digital Clarity, is no exception. However, for context, it is worth reminding investors and shareholders that Digital Clarity was acquired by DBMM as a cash-flow positive business with a great reputation and industry network, winning industry awards.

As stated in the MD&As for many years since the acquisition of Digital Clarity, the operating business has, in most years, been cash flow-positive, but the costs of maintaining a public company far exceed the gross profit in the audited financial statements. That was expected, following the digital business model, though many digital companies do not have any operating revenues while they build the business. The business is being developed to a "to be determined" level (TBD), with all capital infusion and revenues (if any) remaining in the growth model.

Going into the 2025 fiscal year, the Company's mitigating circumstances have all been positively concluded. The company has returned to normal trading and is in the process of evolving into a 2025 management consultancy, which will be normal business. The transformation of a company guided by Digital Clarity as its digital architect demands a "seat at the table" of decision-makers as the subject matter experts in the new digital landscape. Digital Clarity has earned that role. The industry as seen today and in the future is described below:

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:

1.

Operational discipline - maintaining lean operations and optimizing working capital to support reinvestment in research and development;

2.

Strategic repositioning - executing the pivot from a marketing agency to an AI-augmented GTM consultancy; and

3.

Technology acceleration - advancing the DCIE roadmap and aligning talent, partnerships, and IP to future commercialization.

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.

REALITIES TEMPERED BUDGETS AND OUTLOOK - MANAGEMENT COMMENTARY FOLLOWS

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:

1.

Acceleration of the DCIE Roadmap. Completion of the first deployable version of the Digital Clarity Intelligence Engine and onboarding of pilot clients.

2.

Expansion of GTM Consulting Services. Scaling the GTM advisory business in the U.S. and EMEA, focusing on AI adoption strategy and execution for B2B enterprises.

3.

Diversification of Revenue Streams. Introduction of subscription and licensing models for DCIE, driving recurring revenue and gross margin expansion.

4.

Investor GTM Audits. Launch of a pre- and post-investment GTM Audit service for private equity and venture capital markets.

5.

Capital Efficiency. Maintain disciplined cost management and reinvestment ratio to support sustainable growth.

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:

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Move up the value chain, focusing on strategic GTM advisory engagements that directly tie to revenue outcomes;

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Introduce AI efficiency consulting, helping clients replace inefficient marketing expenditure with intelligent automation;

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Invest in proprietary tools, developing the DCIE platform to serve as both an internal accelerator and a market differentiator.

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 CASE FOR AI ADAPTATION IN MARKETING GOING FORWARD

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:

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AI adoption accelerating. McKinsey's State of AI 2025 reports that 78% of global organizations use AI in at least one business function, with marketing, sales, and product development leading adoption.

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Shift toward outcome-based consulting. Gartner projects that by 2026, over 60% of consulting engagements will include AI-driven insight delivery.

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Explosion of the AI-enabled services market. IDC forecasts global spending on AI-centric solutions to exceed $300 billion by 2026, growing at a CAGR above 25%.

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:

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Convert decades of consulting IP into a scalable digital asset.

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Provide predictive, prescriptive, and generative capabilities within one unified environment.

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Enable recurring, high-margin software revenue in addition to advisory income.

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Strengthen DBMM's competitive moat through proprietary data and algorithms.

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.

THE CASE FOR AI ADAPTATION IN MARKETING GOING FORWARD

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

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Global Adoption Surge. McKinsey's State of AI 2025 reports that 78% of global organizations use AI in at least one business function, up from 55% in 2022, with marketing and sales among the top three functional areas of deployment.

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Efficiency Imperative. According to PwC's 2025 Global AI Survey, AI could contribute $15.7 trillion to the global economy by 2030, with $6.6 trillion attributed to productivity gains and $9.1 trillion to consumption-side effects such as personalized marketing and customer experience.

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Budget Reallocation. Gartner's 2025 CMO Spend Report shows that 76% of CMOs plan to increase AI-related investments, even as overall marketing budgets remain flat or decline-a clear signal that executives view AI as a cost-saving, not cost-adding, necessity.

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Competitive Differentiation. Boston Consulting Group (BCG) notes that companies with embedded AI in marketing processes achieve two to three times faster revenue growth than peers who have not integrated AI decision systems.

THE TIME TO INVEST IN AI IS NOW FOR LONG-TERM BENEFIT

AI has moved beyond hype; it is now a capital allocation priority.

For investors and enterprises alike, the question is no longer if to invest, but where and how fast.

Global Investment Landscape

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Record AI Capital Flows. According to Stanford's AI Index 2025, private investment in AI reached $93 billion in 2024, representing a 160% increase since 2020. Venture and corporate investors alike are directing capital toward AI-augmented services, platforms, and infrastructure.

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Enterprise Transformation Window. Accenture's 2025 research shows that organizations that integrate AI into core business models by 2026 are expected to realize 30% higher profitability by 2030 than those that delay adoption.

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AI in Marketing and GTM Functions. IDC estimates that spending on AI-driven marketing applications will grow at a 27% CAGR between 2023 and 2028, reaching $127 billion by 2028. This growth is outpacing every other category of enterprise software investment.

STRATEGIC OPPORTUNITY FOR DIGITAL CLARITY

Digital Clarity sits squarely at the nexus of this investment cycle. The Company's transformation from digital marketing services to AI-enabled GTM consultancy mirrors the investment community's focus on scalable, technology-driven growth models.

The Digital Clarity Intelligence Engine (DCIE)-currently under active development-represents both a defensive moat and a value-creation catalyst. Once commercialized, DCIE is expected to:

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Generate recurring SaaS or usage-based revenue, improving predictability and valuation multiples;

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Reduce service delivery costs through automation, enhancing margins;

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Provide unique data and insight that strengthen client retention and cross-sell opportunities;

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Position DBMM as a pure-play AI GTM intelligence company in a market with limited direct competitors.

Timing and Market Alignment

The timing of DBMM's pivot aligns with what Deloitte describes as "the second wave of enterprise AI adoption" (2025-2028), characterized by scalable, domain-specific platforms rather than generalized AI tools. By focusing on GTM and revenue intelligence, DBMM is targeting a clear commercial niche underserved by large consultancies and crowded point-solution vendors.

Investor Rationale

For shareholders, the case for investing in DBMM is underpinned by:

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Exposure to the fastest-growing segment of the AI economy - applied GTM intelligence;

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A capital-efficient operating model with IP-based scalability;

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A clear path from consultancy to software revenue, increasing enterprise value;

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Leadership with demonstrated delivery in complex B2B environments; and

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Strong macro tailwinds across AI, marketing transformation, and digital efficiency.

AI is not merely an enhancement to Digital Clarity's business model, it is its foundation for future value creation.

The Company's early and disciplined investment in the DCIE platform positions DBMM to capitalize on one of the most profound economic transformations of our time.

Management believes that investing now in proprietary AI capabilities will yield compounding benefits over the next decade: higher margins, recurring revenue, increased valuation multiple, and enduring shareholder value.

THE B2B MARKET REMAINS FERTILE

The B2B (business-to-business) sector remains one of the most fertile, defensible, and scalable opportunities for AI-driven transformation. While consumer markets are crowded with short-cycle technologies and volatile spending patterns, B2B economies are defined by recurring demand, complex buying cycles, and sustained value creation, the precise environment in which Digital Clarity excels.

Enduring Fundamentals

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Resilient Global Spend. According to Gartner's B2B Marketing Benchmarks 2025, global B2B marketing expenditure exceeded $163 billion, up 7% year-over-year despite macroeconomic tightening.

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Technology as a Core Driver. IDC forecasts that B2B digital transformation spending will reach $3.4 trillion by 2026, representing more than 60% of total enterprise IT investment.

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Shift Toward Data-Led GTM. Forrester projects that by 2027, 80% of B2B revenue leaders will prioritize integrated GTM systems combining marketing, sales, and operations data-precisely the convergence DCIE is built to serve.

Why It Matters to Digital Clarity

Digital Clarity operates within this structural expansion. The Company's clients - technology, SaaS, fintech, and enterprise services firms, represent sectors leading the adoption of AI-driven GTM systems.

The reliability of enterprise demand, combined with the rising complexity of decision ecosystems, favors consulting partners who can unify insight, analytics, and strategy execution.

Strategic Advantage

1.

High Switching Barriers. B2B engagements involve long-term, relationship-driven contracts-producing durable revenue and customer lifetime value.

2.

High-Margin Advisory. Strategy-led consulting in B2B environments commands superior margins versus transactional marketing.

3.

AI Enablement at Scale. AI augments both efficiency (reducing cost-per-acquisition) and intelligence (improving sales conversion and forecasting accuracy).

SERVICES FOR A NEW ERA

Staying still is not an option. Digital Clarity delivers a continuum of strategy, analytics, and execution services, unified by a single mission: to help clients identify, quantify, and accelerate growth using structured, AI-enhanced GTM frameworks.

1. Strategic Consulting

DC partners with executive teams - CMOs, CROs, and CEOs - to design scalable GTM architectures. Services include:

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Market segmentation and Ideal Customer Profile (ICP) definition.

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Competitive intelligence and positioning strategy.

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Value proposition development and route-to-market mapping.

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Revenue operations (RevOps) design and performance metrics.

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Board-level GTM audits and due diligence advisory for investors.

This stage defines the foundation of transformation-"where the company is and where it can grow."

2. AI-Augmented Demand Creation

Leveraging both proprietary and third-party AI tools, DC builds predictive, content-driven demand engines:

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Account-based marketing (ABM) and intent-driven outreach.

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Predictive lead scoring and funnel acceleration.

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Content intelligence and personalization using generative AI.

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Pipeline visibility dashboards linking marketing and sales data.

The outcome: shorter sales cycles, higher ROI, and measurable pipeline attribution.

3. Revenue Enablement and Optimization

DC aligns marketing and sales functions through:

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Revenue playbooks and sales enablement frameworks.

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AI-driven forecasting and resource allocation.

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Closed-loop analytics measuring marketing's contribution to revenue.

These services are increasingly delivered via the DCIE platform, which automates parts of the process and provides real-time strategic recommendations.

4. Investor GTM Audit and Advisory

A key innovation for 2026 onward, DC offers pre- and post-investment GTM audits for venture capital and private equity firms. This service identifies risk, validates commercial readiness, and uncovers unrealized growth levers in portfolio companies, essentially functioning as a "commercial due diligence engine" powered by DCIE analytics.

Commercial Model

DC operates under three engagement models:

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Retained advisory - ongoing strategic partnerships.

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Project-based consulting - defined deliverables over set durations.

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Subscription-based platform (DCIE, post-launch) - access to AI intelligence tools and dashboards.

This hybrid model balances stability with scalability, creating a bridge between consulting margins and software economics.

MARKET OPPORTUNITY AND COMPETITION

Market Opportunity

Digital transformation spending continues to surge. IDC's Worldwide Digital Transformation Spending Guide (2025) forecasts $3.9 trillion in annual global digital transformation investment by 2027, representing a 17% CAGR from 2023. Within that, AI-enabled GTM and revenue intelligence solutions account for a rapidly growing subset expected to exceed $45 billion by 2028.

The GTM management consulting market-a fusion of marketing strategy, RevOps, and AI analytics-is estimated at $100 billion globally (Source: BCG Analysis, 2025).

The market is fragmented, offering significant opportunity for specialized, IP-rich players like Digital Clarity to establish leadership in defined niches.

Tailwinds Driving Growth

1.

AI Integration Mandates. By 2027, 80% of B2B enterprises plan to embed AI into customer acquisition and lifecycle management processes (Gartner, 2025).

2.

Data Complexity and Fragmentation. Businesses face data silos that limit insight generation-creating demand for integrated GTM intelligence engines.

3.

Economic Pressure for Efficiency. Boards are demanding lower CAC (Customer Acquisition Cost) and higher revenue efficiency-areas directly addressed by DC's frameworks.

4.

Investor Oversight. PE/VC funds increasingly require data-backed GTM diligence before deploying capital. DC's forthcoming AI audit product directly serves this need.

Competitive Landscape

The competitive field spans:

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Large consultancies (Deloitte, Accenture, Bain) - broad in scope, less agile, limited focus on mid-market GTM execution.

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Boutique advisory firms - high-touch but lack proprietary technology.

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MarTech and RevOps platforms - strong software tools but limited strategic advisory capability.

Digital Clarity differentiates itself through a convergence of three elements rarely found together:

1.

Strategic Consulting Expertise. 20+ years advising complex B2B enterprises.

2.

Proprietary AI Technology. DCIE as a core differentiator and margin enhancer.

3.

Executional Agility. A hybrid team structure capable of adapting to client and market dynamics.

This blend creates a defensible position: a "consultancy-with-technology" model, distinct from software vendors and traditional agencies alike.

DEVELOPING U.S. FOOTPRINT FOR DIGITAL CLARITY IN 2026-2027

The United States represents the largest and most mature market for AI-enabled GTM consulting and SaaS adoption.

According to Statista and PwC (2025), the U.S. accounts for over 45% of global AI investment, with concentrations in technology hubs such as California, Texas, Massachusetts, and New York.

Though small inroads were made in late 2024 into 2025, this will be part of a larger focus moving forward. DBMM's near-term expansion strategy is therefore focused on establishing a physical and commercial presence in these regions.

Strategic Rationale

1.

Client Proximity: Many of Digital Clarity's prospects and target clients - enterprise software, fintech, cybersecurity, and SaaS firms, are headquartered in the U.S.

2.

Investment Ecosystem: U.S. venture and private-equity firms collectively manage over $13 trillion in assets (PitchBook, 2025), creating sustained demand for DC's GTM Audit and Portfolio Advisory Services.

3.

Talent Access: The U.S. provides deep access to data scientists, AI engineers, and GTM strategists required for DCIE development and commercialization.

4.

Partnership Pipeline: Existing partnerships with technology providers (Google, Microsoft, Salesforce, Adobe) can be leveraged more effectively through U.S. proximity and co-marketing programs.

Recent Milestones

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Completion of internal DCIE prototype and early pilot testing.

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Launch of DC's investor-facing GTM Audit framework.

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Participation in OTC Markets Virtual Investor Conference (2025), increasing institutional and retail visibility.

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Publication of investor and industry thought-leadership content on AI and GTM transformation.

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Strengthened R&D and data-science partnerships to accelerate DCIE roadmap.

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Reggie James appeared on numerous podcasts and social channels

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New YouTube channel launching in 2026

New Social Initiatives to be announced to launch DCIE

DIGITAL CLARITY HAS A COMPETITIVE ADVANTAGE

DBMM's Digital Clarity division holds a defensible position within the rapidly expanding AI and GTM transformation marketplace.

This advantage is derived from structural differentiation, intellectual property, and proven operational capability.

1. Proprietary Technology (DCIE)

The Digital Clarity Intelligence Engine is more than software - it is the codification of two decades of consulting expertise, algorithmically expressed.

Once commercialized, DCIE will deliver predictive analytics, decision automation, and growth simulation unmatched by generic AI marketing platforms.

2. Hybrid Business Model

DC unites consulting credibility with software scalability.

This hybrid model allows for:

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Recurring SaaS revenue, complementing high-margin advisory income;

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Continuous data enrichment through consulting engagements;

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Feedback loops that accelerate product learning and differentiation.

Few competitors operate effectively in both spheres.

3. Market Focus and Expertise

DC specializes in B2B technology sectors - SaaS, fintech, enterprise software, and investor-backed ventures. This vertical specialization yields deeper insight, faster deployment, and higher client retention. By contrast, many large consultancies remain too generalist, while small agencies lack the scale or AI capability to compete.

4. Reputation and Leadership

Led by Reggie James, a recognized industry strategist with over 25 years' experience guiding enterprise GTM programs, Digital Clarity has built credibility through award-winning performance and enduring client relationships.

That reputation provides a platform for brand trust, investor confidence, and strategic partnerships.

Conclusion:

Digital Clarity's advantage is structural, not circumstantial - a combination of IP, executional expertise, and focus that positions DBMM at the forefront of the AI-driven consulting revolution.

GROWTH IN INVESTOR AWARENESS AND OUTREACH

DBMM recognizes that investor confidence and transparency are central to sustainable growth in the public markets. Accordingly, management has prioritized consistent communication, visibility, and compliance as pillars of its capital-markets strategy.

Enhanced Market Presence

During 2024-2025, DBMM increased its visibility through:

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Participation in the OTC Markets Virtual Investor Conferences, presenting its AI transformation roadmap and business evolution to global investors;

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Expanded content and disclosure across DBMMGroup.com, DigitalClarity.com, and OTCMarkets.com;

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Strengthened investor relations materials, including strategic updates, financial highlights

These initiatives have broadened the shareholder base, improving liquidity and awareness of DBMM's long-term strategy.

Future Outreach Plans

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Continued participation in AI, digital transformation, and investor conferences to engage both institutional and retail investors.

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Regular publication of quarterly technology and R&D updates post-DCIE milestones.

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Consideration of strategic partnerships and analyst coverage as DCIE approaches commercialization.

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Expanded social and professional media presence to communicate achievements and milestones transparently.

FINANCIAL OVERVIEW/OUTLOOK

THE DISRUPTIVE REALITY OF FISCAL 2025

Fiscal year 2025 tested the resilience of businesses across the global B2B technology landscape with an intensity not witnessed since the immediate post-pandemic period. DBMM, through its operating division Digital Clarity, was not immune to these forces, yet our experience during this tumultuous period catalyzed the most significant strategic transformation in our company's history.

The fiscal year unfolded against a backdrop of cascading disruptions that fundamentally altered client behavior, compressed marketing budgets, and extended sales cycles across the B2B sector. These were not isolated challenges but rather an interconnected web of forces that demanded radical adaptation.

B2B sales teams faced mounting challenges throughout 2024, with win rates dropping by 18% in the latter half despite earlier signs of recovery, while sales cycles increased by 16%, requiring substantially more effort to close deals. Marketing budgets fell by 15% on average in 2024 according to Gartner analysis, with some organizations experiencing cuts as high as 20%, while 71% of CMOs reported that insufficient budgets or resources were hampering their efforts.

Digital Clarity experienced these dynamics directly. Clients who had historically maintained consistent marketing spend patterns suddenly implemented emergency budget reviews mid-fiscal year. Projects that would have been greenlit immediately in prior years were subjected to multi-level approval processes. Decision cycles that typically spanned 30-60 days extended to 90-120 days, with some strategic initiatives deferred indefinitely as organizations prioritized immediate operational stability over growth investments.

The reality of GLOBAL IMPACT

Though it is challenging to justify such a challenging year against the intentions at the beginning, the globalization in which we operate had an impact. Geopolitical risks reached unprecedented levels in 2024-2025, with conflicts in Europe and the Middle East creating ripple effects across global markets, disrupting supply chains and fueling regional instability, while more than 60 countries held significant elections amid widespread voter dissatisfaction over rising prices and reduced living conditions. Global GDP growth decelerated as rising trade frictions, persistent geopolitical and policy uncertainty, elevated market volatility, and inflation divergence reshaped the global outlook, with businesses operating in an environment marked by supply fragilities and fragmented policy signals.

For B2B technology companies, Digital Clarity's core client segment, this uncertainty manifested in postponed expansion plans, conservative hiring, and a sharp pivot toward "prove it now" mentalities. Organizations that would previously invest in transformative marketing strategies on strategic conviction now demanded immediate, quantifiable ROI demonstrations before committing resources. In short, these clients paused activity realizing pursuit of short term gains were futile.

IMPACT ON DIGITAL CLARITY'S B2B MARKET SECTOR

By early 2025, 69% of sales representatives missed their quotas, with the top 17% of representatives generating 81% of total revenue, revealing a growing performance gap and indicating systemic challenges across the B2B sales function. This wasn't simply about individual underperformance; it reflected fundamental shifts in buyer behavior and procurement complexity that rendered traditional sales and marketing approaches increasingly ineffective.

Winners in the B2B space were able to deliver 2 times the average revenue growth for their respective industries in 2024, while about one-third of organizations failed to deliver on their targets, with the biggest challenges cited as improving salesforce productivity, managing pricing pressures, and modernizing go-to-market technologies.

Digital Clarity found itself serving clients caught in this divide. Many struggled with outdated go-to-market frameworks unable to adapt to the new reality, while simultaneously lacking the internal expertise or bandwidth to reimagine their approaches fundamentally.

The confluence of these external forces produced tangible impacts on Digital Clarity's fiscal 2025 performance. Revenues declined, however an uptick has started during the later part of the financial year. These numbers, while disappointing relative to our aspirations, tell only part of the story. They reflect not merely market conditions but a deliberate strategic pivot that required us to temporarily step away from commodity revenue streams to invest in building something transformational.

Behind The Revenue Reality

Our fiscal 2025 revenue performance reflected three distinct dynamics:

First, the accelerated commoditization of our legacy service offerings. A big challenge across B2B marketing in 2024 was eroding marketing budgets, with marketers seeing their budgets shrink over the course of the year and many heading into 2025 with fewer resources, requiring agencies and brands to be extra savvy in where they spend to extract maximum value. Pay-per-click management, SEO optimization, and tactical social media services, once profitable pillars of our business, faced relentless pricing pressure as lower-cost providers flooded the market and AI-powered tools enabled basic execution at dramatically reduced costs.

We made the conscious decision to exit or substantially reduce these commodity offerings rather than compete in a race to the bottom. While this decision impacted near-term revenues, it freed our team to focus entirely on higher-value consulting engagements and DCIE development.

Second, the extended sales cycles and compressed budgets described earlier directly impacted our ability to convert pipeline into closed business during the fiscal year. Deals we anticipated closing in Q2 and Q3 extended into Q4 and beyond. In several cases, clients who expressed strong intent to engage ultimately deferred decisions into fiscal 2026 as they navigated internal budget reallocations and organizational changes.

Third, and most significantly, we deliberately redirected substantial internal resources away from revenue-generating client work toward the intensive development effort required to bring the Digital Clarity Intelligence Engine (DCIE) from conceptual framework to deployable platform. This was not an incidental investment but a strategic imperative that demanded our best talent's focused attention.

A Strategic Inflection Point - Why Standing Still Meant Losing

Confronting these challenges, DBMM's management team faced a fundamental choice: attempt to defend declining commodity revenue streams through price competition and tactical adjustments or use the disruption as catalyst for transformational change.

We chose transformation.

The decision was informed by a clear recognition that the B2B marketing consulting landscape was undergoing a permanent structural shift. In 2025, 89% of leading businesses were already investing in AI to drive revenue growth, with artificial intelligence becoming an essential part of B2B marketing and sales strategies rather than merely an enhancement. Every business leader surveyed for Allego's 2025 AI in Revenue Enablement Report, 100% now uses generative AI tools to support sales, marketing, or customer success, up from just 62% the prior year, marking a sharp shift toward full integration.

The message was clear. AI enablement had moved from competitive advantage to baseline requirement. Organizations lacking AI-augmented capabilities would not simply grow slower than AI-enabled competitors, they would become increasingly irrelevant.

For Digital Clarity, this meant that our decades of consulting expertise, while valuable, required a new delivery mechanism to remain competitively viable. Clients needed not just strategic advice but AI-powered systems that could operationalize that advice at scale, provide predictive insights, and accelerate execution dramatically.

Thus, DCIE was not an optional enhancement to our business model but rather the foundation for our continued relevance and growth.

DIGITAL CLARITY INTELLIGENCE ENGINE (DCIE) TAKES SHAPE

The fiscal 2025 challenges, paradoxically, provided invaluable clarity on precisely what the market needed. Through hundreds of client conversations, we identified consistent pain points that traditional consulting approaches could not adequately address:

1.

Strategic Insight Without Execution Capacity - Clients received excellent strategic recommendations but lacked the internal resources or technological infrastructure to implement them effectively.

2.

Data Abundance Without Actionable Intelligence - Organizations possessed vast datasets from CRM systems, marketing automation platforms, and engagement tracking, yet struggled to synthesize this information into clear, prioritized actions.

3.

Need for Speed at Enterprise Quality - Market dynamics demanded rapid decision-making and campaign deployment, yet quality and strategic alignment couldn't be sacrificed for velocity.

4.

ROI Transparency and Attribution Complexity - CFOs and boards increasingly demanded precise attribution of marketing investments to revenue outcomes, capabilities that traditional marketing agencies couldn't consistently deliver.

5.

AI Literacy Gap - While clients recognized AI's importance, few possessed the internal expertise to evaluate AI solutions, integrate them into existing workflows, or maximize their value.

These insights shaped DCIE's design from first principles.

DCIE: PROPRIETARY TECHNOLOGY AS STRATEGIC DIFFERENTIATOR

DCIE represents the culmination of more than two decades of go-to-market consulting expertise, algorithmically expressed through sophisticated AI-powered modules. This is not an off-the-shelf platform with Digital Clarity branding; it is proprietary intellectual property developed specifically to address the precise market gaps we identified.

Integrated Intelligence for B2B Growth

As mentioned previously, the Digital Clarity Intelligence Engine consists of six sophisticated, interconnected modules:

1.

The Insight Engine Optimization (IEO) leverages machine learning algorithms to provide deep insights into market trends, customer behavior and competitive landscapes. Unlike traditional analytics platforms that report historical performance, IEO identifies emerging patterns before they become obvious to competitors, enabling clients to capitalize on opportunities proactively.

2.

The Strategic Navigator Suite (SNS) streamlines strategy development through sector-specific diagnostics, workflow automation, and scenario planning. SNS transforms strategy formulation from an art form dependent on consultant intuition into a repeatable, scalable methodology enhanced by AI while retaining essential human judgment for final decisions.

3.

The Data Qualification & Alignment Framework (DQAF) ensures that data used in strategy development is accurate, relevant, and aligned with client objectives. DQAF addresses the critical challenge that undermines many AI implementations: unreliable or skewed input data that produces flawed recommendations regardless of algorithmic sophistication.

4.

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, a crucial advantage in volatile markets.

5.

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.

6.

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.

The Hybrid Architecture: combines Security with Cutting-Edge Capability

Critically, 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 addresses the single largest barrier to enterprise AI adoption: data security and privacy concerns. Proprietary information never leaves secure client environments, while DCIE still leverages the cutting-edge capabilities of frontier AI models for analysis and recommendation generation.

New future REVENUE models augmenting and going Beyond Consulting

DCIE has scope to be "Standalone Asset and Revenue Generator"

DCIE's value extends beyond enhancing Digital Clarity's consulting delivery. As proprietary software with immediate commercial application across a large addressable market, DCIE creates multiple potential revenue streams:

Direct Licensing - Organizations can license DCIE as a standalone platform, operated by their internal teams with Digital Clarity providing implementation support and ongoing platform enhancements.

White-Label Partnerships - Strategic partners in complementary sectors can white-label DCIE under their branding, creating new distribution channels and partnership revenue.

Subscription SaaS Model - A fully managed subscription offering provides continuous access to DCIE capabilities plus ongoing updates, support, and strategic guidance,creating predictable, recurring revenue with superior margins to project-based consulting.

Investor GTM Audit Services - Venture capital and private equity firms can leverage DCIE for pre-investment and post-investment go-to-market audits, identifying risks and opportunities in portfolio companies.

The AI marketing market is valued at $47.32 billion in 2025 and is expected to grow at a CAGR of 36.6% to reach $107.5 billion by 2028. DCIE positions DBMM to capture a meaningful share of this explosive growth, particularly in the specialized B2B go-to-market intelligence segment.

FISCAL 2026 OUTLOOK: THE TRANSFORMATION BEARS FRUIT

As DBMM enters fiscal 2026, we transition from investment phase to commercialization phase. DCIE's development journey positions us for meaningful revenue acceleration and improved financial performance.

Revenue Projections and Growth Drivers

Management projects fiscal 2026 revenues of a minimum of $1,200,000, representing intended growth over fiscal 2025. This projection reflects:

DCIE Commercial Launch Impact - Q1 fiscal 2026 commenced with DCIE's commercial availability, enabling conversion of developed pipeline into closed business. Initial pricing models command 2-3x premiums over legacy service offerings, reflecting DCIE's enhanced value delivery.

Pilot Client Conversions - Pilot and beta participants transition to full commercial engagements, providing immediate revenue base as fiscal year opens.

Recurring Revenue Model Introduction - Subscription-based DCIE access creates predictable, high-margin recurring revenue stream beginning in Q2 fiscal 2026.

White-Label Partnership Revenue - To work on at least one white-label partnership anticipated to commence generating licensing revenue during fiscal year.

Expanded Market Reach - Strengthened U.S. presence, particularly in California technology corridors, accelerates client acquisition in the world's largest B2B technology market.

Enhanced Win Rates - DCIE differentiation meaningfully improves competitive positioning, increasing win rates on contested opportunities.

Quarterly Revenue Trajectory Activity

Q1 FY2026 (September - November 2025)

●

DCIE commercial launch and pilot conversions drive immediate revenue impact

●

Traditional consulting engagements continue providing baseline revenue

●

Initial subscription revenue generation begins

Q2 FY2026 (December 2025 - February 2026)

●

Seasonal patterns less impactful due to subscription model introduction

●

White-label partnership revenue potentially commences

●

Expanded marketing activities generate increased lead flow

Q3 FY2026 (March - May 2026)

●

Full DCIE market awareness established through thought leadership and demonstration

●

Multiple subscription renewals and expansions contribute to compounding revenue growth

●

Investor GTM Audit services gain traction with venture capital and private equity firms

Q4 FY2026 (June - August 2026)

●

Compounding effects of recurring revenue model fully realized

●

Strategic client expansion and account growth accelerate

●

Planning for fiscal 2027 aggressive expansion supported by demonstrated traction

Path to Profitability and Sustainable Growth

Fiscal 2026 represents a transitional year toward sustainable profitability, with cash flow improvement preceding GAAP profitability achievement.

Gross Margin Expansion: DCIE-enabled services command premium pricing while reducing delivery costs through AI-powered automation, expanding gross margins from historical 35-40% range toward 55-65% target.

Operating Leverage: Platform approach enables serving more clients with proportionally smaller team expansion, creating operating leverage as revenue scales.

Recurring Revenue Impact: Subscription model provides predictable revenue visibility, enabling more efficient resource allocation and reducing sales cycle dependency.

EBITDA Pathway: Management targets EBITDA breakeven by Q3 fiscal 2026, with positive EBITDA throughout Q4, positioning the company for sustained profitability in fiscal 2027 and beyond.

THE INVESTMENT CASE: WHY DCIE CREATES TRANSFORMATIONAL VALUE

Market Opportunity Alignment

With 89% of leading businesses investing in AI to drive revenue growth and the AI marketing market valued at $47.32 billion in 2025 expected to reach $107.5 billion by 2028 at a 36.6% CAGR, the market timing for AI-enabled go-to-market platforms has never been stronger.

DBMM's transformation positions the company at the intersection of multiple powerful trends:

AI Adoption Acceleration - 100% of business leaders now use generative AI tools to support sales, marketing, or customer success, with half reporting that AI has already helped boost revenue. DCIE provides the specialized go-to-market application layer that makes AI accessible and actionable for B2B organizations.

Shift from Commoditized Services to Strategic Platforms - Winners in the B2B space who deployed AI and related technologies at greater scale achieved 2 times the average revenue growth versus their industries in 2024. DCIE enables Digital Clarity's clients to become those winners while positioning DBMM as the technology provider powering that transformation.

Revenue Intelligence Demand - Companies that effectively use analytics in service of marketing and sales performance are 1.5 times more likely to achieve above-average growth rates than their peers. DCIE's predictive and prescriptive capabilities directly address this need.

Investor-Driven GTM Diligence - Private equity and venture capital firms managing over $13 trillion in assets (PitchBook, 2025) increasingly demand sophisticated go-to-market assessment capabilities. DCIE's Investment Intelligence Platform addresses this previously underserved market segment.

Competitive Positioning and Defensibility

DCIE creates defensible competitive advantages:

Proprietary Technology - Unlike agencies licensing third-party tools, DCIE is wholly owned intellectual property continuously enhanced through client engagements and ongoing development.

Data Network Effects - Each DCIE deployment generates performance data and insights that improve algorithmic accuracy for all subsequent clients, creating compounding value.

Hybrid Expertise Model - Combining AI capability with deep consulting expertise proves difficult to replicate, requiring both technological sophistication and decades of go-to-market domain knowledge.

First-Mover Advantage in Niche - While large consultancies offer generic AI services and point-solution vendors provide narrow tools, few competitors address the specific B2B go-to-market intelligence niche with integrated platform plus advisory services.

Multiple Paths to Shareholder Value Creation

DCIE creates optionality for value realization:

Organic Growth - Scaled deployment of DCIE through Digital Clarity's direct sales creates sustainable, high-margin revenue growth.

Strategic Partnerships - White-label agreements with complementary firms expand distribution without proportional cost increases.

Platform Licensing - Direct DCIE licensing to enterprises and mid-market firms provides software-like economics.

Strategic Acquisition - Proven platform with demonstrated client traction and proprietary IP creates attractive acquisition target for larger consultancies, MarTech platforms, or CRM vendors seeking AI capabilities.

Spin-Out Potential - DCIE's standalone value potentially supports independent capitalization as separate entity, unlocking valuation multiples associated with software businesses rather than consulting firms.

LOOKING FORWARD, CONFIDENCE IN TRANSFORMATION

Fiscal 2025's challenges tested DBMM's resolve, but they also revealed the transformational opportunity that DCIE represents. The convergence of market need, technological capability, and Digital Clarity's domain expertise creates a unique moment.

AI is transforming every aspect of B2B marketing, from team structures and culture to the balance between automation and creativity, with CMOs needing to position their organizations for sustained success in an increasingly AI-driven world by embracing AI literacy, fostering innovation-driven mindsets, and building in-house capabilities.

Digital Clarity has done precisely this, building the capabilities, developing the technology, and establishing the market position required to thrive in the AI-enabled future of B2B go-to-market strategy.

The year ahead offers the opportunity to demonstrate that the pain of fiscal 2025's transformation was investment, not loss. With DCIE now commercially available, pipeline robust, and market demand for AI-enabled go-to-market solutions accelerating, management enters fiscal 2026 with justified confidence that DBMM's best years lie ahead.

Our transformation from commoditized services provider to AI-enabled go-to-market intelligence platform positions us not merely to survive the disruption reshaping our industry but to emerge as a defining force within it.

For shareholders who maintained faith through fiscal 2025's turbulence, your patience is about to be rewarded. For prospective investors evaluating DBMM, the opportunity to participate in a company at the precise inflection point between transformation investment and scaled commercialization rarely presents itself so clearly.

The future belongs to those who build it. We've built DCIE. Now we deploy it.

COMPANY INITIATIVES TO REMOVE CERTAIN AGED DEBT

Regarding capital infusion, the Company resolved in 2015 to eliminate any consideration of using convertible debentures as a financing vehicle. Accordingly, the Company has not issued convertible debentures since 2015 nor have any convertible debentures been executed since 2016.

Additionally, we have demonstrated our adherence to such a philosophy by renegotiating its aged debt with lenders, one at a time, at fixed settlement amounts with no conversion terms. Furthermore, such renegotiations lead to the derecognition of derivative liabilities overhanging our balance sheet. The Company intends to continue its debt negotiation and modification program.

This has been a successful strategy:

During fiscal year 2021 and 2023, and to a lesser extent in fiscal 2020, we successfully reached agreements with certain lenders resulting in a gain on extinguishment for loans payable which amounted to the difference between the carrying value and the revised amount of the obligations.

The gain on extinguishment of principal and accrued interest amounted to $169,837 and $57,802 during fiscal 2021 and 2020, respectively.

We also successfully reached an agreement with a holder of convertible debentures aggregating $249,800 to modify its terms. Such debentures are no longer convertible, are now non-interest bearing, and have been reclassified to loans payable. It also resulted in a decrease in derivative liabilities and an increase in additional paid-in capital of approximately $260,000 during fiscal 2021.

Furthermore, in March 2022, we reached an agreement with a holder of convertible debentures to satisfy obligations aggregating $85,000 in consideration of 30 million shares of the Company's common stock.

In February 2023, we reached an agreement with a holder of convertible debentures to satisfy obligations aggregating $76,000 in consideration of 7.5 million shares of the Company's common stock.

In May 2023, we reduced our liability to a lessor by $15,000.

In February 2025, we reached an agreement with a holder of convertible debentures to satisfy obligations aggregating $739,000 in consideration of 100 million shares of the Company's common stock.

THREE MONTH PERIOD ENDED NOVEMBER 30, 2025

We had $34,000 in cash and our working capital deficiency amounted to approximately $8.6 million at November 30, 2025.

During the three-month period ended November 30, 2025, we used cash in our operating activities amounting to $159,000. Our cash used in operating activities was comprised of our net loss of $305,000 adjusted primarily for the following:

Increase of accounts payable, accrued expenses, accrued interest, and accrued compensation, of approximately $130,000, resulting from a short fall in liquidity and capital resources.

We generated cash from financing activities of $170,000 which primarily consists of the proceeds from the issuance of notes payable.

THREE MONTH PERIOD ENDED NOVEMBER 30, 2024

We had $27,000 in cash and our working capital deficiency amounted to approximately $7.9 million at November 30, 2024.

During the three-month period ended November 30, 2024, we used cash in our operating activities amounting to $126,000. Our cash used in operating activities was comprised of our net loss of $355,000 adjusted primarily for the following:

Change in fair value of derivative liability of $34,000.

Additionally, the following variations in operating assets and liabilities during the three-month period ended November 30, 2024 impacted our cash used in operating activity:

Increase of accounts payable, accrued expenses, accrued interest, and accrued compensation, of approximately $194,000, resulting from a short fall in liquidity and capital resources.

We generated cash from financing activities of $103,000 which primarily consists of the proceeds from the issuance of notes payable.

Comparison of Results for the three-month ended November 30, 2025 and 2024

		For the three-month period ended
		November 30,				November 30,				Increase/ (Decrease)				Increase/ (-)Decrease
		2025				2024				$				%
Revenues		$	47,017			$	28,973			$	18,044				62	%
Cost of revenues			33,431				22,236				11,195				50	%
Sales, general and administrative			166,654				135,480				31,174				23	%
Operating income ( loss)			(153,068	)			(128,743	)			24,325				19	%
Other ( income) expenses
Interest expense			152,971				191,921				(38,950	)			(20	)%
Change in fair value of derivative liability			(625	)			(34,350	)			(34,975	)			NM	)
Total other expenses			152,346				226,271				(73,925	)			(22	)%
Net loss		$	(305,414	)		$	(355,014	)		$	(49,600	)			(14	)%

NM: not meaningful

Our primary sources of revenue are Digital Analytics and Advisory Services.

Revenue is recognized upon transfer of control of promised or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enter into contracts that can include various combinations of services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The increase in our revenues is due to providing our enhanced services to new clients.

The increase in cost of revenues is commensurate with the increase in revenues.

The increase in sales, general and administrative expenses is primarily due to additional expenses incurred in connection with customer acquisition.

The decrease in interest expenses increased primarily from the higher considerations provided pursuant to its financing activities during the first quarter of fiscal 2025.

The change in fair value of in derivative liabilities between comparable periods is primarily attributable to in the Company's fluctuation in expected volatility of our stock price used in the assumptions to compute its fair value at November 30, 2025 and 2024 compared to the measurement dates.

Non-GAAP Financial Measures

Management considers earnings (loss) before interest, taxes, depreciation and amortization, or EBITDA, as adjusted, an important indicator in evaluating our business on a consistent basis across various periods. Due to the significance of non-recurring items, EBITDA, as adjusted, enables our management to monitor and evaluate our business on a consistent basis. We use EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. We believe that EBITDA, as adjusted, eliminates items that are not part of our core operations, such as interest expense, or items that do not involve a cash outlay, such as loss on extinguishment of debt and change in fair value of derivative liability. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income (loss), net income (loss) and cash flows used in operating activities. This non-GAAP financial measure excludes significant expenses that are required by GAAP to be recorded in our financial statements and is subject to inherent limitations. Investors should review the reconciliation of this non-GAAP financial measure to the comparable GAAP financial measure included below. Investors should not rely on any single financial measure to evaluate our business.

		Three-month period ended November 30,
		2025				2024
Net loss		$	(305,414	)		$	(355,014	)
Interest			152,971				191,921
Change in fair value of derivative liability			(625	)			34,350
EBITDA, as adjusted		$	(153,068	)		$	(128,743	)