DIGITAL BRAND MEDIA & MARKETING GROUP, INC. Readers are cautioned that certain statements contained herein are forward-looking statements and should be read in conjunction with our disclosures under the heading "Forward-Looking Statements" above. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. This discussion also should be read in conjunction with the notes to our consolidated financial statements contained in Item 8. "Financial Statements and Supplementary Data" of this Report. Operations Overview/Outlook
The Company developed a document called the Creds Deck which provides a description to prospective clients of Digital Clarity's value proposition. http://www.dbmmgroup.com/wp-content/uploads/2019/12/Digital-Clarity-Creds-Deck_DBMM_Nov2019.pdf
Operationally, fiscal year 2020 has been important in continuing the direction of the Company and steering it toward a scaled growth plan which has been in neutral while the Company addressed certain external challenges beyond its control. Nevertheless, The Company continued to focus on the positive, proven operating model and used that model to expand geographic reach with existing and new clients. DBMM continues to build on its strengths. The Company had strong relationships within the market and intends to build its business focus in a wide variety of industry verticals. The heart of the business is the marketing consultancy.DBMM Group's main business Digital Clarity, works in the area of Digital Marketing. Understanding each client and developing the model to individualize the outlook has been essential. This kind of close relationship with the client resulted in Digital Clarity being considered a close professional advisor.
Why Digital Experts are in demand
The world is changing, and technology is taking the lead. Today, everything is going digital -- entertainment, health, real estate, banking and even currencies. This is, however, understandable. InNorth America alone, 95% of the population are online (statista). With everything turning to digital, it means companies are also jumping online to market their businesses. And to survive the challenges of digital marketing, brands need to keep up with the latest trends. Successfully reaching one's target audience is no longer just putting out TV and print ads. These days, social media is the new arena of digital marketers, as 3.5 billion people are active social media users. To keep up with the ever-changing scene, digital marketing experts need to stay in step with the evolving tech trends. Social media marketing companies like ours work tirelessly to research consumers and what makes them engage with brands. We try to find the best online solutions that will cater to our clients' end-users' queries in the easiest and most cost-efficient way possible -- be it by developing new technology or adapting to trends.
Relentless Digital Growth Positions Digital Clarity as a Leader
The need for seasoned expertise and insight is in huge demand. Digital Clarity's strength, heritage and reach in the digital marketing puts the DBMM brand in an excellent position for investment and growth. Digital Clarity's strength in Search Engine Marketing, Analytics and Social Media means that the Company is ready to feed on that demand and leapfrog into a powerful revenue focused vehicle. Search Engine Marketing
The number of people using internet search engines is increasing year on year and is almost unfathomable. In 2019 57% of the global population accessed the internet and by 2021 this figure is projected to grow to 65%.
All sources: Statista.com
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[[Image Removed]] Digital Clarity helps companies 'get found' on search engines like
How machine learning is enhancing digital marketing strategy
Digital Clarity applies strategy to algorithmic based machine learning tools. The launch of
Machine learning and Digital Marketing
Because machine learning is being used to solve a huge set of diverse problems
with the help of data, channels, content, and context, as marketers, Digital
Clarity stands to benefit from this information and phenomenon as a whole. But,
as the information we gather grows, digital marketing as we know it is set to
change. Digital Clarity will be at the forefront of this change.
Search Engine Optimization
From an SEO point of view, keywords could become less important. Search engines
receive more revenue for ads when they provide users with higher quality
content. As a result, the algorithm they use needs to be more focused on
providing each user with content that will serve a specific purpose, rather than
be packed with the right keyword density. Therefore, the need to start thinking
about the quality of your content as a ranking factor on search engines. This is
where Digital Clarity come and help shape content 'in the right way' to help it
get found.
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Pay Per Click (PPC) Campaigns
With
To become more strategic and take PPC campaigns to the next level for its clients, Digital Clarity:
? Get to grips with the metrics that are most valuable to your business ? Understand obstacles that could get in the way of meeting your goals ? Know the underlying performance drivers to make more strategic decisions
Content Marketing Although still extremely important, the internet has become inundated with too much content. As mentioned above, to succeed, brands need to be creating content that is valuable to readers. To do this, you need to understand consumer trends, data and engagement. Machine learning tools alongside Digital Clarity's strategic approach allows its clients to reduce the amount of time spent tracking data, as well as better decipher that data to create actionable tasks that will lead to success.
The Growth of Digital Marketing & Consultancy Services
[[Image Removed]] The skill set historically owned by agencies offering disciplines such as UX, design, creativity, customer-centric data analytics and customer engagement is now being immersed with large consultancy businesses whose traditional bread and butter was Digital Transformation. Accenture, Deloitte, IBM,KPMG , McKinsey andPricewaterhouseCoopers rank among the most aggressive players in acquiring and partnering with agencies such as Digital Clarity. They present not only an opportunity for Digital Clarity but also a prospective exit and investment opportunity. Digital Marketing Services 2019 continued to see exponential growth in the adoption of Social Media as communication, marketing and engagement avenues. An acceptance of change is driving revenue. The future growth in mobile search is one of the fastest growing ancillary businesses. It was clear that the direction, talent and growth of the Company is in its human capital and outside relationships which must be proactive in order to differentiate itself from competition 17
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The clear opportunity is at the foundation of the Company, namely the need to expedite and continue to encourage development in the digital marketing services sector. The marketing services product is labor intensive and thus the Company must jumpstart the growth by significant capital to grow simultaneously in multiple geographies.
The operating company remained cash flow positive through 2019 despite challenging situations in the parent company, the Company outlook remains robust for the foreseeable future.
Key Milestones 2019 revenues decreased due to external circumstances out of the companies control which placed enormous pressure on the operating business. Despite these circumstances, the client base is expanding in base number and the size of client serviced. At any point in time, our clients represent a variety of industries. Many of these clients choose to operate under an NDA as our clients see DBMM as a competitive advantage. Under that disclaimer, we cannot share all clients' names, but here are a few key clients representing diverse verticals, as follows:
1.
include Super and Luxury Yacht companies such as Sunseeker and Princess
Yachts.
2. Digital Clarity audited Google Search and Analytics for
show, The London Boat Show and one of
Southampton Boat Show. The Company acted as digital advisor with British
Marine for the Abu Dhabi Boat Show. These shows will fit into the circuit
that incorporates
3. Digital Clarity continues to work with sponsors and potential sponsors of a
Formula 1 team that are in the top 5 racing teams in this prestigious and
global sport.
4. Chantico Global - Prestigious asset allocation advisors headquartered in Los
Angeles,
a
international corporations.
5. Babcock Engineering - Defense contractor for the
Defense.
6.
the musicians of the future.
Other examples are representative of the diversity of client base. DBMM's approach using a client's analytics and executing an individualized model to increase ROI as the prime objective, spans a wide range of industries.
Digital Clarity continues to expand into high end Real Estate and Luxury brands and is building a strong network on High Net-worth and Ultra High Net-worth Individuals.
NOTABLE EVENTS - INDUSTRY AWARDS & RECOGNITION
Digital Clarity is an AWARD-WINNING Digital Marketing Services Business year-after-year
Digital Clarity shortlisted for
TheUK Search Awards have been celebrating the best in expertise, talent and achievements of the search industry for over half a decade and are regarded as the premiere celebration of SEO, PPC and content marketing in theUK . Digital Clarity was shortlisted in the hotly contested B2B section inOctober 2019 , 'Best Use of Search' along with client Bentley SYNCHRO, a global construction project management software company that supports the professional needs of those responsible for creating and managing the world's infrastructure. The Company's software has been used in managing and developing projects such as The Shard andBattersea Power Station amongst others. 18
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For 2019, the Company was shortlisted for the coveted
TheUK Search Awards have been celebrating the expertise, talent and achievements of the search industry for over half a decade and are regarded as the premiere celebration of SEO, PPC and content marketing in theUK . The awards attract hundreds of entries from the leading search and digital agencies from across theUK and to those based elsewhere around the globe who are delivering work for theUK market. [[Image Removed]]
All categories were judged by an influential and respected international judging panel. The judging is a robust, credible and transparent two-step process, involving pre-scoring and a face-to-face panel discussion.
THE DIGITAL IMPACT AWARDS 2018
The Digital Impact Awards are the
The Digital Impact Awards sets the industry-wide benchmark in digital
stakeholder engagement. The event honors the best corporate digital
communications work in
This award celebrates the campaigns that best exemplify their successes, obstacles or effectiveness through measurable data. The strongest entries feature proprietary evaluation systems, an effective use of existing systems or solid analysis of metrics.
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The in-depth evaluation strategy used between Digital Clarity allowed the Company to understand the user journey and quality of leads from first click through to final sale.
Andrew Thomas , publishing editor ofCommunicate magazine and founder of the Digital Impact Awards, says, "Last year was one of the most competitive of years in the history of the awards programme. Yet this year's awards signified the leaps and bounds that digital communications are continuing to make across the professional plateau. The sheer quality and character of the evening's winners exemplifies not only the homogeneity of today's digital communications, but equally its importance."
IN 2018 Digital Clarity Shortlisted for Ecommerce Awards for Excellence for ProCook
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Digital Clarity Research Featured in
Digital Clarity looked into the perils of internet addiction, especially among the young and the effects it can have to both the individual as well as broader society. The research was deemed worthy to be published in theHuffington Post , an online paper rum byAriana Huffington and used by journalists worldwide as both a distribution point as well as an inspiration to feed into current events and stories. http://www.huffingtonpost.co.uk/2014/10/16/youths-controlled-internet-addiction_n_599_5068.html 20
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Key Differentiators in Choosing Digital Clarity
Why Digital Marketing is key requirement in any business
SEARCH REMAINS KEY IN
Total
Conducted with PwC, the analysis shows that Display (video) and Search were the
biggest drivers of growth between January and
Search now accounts for £3.7 billion of total H1 digital ad spend, while combined Display (video and non-video) is worth £2.8 billion, a 17% annual uplift. Non-video remains the largest Display format (up 8% YoY to £1.45 billion), but video formats are growing fast (up 27% to £1.32 billion).
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THE NEED FOR PROFESSIONAL CONSULTANCY & OPPORTUNITY FOR MASSIVE GROWTH
Four consultancies lead Ad Age's ranking of the 10 largest agency companies in the world. With combined revenue of$13.2 billion , the marketing services units of Accenture, PwC, IBM and Deloitte sit just below WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu. Last year, only two consultancies-Accenture Interactive and IBM iX-made the top 10. IBM iX was the first to break into the top 10. Given the experience of the team, Digital Clarity's advisory and consultancy is in demand. With the recent growth in these business areas, and the rise of consultancies, it is confirmation that Digital Clarity is headed in the right direction for growth. 21
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Outlook of the global digital marketing spend
Technavio's market research analyst predicts the global digital marketing spending market to grow steadily at a CAGR of around 9% during the forecast period.
One of the major factors influencing the growth of digital marketing is its ability to track and monitor the outcome of spending on digital marketing efforts. With the help of digital marketing platforms, the marketers can view their customer's response and measure the success of the marketing campaign in real-time, without conducting an expensive market research. Much of this market's growth can be attributed to the fact that these platforms are interactive for users. Since the customer engagement rate for these campaigns is relatively higher than other marketing strategies, they are rapidly being adopted by enterprises to increase their customer base. The ability of strategically planned interactive campaigns to effectively engage clients will result in the augmented adoption of digital platforms during the forecast period.
Geographical segmentation of the digital marketing spending market
?Americas - North, Central andSouth America ? APAC -Asia Pacific andJapan ? EMEA -Europe , theMiddle East andAfrica This segmentation analysis predicts theAmericas to account for more than 45% of the total market share by 2020. In this region, the brands have a greater chance of monetizing their advertisements due to the availability of a broad base of the target audience. Factors such as the rapid shift toward online shopping will result in this market's strong growth in theAmericas . GLOBAL AD SPEND CONTINUES [[Image Removed]] 22
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Competitive landscape and key vendors
Digital advertising is the fastest-growing segment of the global market for advertising spending. The increasing use of smartphones and the availability of cheap internet services are the two major factors propelling the growth prospects for this market. More than 30% of the companies are planning to spend around 75% of their advertising expenditures on digital marketing within the next five years.
DIGITAL CLARITY WELL POSITIONED TO SERVICE TOP INTERNATIONAL MARKETS
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Growth Opportunities in the Market
In fiscal year 2020, the Company will continue to take advantage of the global growth in Digital Marketing.
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DIGITAL CLARITY READY TO TAKE COMMERCIAL ADVANTAGE OF SOCIAL MEDIA GROWTH
Digital consumers are now more likely to say they use social to follow the news
(40%) than they are to identify it as a platform for keeping in touch with
friends (39%). Entertainment also now plays a key role in motivating digital
consumers to engage with social media, ranking as the third most important
reason for internet users (38%) but showing the highest growth.
The opportunities for social engagement, at all times of the day and in various
locations, have facilitated the evolution of social platforms into entertainment
hubs. It's no longer about "social" activities in the purest sense, but more
purposeful activities, particularly those based around content consumption. This
helps to explain why motivations like news consumption, finding entertaining
content, researching products, and watching sports have seen increases in the
past few years.
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THE GROWTH OF SOCIAL MEDIA E-COMMERCE
Enabling consumers to finalize a purchase while remaining within social apps has been a goal for social platforms for some time now. Social commerce is seen to have the potential to be a major revenue generator and an important way to diversify revenue streams beyond advertising. AcrossAsia , networks like WeChat and Line have successfully facilitated commerce via their platforms, allowing consumers to carry out a range of commerce activities from booking taxis to paying for restaurant bills or items in-store. But social commerce has been a tough sell in many Western markets. Online consumer habits here can be difficult to change, especially when it comes to the potentially sensitive information involved in financial transactions. Social media can play a big role in the purchase journey right up to the point of purchase, but the appetite to complete a final purchase within the platform remains low. Most will move to retail sites. These benefits must be intrinsically social or deeply embedded with payment systems, and must be grounded in consumer-engagement strategies, in order for social commerce to achieve the roaring success seen in APAC. The prospect of using "buy" buttons on social media in theU.S. has not quite gained traction. The growing role of social networks as a way of researching products does, however, provide social video with a strong value-proposition in The Social Path to Purchase % who say they do the following furthering the social commerce agenda in this market. In theU.S. [[Image Removed]] 25
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WORLDWIDE E-COMMERCE GROWTH OPPORTUNITIES
Retail e-commerce sales worldwide continue to grow exponentially year on year and projected to grow to$4.5 trillion by 2021. Online shopping is one of the most popular online activities worldwide, Goldman Sachs expects on-line shopping retail sales inChina to grow to$1.7 trillion by 2020. Usage varies by region.
Global Retail Ecommerce Sales Will Reach
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Cumulative data from Statista anticipates a 246.15% increase in worldwide
ecommerce sales, from
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Global eCommerce retail sales to hit
New studies projected that the worldwide retail eCommerce sales will reach a new high by 2021. Ecommerce businesses should anticipate a 265% growth rate, from$1.3 trillion in 2014 to$4.9 trillion in 2021. This shows a future of steady upward trend with no signs of decline. [[Image Removed]]
But, what's even more interesting is the global eCommerce sales have been steadily eating up the worldwide retail market. In fact, by 2021, it will account for 17.5% of the total global retail sales.
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Omnichannel shopping will become more prevalent
As the lines blur between the physical and digital environment, multiple
channels will become more prevalent in customers' path to purchase. This is
evidenced by 73% of customers using multiple channels during their shopping
journey. What it means for eCommerce is to understand how their customers buy,
which marketing channels do they engage with, and their motivations and main
drivers to purchase. In the simplest sense, omnichannel shopping means decoding
what, where, when, why, and how people are purchasing the products you sell on a
particular channel.
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Every single touchpoint is important because it puts every single piece of the
puzzle into a whole story. Knowing your customers' touch points before they
purchase will better inform your brand of how to promote your products and
allocate your marketing budget. More and more people are doing their shopping on
social media platforms. With the improvement of social media's selling
capabilities, social media platforms are more than just advertising channels.
People can now conveniently and quickly purchase products on their chosen social
media platform.
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B2B eCommerce is a bigger giant
B2B (business-to-business) eCommerce is the online selling and marketing of products from one business to another. And when compared to the B2C (business-to-consumer) eCommerce industry, B2B eCommerce is projected to be two times higher than B2C by 2020.
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In the US alone, B2B eCommerce sales will hit
The predominance of B2B ecommerce means that B2B businesses must improve and simplify their shopping journey, channeling the B2C ordering experience. The B2B shopping experience is a lot more complicated than that of a B2C buyer. Because of the nature of the transaction, B2B buyers usually need to go through various steps, including sales representative interaction, negotiations, and approvals before they can make a successful purchase. In short, B2B eCommerce businesses must adapt to a more seamless transaction building advanced functionality quote management, price negotiation, easy ordering, order and inventory management for the B2B market.
According to Statista.com in 2019 the largest ecommerce markets are:
1.China :$740 billion 2.United States :$561 billion 3.United Kingdom :$93 billion 4.Japan :$87 billion 5.Germany :$77 billion 6.France :$55 billion 7.South Korea :$69 billion 8.Canada :$41 billion 29
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MOST VALUABLE GLOBAL BRANDS 1. Amazon:$315.5 billion 2. Apple:$309.5 billion 3.$309 billion
4. Microsoft:
5.
6. Facebook:
7. Alibaba:
8.
9. McDonald's:$130.4 billion 10. AT&T:$108.4 billion
GROWTH IN INVESTOR AWARENESS AND OUTREACH.
During 2020,Digital Brand Media & Marketing Group, Inc. will initiate a significant effort to raise positive awareness of DBMM's growth potential on a global basis. The Company had to defer its 2019 plans until certain SEC Matters regarding the delinquent filings brought current inJuly 2018 , remain open. The strategic outreach will be directed at investors around the world who understand the digital marketplace and its expanding influence on consumer decisions. DBMM will target new investors through a global digital and traditional integrated investor outreach campaign which will be run by Digital Clarity, with third parties, as required, for distribution. In all areas, the Company will act in the interests of all stakeholders. In the full industry context of dramatic expansion of digital footprints, there has been no direct correlation between DBMM's revenues and its share price. Economic and industry analysts have opined that the industry multiple continues to grow to, in some cases, 25-30 times revenues. DBMM will expand its client and geographic scale, thus increasing revenues. There were matters outside of DBMM's control which caused growth to be in neutral. With capital infusion, 2020 will follow the model of a growing client base and geographic reach until it achieves a TBD level of profitability. This benchmark will replicate successful industry models in digital technology and marketing. FINANCIAL OVERVIEW/OUTLOOK DBMM has been honing its commercial model since the acquisition of Digital Clarity ("DC") in 2011 which has been cash-flow positive as an operating company since its acquisition. External events outside of DBMM's control has precluded the growth expected to this point, however, its margins will continue to be strong on an annual basis, and once the business reaches appropriate scale with assumed profitability and cross-over point, DBMM will be a very successful business for all of its stakeholders. The growth trajectory anticipated is expected during 2020. Once that occurs, the clients benefit immediately due to a wider range of resources; the shareholders will benefit as the market cap grows. The media market multiple far exceeds the "old" manufacturing multiples, as digital technology and marketing has become one of the fastest growing industries in the world today. DBMM's place in the sector is strong. The industry environment continues to grow exponentially and the future of digital marketing as an essential strategy for any consumer-facing business has been proven over-and-over as certain retail businesses are forced to close their doors for lack of or ineffective digital presence. DBMM's brand, Digital Clarity, increases its valuation with client case studies and industry awards resulting in its being considered a leader in the sector for its size. DBMM's increasing client base, coupled with decreasing certain kind of debt and expenses, positions the Company to attract mezzanine financing, something sought after by many and achieved by few. Coincidently, business development has slowed down temporarily due to Brexit unease in theUK and clients concern about trade issues with or without theEuropean Union and global concerns about the COVID-19, and its near- and long-term implications. Since 2017, DBMM was able to attract new investors to provide the financing required to complete all delinquent filings beginning with the 2015-2016-2017 Super 10-K, and to keep DBMM current inSEC reporting, The Company received a commitment for future working capital in order to grow the Company in key markets, with the intent to move to DBMM profitability. At that point, DBMM would not require future financing until it was ready to acquire 1-2 additional companies to complement and further develop the digital marketing business. The Company also settled its long-standing litigation with a toxic lender, with the settlement fully paid, thus closing the proceeding. Growth capital will increase as the client base re-balanced. 30
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Going forward, there will be an emphasis on investor awareness as soon as theSEC enters a Final Order for the initial decision issuedNovember 12, 2019 . DBMM has been current in its filings sinceJuly 2018 and are encouraged by the outlook after normal trading has re-commenced which will not occur until Final Order has been issued by the Commission. DBMM intends to make significant strides in aggressively widening its brand exposure using a variety of digital and social channels. There are investors around the globe who understand the digital marketplace and its increasing influence on consumer decisions. DBMM is targeting these new investors in the public market through a global digital and traditional, integrated campaign which will be run by Digital Clarity, with third parties, as required for distribution. The expectations for fiscal year 2020 remains to return to normal trading following the dismissal of the SEC Administrative Proceeding regarding delinquent filings which were curedJuly 15, 2018 . The Company intends to move ahead thereafter to the scaled, growth plan in multiple geographies to benefit all stakeholders, once the 2Q identified global pandemic's effect is quantified and considered in business development. DBMM's brand, Digital Clarity, has competitive advantage and intends to meet the challenge as it has in the past.
NINE-MONTH PERIOD ENDED
We had approximately
During the nine-month period ended
Change in fair value of derivative liability of
Nonrecurring gain in extinguishment of debt of
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
An increase in our accrued salaries of approximately
During the quarter ended
NINE-MONTH PERIOD ENDED
We had approximately
During the nine-month period endedMay 31, 2019 , we used cash in our operating activities amounting to approximately$193,000 . Our cash used in operating activities was comprised of our net loss from continuing operations of$458,440 adjusted for the following:
Change in fair value of derivative liability of
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
An increase in our accrued salaries of approximately
During the quarter ended
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RESULTS OF OPERATIONS
Unaudited Consolidated Operating Results
For the Three Months Ended May 31, For the Nine Months Ended May 31,
Increase/ Increase/ Increase/ Increase/
Unaudited (Decrease) Decrease Unaudited (Decrease) Decrease
2020 2019 $ 2020 vs 2019 $ 2020 vs 2019 2020 2019 $ 2020 vs 2019 $ 2020 vs 2019
SALES $ 82,001 $ 88,530 $ (6,529 ) -7 % $ 322,801 $ 329,232 $ (6,431 ) -1.95 %
COST OF SALES 47,241 100,969 (53,728 ) -53 % 240,578 303,232 (62,654 ) -21 %
GROSS PROFIT 34,760 (12,439 ) 47,199 82,223 26,000 56,223
COSTS AND EXPENSES
Sales, general and
administrative 92,860 127,183 (34,323 ) -27 % 345,249 381,608 (36,359 ) -10 %
Gain on
extinguishment of
debt - - - - (192,977 ) - 192,977 -
TOTAL OPERATING
EXPENSES 92,860 127,183 (34,323 ) 152,272 381,608 (229,336 )
OPERATING LOSS (58,100 ) (139,622 ) (81,522 ) 58 % (70,049 ) (355,608 ) (285,559 ) 80 %
OTHER (INCOME)
EXPENSE
Interest expense 78,411 32,141 46,270 144 % 257,147 90,423 166,724 184 %
Other income (12,577 ) - 12,577 NM (12,577 ) - 12,577 NM
Change in fair value
of derivative
liability 4,593 34,406 (29,813 ) -87 % (9,491 ) 12,409 (21,900 ) -176 %
TOTAL OTHER EXPENSE 70,427 66,547 29,034 57 % 235,079 102,832 157,401 8 %
NET LOSS $ (128,527 ) $ (206,169 ) $ (77,642 ) $ (305,128 ) $ (458,440 ) $ (153,312 )
(NM): not meaningful
We currently generate revenue through our
For the three and nine-month period endedMay 31, 2020 our primary sources of revenue are thePay-Per-Click Advertising . This primary source amounted to 53% during the nine-month period endedMay 31, 2020 . Our secondary sources of revenue are our Web Design and Social Media. These secondary sources amounted to approximately 6% of our revenues.
During the three and nine-month periods ended
During the three and nine-month periods ended
The sales, general and administrative expenses during the three and nine-month periods endedMay 31, 2020 decrease from prior periods. Our sales, general and administrative expenses decreased, primarily as a result of decreased in support costs and legal expenses increased in connection with the Company's filings. Interest expense, which include interest accrued on certain notes and loans, increased during the nine-month period endedMay 31, 2020 , due to an additional consideration to satisfy its obligations under certain unsecured loans payable. During the three-month period endedMay 31, 2020 , interest expense increased due to new loan payables compared to the prior period.
Other income, which include a non-recurring grant from the
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Gain on extinguishment of debt increased during the nine-month period ended
The decrease on derivative liabilities is primarily attributable due decrease in the Company's estimated volatility used in the assumptions to compute its fair value atMay 31, 2020 when compared toMay 31, 2019 .
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