Summary of financial condition

Table 2: Comparison of financial condition



                                              October 31, 2021     October 31, 2020
Working capital deficit                      $       (963,891)    $       (501,033)
Current assets                               $          39,069    $          20,937
Total liabilities                            $       1,002,960    $         521,970

Common stock and additional paid in capital $ 8,469,145 $ 7,190,431 Deficit

$     (9,457,922)    $     (7,750,080)

Accumulated other comprehensive income $ 26,838 $ 58,829






Results of operations

YEARS ENDED OCTOBER 31, 2021 AND 2020

Our operating results for the years ended October 31, 2021 and 2020 and the changes in our operating results between them are summarized in the Table 3 below.

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Table 3: Summary

                                         Year ended           Percentage
                                         October 31,          increase /
                                      2021         2020       (decrease)
Revenue net of cost of goods sold $      41,459 $    17,401      138%
Operating expenses                  (1,737,885)   (472,142)      268%
Foreign exchange                          (658)       4,513     (115)%
Interest expense                       (10,758)    (12,887)     (17)%
Impairment of deposits                        -    (22,801)     (100)%
Net loss                            (1,707,842)   (485,916)      251%

Translation to reporting currency (31,991) 12,490 (356)% Comprehensive loss

$ (1,739,833) $ (473,426)      267%




Revenue

During the year ended October 31, 2021, we generated $29,094, in revenue from our SMART Systems software licensing and maintenance of the applications required to run SMART Systems (2020 - $14,375). Our first customer is Duesey Coffee and Chocolates Sdn Bhd ("Duesey Coffee"), of which Mr. Lim is a 50% shareholder. In addition, we generated $12,028 (2020 - $3,026) from WeChat Online product, which was developed specifically for Duesey Coffee in P.R. China, which is managed by Shanghai Duesenberg Marketing Planning Co Ltd, our second customer. Due to current market uncertainty associated with COVID-19 we agreed to bill our customers set monthly fees for these services without entering into any termed contracts, which will allow us or our customers to cancel the services any time. Duesey Coffee agreed to a monthly fee of 10,000 Malaysian Ringgit (approximately USD$2,450), Shanghai Duesenberg Marketing Planning Co Ltd. agreed to a monthly fee of USD$1,000.

In August of 2021, our Duesenberg platform started generating revenue from our online store, which at the moment allows us to sell third-party-products. Our customers are vendors who wish to sell their merchandise on our platform. During the year ended October 31, 2021, we generated $455, in gross revenue from online sales, and paid $118 to our payment gateway provider for the services.





Operating Expenses

Our operating expenses for the years ended October 31, 2021 and 2020 consisted of the following:

Table 4: Changes in operating expenses



                                         Year ended         Percentage
                                         October 31,        increase /
                                       2021       2020      (decrease)
Operating expenses:
Accounting                          $    29,237 $  16,078      82%
Amortization                                990     4,353     (77)%

General and administrative expenses 250,134 59,997 317% Management fees

                          24,000    24,000       -
Professional fees                        32,610    14,242      129%
Regulatory and filing                    33,391    32,827       2%
Salaries and wages                      510,621   295,579      73%
Research and development costs          848,291    14,629     5,699%
Travel and entertainment                  8,611    10,437     (17)%
Total operating expenses            $ 1,737,885 $ 472,142      268%

Our operating expenses increased by $1,265,743 or 268% from $472,142 for the year ended October 31, 2020, to $1,737,885 for the year ended October 31, 2021. The most significant change in our operating expenses was associated with $848,291 in research and development costs which included $616,800 we recorded for initial ergonomics exterior and interior data sheets and CAS IGES files for the Duesenberg EV commissioned from Rocket Supreme, and $231,325 in fees for digitization of the drawings and the blueprints of Duesenberg Heritage vehicles, which we commissioned from Hampshire Automotive Sdn Bhd. ("Hampshire Automotive"); during the year ended October 31, 2020, our research and development costs were $14,629. Our salaries and wages increased by $215,042 from $295,579 we incurred during the year ended October 31, 2020, to $510,621 we incurred during the year ended

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October 31, 2021, the increase was mainly associated with employment agreements for our new CSO and CTO. Other notable expenses included $24,000 in management fees, which did not change in comparison to the year ended October 31, 2020; $29,237 in accounting fees, which increased by $13,159 as compared to $16,078 we incurred during the year ended October 31, 2020; $32,610 in professional fees, which increased by $18,368 from $14,242 we incurred during the year ended October 31, 2020, and $33,391 in regulatory fees, an increase of $564 as compared to $32,827 we incurred during the year ended October 31, 2020.

The above increases were in part offset by decreased travel and entertainment expenses, which during the year ended October 31, 2021, totaled $8,611 as compared to $10,437 we incurred during the comparative period in our fiscal 2020 year, this decrease was associated with reduced travel due to COVID-19 travel bans imposed by various federal governments. In addition, our amortization expense decreased by $3,363 for the year ended October 31, 2021, to $990.





Other Items

During the year ended October 31, 2021, we recorded $10,758 (2020 - $12,887) in interest expense, of which $5,435 (2020 - $8,966) was associated with the liabilities under the notes payable we issued to our major shareholder, and $5,309 (2020 - $3,921) was accrued on the third-party notes payable; we also recorded $658 in realized foreign exchange loss (2020 - $4,513 gain) associated with the fluctuation in foreign exchange rates between the US, Canadian, Malaysian, and Hong Kong currencies.

During the year ended October 31, 2020, we recognized a $22,801 impairment on deposit paid by our subsidiary, Duesenberg Evolution, to a vendor, as underlying agreement to supply certain commodities the Company acquired for trading fell through. We did not have similar transactions during the current year ended October 31, 2021.

Translation to Reporting Currency

Changes in translation to reporting currency result from differences between our functional currencies, being the Canadian dollar for the parent Company, Malaysian Ringgit for Duesenberg Malaysia, and Hong Kong Dollar for Duesenberg Evolution, and our reporting currency, being the United States dollar. These differences are caused by fluctuation in foreign exchange rates between the four currencies as well as different accounting treatments between various financial instruments.





Liquidity



GOING CONCERN

The audited consolidated financial statements included in this Annual Report on Form 10-K have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders and management, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations.

Based upon our current plans, we expect to incur operating losses in future periods. At October 31, 2021, we had a working capital deficit of $963,891 and accumulated losses of $9,457,922 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. The consolidated financial statements included with this Annual Report on Form 10-K do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern. Therefore, we may be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.

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INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY





Table 5: Working Capital

                            At October 31, 2021     At October 31, 2020
Current assets            $              39,069   $              20,937
Current liabilities                 (1,002,960)               (521,970)
Working capital deficit   $           (963,891)   $           (501,033)

During the year ended October 31, 2021, our working capital deficit decreased by $462,858, from $501,033 at October 31, 2020, to $963,891 at October 31, 2021. The increase in working capital deficit was primarily related to changes in vendor payables and accrued liabilities, which increased from $69,525 and $13,366 at October 31, 2020 to $576,881 and $45,318 at October 31, 2021, respectively, and to a smaller extent to increase in amounts owed under notes payable, which increased from $67,429 at October 31, 2020 to $106,892 at October 31, 2021. These increases were in part offset by decreased amounts due to related parties of $273,869, as compared to $371,650 we owed to related parties at October 31, 2020, representing a decrease of $97,781.





Table 6: Cash Flows

                                         At October 31, 2021     At October 31, 2020

Net cash used in operating activities $ (788,995) $ (159,889) Net cash used in investing activities

                (2,760)                       -
Net cash provided by financing
activities                                           787,445                 151,773
Effect of exchange rate changes on
cash                                                      29                      25
Net decrease in cash                    $            (4,281)    $            (8,091)

Net cash used in operating activities.

During the year ended October 31, 2021, we used $788,995 to support our operating activities. This cash was used to cover our cash operating expenses of $1,645,007, and to increase our receivables by $22,749. These uses of cash were offset by increases in our accounts payable and accrued liabilities of $533,503, an increase to accrued salaries payable to our management team of $294,444, an increase to amounts due to our related parties of $50,125, and, to a smaller extent, by a decrease in our prepaids of $689.

During the year ended October 31, 2020, we used $159,889 to support our operating activities. This cash was used to cover our cash operating expenses of $447,005, to increase our receivables by $3,016, and to pay $334 towards our future expenses. These uses of cash were offset by $53,290 increase in amounts due to related parties for reimbursable expenses, by $216,592 increase to accrued salaries payable to our CEO and CFO, and a $20,584 increase to our accounts payable and accrued liabilities.

Non-cash operating activities.

During the year ended October 31, 2021, we recorded $5,435 in interest on our notes payable to Hampshire Avenue and $5,309 in interest owed to third-party lenders under notes payable. We recorded $990 in amortization of our office equipment and $25,849 gain on foreign exchange fluctuation between the US, Canadian, Malaysian, and Hong Kong currencies. In addition, we recorded $76,950 as value of our common shares to be issued for corporate communication services we have received during the year ended October 31, 2021.

During the year ended October 31, 2020, we recorded $22,801 in impairment of our deposits, and $1,130 in foreign exchange fluctuation between the US, Canadian, Malaysian, and Hong Kong currencies. We recorded $8,966 in interest on our notes payable to Hampshire Avenue and $3,921 in interest on CAD$83,309 note payable due on August 31, 2021. In addition, we recorded $4,353 in amortization of our office equipment.

Net cash used in investing activities.

During the year ended October 31, 2021, we used $2,760 to acquire computers and other office equipment.

We did not have any investing activities in our Fiscal 2020 year.

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Net cash provided by financing activities.

During the year ended October 31, 2021, we received $95,150 under loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand. In addition, we borrowed $29,000 from third-party-lenders under 4% demand notes payable. During the year ended October 31, 2021, we received $673,000 in proceeds from two separate private placement financings by issuing a total of 833,333 shares of our common stock. We paid $9,705 in share issuance costs associated with these private placements.

During the year ended October 31, 2020, we received $151,773 under loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand.





Capital Resources

Our ability to continue the development and marketing of the Duesenberg Applications, SMART Systems, Duesenberg WeChat Application, as well as commencement of the development of Duesenberg EV and Duesenberg Heritage vehicles, is subject to our ability to obtain necessary funding. We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital. If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations.

As of October 31, 2021, we had cash on hand of $7,434 and working capital deficit of $963,891, which raises substantial doubt about our continuation as a going concern. During the year ended October 31, 2021, we closed two concurrent private placement financings for net proceeds of $673,000, however, these funds will not be sufficient to complete our current business plans, and we will require additional financing.

We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking new distribution channels for our Duesenberg products, Duesenberg EV, and Duesenberg Heritage Vehicles. We cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Contingencies and Commitments

We had no contingencies at October 31, 2021.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.





Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount 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. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an "emerging growth company," we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company," affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), or upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

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Our significant accounting policies are disclosed in the notes to the audited consolidated financial statements for the year ended October 31, 2021. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:





Principles of Consolidation

The Company's audited consolidated financial statements include the accounts of the Company and its subsidiaries. On consolidation, the Company eliminates all intercompany balances and transactions.

Internal-Use Software

The Company incurs costs related to the development of its VGrab Applications, SMART Systems, Duesenberg WeChat Application, and duesenbergtech.com website. Costs incurred in the planning and evaluation stage of internally-developed software and website, as well as development costs where economic benefit cannot be readily determined, are expensed as incurred. Costs incurred and accumulated during the development stage, where economic benefit of the software can be readily determined, are capitalized and included as part of Intangible assets on the balance sheets. Additional improvements to the web site and applications following the initial development stage are expensed as incurred. Capitalized internally-developed software and website development costs will be amortized over their expected economic life using the straight-line method.

Foreign Currency Translation and Transaction

The Parent Company's functional currency is the Canadian dollar, Duesenberg Malaysia's functional currency is Malaysian Ringgit, and Duesenberg Evolution's functional currency is Hong Kong dollar, the Company's reporting currency is the United States dollar. Duesenberg Nevada and Duesenberg Heritage functional and reporting currencies are the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on translation to the reporting currency are included in the other comprehensive income.

Foreign exchange gains and losses on the settlement of foreign currency transactions are included in foreign exchange expense. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the yearend exchange rate are included in foreign exchange expense. The translations of intercompany balances to the functional currency at the yearend exchange rate are included in accumulated other comprehensive income or loss.

Fair Value of Financial Instruments

Our financial instruments include cash, accounts payable and accruals as well as amounts due to related parties. We believe the fair value of these financial instruments approximate their carrying values due to their short-term nature.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and accounts receivable.

At October 31, 2021, we had $1,955 in cash on deposit with a large chartered Canadian bank, $5,231 in cash on deposits with a bank in Malaysia, and $248 in cash on deposits with a bank in Hong Kong. As part of our cash management process, we perform periodic evaluations of the relative credit standing of these financial institutions. We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.

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