Related Party Transactions Disclosure

6 Months Ended

Apr. 30, 2023

NOTE 3 - RELATED PARTY TRANSACTIONS

The following amounts were due to related parties as at:

	April 30, 2023		October 31, 2022
Due to the Chief Executive Officer (“CEO”) and Director of the Company(a)	$	48,289	$	31,455
Due to a company controlled by the CEO and Director of the Company(a)		-		82,477
Due to a company controlled by the CEO and Director of the Company(e)		2,500,000		-
Notes payable to the CEO and Director of the Company (b)		136,537		112,160
Due to the Chief Financial Officer (“CFO”) and Director of the Company(a)		184,201		148,481
Due to the Chief Strategy Officer (“CSO”) of the Company’s subsidiary(a)		25,000		250,675
Due to a Director of the Company(a)		36,000		24,000
Due to a Director of the Company(a)		36,000		24,000
Due to a Director of the Company(a)		18,000		6,000
Due to a former Director of the Company(c)		-		16,000
Due to a major shareholder for payments made on behalf of the Company(d)		-		507
Total due to related parties	$	2,984,027	$	695,755

(a) Amounts are unsecured, due on demand and bear no interest.

(b) Amounts are unsecured, due on demand and bear interest at 4%.

(c) Mr. Chee Wai Hong resigned from his position as a director of the Company on July 6. 2022, therefore as at April 30, 2023, the amount owed to Mr. Chee Wai Hong, being $16,000 has been included with trade payables.

(d) this Company ceased to be related party, therefore the amount owed has been included with trade payables.

(e) The amount is payable by March 2, 2024. At the discretion of the Company, the amount can be paid in cash or converted to shares at $0.16875 per share, in accordance with a letter the Company received from Brightcliff on March 27, 2023.

Transactions with CEO and Director of the Company

During the six-month period ended April 30, 2023, the Company incurred $60,016 (2022 - $59,801) in wages and salaries to Mr. Lim Hun Beng, the Company’s CEO, President, and director. In addition, the Company incurred $12,174 (2022 - $14,212) in reimbursable expenses with Mr. Lim. During the six-month period ended April 30, 2022, Mr. Lim advanced the Company $20,550 in the form of vendor payments made by him on behalf of the Company. During the six-month period ended April 30, 2023, Mr. Lim lent the Company a total of $19,179 (MYR86,000) in exchange for 4% notes payable that are due on demand.

During the six-month period ended April 30, 2023, the Company accrued $2,398 in interest expense on a total of $133,647 (MYR596,000) the Company owed to Mr. Lim under notes payable. The notes payable accumulate interest at 4% per annum compounded monthly, and are due on demand (2022 - $Nil).

Transactions with Companies Controlled by the CEO and Director of the Company

During the six-month period ended April 30, 2023, the Company incurred $50,987 (2022 - $342,322) to Hampshire Automotive Sdn Bhd. (“Hampshire Automotive”) a private company of which Mr. Joe Lim is a 33% shareholder, for engineering and drafting of the Duesenberg Heritage vehicles, which fees were recorded as part of research and development fees.

On March 2, 2023, the Company entered into an agreement (the “Agreement”) with Brightcliff, a company of which Mr. Lim is major shareholder and director of. The Agreement gave the Company a right to use Duesenberg’s logo and trademark (the “Licensed Trademarks”) in designing, developing, and manufacturing electric vehicles as well as various associated merchandise with the Licensed Trademarks for 20 years. As consideration for the license, the Company agreed to a $5,000,000 fee (the “Licensing Fee”), payable in cash or common shares issued at $0.16875. In addition, the Company agreed to a 3% royalty payable on gross revenue from sales of the trademarked products (Note 9).

On April 5, 2023, the Company issued 14,814,815 Shares as payment for the 50% of the Licensing Fee. The number of shares was determined based on March 2, 2023, share price discounted at 25% and in accordance with a letter from Brightcliff agreeing to amend the conversion price of $0.16875 per share. The Shares issued had a fair value of $1,925,926 (Note 6).

During the comparative six-month period ended April 30, 2022, the Company recognized $14,263 in revenue from licensing and maintenance of its SMART Systems applications to a company of which Mr. Lim is a 50% shareholder. Due to the unfavorable economic conditions following the COVID-19 pandemic, the customer was unable to continue paying for the services, and therefore the Company did not record any revenue from this customer during the six-month period ended April 30, 2023.

Transactions with CFO and Director of the Company

During the six-month period ended April 30, 2023, the Company incurred $48,012 (2022 - $47,841) in wages and salaries to Mr. Liong Fook Weng, the Company’s CFO and director. In addition, the Company incurred $6,540 (2022 - $5,046) in reimbursable expenses with Mr. Liong.

Transactions with Directors of the Company

During the six-month period ended April 30, 2023, the Company incurred a total of $36,000 in management/director fees to its directors (2022 - $36,000).

Transactions with CSO of the Company

During the six-month period ended April 30, 2023, the Company incurred $15,000 (2022 - $90,000) in wages and salaries to its CSO, Mr. Brendan Norman. On December 1, 2022, Mr. Norman and the Company reached an agreement to amend his employment agreement by reducing his monthly fee from $15,000 per month, to $5,000 per month, the amended fees are reported as consulting fees included in general and administrative expenses. During the six-month period ended April 30, 2023, the Company incurred a total of $25,000 in consulting fees with Mr. Norman (2022 - $Nil). In addition, on December 12, 2022, Mr. Norman agreed to convert $265,674 the Company owed him on account of unpaid salary and reimbursable expenses into 2,415,222 shares of the Company’s common stock. These shares were issued on December 28, 2022 (Note 6) and resulted in $311,564 loss on conversion of debt. On January 18, 2023, the Company entered into a subscription agreement with Mr. Norman to issue 333,333 Shares at $0.15 per Share for total proceeds of $50,000; the Shares were issued on February 17, 2023.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

DUESENBERG TECHNOLOGIES INC. 10-Q