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    DSGT   US23340C2035

DSG GLOBAL INC.

(DSGT)
Delayed OTC Markets  -  03:31 2022-11-28 pm EST
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11/17Liteborne Motor Corp. Adds 2 Top Auto-Industry Veterans to Key Executive Positions
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11/15DSG Global Inc. Files its Form 10-Q and Announces Financial Results for Q3 2022 Including Revenue Growth of 186% from Q3 2021
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11/14DSG GLOBAL INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)
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DSG GLOBAL INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

06/14/2022 | 05:32pm EST

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.

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.



                               [[Image Removed]]


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.



                               [[Image Removed]]


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.



                               [[Image Removed]]


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.



                               [[Image Removed]]


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.



                               [[Image Removed]]


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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                               [[Image Removed]]


Previous 'One to One' model vs the new R3 model 'Many to One'



                               [[Image Removed]]



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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                               [[Image Removed]]


The TAG Turf provides detailed trail history and cutting patterns



Revenue Model


DSG derives revenue from four different sources.

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 the TAG systems.

Monthly Rental Fees are paid by those customers that rent the TAG system hardware. The amount of a customer's monthly payment varies based on the type of equipment rented (a TAG, a TAG and INFINITY 7", or a TAG and INFINITY XL 12").

Programmatic Advertising Revenue is a new source of revenue that we believe has the potential to be strategic for us in the future. We are in the process of implementing and designing software to provide advertising and other media functionality on our INFINITY.

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is reasonably assured. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. We accrue for warranty costs, sales returns, and other allowances based on its historical experience.

Our revenue recognition policies are discussed in more detail under "Note 2 - Summary of Significant Accounting Policies" in the notes to our Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.



Markets



Sales and Marketing Plan


The market for the TAG System is the worldwide golf cart and Turf equipment fleets. There are 40,000 golf courses around the world with North America being the largest individual market with 20,000. This represents over 3,000,000 vehicles. The golf market has five distinct types of operations. Municipal, Private Country Clubs, Destination Resorts, Public Commercial, Military and University affiliated. VTS has deployed and has case studies developed TAG systems in each of these categories.



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Our marketing strategy is focused on building brand awareness, generating quality leads, and providing excellent customer service.



North America Sales


Since the largest market is North America, the Company employs a direct sales team and sales agents that provide full sales coverage. Our sales agents are experienced golf industry professionals who maintain established relationships with the golf industry and carry multiple golf lines. Our sales objective is to offer our existing and prospective customers a dedicated, knowledgeable, and outstanding customer service team.

In addition, our team is dedicated to existing accounts that focus on up-selling and cross-selling additional products to our current customer base, securing renewal agreements, and providing excellent customer service. The current regions are:




? Western Canada

? Central Canada

? Eastern Canada

? Northeast USA

? Western USA

? Southeastern USA

? Midwest USA




International Sales



DSG focuses on select global golf markets that offer significant volume opportunities and that value the benefits that our products deliver.

We utilize strategic distributor partnerships in each targeted region/country to sell, install and service our products. Distributors are selected based on market strength, market share, technical and selling capability, and overall reputation. We believe that DSG solutions appeal to all distributors because they are universal and fit any make or model of vehicle. We maintain and leverage our strong relationship with Yamaha, E-Z-GO and Ransomes Jacobsen (sister company to E-Z-GO) in developing our distributor network around the world. Today, many of our distributor partners are the leading distributors for E-Z-GO and RJ and hold a dominant position in their respective markets. While they are Yamaha or E-Z-GO distributors, most sell DSG products to all courses regardless of their choice of golf car as a value add to their customers and to generate additional revenue. We complement this distributor base with independent distributors as needed to ensure we have sufficient coverage in critical markets.

Currently DSG is focused on expanding in Europe, Asia and South Africa. The Company plans to expand next into Australia, New Zealand and Latin America.



Management Companies


Many golf facilities are managed by management companies. The portfolios of these companies vary from a few to hundreds of golf courses. Troon®, the world's largest player in golf course management, has over 200 courses under management. The management companies provide everything from branding, staffing, management systems, marketing, and procurement. DSG is currently providing products and services to Troon, OB Sports, Kemper Sports, Trump, Marriott Golf, Blue Green, Crown Golf, American Golf, Billy Casper, Club Corp, and Club Link.

DSG has been successful in completing installations and developing relationships with several of the key players who control a substantial number of courses. DSG will continue to implement system developments that are driven by the needs of these management companies such as combined reporting, multiple course access through a centralized dashboard. This development will become a competitive advantage for DSG in the management company market.



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DSG has dedicated a team to create specific collateral for this market and has assigned a senior executive to have direct responsibility to manage these relationships.



Competition


We compete with a number of established producers and distributors of vehicle fleet management systems. Our competitors include producers of golf specific applications, such as GPS Industries, LLC., one of the leading suppliers of golf cart fleet management systems, as well as producers of non-golf specific utility vehicle fleet management systems, such as Toro. Many of our competitors have longer operating histories, better brand recognition and greater financial resources than we do. In order for us to successfully compete in our industry we must:



  ? demonstrate our products' competitive advantages;

  ? develop a comprehensive marketing system; and

  ? increase our financial resources.



However, there can be no assurance that even if we do these things, we will be able to compete effectively with the other companies in our industry.

We believe that we will be able to compete effectively in our industry because of the versatility, reliability, and relative affordability of our products when compared to those of our competitors. We will attempt to build awareness of our competitive advantages among existing and potential customers through trade shows, sales visits and demonstrations, online marketing, and positive word of mouth advertising.

However, as we are a newly established company relative to our competitors, we face the same problems as other new companies starting up in an industry, such as limited access to capital. Our competitors may be substantially larger and better funded than us, and have significantly longer histories of research, operation and development than us. In addition, they may be able to provide more competitive products than we can and generally be able to respond more quickly to new or emerging technologies and changes in legislation and regulations relating to the industry. Additionally, our competitors may devote greater resources to the development, promotion and sale of their products or services than we do. Increased competition could also result in loss of key personnel, reduced margins or loss of market share, any of which could harm our business.

Our primary competitor in the field of golf course fleet management is GPS Industries, a company that was founded in 1996 by our sole officer, founder and one of our directors, Mr. Bob Silzer. GPS Industries is currently the largest player in the marketplace with an installed base of approximately 750 golf courses worldwide. GPS Industries was consolidated by various mergers and acquisitions with a diversity of hardware platforms and application software. Since 2009, when GPS Industries has introduced their latest product offering called the Visage, in an exclusive partnership with Club Car, their strategy has been to target mostly their existing customers and motivate them into replacing their existing, older GPS system, with the Visage system.

GPS Industries is leveraging very heavily their partnership with Club Car, which is one of the three largest golf cart manufacturers in the world and at times is benefiting from golf operators' preference for Club Car and their vehicles when they select their management system.



Market Mix


Since the introduction of the DSG product line, we have shown golf course operators that they have now access to a budget-friendly fleet management tool that works not only on golf carts but also with all other vehicles used on the golf course such as turf maintenance, shuttles, and other utility vehicles.

Marketing studies have identified that half of the golf course operators only need a fleet management system and only 15% need a high-end GPS golf system. This illustrates the strong competitive advantage that VTS TAG Systems has versus GPS Industries since their product can only address the needs of a relatively small fraction of the marketplace.

Consequently, GPS Industries' installed base has steadily declined since most of their new product installations have replaced older product for existing customers and some customers have opted for a lower budget system and switched over to VTS TAG Systems.



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Marketing Activities


The Company has a multi-layered approach marketing the TAG suite of products. One of the foundations of this plan is attending industry trade shows which are well attended by golf operators. The two largest shows are the PGA Merchandise Show and the Golf Industry Show which are held in Florida at the end of January. The Company also attends a number of regional shows around North America. International events are attended by our distributors and partners.

The second layer of marketing is memberships in key organizations such as the National Golf Course Owners Association, Golf Course Superintendents Association, and Club Managers Association of America. These are very influential in the industry and have marketing channels such as publications, email blasts, and web-based marketing. The Company also markets directly to course operators through email, surveys direct mail programs.



Lead Generation


One of the primary sources of lead generation is through the Company's strategic partnerships with E-Z-GO, Yamaha, and Ransomes Jacobson. These relationships provide the Company with a great deal of market intelligence. The sales forces of the partners work in tandem with the DSG sales team by passing on the leads, creating joint proposals, and distributing TAG sales material. The Company has also created co-branded materials for specific value items of interest to operators such as Pace of Play solutions. DSG sale s and marketing staff attend partner sales events to conduct training and discuss marketing strategies.

The Company is in the process of testing an internal telemarketing program in several key markets to gauge whether this particular channel warrants larger scale implementation.




Competitive Advantages



Pricing


One of the "heroes" of the TAG System is providing the course operator a range of modular fleet management options that are very competitively priced. Pricing options range from the TURF, TAG, Infinity 7", and Infinity XL 12" System, giving the customer a wide range of pricing options.



Functional advantages


DSG has the distinctive advantage of being able to offer a true fleet management system, encompassing all the vehicles on the golf course, not just the golf carts. Due to the modular nature of the system, customers have now the option to configure their system's configuration to match exactly their needs and their budget.




Product advantages



DSG products are the robust, reliable, and user-friendly systems in the world. DSG is the only company currently providing systems that are waterproof with internal batteries to ensure our partners retain the full golf cart manufacturer's warranty.



Operational Plan


Our Operations Department's main functions are outlined below:

Product Supply Chain Management




  ? Product procurement, lead-time management

  ? Inventory Control




Customer Service



  ? Training

  ? Troubleshooting & Support

  ? Hardware Repairs




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Installations



  ? Content & graphics procurement

  ? System configurations

  ? Shipping and Installation




Infrastructure Management



  ? Communication Servers Management

  ? Cellular Data Carriers

  ? Service and administration tools




Product Supply Chain



In order to maintain high product quality and control, as well as benefiting from cost savings, the Company is currently procuring all main hardware components offshore. Final assembly is locally performed in order to ensure product quality. Other main components are also procured directly from manufacturers or from local suppliers that outsource components office in order to keep the price as low as possible.

The Company is requesting the suppliers to perform a complete set of quality testing and minimum 24 hours' burn-in before the product is delivered. The local hardware assembler and components supplier offers a 12-month warranty. The main hardware components offshore supplier offers a warranty plan of 15 months from the date the product is shipped. With an extended 90 days beyond the current warranty, such repair service would be paid by the supplier except for component replacement costs, which would be paid by DSG.

Another important activity related to the management of the product supply chain is working closely with the suppliers and ensuring that we have alternate sources for the main components and identify well in advance any components that may go "end-of-life" and find suitable replacements before product shortages may occur.




Inventory Control



The Company has implemented strict inventory management procedures that govern the inbound flow of products from suppliers, the outgoing flow to customers as well as the internal movement of inventory between warehouses (Canada, US and UK). There are also procedures in place to control the flow of equipment returning from customers for repairs and their replacements.



Installation


The Company is utilizing a small number of its own field engineers, geographically positioned to be in close proximity of areas with high concentrations of current and future customers. Occasionally, when new installations exceed the internal capacity, the company employs a number of external contractors, on a project-by-project basis. Each contractor has been trained extensively to perform product installations and the Company has created an extensive collection of Installation Manuals for all products and vehicle types.

The product was designed with ease of installation as one of its features. Additionally, the installation process includes a pre-shipping configuration process that prepares each device with all the settings and graphics content (if applicable) required for the specific location it will be deployed. This makes the installation process a lot simpler and less time consuming in the field which reduces costs (accommodations, food, travel) for internal staff as well as external contractor cost (less billable time).

Another benefit of the simplified installation procedure is increased scalability in anticipation of increased number of installs in the future by reducing the skill level and training time requirements for additional contractors.




Customer Service



The Company has deployed its Customer Service staff strategically, so it has at least one service representative active during business hours in North America, Europe and South Africa.



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The Company is handling Customer Service directly in North America and UK, offering telephone and on-line support to end-customers. In other international markets, the first-line customer service is handled by local distributor's staff while DSG is supplying training and more advanced support to the distributors.

For the management of the customer service activities, the Company is utilizing SalesForce.com CRM system which allows creating, updating, closing and escalation of service cases, including the issuance of RMA (Return Material Authorization) numbers for defective equipment. Using SalesForce.com also allows generation of management reports for service issues, customer satisfaction, and equipment failures in order to quickly identify trends, problem accounts or systemic issues.

In addition, DSG began offering the DSG Par 72 Service & Support Plan to guarantee service and support to client courses in the golf business, during fiscal 2016. This program for client courses which guarantees service and support programs within 24 hours of a problem arising.

Product Development and Engineering

The Company employs a team of software engineers in house to develop and maintain the main components of the server software and firmware. All product development is derived from business needs assessment and customer requests. The Product Manager is reviewing periodically the list of feature requests with the Sales, establishes priorities and updates the Product Roadmap. The software engineers are also responsible for developing specialized tools and systems utilized increase efficiency in the operation of the Company. These projects include functionality such as: automated system monitoring, automatic service alerts, improved remote troubleshooting tools, cellular data monitoring and reporting. All these tools are critical in future ability to support more customers with less resources, streamline support, and improve internal efficiency.

All hardware development (electronics and mechanical) is generally outsourced, however small projects like mounting solutions or cabling are handled in house.



Vantage TAG Golf Carts



PACER Single Rider Golf Cart


In 2021, after rigorous testing and consultation with industry leaders and partners, DSG has introduced the PACER Single Rider Golf Cart. The PACER furthers Vantage TAG's mandate to optimize the game for players and operators alike, increasing pace of play, comfort, accessibility, and performance. The PACER can complete up to four rounds of golf on a single charge, is factory equipped with the TAG Control Unit, and upgradable to the TAG Infinity Display at any time. DSG's PACER program allows operators to buy, lease, or install a PACER fleet on a zero overhead, revenue-sharing basis, making it accessible to the widest range of golf courses, venues, campuses and communities.



[[Image Removed]]



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The Vantage TAG PACER Golf Cart

In 2020, DSG/Vantage Tag was working with manufacturers in China to develop and launch our planned single rider "PACER" golf carts for a 2021 launch. After testing several prototypes and consulting with industry leaders and partners, we have delayed launch of the PACER in order to undertake PACER manufacturing in North America, under the close supervision of our designers and marketing partners, and in proximity to our largest anticipated customer base. We believe this decision will allow us to produce an industry-leading product, maintain quality control, reduce fulfillment delays and capitalize on manufacturing synergies between our divisions. We anticipate that we will secure PACER manufacturing capacity within 90 days based on general availability of commercial space and labor. We continue to proceed with PACER sales development and during this transition.



100E Golf Cart


Most recently, Vantage TAG has also introduced the premium 100E Golf Cart, built for serious and casual riders seeking a luxury experience. Available for sale or lease, the 100E combines real world range, performance, and safety into a premium Low Speed Vehicle that only Vantage Tag can offer. Our first low speed, street legal vehicle, the 100E achieves a 90 mile range per charge, is Department of Transportation certified, and comes equipped with a whole package of premium options starting at under $9,998 before discounts and incentives. Available in a range of colors, the 100E brings style, performance, sustainability and fun, from the golf course to town and everywhere in between.



[[Image Removed]]



The Vantage 100E Golf Cart.


In 2020, DSG/Vantage Tag was working with manufacturers in China to develop and launch our planned single rider "PACER" golf carts for a 2021 launch. After testing several prototypes and consulting with industry leaders and partners, we have delayed launch of the PACER in order to undertake PACER manufacturing in North America, under the close supervision of our designers and marketing partners, and in proximity to our largest anticipated customer base. We believe this decision will allow us to produce an industry-leading product, maintain quality control, reduce fulfillment delays and capitalize on manufacturing synergies between our divisions. We anticipate that we will secure PACER manufacturing capacity within 90 days based on general availability of commercial space and labor. We continue to proceed with PACER sales development and during this transition.

IMPERIUM MOTOR COMPANY®-MAKING GREEN TRANSPORTATION AVAILABLE TO EVERYONE

In 2019, DSG Global founded Imperium Motor Company with a mission to bring the worlds most effective and cost-efficient electric vehicles to North America and beyond. Our range of commuter, family, and commercial vehicles offer a lower cost alternative to competitive offerings, with an emphasis on great design, performance, and functionality. Through our exclusive North American manufacturing partnership with Zhejiang Jonway Group Co., Ltd. ("Jonway Group"), and Skywell New Energy Automobile Group ("Skywell"), two of the world's most prolific manufacturers of electric vehicles and components, Imperium now offers one of the largest selections of electric vehicles in North America, including ebikes and scooters, e-rickshaws, low speed cars, trucks, vans and scooters, high speed SUVs and pickups, as well as buses, cargo trucks, and sanitation vehicles.



34





On October 2, 2019, we entered into an exclusive cooperation agreement dated September 17, 2019 with Zhejiang Jonway Group Co., Ltd. ("Jonway Group"), a leading manufacturer of electric vehicles in China. Pursuant to the Agreement, we have received the exclusive right to purchase, homologate, and distribute Jonway Group's range of electric low speed vehicles in the Americas (including the United States, Canada, Mexico and the Caribbean) for a term of 10 years. The distribution rights are subject to the inspection and approval of eligible vehicles by the Company.

Pursuant to the Agreement, the Company was to place an initial order of 17 sample vehicles by January 30, 2020. The sample vehicles are for homologation purposes and subject to inspection and approval by the Company. The initial order was delayed by mutual agreement due to manufacturing and shipping delays resulting from COVID-19. However, as of the date of this Annual Report, the initial order of 17 vehicles has been placed and fulfilled. We have since approved and are currently homologating the vehicles for conformance with North America road & safety standards. The written agreement between Jonway Group and the Company does not specify what percentage of each vehicle purchase price is payable upon order placement. Currently, the parties have agreed to a 30% payment upon order placement with the balance payable upon shipping.

On February 4, 2020, we announced the establishment of our automotive subsidiary, Imperium Motor Company®, and a planned Electric Vehicle (EV) Experience Centre in California. Imperium Motor Company was incorporated in the State of Nevada on September 10, 2020.

On August 21, 2020, we announced the opening of our Electric Vehicle Experience and Training Center located in Fairfield, California, where we plan to offer a range of electric vehicles at the EV Vehicle Experience Centre and to provide dealer support, training, and education.

On October 5, 2020, through Imperium Motor Corp., we entered into a Memorandum of Understanding dated September 10, 2020 with Skywell Shenzen Vehicles Co. Ltd. aka Skywell New Energy Automobile Group Co., Ltd. ("Skywell"), a leading manufacturer of electric vehicles in China. Pursuant to the Memorandum of Understanding, Imperium has received the exclusive right, subject to placement of an initial vehicle order and corresponding payment to Skywell, to purchase, homologate, and distribute Skywell's range of ET5 electric sport utility vehicles in North America and the Caribbean. The Memorandum of Understanding, while stated to be non-binding, provides for the conclusion of a definitive agreement by the parties following the placement of an initial vehicle order by the Company. The definitive agreement was to have a minimum term of 3 years, and will renew automatically for successive 3-year terms, subject to the right of each party to terminate the agreement by giving 30 days notice prior to renewal.

Effective February 9, 2021, we entered into a definitive OEM Cooperation Agreement with Skywell dated February 5, 2021, which agreement modifies and replaces the Memorandum of Understanding. Pursuant to the OEM Cooperation Agreement, Skywell has granted to the Company the exclusive right to distribute Skywell's electric passenger cars, trucks (including but not limited to the ET5 sport utility vehicle), buses and spare parts in the United States and Canada for a term of 5 years. In order to maintain the distributions rights accorded by the agreement, the Company must purchase and deliver 1,000 units within the first year of the term, 2,000 units in the second year, 3,000 units in the third year, 4,000 units in the fourth year, and 5,000 units in the fifth and final year of the term. Skywell may terminate the agreement in its distribution with 30 days' notice if the Company fails to satisfy sales quotas. Product price, terms of payment and logistical matters are subject to the ongoing approval and agreement of the parties from time to time.

Effective February 15, 2021, we entered into a Cooperation Agreement with Rumble Motors, a manufacturer and distributor of electric bikes and other vehicles. Pursuant to the Cooperation Agreement, Rumble has granted to the Company the exclusive right to distribute the Rumble Rover, Rumble Air, and other electric bikes in India, Pakistan, Bangladesh, the United States, Canada, Mexico and the Caribbean for a term of 5 years. The Rumble vehicles remain subject to the Company's testing, approval, and homologation in the respective territories.



35





Imperium EV Passenger Vehicles

[[Image Removed]] IMPERIUM ET5 by Skywell

                    ? SEATING for five passengers
                    ? MOTOR 150 kW max power
                    ? SPEED up to 150 kp/h
                    ? RANGE up to 404 km or 520 km NEDC estimate
                    ? BATTERY 55.33 or 71.98 kWh Li-ion
                    ? EQUIPPED with Automatic Transmission, Air Conditioning,
                      Heater, Power Windows, Power Door Locks, Rear Camera, Push
                      Button Start, Alloy Wheels, Am-Fm USB/SD Stereo and more

[[Image Removed]]   IMPERIUM Terra-e by ZXAUTO in development

                    ? SEATING for five passengers
                    ? MOTOR 135 kW max power
                    ? SPEED up to 145 km/h
                    ? RANGE up to 322 to 435 km estimate
                    ? BATTERY 53.84 or 75.22 kWh Li-ion
                    ? EQUIPPED with Automatic Transmission, Air Conditioning,
                      Heater, Power Windows, Power Door Locks, Rear Camera, Push
                      Button Start, Alloy Wheels, Am-Fm USB/SD Stereo and more

[[Image Removed]]   IMPERIUM W Coupe

                    ? SEATING for four and Unibody Construction
                    ? MOTOR 4.5 kW or optional 7.5 kW Brushless DC Motor available
                    ? SPEED of 40 km/h for LSV model or 75 km/h for mid speed model
                    ? RANGE of up to 120km on Lead Acid Battery Pack or up to 150km
                      with optional Lithium Battery Pack
                    ? BATTERY 72-volt 720 Ah Battery Power with Lead Acid or
                      Optional Lithium Battery Pack available
                    ? EQUIPPED with Automatic Transmission, Air Conditioning,
                      Heater, Power Windows, Power Door Locks, Rear Camera, Push
                      Button Start, Alloy Wheels, Am-Fm USB/SD Stereo and more




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[[Image Removed]]   IMPERIUM Maxi "SUV" Style

                    ? SEATING for four with Steel Safety Cell Construction
                    ? MOTOR 4.5 kW or optional 7.5 kW Brushless DC Motor available
                    ? SPEED up to 40 km/h for LSV model or 60 km/h for mid speed
                      model
                    ? RANGE up to 120 km on Lead Acid Battery Pack or up to 150 km
                      with optional Lithium Battery Pack
                    ? BATTERY 72-volt 720 Ah with Lead Acid or Optional Lithium
                      Battery Pack available
                    ? EQUIPPED with Automatic Transmission, Alloy Wheels, Air
                      Conditioning, Heater, Power Windows, Power Door Locks, Rear
                      Camera, Push Button Start, Am-Fm USB/SD Stereo, Rear Mounted
                      Spare Tire and more

[[Image Removed]]   IMPERIUM Maxi Sport Sedan

                    ? SEATING for four with Steel Safety Cell Construction
                    ? MOTOR 4.5 kW or optional 7.5 kW Brushless DC Motor available
                    ? SPEED up to 40 km/h for LSV model or 60 km/h for mid speed
                      model
                    ? RANGE up to 120 km on Lead Acid Battery Pack or up to 150 km
                      with optional Lithium Battery Pack
                    ? BATTERY 72-volt 720 Ah with Lead Acid or Optional Lithium
                      Battery Pack available
                    ? EQUIPPED with Automatic Transmission, Alloy Wheels, Air
                      Conditioning, Heater, Power Windows, Power Door Locks, Rear
                      Camera, Push Button Start, Am-Fm USB/SD Stereo, Rear Mounted
                      Spare Tire and more




[[Image Removed]]                  IMPERIUM Euro Coupe

                                   ?   SEATING for four with Steel Safety Cell
                                       Construction
                                   ?   MOTOR 4.5 kW to 7.5 kW Brushless DC
                                   ?   SPEED of up to 45 km/h or up to 55 km/h with
                                       optional Performance Package




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    ? RANGE up to 120 km on a single charge
    ? BATTERY 60-volt 600 Ah Maintenance Free Lead Acid or Lithium Battery Pack
      with Optional Performance Package
    ? EQUIPPED with Automatic Transmission, Alloy Wheels, Air Conditioning, Heater,
      Power Windows, Power Door Locks, Rear Camera, Push Button Start, Rear Hatch
      Am-Fm USB/SD Stereo and more




 [[Image Removed]]   IMPERIUM Urbee 4S

                     ? SEATING for four with Steel Safety Cell Construction
                     ? MOTOR 4.0 kW Brushless DC
                     ? SPEED up to 40 km/h
                     ? RANGE up to 120 km on a single charge
                     ? BATTERY 60-volt 600 Ah Maintenance Free Lead Acid
                     ? EQUIPPED with Alloy Wheels, Sunroof, Rear Locking Trunk
                       Heater, Power Windows, Optional Air Conditioning, Alloy
                       Wheels, Am-Fm USB/SD Stereo and more

 [[Image Removed]]   IMPERIUM Urbee 2S

                     ? SEATING for two with Steel Safety Cell Construction
                     ? MOTOR 2.8 kW or optional 4.0 kW Brushless DC
                     ? SPEED up to 55 km/h
                     ? RANGE up to 140 km on a single charge
                     ? BATTERY 60-volt 600 Ah Maintenance Free Lead Acid
                     ? EQUIPPED with Sunroof, Lockable Rear Trunk, Heater, Power
                       Windows, Optional Air Conditioning, Alloy Wheels, Am-Fm
                       USB/SD Stereo and more




 [[Image Removed]]   IMPERIUM Urbee Cargo Van

                     ? SEATING for two with Steel Safety Cell Construction
                     ? MOTOR 4.5 kW Brushless DC Motor Standard
                     ? SPEED up to 45 km/h
                     ? RANGE up to 120 km on a single charge
                     ? BATTERY 60-volt 600 Ah Maintenance Free Lead Acid
                     ? EQUIPPED with Large All Steel Locking Cargo Box with Dual
                       Doors, Heater, Power Windows, Optional Air Conditioning,
                       Alloy Wheels, Am-Fm USB/SD Stereo and more




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 [[Image Removed]]   IMPERIUM Five Star Van

                     ? SEATING for two or five Passengers for Cargo Van
                     ? MOTOR up to 18 kW and 320 volt rated
                     ? SPEED up to 55 km/h for LSV and 100 km/h for Mid Speed Model
                     ? RANGE up to 150 km for Lead Acid Battery Pack or up to 300
                       km with optional Lithium Battery Pack
                     ? BATTERY Quick Change Swappable Battery Packs with level one,
                       two and optional level 3 DC Fast Charging
                     ? EQUIPPED with Dual Air Conditioning, Heater, Power Windows,
                       Power Door Locks, Am-Fm USB/SD Stereo and more

 [[Image Removed]]   IMPERIUM T-Truck

                     ? READY for the road or use inside a warehouse with no
                       tailpipe emissions
                     ? CARGO BED with fold down tailgate
                     ? PERSONAL transportation or commercial ready
                     ? MOTOR 2.0 kW Permanent Magnet DC
                     ? ADJUSTABLE SPEED up to 55 kp/h
                     ? BATTERY Maintenance Free Lead Acid or optional Lithium
                     ? EQUIPPED with Alloy Wheels and Radial Tires, Full Lighting,
                       Turn Signals, Windshield Wiper, Motorcycle Style Front
                       Controls and more




 [[Image Removed]]   IMPERIUM T-Van

                     ? READY for the road or use inside a warehouse with no
                       tailpipe emissions
                     ? STEEL VAN BOX with HD locking dual doors
                     ? PERSONAL transportation or commercial use
                     ? MOTOR 2.0 kW Permanent Magnet DC
                     ? ADJUSTABLE SPEED up to 55 kp/h
                     ? BATTERY Maintenance Free Lead Acid or optional Lithium
                     ? EQUIPPED with Alloy Wheels and Radial Tires, Full Lighting,
                       Turn Signals, Windshield Wiper, Motorcycle Style Front
                       Controls and more




39






 [[Image Removed]]   IMPERIUM T01

                     ? SEATING for three passengers or Taxi open style model
                     ? MOTOR 1.0 kW Permanent Magnet DC with optional 1.5 kW Motor
                       Available
                     ? SPEED up to 40 km/h
                     ? RANGE up to 80 km
                     ? BATTERY 60V 225 Ah Maintenance Free Lead Acid or Optional
                       Lithium Ion Battery.
                     ? EQUIPPED with Auto Trans, Stereo, Heater, Alloy Wheels, Full
                       or Half Doors, DOT Lighting, Turn Signals and more




 [[Image Removed]]   IMPERIUM e-Rickshaw Extended Deluxe

                     ? SEATING for five
                     ? MOTOR 1.5kW or optional 2.0kW Permanent Magnet Motor
                     ? SPEED 32 km/h
                     ? RANGE 60 km or 80 km with optional Battery
                     ? BATTERY 45Ah or 60Ah Optional Colloid Battery Maintenance
                       Free
                     ? E-TAXI style with side seating, roof rack, stereo, alloy
                       wheels, safety steel frame and more

 [[Image Removed]]   Imp-Moto Product Lineup

                     ? Full Lineup of Electric Scooters, ATVs, UTVs and Motorbikes
                     ? Lithium Battery power available on most models
                     ? Off-Road or on road models
                     ? Low Maintenance EV Units
                     ? Units for most every purpose including specialized delivery
                       models and ride share Scooters with quick change battery
                       packs




40





Imperium's Production Partners

Zhejiang Jonway Automobile Co.

Imperium has exclusive distribution rights in the United States, Canada, Mexico and the Caribbean for Jonway built EVs.

Zhejiang Jonway Automobile Co., Ltd ("Jonway") began manufacturing in May 2003. The Taizhou city, Zhejiang province manufacturing plant has an area of 57.3 hectares with more than 800 employees. It has invested more than 600 million RMB in producing the three and five-door SUVs, with a capacity to produce up to 30,000 units per year. The manufacturing operations include pressing, welding, painting and assembling lines. It has also gained the TS16949:2009, GCC, SASO, SONCAP and CCC certification. Jonway offers a network of more than 500 auto dealerships in China alone and has started a distribution network in Italy.

As a national first-class production enterprise, Jonway has passed the ISO 9001 quality management system certification, the product has passed the European certification and the American DOT, EPA certification, and has been exported to more than 80 countries in the world. Jonway has announced its third assembly plant in the city of Xuzhou, China.

Skywell New Energy Automobile Group Co. Ltd.

Sky-well New Energy Automobile Group Co. Ltd. was founded in 2011. Primarily engaged in the manufacturing and sales of large, medium and light buses, passenger cars and related components, it has gradually become a leading enterprise of China's new energy automobile industry. By the end of 2016, the total assets of the company were 7.838 billion Yuan, with the net assets of 1.429 billion Yuan.

Skywell owns Nanjing Jinlong Bus Manufacturing Co., Ltd., Wuhan Sky-well New Energy Automobile Co., Ltd., Shenzhen Sky-well Automobile Co., Ltd, Nanjing Sky Source World Power Technology Co., Ltd and Qingdao Sky-well New Energy Automobile Group Co. Ltd. Its products include the 3.6-18 m series of electric passenger cars and passenger vehicles, which are widely sold in many countries and regions in Southeast Asia and widely used in public transport, tourism, commuting, leasing and other markets. Skywell is also one of the first companies to enter the clean energy bus industry. Known for its emphasis on technology research and development, its skilled workforce, its innovative designs and high-quality products, it has achieved excellent results. Since 2014, Skywell has ranked as the leading seller of new energy passenger cars in the China.

Skywell has granted to the Company the exclusive right to distribute Skywell's electric passenger cars, trucks (including but not limited to the ET5 sport utility vehicle), buses and spare parts in the United States and Canada for a term of 5 years.

Imperium Motor Company Experience Center

Our Imperium Electric Vehicle Northern California Experience Center is located in Fairfield, Solano County, California. Solano County is situated between two of the largest Electric Vehicle markets in California, the San Francisco Bay Area and Greater Sacramento with a combined population of over 10 million people. California is historically the top EV sales volume state with 50% of sales within the United States. The building sits right next to the crossroads of Freeway 80 and Freeway 680 in one of the best economic areas in the nation.

The Experience Center will feature the various models of new Electric Cars, Trucks, Vans, UTVs, ATVs and Scooters arriving soon from the manufacturer. The new building will not only display our new selection of Electric Vehicles but will also host the center for Dealer training and Parts and Service support.

Imperium Distribution Network

We are currently marketing and offering direct sales of our electric vehicles at our Imperium Motor Company Experience Center. However, it is our objective to establish a network of experienced, authorized automotive dealers across the United States and throughout our territory. We are currently recruiting and vetting applicant dealerships and expect to announce our inaugural group of authorized dealers in 2021.



41





Electric Vehicle Market Overview



United States


The number of electric vehicles (EVs) on U.S. roads is projected to reach 18.7 million in 2030, up from 1 million at the end of 2018. This is about 7% of the 259 million vehicles (cars and light trucks) expected to be on U.S. roads in 2030. EV sales in the United States were up 79% in 2018 while global EV sales grew 64% in the same year.



Canada


Sales for 2018 were over 150% higher than 2017 and saw more EVs sold across the country in 2018 than in the previous three years combined. Nearly 3% of all new vehicles are electric, a higher rate than in the United States.



Mexico


EV sales in Latin America increased by 90% in 2018 due to growing demand in Mexico, Colombia and Costa Rica. While the Latin American EV market is far smaller than East Asia, Europe and North America, accounting for less than 1% of global EV sales in 2018, it is starting to grow thanks to a handful of incentives and targets. Mexico and Costa Rica, for example, exempt EVs from numerous taxes while Colombia has an ambitious target of 600,000 EVs on its roads by 2030.

Companies are also increasing their activity. BYD Co. now sells electric buses across the region and Tesla Inc. recently launched its best-selling Model 3 in Mexico.




Caribbean



While most Caribbean islands are rapidly modernizing their electric grids, the modernization of transportation systems has lagged. Is change in the air? In November, the government of Bermuda signed a memorandum of understanding with the Rocky Mountain Institute (RMI), embracing a plan to fully transition the island's transportation sector to EVs.

The case for EVs is strong in Bermuda, as it is across the Caribbean. With predominantly flat terrain and driving distances that are short enough to eliminate "range anxiety," EVs make perfect sense.

Caribbean nations are uniquely positioned to reap major benefits from EVs with the abundance of sunshine that could provide renewable solar power on a significant scale. EV adoption would also reduce reliance on fuel imports, which creates extreme economic vulnerability linked to oil price fluctuations as well as contribute to disaster resilience through energy storage-EV batteries can serve as backup power sources during hurricanes.

Competition in the EV Market

The EV market is highly competitive and evolving rapidly, with new manufacturers and distributors consistently entering the industry to satisfy actual and expected growth in the demand for competitively priced vehicles. As a result, we expect that we will experience significant competition from new and established manufacturers, marketers and distributors. These include niche manufacturers of specialty electric vehicles, and large established manufacturers of automobiles. These, including manufacturers of EVs such as the Tesla Model S, the Chevrolet Volt and the Nissan Leaf.

Most of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Virtually all of our competitors have more extensive customer bases and broader customer and industry relationships than we do. In addition, almost all of these companies have longer operating histories and greater name recognition than we do. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively.




Other Recent Developments



On November 1, 2020, the Company entered into an Advisory Services and Consulting Agreement with a third party for a term of twelve (12) months, and which may be terminated by either party after six (6) months, whereby the Company agrees to pay a non-refundable cash consulting fee of $3,500 per month as well as consideration of a number of restricted common shares of the Company's to be mutually determined by the parties upon the Company's listing on a U.S. national exchange.

On December 23, 2020, the Company entered into a two-year redeemable stock purchase agreement (the "Series F SPA") with a third party for the purchase of shares of the Company's Series F Preferred stock at a price of $1,000 per share. In addition, the Company agreed to issued 3,000,000 Warrants, exercisable into one common share per warrant at an exercise price of $0.50, for a term of 5 years and are not eligible for cashless exercise. On the date of the SPA, the third party purchased 1,500 Series F Preferred shares in exchange for $1,500,000. Further, under the terms of the SPA, the third party agreed to purchase an additional 1,500 Series F Preferred shares upon the filing by the Company of a registration statement with the Securities and Exchange Commission (the "Registration Statement") registering the common shares underlying the Series F Preferred shares and underlying the warrants. At the Company's request, the third party agrees to purchase an additional 1,000 Series F Preferred shares every thirty days (an "Additional Closing") as long as the Registration Statement remains effective and the Company's average daily trading volume for the third trading days prior to an Additional Closing is at least $500,000 per day.




42

On January 29, 2021, the Company issued a preliminary prospectus (the "Registration Statement") to offer and sell up to 10,000,000 common shares, which will consist of up to 3,000,000 common shares issuable upon exercise of outstanding warrants, and up to 7,000,000 common shares upon conversion of certain Series F Preferred shares of the Company.

On April 21, 2021, the Company filed with the Securities and Exchange Commission a Registration Statement on Form S-1 to register a firm commitment underwritten public offering of Units consisting of common shares and common share purchase warrants in the aggregate amount of $15,000,000 (the "Offering"). The offering price of the Units will be determined between the underwriter and the Company at the time of pricing, considering the Company's historical performance and capital structure, prevailing market conditions, and overall assessment of the Company's business, and may be at a discount to the then current market price.

In connection with the Offering, the Company has applied to list its common stock and warrants on the Nasdaq Capital Market under the symbols "DSGT" and "DSGTW". No assurance can be given that the Company's application will be approved or that the trading prices of its common stock on the OTCQB market will be indicative of the prices of its common stock if its common stock were traded on the Nasdaq Capital Market. If the listing application is not approved by the Nasdaq Stock Market, the Company will not be able to consummate the Offering and will terminate the Offering.

On September 13, 2021, the Company entered into a securities purchase agreement with a third party. Pursuant to the agreement, the Company received cash proceeds of $2,000,000 on September 13, 2021 in exchange for the issuance of an unsecured convertible promissory note in the principal amount of $2,400,000, which was inclusive of a $400,000 original issue discount and bears interest at 9% per annum to the holder. If the convertible note is not paid in full before December 12, 2021, an additional $100,000 of guaranteed interest will be added to the note. An additional $100,000 of guaranteed interest will be added to the note on the 12th day of each succeeding month during which any portion of the convertible note remains unpaid. Any principal or interest on the convertible note that is not paid when due or during any period of default bears interest at 24% per annum.

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.

On February 17, 2022, the Company entered into a Waiver of Conditions to the Share Purchase Agreement (the "SPA") dated December 13, 2021. The Company received two payments in the amount of $250,000 on each of February 28, 2022 and March 31, 2022. The Company agrees to repay these amounts, on an ongoing basis, with an amount equaling 20% of any gross proceeds collected by the Company until such time that 250 shares of the Series F Preferred Stock issued pursuant to this agreement and the SPA are redeemed in full. Under the original terms of the SPA, the redemption required a 15% premium, and due to the redemption being mandatory, the above transactions were treated as loans and not as mezzanine equity. A Redemption Premium of $75,000 was recognized, and recorded as part of the loan.

During the three months ended March 31, 2022, the Company made required payments in the amount of $20,411, which was applied against the loan payable.



Material Contracts


On March 2, 2020, we entered into an advisory services agreement with a third party. Under the terms of this five-year agreement, the third party has agreed to provide the Company with strategic brand and business positioning, strategic marketing, concept development and ongoing strategic consulting services. In consideration of the services to be rendered by the third party, the Company has agreed to (1) make a cash payment in the amount of $350,000 payable in several tranches following the Company's completion of future financings of the Company, and monthly payments of $10,000 following the first twelve months of the engagement, and (2) issue a five-year warrant to purchase 2,829,859 at an exercise price of $0.25 per share, upon the execution of the agreement (the "First Warrant"), and a five-year warrant to purchase such number the Company's common shares that is equal to 10% of the Company's common shares calculated on a fully diluted basis as of the closing date of the future financing, at an exercise price per share equal to the 80% of the price of the Company's securities in such future financing less the number of shares represented by the First Warrant. The warrants contains, among other provisions customary for the instruments of this nature, provisions pertaining to cashless exercise, and two-year piggy-back registration rights which entitle the holders of the warrants to register the common shares underlying their warrants alongside other registrable securities of the Company, subject to underwriter cutbacks in case of underwritten public offering(s) of the Company's securities, if any.

On July 10, 2020, we signed a two-year operating lease agreement for retail, showroom and warehouse space in Fairfield, CA expiring on August 31, 2022 and with the first right of refusal for a 3-5-year lease extension, if written notice is provided prior to the expiration of the current term. The annual rent for the premises starts at $93,000. The lease includes a rent-free period with rent payments commencing on October 1, 2020.

On July 14, 2020, we signed a three-year operating lease agreement expiring on July 31, 2023 for office space in Surrey, BC with two rights to renew, each for an additional two-year term, if written notice is provided no later than 9 months prior to the expiration of the current term. The annual base rent for the premises starts at CAD$51,552, with additional rent of CAD$1,551 per month for operating expenses. The lease includes a rent-free period with rent payments commencing on November 1, 2020.

On October 21, 2020, we entered into an Advisory Services and Data Delivery Agreement with a third party for a term of nine (9) months, and which may be renewed for an additional nine (9) months upon mutual written agreement, whereby the Company agrees to issue 500,000 common shares for advisory services valued at $100,000 and 1,500,000 common shares valued at $300,000 for the purchase of sector-specific data records for marketing purposes.

On October 26, 2020, we entered into an amended Investor Relations Agreement with a third party for a term of twelve (months), expiring on October 3, 2021, whereby the Company agrees to issue 100 Series B preferred shares convertible into 1,000,000 common shares and 1,000,000 warrants exercisable into common shares at an exercise price of $0.25 for a period of three years.

On November 1, 2020, we entered into an Advisory Services and Consulting Agreement with a third party for a term of twelve (12) months, and which may be terminated by either party after six (6) months, whereby the Company agrees to pay a non-refundable cash consulting fee of $3,500 per month as well as consideration of an amount of restricted shares of the Company's common stock to be determined as mutually agreed upon by the parties upon the Company's listing on a U.S. national exchange. (Encore)



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On December 23, 2020, we entered into a two-year redeemable stock purchase agreement (the "Series F SPA") with a third party for the purchase of shares of the Company's Series F Preferred stock ("Series F") at a price of $1,000 per share. In addition, the Company agreed to issued 3,000,000 Warrants, exercisable into one common share per Warrant at an exercise price of $0.50, for a term of 5 years and are not eligible for cashless exercise. On the date of the SPA, the third party purchased 1,500 shares of Series F in exchange for $1,500,000. Further, under the terms of the SPA, the third party agreed to purchase an additional 1,500 shares of Series F upon the filing by the Company of a registration statement with the Securities and Exchange Commission (the "Registration Statement") registering the shares underlying the Series F and underlying the Warrants. At the Company's request, the third party agrees to purchase an additional 1,000 shares of Series F every thirty days (an "Additional Closing") as long as the Registration Statement remains effective and the Company's average daily trading volume for the third trading days prior to an Additional Closing is at least $500,000 per day.



Description of Property


Our principal executive office is located at 207-15272 Croydon Drive, Surrey, BC, V3Z 0Z5 Canada, where we lease approximately 2,024 square feet of office space. On July 14, 2020, the Company entered into a three-year operating lease agreement expiring on July 31, 2023 for office space in Surrey, BC with two rights to renew, each for an additional two-year term, if written notice is provided no later than 9 months prior to the expiration of the current term. The annual base rent for the premises starts at CAD$51,552, with additional rent of CAD$1,551 per month for operating expenses. The lease includes a rent-free period with rent payments commencing on November 1, 2020.

Imperium Motors has an office located at 4670 Central Way, Unit D, Fairfield, California 94534, which is also the location of our Imperium Experience Center. On July 10, 2020, the Company entered into a two-year operating lease agreement for retail, showroom and warehouse space in Fairfield, CA expiring on August 31, 2022 and with the first right of refusal for a 3-5-year lease extension, if written notice is provided prior to the expiration of the current term. The annual rent for the premises starts at $93,000. The lease includes a rent-free period with rent payments commencing on October 1, 2020.



Intellectual Property



General


Our success will depend in part on our ability to protect our products and product candidates by obtaining and maintaining a strong proprietary position both in the United States and in other countries. To develop and maintain our proprietary position, we will rely on patent protection, trade secrets, know-how, continuing technological innovations and licensing opportunities. In that regard, we retain and rely on the advice of legal counsel specialized in the field of intellectual property.



Patents



DSG owns two U.S. patents:


? US Patent No. 8,836,490 for a "Vehicle Management" was issued September 16,

2014 and expires June 29, 2031.

? US Patent No. 9,280,902 for a "Facilities Management" was issued March 8, 2016

and expires January 24, 2032.




Domain Names


We have registered and own the domain name of our websites www.vantage-tag.com, www.dsgtglobal.com, and www.imperiummotorcompany.com.



Copyright


We own the common law copyright in the contents of our websites (www.vantage-tag.com, www.dsgtglobal.com, www.imperiummotorcompany.com) and our various promotional materials.



Trademarks


We own the common-law trademark rights in our corporate names, product names, and associated logos, including "DSG TAG", "TAG Golf", "ECO TAG", "TAG Text", "TAG Touch", "TAG", "TAG Commercial", "TAG Military", "Imperium", and "Imperium Motors". We have not applied to register any trademarks with the U.S. Patent and Trademark Office or with any other national or multi-national trademark authority. We assert common law trademark rights in our corporate name and those of our subsidiaries.



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Employees


As of the date of this quarterly report we have thirty full-time employees in general and administrative, operations, engineering, research and development, business development, sales and marketing, and finance. We also engage independent contractors and consultants from time to time on an as-needed basis to supplement our core staff.



Government Regulation


As a vehicle importer and distributor, we are required to ensure that all vehicles meet applicable safety and environmental standards. In the United States, our vehicles must meet the applicable provisions of the U.S. Code of Federal Regulations ("CFR") Title 49 - Transportation. This includes providing Manufacture Identification information (49 CFR Part 566), VIN-deciphering information (49 CFR Part 565, and certifying that our vehicles meet or exceed the applicable sections of the Federal Motor Vehicle Safety Standards (40 CFR Part 571) and Environmental Protection Agency noise emission standards (40 CFR 205).

In Canada, issuance of the National Safety Mark (the "NSM") by the Minister of Transport for Canada will be required to distribute vehicles in Canada for the Canadian market. Receipt of the NSM is contingent on us demonstrating that our vehicles are designed and manufactured to meet or exceed the applicable sections of the Canadian Motor Vehicle Safety Act (C.R.C. Chapter 1038) and that appropriate records are maintained.

Automotive dealers, including us and the members of our dealership network, are also regulated by, among other agencies, the Federal Trade Commission (FTC) and the Federal Reserve Board. Congress even enhanced the FTC's rulemaking authority over motor vehicle dealers as part of the Wall Street Reform law. The major federal statutes and regulations that currently cover automobile dealers include the Truth in Lending Act, Federal Consumer Leasing Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Gramm-Leach-Blilely Act, Federal Trade Commission Act, etc.

In addition to federal laws, motor vehicle dealers are subject to rigorous state laws and regulations, licensed in every state, and bonded in virtually in every state. Dealers are subject to state consumer protection statutes, enforced by 50 state consumer protection agencies and state attorneys general.

In addition to regulations applicable to businesses in general, we may also be subject to direct regulation by governmental agencies, including the FCC and Department of Defense.

Components of Our Results of Operations



Revenue


We derive revenue from four different sources, as follows:



  ? Systems sales revenue, which consists of the sales price paid by those
    customers who purchase or 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 the TAG systems.

  ? Monthly rental fees are paid by those customers that rent the TAG system
    hardware. The amount of a customer's monthly payment varies based on the type
    of equipment rented (a TAG, a TAG and TEXT, or a TAG and INFINITY).

  ? Programmatic advertising revenue is a new source of revenue that we believe
    has the potential to be strategic for us in the future. We are in the process
    of implementing and designing software to provide advertising and other media
    functionality on our INFINITY units.

  ? Electronic fleet sales revenue is a new source of revenue which consists
    primarily of wholesale distribution sales of our electronic fleet including
    vehicles, e-bikes and e-scooters.




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We recognize 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. We accrue for warranty costs, sales returns, and other allowances based on its historical experience.

Our revenue recognition policies are discussed in more detail under "Note 3 - Summary of Significant Accounting Policies" in the notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Cost of Revenue

Our cost of revenue consists primarily of hardware purchases, wireless data fees, mapping, installation costs, freight expenses and inventory adjustments.

  ? Hardware purchases. Our equipment purchases consist primarily of TAG system
    control units, TEXT display, and INFINITY displays. The TAG system control
    unit is sold as a stand-alone unit or in conjunction with our TEXT
    alphanumeric display or INFINITY high definition "touch activated" display.
    Hardware purchases also include costs of components used during installations,
    such as cables, mounting solutions, and other miscellaneous equipment.

  ? Wireless data fees. Our wireless data fees consist primarily of the data fees
    charged by outside providers of GPS tracking used in all of our TAG system
    control units.

  ? Mapping. Our mapping costs consist of aerial mapping, course map, geofencing,
    and 3D flyovers for golf courses. This cost is incurred at the time of
    hardware installation.

  ? Installation. Our installation costs consist primarily of costs incurred by
    our employed service technicians for the cost of travel, meals, and
    miscellaneous components required during installations. In addition, these
    costs also include fees paid to external contractors for installations on a
    project-by-project basis.

  ? Electronic fleet purchases. Our electronic fleet purchases consists of the
    landed cost of electronic vehicles, e-bikes and e-scooters which includes the
    cost of the unit, and any relevant freight and import fees.

  ? Freight expenses and Inventory adjustments. Our freight expenses consist
    primarily of costs to ship hardware to courses for installations. Our
    inventory adjustments include inventory write offs, write downs, and other
    adjustments to the cost of inventory.

  ? Operating expenses & other income (expenses) We classify our operating
    expenses and other income (expenses) into six categories: compensation,
    general and administrative, warranty, foreign currency exchange, and finance
    costs. Our operating expenses consist primarily of sales and marketing,
    salaries and wages, consulting fees, professional fees, trade shows, software
    development, and allocated costs. Allocated costs include charges for
    facilities, office expenses, telephones and other miscellaneous expenses. Our
    other income (expenses) primarily consists of financing costs and foreign
    exchange gains or losses.



    ?   Compensation expense. Our compensation expenses consist primarily of
        personnel costs, such as employee salaries, payroll expenses, and employee
        benefits. This includes salaries for management, administration,
        engineering, sales and marketing, and service support technicians.
        Salaries and wages directly related to projects or research and
        development are expensed as incurred to their operating expense category.

    ?   General and administrative. Our general and administrative expenses
        consist primarily of sales and marketing, commissions, travel, trade
        shows, consultant fees, insurance, and compliance and other administrative
        functions, as well as accounting and legal professional services fees,
        allocated costs and other corporate expenses. Sales and marketing includes
        brand marketing, marketing materials, and media management.

    ?   Warranty expense (recovery). Our warranty expenses consist primarily of
        associated material product costs, labor costs for technical support
        staff, and other associated overhead. Warranty costs are expensed as they
        are incurred.



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    ?   Bad debt. Our bad debt expense consists primarily of amounts written down
        for doubtful accounts recorded on trade receivables.

    ?   Depreciation and amortization. Our depreciation and amortization costs
        consist primarily of depreciation and amortization on fixed assets,
        equipment on lease and intangible assets.

    ?   Foreign currency exchange. Our foreign currency exchange consists
        primarily of foreign exchange fluctuations recorded in Canadian dollar
        (CAD), British Pounds (GBP), or Euro (EUR) at the rates of exchange in
        effect when the transaction occurred.

    ?   Finance costs. Our finance costs consist primarily of investor interest
        expense, investor commission fees, and other financing charges for
        obtaining debt financing.


We expect to continue to invest in corporate infrastructure and incur additional expenses associated with being a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs associated with Section 404 of the Sarbanes-Oxley Act of 2002. In addition, we expect sales and marketing expenses to increase in absolute dollars in future periods. In particular, we expect to incur additional marketing costs to support the expansion of our offerings in new markets like commercial fleet management and agriculture.

Results of Operations

The following table summarizes key items of comparison and their related increase (decrease) for the three months ended March 31, 2022, and 2021:

                                            For the Three Months
                                                    Ended                   Increase
                                         31-Mar-22        31-Mar-21        (Decrease)
                                            ($)              ($)              (%)
Revenues                                     744,251          387,106             92.3
Cost of revenue                              486,957          130,692            272.6
Gross profit                                 257,294          256,414              0.3

Operating expenses:
Compensation expense                         455,954        1,263,384            (63.9 )
General and administrative expense           678,489          401,543             69.0
Bad debt expense                              12,482            4,580            172.5
Depreciation and amortization expense          3,137            5,123            (38.8 )
Total operating expenses                   1,150,062        1,674,630            (31.3 )
Loss from operations                        (892,768 )     (1,418,216 )          (37.0 )

Other income (expense)
Foreign currency exchange                    (28,433 )        (14,826 )           91.8
Other income                                       -           16,645           (100.0 )
Redemption premium                            (3,062 )              -                -
Gain (Loss) on disposal                        3,960                -                -
Gain (Loss) on extinguishment of debt         10,240           76,316            (86.6 )
Finance costs                               (556,612 )        (11,490 )         4744.3
Total other expense                         (573,907 )         66,645           (961.1 )

Net loss                                  (1,466,675 )     (1,351,571 )            8.5


As of March 31, 2022, the Company had signed contracts totaling over $2.75 million in gross sales, inclusive of recurring revenue on GPS tracking system. Due to delays related to manufacturing and shipment of product, fulfilment was not yet completely satisfied for the fleet management solution (GPS and Infinity), and only $744,251 was recognizable as a revenue stream including our new line of Shelby and Vantage golf carts, for the three months ended March 31, 2022. As product becomes available, DSG expects to satisfy its performance obligations on the remaining contracts for fleet management solution during the second quarter of fiscal 2022.

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Comparison of the three months ended March 30, 2022, and 2021:

Revenue

               For the Three Months Ended
                        March 31
                                          %
             2022          2021        Change

Revenue   $  744,251     $ 387,106        92.3


Revenue increased by $357,145 or 92.3% for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Sales increased for the three months ended, year over year, as a result of the Company's new licensed Shelby Golf Cart product release, in addition to GPS Infinity sales. 80% or approximately $595,000 of the revenue recognized as of March 31, 2022 was associated to GPS and Fleet management solution, the remaining 20% of the revenue is attributed to new line of Licensed Shelby golf carts and electric low speed vehicle division.

Cost of Revenue

                      For the Three Months Ended
                               March 31,
                                                 %
                    2022          2021        Change

Cost of revenue   $ 486,957     $ 130,692       272.6


Cost of revenue increased by $356,265 or 272.6% for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The table below outlines the differences in detail:


                                          For the Three Months Ended
                          March 31,      March 31,                            %
                             2022           2021         Difference       Difference
Cost of goods             $  453,641     $  109,920     $    343,721            312.7
Wireless fees                 30,417         18,720           11,697             62.5
Mapping & Freight Costs        2,899          2,052              847             41.3
                          $  486,957     $  130,692     $    356,265            272.6


Cost of sales increased by 272.6% for the three months ended March 31, 2022. After introducing our new line of licensed Shelby golf carts, our cost of goods and revenue expanded considerably. The increase in the cost of goods as compared to the three months ended March 31, 2021 is due to chip shortages, increase of manufacturing cost of our primary part of our technology, and increase of freight costs. Our Wireless fees increased due to new satisfied installations of our fleet management solution (GPS and Infinity) which is correlated to our increase of revenue.

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Compensation Expense

                            For the Three months ended
                                     March 31,
                                                        %
                         2022           2021         Change

Compensation expense   $ 455,954     $ 1,263,384       (63.9 )



Compensation expense decreased by $807,430, or 63.9%, for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021. This is related to a reduction of cost of labor of internal projects allocated to the GPS tracking system that came to completion by the end of 2021 and beginning of 2022.

General and Administration Expense

General & administration expense increased by $276,946 or 69.0% for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The table below outlines the differences in detail:

                                                    For the Three Months Ended
                                    March 31,       March 31                            %
                                      2022            2021         Difference       Difference
Accounting & legal                 $    24,261     $   54,548     $    (29,928 )          (54.9 )
Marketing & advertising                 85,135          8,221           76,914            935.6
Subcontractor & commissions            139,967        168,099          (28,132 )          (16.7 )
Hardware                                16,059          8,774            7,285             83.0
Amortization on ROU asset                  969              -              969                -
Office expense, rent, software,
bank & credit card charges,
telephone & meals                      411,738        161,901          249,838            154.3
                                   $   678,489     $  401,543     $    276,946             69.0


The overall increase in general and admin expenses was primarily due to increases in office expense, rent, software, bank & credit card charges, telephone & meals, and marketing & advertising expense. The increased of these general and administration expenses are related to the company's participation on the annual PGA show, to introduce our Vantage golf cart line of products, Licensed Shelby golf cart and new 10' Infinity. Due to COVID, by the three months ended March 31 2021, the PGA show was performed online not incurring in extra cost by the company to assist the annual show.

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Foreign Currency Exchange

                                      For the Three Months Ended
                                              March 31,
                                                                 %
                                    2022          2021        Change

Foreign currency exchange loss $ (28,433 ) $ (14,826 ) 91.8

For the three months ended March 31, 2022, we recognized a foreign exchange loss of $28,433 compared to a loss of $14,826 for the three months ended March 31, 2021. The changes were due to changes in foreign currency rates on payables, receivables, loans and other foreign balances denominated in currencies other than the functional currencies of the legal entities in which the transactions are recorded. Foreign currency fluctuations are primarily from the United States dollar, Canadian dollar, Euro and British pound.

Gain (Loss) on extinguishment of debt

                                            For the Three Months Ended
                                                     March 31,
                                                                       %
                                           2022          2021       Change

Gain (Loss) on extinguishment of debt $ 10,240 $ 76,316 (86.6 )

The Company recorded a gain of $10,240 for the three months ended March 31, 2022 compared to a gain of $76,316 for the comparative period. The Company recorded a gain for amounts owing to various vendors as not deemed payable or as settled. Loss was recorded in the comparative period as a result of conversions of convertible debt and accrued interest.

Finance Costs

                     For the Three Months Ended
                              March 31,
                                                %
                   2022          2021         Change

Finance costs   $ (556,612 )   $ (11,490 )     4744.3


Finance costs increased by $545,122 or 4744.3%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The increase is as a result of interest on convertible debt being recorded in the three months ended March 31, 2022, where none existed in the prior comparable quarter.

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Net Loss

                   For the Three Months ended
                           March 31,
                                                %
               2022             2021          Change

Net loss   $ (1,466,675 )   $ (1,351,571 )        8.5


As a result of the above factors, net loss increased by $115,104 or 8.5% for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Liquidity and Capital Resources

From our incorporation on April 17, 2008 through March 31, 2022, we have financed our operations, capital expenditures and working capital needs through the sale of common shares and the incurrence of indebtedness, including term loans, convertible loans, revolving lines of credit and purchase order financing. As of March 31, 2022, we had $5,581,113 in total liabilities, the majority of which matures within the next twelve months.

We had cash in the amount of $285,433 as of March 31, 2022, as compared to $275,383 as of December 31, 2021. We had a working capital deficit of $3,498,092 as of March 31, 2022 compared to working capital deficit of $2,314,163 as of December 31, 2021.

Liquidity and Financial Condition

Our financial position as of March 31, 2022, and December 31, 2021, and the changes for the periods then ended are as follows:

Working Capital

                                   March 31, 2022       December 31, 2021
            Current assets        $      1,909,079     $         1,700,226
            Current liabilities   $      5,407,171     $         4,014,389
            Working capital       $     (3,498,092 )   $        (2,314,163 )



Cash Flow Analysis

Our cash flows from operating, investing, and financing activities are
summarized as follows:

                                                     March 31,
                                               2022            2021

Net cash used in by operating activities $ (750,481 ) $ (1,409,822 ) Net cash used in investing activities

            8,799          (10,573 )

Net cash provided by financing activities 729,589 1,306,111 Effect of exchange rate changes on cash 22,143

           16,076
Net decrease in cash                            10,050          (98,208 )
Cash at beginning of period                    275,383        1,372,016
Cash at end of period                       $  285,433     $  1,273,808


Net Cash Used in Operating Activities.

During the three months ended March 31, 2022, cash used in operations totaled $750,481. This reflects the net loss of $1,466,675 adjusted for $716,194 changes in non-cash working capital items and adjustments for non-cash items. Non-cash and working capital adjustments consisted primarily of non-cash change in accretion of discounts on debt of $167,355, offset by increase in prepaid expense of $174,650, increase in trade payables and accruals of $596,277, decrease in accounts receivable and other receivables of $165,574, and decrease in lease receivable of $161,963.

Net Cash Used in Investing Activities.

The Company purchased equipment for $1,426, and disposed of equipment for proceeds of $10,225.

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Net Cash Provided by Financing Activities.

Net cash from financing activities during the three months ended March 31, 2022 totaled $729,589, which mainly relates to $250,000 received from issuing preferred shares and $500,000 received from notes payable partially offset by repayments made of $20,411 on notes payable.

Outstanding Indebtedness

Our current indebtedness as of March 31, 2022 is comprised of the following:

  ? Unsecured, convertible note payable to a former related party with an
    outstanding principal amount of $310,000, bearing interest at 5% per annum,
    mature and in default;

  ? Senior secured, convertible note payable with an outstanding principal amount
    of $Nil, and a carrying value of $9,487 relating to an outstanding penalty;

  ? Unsecured, promissory note with carrying value of $1,926,263 and outstanding
    principal amount of $1,897,500, bearing interest at 9% per annum and 24% per
    annum in default, maturing June 20, 2022. If not repaid by December 12, 2021,
    an additional $100,000 of guaranteed interest will be added on December 12,
    2021 and the 12th day of each succeeding month during which any portion of the
    convertible note remains unpaid. 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;



  ? Unsecured loan payable with an outstanding principal amount of $31,490
    (CAD$40,000). The loan is non-interest bearing and eligible for CAD$10,000
    forgiveness if repaid by December 31, 2022. If not repaid by December 31,
    2022, the loan bears interest at 5% per annum and is due on December 31, 2025;

  ? Unsecured loan payable with an outstanding principal amount of $31,490
    (CAD$40,000). The loan is non-interest bearing and eligible for CAD$10,000
    forgiveness if repaid by December 31, 2022. If not repaid by December 31,
    2022, the loan bears interest at 5% per annum and is due on December 31, 2025;

  ? Unsecured loan payable with an outstanding principal amount of $30,065. The
    loan bears interest at 1% per annum and is due on May 21, 2022 with payments
    deferred for the first six months of the term;

  ? Secured loan payable with an outstanding principal amount of $150,000. The
    loan bears interest at 3.75% per annum and is due on June 5, 2050. The loan is
    secured by all tangible and intangible assets of Company. Fixed payments of
    $731 are due monthly and begin 12 months from the date of the loan which is
    applied against any accrued interest first.

  ? Series F Preferred Stock payments, two payments of $250,000 received on each
    of February 28, 2022 and March 31, 2022. Until such time that the 5000 shares
    of the Series F Preferred Stock are redeemed in full, an amount equal to 20%
    of any gross proceeds collected by the Company are also required to be
    remitted. Under the original terms of the SPA, redemption of preferred F
    series shares requires a 15% premium payment on the face value. As such, a
    Redemption Premium of $75,000 was recognized, and recorded as interest
    expense, included as part of the loan, and will be repaid as part of the 20%
    gross sales remittance. As at March 31, 2022, there was a balance of $482,651
    outstanding.


Related Party Transactions

During the three months ended March 31, 2022 the Company incurred $191,531 (2021 - $162,362) in salaries which includes a bonus of $30,000 (2021 - $87,362) in fees to the President, CEO, and CFO of the Company. The Company also repaid $28,118 of management fees and salaries previously owing to the President, CEO, and CFO of the Company as of December 31, 2021. As at March 31, 2022, the Company owed $72,645 (December 31, 2021 - $28,118) to the President, CEO, and CFO of the Company for management fees and salaries. Amounts owed and owing are unsecured, non-interest bearing, and due on demand.


On March 4, 2021, the Company issued an aggregate of 16 shares of Series B
convertible preferred shares to the Company's board of directors for past
services. These preferred shares were valued at $849,600 based on the fair value
of the underlying common stock. The issuance is recorded under compensation
expense.

                    Director             # of Preferred Shares
                    Stephen Johnston               4
                    James B Singerling             4
                    Robert Silzer                  4
                    Carol Cookerly                 2
                    Michael Leemhuis               2
                    Total                         16


The Series B preferred stock convertible on a 1 for 100,000 basis into common shares.

52





Prospective Capital Needs

We estimate our operating expenses and working capital requirements for the twelve-month period to be as follows:

       Estimated Expenses for the Twelve-Month Period ending March 31, 2022
     General and administrative                        $           2,404,000
     Research and development                                      2,043,600
     Marketing                                                       755,000
     Sales and dealer network                                        540,000
     Payroll overhead                                              1,259,000
     Service and maintenance                                         785,900
     Assembly facility                                             1,750,000
     Inventory                                                    10,700,000
     Total                                             $          20,237,500


As noted earlier, during the three months ended March 31, 2022, cash used in operations totaled $750,481 and is expected to increase in the future periods as the Company obtains more contract sales. At present, our cash requirements for the next 12 months outweigh the funds available. Of the $20,237,500 that we require for the next 12 months, we had $285,433 in cash as of March 31, 2022, and working capital deficit of $3,498,092. Our principal sources of liquidity are cash generated from product sales, securities purchase agreements and debt financings. As at March 31, 2022, the Company had secured signed contracts of over $2.75 million of which approximately $0.7 million was recognized in the first quarter of fiscal 2022. The Company expects to satisfy the majority of its performance obligations during the second quarter of fiscal 2022 totaling approximately $1.0 million. In order to achieve sustained profitability and positive cash flows from operations, we will need to increase revenue and/or reduce operating expenses. Our ability to maintain, or increase, current revenue levels to achieve and sustain profitability will depend, in part, on demand for our products.

In order to improve our liquidity, we also plan to pursue additional equity financing from private investors and a registered public offering. We do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources obligations and execute our business plan. There can be no assurances that we will be able to raise additional capital on acceptable terms or at all, which would adversely affect our ability to achieve our business objectives.

On April 21, 2021, we filed with the Securities and Exchange Commission a Registration Statement on Form S-1 to register a firm commitment underwritten public offering of Units consisting of common shares and common share purchase warrants in the aggregate amount of $15,000,000 (the "Offering"). The offering price of the Units will be determined between the underwriter and the Company at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and may be at a discount to the then current market price.

In connection with the Offering, we have applied to list its common stock and warrants on the Nasdaq Capital Market under the symbols "DSGT" and "DSGTW". No assurance can be given that our application will be approved or that the trading prices of its common stock on the OTCQB market will be indicative of the prices of its common stock if its common stock were traded on the Nasdaq Capital Market. If the listing application is not approved by the Nasdaq Stock Market, we will not be able to consummate the Offering and will terminate the Offering.

Off-Balance Sheet Transactions

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statements presentation, financial condition, results of operations, and cash flows will be affected.

53




We believe that the assumptions and estimates associated with revenue recognition, foreign currency and foreign currency transactions and comprehensive loss have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see the notes to our condensed consolidated financial statements.

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Financials (USD)
Sales 2021 2,09 M - -
Net income 2021 -6,38 M - -
Net Debt 2021 2,53 M - -
P/E ratio 2021 -2,17x
Yield 2021 -
Capitalization 9,45 M 9,45 M -
EV / Sales 2020 136x
EV / Sales 2021 9,18x
Nbr of Employees -
Free-Float 100,0%
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Managers and Directors
Robert C. Silzer President, CEO, CFO, Secretary & Treasurer
Stephen Johnston Independent Director
James Singerling Director
Carol Cookerly Director
Michael G. Leemhuis Director
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