DSG Global Small Cap Research Report

Investment and Company Research Opportunity Research TRADE ALERT www.goldmanresearch.com Copyright © Goldman Small Cap Research, 2021 Page 5 of 8 Volatility and liquidity are typical concerns for microcap stocks that trade on the over the counter (OTC) stock market. The Company plans to up-list its shares in June. However, delays may occur which would have a deleterious effect on the Company, including its capital raise plans, which would heighten the inherent execution risk in these shares. A reverse split to meet NASDAQ’s $4.00 price requirement could be difficult to maintain in the absence of milestone achievements for the Company or the industry. With the respect to the prospective funding, since the proceeds of any future funding would be used in large part to advance major business development and sales, we believe that any dilutive effect from such a funding could be offset by related increases in market value. CONCLUSION At present, DSGT trades at a market cap of $24M, which we believe reflects a low-end valuation for the Company based on its prospects and positioning versus its peers and their valuations. Plus, it sends a message to us that this low valuation assumes little value to Vantage Tag which could be a sleeper, going forward, although we admittedly need to perform more due diligence on this subsidiary. If the Company achieves the above milestones (minus bus contract) we proffer that it could reach the $0.50 - $.0.60 mark which would still be only a $60-75M market cap for the combined company. If they win the bus award, all bets are off. Here's why. Peers such as Nikola (NASDAQ – NKLA) , Arcimoto (NYSE – FUV), Electramecannica Vehicles (NASDAQ – SOLO), Canoo (NASDAQ – GOEV) are projected to enjoy huge growth next year, yet average $22M in projected sales for 2021, akin to our $20M-25M forecast for DSGT. Considering that the average market cap is over $1.8 billion, and absent the bus contract potential, we believe that Imperium could generate at least $20M in revenue this year, the current $24M market cap assigned DGST is ridiculous. While manufacturers typically trade at higher multiples than distributors, the gulf between the group and DSGT appears to be too great. Looking ahead, we believe the Company could generate $60M or higher in 2022. The average group price/sales multiple for 2022 is just under 14x projected 2022 sales. Perhaps a 6-9x price sales multiple on 2022 sales for the Company would likely be appropriate down the road. Thus, if major sales growth is achieved a current short-term trade may evolve into a unique longer-term opportunity.