Background
On
October 28, 2011, DiMi Telematics International, Inc. (“DTII”) entered into a Share Exchange Agreement (the “Share
Exchange”) with DiMi Telematics, Inc. (“DTI”) and its stockholders. Pursuant to the agreement, DTII issued 29,150,000
shares of its common stock in exchange for all outstanding shares and warrants to purchase common shares of DTI. As a result of
the Share Exchange Agreement, DTI became a subsidiary of DTII. DTII assumed operation of DTI and entered the Telematics,
or Machine to Machine/M2M industry. On November 10, 2011, the closing of the Share Exchange occurred. In connection
with the Share Exchange, 5,000,000 of DTII’s issued and outstanding shares of common stock were surrendered for cancellation.
The
following discussion includes information about the business operations, management and financial condition of DTII and DTI. Unless
specifically set forth to the contrary, when used in this report the terms “we,” “us,” “our,”
the “Company” and similar terms refer to DTII, a Nevada corporation, and its wholly owned subsidiary DTI, also a Nevada
corporation.
General
The
Company designs, develops and distributes Machine-to-Machine (“M2M”) communications solutions used to remotely track,
monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile
device. Through our proprietary software and hosted service offerings, the Company endeavors to capitalize on the pervasiveness
and data transport capabilities of wireless networks in order to facilitate communications and process efficiencies between commercial
and industrial business owners/managers and their respective networked control systems, sensors and devices.
Strategically,
the Company is focused on the M2M market segments in which we can provide highly differentiated and value-driven solutions capable
of unleashing tangible productivity gains, material cost reductions and quantifiable risk mitigation across an enterprise.
Our
mission is to earn global distinction as the leading supplier of world class M2M communications solutions that empower our customers
to optimize efficiencies and productivity through remote tracking, monitoring, management and protection of their most valuable
assets.
The
DiMi Solution Platform
Our
flagship M2M solution is “
DiMi
,” a proprietary, patent-pending, business intelligence and two-way communications
platform that captures and seamlessly integrates real-time data from networked tracking, monitoring, alarm and alert systems,
sensors and devices; and, in turn, centralizes this data onto an online command and control dashboard that is accessible 24/7
by a designated user or community of designated users through the secure
DiMi
Internet portal, found at
www.dimispeaks.com
.
To
date, we have not yet commenced commercial marketing of
DiMi
and have not yet generated revenues from operations.
DiMi
is
to begin beta tested in anticipation of the initial commercial roll-out of version 4.0, which is anticipated will take place in
the third quarter of 2017. We have also instructed our outsource software developer to begin work on smartphone apps to work in
conjunction with version 4.0. For more information on our agreements with our outsource software developer for the development
of version 4.0 and corresponding smartphone apps to work in conjunction with version 4.0, see “MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.”
With
adoption of the
DiMi
M2M communication
s
platform, users can remotely control, monitor, manage and
acquire data from their operational assets, providing the interface for lighting, temperature, humidity, keycard access, fleet
management and many other vital systems that impact the enterprise.
DiMi
uses established secure technology standards
(i.e. LONet, MODbus, BACnet and ELK) combined with a unique, proprietary software interface that keeps users connected to their
asset management and control systems through any web-enabled computer or mobile device.
By
providing dynamic, real-time access to critical information from a wide array of new or legacy sensors, GPS tracking tools and/or
diagnostic devices – irrespective of their make, model or manufacturer,
DiMi
alerts or reports back to
its users via familiar communication tools, like instant messaging, email, HTML and text messaging. Users can even issue global
commands to its asset management and control systems through the
DiMi
software interface. Moreover,
DiMi
leverages
the collected knowledge of a particular asset or assets and compares it to historical performance metrics and other critical benchmarks
through an integrated data management module, giving users insight that allows them to rapidly identify and implement proper preventive
maintenance measures, efficiency improvements and other key operational activities.
Our
proprietary M2M solutions utilize a cloud-based, two-way communications delivery platform, marketed as “
DiMi
.”
Leveraging the power, scalability and flexible turnkey advantages of
DiMi’s
patent-pending software
and hosting platform, users are able to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time
from virtually any web-enabled desktop computer or mobile device while located anywhere in the world.
DiMi
features
a robust, customized interface that gives its users secure command and control functionality of multiple remote, connected sensors,
alarms and diagnostic devices. Moreover, the intuitive
DiMi
framework readily adapts to and integrates both new
and legacy monitoring/sensing equipment – irrespective of make, model or manufacturer – providing for simplified,
economical M2M deployments.
Our
DiMi
solution
is currently being used to actively monitor property management systems in several high-rise commercial and residential buildings
in New York City – all beta sites which have served to demonstrate the efficacy of the
DiMi
technology
and M2M communications platform. Moving forward, the Company intends to concentrate its
DiMi
commercialization
efforts on marketing the solution to property management companies, commercial property developers, government/military installations,
industrial facilities, retail and restaurant chains, colleges and universities, fleet managers, and any business or institutional
concern with valuable fixed and mobile assets requiring remote surveillance, regular maintenance or general oversight.
We
expect to deliver
DiMi
as a monthly, hosted service that puts critical information into the palm of its user’s
hands with no major hardware investments. Our hosting platform can be tailored for each customer to create secure and reliable
end-to-end connectivity between their specific remote connected equipment and
DiMi
’s proprietary web interface.
Once a new client’s core M2M business needs have been confirmed, the Company will closely collaborate with the client to
design the organizational and process modifications required to ensure a successful
DiMi
launch, offering full
service project definition, management, user interface customization, implementation services and ongoing quality assurance and
testing.
Uses
and Benefits of the DiMi Solution
Based
upon the knowledge and experience of our executive management in real estate operations and management, we have initially targeted
the real estate management industry for initial commercialization of the
DiMi
Platform solution. Among the uses
and benefits of
DiMi
in the real estate industry are the following:
“Smart”
Facility Management
Today’s
buildings – whether residential, commercial, medical or otherwise – are sustained through operation of various utility
systems. Through these systems, electricity, heat, HVAC, water, lighting, security and other necessities, are provided to the
buildings.
Some
conventional systems are controlled by human operators and, thus, require maintenance staff on-site or on-call to control, maintain
and otherwise operate such systems. Other systems may be controlled electronically or through a combination of electronic and
human control. These systems force building owners to extend additional resources and incur burdensome costs in order to maintain
proper operation of the systems, as well as account for human errors that may result from improper system operation or management.
Moreover, many conventional systems are not capable of remotely controlling multiple buildings having multiple building functionalities
using a single monitor and control device nor can they adapt to various control interfaces that are used by the buildings and
facility managers.
Our
DiMi
solution
works as a centralizing component of a facility or multiple facilities’ management system, acquiring and interpreting data
from thousands of networked devices monitoring systems operating in multiple locations.
Whether
a facility manager is looking to save oil and gas, monitor carbon emissions, avert a flood or monitor and control temperatures,
lighting or remote keycard access,
DiMi
provides a fully integrated, affordable solution. Moreover,
DiMi
allows
our clients to evaluate their building management practices for strengths, weaknesses and opportunities to be greener, more productive
and more efficient.
DiMi
’s virtual grid can track and sort building data to enable cost savings, reduce the
carbon footprint and set new global standards of performance for the facility management industry.
Energy
Savings
For
boilers to run at peak efficiency, operators must attend to boiler staging, water chemistry, pumping and boiler controls, boiler
fuel-air mixtures, burn-to-load ratios and stack temperatures.
DiMi
can consolidate all the above efficiency-enhancing
metrics and provide monitoring of water chemistry and temperature to improve equipment efficiency and reduce energy expenditures.
DiMi
provides
these features on a cost effective platform which empowers users to realize significant cost savings.
DiMi
can
help maintain consistent temperature throughout buildings and provide the ability for managers to monitor and control irregularities.
Users benefit from being able to: prevent system wear and tear from operating under stress, increase the life of the systems through
proper timing of maintenance and determine peak efficiencies and set pre-defined conditions and alerts.
DiMi
’s
service can also measure water consumption by unit to ascertain usage by tenant and carbon emissions to track changes.
Enhanced
Security
DiMi
can
provide remote monitoring, control and access to restricted areas. Our technology provides an audit trail that enables users to
see who accessed a room and when. The ability to track entries to individual rooms via the audit trail eliminates the cost of
replacing locks and lost keys.
DiMi
readily interfaces with most alarm panels on the market as well as most existing
keycard access systems.
Disaster
Management
Water
leaks and flooding may be costly for property managers and owners.
DiMi
can assist with disaster management by
providing the ability to monitor strategically placed water sensors in bathrooms, elevator shafts, rooftop drains or any other
problematic area. Users will be alerted if there are any irregularities within a defined scope to avert catastrophes. In addition,
hurricane shields can be activated from a remote location to avoid disaster and minimize costs in protecting assets.
Routine
Maintenance
All
forms of routine maintenance that can be automated can be controlled directly using the
DiMi
M2M communications
solution. From pre-defined schedules, on a demand basis when equipped with the proper sensors to a user’s instant messaging
(“IM”) account anywhere the Internet is accessible, maintenance can be performed at will. For example, automated service
calls can be enabled when a boiler is operating outside of predetermined optimal ranges or, storage tank levels can be preset
to enable
DiMi
to trigger automatic scheduling of oil deliveries
Building
Value
We
believe that a building that incorporates
DiMi
will have a documented pedigree of asset performance. Energy management
and efficiency gains, along with maintenance and repair history, are mapped through our Master Data Management module.
DiMi
’s
information management capabilities increase property return on investment and overall property value.
The
Marketplace
Although
widely heralded as a “transformative” technology, M2M is not new. The concept was first used during World War II for
identifying “friend” or “foe” to prevent pilots from hitting the wrong targets. Satellites use M2M to
fire engines based on guidance and navigation sensors. Garage door openers respond to the clicker in a car. The difference now
is that you can network the sensors in devices and objects, and use the data for extended purposes, such as recognizing that the
garage door was left open and notifying the homeowner or security company to close it by way of remote command.
M2M
– also commonly called “ubiquitous” or “pervasive” computing – refers to digital microprocessors
and sensors embedded in everyday objects and connected to networks. M2M most often refers to “machine-to-machine,”
although mobile-to-machine or man-to-machine is also used to describe this fast evolving family of technologies. Because M2M communications
can exist in practically any machine, environment and market, it holds the potential to reshuffle entire industry structures,
creating an anticipated windfall for technology enablers in the M2M arena and enabling an array of solutions that deliver new
levels of “smart services” and commerce.
Secondary
Target Markets
Distilling
customer needs to discrete services allows us to target and expand high value opportunities and generate critical need niches
in vertical market sectors. Combining these niches into a consolidated service, offering a single point customer interface, is
expected to give the Company key competitive differentiation in the marketplace.
Restaurant
and Retail Chains
–
DiMi
can provide owners and managers of restaurants and retail businesses
the ability to monitor and control multiple locations remotely from any web-enabled computer or mobile device. We can provide
the interface that gives users real-time insight and control of critical systems within their establishments that enable them
to reduce costs, manage more efficiently and increase their return on investment. As long as there is Internet access, users can
monitor and manage all of their properties – whether at home, walking down the street or traveling out of the country.
With
respect to restaurants,
DiMi
provides the ability to monitor the humidity and temperature of walk-in environments,
such as freezers, wine cellars and refrigeration units, helping to ensure that meats age properly, cellaring of wines is maintained
and cheese or other perishables are well stored. When a power failure or surge occurs, immediate alerts are sent to a manager
or owner’s handheld device, enabling quicker response times and reducing the loss of inventory from food spoilage or wine
cellar temperature fluctuation.
Weather
extremes may also trigger instability in a restaurant environment.
DiMi
helps by providing the ability to remotely
monitor temperatures in one or more restaurants and signal any deviation from normal.
Schools,
Colleges and Universities
– With
DiMi
, educational facilities can experience the peace of mind that
comes with being able to monitor points of entry as well as restricted areas on-site or remotely from any web-enabled computer
or mobile device.
Our
solution helps to protect sensitive documents, dormitories and classrooms housing expensive assets, such as computer centers,
biotech labs, movie production and digital publishing facilities. Moreover, through use of
DiMi
’s auditing capabilities,
school building managers can mitigate losses due to theft and receive immediate, real-time feedback in emergency situations, including
security breaches, fire, smoke, gas leaks, and carbon monoxide and carbon dioxide alerts, among other potential crises.
Healthcare
Facilities
– In addition to benefiting from the same remote monitor and control capabilities afforded all sectors
involving the management of building systems, healthcare facilities can leverage
DiMi
M2M communications solutions
in highly innovative ways to enhance resident patient care.
For
instance,
DiMi
can provide care facilities with an ability to prevent scalding due to inconsistencies in tap
water temperature. The risk is greater where the resident population may be elderly, prone to sensory loss or when nerve reaction
times are reduced; thus, the intuitive reaction to pull away from the scalding hot water is not sufficient to avoid potentially
severe skin burns.
Another
potential application is home monitoring of patients suffering from chronic diseases and conditions, such as congestive heart
failure, hypertension, diabetes, asthma and obesity. Hospitals, clinics and physician practices can utilize
DiMi
to
establish an additional communication channel with their patients, removing geographic barriers and enhancing the quality of care.
Connecting
with Telehealth devices used in the home and accessed via any web-enabled computer or wireless device,
DiMi
’s
powerful interface can give medical staff the ability to monitor and quickly assess – in real-time – an at-home patient’s
oxygen levels, pulse, blood pressure and other vital statistics, potentially reducing hospitalization rates, improving treatment
plans and decreasing emergency room visits. Moreover, DiMi’s data management module captures important patient data for
medical records, which can help reduce costs related to paperwork and prevent costly mistakes that could lead to malpractice claims.
Industrial
Complexes
–
DiMi
’s cloud-based M2M communications platform supports a vast array of possibilities
to employ innovative tracking, sensing, monitoring, alerting and reporting equipment to remotely monitor and manipulate industrial
control systems. Integrating with existing or new backend systems,
DiMi
can serve as the command and control
interface for a vast number of industrial M2M applications in sectors that range from oil and gas, water treatment and waste management
to manufacturing, green power generation and utilities.
One
possible
DiMi
application is managing an industrial complex’s consumption of energy by reducing or shifting
electricity use to improve electric grid reliability, manage electricity costs, and encourage load shifting or load shedding during
times when the electric grid is near capacity. Another would be real-time remote monitoring and control of automated irrigation
systems for a commercial farming enterprise or monitoring and detecting tank leaks at oil refineries.
Because
DiMi
is
hardware-agnostic and readily customized to address the demands of any industrial sector, we believe that the
DiMi
interface
can be leveraged and applied to protect a vast array of fixed and mobile assets deemed valuable and mission-critical.
Logistics/Fleet
Management
- Powered by
DiMi
, DiMi Telematics provides the commercial transport industry with a cost effective
method of monitoring in real-time all aspects of fleet operations, including driver and vehicle performance, geo-tracking, safety,
compliance and efficiency. The resulting benefits range from the successful streamlining of routes and schedules to save money
in fuel consumption and personnel costs, to mitigating risk and lowering insurance costs.
Certain
U.S. legislation (e.g.,
Food Safety Act 1990, Quick Frozen Foodstuffs Regs 1995 and the Temperature Control Regs 1995)
mandates
that mobile transporters of chilled food products closely monitor the temperature of goods in transit to protect them from spoilage.
Working in concert with automated, wireless temperature monitoring devices,
DiMi
is able to transmit alerts directly
to fleet managers and/or refrigerated truck drivers when load temperatures approach predefined levels requiring immediate attention.
Competition
Given
the positive outlook for the M2M industry and our targeted market segments, we will sell our solutions in intensely competitive
markets. Some of our competitors have significantly greater financial, technical, sales and marketing resources than we do. As
the markets for our software products and hosting services continue to develop, additional companies, including those with significant
market presence in the wireless industry, could enter the markets in which we compete and further intensify competition. In addition,
we believe price competition may become a more significant competitive factor in the future.
Several
businesses that share the M2M space can be viewed as competitors, such as M2M application service providers, Mobile Virtual Network
Operators, system integrators and wireless operators/carriers that offer a variety of the components and services required for
the delivery of complete M2M solutions.
We
believe we have a competitive advantage and are uniquely positioned as an M2M solution-centric business because our M2M communications
platform is hardware-agnostic, and our hosting environment is in the cloud which gives us the ability to help businesses lower
their IT infrastructure costs and management requirements while improving performance, scalability and flexibility.
We
have also taken, and will continue to take, the necessary steps to secure the proprietary aspects of our applications through
patent filings in the U.S. and in key international markets. Moreover, we intend to remain focused on proactively developing best-of-breed
Internet-enabled M2M solutions that are designed to effectively meet the evolving needs of our primary target market, namely web-based
remote asset tracking, management and control with applications in the commercial, industrial, educational, government and military
sectors.
The
markets for our M2M communications solutions will remain characterized by rapid technological change and evolving industry standards.
Nonetheless, the principal competitive factors in these markets will continue to be product performance, ease of use, reliability,
price, breadth of solution offerings, sales and distribution capability, technical support and service, customer relations, and
general industry and economic conditions.
We
believe that our consultative approach to enabling hosted M2M technologies for our clients, as well as the attention we give to
their specific needs, requirements and circumstances, are critical competitive differentiators that we are dedicated to preserving
and nurturing as we grow. Moreover, prudent and timely integration of new and emerging digital and web technologies into our M2M
communications platform will remain an underpinning mission for us if we are to earn and maintain distinction as a recognized
industry leader.
Among
the public companies with which we may compete are: Digi International, Inc. (Nasdaq: DGII), EnerNOC, Inc. (Nasdaq: ENOC), Evolving
Systems, Inc. (Nasdaq: EVOL), Gemalto, NV (OTCQB: GTOFF), Numerex Corp. (Nasdaq: NMRX), RF Monolithics, Inc. (Nasdaq: RFMI), Telular
Corporation (Nasdaq: WRLS) and Trimble Navigation Ltd. (Nasdaq: TRMB). Many of these competitors have greater name recognition
as well as financial and other resources than we have. We may never become a competitive influence in the marketplace.
Plan
of Operations
DiMi
Telematics, Inc. is headquartered in New York City and incorporated under the laws of the State of Nevada. Aside from the oversight
and administration of our corporate, financial and legal affairs by the executive management team, once commercial roll-out of
DiMi
takes
place, our Company’s operating activities will be centralized in three core areas:
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Sales
and Marketing
will employ both direct and indirect sales models utilizing an in-house business development team,
partners and resellers and self-service through a service on-demand web interface.
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Our
initial sales and marketing team will be comprised of our current management staff, and supplemented by the hiring of dedicated
sales professionals as the Company matures. However, we intend to immediately begin building out our global distribution network
through reseller and strategic marketing agreements with qualified third party sources. To support and nurture strong relationships
with our future sales and marketing partners, we expect to provide co-marketing, trade show support, product training and
DiMi
demo
units, while also actively engaging in industry awareness and leading generation programs.
Once
a new client’s core M2M business needs have been confirmed, our solutions team will closely collaborate with the client
to design the organizational and process modifications required to ensure a successful
DiMi
launch, offering
full service project definition, management, user interface customization, implementation services and ongoing quality assurance
and testing.
In
order to achieve accelerated market penetration and sustainable, recurring revenue from a global customer base, the Company expects
to ultimately adopt a hybrid sales and marketing model involving the following: direct sales (solutions team), channel sales (via
leading Value-Added Resellers (“VARs”) and distributors dedicated to niche market applications that
DiMi
is
capable of addressing in target domestic and international markets) and strategic marketing and integration collaborations with
industry leading system integrators, Original Equipment Manufacturers (“OEMs”) and large cellular carriers and dealers.
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Operations
will
be responsible for managing daily activities related to monitoring and administering our cloud-based server operations, 24/7
client service/help desk, professional services and installation support and quality assurance and testing of our DiMi software
and hosting platform, as well as the implementation and ongoing administration of our hosted clients’ M2M communications
platforms.
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Our
DiMi
solution
is currently being used to actively monitor property management systems in numerous high-rise commercial and residential buildings
in New York City. All beta sites are owned and managed by the FATA Organization. These sites have served to successfully prove
the
DiMi
software technology and hosting platform and will provide the Company’s sales and marketing team
with the capability to provide live demonstrations of the
DiMi
platform.
After
our solutions team works in close collaboration with our customers throughout their respective
DiMi
implementation
projects, our account service representatives will assume responsibility for ongoing technical and administrative support following
DiMi’
s
deployment. In addition, our customers will have access to a dedicated team of customer service and technical specialists who
can be reached after hours and on weekends through a telephone helpdesk and an online technical support center.
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Product
Development
will be charged with enhancing our existing M2M software applications and services and introducing new
and complementary hosted products and applications on a timely basis. We anticipate that the creative formulation of enhancements
and new product conceptualization will be performed in-house by our officers and directors. Thereafter, we intend to outsource
software enhancement and product development to third parties.
|
Currently,
the Company, in collaboration with its outsource software development team, is engaged in developing the next generation of its
M2M communications platform,
DiMi 4.0,
which is being designed to provide for a number of technological enhancements
and new user benefits being built into the system, including Voice Over Internet Protocol. Based on current development timelines,
DiMi
4.0
should be finalized and ready for commercial launch on or before the end of the third quarter of 2017.
At
that time the Company intends to concentrate its
DiMi
commercialization efforts on marketing the solution to
property management companies, commercial property developers, government/military installations, industrial facilities, retail
and restaurant chains, colleges and universities, fleet managers, and any business or institutional concern with valuable fixed
and mobile assets requiring remote surveillance, regular maintenance or general oversight.
Intellectual Property
Our M2M communications solutions rely
on and benefit from our portfolio of intellectual property, including pending patents, trademarks, trade secrets and domain names.
Patent Applications:
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1.
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U.S. Patent Application No. 12/798,923
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Filed April 13, 2010
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Title: Monitoring and Control Systems and Methods
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Jurisdiction: U.S. Patent and Trademark Office
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2.
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International Application Serial No. PCT/US2010/030882
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Title: Monitoring and Control Systems and Methods
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3.
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Taiwan Patent Application Serial No. 99111633
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Title: Monitoring and Control Systems
and Methods
Taiwanese
Patent No. I503638
Approved October 11, 2015
Expires April 14, 2030
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U.S. Trademark Applications
1.
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Greenfreak Serial No.: 77724645
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2.
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Domain Names
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http://www.dimispeaks.com
http://www.greenfreak.com
http://www.controlfreak.org
http://www.theicontrol.us
http://www.icontrol.mobi
http://www.icontrolmultiple.com
http://www.icontrolnow.com
http://www.icontrolonline.com
http://www.greened.biz
http://www.greenfreak.biz
http://www.green-freak.com
http://www.green-freak.info
http://www.green-freak.me
http://www.green-freak.mobi
http://www.green-freak.org
http://www.greened.ws
http://www.greenfreak.info
http://www.greenfreak.me
http://www.greenfreak.mobi
http://www.greenfreak.ws
http://www.greened.net
http://www.askdimi.net
http://www.askdimi.org
http://www.askdimi.info
http://www.askdimi.biz
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http://www.askdimi.us
http://www.cntrlfreaks.biz
http://www.cntrlfreaks.us
http://www.cntrlfreaks.com
http://www.cntrlfreaks.info
http://www.cntrlfreaks.net
http://www.cntrlfreaks.org
http://www.greenfreak.us
http://www.greenfreak.com
http://www.Precisionloc8.com
http://www.Precisionloc8.net
http://www.Precisionlok8.com
http://www.Precisionlok8.net
http://www.Precisionlocate.com
http://www.Precisionlocate.net
http://www.DiMiTelematics.com
http://www.DiMiTelematics.net
http://www.DiMiTM.com
http://www.DiMiTM.net
http://www.DiMi-tm.com
http://www.DiMi-tm.net
http://www.DiMi-m2m.com
http://www. DiMi-m2m.net
http://www. DiMim2m.com
http://www. DiMim2m.net
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History of DTI
DTI was formed as a Nevada corporation
on January 28, 2011 under the name Medepet, Inc. On June 30, 2011, Medepet, Inc. changed its name to Precision Loc8,
Inc., on July 28, 2011, Precision Loc8, Inc. changed its name Precision Telematics, Inc. and on August 10, 2011, Precision
Telematics changed its name to DiMi Telematics, Inc.
On
or about July 31, 2011, DTI entered into an Asset Purchase Agreement with Roberto Fata pursuant to which Mr. Fata sold
and DTI purchased the technology encompassing
DiMi
, including certain specified assets used in the remote monitoring
and control of building management systems through unique software interface.
History
of DTII
DTII
was originally formed as Cine-Source Entertainment, Inc. (“Old Corporation”), a Colorado corporation, on July 29,
1988. Pursuant to a Plan of Merger dated February 24, 2004, the Old Corporation filed Articles and Certificate of Merger
with the Secretary of State of the State of Colorado merging the Old Corporation into Cine-Source Entertainment, Inc. (the “Surviving
Corporation”), a Colorado corporation Thereafter, on April 27, 2004, the name of the Surviving Corporation was changed
to First Quantum Ventures, Inc. On April 13, 2006, the Surviving Corporation formed a wholly owned subsidiary, a Nevada corporation,
under the name First Quantum Ventures, Inc., and on May 5, 2006 merged the Surviving Corporation into First Quantum Ventures,
Inc. On November 10, 2011, DTII acquired DTI in a “reverse merger” as discussed elsewhere in this Annual Report
on Form 10-K.
Fiscal
Year End
Following
the closing of the Share Exchange pursuant to which DTII acquired DTI, DTII changed its fiscal year end to August 31, so
as to correspond to the fiscal year end of DTI.
Employees
As
of November 30, 2016, other than our officers and directors, we had no full time or part time employees other than our Chief Executive
Officer.
An
investment in our common stock involves significant risks. You should carefully consider the following risks and all other information
set forth in this Annual Report before deciding to invest in our common stock. Our business, financial condition and results of
operations may suffer as a result of these risks.. In that case, the value of our common stock may decline and you could lose
all or part of your investment.
Risks
Associated with the Company’s Prospective Business and Operations
The
Company lacks meaningful operating history and will require substantial capital if it is to be successful. We will require additional
funds for our operations.
At
August 31, 2016, we had net negative working capital of approximately $115,104. We will require significant cash during fiscal
2016-17, in order to grow our business, including implementing any acquisitions. No assurances can be given that the Company will
be able to obtain the necessary funding during this time to make any acquisitions or for any other purpose. The inability to raise
additional funds will have a material adverse effect on the Company’s business, plan of operation and prospects. Acquisitions
may be made with cash or our securities or a combination of cash and securities. To the extent that we require cash, we may have
to borrow the funds or sell equity securities. The issuance of equity, if available, would result in dilution to our stockholders.
We have no commitments from any financing source and we may not be able to raise any cash necessary to complete an acquisition.
If we fail to make any acquisitions, our future growth may be limited. If we make any acquisitions, they may disrupt or have a
negative impact on our business.
The
terms on which we may raise additional capital may result in significant dilution and may impair our stock price. Because of our
cash position, our stock price and our immediate cash requirements, it is difficult for us to raise capital for any acquisition.
We cannot assure you that we will be able to get financing on any terms, and, if we are able to raise funds, it may be necessary
for us to sell our securities at a price that is at a significant discount from the market price and on other terms which may
be disadvantageous to us. In connection with any such financing, we may be required to provide registration rights to the investors
and pay damages to the investor in the event that the registration statement is not filed or declared effective by specified dates.
The price and terms of any financing which would be available to us could result in both the issuance of a significant number
of shares and significant downward pressure on our stock price.
There
is substantial doubt about our ability to continue as a going concern.
Our
independent public accounting firm in their report dated December 16, 2016 included an explanatory paragraph expressing substantial
doubt in our ability to continue as a going concern without additional capital becoming available. Going concern contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time.
Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon
our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable
operations. As a result, our financial statements do not reflect any adjustment which would result from our failure to continue
to operate as a going concern. Any such adjustment, if necessary, would materially affect the value of our assets.
The
Company’s officers and directors may have conflicts of interest and do not devote their full time to the Company’s
operations
.
The
Company’s officers and directors may have conflicts of interest in that they are and may become affiliated with other companies.
In addition, the Company’s officers do not devote their full time to the Company’s operations. Until such time that
the Company can afford executive compensation commensurate with that being paid in the marketplace, its officers will not devote
their full time and attention to the operations of the Company. No assurances can be given as to when, if ever, the Company will
be financially able to engage its officers on a full time basis.
We
have not voluntarily implemented various corporate governance measures in the absence of which, stockholders may have more limited
protections against interested director transactions, conflicts of interest and similar matters.
Recent
federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures
designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted
in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities
exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures
that are required under the rules of national securities exchanges are those that address board of directors' independence, audit
committee oversight, and the adoption of a code of ethics. While our board of directors intends to adopt a Code of Ethics, we
have not yet done so nor have we adopted any of these corporate governance measures and, since our securities are not listed on
a national securities exchange, we are not required to do so. It is possible that if we were to adopt some or all of these corporate
governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being
made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence
of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning
matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority
of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current
lack of corporate governance measures in formulating their investment decisions.
Provisions
of our Articles of Incorporation and Bylaws may delay or prevent take-over which may not be in the best interest of our stockholders.
Provisions
of our articles of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special
meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions
of the Nevada Revised Statutes also may be deemed to have certain anti-takeover effects which include that control of shares acquired
in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority
of a corporation's disinterested stockholders. In addition, our articles of incorporation authorize the issuance of up to 50,000,000
shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors, of
which no shares of preferred stock are issued and outstanding as of August 31, 2016. Our board of directors may, without stockholder
approval, issue preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of our common stock. As a result, our board of directors can issue such stock to investors
who support our management and give effective control of our business to our management.
We
may be exposed to potential risks relating to our internal control over financial reporting.
As
directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the SEC has adopted rules requiring public
companies to include a report of management in the Company's internal control over financial reporting in its annual reports.
While
we expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX 404,
there is a risk that we will not comply with all of the requirements imposed thereby. At present, there is no precedent available
with which to adequately measure compliance. In the event we identify significant deficiencies or material weaknesses in our internal
control over financial reporting that we cannot remediate in a timely manner, investors and others may lose confidence in the
reliability of our financial statements and our ability to obtain equity or debt financing could suffer.
Our
business relies heavily on outsource software developers, which could harm our business by adversely affecting the availability,
delivery, reliability, and development cost of our platform.
We
have limited staffing and are relying on our outsource software developer to create our DiMi 4.0 platform. If the outsource software
developer delays or curtails progress on our platform, we may not be able to roll out the related platform in desired configurations,
or in a timely manner. In addition, we may not be able to replace the functionality provided by the third-party software that
we currently offer if that software becomes obsolete, defective, or incompatible with future versions of our software (especially
if we use different outsource software developers for different versions of our platform) or if the software is not adequately
maintained or updated. Even though other software developers are available, qualification of the alternative developer and establishment
of reliable software code could result in delays and a possible loss of sales as well as a significant increase in development
costs, which could harm our operating results. In addition, defective or delayed roll out of our platform could harm our reputation
and brand recognition.
Risks
Related to the Company’s Common Stock
The
Company does not expect to pay dividends in the foreseeable future.
The
Company has never paid cash dividends on its common stock and has no plans to do so in the foreseeable future. The Company intends
to retain earnings, if any, to develop and expand its business.
“Penny
stock” rules may make buying or selling the common stock difficult and severely limit their market and liquidity.
Trading
in the Company’s common stock is subject to certain regulations adopted by the SEC commonly known as the “Penny Stock”
rules. The Company’s common stock qualifies as penny stock and is covered by Section 15(g) of the Securities and Exchange
Act of 1934, as amended (the “1934 Act”), which imposes additional sales practice requirements on broker/dealers who
trade in the Company’s common stock in the market. The “Penny Stock” rules govern how broker/dealers can deal
with their clients and “penny stock.” For sales of the Company’s common stock, the broker/dealer must make a
special suitability determination and receive from clients a written agreement prior to making a trade. The additional burdens
imposed upon broker/dealers by the “penny stock” rules may discourage broker/dealers from effecting transactions in
the Company’s common stock, which could severely limit our stock’s market price and liquidity. This could prevent
investors from reselling the Company’s common stock and may cause the price of our common stock to decline.
Although
publicly traded, the Company’s common stock has substantially less liquidity than the average trading market for a stock
listed on a national securities exchange, and its market price may fluctuate dramatically in the future
.
Although
the Company’s common stock is eligible for quotation on the OTC Pink, the trading market in the common stock has substantially
less liquidity than shares of companies listed on national securities exchanges. A public trading market having the desired characteristics
of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock
at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over
which we have no control. Due to, among other reasons, limited trading volume, the market price of the Company’s common
stock may fluctuate significantly in the future, and these fluctuations may be unrelated to the Company’s performance. General
market price declines or overall market volatility in the future could adversely affect the price of the Company’s common
stock, and the current market price may not be indicative of future market prices.