| BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS | 1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS Basis of Presentation The accompanying unaudited consolidated financial statements of DiMi Telematics International, Inc. (formerly known as First Quantum Ventures, Inc.), a Nevada corporation (the “Company”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-K for the fiscal year ended August 31, 2015. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of November 30, 2015, and the results of operations and cash flows for the three months ended November 30, 2015 and 2014. The results of operations for the three months ended November 30, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year. Name Title(s) Barry Tenzer President, Chief Executive Officer, Chief Financial Officer, Secretary and Director Roberto Fata Executive Vice President – Business Development and Director The Company accounted for the acquisition under the purchase method of accounting for business combinations. Under the purchase method of accounting in a business combination effected through an exchange of equity interest, the entity that issues the equity interest is generally the acquiring entity. In some business combinations (commonly referred to as reverse acquisitions), however, the acquired entity issues the equity interest. Accounting for business combinations requires consideration of the facts and circumstances surrounding a business combination that generally involves the relative ownership and control of the entity by each of the parties subsequent to the acquisition. Based on a review of these factors, the acquisition was accounted for as a reverse acquisition, i.e., the Company was considered the acquired company and DTI was considered the acquiring company for accounting purposes. As a result, the Company’s assets and liabilities were incorporated into DTI’s balance sheet based on the fair value of the net assets acquired. Further, the Company’s operating results do not include the Company’s results prior to the date of closing. Accordingly the accompanying financial statements are the financial statements of the DTI. In addition, the Company’s fiscal year end changed to DTI’s fiscal year end of August 31 following the closing. The Company has retroactively reflected the acquisition in DTI’s common stock in a ratio consistent with the Share Exchange. On March 15, 2012, First Quantum
changed its name to DiMi Telematics International, Inc. Nature of Business Operations DTI is a development stage company formed on January 28, 2011 as Medepet Inc., a Nevada corporation. During the first year of operations DTI redefined its business purpose and operation. On June 20, 2011, DTI changed its name from Medepet Inc. to Precision Loc8. On July 28, 2011, DTI changed its name from Precision Loc8 to Precision Telematics Inc. On August 9, 2011, DTI changed its name to DiMi Telematics Inc. On July 28, 2011, DTI entered into an asset purchase agreement for the purchase of intellectual property. DTI designs, develops and distributes Machine-to-Machine (“M2M”) communications solutions used to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device. Through our proprietary software and hosted service offerings, DTI is endeavoring to capitalize on the pervasiveness and data transport capabilities of wireless networks in order to facilitate communications and process efficiencies between commercial and industrial business owners/managers and their respective networked control systems, sensors and devices. DTI is focused on the M2M market segments in which we can provide highly differentiated and value-driven solutions capable of unleashing tangible productivity gains, material cost reductions and quantifiable risk mitigation across an enterprise. Aside from the oversight and administration of our corporate, financial and legal affairs by the executive management team, our operating activities are centralized in three core areas: • Sales and Marketing • Operations DiMi • Product Development Going Concern The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $81,092 for the three months ended November 30, 2015 and had an accumulated deficit of $2,143,716 as of November 30, 2015. The Company has net working capital of $94,296 as of November 30, 2015. DTI’s flagship M2M solution is “ DiMi DiMi www.dimispeaks.com With adoption of the DiMi s DiMi By providing dynamic, real-time access to critical information from a wide array of new or legacy sensors, GPS tracking tools and/or diagnostic devices – irrespective of their make, model or manufacturer, DiMi DiMi DiMi DTI’s DiMi DiMi DiMi Once a new client’s core M2M business needs have been confirmed, DTI will closely collaborate with the client to design the organizational and process modifications required to ensure a successful DiMi Cash and Cash Equivalents For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance of $250,000. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that
it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. iPhone Application The iPhone application is stated at cost. When retired or otherwise disposed of, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful life, or three (3) years. DiMi Platform When retired or otherwise disposed of, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful life, or five (5) years. The impairment was due to the DiMi platform and the complications with finding suitable properties for beta testing. As of August 31, 2015, the Company recognized full impairment of the DiMi Platform and expensed $334,685 as a loss from impairment. Intellectual Property Our M2M communications solutions rely on and benefit from our portfolio of intellectual property, including pending patents, trademarks, trade secrets and domain names. Intellectual property is stated at cost. When retired or otherwise disposed of, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference
less any amount realized from disposition is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful life, or three (3) to fifteen (15) years. Revenue Recognition The Company recognizes revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Stock Based Compensation The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement. Fair Value Measurements The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. The Company believes the carrying amounts of cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities are a reasonable approximation of the fair value of those financial instruments because of the nature of the underlying transactions and the short-term maturities involved. Recent Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. Net Loss per Share Basic loss per share amounts is computed based on net loss divided by the weighted average number of common shares outstanding. There were no outstanding warrants as of November 30, 2015. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. Management Estimates The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates. |
