UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For
the quarterly period ended
or
| Transition Report Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from _____________ to _____________.
Commission
file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, zip code)
(Registrant’s telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each classes | Trading Symbols(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
As at November 14, 2022, the issuer had shares of common stock issued and outstanding.
DSG GLOBAL, INC.
TABLE OF CONTENTS
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PART I: FINANCIAL INFORMATION
ITEM 1: Financial Statements (unaudited)
The accompanying unaudited interim condensed consolidated financial statements of DSG Global Inc. as at September 30, 2022, have been prepared by our management in conformity with accounting principles generally accepted in the United States of America and in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
Operating results for the nine-month period ended September 30, 2022, are not necessarily indicative of the results that can be expected for the year ending December 31, 2022.
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DSG GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT SEPTEMBER 30, 2022, AND DECEMBER 31, 2021
(Expressed in U.S. dollars)
(UNAUDITED)
September 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Trade receivables, net | ||||||||
| Lease receivable | ||||||||
| Inventories | ||||||||
| Prepaid expenses and deposits | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Lease receivable | ||||||||
| Fixed assets, net | ||||||||
| Right-of-use assets | ||||||||
| Intangible assets, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade and other payables | $ | $ | ||||||
| Deferred revenue | ||||||||
| Lease liability | ||||||||
| Loans payable | ||||||||
| Convertible notes payable | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Lease liability | ||||||||
| Loans payable | ||||||||
| TOTAL LIABILITIES | ||||||||
| Contingencies (Note 16) | ||||||||
| MEZZANINE EQUITY | ||||||||
| Redeemable preferred stock, $ par value, shares authorized (2021 – ), issued and outstanding, to be issued (2021 – issued and outstanding, to be issued) | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ par value, shares authorized (2021 – ), issued and outstanding (2021 – issued and outstanding) | ||||||||
| Common stock, $par value, shares authorized, (2021 – ); issued and outstanding (2021 – ) | ||||||||
| Additional paid in capital, common stock | ||||||||
| Discounts on common stock | ( | ) | ( | ) | ||||
| Common stock to be issued | ||||||||
| Obligation to issue warrants | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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DSG GLOBAL, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Expressed in U.S. dollars)
(UNAUDITED)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
| Revenue | $ | $ | $ | |||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Compensation expense | ||||||||||||||||
| General and administration expense | ||||||||||||||||
| Research and development | ||||||||||||||||
| Bad debt expense | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Foreign currency exchange | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income | ( | ) | ||||||||||||||
| Loss on sale of lease receivable | ( | ) | ||||||||||||||
| (Loss) Gain on extinguishment of debt | ( | ) | ||||||||||||||
| Gain on disposal | ||||||||||||||||
| Interest on preferred shares | ( | ) | ||||||||||||||
| Finance costs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Net loss per share | ||||||||||||||||
| Basic and diluted | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Weighted average number of shares used in computing basic and diluted net income (loss) per share: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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DSG GLOBAL, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Expressed in U.S. dollars)
(UNAUDITED)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive (loss) income | ||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements
| 6 |
DSG GLOBAL, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Expressed in U.S. dollars)
(UNAUDITED)
| Common Stock | Preferred Stock (equity) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Additional paid in capital | Discount on common stock | To be issued | Obligation to issue warrants | Shares | Par value | Additional paid in capital | To be issued | Accumulated other comprehensive income | Accumulated deficit | Total stockholders’ deficit | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||
| Shares issued for debt settlement | ( | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares and warrants issued for services | ( | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of shares due to duplicate issuance | ( | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred shares issued for services | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued on conversion of preferred shares | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2021 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Shares and warrants issued for services | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued on conversion of preferred shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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DSG GLOBAL INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022, AND 2021
(Expressed in U.S. Dollars)
(UNAUDITED)
September 30, 2022 | September 30, 2021 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Change in ROU assets | ||||||||
| Accretion of discounts on debt | ||||||||
| Bad debt expense | ||||||||
| Loss on sale of lease receivable | 3,923 | - | ||||||
| Preferred shares issued for services | ||||||||
| Common shares and warrants issued for services | ||||||||
| Unrealized foreign exchange (gain) loss | ( | ) | ( | ) | ||||
| Gain on asset disposal | ( | ) | ||||||
| Changes in non-cash working capital: | ||||||||
| Trade receivables, net | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Prepaid expense and deposits | ( | ) | ||||||
| Lease receivable | ( | ) | ( | ) | ||||
| Trade payables and accruals | ( | ) | ||||||
| Deferred revenue | ||||||||
| Lease liabilities | ( | ) | ||||||
| Interest on mandatorily redeemable preferred shares | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Disposal of property and equipment | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuing preferred shares, and shares to be issued | ||||||||
| Proceeds from notes payable | ||||||||
| Debt issue costs | ( | ) | ||||||
| Repayment on lease liabilities | ( | ) | ||||||
| Proceeds from sale of lease receivable | ||||||||
| Gain on extinguishment of debt | ( | ) | ( | ) | ||||
| Payments on notes payable | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ||||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at the end of the period | $ | $ | ||||||
| Supplemental Cash Flow Information (Note 17) | ||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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DSG GLOBAL, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(UNAUDITED)
Note 1 – ORGANIZATION
DSG Global, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on September 24, 2007.
The Company is a technology development company engaged in the design, manufacture, and marketing of fleet management solutions in the golf industry. The Company’s principal activities are the sale and rental of GPS tracking devices and interfaces for golf vehicles and related support services. Starting during the year ended December 31, 2021, the Company began to market low speed electric vehicles, and e-bikes, recognizing its first sales in this space. Sales from these product lines have not reached a level of materiality to be disclosed as separate segments of the business . The Company also began the start of the homologation project for electric vehicles.
On April 13, 2015, the Company entered into a share exchange agreement with DSG Tag Systems Inc. (“DSG”), now a wholly-owned subsidiary of the Company, incorporated under the laws of the State of Nevada on April 17, 2008 and extra provincially registered in British Columbia, Canada in 2008. In March 2011, DSG formed DSG Tag Systems International, Ltd. in the United Kingdom (“DSG UK”). DSG UK is a wholly owned subsidiary of DSG.
On September 15, 2020, the Company incorporated Imperium Motor Corp. (“Imperium”), under the laws of the State of Nevada on September 10, 2020, for which it subscribed to all authorized capital stock, shares of Preferred Class A Stock, at a price of $ per share. Imperium is a wholly owned subsidiary of the Company.
On August 12, 2021, the Company incorporated Imperium Motor of Canada Corporation (“Imperium Canada”), under the laws of British Columbia, Canada, for which it subscribed to all authorized capital stock, shares of Class A Voting Participating common shares, at a price of $ per share. Imperium Canada is a wholly owned subsidiary of the Company.
On September 17, 2021, The Company incorporated AC Golf Carts, Inc. (“AC Golf Carts”), under the laws of the State of Nevada, for which it subscribed to all authorized stock, common shares at a price of $ par value per share. AC Golf Carts is a wholly owned subsidiary of the Company.
Note 2 – GOING CONCERN
These unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and note holders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.
The outbreak of the coronavirus, also known as “COVID-19”, has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures may have an adverse impact on global economic conditions as well as on the Company’s business activities. The extent to which the coronavirus may impact the Company’s business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. These events are highly uncertain and as such, the Company cannot determine their financial impact at this time. While certain restrictions are presently in the process of being relaxed, it is unclear when the world will return to the previous normal, if ever. This may adversely impact the expected implementation of the Company’s plans moving forward.
As
of September 30, 2022, the Company had working capital deficit of $
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q.
| 9 |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited interim condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2021. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Principles of Consolidation
The interim condensed consolidated financial statements include the accounts of DSG Global Inc., its subsidiary VTS, and its wholly owned subsidiaries Imperium Motor Corp., DSG Tag Systems Inc., Imperium Motor Company of Canada Corporation, DSG UK, and AC Golf Carts, collectively referred to as the “Company”. All intercompany accounts, transactions and profits were eliminated in the consolidated financial statements.
Use of Estimates
The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the condensed consolidated financial statements in the period they are determined. There were no new estimates in the period.
Recently Adopted Accounting Pronouncements
Recent accounting pronouncements issued by FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s interim condensed consolidated financial statements.
Significant Accounting Policies
Revenue from Contracts with Customers
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:
| ● | executed contracts with the Company’s customers that it believes are legally enforceable; | |
| ● | identification of performance obligations in the respective contract; | |
| ● | determination of the transaction price for each performance obligation in the respective contract; | |
| ● | allocation the transaction price to each performance obligation; and | |
| ● | recognition of revenue only when the Company satisfies each performance obligation. |
| 10 |
Performance Obligations and Signification Judgments
The Company’s revenue streams can be categorized into the following performance obligations and recognition patterns:
1. Sale, delivery and installation of Tag, Text and Infinity products, along with digital mapping and customer training. The Company recognizes revenue at a point in time when final sign-off on the installation is obtained from the General Manager and/or Director of Golf.
2. Provision of internet connectivity, regular software updates, software maintenance and basic customer support service. The Company recognizes revenue over time, evenly over the term of the service.
3. Sale and delivery of Fairway Rider products. The Company recognizes revenue at a point in time when control transfers to the customer.
4. Sale and delivery of Electric Vehicles. The Company recognizes revenue at a point in time when control transfers to the customer.
Transaction prices for performance obligations are explicitly outlined in relevant agreements, therefore, the Company does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified.
Warranty Reserve
The Company accrues for warranty costs, sales returns, and other allowances based on its historical experience. During the period ended September 30, 2022 and the comparable period of September 30, 2021, the Company did not provide a warranty for any of its products sold during those periods. The warranty reserve was $ as at September 30, 2022 and 2021.
Re-classification
During
the period ended September 30, 2022, the Company re-classified dividends that were accrued on its redeemable preferred shares during
the year ended December 31, 2021. An amount of $
Note 4 – TRADE RECEIVABLES, NET
As of September 30, 2022, and December 31, 2021, trade receivables consist of the following:
| September 30, 2022 | December 31,2021 | |||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Total trade receivables, net | $ | $ | ||||||
Note 5 – INVENTORIES
As of September 30, 2022, and December 31, 2021, inventories consist of the following:
| September 30, 2022 | December 31, 2021 | |||||||
| Parts and accessories | $ | $ | ||||||
| Golf carts | ||||||||
| E-bikes | ||||||||
| Electric vehicles | ||||||||
| Total inventories | $ | $ | ||||||
| 11 |
Note 6 – FIXED ASSETS AND EQUIPMENT ON LEASE
As of September 30, 2022, and December 31, 2021, fixed assets consisted of the following:
| September 30, 2022 | December 31, 2021 | |||||||
| Machinery | $ | $ | ||||||
| Furniture and equipment | ||||||||
| Computer equipment | ||||||||
| Vehicles | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| $ | $ | |||||||
For
the three and nine months ended September 30, 2022, total depreciation expense for fixed assets was $
Note 7 – INTANGIBLE ASSETS
As of September 30, 2022, and December 31, 2021, intangible assets consist of the following:
| September 30, 2022 | December 31, 2021 | |||||||
| Intangible asset – Patent | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Patents
are amortized on a straight-line basis over their estimated useful life of
Note 8 – TRADE AND OTHER PAYABLES
As of September 30, 2022, and December 31, 2021, trade and other payables consist of the following:
| September 30, 2022 | December 31, 2021 | |||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued interest | ||||||||
| Other liabilities | ||||||||
| Total payables | $ | $ | ||||||
| 12 |
Note 9 – LOANS PAYABLE
As of September 30, 2022, and December 31, 2021, loans payable consisted of the following:
| September 30, 2022 | December 31, 2021 | |||||||
| Unsecured loan payable in the amount of CAD$ | $ | $ | ||||||
| Unsecured loan payable in the amount of CAD$ | ||||||||
| Unsecured loan payable, due on | ||||||||
| Secured loan payable, due on | ||||||||
| Unsecured loan payable, due on | ||||||||
| Preferred F series shares issued with mandatory redemption(f) | ||||||||
| Current portion | ( | ) | ( | ) | ||||
| Loans payable, Long term | $ | $ | ||||||
| (a) | |
| (b) | |
| (c) | |
| (d) | |
| (e) | On
September 13, 2021, the Company entered into a securities purchase agreement with a non-related party. Pursuant to the agreement,
the Company received cash proceeds of $ |
| In the event of a default, the note is convertible at the price that is equal to a 40% discount to the lowest trading price of the Company’s common shares during the 30 day trading period prior to the conversion date. | |
During the three and nine months ended September 30, 2022, the Company recorded $
As the note is now in default, it has become convertible. See Note 10. | |
| (f) | |
| During the nine months ended September 30, 2022, the Company made required payments in the amount of $, which was applied against the loan payable. |
| 13 |
Note 10 – CONVERTIBLE NOTES
As of September 30, 2022, and December 31, 2021, convertible loans payable consisted of the following:
Third Party Convertible Notes Payable
| (a) | On March 31, 2015, the
Company issued a convertible promissory note in the principal amount of $ |
| (b) | On June 5, 2017, the Company
issued a convertible promissory note in the principal amount of $ |
| (c) | As per Note 9 (e) above, the $ |
Note 11 - LEASES
Lessor
During the year ended December 31, 2020, the Company began financing the lease of certain assets under rental revenue contracts with its customers and accounts for them in accordance with ASC 842 as outlined under “Leases” in Note 3 of the consolidated financial statements for the year ended December 31, 2020.
During
the nine months ended September 30, 2022, the Company recognized new lease receivables of $
| 14 |
| Lease receivable | September 30, 2022 | December 31, 2021 | ||||||
| Balance, beginning of the period | $ | $ | ||||||
| Additions | ||||||||
| Transfer to third party | ( | ) | ( | ) | ||||
| Interest on lease receivables | ||||||||
| Receipt of payments | ( | ) | ( | ) | ||||
| - | ||||||||
| Foreign exchange | ( | ) | ( | ) | ||||
| Balance, end of the period | ||||||||
| Current portion of lease receivables | ( | ) | ( | ) | ||||
| Long term potion of lease receivables | $ | $ | ||||||
Lease receivables are measured at the commencement date based on the present value of future lease payments less the present value of the unguaranteed residual asset. The Company uses the rate implicit in the rental revenue contracts to calculate the present value of future payments and unguaranteed residual asset at the date of commencement.
Lessee
The Company leases certain assets under lease agreements.
On
October 1, 2019, the Company entered into a
On
July 10, 2020, the Company entered into a lease agreement for retail, showroom and warehouse space in Fairfield, CA (the “Fairfield
Lease”). Upon initial recognition of the lease, the Company recognized right-of-use assets of $
On
July 14, 2020, the Company entered into a lease agreement for office space in Surrey, BC (the “Croydon Lease”). Upon initial
recognition of the lease, the Company recognized right-of-use assets of $
On
April 1, 2021, the Company entered into a lease agreement for a credit card processing machine (the “FD 150 Lease”). Upon
initial recognition of the lease, the Company recognized right-of-use assets of $
On
June 2, 2021, the Company entered into a lease agreement for a trailer (the “Trailer Lease”). Upon recognition of the lease,
the Company recognized right-of-use assets of $
| 15 |
Right-of-use assets:
| Right-of-use assets | September 30, 2022 | December 31, 2021 | ||||||
| Cost | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Foreign exchange | ||||||||
| Total right-of-use assets | $ | $ | ||||||
| Lease liability | September 30, 2022 | December 31, 2021 | ||||||
| Current portion | $ | $ | ||||||
| Long-term portion | ||||||||
| Total lease liability | $ | $ | ||||||
Lease
liabilities are measured at the commencement date based on the present value of future lease payments. As the Company’s leases
did not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the commencement
date in determining the present value of future payments. The Company used a weighted average discount rate of
Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.
Lease
expense for the nine months ended September 30, 2022, was $
Future minimum lease payments to be paid by the Company as a lessee for leases as of September 30, 2022, for the next four years are as follows:
| Lease commitments and lease liability | September 30, 2022 | |||
| 2022 | $ | |||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| Total future minimum lease payments | ||||
| Discount | ( | ) | ||
| Total | ||||
| Current portion of lease liabilities | ( | ) | ||
| Long-term portion of lease liabilities | $ | |||
| 16 |
Note 12 – MEZZANINE EQUITY
Authorized
shares of redeemable Series C preferred shares, authorized, each having a par value of $ per share. Each share of Series C preferred shares is convertible into shares of common stock at a conversion rate equal to the lowest traded price for the fifteen trading days immediately preceding the date of conversion.
shares of redeemable Series D preferred shares, authorized, each having a par value of $ per share. Each share of Series D preferred shares is convertible into shares of common stock.
shares of redeemable Series E preferred shares, authorized, each having a par value of $ per share. Each share of Series E preferred shares is convertible into shares of common stock.
shares of redeemable Series F preferred shares, authorized, each having a par value of $ per share.
The following table summarizes the Company’s redeemable preferred share activities for the period ended September 30, 2022, and for the comparative September 30, 2021 period.
| Shares | Par | Additional paid in capital | To be issued | Total | ||||||||||||||||
| Balance December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||
| Issuance | ( | ) | ||||||||||||||||||
| Converted for common shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance, September 30, 2021 | $ | $ | $ | $ | ||||||||||||||||
| Balance December 31, 2021 | $ | $ | $ | $ | ||||||||||||||||
| Issuance | ( | ) | ||||||||||||||||||
| Converted for common shares | ( | ) | ( | ) | ( | ) | (2) | ) | ||||||||||||
| Accrued preferred stock dividends(1) | - | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2022 | $ | $ | $ | $ | ||||||||||||||||
| (1) | |
| (2) |
Mezzanine Preferred Equity Transactions
During the nine months ended September 30, 2022:
| ● | Series F Preferred Shares were converted into common shares (see note 14). | |
| ● | On
September 15, 2022, pursuant to the December 2021 Series F SPA, the Company received $ | |
| ● | On
August 29, 2022, pursuant to the December 2021 Series F SPA, the Company received $ | |
| ● | On
July 29, 2022, pursuant to the December 2021 Series F SPA, the Company received $ | |
| ● | On
March 31, 2022, pursuant to the December 2021 Series F SPA, the Company received $ | |
| ● | On
February 7, 2022, pursuant to the December 2021 Series F SPA, the Company received $ | |
| ● | On
January 4, 2022, pursuant to the December Series 2021 F SPA, the Company received $ |
| 17 |
During the year ended December 31, 2021:
| ● | Series C Preferred Shares were converted into common shares, see note 14. | |
| ● | On
November 6, 2020, the Company received gross proceeds of $ | |
| ● | On
December 7, 2020, the Company received gross proceeds of $ | |
| ● | On
December 23, 2020, the Company entered into a Securities Purchase Agreement (the “Series F SPA”) whereby the Company
agreed to sell and the Purchaser agrees to purchase, in a series of closings (the “Closings”) of at least Series
F preferred shares at a price of $ per share. The First and Second Closings, will each be for Preferred Shares at a purchase
price of $ | |
| ● | On
February 4, 2021, the Company issued Series F preferred shares pursuant to the First Closing of the Series F SPA with a relative
fair value of $ | |
| ● | On
June 10, 2021, pursuant to the Series F SPA, the Company received $ | |
| ● | On
July 20, 2021, pursuant to another Securities Purchase Agreement (the “July Series F SPA”), the Company received $ | |
| ● | On August 3, 2021, Series F Preferred Shares were converted into common shares, see note 14. | |
| ● | On October 22, 2021, Series F Preferred Shares were converted into common shares, see note 14. | |
| ● | On November 30, 2021, Series F Preferred Shares were converted into common shares, see note 14. | |
| ● | On
December 14, 2021, pursuant to another Securities Purchase Agreement (the “December Series F SPA”), the Company received
$ | |
| ● | On
December 31, 2021, pursuant to the December Series F SPA, the Company received $ |
Note 13 – PREFERRED STOCK
Authorized
shares of Series A preferred shares authorized each having a par value of $ per share.
shares of Series B convertible preferred shares authorized each having a par value of $ per share. Each share of Series B convertible preferred shares is convertible into shares of common stock.
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Preferred Stock Transactions
During the nine months ended September 30, 2022:
| ● | On
August 1, 2022, the Company issued an aggregate of shares of Series B preferred shares to the CEO of the Company for past services.
These preferred shares were value at $ | |
| ● | On
June 27, 2022, the Company issued an aggregate of shares of Series B preferred shares to the Company’s board of directors
for past services. These preferred shares were value at $ |
During the year ended December 31, 2021:
| ● | On
October 26, 2020, the Company agreed to issue Series B preferred shares that are convertible into common shares and | |
| ● | On
March 4, 2021, the Company issued an aggregate of shares of Series B preferred shares to the Company’s board of directors
for past services. These preferred shares were valued at $ | |
| ● |
Series B preferred shares with a fair value of $ |
Note 14 – COMMON STOCK
Authorized
common shares, authorized, each having a par value of $ per share.
Common Stock Transactions
During the nine months ended September 30, 2022:
| ● | The
Company issued an aggregate of shares of common stock to satisfy shares to be
issued for investor relations. The shares had a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ |
During the year ended December 31, 2021:
| ● | The
Company issued an aggregate of shares of common stock with a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ | |
| ● | The
Company issued shares of common stock with a fair value of $ | |
| ● | The Company cancelled shares of common stock which were returned to treasury due to a duplicated issuance for share settled debt during the year ended December 31, 2020. |
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Common Stock to be Issued
Common stock to be issued as at September 30, 2022 consists of:
None.
Common stock to be issued as at December 31, 2021 consists of:
| ● | shares valued at
$ |
Warrants
During the nine months ended September 30, 2022:
No warrant activity took place in the nine months ended September 30, 2022.
During the year ended December 31, 2021:
| ● | The
Company granted | |
| ● | The
Company granted | |
| ● | The
Company granted | |
| ● | On
July 20, 2021, pursuant to the July Series F SPA, the Company is to issue |
The fair values of the warrants were calculated using the following assumptions for the Black Sholes Option Pricing Model:
| December 31, 2021 | ||||
| Risk-free interest rate | ||||
| Expected life | ||||
| Expected dividend rate | % | |||
| Expected volatility | ||||
The continuity of the Company’s common stock purchase warrants issued and outstanding is as follows:
| Warrants | Weighted average exercise price | |||||||
| Outstanding at year December 31, 2021 | $ | |||||||
| Outstanding as of September 30, 2022 | $ | |||||||
As
of September 30, 2022, the weighted average remaining contractual life of warrants outstanding was
Note 15 – RELATED PARTY TRANSACTIONS
During
the nine months ended September 30, 2022, the Company incurred $
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Note 16 – CONTINGENCIES
Indemnifications
In the normal course of business, the Company indemnifies other parties, including customers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed to hold the other parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws contain similar indemnification obligations to the Company’s agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the Company’s limited history with prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material effect on the Company’s operating results, financial position, or cash flows.
Note 17 – SUPPLEMENTAL CASH FLOW INFORMATION
| Nine-months ended | ||||||||
| September 30, 2022 | September 30, 2021 | |||||||
| Cash paid during the period for: | ||||||||
| Taxes | $ | $ | ||||||
| Interest payments | ||||||||
| Non-cash investing and financing transactions: | ||||||||
| Shares issued for debt settlement | $ | $ | ||||||
| Dividends payable with preferred shares to be issued | ||||||||
| Initial recognition of lease assets | ||||||||
| Initial recognition of lease liabilities | ||||||||
| Shares issued on conversion of preferred shares | ||||||||
| Shares issued for convertible notes payable and accrued interest | ||||||||
Note 18 – SUBSEQUENT EVENTS
Management has evaluated events subsequent to the period ended for transactions and other events that may require adjustment of and/or disclosure in such interim condensed consolidated financial statements.
Subsequent to September 30, 2022:
| ● | The
Company issued Series F preferred shares on October 18, 2022, related to the $ | |
| ● | On
October 21, 2022. Pursuant to the December Series F SPA, the Company received $ for the subscription of Series F preferred
shares, as well as issued Series F preferred shares to settle $ | |
| ● | On October 21, 2022, Series F preferred shares were converted into common shares. | |
| ● | On
November 3, 2022, the Company issued an aggregate of shares of Series B preferred shares to a consultant of the Company for services
to be rendered. These preferred shares were valued at $ |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based on, and should be read in conjunction with, the condensed, consolidated interim financial statements and the related notes thereto of DSG Global, Inc. contained in this Quarterly Report on Form 10-Q (this “Report”).
As used in this section, unless the context otherwise requires, references to “we,” “our,” “us,” and “our company” refer to DSG Global, Inc. a Nevada corporation, together with our consolidated subsidiaries,
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.
In particular, without limiting the generality of the foregoing disclosure, the forward-looking statements contained in this Quarterly Report on Form 10-Q and which are inherently subject to a variety of risks and uncertainties that could cause actual results, performance or achievements to differ significantly include but are not limited to:
| ● | our ability to successfully homologate our electric vehicles offerings; | |
| ● | anticipated timelines for product deliveries; | |
| ● | the production capacity of our manufacturing partners and suppliers; | |
| ● | the stability, availability and cost of international shipping services; | |
| ● | our ability to establish and maintain dealership network for our electric vehicles; | |
| ● | our ability to attract and retain customers; | |
| ● | the availability of adequate manufacturing facilities for our PACER golf carts; | |
| ● | the consistency of current labor and material costs; | |
| ● | the availability of current government economic incentives for electric vehicles; | |
| ● | the expansion of our business in our core golf market as well as in new markets like electric vehicles, commercial fleet management and agriculture; | |
| ● | the stability of general economic and business conditions, including changes in interest rates; | |
| ● | the Company’s ability to obtain financing to execute our business plans, as and when required and on reasonable terms; | |
| ● | our ability to accurately assess and respond to market demand in the electric vehicle and golf industries; | |
| ● | our ability to compete effectively in our chosen markets; | |
| ● | consumer willingness to accept and adopt the use of our products; | |
| ● | the anticipated reliability and performance of our product offerings; | |
| ● | our ability to attract and retain qualified employees and key personnel; | |
| ● | our ability to maintain, protect and enhance our intellectual property; | |
| ● | our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company. | |
| ● | the ability of our Chairman, President and Chief Executive Officer to control a significant number of shares of our voting capital; | |
| ● | the impact of the COVID-19 pandemic on capital markets; | |
| ● | frustration or cancellation of key contracts; | |
| ● | short selling activities; | |
| ● | our ability to complete an offering of our common stock and warrants pursuant to the Registration Statement on Form S-1 filed by with the Securities and Exchange Commission on April 21, 2021 (the “Offering”) and the concurrent listing of our common stock and of the warrants on the Nasdaq Capital Market.. | |
| ● | the immediate and substantial dilution of the net tangible book value of our common stock by the Offering; | |
| ● | our ability to meet the initial or continuing listing requirements of the Nasdaq Capital Market; and | |
| ● | our intention to effect a reverse stock split of our outstanding common stock immediately following the effective date of the Offering but prior to the closing of the Offering. |
Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions, which may have been used.
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These forward-looking statements speak only as of the date of this Form 10-Q and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of the factors set forth below in Part II, Item 1A, “Risk Factors,” and in our other reports filed with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Principles. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.
ABOUT DSG GLOBAL INC.
DSG Global Inc. is a technology development, manufacturing and distribution company based in British Columbia, Canada and Fairfield, California. DSG stands for “Digital Security Guard”, our first fleet management technology and primary value statement. Through Vantage TAG, our golf and fleet management division, we are engaged in the design, manufacture, and sale of fleet and player experience management solutions for the golf industry, and for commercial, government and military applications. More recently, Vantage TAG has introduced a range of innovative single player and luxury golf carts. In 2020, we established an electric vehicle division, Imperium Motor Company, headquartered at our Imperium Experience Centre in Fairfield, California. Imperium Motors is engaged in the importation, marketing and distribution of a wide range a low-speed and high-speed electric passenger vehicles for commuter, family, commercial, and public use.
We were founded by a group of individuals who have dedicated their careers to fleet management technologies and have been at the forefront of the industry’s most innovative developments. Our executive team has over 50 years of experience in the design and manufacture of wireless, GPS, and fleet tracking solutions, and over 40 years of experience in automotive retail, wholesale, distribution, and manufacturing.
Powered by patented analytics and an extraordinary depth of industry knowledge, DSG’s mandate is to improve lives and businesses with intelligent, affordable, adaptable and environmentally responsible transportation technologies and electric vehicles.
Our principal executive office is located at 207 - 15272 Croydon Drive Surrey, British Columbia, V3Z 0Z5, Canada. The telephone number at our principal executive office is 1 (877) 589-8806. Our electric vehicle division, Imperium Motor Company, is headquartered at our Imperium Experience Center, Located at 4670 Central Way, Suite D, Fairfield, CA 95605. Imperium’s telephone number is 1 (707) 266-7575. The Company’s stock symbol is DSGT.
Corporate History
DSG Global, Inc. (formerly Boreal Productions Inc.) was incorporated under the laws of the State of Nevada on September 24, 2007. We were formed to option feature films and TV projects to be packaged and sold to movie studios and production companies.
In January 2015, we changed our name to DSG Global, Inc. and effected a one-for-three reverse stock split of our issued and outstanding common stock in anticipation of entering in a share exchange agreement with DSG TAG Systems, Inc., a corporation incorporated under the laws of the State of Nevada on April 17, 2008 and extra provincially registered in British Columbia, Canada in 2008.
On April 13, 2015, we entered into a share exchange agreement with Vantage Tag Systems Inc. (“VTS”) (formerly DSG Tag Systems Inc.) and the shareholders of VTS who become parties to the agreement. Pursuant to the terms of the share exchange agreement, we agreed to acquire not less than 75% and up to 100% of the issued and outstanding common shares in the capital stock of VTS in exchange for the issuance to the selling shareholders of up to 20,000,000 pre-reverse split shares of our common stock on the basis of 1 common share for 5.4935 common shares of VTS.
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On May 6, 2015, we completed the acquisition of approximately 75% (82,435,748 common shares) of the issued and outstanding common shares of VTS as contemplated by the share exchange agreement by issuing 15,185,875 pre-reverse split shares of our common stock to shareholders of VTS who became parties to the agreement. In addition, concurrent with the closing of the share exchange agreement, we issued an additional 179,823 pre-reverse split shares of our common stock to Westergaard Holdings Ltd. in partial settlement of accrued interest on outstanding indebtedness of VTS.
Following the initial closing of the share exchange agreement and through October 22, 2015, we acquired an additional 101,200 shares of common stock of VTS from shareholders who became parties to the share exchange agreement and issued to these shareholders an aggregate of 18,422 pre-reverse split shares of our common stock. Following completion of these additional purchases, DSG Global Inc. owns approximately 100% of the issued and outstanding shares of common stock of VTS. An aggregate of 4,229,384 shares of Series A Convertible Preferred Stock of VTS were exchanged for 51 Series B and 3,000,000 Series E preferred shares during the year ended December 31, 2018 by Westergaard Holdings Ltd., an affiliate of Keith Westergaard, a previous member of our board of directors which have not been issued as of September 30, 2021.
The reverse acquisition was accounted for as a recapitalization effected by a share exchange, wherein VTS is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized. We adopted the business and operations of VTS upon the closing of the share exchange agreement.
DSG TAG was incorporated under the laws of the State of Nevada on April 17, 2008 and extra provincially registered in British Columbia, Canada in 2008. In March 2011, DSG TAG formed DSG Tag Systems International, Ltd. in the United Kingdom (“DSG UK”). DSG UK is a wholly owned subsidiary of DSG TAG.
On March 26, 2019, we effected a reverse stock split of our authorized and issued and outstanding shares of common stock on a four thousand (4,000) for one (1) basis. Upon effect of the reverse split, our authorized capital decreased from 3,000,000,000 pre-reverse split shares of common stock to 750,000 shares of common stock and correspondingly, our issued and outstanding shares of common stock decreased from 2,761,333,254 pre-reverse split to 690,403 shares of common stock, all with a par value of $0.001. Our outstanding shares of Preferred Stock remain unchanged.
On December 22, 2020, we amended our Articles of Incorporation to increase our authorized common shares from 150,000,000 to 350,000,000, and to designate 14,010,000 shares of preferred stock, par value $0.001 per share, including 3,000,000 Series A Preferred stock, 10,000 Series B Convertible Preferred stock, 10,000 Series C Convertible Preferred stock, 1,000,000 Series D Convertible Preferred stock, 5,000,000 Series E Convertible Preferred stock and 10,000 Series F Convertible Preferred Stock.
Imperium Motor Corp. was incorporated under the laws of the State of Nevada on September 15, 2020. Imperium Motor of Canada Corporation was incorporated under the laws of British Columbia, Canada, on August 12, 2021.
On August 12, 2021, the Company incorporated Imperium Motor of Canada Corporation (“Imperium Canada”), under the laws of British Columbia, Canada, for which it subscribed to all authorized capital stock, 100 shares of Class A Voting Participating common shares, at a price of $0.10 per share. Imperium Canada is a wholly owned subsidiary of the Company.
On September 17, 2021, the Company incorporated AC Golf Carts, Inc. (“AC Golf Carts”), under the laws of the State of Nevada, for which it subscribed to all authorized stock, 100 common shares at a price of $0.001 par value per share. AC Golf Carts is a wholly owned subsidiary of the Company.
About our Business Divisions
VANTAGE TAG FLEET MANAGEMENT AND GOLF DIVISION
Vantage Tag Golf and Fleet Management Technologies
Vantage TAG Systems has developed a patented combination of hardware and software which we believe is the first completely modular and scalable fleet management solution for the golf industry and beyond. Marketed around the world, the TAG System and suite of products are deployed to help golf course operators manage their fleets of golf carts, turf equipment, and utility vehicles, providing real time vehicle global positioning, geofencing, remote control, and remote vehicle lockdown security features. The TAG System optimizes course efficiencies and pace of play, all while integrating a customizable array of player experience features such as player messaging, course mapping and 3d flyover, course & tournament marshalling, pro tips, food & beverage ordering, and ad streaming, among others.
The Vantage TAG System is designed from the ground up to be a golf/turf vehicle fleet management system. Its main function is addressing the golf course operator needs. While employing same core technology (cellular wireless and GPS) as traditional commercial vehicle fleet management systems, Vantage TAG has created patent pending solutions to adapt it to the very specific requirements of the golf environment. Compared to mainstream fleet tracking products, Vantage TAG collects 10 to 50 times more data points per MB (megabyte) of cellular data due to its proprietary data collection and compression algorithms. Also, the relative positioning accuracy is improved by almost one order of magnitude by the use of application-specific geo-data validation and correction methods.
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Vantage TAG’s proprietary methods make it possible to offer a solution suitable for use on golf courses at a price low enough to be affordable in the industry. Every system component incorporates state-of-the-art technology (server, mobile trackers, display). In developing its products vantage TAG Systems has adopted an application-oriented approach placing the most emphasis (and research & development) on server and end-user software by taking advantage of the commodity level reached by mainstream technologies such as Global Positioning (GPS) and M2M (Machine to Machine) Cellular Data in the wider context of Commercial Fleet Management.
Vantage TAG leveraged the existence of an abundance of very cost-effective telematics solutions by selecting an “off-the-shelf” hardware platform that meets all the main performance and environmental requirements for operation in the harsh, outdoor golf course environment. While removing all risk and cost associated with developing a proprietary hardware platform, Vantage TAG has maintained the unique nature of its hardware solution by developing a set of proprietary adapters and interfaces specifically for the golf application.
Vantage TAG has secured an exclusive supply agreement with the third-party hardware manufacturers for the vertical of golf industry. Additionally, Vantage TAG owns the design of all proprietary adapters and interfaces. This removes the risk of a potential competitor utilizing the same hardware platform. Competitors could attempt to reverse engineer or copycat the TAG technology and equipment. This risk factor is mitigated by the fact that our product does not rely on a particular technology or hardware platform to be successful but on a very specific vertical software application that is far more difficult to copy (and respectively easier to protect).
The application software contains patent features implemented in every core component of the system. The TAG device runs DSG proprietary firmware incorporating unique data collection and compression algorithms. The web server software which powers the end-user application is also proprietary and incorporates the industry knowledge accumulated through the over 70 years of collective experience of the DSG Global team.
This approach has given the product line a high level of endurance against technology obsolescence. At any point in time, if a hardware component is discontinued or a better/less expensive hardware platform becomes available, the software application can be easily adapted to operate on the new platform or with the new component. The company benefits from the constant increase of performance and cost reduction of mainstream hardware technology without any additional cost.
The web-based Software-as-a-Service (SaaS) model used by the Vantage TAG System is optimal for low operating and support costs and rapid-cycle release for software updates. It is also a major factor in eliminating or substantially reducing the need for any end-user premises equipment. Customers have access to the service through any internet connected computer or mobile device, there is no need for a local wireless network on the facility and installation time and cost are minimal.
Vantage TAG is positioned to take advantage of mainstream technology and utilize “best of breed” hardware platforms to create new generations of products. Our software is designed to be “portable” to future new platforms with better GPS and wireless technology in order to maintain the Company competitive edge.
All new product development effort of Vantage TAG is following the same model: select the best of breed third-party hardware platform, design and produce custom proprietary accessories while focusing the bulk of the development efforts on vertical software application to address a very specific set of end-customer needs.
The latest addition to the TAG family of products, the TAG INFINITY is a perfect example of this development philosophy in action: the main component is a last-generation Android tablet PC wrapped in a custom designed outdoor enclosure containing the power supply and interface components required for the golf environment. The software application is taking advantage of all the advanced high-resolution graphics, touch user interface and computing power of the Android OS delivering a vastly superior user experience compared to competitive systems. The time to market for this product was 30% of how long it took to develop and launch this type of products in the past.
The TAG Control Unit
The company’s flagship product is the TAG Control unit. The TAG can operate as a “stand alone” unit or with one of two displays; the INFINITY 7” alphanumeric display or the INFINITY high definition “touch activated” screen. The TAG is GPS enabled and communicates with the TAG software using cellular GSM networks. Utilizing the cellular networks rather than erecting a local Wi-Fi network assures carrier grade uptime, and vehicle tracking “off- property”. GSM is the de facto global standard for mobile communications.
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The TAG unit itself is discreetly installed usually in the nose of the vehicle to give the GPS clear line of site. It is then connected to the vehicle battery and ignition. The property is then mapped using the latest satellite imagery that is graphically enhanced and loaded into the TAG System as a map.
Once installed the vehicle owner utilizes the TAG software to locate the vehicle in real time using any computer, smartphone, or tablet that has an internet connection and perform various management operations.
The operator can use the geo-fencing capabilities to create “zones” on the property where they can control the vehicles behavior such as shutting down a vehicle that is entering a sensitive or dangerous area. The TAG System also monitors the strength of the vehicle’s battery helping to prevent sending out vehicles undercharged batteries which can be an inconvenience for the course and negatively impact the golfer experience.
Features and Benefits:
| ● | Internal battery utilizing Smart Power technology which charges the battery only when the vehicle is running (gas) or being charged (electric) |
| ● | Pace of Play management and reporting which is a critical statistic for the golf operator |
| ● | No software to install |
| ● | Web based access on any computer, smartphone, or tablet |
| ● | Set up restricted zones to protect property, vehicles, and customers |
| ● | Real time tracking both on and off property (using Street Maps) |
| ● | Email alerts of zone activity |
| ● | Cart lockdown |
| ● | Detailed usage reporting for improved maintenance, proper vehicle rotation, and staff efficiency |
| ● | Geofencing security features |
| ● | Ability to enforce cart path rules which is key to protecting course on wet weather days |
| ● | Modular system allows for hardware and feature options to fit any budget or operations |
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INFINITY 7” Display
The INFINITY 7” is paired with the TAG Control unit as DSG’s entry level display system for operators who desire to provide basic hole distance information and messaging to the golf customer. The INFINITY 7” is a very cost-effective solution for operators who desire to give their customers GPS services with the benefits of a Fleet Management back end. The INFINITY 7” can be mounted on the steering column or the dash depending on the customer’s preference.
VTS’s entry level alphanumeric golf information display
Features and Benefits:
| ● | Hole information display |
| ● | Yardage displays for front, middle, back locations of the pin |
| ● | Messaging capabilities – to individual carts or fleet broadcast |
| ● | Zone violation warnings |
| ● | Pace of Play notifications |
| ● | Smart battery technology to prevent power drain |
| ● | Versatile mounting option |
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INFINITY XL 12” Display
The INFINITY XL 12” is a solution for operators who desire to provide a high-level visual information experience to their customers. The INFINITY XL 12” is a high definition “Infinity XL 12” “activated display screen mounted in the golf cart integrated with the TAG Control unit to provide a full back/front end Fleet Management solution. The INFINITY XL 12” displays hole graphics, yardage, and detailed course information to the golfer and provides interactive features such as Food and Beverage ordering and scorekeeping.
The industry leading Infinity XL 12” HD – the most sophisticated display on the market.
Features and Benefits:
| ● | Integrated Food and Beverage ordering |
| ● | Pro Tips |
| ● | Flyover capability |
| ● | Daily pin placement display |
| ● | Interactive Scorecard with email capability |
| ● | Multiple language choices |
| ● | No power drain with Smart Battery technology |
| ● | Full broadcast messaging capabilities |
| ● | Pace of Play display |
| ● | Vivid hole graphics |
| ● | Option of steering or roof mount |
| ● | Generate advertising revenue and market additional services |
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PROGRAMMATIC Advertising Platform
A unique feature of the INFINITY XL 12” system is the advertising display capability. This can be used by the operator for internal promotion of services or for generating revenue by selling the ad real estate since the golf demographic is very desirable to advertisers. The INFINITY XL 12” displays banner, panel, full page, pro tip, and Green view ads. There is also ad real estate on the interactive feature screens for Food and Beverage ordering and the scorecard. The Infinity XL 12” System can also display animated GIF files or play video for added impact.
Advertising displayed in multiple formats including animated GIF and video
DSG has developed proprietary “Ad Manager” software which is used to place and change the ads on the system(s) from a central NOC (Network Operations Center) in real time. The Ad Manager can deploy to a single system or multiple systems. This creates a network of screens that is also very desirable to advertisers as ad content can be deployed locally, regionally, or nationally. The advertising platform is an important part of the company’s future marketing and sales strategy.
DSG R3 Advertising Platform
The DSG R3 program delivers advance ROI (Revenue Optimization Intelligence). Utilizing all streams of advertising delivery, such as automated, direct, and self-serve. The R3 program has the ability to deliver relevant advertising to golfers the moment they sit in the cart. The R3 model is more effective than the previous advertising model of ‘One to One’, these are local ads only sold through direct sales by courses, or 3 rd party advertising sales firms. The new R3 model offers ‘Many to one’ advertising options, delivering thousands of national, regional, and local advertisers an opportunity to advertise on our screens through our R3 Marketplace.
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Previous ‘One to One’ model vs the new R3 model ‘Many to One’
TAG TURF/ECO TAG
The TAG Turf and the new ECO TAG were developed to give course operators the same back end management features for their turf equipment and utility vehicles. Turf equipment is expensive, and a single piece can run over $100,000 and represents a large portion of a golf course operating budget. The TAG Turf and ECO TAG have comprehensive reporting that the operator can utilize to implement programs that can increase efficiencies, reduce labor costs, help lower idle times, provide fuel consumption and equipment performance, provide historical data on cutting patterns, and reduce pollution from emissions by monitoring idle times. Since the golf course needs to be maintained regardless of volume these cost saving measures directly impact the operator’s bottom line.
Features and Benefits:
| ● | Can be installed on any turf, utility, or service vehicle |
| ● | Work activity tracking and management |
| ● | Work breakdown and analysis per area, work group, activity type or specific vehicle |
| ● | Vehicle idling alerts |
| ● | Zone entry alerts |
| ● | Detailed travel (cutting patterns) history |
| ● | Detailed usage reports with mileage and hours |
| ● | Protection for ecological areas through geo fencing |
| ● | Vehicle lock down and ‘off property’ locating features |
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The TAG Turf provides detailed trail history and cutting patterns
Revenue Model
DSG derives revenue from four different sources, with an additional source of revenue in planning stages.
Systems Sales Revenue, which consists of the sales price paid by those customers who purchase our TAG system hardware lease our TAG system hardware.
Monthly Service Fees are paid by all customers for the wireless data fee charges required to operate the GPS tracking on