UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



|[X] | Quarterly
    Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | -------------------------------------------------------------------------------------------



For
the quarterly period ended September 30, 2017



or



|[  ] | Transition
    Report Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934
|---- | -----------------------------------------------------------------------------------------



For
the transition period from _____________ to _____________.



Commission
file number 000-53988



DSG
GLOBAL, INC.

(Exact
name of registrant as specified in its charter)



|Nevada                                                              |  | 26-1134956                                                                                   
|------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------
|(State
    or other jurisdiction of 
incorporation or organization) |  | (I.R.S.
                                         Employer
        Identification
        No.)



214
- 5455 152nd Street

Surrey,
British Columbia V3S 5A5, Canada

(Address
of principal executive offices, zip code)



(604)
575-3848

(Registrant’s
telephone number, including area code)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes [  ] No [X]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check one):



|Large
    accelerated filer | [  ] |                                                 | Accelerated
    filer         | [  ]
|--------------------------- | ---- | ----------------------------------------------- | ----------------------------- | ----
|Non-accelerated
    filer   | [  ] | (Do
    not check if smaller reporting company) | Smaller
    reporting company | [X] 



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No
[X]



As
September 30, 2017, the issuer had 39,476,236 shares of common stock issued and outstanding.






















DSG
GLOBAL, INC.TABLE OF CONTENTS



|                               |                                                                                       | Page
    No.
|------------------------------ | ------------------------------------------------------------------------------------- | ------------
|PART I — FINANCIAL INFORMATION |                                                                                      
|                               |                                                                                       |             
|Item
    1.                    | Financial Statements (unaudited)                                                      | 3           
|                               |                                                                                       |             
|                               | Condensed Consolidated Balance Sheets                                                 | 4           
|                               |                                                                                       |             
|                               | Condensed Consolidated Statements of Operations                                       | 5           
|                               |                                                                                       |             
|                               | Condensed Statements of Comprehensive Loss                                            | 6           
|                               |                                                                                       |             
|                               | Condensed
    Consolidated Statements of Stockholders’ Deficit                        | 7           
|                               |                                                                                       |             
|                               | Condensed Consolidated Statements of Cash Flows                                       | 7           
|                               |                                                                                       |             
|                               | Notes to Condensed Consolidated Financial Statements                                  | 8           
|                               |                                                                                       |             
|Item
    2.                    | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19          
|                               |                                                                                       |             
|Item
    3.                    | Quantitative and Qualitative Disclosures About Market Risk                            | 28          
|                               |                                                                                       |             
|Item
    4.                    | Controls and Procedures                                                               | 28          
|                               |                                                                                       |             
|PART II — OTHER INFORMATION    |                                                                                      
|                               |                                                                                       |             
|Item
    1.                    | Legal Proceedings                                                                     | 30          
|                               |                                                                                       |             
|Item
    1A.                   | Risk Factors                                                                          | 30          
|                               |                                                                                       |             
|Item
    2.                    | Unregistered Sales of Equity Securities and Use of Proceeds                           | 31          
|                               |                                                                                       |             
|Item
    3.                    | Defaults Upon Senior Securities                                                       | 31          
|                               |                                                                                       |             
|Item
    4.                    | Mine Safety Disclosures                                                               | 31          
|                               |                                                                                       |             
|Item
    5.                    | Other Information                                                                     | 31          
|                               |                                                                                       |             
|Item
    6.                    | Exhibits                                                                              | 31          
|                               |                                                                                       |             
|Signatures                     | 34                                                                                   



2







PART
I: FINANCIAL INFORMATION



ITEM
1: Financial Statements (unaudited)



The
accompanying unaudited consolidated interim financial statements of DSG Global Inc. as at September 30, 2017, have been prepared
by our management in conformity with accounting principles generally accepted in the United States of America and in accordance
with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity
in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have been included and all such adjustments are of
a normal recurring nature.



Operating
results for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that can be
expected for the year ending December 31, 2017.



3







DSG
GLOBAL, INC.

CONDENSED
CONSOLIDATED BALANCE SHEETS



|                                                                                                                             |  | September
    30, 2017 |             |   | December
    31, 2016 |  
|---------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ----------- | - | --------------------- | -
|                                                                                                                             |  | (unaudited)            |             |   |                       |  
|ASSETS                                                                                                                       |  |                        |             |   |                       |  
|CURRENT
    ASSETS                                                                                                           |  |                        |             |   |                       |  
|Cash                                                                                                                         |  | $                      | 8,968       |   |                       | $
|Accounts
    receivable, net of allowances of $12,933 and $47,289, respectively                                              |  |                        | 112,453     |   |                       |  
|Inventory                                                                                                                    |  |                        | 67,689      |   |                       |  
|Prepaid
    expenses and deposits                                                                                            |  |                        | 12,920      |   |                       |  
|TOTAL
    CURRENT ASSETS                                                                                                     |  |                        | 202,030     |   |                       |  
|                                                                                                                             |  |                        |             |   |                       |  
|NON-CURRENT
    ASSETS                                                                                                       |  |                        |             |   |                       |  
|Property
    and equipment                                                                                                   |  |                        | 23,001      |   |                       |  
|Intangible
    assets                                                                                                        |  |                        | 15,943      |   |                       |  
|TOTAL
    NON-CURRENT ASSETS                                                                                                 |  |                        | 38,944      |   |                       |  
|                                                                                                                             |  |                        |             |   |                       |  
|TOTAL
    ASSETS                                                                                                             |  | $                      | 240,974     |   |                       | $
|                                                                                                                             |  |                        |             |   |                       |  
|LIABILITIES
    AND STOCKHOLDERS' DEFICIT                                                                                    |  |                        |             |   |                       |  
|CURRENT
    LIABILITIES                                                                                                      |  |                        |             |   |                       |  
|Bank
    overdraft                                                                                                           |  | $                      | -           |   |                       | $
|Trade
    and other payables                                                                                                 |  |                        | 3,125,576   |   |                       |  
|Payable
    to related party                                                                                                 |  |                        | -           |   |                       |  
|Deferred
    revenue                                                                                                         |  |                        | 128,045     |   |                       |  
|Warranty
    reserve                                                                                                         |  |                        | 122,120     |   |                       |  
|Convertible
    note payable to related party                                                                                |  |                        | 310,000     |   |                       |  
|Loans
    payable                                                                                                            |  |                        | 894,096     |   |                       |  
|Derivative
    liabilities                                                                                                   |  |                        | 777,127     |   |                       |  
|Convertible
    loans payable                                                                                                |  |                        | 1,821,316   |   |                       |  
|TOTAL
    CURRENT LIABILITIES                                                                                                |  |                        | 7,178,280   |   |                       |  
|                                                                                                                             |  |                        |             |   |                       |  
|MEZZANINE
    EQUITY                                                                                                         |  |                        |             |   |                       |  
|Redeemable
    non-controlling interest - preferred shares                                                                   |  | $                      | 5,286,731   |   |                       | $
|                                                                                                                             |  |                        |             |   |                       |  
|STOCKHOLDERS'
    DEFICIT                                                                                                    |  |                        |             |   |                       |  
|Common
    stock, $0.001 par value, 850,000,000 shares authorized 39,476,236 and 30,291,187 shares outstanding, respectively |  |                        | 39,476      |   |                       |  
|Additional
    paid in capital                                                                                               |  |                        | 17,156,332  |   |                       |  
|Shares
    issued as deposit                                                                                                 |  |                        | (198,000    | ) |                       |  
|Other
    accumulated comprehensive income                                                                                   |  |                        | 870,916     |   |                       |  
|Deficit                                                                                                                      |  |                        | (28,927,197 | ) |                       |  
|Total
    shareholders’ deficit attributable to DSG Global, Inc.                                                             |  |                        | (11,058,473 | ) |                       |  
|Non-controlling
    interest                                                                                                 |  |                        | (1,165,564  | ) |                       |  
|TOTAL
    STOCKHOLDERS' DEFICIT                                                                                              |  |                        | (12,224,037 | ) |                       |  
|                                                                                                                             |  |                        |             |   |                       |  
|TOTAL
    LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                              |  | $                      | 240,974     |   |                       | $





Going
concern (Note 2)

Contingencies
(Note 13)

Subsequent
events (Note 14)



(The
accompanying notes are an integral part of these condensed consolidated financial statements)



4







DSG
GLOBAL, INC.

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                             |  | Three
    Months Ended |            |   | Nine
    Months Ended  |  
|------------------------------------------------------------ |  | ---------------------- | ---------- | - | ---------------------- | -
|                                                             |  | September
    30, 2017 |            |   | September
    30, 2016 |  
|                                                             |  |                        |            |   |                        |  
|Revenue                                                      |  | $                      | 303,151    |   |                        | $
|Cost
    of revenue                                          |  |                        | 121,072    |   |                        |  
|Gross
    profit                                             |  |                        | 182,079    |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Operating
    expenses                                       |  |                        |            |   |                        |  
|Compensation                                                 |  |                        | 151,383    |   |                        |  
|Research
    and development                                 |  |                        | -          |   |                        |  
|General
    and administration                               |  |                        | 299,488    |   |                        |  
|Warranty                                                     |  |                        | 18,354     |   |                        |  
|Bad
    debts                                                |  |                        | 21,670     |   |                        |  
|Depreciation
    and amortization                            |  |                        | 8,668      |   |                        |  
|Total
    operating expenses                                 |  |                        | 499,563    |   |                        |  
|Loss
    from operations                                     |  |                        | (317,484   | ) |                        |  
|                                                             |  |                        |            |   |                        |  
|Other
    income (expense)                                   |  |                        |            |   |                        |  
|Foreign
    exchange gain (loss)                             |  |                        | 297,333    |   |                        |  
|Other
    income (expense)                                   |  |                        | (465)      |   |                        |  
|Unrealized
    gains (losses) on derivative instruments, net |  |                        | (134,220   | ) |                        |  
|Finance
    costs                                            |  |                        | (439,467)  |   |                        |  
|Total
    other income (expense)                             |  |                        | (276,819)  |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Net
    loss                                                 |  |                        | (594,303)  |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Less
    attributed to non-controlling interest              |  |                        | (67,547)   |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Net
    loss attributable to DSG Global, Inc.                |  | $                      | (661,850)  |   |                        | $
|                                                             |  |                        |            |   |                        |  
|Net
    loss per share                                       |  |                        |            |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Basic
    and diluted                                        |  | $                      | (0.02)     |   |                        | $
|                                                             |  |                        |            |   |                        |  
|Weighted
    average number of shares:                       |  |                        |            |   |                        |  
|                                                             |  |                        |            |   |                        |  
|Basic
    and diluted                                        |  |                        | 38,552,866 |   |                        |  



(The
accompanying notes are an integral part of these condensed consolidated financial statements)



5







DSG
GLOBAL, INC.

CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)



|                                                                      |  | Three Months Ended |          |   | Nine Months Ended  |  
|--------------------------------------------------------------------- |  | ------------------ | -------- | - | ------------------ | -
|                                                                      |  | September 30, 2017 |          |   | September 30, 2016 |  
|                                                                      |  |                    |          |   |                    |  
|Net loss                                                              |  | $                  | (594,303 | ) |                    | $
|Change in foreign currency translation adjustments                    |  |                    | (214,961 | ) |                    |  
|Comprehensive loss                                                    |  |                    | (809,264 | ) |                    |  
|Less: Comprehensive loss attributable to non-controlling
    interest |  |                    | (67,673  | ) |                    |  
|                                                                      |  |                    |          |   |                    |  
|Total comprehensive loss attributable to DSG Global, Inc.             |  | $                  | (876,937 | ) |                    | $





(The
accompanying notes are an integral part of these condensed consolidated financial statements)





6







DSG
GLOBAL, INC.

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                |  | Nine
    Months Ended  |           
|------------------------------------------------------------------------------- |  | ---------------------- | ----------
|                                                                                |  | September
    30, 2017 |           
|Cash
    flows from operating activities:                                       |  |                        |           
|Net
    loss attributable to the Company                                        |  | $                      | (1,956,136
|                                                                                |  |                        |           
|Adjustments
    to reconcile net loss to net cash used in operating activities: |  |                        |           
|Depreciation
    and amortization                                               |  |                        | 24,178    
|Inventory
    write-off                                                         |  |                        | 1,930     
|Depreciation
    included in cost of revenue                                    |  |                        | 5,216     
|Amortization
    of deferred financing fees                                     |  |                        | 25,786    
|Accretion
    ofdiscounts on convertible debt                                   |  |                        | 532,803   
|Gain
    onfair value adjustment on derivative liabilities                      |  |                        | (119,268  
|Reserve
    for bad debts                                                       |  |                        | 67,047    
|Shares
    issued for services                                                  |  |                        | 562,500   
|Gain
    / loss on extinguishment of debt                                       |  |                        | (3,143)   
|Changes
    in operating assets and liabilities:                                |  |                        |           
|Accounts
    receivable                                                         |  |                        | (89,462   
|Inventory                                                                       |  |                        | 10,954    
|Funds
    held in trust                                                         |  |                        | -         
|Prepaid
    expenses and deposits                                               |  |                        | 43,156    
|Related
    party receivable                                                    |  |                        | -         
|Other
    assets                                                                |  |                        | -         
|Trade
    payables and accruals                                                 |  |                        | 562,320   
|Warranty
    reserve                                                            |  |                        | 10,405    
|Related
    party transactions                                                  |  |                        | (1,526)   
|Deferred
    revenue                                                            |  |                        | (21,102)  
|Net
    cash used in operating activities                                       |  |                        | (344,342) 
|                                                                                |  |                        |           
|Cash
    flows from investing activities                                        |  |                        |           
|Purchase
    of property and equipment                                          |  |                        | -         
|Return
    of rental equipment                                                  |  |                        | -         
|Purchase
    of intangible assets                                               |  |                        | -         
|Net
    cash used in investing activities                                       |  |                        | -         
|                                                                                |  |                        |           
|Cash
    flows from financing activities                                        |  |                        |           
|Bank
    overdraft                                                              |  |                        | (5,316)   
|Proceeds
    from issuance of common stock                                      |  |                        | 50,000    
|Payments
    on notes payable                                                   |  |                        | -         
|Proceeds
    from notes payable                                                 |  |                        | 721,750   
|Net
    cash provided by financing activities                                   |  |                        | 766,434   
|                                                                                |  |                        |           
|Net
    increase in cash                                                        |  |                        | 422,092   
|                                                                                |  |                        |           
|Effect
    of exchange rate changes on cash                                     |  |                        | (413,124  
|                                                                                |  |                        |           
|Cash
    at beginning of period                                                 |  |                        | -         
|Cash
    at the end of the period                                               |  | $                      | 8,968     
|                                                                                |  |                        |           
|Supplemental
    disclosures (Note 11)                                          |  |                        |           



(The
accompanying notes are an integral part of these condensed consolidated financial statements)



7







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
1 – ORGANIZATION



DSG
Global, Inc. was incorporated under the laws of the State of Nevada on September 24, 2007 as Boreal Productions Inc. We were formed
to option feature films and TV projects to be packaged for sale to movie studios and production companies. On January 19, 2015,
our board of directors approved an agreement and plan of merger to merge with DSG Global Inc., a Nevada corporation, and effected
a name change to DSG Global, Inc. On April 17, 2008, we incorporated our wholly-owned subsidiary, DSG Tag Systems Inc. (“DSG
TAG”), a company extra provincially registered in British Columbia, Canada, with operations in the design, manufacture,
and marketing of fleet management solutions for the golf industry as well as commercial, government, and military applications.
In March 2011, DSG TAG formed DSG Tag Systems International, Ltd., a United Kingdom company (“DSG UK”). DSG UK is
a wholly owned subsidiary of DSG TAG.



Note
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis
of Presentation



The
accompanying condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles
in the United States (“US GAAP”) and with the instructions to Form 10-Q.



Certain
information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been
condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore,
the unaudited condensed interim consolidated financial statements should be read in conjunction with the financial statements
and the notes thereto, included in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2016. Current
and future financial statements may not be directly comparable to the Company’s historical financial statements. However,
except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements
for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely
of normal recurring adjustments, have been made. Operating results for the three and nine months ended September 30, 2017 are
not necessarily indicative of the results that may be expected for the year ending December 31, 2017.



Principles
of Consolidation



The
consolidated financial statements include the accounts of DSG Global Inc. and its subsidiary DSG TAG., and its wholly owned
subsidiary DSG UK. All material intercompany accounts and transactions were eliminated on consolidation.



Use
of Estimates



The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly
evaluates estimates and assumptions related to the allowance for doubtful accounts, valuation of inventory, fair value and estimated
useful life of long-lived assets, fair value of convertible loans and derivative liabilities, fair-value of share-based compensation,
and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are
not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from
the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future
results of operations will be affected.



8







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Accounts
Receivable



All trade receivables are due thirty days
from the date billed. If the funds are not received within thirty days the customer is contacted to arrange payment. The Company
uses the allowance method to account for uncollectable trade receivables.



Property
and Equipment



Property
and equipment are stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life
of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows:



|Office
    furniture and equipment | 5
    years, straight-line
|---------------------------------- | --------------------------
|Computer
    equipment             | 3
    years, straight-line
|Rental
    equipment               | 5
    years, straight-line



As
of September 30, 2017, and December 31, 2016, property and equipment consisted of the following:



|                                   |  | September
    30, 2017 |         |   | December
                                         31, 2016 |  
|---------------------------------- |  | ---------------------- | ------- | - | ---------------------------------------------------------- | -
|Office
    furniture and equipment |  | $                      | 21,560  |   |                                                            | $
|Computer
    equipment             |  |                        | 28,352  |   |                                                            |  
|Accumulated
    depreciation       |  |                        | (47,879 | ) |                                                            |  
|                                   |  | $                      | 2,033   |   |                                                            | $



As
of September 30, 2017, and December 31, 2016, rental equipment consisted of the following:



|                             |  | September
    30, 2017 |          |   | December
                                         31, 2016 |  
|---------------------------- |  | ---------------------- | -------- | - | ---------------------------------------------------------- | -
|Tags                         |  | $                      | 134,385  |   |                                                            | $
|Text                         |  |                        | 29,701   |   |                                                            |  
|Touch                        |  |                        | 24,603   |   |                                                            |  
|Accumulated
    depreciation |  |                        | (167,721 | ) |                                                            |  
|                             |  | $                      | 20,968   |   |                                                            | $



Concentration
of Credit Risk



Financial
instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables
arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions.
The Company has a diversified customer base, most of which are in Canada. The Company controls credit risk related to accounts
receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength
of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible
accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.



Risks
and Uncertainties



The
Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated
with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange
rates and the volatility of public markets.



9







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Reclassifications



Certain
prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no
effect on the reported results of operations or cash flow.



Recently
Issued Accounting Pronouncements



For
fiscal years beginning after December 15, 2018:



In
March 2017, the Financial Accounting Standards Board (“FASB”) issued ASC 2017-08 “Receivables – Nonrefundable
Fees and Other Costs (Subtopic 310-20) – Premium Amortization on Purchased Callable Debt Securities” an amendment
to shorten the amortization period for certain callable debt securities held at a premium to the earliest call date. The amendments
do not require an accounting change for securities held at a discount.



In
July 2017, the Financial Accounting Standards Board (“FASB”) issued ASC 2017-11 “Earnings Per Share (Topic
260), Distinguishing Liability from Equity (Topic 480), and Derivatives and Hedging (Topic 815) – (i) Accounting for Certain
Financial Instruments with Down Round Features (ii) Replace of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments.”
The amendments in (i) change the classification analysis of certain equity-linked financial instruments (or embedded features)
with down round features and to help clarify existing disclosure requirements. The amendments in (ii) characterize the indefinite
deferral of certain provisions and do not have an accounting effect.



The
Company is currently evaluating the impact of the above standards on their consolidated financial statements. Other recent accounting
pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants,
and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future consolidated financial statements.



Going
Concern



These
condensed consolidated interim financial statements have been prepared on a going concern basis, which imply the Company will
continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company
as a going concern is dependent upon the continued financial support from its shareholders, on the ability of the Company to grow
its revenue base, on its ability to successfully grow the companies in which it is invested, and on the ability of the Company
to obtain necessary equity financing to both support the latter objectives and to invest in and grow new companies. The Company
has recurring losses since inception, and incurred a net loss of $1,913,751 during the period ended September 30, 2017, and had
accumulated losses of $28,927,197 and a working capital deficit of $6,976,250 as at September 30, 2017. These factors raise substantial
doubt regarding the Company’s ability to continue as a going concern. Although there are no assurances that management’s
plans will be realized, management believes that the Company will be able to continue operations into the future. These condensed
consolidated interim financial statements do not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



Note
3 – ACCOUNTS RECEIVABLE



|                                         |  | September
30, 2017 |         |   | December
31, 2016 |  
|---------------------------------------- |  | ------------------ | ------- | - | ----------------- | -
|Trade
    accounts receivable            |  | $                  | 132,171 |   |                   | $
|Allowance
    for bad debts              |  |                    | (19,718 | ) |                   |  
|Total
    trade accounts receivable, net |  | $                  | 112,453 |   |                   | $



10







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)



Note
4 – INTANGIBLE ASSETS



|                             |  | September
                                         30, 2017 |        |   | December
                                         31, 2016 |  
|---------------------------- |  | ----------------------------------------------------------- | ------ | - | ---------------------------------------------------------- | -
|Patent
    costs             |  | $                                                           | 21,593 |   |                                                            | $
|Accumulated
    amortization |  |                                                             | (5,650 | ) |                                                            |  
|                             |  | $                                                           | 15,943 |   |                                                            | $



Note
5 – TRADE AND OTHER PAYABLES



|                                   |  | September
                                         30, 2017 |           |  | December
                                         31, 2016 |  
|---------------------------------- |  | ----------------------------------------------------------- | --------- |  | ---------------------------------------------------------- | -
|Trade
    payables                 |  | $                                                           | 1,000,239 |  |                                                            | $
|Accrued
    expenses               |  |                                                             | 233,223   |  |                                                            |  
|Accrued
    interest               |  |                                                             | 1,737,856 |  |                                                            |  
|Other
    liabilities              |  |                                                             | 154,258   |  |                                                            |  
|Total
    trade and other payables |  | $                                                           | 3,125,576 |  |                                                            | $



Note
6 – LOANS PAYABLE



|                                                                                                                                                                |  | September
    30, 2017 |         |  | December
                                         31, 2016 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------- |  | ---------------------------------------------------------- | -
|                                                                                                                                                                |  |                        |         |  |                                                            |  
|Unsecured,
    due on demand, interest 15% per annum                                                                                                            |  | $                      | 203,533 |  |                                                            | $
|Unsecured,
    due on demand, interest 36% per annum                                                                                                            |  |                        | 49,790  |  |                                                            |  
|Unsecured,
    loan payable, interest 18% per annum                                                                                                             |  |                        | 317,500 |  |                                                            |  
|Unsecured,
loan payable, fee for services payable on the original loan amount of 5% by May 6, 2016, 10% payable by June 5, 2016, or 20% payable
by July 5, 2016 |  |                        | 73,273  |  |                                                            |  
|Unsecured,
    loan payable, interest 10% per annum,with a minimum interest amount of $25,000, dueJuly 22, 2016.                                                |  |                        | 250,000 |  |                                                            |  
|                                                                                                                                                                |  |                        |         |  |                                                            |  
|                                                                                                                                                                |  | $                      | 894,096 |  |                                                            | $



Note
7 – CONVERTIBLE NOTES



Related
Party Notes



|(a) | On
    March 31, 2015, the Company issued a convertible promissory note in the principal amount of $310,000 to a company owned by
    a director of the Company. The convertible promissory note is unsecured, bears interest at 5% per annum, was due on March
    30, 2016, and was convertible at $1.25 per share. As at September 30, 2017, the carrying value of the debenture was $310,000
    (December 31, 2016 - $310,000).                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(b) | On
                                         December 16, 2016, the Company issued a convertible promissory note in the principal
                                         amount of Cdn$40,000 to Brent Silzer, a family member of the CEO and CFO of the Company.
                                         The convertible promissory note is unsecured, bears interest at 8% per annum, was due
                                         on January 15, 2017, and was convertible at $0.05 per share. After January 15,
                                         2017, interest accrues at 4% per month. Interest will be accrued and payable at the time
                                         of promissory note repayment.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On
    April 3, 2017, this related party convertible debenture and all unpaid interest and penalties was settled in cash of Cdn$45,500
    and the issuance of 525,049 common shares pursuant to a debt settlement and subscription agreement as described in Note 9.
    As at September 30, 2017, the carrying value of the debenture was $nil (December 31, 2016 - $29,791).                                                                                                                                                                                                                                                                                                                                                   





11







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)



Note
7 – CONVERTIBLE NOTES (continued)



Third
Party Notes



|(c) | On
                                         November 7, 2016, the Company entered into a securities purchase agreement with
                                         Coastal Investment Partners (the “Lender”). Pursuant to the agreement, the
                                         Lender provided the Company with proceeds of $125,000 on November 10, 2016.
                                         In exchange, the Company issued a secured convertible promissory note in the principal
                                         amount of $138,888.89 (the “Note”), inclusive of an 8% original issue discount,
                                         which bears interest at 8% per annum to the holder. The Note matures six months from
                                         issuance and is convertible at the option of the holder into our common shares at a price
                                         per share that is the lower of $0.12 or the closing price of our common stock on the
                                         conversion date. In addition, under the same terms, the Company also issued a secured
                                         convertible note of $50,000 in consideration of cash proceeds of $10,000 and another
                                         secured convertible note of $75,000 in consideration of cash proceeds of $10,000. Under
                                         the agreements, the Company has the right to redeem $62,500 and $40,000 of the notes
                                         in consideration of $1 each at any time prior to the maturity date in the event that
                                         the Note is exchanged or converted into a revolving credit facility with Coastal Investment,
                                         whereupon the two $10,000 convertible note balances shall be rolled into such credit
                                         facility. Discount on the notes was $116,389 and is being accreted over life of
                                         the notes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On May 7, 2017, the Company triggered
an event of default, under Section 6(a)(i) of the convertible note agreement with the Lender dated November 7, 2016, by
failing to repay the full principal amount and all accrued interest. The entire principal amount of the loan is due on demand
and shall continue to accrue interest at an increased rate of 1.5% per month (18% per annum) or the maximum rate permitted under
applicable law until the note is repaid in full.



On
May 8, 2017, the Company issued 100,000 common shares for the conversion of $5,000 of the $72,500 convertible note dated November
7, 2016. Refer to Note 9.



On
May 24, 2017, the Company issued 210,000 common shares for the conversion of $10,500 of the $72,500 convertible note dated November
7, 2016. Refer to Note 9.



On May 25, 2017, the Lender
provided conversion notice for the remaining principal $57,000 of the $72,500 convertible note dated November 7, 2016. This
conversion was not processed by the Company’s transfer agent due to direction from the Company not to honor any further
conversion notices from the Lender. In response, the Company received legal notification pursuant to the refusal to process further
conversion notices, see note 14.



As at September 30, 2017, the carrying
value of the debenture was $245,889 (December 31, 2016 - $82,056) and the fair value of the derivative liability was $145,000
(December 31, 2016 - $365,944). During the nine months ended September 30, 2017, the Company had accreted $179,333 (2016
- $nil) of the debt discount to interest expense.



|(d) | On
                                         December 21, 2016, the Company entered into a convertible note agreement for the principal
                                         amount of $74,500 for consideration of proceeds of $72,250 received on
                                         January 10, 2017. The terms are payable at the date of maturity, December 21, 2017, together
                                         with interest of 12% per annum. Interest will be accrued and payable at the time of promissory
                                         note repayment. The holder shall have the right to convert all or any part of
                                         the outstanding and unpaid principal amount into fully paid and non-assessable shares
                                         of common stock at a conversion price equal to the lessor of (i) the closing sale
                                         price of the common stock on the trading day immediately preceding the
                                         closing date, and (ii) 50% of the lowest sale price for the common stock
                                         during the twenty five consecutive trading days immediately preceding the
                                         conversion date. Discounts and deferred financing fees on the note were $2,250
                                         and $4,750, respectively, and are being accreted over life of the note. Derivative
                                         liability applied as discount on the note was $72,250 and is being accreted over
                                         the life of the note.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On
July 24, 2017, the Company issued 800,000 common shares for the conversion of $26,850 of the principal and a $750 finance fee.
Refer to Note 9.



As at September 30, 2017, the carrying
value of the debenture was $31,111 (December 31, 2016 - $nil) and the fair value of the derivative liability was $47,650 (December
31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted $58,952 (2016 - $nil) of the
debt discount and $3,759 (2016 - $nil) of the financing fees to interest expense.



12







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
7 – CONVERTIBLE NOTES (continued)



|(e) | On
                                         January 18, 2017, the Company issued a convertible promissory note in the principal amount
                                         of $75,000. The terms are payable at the date of maturity, October 18, 2017, together
                                         with interest of 12% per annum. Interest will be accrued and payable at the time of promissory
                                         note repayment. The holder shall have the right to convert all or any part of
                                         the outstanding and unpaid principal amount into fully paid and non-assessable shares
                                         of common stock at a conversion price equal to the lessor of (i) 60% multiplied
                                         by the lowest trading price (representing a discount rate of 40%) during the previous
                                         twenty-five trading day period ending on the latest complete trading day
                                         prior to the date of this Note and (ii) the variable conversion price which means 50%
                                         multiplied by the lowest trading price (representing a discount rate of 50%) during
                                         the previous twenty five trading day period ending on the latest complete trading
                                         day prior to the conversion date. Debt issuance costs and deferred financing
                                         fees on the note were $4,750 and $2,750, respectively, and are being accreted
                                         over life of the note. Derivative liability applied as discount on the note was $75,000
                                         and is being accreted over the life of the note.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On
July 28, 2017, the Company issued 500,000 common shares for the conversion of $4,474 of principal and $4,586 of interest for a
total conversion of $9,060. Refer to Note 9.



On
September 7, 2017, the Company issued 750,000 common shares for the conversion of $12,549 of principal and $951 of interest for
a total conversion of $13,500. Refer to Note 9.



As at September 30, 2017, the carrying
value of the debenture was $57,977 (December 31, 2016 - $nil) and the fair value of the derivative liability was $57,977 (December
31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted $79,750 (2016 - $nil) of the
debt discount and $2,750 (2016 - $nil) of the financing fees to interest expense.



|(f) | On
                                         April 3, 2017, the Company issued a convertible promissory note in the principal amount
                                         of $110,000. The terms are payable at the date of maturity, October 3, 2017, together
                                         with interest of 10% per annum. Interest will be accrued and payable at the time of promissory
                                         note repayment. In connection with the issuance of this convertible promissory note,
                                         the borrower shall issue 550,000 shares of common stock as a commitment fee provided,
                                         however, these shares must be returned if the note is fully repaid and satisfied
                                         prior to the date which is 180 days following the issuance. The holder shall have
                                         the right to convert all or any part of the outstanding and unpaid principal amount into
                                         fully paid and non-assessable shares of common stock at a conversion price equal
                                         to the lessor of (i) 55% multiplied by the lowest trading price (representing
                                         a discount rate of 45%) during the previous twenty-five trading day period ending
                                         on the latest complete trading day prior to the date of this note and (ii)
                                         the alternate conversion price which means 55% multiplied by the lowest trading
                                         price (representing a discount rate of 50%) during the previous twenty five trading
                                         day period ending on the latest complete trading day prior to the conversion date.
                                         Deferred financing fees on the note were $10,000 and are being accreted over the
                                         life of the note. Derivative liability applied as discount on the note was $100,000 and
                                         is being accreted over the life of the note.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





As at September 30, 2017, the carrying
value of the debenture was $108,197 (December 31, 2016 - $nil) and the fair value of the derivative liability was $100,000 (December
31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted $98,361 (2016 - $nil) of the
debt discount and $9,836 (2016 - $nil) of the financing fees to interest expense.



13







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
7 – CONVERTIBLE NOTES (continued)



|(g) | On
                                         June 5, 2017, the Company issued a convertible promissory note in the principal amount
                                         of $110,000. The terms are payable at the date of maturity, December 5, 2017, together
                                         with interest of 10% per annum. Interest will be accrued and payable at the time of promissory
                                         note repayment. The holder shall have the right to convert all or any part of
                                         the outstanding and unpaid principal amount into fully paid and non-assessable shares
                                         of common stock at a conversion price equal to the lessor of (i) 55% multiplied
                                         by the lowest trading price (representing a discount rate of 45%) during the previous
                                         twenty-five trading day period ending on the latest complete trading day
                                         prior to the date of this note and (ii) the alternate conversion price which means 55%
                                         multiplied by the lowest trading price (representing a discount rate of 50%) during the
                                         previous twenty-five trading day period ending on the latest complete trading
                                         day prior to the conversion date. Deferred financing fees on the note were
                                         $7,000 and are being accreted over the life of the note. Derivative liability
                                         applied as discount on the note was $103,000 and is being accreted over the life
                                         of the note.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
at September 30, 2017, the carrying value of the debenture was $70,328 (December 31, 2016 - $nil) and the fair value of the derivative
liability was $103,000 (December 31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted
$65,853 (2016 - $nil) of the debt discount and $4,475 (2016 - $nil) of the financing fees to interest expense.



|(h) | On
                                         July 17, 2017, the Company issued a convertible promissory note in the principal amount
                                         of $135,000. The terms are payable at the date of maturity, July 17, 2018, together with
                                         interest of 10% per annum. Interest will be accrued and payable at the time of promissory
                                         note repayment. The holder shall have the right to convert all or any part of
                                         the outstanding and unpaid principal amount into fully paid and non-assessable shares
                                         of common stock at a conversion price equal to the lessor of (i) 45% multiplied
                                         by the lowest trading price during the previous twenty trading day period
                                         ending on the latest complete trading day prior to the date of this note and (ii)
                                         the alternate conversion price which means 55% multiplied by the lowest trading
                                         price during the previous thirty trading day period ending on the latest complete
                                         trading day prior to the conversion date. Deferred financing fees on the
                                         note were $16,500 and are being accreted over the life of the note. Derivative
                                         liability applied as discount on the note was $118,500 and is being accreted over
                                         the life of the note.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
at September 30, 2017, the carrying value of the debenture was $27,740 (December 31, 2016 - $nil) and the fair value of the derivative
liability was $118,500 (December 31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted
$24,350 (2016 - $nil) of the debt discount and $3,390 (2016 - $nil) of the financing fees to interest expense.



|(i) | On
                                         August 17, 2017, the Company issued a convertible promissory note in the principal amount
                                         of $110,500. The convertible debenture is unsecured, bears interest at 8% per annum,
                                         was due on August 16, 2018, and is convertible at 58% of to the lowest trading price
                                         during the previous trading days to the date of a conversion notice. Deferred financing
                                         fees on the note were $5,250 and are being accreted over the life of the note.
                                         Derivative liability applied as discount on the note was $105,000 and is being accreted
                                         over the life of the note.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
at September 30, 2017, the carrying value of the debenture was $13,592 (December 31, 2016 - $nil) and the fair value of the derivative
liability was $105,000 (December 31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted
$12,945 (2016 - $nil) of the debt discount and $647 (2016 - $nil) of the financing fees to interest expense.





14







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
7 – CONVERTIBLE NOTES (continued)



|(j) | On
                                         September 6, 2017, the Company issued a convertible promissory note in the principal
                                         amount of $107,000. The note is unsecured, bears interest at 10% per annum, and is due
                                         on March 06, 2018. The holder shall have the right to convert all or any part
                                         of the outstanding and unpaid principal amount into fully paid and non-assessable shares
                                         of common stock at a conversion price equal to the lessor of (i) 55% multiplied
                                         by the lowest trading price (representing a discount rate of 45%) during the previous
                                         twenty-five trading day period ending on the latest complete trading day
                                         prior to the date of this note and (ii) the alternate conversion price
                                         which means 55% multiplied by the lowest trading price (representing a discount
                                         rate of 50%) during the previous twenty-five trading day period ending on the
                                         latest complete trading day prior to the conversion date. Deferred financing fees
                                         on the note were $7,000 and are being accreted over the life of the note. Derivative
                                         liability applied as discount on the note was $100,000 and is being accreted over
                                         the life of the note.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As at September 30, 2017, the carrying
value of the debenture was $14,180 (December 31, 2016 - $nil) and the fair value of the derivative liability was $100,000
(December 31, 2016 - $nil). During the nine months ended September 30, 2017, the Company had accreted $13,260 (2016 - $nil)
of the debt discount and $928 (2016 - $nil) of the financing fees to interest expense.



|(k) | As
    at September 30, 2017, the Company owed a convertible promissory note of $nil (December 31, 2016 - $150,000). The convertible
    promissory note is unsecured, bears interest at 24% per annum, was due on September 19, 2016 or upon filing of registration
    statement, and was convertible at $0.27 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On
May 17, 2017, the Company issued 3,000,000 common shares for the conversion of $150,000 of the principal pursuant to a debt settlement
and subscription agreement as described in note 9.



|(l) | As
    at September 30, 2017, the Company owed a convertible promissory note in the principal amount of $1,002,302 (Cdn$1,231,128)
    (December 31, 2016 - $916,905 (Cdn$1,231,128)). The convertible promissory note is unsecured, bears interest at 15.2% per
    annum, mature from February 28 to December 31, 2015, and is convertible into Tags units at the average closing price of the
    120 days period prior to conversion date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(m) | As
    at September 30, 2017, the Company owed a convertible promissory note in the principal amount of $250,000. The convertible
    promissory note is unsecured, bears interest at 10% per annum, is due on demand, and is convertible at $1.75 per share.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Note
8 – MEZZANINE EQUITY



DSG
TAG has 150,000,000 shares of undesignated preferred stock authorized, each having a par value of $0.001 as of September 30, 2017
and December 31, 2016. DSG TAG designated 5,000,000 shares as Series A Convertible Preferred Stock (“Series A Shares”)
and issued 4,309,384 Series A Shares to a company controlled by a director of DSG TAG for conversion of its debt of $5,386,731
on October 24, 2014. The Series A Shares have no general voting rights and carry a 5% per annum interest rate. Series A Shares
that are converted to common shares are entitled to the same voting rights as other common shareholders. At any time on or after
the issuance date any holder of Series A Shares may convert to common stock based on predetermined conversion price of $1.25 per
share. The preferred shares are recorded in the consolidated financial statements as Mezzanine Equity. The Series A Shares are
subject to a redemption obligation at $1.25 per share pursuant to the following terms:



| | ● | On
    or before August 1, 2016, we must complete a financing for gross proceeds of at least $2.5 million and use at least $1.125
    million to redeem a minimum of 900,000 Series A Shares;                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                            
| | ● | On
    or before September 1, 2016, we must complete an additional financing for gross proceeds of at least $2.5 million and use
    at least $1.125 million to redeem a minimum of 900,000 additional Series A Shares; and
| |   |                                                                                                                                                                                                                            
| | ● | On
    or before October 1, 2016, we must complete an additional financing for gross proceeds of at least $5.0 million and use at
    least $3.14 million to redeem the remaining 2,509,384 Series A Shares.               



As
of September 30, 2017, 80,000 preferred shares have been purchased by an unrelated third-party and exchanged for 80,000 shares
of common stock of DSG Global, Inc.



15







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
9 – COMMON STOCK



On December 23, 2016, the Company entered
into an investor relations agreement with Chesapeake Group Inc., to assist the Company in all phases of investor relations including
broker/dealer relations. The contract commenced on January 3, 2017 and will end on July 2, 2017. In consideration for the agreement,
the Company is committed to issuing 1,800,000 shares of common stock within ten days of the agreement, plus an additional
450,000 shares of common stock representing a monthly fee of $3,750. These shares of common stock are to be issued
in monthly installments of 75,000 shares of common stock on the 2nd of each month beginning on February 2, 2017 and ending
on July 2, 2017. On February 15, 2017, the Company issued 2,250,000 shares of common stock at a purchase price of $0.051 per common
stock satisfying the full terms of the agreement.



On April 3, 2017, the Company entered into
an agreement to issue 481,836 shares of common stock pursuant to the conversion of a Cdn$24,092 convertible note balance
at a conversion price of $0.05 per share of common stock. The Company also agreed to issue 43,213 shares of common stock pursuant
to the conversion of interest outstanding totaling Cdn$2,161 at a conversion price of $0.05 per share of common stock.



On
April 6, 2017, the Company issued 550,000 shares of common stock as a commitment fee, pursuant to the terms of the convertible
promissory note issued on April 3, 2017, see note 7. These shares are contingently redeemable, at the issuers control, pursuant
to the agreement that the shares must be returned if the note is fully repaid and satisfied prior to the date which is
180 days following the issuance.



On
April 7, 2017, the Company issued 500,000 shares of common stock pursuant to the Securities Purchase Agreement dated March 15,
2017 at $0.10 per common share for total consideration of $50,000.



On May 4, 2017, the Company approved
the conversion of a $150,000 convertible note held by Gemini Holdings, Inc with the Company. Pursuant to this conversion, on May
17, 2017, the Company issued 3,000,000 shares of common stock to settle the note at a price of $0.05 per common share.



On May 8, 2017, the Company received
a notice for the conversion of $5,000 of a $72,500 convertible note held with Coastal Investment Partners. The Company issued 100,000
shares of common stock pursuant to this conversion notice at a price of $0.05 per common share.



On May 8, 2017, the Company received
a notice for the conversion of $10,500 of a $72,500 convertible note held with Coastal Investment Partners. The Company issued
210,000 shares of common stock pursuant to this conversion notice.



On
July 11, 2017 the Company received a notice for the conversion of $27,000 of a $74,500 convertible note held with EMA. The Company
issued 800,000 common shares at a conversion price of $0.0345 pursuant to this conversion.



On
July 28, 2017 the Company received a notice for the conversion of $9,060 of a $75,000 convertible note held with Auctus Fund,
LLC. The Company issued 500,000 common shares at a conversion price of $0.01812 pursuant to this conversion.



On
September 7, 2017 the Company received a notice for the conversion of $13,500 of a $75,000 convertible note held with Auctus Fund,
LLC. The Company issued 750,000 common shares at a conversion price of $0.018 pursuant to this conversion.



Non-controllingInterest



DSG
TAG has 150,000,000 shares of undesignated preferred stock authorized, each having a par value of $0.001 as of September 30, 2017
and December 31, 2016. DSG TAG designated 5,000,000 shares as Series A Convertible Preferred Stock (“Series A Shares”)
and issued 4,309,384 Series A Shares to a company controlled by a director of DSG TAG for conversion of its debt of $5,386,731
on October 24, 2014. The Series A Shares were not exchanged for securities of DSG Global, Inc. as part of the Share Exchange Agreement.
As of September 30, 2017, the non-controlling interest was $1,165,564 (December 31, 2016 - $1,099,140).





16







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
10 – RELATED PARTY TRANSACTIONS



On March 31, 2015, the Company entered into
an agreement with a marketing firm that is owned by one of the directors of the Company. The terms included cash payment of $17,500
and a note in the amount of $310,000, with 5% interest per annum, convertible at the election of the holder into 248,000 shares
of common stock of DSG Global, Inc. at a price of $1.25 per share, maturing on March 30, 2016. As of September 30, 2016,
it was estimated that approximately 90% of the marketing services related to the agreement have been expensed in the amount of
$280,000 and the remaining $30,000 is recorded as a prepaid deposit. As of September 30, 2017, a Director of the Company
has filed a notice of default in regard to the related party convertible note on the financial statements of DSG TAG. The note
was issued in lieu of marketing services, the note maturity date is March 31, 2016. On October 24, 2017, an interim award
of $279,000 was enforced by the arbitrator.



As
of September 30, 2017, the Company owes $205,162 (December 31, 2016 - $254,010) to the CEO and CFO of the Company for management
fees, which has been recorded in trade and other payables. The amounts owing are unsecured, non-interest bearing, and due on demand.



As of September 30, 2017, the Company owes
$nil (December 31, 2016 - $1,526) to a director and officer of the Company. The amount owing is unsecured, non-interest
bearing, and due on demand.



Note
11 – SUPPLEMENTAL INFORMATION



|Supplemental disclosures                                     |  |   |         |  |  |   |       | 
|------------------------------------------------------------ |  | - | ------- |  |  | - | ----- | 
|Cash paid during the period for:                             |  |   |         |  |  |   |       | 
|Income tax payments                                          |  | $ | -       |  |  | $ | -     | 
|Interest
    payments                                        |  | $ | 24,080  |  |  | $ | 4,066 | 
|                                                             |  |   |         |  |  |   |       | 
|Non-cash financing and investing activities:                 |  |   |         |  |  |   |       | 
|Shares issued
    for services                               |  | $ | 562,500 |  |  | $ | -     | 
|Shares issued
    for convertible notes payable              |  | $ | 346,544 |  |  |   |       | 
|Shares issued
    for convertible related party note payable |  | $ | 20,252  |  |  |   |       | 
|Returnable shares
    issued for commitment fee              |  | $ | 198,000 |  |  |   |       | 



Note
12 – WARRANTY RESERVE



The
Company’s product warranty costs are part of its cost of sales based on associated material product costs, labor costs for
technical support staff, and associated overhead. The products sold are generally covered by a warranty for a period of one year.
As of September 30, 2017, the Company has set up a reserve for future warranty costs of $122,120 (December 31, 2016 - $111,715).
The Company’s past experience with warranty related costs was used as a basis for the reserve. During the nine months ended
September 30, 2017, the Company incurred warranty expense of $25,716 (2016 - $161,762).



In
the normal course of business, the Company indemnifies other parties, including customers, lessors, and parties to other transactions
with the Company, with respect to certain matters. The Company has agreed to hold the other parties harmless against losses arising
from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain
parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In
addition, the Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws
contain similar indemnification obligations to the Company’s agents. It is not possible to determine the maximum potential
amount under these indemnification agreements due to the Company’s limited history with prior indemnification claims and
the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these
agreements have not had a material effect on the Company’s operating results, financial position, or cash flows.



17







DSG
GLOBAL, INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017

(UNAUDITED)



Note
13 – CONTINGENCIES



On
December 30, 2012, a corporation filed an action against the Company in the United States courts claiming patent infringement.
On March 8, 2013, the parties agreed to a settlement, with the Company admitting no wrongdoing, in the amount of $125,000. The
settlement is to be paid over an 18-month period in equal installments of $7,500 with annual interest at a rate of 8%. The Company
has accrued all liabilities related to this matter in the financial statements.



On June 4, 2015, a shareholder of the Company’s
subsidiary filed a lawsuit to recover a loan of Cdn$100,000 which was made on October 16, 2012 and was due on July 16, 2013 with
accrued interest. On August 13, 2015, a settlement was reached between both parties to pay the loan amount remaining plus interest,
for a total of $119,700. In addition, the shareholder’s outstanding shares of DSG TAG were converted into 18,422 shares
of common stock of DSG Global, Inc. on October 22, 2015. On February 16, 2016, a new agreement was reached after a breach of the
settlement agreement dated August 13, 2015. DSG TAG defaulted on the settlement agreement and both parties agreed to new terms.
DSG TAG Systems agreed to pay the plaintiff Cdn$86,780 in monthly installations of Cdn$5,423.75 over a period of
sixteen consecutive months, the first payment commencing April 20, 2016. DSG TAG failed to make further payments after 2 scheduled
payments in May and June 2016. On September 27, 2016, the shareholder filed a Subpoena to Debtor at the Supreme Court of British
Columbia. On October 17, 2016, the Supreme Court of British Columbia made an order in relating to the above discussed lawsuit
from a shareholder to recover a loan of Cdn$100,000. DSG TAG was ordered to repay the remaining loan plus costs in the
amount of $77,589 to the shareholder in 14 monthly payments of $5,500 each plus $589 at the 15th month, starting February 15,
2017. The Company has accrued liabilities related to this matter in the financial statements. As of September 30, 2017, the Company
has not yet made any payments.



A
Director of the Company, representing their company Adore Creative Agency Inc. (Adore) has filed a notice of default in regards
to the related party convertible note on the financial statements of DSG TAG. The note was issued in lieu of marketing services,
the note maturity date is March 31, 2016. The arbitrator awarded that a note payable due to Adore $279,000 is issuable and outstanding.
The note was previously recorded on the balance sheet as a convertible note payable to a related party.



On
September 7, 2016, a vendor has filed a Complaint for Damage in Florida to recover unpaid amounts of $27,335 plus interest. The
invoice was not paid as the Company believes the vendor did not provide the service according to the agreement between the two
parties. On May 31, 2017, the Company was ordered to repay the total invoice amount of $22,396 plus interest of $7,722 as well
as costs and reasonable attorney fees totaling $9,971, which has been accrued on the financial statements. As of September 30,
2017, the Company not yet made any payments.



On May 31, 2017, in response to the Company’s
refusal to process further conversion notices, the Company received legal notice that a lender of the Company would be
commencing all collection efforts to recover convertible loans of $245,889. The letter also served as notice of an obligation
to maintain all documents and records, including electronic information.



On
October 10, 2017, a vendor filed a complaint for Breach of Contract with Superior Court of the State of California. The Complainant
is alleging that it is contractually owed 1,848,130 of DSG’s common stock and has asked for a cash reward of $270,000. In
addition, a related vendor also filed a complaint for $72,000 as part of consulting agreement the Company executed. The Company
believes the vendors have not performed duties required on the contractual relationships and that obligations exist, so no obligation
has been recorded.



Note
14 – SUBSEQUENT EVENTS



On
November 16, 2017 the DSG Global Inc. Shareholder Report indicated that 60,727,920 shares had been issued to Cede & Co during
the months of October and November 2017.



18













Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations



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. These forward-looking statements include, but
are not limited to, statements concerning the following:



| | ● | our
    future financial and operating results;                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                          
| | ● | our
    intentions, expectations and beliefs regarding anticipated growth, market penetration and trends in our business;                
| |   |                                                                                                                                          
| | ● | the
    timing and success of our business plan;                                                                                         
| |   |                                                                                                                                          
| | ● | our
    plans regarding future financings;                                                                                               
| |   |                                                                                                                                          
| | ● | our
    ability to attract and retain customers;                                                                                         
| |   |                                                                                                                                          
| | ● | our
    dependence on growth in our customers’ businesses;                                                                               
| |   |                                                                                                                                          
| | ● | the
    effects of market conditions on our stock price and operating results;                                                           
| |   |                                                                                                                                          
| | ● | our
    ability to maintain our competitive technological advantages against competitors in our industry;                                
| |   |                                                                                                                                          
| | ● | the
    expansion of our business in our core golf market as well as in new markets like commercial fleet management and agriculture;    
| |   |                                                                                                                                          
| | ● | our
    ability to timely and effectively adapt our existing technology and have our technology solutions gain market acceptance;        
| |   |                                                                                                                                          
| | ● | our
    ability to introduce new offerings and bring them to market in a timely manner;                                                  
| |   |                                                                                                                                          
| | ● | our
    ability to maintain, protect and enhance our intellectual property;                                                              
| |   |                                                                                                                                          
| | ● | the
    effects of increased competition in our market and our ability to compete effectively;                                           
| |   |                                                                                                                                          
| | ● | the
    attraction and retention of qualified employees and key personnel;                                                               
| |   |                                                                                                                                          
| | ● | future
    acquisitions of or investments in complementary companies or technologies; and                                                
| |   |                                                                                                                                          
| | ● | our
    ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company.



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.



19







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 state 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.



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 DSG TAG Systems Inc. and the shareholders of DSG TAG Systems 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 DSG TAG Systems in exchange for the issuance
to the selling shareholders of up to 20,000,000 shares of our common stock on the basis of 1 common share for 5.4935 common shares
of DSG TAG Systems.



On
May 6, 2015, we completed the acquisition of approximately 75% (82,435,748 common shares) of the issued and outstanding common
shares of DSG TAG Systems as contemplated by the share exchange agreement by issuing 15,185,875 shares of our common stock to
shareholders of DSG TAG Systems who became parties to the agreement. In addition, concurrent with the closing of the share exchange
agreement, we issued an additional 179,823 shares of our common stock to Westergaard Holdings Ltd. in partial settlement of accrued
interest on outstanding indebtedness of DSG TAG Systems.



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 DSG TAG Systems from shareholders who became parties to the share exchange agreement, and issued to these shareholders
an aggregate of 18,422 shares of our common stock. Following completion of these additional purchases, DSG Global owns approximately
100% of the issued and outstanding shares of common stock of DSG TAG Systems. An aggregate of 4,229,384 shares of Series A Convertible
Preferred Stock of DSG TAG Systems continues to be held by Westergaard Holdings Ltd., an affiliate of Keith Westergaard, a former
member of our board of directors.



The
reverse acquisition was accounted for as a recapitalization effected by a share exchange, wherein DSG TAG Systems 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 DSG TAG Systems upon
the closing of the share exchange agreement.



20







Overview
of Our Business



DSG
Global, Inc. is a technology development company based in Surrey, British Columbia, Canada, engaged in the design, manufacture,
and marketing of fleet management solutions for the golf industry, as well as commercial, government and military applications.
Our principal activities are the sale and rental of GPS tracking devices and interfaces for golf vehicles, and related support
services. 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, and our executive team has over 50 years of experience
in the design and manufacture of wireless, GPS, and fleet tracking solutions. We have developed the TAG suite of products that
we believe is the first completely modular fleet management solution for the golf industry. The TAG suite of products is currently
sold and installed around the world in golf facilities and as commercial applications through a network of established distributors
and partnerships with some of the most notable brands in fleet and equipment manufacture.



DSG
stands for “Digital Security Guard”, which is our primary value statement giving fleet operator’s new capabilities
to track and control their vehicles. We have developed a proprietary combination of hardware and software that is marketed around
the world as the TAG system. We have primarily focused on the golf industry where the TAG system is deployed to help golf course
operators manage their fleet of golf carts, turf equipment, and utility vehicles. We are a leader in the category of fleet management
in the golf industry and were awarded “Best Technology of the Year” in 2010 by Boardroom magazine, a publication of
the National Golf Course Owners Association. To date the TAG system is installed on over 8,000 vehicles and has been used to monitor
over 6,000,000 rounds of golf.



The
TAG system fills a void in the marketplace by offering a modular structure that allows the customer to customize their system
to meet desired functionality and budget constraints. In addition to the core TAG system vehicle control functionality, which
can operate independently, we offer two golfer information display systems — the alphanumeric TEXT and high definition TOUCH
— providing the operator with two display options which is unique in the industry.



The
primary market for our TAG system is the 40,000 golf operations worldwide. While the golf industry remains the primary focus of
our sales and marketing efforts, we have completed several successful pilots of the TAG system in other markets such as agriculture
and commercial fleet operations. With appropriate resources, we intend to expand our sales and marketing efforts into these new
markets.



We
have a direct sales force in North America, which comprises the most significant portion of the golf fleet market, and have developed
key relationships with distributors and golf equipment manufacturers such as E-Z-GO, Yamaha and Ransomes Jacobsen to help drive
sales for the North American and worldwide markets.



In
order to successfully deliver products, increase sales, and maintain customer satisfaction, we need to have a reliable supplier
of our hardware units and components at competitive prices. Presently, we source our TOUCH units from one supplier in China and
our TAG units from one supplier in the United Kingdom. We have recently established a new relationship with a supplier for our
TOUCH units in China to provide us with higher quality, newer technology at competitive pricing. We are also exploring the opportunity
of a partnership with a US manufacturer.



In
addition, DSG is currently in negotiations with a telecommunications provider to provide new technology in hardware and wireless
access.



Our
Revenue Model



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 TOUCH).                                     
| |   |                                                                                                                                                                                                                                                                     
| | ● | 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 TOUCH units.



21







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 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 TOUCH display
    tablets. The TAG system control unit is sold as a stand-alone unit or in conjunction with our TEXT alphanumeric display or
    TOUCH 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.                                                                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | 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, research and development, 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.                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | Research
    and development. Our research and development expenses consist primarily of personnel costs and professional services
    associated with the ongoing development and maintenance of our technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | Research
    and development expenses include payroll, and other headcount-related expenses associated with product development. Research
    and development expenses also include third-party development and programming costs. Such costs related to software development
    are included in research and development expense until the point that technological feasibility is reached. Research and development
    is expensed and is included in operating expenses.                                                                                                                                                                                                             



22







| | ● | 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.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.                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | 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.



Additional
Capital



We
require additional capital to continue to develop software and products, meet our contractual 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.



Results
of Operations



Three
Months Ended September 30, 2017



Revenues
and Gross Profit



We
recorded revenues of $303,151 and a gross profit of $182,079 during the three months ended September 30, 2017 compared to revenues
of $243,469 and gross profit of $52,083 during the three months ended September 30, 2016. The increase is due to the fact that
we recorded a one-time charge on impairment of inventory of $83,184 during fiscal 2016. Overall, our revenues are comparable to
the prior year despite the fact that we have been forced to move to a 3G/4G GPS cellular device, require redevelopment of our
advertising, and integrating our tournament software onto the TOUCH screen. Our company, along with the new sales team, is aggressively
building its pipeline for continued growth into fiscal 2018.



Operating
Expenses



For
the three months ended September 30, 2017, we recorded operating expenses of $499,563 compared to operating expenses of $540,794
during the three months ended September 30, 2016. The decrease in operating expenses was attributed to the following:



| | ● | Decrease
    of $35,070 in compensation expense, as we hired less contract workers and had minimal share-based compensation expense;                                                                                                                                                                                                                                                           
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Decrease
    of $18,088 in research and development expense, as we did not incur any expenses in fiscal 2017 to reduce our operating costs
    and preserve our limited cash flow for other operating activities;                                                                                                                                                                              
| | ● | Increase
    of $24,382 in general and administrative expense related to an increase in professional fees related to accounting and legal
    costs with our SEC filing requirements. We also incurred more costs for the hiring of subcontractors, but was partially offset
    by a decrease in marketing and advertising costs as we reduced our overall costs due to our limited cash flow;



23







| | ● | Increase
    of $21,668 in bad debt expense as we had a number of uncollectible amounts that were fully impaired during the period; and                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Decrease
    of $31,036 in warranty expense due to an increase in warranty costs in fiscal 2016 related to the technical issues with our
    touch tablets that we ordered from a supplier in China during fiscal 2016.



Net
Loss



During
the three months ended September 30, 2017, we incurred a net loss of $661,850 or $0.02 loss per share compared to a net loss of
$565,378 or loss per share of $0.02 during the three months ended September 30, 2016. In addition to revenues and operating expenses,
we also incurred other income and expenses which included:



| | ● | Finance
    costs of $439,467 compared to $153,003 during the three months ended September 30, 2016. The increase was due to the fact
    that we had more loans payable and convertible debentures issued during fiscal 2017 which resulted in a higher amount of interest
    and accretion expense as compared to the prior year;                                                                                                                                                                                                                                                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Unrealized
    losses of $134,220 compared to $nil during the three months ended September 30, 2016 due to the change in fair value of the
    derivative liabilities which was attributed to an increase in the number and amount of convertible debentures as well as an
    increase in the volatility of our common stock; and                                                                                                                                                                                                                                                                                                                   
| | ● | Foreign
    currency exchange gain of $297,333 compared to a foreign exchange currency loss of $23,816 during the three months ended September
    30, 2016. The gain was primarily due to unrealized exchange gain on the change in derivative liabilities for the three months
    ending September 30, 2017 due to exchange rate fluctuations on payables, receivables, and other foreign exchange transactions
    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 Canadian Dollar, Euro and British pound.



Nine
Months Ended September 30, 2017



Revenues
and Gross Profit



We
recorded revenues of $975,623 and a gross profit of $649,106 during the nine months ended September 30, 2017 compared to revenues
of $980,714 and gross profit of $554,261 during the nine months ended September 30, 2016. The increase is due to the fact that
we recorded a one-time charge on impairment of inventory of $107,193 during fiscal 2016. Overall, our revenues are comparable
to the prior year despite the fact that we have been forced to move to a 3G/4G GPS cellular device, require redevelopment of our
advertising, and integrating our tournament software onto the TOUCH screen. Our company, along with the new sales team, is aggressively
building its pipeline for continued growth into fiscal 2018.



Operating
Expenses



For
the nine months ended September 30, 2017, we recorded operating expenses of $1,905,902 compared to operating expenses of $1,624,858
during the nine months ended September 30, 2016. The increase in operating expenses was attributed to the following:



| | ● | Increase
    of $422,012 in general and administrative expense related to fair value of shares that were issued for services during the
    year offset by decreases in office expense and marketing and advertising costs as we focused on reducing our overall costs
    due to our limited cash flow;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Decrease
    of $54,436 in research and development expense, as we did not incur any expenses in fiscal 2017 to reduce our operating costs
    and preserve our limited cash flow for other operating activities;                                                                                       
| | ● | Increase
    of $62,762 in bad debt expense as we had a number of uncollectible amounts that were fully impaired during fiscal 2017; and                                                                                                                                                                
| | ● | Decrease
    of $136,046 in warranty expense due to an increase in warranty costs in fiscal 2016 related to the technical issues with our
    touch tablets that we ordered from a supplier in China during fiscal 2016.                                                                                



Net
Loss



During
the nine months ended September 30, 2017, we incurred a net loss of $1,913,751 or $0.05 loss per share compared to a net loss
of $1,247,971 or loss per share of $0.04 during the nine months ended September 30, 2016. In addition to revenues and operating
expenses, we also incurred other income and expenses which included:



24







| | ● | Finance
    costs of $1,109,185 compared to $433,516 during the nine months ended September 30, 2016. The increase was due to the fact
    that we had more loans payable and convertible debentures issued during fiscal 2017 which resulted in a higher amount of interest
    and accretion expense as compared to the prior year;                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Unrealized
    losses of $42,550 compared to $nil during the nine months ended September 30, 2016 due to the change in fair value of the
    derivative liabilities which was attributed to an increase in the number and amount of convertible debentures as well as an
    increase in the volatility of our common stock;                                                                                                                                                                                                                                                                                    
| | ● | Foreign
    currency exchange gain of $458,279 compared to $27,386 during the nine months ended September 30, 2016. The gain was primarily
    due to unrealized exchange gain on the change in derivative liabilities for the three months ending September 30, 2017 due
    to exchange rate fluctuations on payables, receivables, and other foreign exchange transactions 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 Canadian Dollar, Euro and British pound.



Liquidity
and Capital Resources



|                    |  | At
                                                                                September 30, 2017 |            |   | At
                                                                                December 31, 2016 |  
|------------------- |  | ----------------------------------------------------------------------------------------------------- | ---------- | - | ---------------------------------------------------------------------------------------------------- | -
|Current Assets      |  | $                                                                                                     | 202,030    |   |                                                                                                      | $
|Current Liabilities |  | $                                                                                                     | 7,178,280  |   |                                                                                                      | $
|Working Capital     |  | $                                                                                                     | (6,976,250 | ) |                                                                                                      | $



From
our incorporation in April 17, 2008 through September 30, 2017, 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. At September 30, 2017, we had $7,178,280 in outstanding indebtedness, which all
matures within the next twelve months.



As
of September 30, 2017, we had cash of $8,968 as compared to $nil as of December 31, 2016. Our working capital deficit as at September
30, 2017 was $6,976,250 compared to $5,580,774 as of December 31, 2016. The increase in our working capital deficit was due to
the fact that we are still incurring negative cash flows from operating activities and require the use of debt financing to support
our on-going operations.



Cash
Flow Analysis



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



|                                                             |  | September 30, |         
|------------------------------------------------------------ |  | ------------- | --------
|                                                             |  | 2017          |         
|                                                             |  |               |         
|Net cash (used in) provided by operating activities          |  | $             | (344,342
|Net cash (used in) provided by investing activities          |  |               | -       
|Net cash provided by financing activities                    |  |               | 766,434 
|Net (decrease) increase in cash                              |  |               | 422,092 
|Effect of exchange rate changes on cash and cash equivalents |  |               | (413,124
|Cash at beginning of period                                  |  |               | 0.00    
|Cash at end of period                                        |  | $             | 8,969   



Cash
Flows Used in Operating Activities



During
the nine months ended September 30, 2017, we used cash of $344,342 for operating activities compared to $472,808 used for operating
activities during the nine months ended September 30, 2016. The majority of cash available to our company is used for operating
activities net of any impacts relating to exchange rate changes.



Cash
Flows Used in Investing Activities



During
the nine months ended September 30, 2017, we did not use any cash for investing activities as compared to the use of $6,713 for
investing activities during the nine months ended September 30, 2016.



25







Cash
Flows Provided by Financing Activities



During
the nine months ended September 30, 2017, we received $766,434 of cash from financing activities related primarily to $721,750
received from the issuance of debt financing and $50,000 of proceeds from the issuance of shares of common stock. During the nine
months ended September 30, 2016, we received $484,903 from financing activities which was primarily from receipts of $551,028
from issuance of notes payable less $70,128 of repayments on outstanding notes payable.



Outstanding
Indebtedness



Our
current indebtedness as of September 30, 2017 is comprised of the following. For loans that have expired terms, we are in talks
with the lenders to extend them. The company must increase revenue or raise more equity capital to meet the payment obligations.



Our
current indebtedness as of September 30, 2017 is comprised of the following:



|● | Unsecured
    loan payable in the amount of $317,500 bearing interest at 18% per annum and due on demand;                                                                                                                                                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured
    note payable in the amount of $49,790, bearing interest at 36% per annum and due on demand;                                                                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured
    note payable in the amount of $203,533, bearing interest at 15% per annum and due on demand;                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured
    loan payable in the amount of $73,273 fees for services payable on the original loan amount of 5% by May 6, 2016, 10% payable
    by June 5, 2016, or 20% payable by July 5, 2016                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured
    loan payable in the amount of $250,000, bearing interest at 10% per annum, with a minimum interest amount of $25,000, and
    due on July 22, 2016.                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Secured
    convertible loan payable in the amount of $1,002,302, bearing interest at 15.2% per annum and due on December 31, 2015;                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured,
    convertible note payable to related party in the amount of $310,000, bearing interest at 5% per annum and due on March 30,
    2016;                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured,
    convertible note payable in the amount of $250,000, bearing interest at 10% per annum and due on February 25, 2016;                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Senior
    secured discount convertible notes payable in the amount of $245,889, bearing interest at 8% per annum. Repayable in cash
    or common shares at the lower of (i) twelve cents ($0.12) and (ii) the closing sales price of the Common Stock on the date
    of conversion and due on May 7, 2017. Currently in default, due and payable on demand, and bearing interest at an increased
    rate of 18% per annum;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured,
    convertible note payable in the amount of $31,111 bearing interest at 12% per annum. Repayable in cash or common shares at
    the lower of (i) current market price and (ii) 50% of the lowest trading price of Common Stock during the 25 Trading Days
    immediately preceding the date of conversion. Matures on December 21, 2017.                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured,
    convertible note payable in the amount of $57,977 bearing interest at 12% per annum. Repayable in cash or common shares at
    the lower of (i) three cents and (ii) 50% of the lowest trading price of Common Stock during the 25 Trading Days immediately
    preceding the date of conversion. Matures on October 18, 2017.                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|● | Unsecured,
    convertible note payable in the amount of $110,000 bearing interest at 10% per annum. Repayable in cash or common shares at
    the lower of (i) six cents and (ii) 55% of the lowest trading price of Common Stock during the 25 Trading Days immediately
    preceding the date of conversion. Matures on October 3, 2017.                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Unsecured,
    convertible note payable in the amount of $110,000 bearing interest at 10% per annum. Repayable in cash or common shares at
    the lower of (i) eight cents and (ii) 55% of the lowest trading price of Common Stock during the 25 Trading Days immediately
    preceding the date of conversion. Matures on December 5, 2017.                                                                                



26







| | Unsecured,
        convertible note payable in the amount of $135,000 bearing interest at 10% per annum. Repayable in cash or common shares
        at the lower of (i) 45% multiplied by the lowest Trading Price (representing a discount rate of 45%) during the previous
        twenty (20) Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) 55% of
        the lowest trading price of Common Stock during the 30 Trading Days immediately preceding the date of conversion. Matures
        on July 17, 2017.
        
        Unsecured,
        convertible note payable in the amount of $110,500 bearing interest at 10% per annum. Repayable in cash or common shares
        according to the respective terms.
        
        Unsecured,
        convertible note payable in the amount of $107,000 bearing interest at 10% per annum. Repayable in cash or common shares
        at the lower of (i) 55% multiplied by the lowest Trading Price (representing a discount rate of 45%) during the previous
        twenty five (25) Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii)
        55% of the lowest trading price of Common Stock during the 25 Trading Days immediately preceding the date of conversion.
        Matures on March 6, 2017.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Preferred
Stock Redemption Obligations



Westergaard
Holdings Ltd., an affiliate of Keith Westergaard, a former member of our board of directors, owns 4,229,384 shares (the “Series
A Shares”) of Series A Convertible Preferred Stock of DSG TAG Systems. Pursuant to a Subscription / Debt Settlement Agreement
dated September 26, 2014 between DSG TAG Systems and Westergaard Holdings, as amended on April 29, 2016, DSG TAG Systems has agreed
that DSG Global, Inc. will complete financings for gross proceeds of at least $10 million and use a portion of the proceeds to
redeem all of the Series A Shares at a price of $1.25 per share, as follows:



| | ● | On
    or before August 1, 2016, we must complete a financing for gross proceeds of at least $2.5 million and use at least $1.125
    million to redeem a minimum of 900,000 Series A Shares;                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                            
| | ● | On
    or before September 1, 2016, we must complete an additional financing for gross proceeds of at least $2.5 million and use
    at least $1.125 million to redeem a minimum of 900,000 additional Series A Shares; and
| |   |                                                                                                                                                                                                                            
| | ● | On
    or before October 1, 2016, we must complete an additional financing for gross proceeds of at least $5.0 million and use at
    least $3.14 million to redeem the remaining 2,509,384 Series A Shares.               



If
we fail to satisfy the above described financing and share redemption schedule, we will be in default of the subscription and
Debt Settlement Agreement which would entitle the holder of the Preferred Shares to convert the Series A Convertible Preferred
Shares into common shares in the capital of DSG Global at the price of $1.25 per share. As of the date of this report, these commitments
have not been satisfied and we are currently negotiating an extension on the terms of this agreement.



If
we fail to satisfy the above described financing and share redemption schedule, we will be in default of the Subscription and
Debt Settlement Agreement which would entitle the holder of the Preferred Shares to convert the Series A Convertible Preferred
Shares into common shares in the capital of DSG Global at the price of $1.25 per share.



Prospective
Capital Needs



We
estimate our operating expenses and working capital requirements for the twelve-month period beginning October 1, 2017 to be as
follows:



|Estimated Expenses for the Twelve-Month Period ending September 30, 2018
|------------------------------------------------------------------------
|Management compensation                                                 
|Professional fees                                                       
|General and administrative                                              
|Total                                                                   



27







As
noted earlier, during the nine months ended September 30, 2017, cash used in operations totaled $308,206. The relatively low level
of cash used compared to our estimated working capital needs in the future was the result of an accumulation of vendor payables,
customer receivables, and an increasing loan payable balance. We need to reduce the current level of payables in the near future
to keep a good relationship with our vendors and expand our sales and service team to achieve our operational objectives. At present,
our cash requirements for the next 12 months outweigh the funds available. Of the $2,550,000 that we require for the next 12 months,
we had $8,969 in cash as of September 30, 2017, and a working capital deficit of $7,010,466. Our principal sources of liquidity
are cash generated from product sales. 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 or possibly 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. To help
finance our day to day working capital needs, the founder and CEO of the company has made a total payment of $113,475 since late
2015. 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.



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.



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.



Item
3. Quantitative and Qualitative Disclosures About Market Risk



Not
Applicable



Item
4. Controls and Procedures



Evaluation
of Disclosure Controls and Procedures



The
phrase “disclosure controls and procedures” refers to controls and procedures designed to ensure that information
required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the U.S. Securities and Exchange Commission, or SEC. Disclosure controls and procedures are also designed
to ensure that such information is accumulated and communicated to our management, including our interim chief executive officer,
or Interim CEO, and chief financial officer, or CFO, as appropriate to allow timely decision regarding required disclosure.



28







Our
management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2017, the end of the period covered
by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of September 30, 2016,
our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable
assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated
and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.



Changes
in Internal Control



There
were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules
13a-15(d) or 15d-15(d) of the Exchange Act during the first quarter of 2017 that materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.



Limitations
on Effectiveness of Controls and Procedures



In
designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition,
the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management
is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.



29











PART
II: OTHER INFORMATION



ITEM
1. LEGAL PROCEEDINGS



On
June 4, 2015, a lawsuit was commenced against DSG TAG Systems Inc. in the Supreme Court of British Columbia, captioned Amanda
McGuire v. DSG TAG Systems Inc., No. S-154634, Vancouver Registry. The plaintiff alleges that a promissory note in the principal
amount of $100,000 CDN issued by DSG TAG Systems was not converted into common shares of DSG TAG Systems, as asserted by DSG TAG
Systems, and the plaintiff seeks repayment of indebtedness in the amount of $100,000 CDN plus interest and costs. An agreement
was reached on August 13, 2015 between DSG TAG Systems and the plaintiff, pursuant to which DSG TAG Systems agreed to pay the
plaintiff $119,700 CDN in monthly installations of $17,100 CDN, the first payment commencing on October 1, 2015, and the plaintiff
agreed to exchange 101,200 shares of common stock of DSG Tag Systems for 18,422 shares of common stock of DSG Global, which exchange
occurred on October 22, 2015.



On
December 3, 2015, a second action lawsuit was commenced against DSG TAG Systems Inc. in the Supreme Court of British Columbia,
captioned Amanda McGuire v. DSG TAG Systems and DSG Global Inc., No. S-1510050, Vancouver Registry. The plaintiff filed a claim
for default on the settlement agreement entered in on August 13, 2015 due to non-payment. On February 20, 2016, a new agreement
was reached between DSG TAG Systems and the plaintiff, pursuant to which DSG TAG Systems agreed to pay the plaintiff $86,780 CDN
in monthly installations of $5,423.75 CDN over a period of sixteen consecutive months, the first payment commencing April 20,
2016.



On
October 17, 2016, the Supreme Court of British Columbia made a new order after we did not make the above-mentioned payments on
schedule to the shareholder per the settlement agreement. DSG TAG was ordered to repay the remaining loan plus costs in the amount
of $77,589 to the shareholder in 14 monthly payments of $5,500 each plus $589 at the 15th month starting February 15, 2017.



On
September 7, 2016, a vendor has filed a Complaint for Damage in Florida (Case Number: CACE-16-016663) to recover unpaid invoice
amount of $27,335 plus interest of $4,939. The invoice was not paid due to a dispute that DSG TAG did not think that vendor had
delivered the service according to the agreement between the two parties. On May 31, 2017, the Company was ordered to repay the
total invoice amount of $22,396 plus interest of $7,722 as well as costs and reasonable attorney fees incurred in this action
totaling $9,971. The Company has accrued liabilities related to this matter in the financial statements. As of September 30, 2017,
the Company not yet made any payments.



On
May 31, 2017, in response to the Company’s refusal to process further conversion notices, the Company received legal notice
that a lendor of the Company would be commencing all collection efforts to recover convertible loans of $245,889. The letter also
served as notice of an obligation to maintain all documents and records, including electronic information.



On
October 10, 2017, a vendor filed a complaint for Breach of Contract with Superior Court of the State of California. The Complainant
is alleging that it is contractually owed 1,848,130 of DSG’s common stock and has asked for a cash reward $270,000. In addition,
a related vendor filed in the same filing a complaint for $72,000 as part of consulting agreement DSG executed. The Company believes
the vendors have not performed duties required on the contractual relationships and that obligations exist.



We
may, from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our growth
continues, we may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims
cannot be predicted with certainty, and the resolution of any future matters could materially affect our future financial position,
results of operations or cash flows.



ITEM
1A. RISK FACTORS



As
a smaller reporting company, we are not required to provide the information required by this item.



30









Item
2. Unregistered Sales of Equity Securities and Use of Proceeds



On
September 6, 2017 and November 15, 2017, the Company issued a convertible promissory notes in the principal amount of $107,000.
The terms are payable at the date of maturity, March 6, 2018, together with interest of 10% per annum. Interest will be accrued
and payable at the time of promissory note repayment. The Holder shall have the right to convert all or any part of the outstanding
and unpaid principal amount into fully paid and non-assessable shares of Common Stock at a conversion price equal to the lessor
of (i) 55% multiplied by the lowest Trading Price (representing a discount rate of 45%) during the previous twenty five (25) Trading
Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) the Alternate Conversion Price which
means 55% multiplied by the lowest Trading Price (representing a discount rate of 50%) during the previous twenty five (25) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date.



The
Company used the preceding securities issuances for general working capital purposes.



Item
3. Defaults Upon Senior Securities



None.



Item
4. Mine Safety Disclosures



Not
Applicable.



Item
5. Other Information



Not
Applicable.



Item
6. Exhibits



|Exhibit |  |                                                                                                                                               |  | Filed |  |         |  | Filing   |  |         
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  | ------- |  | -------- |  | --------
|Number  |  | Exhibit
    Description                                                                                                                       |  | Form  |  | Exhibit |  | Date     |  | Herewith
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.1.1   |  | Articles of Incorporation of the Registrant                                                                                                   |  | SB-2  |  | 3.1     |  | 10-22-07 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.1.2   |  | Certificate of Change of the Registrant                                                                                                       |  | 8-K   |  | 3.1     |  | 06-24-08 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.1.3   |  | Articles of Merger of the Registrant                                                                                                          |  | 8-K   |  | 3.1     |  | 02-23-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.1.4   |  | Certificate of Change of the Registrant                                                                                                       |  | 8-K   |  | 3.2     |  | 02-23-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.1.5   |  | Certificate of Correction of the Registrant                                                                                                   |  | 8-K   |  | 3.3     |  | 02-23-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.2.1   |  | Bylaws of the Registrant                                                                                                                      |  | SB-2  |  | 3.2     |  | 10-22-07 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|3.2.2   |  | Amendment No. 1 to Bylaws of the Registrant                                                                                                   |  | 8-K   |  | 3.2     |  | 06-19-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|4.1     |  | Form
    of the Registrant’s common stock certificate                                                                                         |  |       |  |         |  |          |  | X       
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|4.1.2   |  | DSG Global, Inc. 2015 Omnibus Incentive Plan                                                                                                  |  | 10-Q  |  | 10.3    |  | 11-13-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.1    |  | Subscription Agreement / Debt Settlement, dated September 26, 2014, between DSG TAG Systems Inc. and Westergaard Holdings Ltd.                |  | 8-K   |  | 10.1    |  | 08-17-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.2    |  | Addendum to Subscription Agreement / Debt Settlement, dated October 7, 2014, between DSG TAG Systems Inc. and Westergaard Holdings Ltd.       |  | 8-K   |  | 10.2    |  | 08-17-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.3    |  | Second Addendum to Subscription Agreement / Debt Settlement, dated April 29, 2015, between DSG TAG Systems Inc. and Westergaard Holdings Ltd. |  | 8-K   |  | 10.3    |  | 08-17-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.4    |  | Third Addendum to Subscription Agreement / Debt Settlement, dated August 11, 2015, between DSG TAG Systems Inc. and Westergaard Holdings Ltd. |  | 8-K   |  | 10.4    |  | 08-17-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.5    |  | Letter from Westergaard Holdings Ltd., dated September 1, 2015, extending dates of redemption obligations.                                    |  | 8-K   |  | 10.1    |  | 09-08-15 |  |         
|        |  |                                                                                                                                               |  |       |  |         |  |          |  |         
|10.6    |  | Letter from Westergaard Holdings Ltd., dated November 10, 2015, extending dates of redemption obligations                                     |  | 10-Q  |  | 10.1    |  | 11-13-15 |  |         



31











|Exhibit |  |                                                                                                                                                |  | Filed |  |         |  | Filing   |  |         
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  | ------- |  | -------- |  | --------
|Number  |  | Exhibit
    Description                                                                                                                        |  | Form  |  | Exhibit |  | Date     |  | Herewith
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.7    |  | Letter from Westergaard Holdings Ltd., dated December 31, 2015, extending dates of redemption obligations                                      |  | 8-K   |  | 10.1    |  | 03-09-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.8    |  | Convertible Note of DSG TAG Systems Inc., dated March 31, 2015, payable to Adore Creative Agency, Inc.                                         |  | 8-K   |  | 10.5    |  | 08-14-15 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.9    |  | Convertible Note Agreement, dated August 25, 2015, between the Registrant and Jerry Katell, Katell Productions, LLC and Katell Properties, LLC |  | 10-Q  |  | 10.2    |  | 11-13-15 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.10   |  | Agreement (TAG Touch) dated February 15, 2014 between DSG TAG Systems Inc. and DSG Canadian Manufacturing Corp.                                |  | 8-K   |  | 10.1    |  | 05-06-15 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.11   |  | Loan agreement, dated October 24, 2014 between DSG TAG Systems Inc. and A.Bosa & Co (Kootenay) Ltd.                                            |  | 10-K  |  | 10.11   |  | 05-02-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.12   |  | Lease agreement (Modified), dated January 21, 2016 and February 1, 2016 between DSG TAG Systems Inc. and Benchmark Group                       |  | 10-K  |  | 10.12   |  | 05-02-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.13   |  | Loan agreement, dated February 11, 2016 between DSG TAG Systems Inc. and Jeremy Yaseniuk                                                       |  | 10-K  |  | 10.13   |  | 05-02-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.14   |  | Loan agreement, dated March 31, 2016 between DSG TAG Systems Inc. and E. Gary Risler                                                           |  | 10-K  |  | 10.14   |  | 05-02-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.15   |  | Letter
    from Westergaard Holdings Ltd., dated April 29, 2016                                                                                |  | 10-K  |  | 10.15   |  | 05-20-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.16   |  | Security purchase agreement between DSG Global Inc. and Coastal Investment Partners, dated November 7 2016                                     |  | 8-K   |  | 10.16   |  | 11-15-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|10.17   |  | Letter of Resignation by Board Member Keith Westergaard                                                                                        |  | 10-Q  |  | 10.17   |  | 12-16-16 |  |         
|        |  |                                                                                                                                                |  |       |  |         |  |          |  |         
|21.1    |  | List
    of Subsidiaries                                                                                                                       |  | 10-K  |  | 21.1    |  | 05-02-16 |  |         



32









|Exhibit |  |                                                                                                                                                                                       |  | Filed |  |         |  | Filing |  |         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  | ------- |  | ------ |  | --------
|Number  |  | Exhibit
    Description                                                                                                                                                               |  | Form  |  | Exhibit |  | Date   |  | Herewith
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|31.1    |  | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|32.1    |  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101*    |  | Interactive
    Data File                                                                                                                                                             |  |       |  |         |  |        |  |         
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.INS |  | XBRL
    Instance Document                                                                                                                                                            |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.SCH |  | XBRL
    Taxonomy Extension Schema Document                                                                                                                                           |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.CAL |  | XBRL
    Taxonomy Extension Calculation Linkbase Document                                                                                                                             |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.DEF |  | XBRL
    Taxonomy Extension Definition Linkbase Document                                                                                                                              |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.LAB |  | XBRL
    Taxonomy Extension Label Linkbase Document                                                                                                                                   |  |       |  |         |  |        |  | X       
|        |  |                                                                                                                                                                                       |  |       |  |         |  |        |  |         
|101.PRE |  | XBRL
    Taxonomy Extension Presentation Linkbase Document                                                                                                                            |  |       |  |         |  |        |  | X       



|# | The
    information in this exhibit is furnished and deemed not filed with the Securities and Exchange Commission for purposes of
    section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of DSG Global,
    Inc. under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, whether made before or after the
    date hereof, regardless of any general incorporation language in such filing.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33









SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



|Date:
    December 20, 2017 | DSG
    Global Inc.
|--------------------------- | -------------------
|                            | (Registrant)       
|                            |                    
|                            | By:                
|                            |                    
|                            |                    
|                            |                    
|                            |                    





34