Forward-Looking Statements
This Quarterly Report on Form 10-Q filed by Duesenberg Technologies Inc.
contains forward-looking statements. These are statements regarding financial
and operating performance and results and other statements that are not
historical facts. Words such as "believe," "anticipate," "expect," "intend,"
"plan," "may," and other similar expressions identify forward-looking
statements. In addition, any statements that refer to expectations, projections
or other characterizations of future events or circumstances are forward-looking
statements. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, the following:
·our ability to execute prospective business plans;
·inexperience in developing and mass-producing electric vehicles;
·actions by government authorities, including changes in government regulation;
·changes in the electric vehicle market;
·dependency on certain key personnel and any inability to retain and attract
qualified personnel;
·developments in alternative technologies or improvements in the internal
combustion engine;
·disruption of supply or shortage of raw materials;
·failure of our conceptual vehicles to perform as expected;
·failure to manage future growth effectively;
·future decisions by management in response to changing conditions;
·inability to design, develop, market and sell electric vehicles and services
that address additional market opportunities;
·inability to keep up with advances in electric vehicle technology;
·inability to reduce and adequately control operating costs;
·inability to succeed in maintaining and strengthening the Duesenberg brand;
·labor and employment risks;
·misjudgments in the course of preparing forward-looking statements;
·our ability to raise sufficient funds to carry out our proposed business plan;
·the unavailability, reduction or elimination of government and economic
incentives;
·uncertainties associated with legal proceedings;
·general economic conditions, because they may affect our ability to raise
money;
·our ability to raise enough money to continue our operations;
·changes in regulatory requirements that adversely affect our business; and
·other uncertainties, all of which are difficult to predict and many of which
are beyond our control.
While we consider these assumptions as reasonable, based on information
currently available to us, these assumptions may prove to be incorrect. Actual
results may vary from such forward-looking information for a variety of reasons,
including but not limited to risks and uncertainties disclosed in the section
titled "Part II - Item 1A - Risk Factors."
You are cautioned not to place undue reliance on these forward-looking
statements, which relate only to events as of the date on which the statements
are made. Except as required by applicable securities laws, we undertake no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that arise after the date of this quarterly report. You should
refer to and carefully review the information in future documents we file with
the Securities and Exchange Commission (the "SEC").
General
You should read this discussion and analysis in conjunction with our unaudited
condensed consolidated financial statements and related notes included in this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and related notes for the fiscal year ended October 31, 2022, included in our
Annual Report on Form 10-K. The inclusion of supplementary analytical and
related information may require us to make estimates and assumptions to enable
us to fairly present, in all material respects, our analysis of trends and
expectations with respect to our results of operations and the financial
position taken as a whole. Actual results may vary from the estimates and
assumptions we make.
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We were incorporated on August 4, 2010, under the laws of the State of Nevada
under the name "SOS Link Corporation". On April 15, 2011, we changed our place
of incorporation from the State of Nevada to the Province of British Columbia,
Canada and concurrently changed our name to Venza Gold Corp. On January 6, 2014,
we changed our name to CoreComm Solutions Inc., on February 11, 2015, we changed
our name to VGrab Communications Inc., and on December 23, 2020, we changed our
name to Duesenberg Technologies Inc.
As of the date of this Quarterly Report on Form 10-Q we have the following
subsidiaries:
Name Incorporation Incorporation Date
Duesenberg Malaysia Sdn Malaysia Companies Act 2016 May 17, 2018
Bhd.
Duesenberg Technologies Companies Ordinance, Chapter 622 of February 18, 2019
Evolution Ltd the Laws of Hong Kong
Duesenberg Inc. Nevada, USA November 1, 2019
Duesenberg Heritage LLC Nevada, USA May 21, 2021
On May 17, 2018, we incorporated Duesenberg Technologies Malaysia Sdn Bhd.,
("Duesenberg Malaysia"), under the Malaysia Companies Act 2016. The main
business objective of Duesenberg Malaysia is to facilitate and source New Green
Energies, such as electric, hydrogen and solar. In addition, Duesenberg Malaysia
continues to maintain the developed online e-commerce. Since its incorporation,
Duesenberg Malaysia has been working on the development of its SMART System
prototype. Duesenberg's SMART System will consist of several modules, including
Duesenberg Membership system, which will allow its users to sign up for
service/maintenance of Duesenberg vehicles, purchase Duesenberg merchandize,
book high-end villas/planes/yachts, via internet or quick response code, also
known as "QR Code", Duesenberg Cloud Management System ("DCMS"), and Duesenberg
Database Management System ("DDMS"). DCMS and DDMS form the backbone of
Duesenberg's SMART System, allowing to integrate each future developed
Duesenberg SMART System's module into the platform. The Company is currently
testing the Duesenberg SMART System's functionality before integrating it as
part of the Duesenberg's New Energy Vehicle operating system, or marketing it to
potential clients as a stand-along system.
On February 18, 2019, we formed another subsidiary, Duesenberg Technologies
Evolution Ltd ("Duesenberg Evolution"). The main business objective of
Duesenberg Evolution is to research new technologies and software integration
development techniques and establish connections with potential strategic
partners in the Asian region and in P.R. China. In addition, Duesenberg
Evolution is to position itself as commodities trader to capture the current
market trends in P.R. China.
On August 14, 2019, Duesenberg Evolution finalized a development of a mobile
software application, Duesenberg WeChat Application, which was developed to be
used with smartphones in P.R. China using the WeChat on Android and Apple iOS
operating systems. Duesenberg WeChat Application allows its users to sign up for
memberships, deposit money, purchase products, redeem vouchers, and upload media
promotions onto the smartphones.
In March of 2020 we completed development of the prototype Duesenberg vending
machine (the "Vending Machine") and were attempting to organize the first test
run before starting a large-scale production and commercialization of the
Vending Machines. Prior to COVID-19 measures, we were expecting to have the
first prototype of the Vending Machine installed and operational at a local
university by the end of April with further units to be placed across the
university's campus and other universities across Malaysia. However, due to
COVID-19 measures, we were required to postpone the roll-out until the
restrictions set to prevent the spread of virus were lifted and businesses were
allowed to resume their normal operations.
The newly developed Vending Machine is customizable to sell variety of consumer
products ranging from traditional snacks, soft drinks, and coffee, to prepaid
mobile cards and other goods, while simultaneously displaying advertisements and
other various promotional content. Each Vending Machine is based on the
operating system developed by us, and is supplied with a credit card reader and
a QR Code reader, which facilitate not only payments with credit cards, but also
enables payments via eWallet and other membership-based payments. Due to the
Company's current focus on development of New Energy and Heritage Vehicles, we
have temporarily stopped our development and marketing of the Vending Machine.
On November 1, 2019, we incorporated Duesenberg Inc., a Nevada corporation
("Duesenberg Nevada"). The purpose of Duesenberg Nevada is to undertake the
development of Electric Vehicles ("Duesenberg EV") using the Duesenberg brand.
We were given the rights to use the Duesenberg trademark name in 2018. In order
to develop the Duesenberg
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EV we are planning to partner with 3-rd party developers and suppliers in the
United States of America. We plan on using our Duesenberg SMART System as part
of the Duesenberg EV's operating system.
On January 8, 2021, Duesenberg Nevada signed an agreement with Rocket Supreme,
the Barcelona, Spain automotive design house established by Christopher Reitz.
As of the date of this Quarterly Report on Form 10-Q, we have received initial
ergonomics exterior and interior data sheets and CAS IGES files as well as the
initial drafts of the exterior and interior designs for the Duesenberg EV. We
expect the final design of the first Duesenberg EV to be released in mid to late
2023. Based on the initial drafts, we commenced negotiations with various
manufacturers required to continue the development and manufacturing of the
required components for the Duesenberg's EV. Majority of current work is being
outsourced to Hampshire Automotive Sdn Bhd ("Hampshire Automotive"), an entity
related to the Company, who has already established necessary connections with
suppliers and other manufacturers required for manufacturing of the Heritage
Vehicles.
On May 21, 2021, we formed Duesenberg Heritage LLC. under the laws of the State
of Nevada ("Duesenberg Heritage"). Duesenberg Heritage's operations will be
focused on reproducing very limited Duesenberg heritage vehicles, the Duesenberg
Model J and Boat Tail series, which were originally manufactured in the 1920s
and 1930s. The Company is currently in the initial stage of its prototype
development and expects that the pre-production of the heritage vehicles from
that era (as well as possibly converting them to electrical models) will
commence during Fiscal 2023. The pre-production process is expected to be time
consuming and will require highly specialized and skilled tradesman. In order to
facilitate this, the management is actively looking to engage or hire qualified
consultants, and for the ways to finance the process.
In order to support the development and future production of Duesenberg EV or
New Energy Vehicles ("NEV") as well as Duesenberg Heritage vehicles, we will
require significant financing. During the year ended October 31, 2022, we closed
two private placement financings by issuing a total of 11,113,152 shares of our
common stock (the "Shares") for gross proceeds of $1,567,184. During the
three-month period January 31, 2023, we raised an additional $28,290 as part of
the $50,000 financing which closed on February 17, 2023. The Shares were issued
pursuant to the provisions of Regulation S of the United States Securities Act
of 1933, as amended (the "Act") to the persons who are not residents of the
United States and are otherwise not "U.S. Persons" as that term is defined in
Rule 902(k) of Regulation S of the Act. The funds we have raised in the above
financings are not sufficient to bring our Duesenberg EV and Duesenberg Heritage
vehicle production plans to completion, and we will require additional funding.
We cannot assure the reader that we will be successful in securing the further
funding as required.
Recent Corporate Events
The following corporate developments have occurred during the quarter ended
January 31, 2023, and up to the date of the filing of this Quarterly Report:
Debt Restructuring
On December 12, 2022, we entered into a debt settlement agreement with Mr.
Brendan Norman, the Company's Chief Strategy Officer ("CSO"), who agreed to
settle a total of $265,674 the Company owed him in exchange for 2,415,218
Shares. On the same date we entered into two separate debt settlement agreements
for a total of $31,267 to be converted into 284,245 Shares with debt holders,
who we issued notes payable which were payable on demand and carried 4% annual
interest rate compounded monthly. These transactions resulted in a loss on debt
settlement of $348,231. The shares were issued pursuant to the provisions of
Regulation S of the Act based on the representations received from the debt
holders that they were not residents of the United States and were otherwise not
"U.S. Persons" as that term is defined in Rule 902(k) of Regulation S of the
Act.
Private Placement Financings
On February 17, 2023, we closed a private placement financing by issuing 333,333
Shares for gross proceeds of $50,000. The Shares were issued to Mr. Brendan
Norman, the Company's CSO, pursuant to the provisions of Regulation S of the
Act, as Mr. Norman confirmed that he is not a resident of the United States and
is otherwise not a "U.S. Person" as that term is defined in Rule 902(k) of
Regulation S of the Act.
License Agreement with Brightcliff Limited
On March 2, 2023, the Company entered into a manufacturing, sales, servicing,
merchandise and license agreement
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(the "Agreement"), with Brightcliff Limited ("Brightcliff").
The Agreement gives the Company a right to use Duesenberg's logo and trademark
(The "Licensed Trademarks") in designing, developing, and manufacturing electric
vehicles as well as various associated merchandise with the Licensed Trademarks
for 20 years. As consideration for the license, the Company agreed to a
$5,000,000 fee, payable in cash or common shares, which shares would be issued
at 25% discount to current market value. In addition, the Company will have to
pay a royalty of 3% from gross revenue on sales of the trademark products.
The Company is unable to sublicense the Licensed Trademarks without the prior
written consent of Brightcliff, and subject to payment of a sublicensing fee in
the amount of $1,000,000 in cash or stock, at Brightcliff's sole option, along
with a royalty fee at the rate of 8% of the sublicensee's revenue from its sale
of the Licensed Products.
The Agreement will be terminated and the Company will lose its rights to the
Licensed Trademarks if the Company failed to have licensed products ready for
sale to the public within five years of the effective date of the Agreement.
The Agreement with Brightcliff is considered a related party transaction as the
Company's CEO and director is a shareholder and director of Brightcliff.
License Agreement with Duesenberg Korea
On March 3, 2023, the Company entered into a manufacturing, sales, servicing,
merchandise and license agreement with Duesenberg Korea Inc. ("DKI") (the
"Sublicense Agreement"). Under the terms of the Sublicense Agreement, the
Company has granted a license to DKI to design, develop, and manufacture
electric vehicles and associated merchandise using Duesenberg logo and trademark
in South Korea.
The Sublicense Agreement is for a term of 20 years and includes a royalty fee of
4% payable on gross revenue from the sale of the products and merchandise
marketed under Duesenberg's logo and trademark.
The Sublicense Agreement will be terminated and DKI will lose its rights to the
Licensed Trademarks if DKI failed to have licensed products ready for sale to
the public within three years of the effective date of the Sublicense Agreement.
Brightcliff has agreed to waive the sublicensing fee and royalty fee that would
otherwise be applicable to Brightcliff as a result of this Sublicense Agreement.
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DUESENBERG TECHNOLOGIES INC. 