INITIAL DECISION RELEASE NO. 1389

ADMINISTRATIVE PROCEEDING

FILE NO. 3-17990

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of :

:

DIGITAL BRAND MEDIA & MARKETING : INITIAL DECISION

GROUP, INC., and : November 12, 2019

INTELLICELL BIOSCIENCES, INC. :

APPEARANCES: Samantha M. Williams, David S. Frye, and Stephan J. Schlegelmilch

for the Division of Enforcement, Securities and Exchange Commission

Maranda Fritz, of Thompson Hine LLP, for Digital Brand Media & 

Marketing Group, Inc.

BEFORE: Carol Fox Foelak, Administrative Law Judge

SUMMARY

This Initial Decision concludes that Digital Brand Media & Marketing Group, Inc., 

violated the reporting requirements of the Securities Exchange Act of 1934 – Section 13(a) and 

Rules 13a-1 and 13a-13. Digital Brand’s securities are registered with the Securities and 

Commission pursuant to Section 12(g) of the Exchange Act, and it failed to file required periodic 

reports with the Commission between 2015 and 2018. It has since filed overdue reports and 

remained current. No sanction is imposed since neither of the available sanctions – revocation or 

suspension of the registration of Digital Brand’s securities – is appropriate for the facts in this 

case. 

I. INTRODUCTION

A. Procedural Background

The Commission instituted this proceeding with an Order Instituting Proceedings (OIP), 

pursuant to Section 12(j) of the Exchange Act, on May 16, 2017.

1

 Following an August 9, 2017, 

 

1

The proceeding has ended as to Intellicell Biosciences, Inc. Digital Brand Media & Mktg. 

Grp., Initial Decision Release No. 1390 (A.L.J. Nov. 12, 2019). 

 
2

hearing,2an Initial Decision revoked the registration of the registered securities of Digital Brand. 

Digital Brand Media & Mktg. Grp., Initial Decision Release No. 1226, 2017 SEC LEXIS 3620 

(A.L.J. Nov. 16, 2017). 

On August 22, 2018, in light of Lucia v. SEC, 138 S. Ct. 2044 (2018), the Commission 

ordered a new hearing in each pending proceeding, including this one, before an administrative 

law judge who had not previously participated in the proceeding, unless the parties expressly 

agreed to alternative procedures, including agreeing that the proceeding remain with the previous 

presiding administrative law judge. Pending Admin. Proc., Securities Act of 1933 Release No. 

10536, 2018 SEC LEXIS 2058, at *2-3. Accordingly, the proceeding was reassigned to the 

undersigned. Pending Admin. Proc., Admin. Proc. Rulings Release No. 5955, 2018 SEC LEXIS 

2264 (C.A.L.J. Sept. 12, 2018). The parties agreed that the case would go forward based on the 

previous record, with the exception of the November 16, 2017, Initial Decision; oral argument 

was held on March 21, 2019; the parties also filed motions for summary disposition and 

responsive filings. See Digital Brand Media & Mktg. Grp., Admin. Proc. Rulings Release Nos. 

6315, 2018 SEC LEXIS 3177 (A.L.J. Nov. 9, 2018); 6449, 2019 SEC LEXIS 152 (A.L.J. Feb. 

11, 2019).

B. Allegations and Arguments of the Parties

The OIP alleges that Digital Brand’s securities are registered with the Commission 

pursuant to Section 12(g) of the Exchange Act and that Digital Brand had not filed any required

periodic reports since filing a report for the quarter ended May 31, 2015. Digital Brand argues 

that the proceeding should be dismissed since it had submitted timely reports until November 

2013, when it was advised that its auditor had been barred from appearing before the 

Commission such that its Form 10-K for that year had to be redone; it has now filed past-due and 

current reports; and it intends, and has the means, to continue filing timely reports. The Division 

requests that the registration of Digital Brand’s securities be revoked, noting the company’s 

period of delinquency and arguing that, although the company has now filed the overdue reports, 

the reports contain deficiencies, the company prioritized other matters over timely filings in 

using its limited resources, and the company’s unchanged parlous financial situation, which has 

required periodic infusions of outside funding for urgent matters, suggests that the problem will 

recur in the future. 

This Initial Decision is based on the existing record and the Commission’s public official 

records concerning Digital Brand, of which official notice is taken pursuant to 17 C.F.R. § 

201.323.3 All arguments and proposed findings and conclusions that are inconsistent with this 

decision were considered and rejected. 

 

2 Citations to the transcript of the August 9, 2017, hearing will be noted as “Tr. __.” Citations to 

exhibits offered by the Division and Respondent at that hearing will be noted as “Div. Ex. __” 

and Resp. Ex. __,” respectively. 

3

The Commission’s public official records include Digital Brand’s periodic reports, Forms 10-K 

and 10-Q, that were signed by Linda Perry, Digital Brand’s Executive Director, who testified on 

behalf of Digital Brand at the August 9, 2017, hearing. Tr. 71-137, 144-93. 
3

II. FINDINGS OF FACT

Digital Brand (CIK No. 1127475),

4

is a Florida corporation with its principal place of 

business in London, England,

5 with a class of securities registered with the Commission pursuant 

to Exchange Act Section 12(g). Digital Brand filed a Form 10-K for the fiscal year ended 

August 31, 2014, on February 17, 2015, as amended February 19, 2015 (2014 Form 10-K). 

Then, after filing Forms 10-Q for the first three quarters of fiscal year 2015, Digital Brand did 

not timely file periodic reports for more than two years. It filed a Form 10-K for fiscal years 

2015, 2016, and 2017, on May 31, 2018, as amended April 24 and October 1, 2019 (Super 10-

K). It also filed a Form 10-K for fiscal year 2018, on December 14, 2018, as amended April 23 

and October 1, 2019 (2018 Form 10-K). Digital Brand’s business is online marketing 

consulting.6 Tr. 145; 2018 Form 10-K at 4.

Linda Perry, Digital Brand’s Executive Director testified on behalf of Digital Brand at the 

August 9, 2017, hearing. Tr. 71-137, 144-93. Perry has been listed as CEO or Executive 

Director in, and signed, all of Digital Brand’s periodic reports since at least January 23, 2003.7 

A reverse merger during 2003 led to the company’s current configuration.8

As of the May 16, 2017, date of the OIP, the company was delinquent in its periodic 

filings with the Commission, having not filed any periodic reports since its Form 10-Q for the 

period ended May 31, 2015, filed on September 24, 2015. Digital Brand’s then most recent 

audited financial statements, contained in the 2014 Form 10-K reported sales for the year of 

$417,607, a net loss of $739,534, an accumulated deficit of approximately $11,600,000, and a 

working capital deficit of approximately $1,900,000. The auditor’s report included a “going 

concern” statement, indicating substantial doubt about the company’s ability to continue as a 

going concern. The audited financial statements contained in the 2018 Form 10-K also 

contained a “going concern” statement and reported for the year ended August 31, 2018: sales of 

$536,501; a net loss of $456,410, an accumulated deficit of $13,812,485; and a working capital 

 

4

The CIK number is a unique identifier for each corporation in the Commission’s EDGAR 

database. The user can retrieve filings of a corporation by using its CIK number. 

5 Digital Brand has a “virtual” presence in New York City. Tr. 72-73. 

6 Digital Brand’s business has been described as “somewhat esoteric, and appear[ing] to require 

interpersonal relationships with existing and prospective clients.” Asher Enters., Inc. v. Digital 

Brand Media Mktg. Grp., Inc., No. 0600717/2014, 2016 N.Y. Misc. LEXIS 5146, at *5 (N.Y 

Sup. Ct. entered Aug. 5, 2016).

7

Perry testified that she was first associated with the company “about 2006 and ’7.” Tr. 72.

8

Since then, the only other signatories to the periodic reports were Barrington Fludgate (through 

Form 10-Q for the quarter ended February 28, 2010) and Dominic Hawes-Fairley (through Form 

10-Q for the quarter ended May 31, 2011). 
4

deficit of approximately $3.3 million. The financial statements in the company’s periodic 

reports throughout its history, to date, have contained “going concern” statements. 

OTC Link (formerly “Pink Sheets”) operated by OTC Markets Group Inc. discontinued 

the display of quotes for Digital Brand’s stock (symbol “DBMM”); OTC’s website currently 

displays a Caveat Emptor warning, illustrated with a skull and crossbones, for DBMM common 

stock. See OTC Markets, DBMM, https://www.otcmarkets.com/stock/DBMM/overview (last 

visited October 30, 2019), of which official notice is taken pursuant to 17 C.F.R. § 201.323. Cf.

Joseph S. Amundsen, Exchange Act Release No. 69406, 2013 SEC LEXIS 1148, at *1 n.1 (Apr. 

18, 2013), pet. denied, 575 F. App’x 1 (D.C. Cir. 2014).

Prior to Digital Brand’s delinquency, its auditor was Sherb & Co., LLP. See, e.g., Digital 

Brand’s Forms 10-K for the fiscal years ended August 31, 2004 through 2012. Sherb & Co. was 

denied the privilege of appearing and practicing before the Commission as an accountant, as of 

November 6, 2013. Sherb & Co., LLP, Exchange Act Release No. 70823, 2013 SEC LEXIS 

3479 (Nov. 6, 2013). As a result, Digital Brand had to have its financial statements for the 2011, 

2012, and 2013 fiscal years re-audited. Tr. 149. Perry engaged a successor auditor, to which she 

paid $40,509, but she never received the audit. Tr. 149-50. Eventually, in July 2014, she 

engaged a different firm. Tr. 150. On September 24, 2014, Digital Brand filed its amended 

Form 10-K for the year ended August 31, 2013,9as well as amended Forms 10-Q for the quarters 

ended November 30, 2013; February 28, 2014; and May 31, 2014. Tr. 116, 150-51, 154. The 

cost of the re-audits and amended filings was over $100,000, some of which was still owing as of 

the August 9, 2017, hearing. Tr. 154-59. Perry had arranged mezzanine financing for the 

project, but it fell through. Tr. 154. Around the same time Digital Brand paid attorneys about 

$25,000 for an unrelated matter.10 Tr. 161-63. 

The reason for the delay in filings was a lack of funds. Tr. 98-103, 108-12. Digital 

Brand had borrowed money and became involved in litigation with the lender, Asher Enterprises, 

concerning repayment, that resulted in a judgment ordering Digital Brand to pay Asher 

Enterprises $122,801.87.

11

 Tr. 113-28, 164-66, 170-78. In February 2016, Perry had $25,000 

 

9 As originally filed, on December 16, 2013, after the disqualification of Sherb & Co., the Form 

10-K lacked audited financial statements. 

10 The unrelated matter was a deposit chill imposed on Digital Brand stock by the Depository 

Trust Company; DTC lifted the chill on November 8, 2013. Tr. 159-63; Resp. Ex. E. For an 

explanation of “deposit chill,” see SEC Office of Investor Education and Advocacy, DTC Chills 

and Freezes, https://www.sec.gov/oiea/investor-alerts-bulletins/ib_dtcfreezes.html. The evidence 

as to the reason for the chill is unclear; Perry believes that it resulted from the actions of a noninsider stockholder. Tr. 159-61, 179. 

11 Perry knew that Asher Enterprises was a toxic lender charging high rates of interest, but had 

successfully repaid borrowings that started in 2010 until going into the default on 2013 loans that 

led to the litigation. Tr. 113-15, 125-26, 176, 190. In November 2013, Perry learned that Curt 

Kramer, an affiliate of Asher Enterprises, had been sanctioned by the Commission. Tr. 166; See 

Curt Kramer, Securities Act Release Nos. 9485, 2013 SEC LEXIS 3745 (Nov. 25, 2013); 10239, 
5

and decided to devote it to paying Asher Enterprises rather than to paying Digital Brand’s 

auditor. Tr. 172. Perry believed that to be in the best interest of Digital Brand’s shareholders. 

Tr. 125. Perry considers that she and Digital Brand were victimized by Asher Enterprises. Tr. 

176. Alternative financial sources did not want involvement until the Asher Enterprises matter 

was settled.12 Tr. 125, 180. As of August 9, 2017, the date of the hearing, Perry had reached an 

agreement (which had not yet been formalized) for funding from parties whom she would not 

identify to finance the then-overdue filings. Tr. 108.

Since filing the overdue reports from the period of delinquency, Digital Brand has filed 

periodic reports timely. Form 10-Q for the period ended February 28, 2019, was filed on April 

9, 2019, and Form 10-Q for the period ended May 31, 2009, was filed on July 12, 2019. 

As Digital Brand represented in a letter dated October 3, 2019,13all deficiencies 

identified by the Division of Corporation Finance (CorpFin) have been cured with the filing of 

amended Forms 10-K of the Super 10-K and the 2018 Form 10-K on October 1, 2019.14 

Although those two consolidated reports do not cure the registrant’s violations of having failed to 

file periodic reports timely, CorpFin generally accepts such filings:

Generally, the Division of Corporation Finance will not issue comments asking a 

delinquent registrant to file separately all of its delinquent filings if the registrant 

files a comprehensive annual report on Form 10-K that includes all material 

information that would have been included in those filings.

Financial Reporting Manual § 1320.4, https://www.sec.gov/files/cf-financial-reportingmanual.pdf.

III. CONCLUSIONS OF LAW

By failing to timely file required annual and quarterly reports, Digital Brand violated 

Exchange Act Section 13(a) and Rules 13a-1 and 13a-13. 

 

2016 SEC LEXIS 4032 (Oct. 27, 2016) (imposing sanctions, by consent, on Kramer and various 

companies with which he was affiliated); see also Myriad Interactive Media, Inc., Exchange Act 

Release No. 775791, 2015 SEC LEXIS 3599, at *12 (describing Kramer as “a promoter of 

‘toxic’ microcap financing”).

12 The Asher Enterprises litigation ended in June 2018. 2018 Form 10-K at 6.

13 The Division responded, and Digital Brand replied, on October 23 and 28, 2019, respectively.

14 The Division suggests that Digital Brand has not complied with Florida law requiring it to 

elect at least one third of its directors annually. Opp. at 9 & n.8. However, this is outside the 

allegations in the OIP and no evidence concerning it was introduced at the hearing.
6

IV. SANCTION

The Division requests that the registration of Digital Brand’s securities be revoked.15 

Digital Brand urges that the proceeding be dismissed. While Digital Brand’s violation calls for a 

sanction, neither of the available sanctions – revocation or suspension of the registration of its 

securities – is “necessary or appropriate for the protection of investors,” as required by Exchange 

Act Section 12(j), pursuant to which this proceeding was authorized. 

In proceedings pursuant to Section 12(j) of the Exchange Act against issuers that violated 

Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, the determination “of what 

sanctions will ensure that investors will be adequately protected . . . turns on the effect on the 

investing public, including both current and prospective investors, of the issuer’s violations, on 

the one hand, and the Section 12(j) sanctions, on the other hand.” Gateway Int’l Holdings, Inc., 

Exchange Act Release No. 53907, 2006 SEC LEXIS 1288, at *19-20 (May 31, 2006). The 

Commission “consider[s], among other things, the seriousness of the issuer’s violations, the 

isolated or recurrent nature of the violations, the degree of culpability involved, the extent of the 

issuer’s efforts to remedy its past violations and ensure future compliance, and the credibility of 

its assurances, if any, against further violations.” Id. at *19-20 (citing Steadman v. SEC, 603 

F.2d 1126, 1139-40 (5th Cir. 1979), aff’d on other grounds, 450 U.S. 91 (1981)).

The violations were serious in that failure to file periodic reports violates a crucial 

provision of the Exchange Act. The purpose of the periodic reporting requirements is to publicly 

disclose current, accurate financial information about an issuer so that investors may make 

informed decisions:

The reporting requirements of the Securities Exchange Act of 1934 is the primary 

tool which Congress has fashioned for the protection of investors from negligent, 

careless, and deliberate misrepresentations in the sale of stock and securities. 

Congress has extended the reporting requirements even to companies which are 

“relatively unknown and insubstantial.”

SEC v. Beisinger Indus. Corp., 552 F.2d 15, 18 (1st Cir. 1977) (quoting legislative history); 

accord e-Smart Techs., Inc., Exchange Act Release No. 50514, 2004 SEC LEXIS 2361, at *8-9 

(Oct. 12, 2004).16 

Digital Brand’s violations were recurrent in that it did not file any required annual and 

quarterly reports for more than two years. This followed an earlier period of filings that were 

delayed because of insufficient financial resources. Concerning the degree of culpability 

 

15 The only remedies available in this proceeding, pursuant to Section 12(j) of the Exchange Act, 

to address the company’s reporting violations are revocation or suspension for up to twelve 

months of the registration of its securities. 

16 The Commission has warned that “many publicly traded companies that fail to file on a timely 

basis are ‘shell companies’ and, as such, attractive vehicles for fraudulent stock manipulation 

schemes.” e-Smart Techs., Inc., 2004 SEC LEXIS 2361, at *9 n.14. Although Digital Brand’s 

business is “somewhat esoteric” and has never been profitable, it is not a shell company. 
7

involved, there is no evidence that it forwent periodic reports to conceal its parlous financial 

condition. Rather, Digital Brand devoted its limited resources to what it regarded as more 

pressing obligations, such as paying a court-ordered judgment to a lender. Concerning the extent 

of its efforts to remedy its past violations and ensure future compliance, Digital Brand has, to the 

extent possible after the fact, remedied its past delinquency by providing past and current audited 

financial information in consolidated Forms 10-K and is compliant with its current reporting 

obligations. However, investors did not have this information for about two years due to the 

company’s directing its limited resources to what it regarded as more pressing matters and, 

despite the best intentions, future compliance is affected by the company’s financial status and 

need to rely on obtaining outside financing. The company’s continuing losses means it has 

insufficient revenues to cover all its expenses, which include the expenses of auditing or 

reviewing its financial statements and filing periodic reports. The need to obtain outside 

financing, which may or may not be forthcoming, will impact future compliance.

Digital Brand points to external factors as contributing to its delinquency – the need to 

devote resources to re-audit due to the disqualification of its original auditor, litigation with its 

creditor, and inability to obtain financing. The Commission has rejected the argument that the 

contribution of actions of a third party to the delinquency shields an issuer from accountability. 

China-Biotics, Inc., Exchange Act Release No. 70800, 2013 SEC LEXIS 3451, at *74-75 (Nov. 

4, 2013); Cobalis Corp., Exchange Act Release No. 64813, 2011 SEC LEXIS 2313, at *20 (July 

6, 2011), recon. denied, Exchange Act Release No. 65118, 2011 SEC LEXIS 2839 (Aug. 12, 

2011); Eagletech Commc’ns, Inc., Exchange Act Release No. 54095, 2006 SEC LEXIS 1534, at 

*6 (July 5, 2006).

Digital Brand’s filing of past due reports and its continuing to file current reports are 

mitigating factors as is its response to CorpFin’s identification of deficiencies, which it corrected

by filing amended Forms 10-K. Thus the company’s situation differs from cases in which the 

Commission determined that revocation was necessary or appropriate. See Calais Res., Inc., 

Exchange Act Release No. 67312, 2012 SEC LEXIS 2023, at *23 (June 22, 2012) (frowning on 

the issuer’s “troubling willingness . . . to ignore clear staff directives regarding reporting 

obligations”); Absolute Potential, Inc., Exchange Act Release No. 71866, 2014 SEC LEXIS 

1193 (Apr. 4, 2014) (shell company with total assets of $27, accumulated deficit of $1,972,404; 

filings made during administrative proceeding, but unpersuasive explanations for protracted 

delinquencies and absence of concrete changes to ensure compliance as of date of Commission 

opinion); Nature’s Sunshine Prods., Inc., Exchange Act Release No. 59268, 2009 SEC LEXIS 

81 (Jan. 21, 2009) (filings just before oral argument on petition for review of Initial Decision; 

filings were materially deficient); Am.’s Sports Voice, Inc., Exchange Act Release No. 55511, 

2007 SEC LEXIS 1241 (Mar. 22, 2007) (no filings), recon. denied, Exchange Act Release No. 

55867, 2007 SEC LEXIS 1239 (June 6, 2017). 

As the Division points out, Digital Brand’s Super 10-K and 2018 Form 10-K 

comprehensive filings do not contain the interim financial information that would have been 

covered by the missing quarterly reports, which brings the company outside of the reporting 

manual’s (partial) safe harbor for a comprehensive annual report that includes “all material 

information that would have been included” in the delinquent filings. Nonetheless, filing nonaudited interim financials for quarters up to three years old offers limited benefit to investors and 
8

the public. Failure to include that information is not sufficient, on its own, to make revocation in 

the public interest.

The Division cites American Steller Energy, Inc. (n/k/a Tara Gold Res. Corp.), Exchange 

Act Release No. 64897, 2011 SEC LEXIS 2455 (July 18, 2011) (Tara Gold), to support its 

argument that Digital Brand’s comprehensive filings do not shield it from revocation. However, 

Digital Brand’s reporting is distinguishable from Tara Gold’s. Tara Gold had a nine-year period 

of delinquencies, promised to make various overdue filings by dates that it did not meet, and 

failed to include various material information in the filings it did make. 

While revocation is not “necessary or appropriate for the protection of investors,” neither 

is suspension. Digital Brand’s reporting is now current, but suspension would relieve it of the 

requirement of filing periodic reports for the period of the suspension. Depriving investors of 

current financial information would be an undesirable consequence of a suspension and, contrary 

to the primary purpose of the reporting requirements of the Exchange Act, antithetical to “the 

protection of investors.” Even so, Digital Brand should be aware that further violations of its 

periodic reporting timeliness and completeness obligations may mark it as a recidivist and invite 

further scrutiny from Commission staff. 

In conclusion, the violations alleged in the OIP are proven, but no available sanction is 

appropriate. Thus, this proceeding will be dismissed.

V. ORDER

IT IS ORDERED that this administrative proceeding IS DISMISSED.

This Initial Decision shall become effective in accordance with and subject to the 

provisions of Rule 360 of the Commission’s Rules of Practice, 17 C.F.R. § 201.360. Pursuant to 

that Rule, a party may file a petition for review of this Initial Decision within twenty-one days 

after service of the Initial Decision. A party may also file a motion to correct a manifest error of 

fact within ten days of the Initial Decision, pursuant to Rule 111 of the Commission’s Rules of 

Practice, 17 C.F.R. § 201.111. If a motion to correct a manifest error of fact is filed by a party, 

then a party shall have twenty-one days to file a petition for review from the date of the 

undersigned’s order resolving such motion to correct a manifest error of fact. The Initial 

Decision will not become final until the Commission enters an order of finality. The 

Commission will enter an order of finality unless a party files a petition for review or a motion to 

correct a manifest error of fact or the Commission determines on its own initiative to review the 

Initial Decision as to a party. If any of these events occur, the Initial Decision shall not become 

final as to that party.

______________________________

Carol Fox Foelak

Administrative Law Judge