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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedOctober 31,
2010

[   ]TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [   ] to [  
]

Commission file number 000-52452

DUSSAULT APPAREL
INC.(Exact name of registrant as specified in its charter)

|Nevada                                                               | 98-0513727                                
|-------------------------------------------------------------------- | ------------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification
      No.)
|                                                                     |                                           
|                                                                     |                                           
|                                                                     |                                           
|2250 East Hastings Street, Vancouver, BC                             | V5L 1V4                                   
|(Address of principal executive offices)                             | (Zip Code)                                
|                                                                     |                                           
|Registrant's telephone number, including area code:                  | (604) 973 0283                            

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value
  (Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.

  Yes [   ]     No [X]

Indicate by check mark if the registrant is not required to file
  reports pursuant to Section 13 or Section 15(d) of the ActYes [   ]     No [X]

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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 last 90 days. Yes [X]     No
[   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [   ]     No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.[   ]

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 definition of "large accelerated filer," "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

|Large accelerated filer [   ] | Accelerated
      filer                
       [   ]
|----------------------------- | ----------------------------------------------------
|Non-accelerated filer   [   ] | 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]

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on April 30, 2010 was $4,678,135 based on a
$0.045 closing price for the Common Stock on April 30, 2010. For purposes of
this computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the registrants
  classes of common stock as of the latest practicable date.

122,958,557 as of February 14, 2011

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|Item
      1.  | Business                                                                                                                 | 4 
|-------------- | ------------------------------------------------------------------------------------------------------------------------ | --
|               |                                                                                                                          |   
|Item
      1A. | Risk
      Factors                                                                                                       | 8 
|               |                                                                                                                          |   
|Item
      1B. | Unresolved
      Staff Comments                                                                                          | 12
|               |                                                                                                                          |   
|Item
      2.  | Properties                                                                                                               | 12
|               |                                                                                                                          |   
|Item
      3.  | Legal
      Proceedings                                                                                                  | 13
|               |                                                                                                                          |   
|Item
      4.  | [Removed
      and Reserved]                                                                                             | 13
|               |                                                                                                                          |   
|Item
      5.  | Market
      for Registrants Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 13
|               |                                                                                                                          |   
|Item
      6.  | Selected
      Financial Data                                                                                            | 14
|               |                                                                                                                          |   
|Item
      7.  | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                              | 14
|               |                                                                                                                          |   
|Item
      7A. | Quantitative
      and Qualitative Disclosures About Market Risk                                                         | 19
|               |                                                                                                                          |   
|Item
      8.  | Financial
      Statements and Supplementary Data                                                                        | 19
|               |                                                                                                                          |   
|Item
      9.  | Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure                         | 25
|               |                                                                                                                          |   
|Item
      9A. | Controls
      and Procedures                                                                                            | 25
|               |                                                                                                                          |   
|Item
      9B. | Other
      Information                                                                                                  | 26
|               |                                                                                                                          |   
|Item
      10. | Directors,
      Executive Officers and Corporate Governance                                                             | 26
|               |                                                                                                                          |   
|Item
      11. | Executive
      Compensation                                                                                             | 30
|               |                                                                                                                          |   
|Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters               | 32
|               |                                                                                                                          |   
|Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                                          | 33
|               |                                                                                                                          |   
|Item
      14. | Principal
      Accounting Fees and Services                                                                             | 33
|               |                                                                                                                          |   
|Item
      15. | Exhibits,
      Financial Statement Schedules                                                                            | 34

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PART I

Item 1.      Business

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as "may",
"should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to "common
shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us" and "our
company" mean Dussault Apparel Inc., unless the context clearly requires or
states otherwise.

Corporate Overview

The address of our principal executive office is 2250 East
Hastings Street, Vancouver, BC V5L 1V4. Our telephone number is  (604) 973
0283.

Our common stock is quoted on the OTC Bulletin Board under the
symbol "DUSS".

Corporate History

We were incorporated on August 1, 2006, in the State Nevada
under the name Release Your Lease Inc. Our initial business plan was to create a
web-based service for buyers and sellers of leased automobiles. Our stock was
listed for trading on the OTC Bulletin Board on March 14, 2007 under the symbol
"RLYL". A decision was made by new management, to change the corporate direction
of our company and to pursue opportunities in the retail fashion industry.

Effective June 11, 2007, we completed a merger with our wholly
subsidiary Dussault Apparel Inc. As a result, we changed our name from "Release
Your Lease Inc." to "Dussault Apparel Inc." We changed the name of our company
to better reflect the anticipated direction and business of our company. On June
11, 2007, our symbol changed to "DUSS". The subsidiary was created solely for
the purpose of the merger and change of name.

Effective June 11, 2007 we effected a fourteen (14) for one (1)
forward stock split of our authorized, issued and outstanding shares. As a
result, our authorized capital increased from 75,000,000 shares of common stock
with a par value of $0.001 to 10,050,000,000 shares of common stock with a par
value of $0.001. Our issued and outstanding share capital increased from
3,060,000 shares of common stock to 49,000,000 shares of common stock.

On November 8, 2007, we opened our first retail location on
Melrose Avenue, Los Angeles, California. Our Melrose location featured womens
and mens Ready-To-Wear collections as well as jewelry, luggage and headwear. On
October 31, 2008, we elected to close our store located on Melrose Avenue in Los
Angeles, California and ceased all operations relating to this location.
Given the losses associated with our Melrose location, and the market
circumstances for retailers, management was of the view such closure was
necessary to prevent further losses and conserve working capital.

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On April 15, 2009, our company entered into an assignment of
royalty with Jason Dussault. The assignment of royalty provides for the payment
by Jason Dussault of 5% of the royalties received by him pursuant to a
merchandising license agreement with Gene Simmons Company and USPA Accessories
LLC for the license of "Moneybag" intellectual property and related products,
pursuant to and in accordance with the terms and conditions of a merchandising
license agreement. Jason Dussault has agreed to provide sales and design
services under a merchandising license agreement in consideration for royalty
payments from 4.5% to 7.5% of gross income from sales derived under a
merchandising license agreement. From any royalty payments that may become and
payable to Jason Dussault, Mr. Dussault has agreed to assign to our company 5%
of the gross income and has agreed to assign to our company to his rights, title
and interest in and to the amount of the royalty. We have been advised that the
underlying license agreement with Gene Simmons Company and USPA Accessories LLC
has been terminated. As a result we will not be receiving any assigned royalty
payments.

Between May 15, 2009 and July 10, 2009, we entered into
consulting agreements with four (4) consultants, wherein, each of the
consultants agreed to provide consulting services to our company. Pursuant to
the terms of the consulting agreements, we have agreed to issue an aggregate of
2,750,000 restricted shares of our companys common stock.

On October 31, 2009, our company entered into a merchandising
license agreement with USPA Accessories, LLC, wherein, our company agreed to
provide design services under a merchandising license agreement in consideration
for royalty payments of 10% of the gross income from the sales derived under a
merchandising license agreement.

On November 10, 2009, our company entered into a distribution
agreement with EHM Holdings for a term of two years, wherein, EHM Holdings holds
distribution rights to Deuce Custom Ink brand throughout Canada.

On January 10, 2011, we announced that we will create a custom
design wrap, embroidered interior, and custom metal work for a champion towboat
offered by Centurion World Championship Towboats and distributed through
award-winning boat dealer, Breakwater Marine. The custom design wrap will be
unveiled during day one at the 2011 Vancouver International Boat Show, returning
February 9th to 13th at its new venue, the Vancouver Convention Centre in
Vancouver, British Columbia. The custom one-of-a-kind Dussault Centurion ENZO
watercraft, valued at $150,000.00, will be sold to the highest bidder by the end
of the Show, with partial proceeds benefiting Canuck Place Children's Hospice
and the Make A Wish Foundation. As part of the design project, Jason Dussault
will also be creating two custom life jackets and a custom surfboard wrap. These
items will be on display throughout the show and then awarded to show attendees
through a random draw.

We will continue to focus on our remaining operations and
distribution arrangements and will seek additional opportunities in the apparel
retail sector.

Our Current Business

Our current business is primarily limited to licensing our
Deuce Collection of apparel such as hats and t-shirts , we also will continue to
produce limited collections of our Dussault luxury hoodies and Dussault Headwear
when deemed economically viable. We also design skateboards and swimwear for
promotional events, we outsource the manufacturing of promotional items to third
parties.We have also begun selling limited edition prints of our artwork through
our company website . Any limited collections of Dussault hoodies and headware
are only produced based upon demand. We outsource the manufacturing of these
orders to third parties. Upon submission and receipt of the order the client /
retailer is required to prepay 50% of the order, with the balance payable on
delivery. When we place the order with a manufacturer for production, we pay for
the manufacturing costs upon completion. We do not have any agreements in place
for manufacturing, given this model. Given this order by order business model,
we can function without maintaining large inventories and reduced warehousing of
products. We do incur costs of sample production. Our design functions are
carried out at our head office location. Any Dussault hoodies that are produced
are manufactured in Canada, licensed products are managed entirely by our
license partners we only incur cost of design and sampling the license tee
shirts are manufactured in the United States, Canada and China, our licensed
head ware is manufactured in China.

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We do have distribution agreements in regards to our "Deuce"
collection in Canada, and for our head ware collection in the United States as
follows:

- On November 10, 2009, our company entered into a distribution agreement
  with EHM Holdings for a term of two years, wherein, EHM Holdings holds
  distribution rights to Deuce Custom Ink brand throughout Canada. Our Deuce
  collection is distributed pursuant to this agreement with EHM Holdings,
  pursuant to which we split the gross profit margin from the product sales with
  them.
- On October 31, 2009, our company entered into a merchandising license
  agreement with USPA Accessories, LLC, wherein, our company agreed to provide
  design services under a merchandising license agreement in consideration for
  royalty payments of 10% of the gross income from the sales derived under a
  merchandising license agreement. Our head ware collection is distributed
  pursuant to this agreement with USPA Accessories, LLC , doing business as
  Concept One,

Both of the foregoing distribution/merchandising agreements are
non-exclusive.

Distribution Methods Of Our Products

Our products are sold in Canada through retail stores, upscale
retailers, boutiques and specialty stores and our companys website

At present, our products are available in approximately 100
retail locations primarily across Western Canada, through approximately 40
different retailers. Given that such retailers only carry on an order by order
basis, we can provide no assurances that such retailers will continue to
purchase and carry our products on any ongoing basis. Our products are also
available online through our companys website.

As we are in the development stage of our business, our vision
is to redefine the premium apparel experience and fulfill the lofty desires of
fashion-conscious customers worldwide. Our target market is broad as our brand
appeals to customers anywhere between the ages of 15-50. The younger clientele
appreciate the forward fashion, and trend setting edginess while our customers
in their 30s and 40s love the quality and throwback style of the old rock
generations.

Marketing

Our main focus of marketing our company is the reality
television show "Dussault Inc.", produced by Paperny Films. Filming for Season
One of the show has been completed and aired in Canada on the Biography Channel.
The show is expected to air on Citytv in early summer 2011. The show follows the
daily life of designer Jason Dussault and the staff of Dussault Apparel. Paperny
films has announced the second season will begin filming in Los Angeles in the
spring of 2011.

Our other method of marketing is viral. From short films to
animations and music videos and collaborations with manufacturers of products
that tie in with the premium apparel experience demographic our company is
targeting. We are constantly developing and airing branded videos on
YouTube.com, Facebook.com and communicated through twitter and blogs. The viral
marketing method allows us to cost-effectively reach a wider market on an
ongoing basis.

Our products have been featured on several television shows
such as Gene Simmons Family Jewels and Criss Angels Mind Freak. Family Jewels
has dedicated entire episodes to our brand, covering events and parties that we
have hosted with some of Los Angeles hottest celebrities. Gene Simmons has also
promoted us through wearing our product while appearing on the television show
Are You Smarter Than A Fifth Grader, as well as numerous other television
appearances.

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We also utilize street teams of Dussault followers to promote
our line in the night life club scene. Our hoodies are being consistently
promoted through fashion shows, concerts, and industry parties. The cost
incurred for this type of marketing is through merchandise and marketing
materials give aways.

Competition

We face intense competition in the apparel industry from other
established companies. A number of our competitors may have significantly
greater financial, technological, manufacturing, sales, marketing and
distribution resources than we do. Their greater capabilities in these areas may
enable them to better withstand periodic downturns in the apparel industry,
compete more effectively on the basis of price and production and more quickly
develop new products. In addition, there are low barriers of entry into this
industry and new companies may enter the markets in which we compete, further
increasing competition in the industry. We believe that our ability to compete
successfully depends on a number of factors, including the style and quality of
our products and the strength of our brand name, as well as many factors beyond
our control. We may not be able to compete successfully in the future, and
increased competition may result in price reductions, reduced profit margins,
loss of market share and an inability to generate cash flows that are sufficient
to maintain or expand our development and marketing of new products, which would
adversely impact the trading price of our common stock.

Government Regulation and Supervision

Our operations are subject to the effects of international
treaties and regulations such as the North American Free Trade Agreement
(NAFTA). We are also subject to the effects of international trade agreements
and embargoes by entities such as the World Trade Organization. Generally, these
international trade agreements benefit our business rather than burden it
because they tend to reduce trade quotas, duties, taxes and similar impositions.
However, these trade agreements may also impose restrictions that could have an
adverse impact on our business, by limiting the countries from whom we can
purchase our fabric or other component materials, or limiting the countries
where we might market and sell our products.

Labeling and advertising of our products is subject to
regulation by the Federal Trade Commission. We believe that we are in
substantial compliance with these regulations.

Research and Development

We do not currently have a formal research and development
effort but we plan to continue to develop new products.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve months ending October 31, 2011.

Corporate Offices

Our principal office is located at 2250 East Hastings Street,
Vancouver, BC V5L 1V4. We sublease space at this location from Dayton Boot Co.
Ltd. for $4,000 per month, on a month to month basis. We believe that this space
is sufficient to meet our present needs and do not anticipate any difficulty in
securing alternative or additional space, as needed, on terms acceptable to us.

Employees

Currently, our only employees are our directors and officers,
who include Jason Dussault, our president, chief executive officer, secretary,
treasurer and sole director, Robert Mintak, our chief operating officer and
chief financial officer and Jason Sundar, our VP corporate finance. No cash
salaries are paid to any of the officers or directors at present.

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We do not expect to hire new employees over the next 12 month
period.

Intellectual Property

We own and operate the following registered internet domain
names:

- www.dussaultapparel.com;
- www.dussualtink.com; and
- www.deuceink.com
- www.dussaultjeans.com,

We own and operate the following trademark:

- Dussault Custom Ink Trademark. In addition, we acquired all rights to the
  tradename Open Sundaes. As of the date of this report no formal filing
  reserving this tradename has been made, but it is anticipated that applicable
  filings will be undertaken in the very near future in order to perfect our
  rights to this tradename.

REPORTS TO SECURITY HOLDERS

We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission and our filings are available to the public over the internet at the
Securities and Exchange Commissions website at http://www.sec.gov. The public
may read and copy any materials filed by us with the Securities and Exchange
Commission at the Securities and Exchange Commissions Public Reference Room at
100 F Street N.E. Washington D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the Securities and
Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site
that contains reports, proxy and formation statements, and other information
regarding issuers that file electronically with the SEC, at http://www.sec.gov.

Item 1A.  Risk Factors

RISKS RELATED TO OUR BUSINESS

We have had minimal cash flows from operations and if we are
not able to obtain further financing we may be forced to scale back or cease
operations or our business operations may fail.

To date we have had minimal cash flows from operations and we
have been dependent on sales of our equity securities to meet our cash
requirements. As of October 31, 2010, we had working capital surplus of $62,425.
We do not expect positive material cash flow from operations in the near term.
We have estimated that we may require up to $75,000 to carry out our plan in
regards to retail fashion during the twelve month period ended October 31, 2011.
However, there is no assurance that actual cash requirements will not exceed our
estimates.

We depend on third parties for significant elements of our
sales and distribution efforts. If these third parties do not continue to assist
us in our sales and distribution, our revenue could decrease, which would have
an adverse impact on our business.

We have limited marketing efforts. We depend substantially upon
third parties for several critical elements of our business including, among
other things, sales and distribution activities. There can be no assurance that
we or these third parties will be able to establish or maintain adequate sales
and distribution capabilities, that we will be able to enter into agreements or
relationships with third parties in additional territories on financially
acceptable terms or that any third parties with whom we enter into such
arrangements will be successful in selling or distributing our products.

8

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If they are not, our business could be negatively
impacted. Also, if we are unable to maintain our relationships with these sales
agents and distributors or if these sales agents and distributors begin selling
our competitors products, then our ability to generate revenues through the sale
of our products could be negatively impacted.

Changes to government regulation and supervision could have
an adverse effect on our business.

Any negative changes to international trade agreements and
regulations such as NAFTA or any agreements affecting international trade such
as those made by the World Trade Organization which result in a rise in trade
quotas, duties, taxes and similar impositions or which has the result of
limiting the countries from whom we can purchase our fabric or other component
materials, or limiting the countries where we might market and sell our
products, could have an adverse effect on our business.

Changes in trends may cause uncertainties with respect to
the growth of our company and can effect our ability to generate revenues.

Our ability to generate revenues in the future is dependent on
whether we successfully develop our products and create a marketable product and
license or otherwise commercialize our products. We cannot predict whether or
when this may happen and this causes uncertainty with respect to the growth of
our company and our ability to generate revenues.

Our revenues are influenced by general economic cycles,
diminished consumer spending may have an adverse effect on our business and
financial condition.

Apparel is a cyclical industry that is dependent upon the
overall level of consumer spending. Our wholesale customers anticipate and
respond to adverse changes in economic conditions and uncertainty by reducing
inventories and canceling orders. As a result, factors that diminish consumer
spending and confidence in any of the regions in which we compete, particularly
deterioration in general economic conditions, increases in energy costs or
interest rates, housing market downturns, and other factors such as acts of war,
acts of nature or terrorist or political events that impact consumer confidence,
could reduce our sales and adversely affect our business and financial
condition. For example, the price of oil has risen in the recent past. A
continued or sustained rise in oil prices could adversely affect consumer
spending and demand for our products and also increase our operating costs, both
of which could adversely affect our business and financial condition.

Intense competition in the worldwide apparel industry could
reduce our sales and prices and adversely affect our business and financial
condition.

We face a variety of competitive challenges from streetwear and
casual apparel marketers, fashion-oriented apparel marketers, vertically
integrated specialty stores and retailers of private-label products. Some of
these competitors have greater financial and marketing resources than we do and
may be able to adapt to changes in consumer preferences or retail requirements
more quickly, devote greater resources to the building and sustaining of their
brand equity and the marketing and sale of their products or adopt more
aggressive pricing policies than we can. As a result, we may not be able to
compete as effectively with them and may not be able to maintain or grow the
equity of and demand for our brand. Increased competition in the worldwide
apparel industry  including from international expansion of vertically
integrated specialty stores, from department stores, chain stores and mass
channel retailers developing exclusive labels, and from well-known and
successful non-apparel brands expanding into jeans and casual apparel  could
reduce our sales and adversely affect our business and financial condition.

We rely on contract manufacturing of our products. Our
inability to secure production sources meeting our quality, cost, working
conditions and other requirements, or failures by our contractors to perform,
could harm our sales, service levels and reputation.

We source our products from independent manufacturers who
purchase fabric and other raw materials. As a result, we must locate and secure
production capacity. We depend on independent manufacturers to maintain adequate
financial resources, secure a sufficient supply of raw materials, and maintain
sufficient development and manufacturing capacity in an environment characterized by
continuing cost pressure and demands for product innovation and speed-to-market.
In addition, we do not have material long-term contracts with any of our
independent manufacturers, and these manufacturers generally may unilaterally
terminate their relationship with us at any time.

9

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Our dependence on contract manufacturing could subject us to
difficulty in obtaining timely delivery of products of acceptable quality. A
manufacturer's failure to ship products to us in a timely manner or to meet our
quality standards could cause us to miss the delivery date requirements of our
wholesale customers. In addition, any interference with our ability to receive
shipments from those manufacturers, such as conditions at ports or issues that
otherwise affect transportation and warehousing providers, could cause delayed
delivery of product. Additionally, if we experience a significant increase in
demand, or if we need to replace any of the manufacturers that we currently use,
we may have to expand our third party manufacturing capacity. We cannot assure
you that this capacity will be available to us, or available on terms that are
acceptable to us. Failing to make timely deliveries may cause our customers to
cancel orders, refuse to accept deliveries, impose non-compliance charges
through invoice deductions or other charge-backs, demand reduced prices or
reduce future orders, any of which could harm our sales and margins.

Our success depends on the continued protection of our
trademark and other proprietary intellectual property rights.

Our trademark and other intellectual property rights are
important to our success and competitive position, and the loss of or inability
to enforce trademark and other proprietary intellectual property rights could
harm our business. Despite any precautions we may take to protect our
intellectual property, policing unauthorized use of our intellectual property is
difficult, expensive and time consuming, and we may be unable to adequately
protect our intellectual property or determine the extent of any unauthorized
use, particularly in those foreign countries where the laws do not protect
proprietary rights as fully as in Canada or the United States. Our efforts to
establish and protect our trademark and other proprietary intellectual property
rights may not be adequate to prevent imitation or counterfeiting of our
products by others or to prevent others from seeking to block sales of our
products for violating their trademarks and proprietary rights. Unauthorized
copying of our products or unauthorized use of our trademarks or other
proprietary rights may not only erode sales of our products but may also cause
significant damage to our brand names and our ability to effectively represent
ourselves to our customers. Also, we cannot assure you that others will not
assert rights in, or ownership of, our trademarks and other proprietary rights,
that our proprietary rights would be upheld if challenged or that we would, in
that event, not be prevented from using our trademarks, any of which could have
a material adverse effect on our financial condition and results of operations.
Further, we could incur substantial costs in legal actions relating to our use
of intellectual property or the use of our intellectual property by others. Even
if we are successful in these actions, the costs we incur could have a material
adverse effect on us.

The loss of our Chief Executive Officer or other key
management personnel would have an adverse impact on our future development and
could impair our ability to succeed.

Our performance is substantially dependent upon the expertise
of our Chief Executive Officer, Jason Dussault, and other key management
personnel. Mr. Dussault spends all of his working time on our business. It may
be difficult to find qualified individuals to replace Mr. Dussault or other key
management personnel if we were to lose any one or more of them. The loss of Mr.
Dussault or any of our key management personnel could have a material adverse
effect on our business, development, financial condition, and operating results.
We do not maintain "key man" insurance with respect to Mr. Dussault or any of
our other key management personnel, and any of them may leave us at any time,
which could severely disrupt our business and future operating results.

Our licensees may not comply with our product quality,
manufacturing standards, marketing and other requirements.

We license our trademarks to third parties for manufacturing,
marketing and distribution of various products. While we enter into agreements
with our licensees covering product design, product quality, sourcing,
manufacturing, marketing and other requirements, our licensees may not comply
fully with those agreements. Non-compliance could include marketing products
under our brand names that do not meet our quality and other requirements or
engaging in manufacturing practices that do not meet our
standards. These activities could harm our brand equity, our reputation and our
business.

10

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Violation of labor laws and practices by our licensees or
suppliers could harm our business.

We require our licensing partners and suppliers to operate in
compliance with applicable laws and regulations. While our code of conduct
promotes ethical business practices, we do not control our licensees or
suppliers or their labor practices. The violation of labor or other laws by any
of our licensees or suppliers, or divergence of a licensee's or supplier's labor
practices from those generally accepted as ethical in Canada or the United
States, could interrupt or otherwise disrupt the shipment of our products, harm
the value of our trademarks, damage our reputation or expose us to potential
liability for their wrongdoings.

Our quarterly sales and operating results fluctuate as a
result of a variety of factors, including seasonal fluctuations in demand for
premium apparel and related categories, and accessories, delivery date delays,
recognition of stock-based compensation and potential fluctuations in our
annualized tax rate, which may result in volatility of our stock price.

Our quarterly sales and operating results have varied
significantly in the past and can be expected to fluctuate in the future due to
a number of factors, many of which are beyond our control. For example, sales of
our products have historically been somewhat seasonal in nature with the largest
sales generally occurring in the second half of the year. Delays in scheduling
or pickup of products by our licensing partners wholesale customers could
negatively impact our revenues and results of operations for any given quarter.
As a result of these specific and other general factors, our operating results
will likely vary from quarter to quarter and the results for any particular
quarter may not be necessarily indicative of results for the full year. Any
shortfall in sales or net income from levels expected by securities analysts and
investors could cause a decrease in the trading price of our common stock.

RISKS RELATED TO OUR COMMON STOCK

Our common stock may be affected by limited trading volume
and may fluctuate significantly. Substantial fluctuations in our stock price
could significantly reduce the price of our stock.

There has been a limited public market for our common stock and
there can be no assurance an active trading market for our common stock will
develop. This could adversely affect our shareholders ability to sell our
common stock in short time periods or possibly at all. Our common stock has
experienced and is likely to experience significant price and volume
fluctuations that could adversely affect the market price of our common stock
without regard to our operating performance. Our stock price could fluctuate
significantly in the future based upon any number of factors such as: general
stock market trends; announcements of developments related to our business;
fluctuations in our operating results; announcements of technological
innovations, new products or enhancements by us or our competitors; general
conditions in the markets we serve; general conditions in the U.S. or world
economy; developments in patents or other intellectual property rights; the
performance of our eligible portfolio companies; and developments in our
relationships with our customers and suppliers. Substantial fluctuations in our
stock price could significantly reduce the price of our stock.

Our common stock is traded on the "Over-the-Counter Bulletin
Board," which may make it more difficult for investors to resell their shares
due to suitability requirements.

Our common stock is currently traded on the Over the Counter
Bulletin Board (OTCBB) where we expect it to remain in the foreseeable future.
Broker-dealers often decline to trade in OTCBB stocks given the market for such
securities are often limited, the stocks are more volatile, and the risk to
investors is greater. These factors may reduce the potential market for our
common stock by reducing the number of potential investors. This may make it
more difficult for investors in our common stock to sell shares to third parties
or to otherwise dispose of their shares. This could cause our stock price to
decline.

11

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Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commissions penny stock regulations
and the Financial Industry Regulatory Authoritys sales practice requirements,
which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse.

The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

In addition to the "penny stock" rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common shares.

Item 1B.  Unresolved Staff Comments

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

Item 2.     Properties

Our principal office is located at 2250 East Hastings Street,
Vancouver, BC V5L 1V4. We sublease at a cost of $4,000 per month from Dayton
Boot Co. Ent. Ltd., which is deducted from the loan due to us from Dayton. We
believe that this space is sufficient to meet our present needs and do not
anticipate any difficulty in securing alternative or additional space, as
needed, on terms acceptable to us.

12

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Item 3.      Legal Proceedings

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial stockholder,
is an adverse party or has a material interest adverse to our interest.

Item 4.      [Removed and Reserved]

PART II

Item 5.      Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Our shares of common stock are currently trading on the OTC
Bulletin Board under the Symbol "DUSS.OB". Our shares of common stock were
initially approved for quotation on the OTC Bulletin Board on March 14, 2007
under the symbol, "RLYL". On June 11, 2007, we changed our name to "Dussault
Apparel Inc." upon completion of our merger with our wholly owned subsidiary,
"Dussault Apparel Inc." and our trading symbol was changed to our current
trading symbol, "DUSS.OB".

The following table reflects the high and low bid information
for our common stock obtained from Stockwatch and reflects inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

National Association of Securities Dealers OTC Bulletin BoardQuarter Ended
      High
      LowOctober 31, 2010
      $0.0285
      $0.006July 31, 2010
      $0.0475
      $0.018April 30, 2010
      $0.075
      $0.012January 31, 2010
      $0.069
      $0.019October 31, 2009
      $0.071
      $0.02July 31, 2009
      $0.12
      $0.0116April 30, 2009
      $0.0225
      $0.001January 31, 2009
      $0.15
      $0.011October 31, 2008
      $0.69
      $0.12


As of January 13, 2011, there were 42 holders of record of our
common stock and 122,958,557 common shares were issued and outstanding.

Our common shares are issued in registered form. The registrar
and transfer agent for our shares of common stock Island Stock Transfer, 100
Second Avenue South, Suite 104N, St. Petersburg, FL 33701, Telephone: (727)
289-0010, Facsimile: (727) 289-0069.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

13

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Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

No previously undisclosed sales of unregistered securities.

Equity Compensation Plan Information

Except as disclosed below, we do not have a stock option plan
in favor of any director, officer, consultant or employee of our company.

Purchase of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fourth quarter of our fiscal year ended October 31, 2010.

Item 6.      Selected Financial
Data

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

Item 7.      Managements
Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our
audited financial statements and the related notes for the years ended October
31, 2010 and October 31, 2009 that appear elsewhere in this annual report. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to those discussed
below and elsewhere in this annual report, particularly in the section entitled
"Risk Factors" beginning on page 8 of this annual report.

Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.

Cash Requirements

Over the next twelve months we intend to use any funds that we
may have available to fund our operations.

Not accounting for our working capital surplus of $62,425 as of
October 31, 2010, we require additional funds of approximately $75,000 at a
minimum to proceed with our plan of operation over the next twelve months. As we
do not have the funds necessary to cover our projected operating expenses for
the next twelve month period, we will be required to raise additional funds
through the issuance of equity securities, through loans or through debt
financing. There can be no assurance that we will be successful in raising the
required capital or that actual cash requirements will not exceed our estimates.
We intend to fulfill any additional cash requirement through the sale of our
equity securities.

Our auditors have issued a going concern opinion for our year
ended October 31, 2010. This means that there is substantial doubt that we can
continue as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills. As we had cash in the amount of $30,833 and
a working capital surplus in the amount of $62,425 as of October 31, 2010, we do
not have sufficient working capital to enable us to carry out our stated plan of
operation for the next twelve months. We plan to complete debt financings and/or
private placement sales of our common stock in order to raise the funds
necessary to pursue our plan of operation and to fund our working capital
deficit in order to enable us to pay our accounts payable and accrued
liabilities. We currently do not have any arrangements in place for the
completion of any debt financings or private placement financings and there is
no assurance that we will be successful in completing any debt financing or
private placement financing.

14

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Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
  twelve months ending October 31, 2011.

Research and Development

We do not intend to allocate any funds to research and
development over the twelve months ending October 31, 2011.

Results of Operations for the Years Ended October 31, 2010
and 2009

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the years ended
October 31, 2010 and 2009.

Our operating results for the years ended October 31, 2010 and
2009 are summarized as follows:

Year EndedOctober 31,2010
      
      
      2009Sales
      $
      216,815
      
      $
      610,923Cost of Sales
      $
      185,361
      
      $
      159,178Operating Expenses
      $
      1,078,643
      
      $
      580,680Net Loss from Operations
      $
      (1,028,400
      )
      $
      (57,901
      )


Sales

Our sales for the year ended October 31, 2010 were $216,815,
compared to our sales for the year ended October 31, 2009, which were $610,923,
representing approximately a 64% decrease. This decrease in sales is primarily
due to our shift from being a manufacturer-wholesaler of our Dussault Apparel
Collection of luxury hoodies and apparel lines and moving towards a licensing
model. Due to this transition in the business model we missed the fall and
winter selling cycle, traditionally the largest sales season. We are now working
on the industry seasonal selling cycle.

We expect our revenue to grow as we are now on the industry
selling cycle and have established relationships with our licensing partners and
have collections ready for the upcoming seasons and we further establish our
presence within premium retail channels.

During the year ended October 31, 2010 our company did not
recognize an inventory markdown (as compared to a markdown of $35,640 for the
year ended October 30, 2009 and a markdown of $1,791,526 during the year ended
October 31, 2008). The underlying reasons for the markdown during the year ended
October 31, 2008 were as follows: the inventory arrived in the summer of 2007.
The inventory constituted the Winter Collection for 2007-2008. Our company was
unsuccessful in generating large enough sales to turn the inventory during the
season. Fashion companies must always be presenting new products to clients,
when an item does not sell it is marked down to sell, unfortunately the general
economic situation was rapidly deteriorating in the summer /fall of 2008 with
retailers and manufacturers liquidating stock, closing outlets and cutting back
on purchases. These circumstances made it difficult to sell the inventory to the
traditional apparel clearance channels. Additionally sales at the Dussault Store
in Los Angeles were virtually non- existent. Our company made the decision to
protect its cash on hand and close the Dussault Store in Los Angeles. With no
staff remaining in Los Angeles to oversee and manage warehoused inventory and
not enough capital to transport and store the inventory in Canada we sold the
inventory at the best price and terms we could get at the time. The markdown
value was based upon the sale price negotiated with the buyer of the
inventory.

15

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Cost of Sales

Our cost of sales for the year ended October 31, 2010 was
$185,361 (85% of product sales), compared to our cost of sales for the year
ended October 31, 2009, which was $159,178 (26% of product sales). The decrease
in our cost of sales is mainly due to decreased sales and the transition from
manufacturer to licensor. We expect that our cost of sales will decrease over
the next twelve months, mainly due to our focus primarily on licensing projects
and that sampling and literature support is in place related to these sales.

Future cost of sales may be impacted by the inclusion of new
brands which may have product cost structures and margins different from those
of our existing product lines, the effects of inflation and changing prices from
our suppliers and fluctuations in foreign currency rates as certain costs are
incurred in foreign currencies.

Inventory Markdown

Inventory was marked down during the fiscal years as follows:

October 31,
      2010
    
    October 31, 2009$Nil
    
    $35,640


During our October 31, 2008 year end, we recognized a markdown
of 1,791,526. The markdown was occasioned by the planned closure of our
companys retail outlet on Melrose Drive in Los Angeles, which occurred November
2008. The loss of our companys retail outlet left our company no alternative
but to sell the majority of inventory to discounters below cost. The markdown
was calculated as the difference between recorded cost and the amount realized
in the discounted sale, the amount realized being $181,847.50. No estimates were
involved.

A certain portion was earmarked for Canadian operations and was
shipped to Canada after the store closed. This inventory was expected to realize
a gross profit, therefore the portion earmarked for Canada was recorded as
ending inventory at recorded cost.

The markdown in the October 31, 2009 year was the result of a
critical review of inventory to cull items that proved to be non-marketable, or
nearly so. The markdown was calculated as the recorded value of the items.

Operating Expenses

For the year ended October 31, 2010, our total operating
expenses were $1,078,643 as compared to $580,680 for the year ended October 31,
2009. The increase in our total operating costs is mainly due to an increase in
wages, consulting fees, intellectual property acquisition and bad debts.

We expect to continue to increase our business activities and
we expect our total operating expenses, excluding stock-based compensation, to
continue to remain stable or decrease over the coming twelve months. We expect
any future increases in our total operating expenses to decrease as a percentage
of total revenue.

Liquidity and Financial Condition

Working CapitalAt October 31,
    
    
    At October 31,2010
    
    
    2009Current Assets
    $
    76,397
    
    $
    140,377Current Liabilities
    $
    13,972
    
    $
    106,537Working Capital
    $
    62,425
    
    $
    33,840


16

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Cash FlowsAt October 31,
      
      
      At October 31,2010
      
      
      2009Net Cash (Used by) Operating
      Activities
    $
    (66,683
    )
    $
    (264,298
    )Net Cash (Used by) Provided by Investing
      Activities
    $
    (108,859
    )
    $
    120,401Net Cash Used by) Provided by
      Financing Activities
    $
    104,703
    
    $
    54,434Effect of Exchange Rate Changes
    $
    46,681
    
    $
    (20,760
    )Increase (Decrease) In
      Cash During The Period
    $
    (22,158
    )
    $
    (110,223
    )


We had cash in the amount of $30,833 as of October 31, 2010 as
compared to $52,991 as of October 31, 2009. We had a working capital surplus of
$62,425 as of October 31, 2010 compared to working capital surplus of $33,840 as
of October 31, 2009.

We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital as needed. In
this regard we have raised additional capital through equity offerings and loan
transactions. During the year ended October 31, 2010, we raised $75,000 from the
sale of our common stock.

Future Financings

Presently, our revenues may not be sufficient to meet our
operating and capital expenses.

Our capital requirements are difficult to plan in light of our
current strategy to limit our operations and our products. Since our inception,
we have been dependent on investment capital as an important source of
liquidity. Our operations presently are generating negative cash flow, and we do
not expect positive cash flow from operations in the near term. We need to
secure additional working capital in the short-term in order to sustain our
operations and execute our business plan. We have incurred operating losses
since inception, and this is likely to continue into the year ended October 31,
2011.

There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis should it be required, or generate significant
material revenues from operations, we will not be able to meet our other
obligations as they become due and we will be forced to scale down or perhaps
even cease our operations.

Contractual Obligations

As a "smaller reporting company", we are not required to
provide tabular disclosure obligations.

Going Concern

We have suffered recurring losses from operations and are
dependent on our ability to raise capital from stockholders or other sources to
meet our obligations and repay our liabilities arising from normal business
operations when they become due. In their report on our audited financial
statements for the year ended October 31, 2010, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosure describing the circumstances that lead to this disclosure by our
independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

17

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Critical Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with
generally accepted accounting principles in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of our
companys financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions and could have a
material effect on the reported amounts of our companys financial position and
results of operations.

Inventory

Inventory was moved to the Vancouver office after the retail
outlet in Los Angeles was closed in November, 2008. Inventories are stated at
the lower of cost or market value. Market value represents net realizable value.
Inventory is priced according to the FIFO first in first out method, and
counted periodically. Current inventory at October 31, 2010 is $41,548.

Loss Per Share

Net loss per share is calculated in accordance with FASB ASC
260, Earnings Per Share, for the periods presented. Basic net loss per share is
based upon the weighted average number of common shares outstanding. Diluted net
loss per share is based on the assumption that all dilutive convertible shares
and stock options were converted or exercised. Our company has potentially
dilutive securities in a convertible loan payable, however the conversion would
be anti-dilutive and is not considered in the calculation.

The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations for the
years ended October 31, 2010 and 2009:

2010
    
    
    2009Basic and diluted net loss
      per share:NumeratorNet Earnings (Loss)
    $
    (979,719
    )
    $
    (595,661
    )DenominatorBasic
      and diluted weighted
      average              number
      of shares outstanding
    
    81,992,186
    
    
    65,101,863Basic and Diluted Net Loss
      Per Share
    $
    (0.01
    )
    $
    (0.01
    )


Recent Accounting Pronouncements

In May, 2009, the FASB issued FASB issued ASC 855 (SFAS No.
165), Subsequent Events, which established general accounting standards
and disclosure for subsequent events. In accordance with SFAS No. 165, our
company has evaluated subsequent events through the date the financial
statements were filed.

In June, 2009, the FASB issued their final SFAS, No. 168,
FASB Accounting Standards Codification, (ASC), and the Hierarchy
of Generally Accepted Accounting Principles. This was reflected in the
codification as FASB ASC 105, Generally Accepted Accounting Principles.
ASC is the single source of authoritative US generally accepted accounting
principles recognized by the FASB to be applied to nongovernmental entities. It
is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The adoption of ASC 105 will not have an impact
on our companys financial position, results of operations or cash flows.

18

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Item 7A.   Quantitative and Qualitative Disclosures
About Market Risk

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

Item 8.      Financial Statements
and Supplementary Data

19

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To: The Board of Directors and Shareholders Dussault
Apparel Inc. 
  Vancouver, B.C., Canada

I have audited the accompanying balance sheet of Dussault
Apparel Inc. as of October 31, 2010 and 2009 and the related statements of
operations, of shareholders equity (deficit) and of cash flows for the years
ended October 31, 2010 and 2009 These financial statements are the
responsibility of the Companys management. My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that I plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.

In my opinion, based on my audit, the financial statements
referred to above present fairly, in all material respects, the financial
position of Dussault Apparel Inc. as of October 31, 2010 and 2009 and the
results of its operations and its cash flows for the years ended October 31,
2010 and 2009 in conformity with United States generally accepted accounting
principles.

The Companys financial statements are prepared using
accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company as at
October 31, 2010 had not established an ongoing source of revenues sufficient to
cover its operating costs and to allow it to continue as a going concern. These
factors raise substantial doubt concerning the Companys ability to continue as
a going concern. Its ability to continue as a going concern is dependent on the
successful stimulation of sales in order to fund operating losses and become
profitable. If the Company is unable to make it profitable, the Company could be
forced to cease development of operations. Management cannot provide any
assurances that the Company will be successful in its operation. The
accompanying financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern

The Company has determined that it is not required to have, nor
was I engaged to perform, an audit of the effectiveness of its documented
internal controls over financial reporting.

/s/

John Kinross-Kennedy Certified Public Accountant
Irvine, California 
  February 12, 2011

20

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|DUSSAULT APPAREL INC.                              
|---------------------------------------------------
|Balance Sheet
      as at October 31, 2010 and 2009

|                                                                                                                                                                                                                                                                                     |   | 2010        |   |   | 2009       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------- | - | - | ---------- | -
|                                                                                                                                                                                                                                                                                     |   |             |   |   | (Restated) |  
|ASSETS                                                                                                                                                                                                                                                                               |   |             |   |   | Note 3     |  
|Current Assets                                                                                                                                                                                                                                                                       |   |             |   |   |            |  
|Cash                                                                                                                                                                                                                                                                                 | $ | 30,833      |   | $ | 52,991     |  
|Accounts Receivable                                                                                                                                                                                                                                                                  |   | 4,016       |   |   | 52,477     |  
|Allowance for Doubtful Accounts                                                                                                                                                                                                                                                      |   | -           |   |   | (11,204    | )
|Inventory                                                                                                                                                                                                                                                                            |   | 41,548      |   |   | 46,114     |  
|Total Current Assets                                                                                                                                                                                                                                                                 |   | 76,397      |   |   | 140,378    |  
|Notes
      Receivable                                                                                                                                                                                                                                                               |   | 112,127     |   |   | 238,565    |  
|Property and
      Equipment, net                                                                                                                                                                                                                                                    |   | 6,552       |   |   | 11,425     |  
|Other
      Assets                                                                                                                                                                                                                                                                   |   |             |   |   |            |  
|Trade Mark                                                                                                                                                                                                                                                                           |   | 183,859     |   |   | -          |  
|Deposits                                                                                                                                                                                                                                                                             |   | 1,933       |   |   | 41,934     |  
|Total
      Assets                                                                                                                                                                                                                                                                   | $ | 380,868     |   | $ | 432,302    |  
|LIABILITIES AND
      STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                           |   |             |   |   |            |  
|Current
      Liabilities                                                                                                                                                                                                                                                            |   |             |   |   |            |  
|Accounts Payable and accrued liabilities                                                                                                                                                                                                                                             | $ | 13,972      |   | $ | 100,551    |  
|Customer Deposits                                                                                                                                                                                                                                                                    |   | -           |   |   | 5,986      |  
|Total Current Liabilities                                                                                                                                                                                                                                                            |   | 13,972      |   |   | 106,537    |  
|Other Liabilities                                                                                                                                                                                                                                                                    |   |             |   |   |            |  
|Loan Payable                                                                                                                                                                                                                                                                         |   | 88,000      |   |   | -          |  
|Total Liabilities                                                                                                                                                                                                                                                                    |   | 101,972     |   |   | 106,537    |  
|Stockholders' Equity                                                                                                                                                                                                                                                                 |   |             |   |   |            |  
|Common
      Stock, $0.001 par value;
      authorized                       200,000,000
      shares; issued and
      outstanding                       111,990,000
      shares as at October 31,
      2010                       67,212,000
      shares as at October 31, 2009 |   | 111,990     |   |   | 67,212     |  
|Additional Paid-In Capital                                                                                                                                                                                                                                                           |   | 11,845,352  |   |   | 10,065,348 |  
|Accumulated deficit during the development stage                                                                                                                                                                                                                                     |   | (10,656,773 | ) |   | (9,764,841 | )
|Deficit                                                                                                                                                                                                                                                                              |   | (1,028,400  | ) |   | -          |  
|Accumulated other comprehensive income (loss)                                                                                                                                                                                                                                        |   | 6,727       |   |   | (41,954    | )
|Total Stockholders' Equity                                                                                                                                                                                                                                                           |   | 278,896     |   |   | 325,765    |  
|Total Liabilities and Stockholders'
      Equity                                                                                                                                                                                                                                     | $ | 380,868     |   | $ | 432,302    |  

21

---

|DUSSAULT APPAREL INC.                                           
|----------------------------------------------------------------
|Statement of Operations                                         
|For the year
      ended and three months ended October 31, 2010

|                                                                    |   | For the three months ended |   |   | For the year ended |  
|------------------------------------------------------------------- | - | -------------------------- | - | - | ------------------ | -
|                                                                    |   | October
      31,          |   |   | October
      31,  |  
|                                                                    |   | 2010                       |   |   | 2009               |  
|                                                                    |   |                            |   |   |                    |  
|                                                                    |   |                            |   |   |                    |  
|Revenue                                                             | $ | 27,629                     |   | $ | 82,861             |  
|Cost of Sales                                                       |   | 6,813                      |   |   | 27,288             |  
|Operating Income                                                    |   | 20,816                     |   |   | 55,573             |  
|General and Administrative Expenses:                                |   |                            |   |   |                    |  
|Salaries & Wages                                                    |   | 216,978                    |   |   | 41,404             |  
|Professional Fees                                                   |   | 19,019                     |   |   | 38,395             |  
|Consulting                                                          |   | 503,982                    |   |   | 69,250             |  
|Occupancy Costs                                                     |   | 13,522                     |   |   | 4,467              |  
|Advertising                                                         |   | 11,286                     |   |   | -                  |  
|Design                                                              |   | 3,831                      |   |   | (702               | )
|Depreciation                                                        |   | 4,873                      |   |   | 4,866              |  
|Inventory markdown                                                  |   | -                          |   |   | 35,640             |  
|Bad Debts                                                           |   | 109,735                    |   |   | -                  |  
|Other Administrative Exp.                                           |   | 29,800                     |   |   | 72,428             |  
|Total Expenses                                                      |   | 913,026                    |   |   | 265,748            |  
|                                                                    |   |                            |   |   |                    |  
|Operating Income (Loss)                                             |   | (892,210                   | ) |   | (210,175           | )
|                                                                    |   |                            |   |   |                    |  
|Other Income                                                        |   |                            |   |   |                    |  
|Royalties                                                           |   | 5,040                      |   |   | -                  |  
|Interest Income                                                     |   | 51                         |   |   | -                  |  
|                                                                    |   |                            |   |   |                    |  
|Reclassification of Vancouver
      expenses                        |   |                            |   | $ | (111,492           | )
|                                                                    |   | 5,091                      |   |   | (111,492           | )
|                                                                    |   |                            |   |   |                    |  
|Net Income (Loss)                                                   |   | (887,119                   | ) |   | (321,667           | )
|                                                                    |   |                            |   |   |                    |  
|Currency translation adjustment                                     |   | 41,476                     |   |   | (7,589             | )
|                                                                    |   |                            |   |   |                    |  
|Comprehensive income (loss)                                         | $ | (845,643                   | ) | $ | (329,256           | )
|                                                                    |   |                            |   |   |                    |  
|Loss Per Common Share:                                              |   |                            |   |   |                    |  
|Basic and diluted                                                   |   | ($0.01                     | ) |   | ($0.00             | )
|                                                                    |   |                            |   |   |                    |  
|Weighted average shares       
      outstanding, basic and diluted |   | 111,555,217                |   |   | 67,212,000         |  

22

---

|DUSSAULT APPAREL INC.                                       
|------------------------------------------------------------
|Statement of Stockholders' Equity                           
|For the period
      from August 1, 2006 to October 31, 2010

|                                                                 |  |                    |   |   |            |   |   |            |   |   | Accumulated |   |   | Accumulated |   |   |               |  |   |            |  
|---------------------------------------------------------------- |  | ------------------ | - | - | ---------- | - | - | ---------- | - | - | ----------- | - | - | ----------- | - | - | ------------- |  | - | ---------- | -
|                                                                 |  |                    |   |   |            |   |   |            |   |   | Other       |   |   | Deficit     |   |   |               |  |   | Total      |  
|                                                                 |  | Common
      Stock |   |   | Additional |   |   | Compre-    |   |   | during the  |   |   |             |   |   | Shareholders' | 
|                                                                 |  | Number of          |   |   |            |   |   | Paid-In    |   |   | hensive     |   |   | Development |   |   |               |  |   | Equity     |  
|                                                                 |  | Shares             |   |   | Amount     |   |   | Capital    |   |   | Income      |   |   | Stage       |   |   | Deficit       |  |   | (Deficit)  |  
|Inception: August 1, 2006                                        |  | -                  |   | $ | -          |   | $ | -          |   | $ | -           |   | $ | -           |   | $ | -             |  | $ | -          |  
|Aug. 31, 2006: issued stock for cash at $0.02 per share          |  | 1,500,000          |   |   | 1,500      |   |   | 13,500     |   |   |             |   |   |             |   |   |               |  |   | 15,000     |  
|Oct31, 2006: issued stock for cash at $0.02
      per share      |  | 1,550,000          |   |   | 1,550      |   |   | 29,450     |   |   |             |   |   |             |   |   |               |  |   | 31,000     |  
|Net loss for period January 12 - October 31, 2006                |  |                    |   |   |            |   |   |            |   |   |             |   |   | (2,154      | ) |   |               |  |   | (2,154     | )
|Balances at October 31, 2006                                     |  | 3,050,000          |   | $ | 3,050      |   | $ | 42,950     |   | $ | -           |   | $ | (2,154      | ) | $ | -             |  | $ | 43,846     |  
|Nov. 8, 2006: issued stock for cash at $0.02 per share           |  | 450,000            |   |   | 450        |   |   | 8,550      |   |   |             |   |   |             |   |   |               |  |   | 9,000      |  
|Balances before 14 for 1 forward common stock
      split        |  | 3,500,000          |   |   | 3,500      |   |   | 51,500     |   |   |             |   |   | (2,154      | ) |   |               |  |   | 52,846     |  
|Jun 11, 2007: 14 for 1 forward common stock split                |  | 45,500,000         |   |   | 45,500     |   |   | (45,500    | ) |   |             |   |   |             |   |   |               |  |   | -          |  
|Balances after 14 for 1 forward common stock
      split         |  | 49,000,000         |   | $ | 49,000     |   | $ | 6,000      |   | $ | -           |   | $ | (2,154      | ) | $ | -             |  | $ | 52,846     |  
|Aug31, 2007 issued stock for services at $1.00 per sh.           |  | 5,272,000          |   |   | 5,272      |   |   | 5,266,728  |   |   |             |   |   |             |   |   |               |  |   | 5,272,000  |  
|Aug. 31, 2007 issued stock for cash at $1.00
      per share     |  | 2,215,000          |   |   | 2,215      |   |   | 2,212,785  |   |   |             |   |   |             |   |   |               |  |   | 2,215,000  |  
|Net loss for year ended October 31, 2007                         |  |                    |   |   |            |   |   |            |   |   |             |   |   | (5,921,650  | ) |   |               |  |   | (5,921,650 | )
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|Balances at October 31, 2007                                     |  | 56,487,000         |   | $ | 56,487     |   | $ | 7,485,513  |   | $ | -           |   | $ | (5,923,804  | ) | $ | -             |  | $ | 1,618,196  |  
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|Nov. 23, 2007: stock returned to Treasury                        |  | (13,000,000        | ) |   | (13,000    | ) |   | 13,000     |   |   |             |   |   |             |   |   |               |  |   | -          |  
|April 30, 2008 contribution of Vancouver office
      assets     |  |                    |   |   |            |   |   | 667,242    |   |   |             |   |   |             |   |   |               |  |   | 667,242    |  
|Apr. 28, 2008 issued stock for cash at $1.00 per share           |  | 1,275,000          |   |   | 1,275      |   |   | 1,273,725  |   |   |             |   |   |             |   |   |               |  |   | 1,275,000  |  
|Oct. 7, 2008 issued stock for cash at $1.20
      per share      |  | 6,925,000          |   |   | 6,925      |   |   | 1,378,075  |   |   |             |   |   |             |   |   |               |  |   | 1,385,000  |  
|Net loss for the year ended October 31, 2008                     |  |                    |   |   |            |   |   |            |   |   | (21,194     | ) |   | (4,158,068  | ) |   |               |  |   | (4,179,262 | )
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|Balances at October 31, 2008                                     |  | 51,687,000         |   | $ | 51,687     |   | $ | 10,817,555 |   | $ | (21,194     | ) | $ | (10,081,872 | ) | $ | -             |  | $ | 766,176    |  
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|Overcontribution of Vancouver assets                             |  |                    |   |   |            |   |   | (445,966   | ) |   |             |   |   |             |   |   |               |  |   | (445,966   | )
|Oct. 14, 2008 stock surrendered to Treasury
      and cancelled  |  | (1,500,000         | ) |   | (1,500     | ) |   | 1,500      |   |   |             |   |   |             |   |   |               |  |   | -          |  
|Nov. 13, 2008 issued stock for cash at $0.01 per share           |  | 8,600,000          |   |   | 8,600      |   |   | 77,400     |   | $ | (8,493      | ) |   |             |   |   |               |  |   | 77,507     |  
|Nov. 14, 2008 stock surrendered to Treasury
      and cancelled  |  | (500,000           | ) |   | (500       | ) |   | 500        |   |   |             |   |   |             |   |   |               |  |   | -          |  
|Nov. 24, 2008 issued stock for services at $0.01 per share       |  | 425,000            |   |   | 425        |   |   | 3,825      |   |   |             |   |   |             |   |   |               |  |   | 4,250      |  
|Nov. 26, 2008 issued stock for services at
      $0.01 per share |  | 600,000            |   |   | 600        |   |   | 5,400      |   |   |             |   |   |             |   |   |               |  |   | 6,000      |  
|Feb. 2, 2009 issued stock for services at $0.01 per sh.          |  | 2,900,000          |   |   | 2,900      |   |   | 26,100     |   |   |             |   |   |             |   |   |               |  |   | 29,000     |  
|Feb 28, 2009 issued stock for services at
      $0.006 per sh.   |  | 5,000,000          |   |   | 5,000      |   |   | 25,000     |   |   |             |   |   |             |   |   |               |  |   | 30,000     |  
|Net loss for the year ended October 31, 2010                     |  |                    |   |   |            |   |   |            |   |   | (12,267     | ) |   | (128,935    | ) |   |               |  |   | (141,202   | )
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|Balances at October 31, 2009                                     |  | 67,212,000         |   | $ | 67,212     |   | $ | 10,511,314 |   | $ | (41,954     | ) | $ | (10,210,807 | ) | $ | -             |  | $ | 325,765    |  
|                                                                 |  |                    |   |   |            |   |   |            |   |   |             |   |   |             |   |   |               |  |   |            |  
|December 4, 2009 stock surrendered to Treasury                   |  | (1,972,000         | ) |   | (1,972     | ) |   | 1,972      |   |   |             |   |   |             |   |   |               |  |   | -          |  
|May 18, 2010 issued stock for cash at $0.005
      per share     |  | 15,000,000         |   |   | 15,000     |   |   | 60,000     |   |   |             |   |   |             |   |   |               |  |   | 75,000     |  
|May 18, 2010 issued stock for compensation at $0.027 per share   |  | 13,000,000         |   |   | 13,000     |   |   | 338,000    |   |   |             |   |   |             |   |   |               |  |   | 351,000    |  
|May 18, 2010 issued stock for services at
      $0.027 per share |  | 12,750,000         |   |   | 12,750     |   |   | 331,500    |   |   |             |   |   |             |   |   |               |  |   | 344,250    |  
|July 9, 2010 issued stock for trademark at $0.028 per share      |  | 5,000,000          |   |   | 5,000      |   |   | 135,000    |   |   |             |   |   |             |   |   |               |  |   | 140,000    |  

23

---

|September 9, 2010 issued
      stock for services at $0.0226 per share |  | 1,000,000   |  |   | 1,000   |  |   | 21,600     |  |   |        |  |   |             |   |   |            |   |   | 22,600   |  
|---------------------------------------------------------------------- |  | ----------- |  | - | ------- |  | - | ---------- |  | - | ------ |  | - | ----------- | - | - | ---------- | - | - | -------- | -
|October 31, 2010: prior period adjustment
      (Note 3)               |  |             |  |   |         |  |   | 445,966    |  |   |        |  |   | (445,966    | ) |   |            |   |   | -        |  
|Net loss for the year ended
      October 31, 2010                     |  |             |  |   |         |  |   |            |  |   | 48,681 |  |   |             |   |   | (1,028,400 | ) |   | (979,719 | )
|Balances at October 31, 2010                                           |  | 111,990,000 |  | $ | 111,990 |  | $ | 11,845,352 |  | $ | 6,727  |  | $ | (10,656,773 | ) | $ | (1,028,400 | ) | $ | 278,896  |  

24

---

|DUSSAULT APPAREL INC.                              
|---------------------------------------------------
|Statement of Cash Flows                            
|For the years
      ended October 31, 2010 and 2009

|                                                                                                |   | For the year ended |  
|----------------------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                                |   | October
      31,  |  
|                                                                                                |   | 2010               |  
|                                                                                                |   |                    |  
|Cash flows from operating activities:                                                           |   |                    |  
|Net loss                                                                                        | $ | (1,028,400         | )
|Adjustments to reconcile net
      loss to         net cash used
      by operating activities: |   |                    |  
|Depreciation                                                                                    |   | 4,873              |  
|Stock issued
      for services                                                                 |   | 366,850            |  
|Stock issued for compensation                                                                   |   | 351,000            |  
|Stock issued
      for patent                                                                   |   | 140,000            |  
|Inventory markdown                                                                              |   | -                  |  
|Writedown
      of note receivable                                                              |   | 109,735            |  
|Contribution of capital assets                                                                  |   | -                  |  
|Allowance
      for doubtful accounts                                                           |   | (11,204            | )
|Prior
      period adjustment to expenses (Note 3)                                              |   | -                  |  
|Change in operating assets and
      liabilities:                                               |   |                    |  
|Accounts receivable                                                                             |   | 48,461             |  
|Accounts payable                                                                                |   | (86,579            | )
|Inventory                                                                                       |   | 4,566              |  
|Deposits                                                                                        |   | 40,001             |  
|Customer Deposits                                                                               |   | (5,986             | )
|Net cash (used by) operating activities                                                         |   | (66,683            | )
|Cash flows from investing activities:                                                           |   |                    |  
|Common stock issued for cash                                                                    |   | 75,000             |  
|Sale (Purchase)
      of equipment                                                              |   | -                  |  
|Purchase of Trade Mark                                                                          |   | (183,859           | )
|Net cash (used by) provided by
      investing activities                                       |   | (108,859           | )
|Cash flows from financing activities:                                                           |   |                    |  
|Proceeds of loan
      receivable                                                               |   | 16,703             |  
|Proceeds of loan                                                                                |   | 88,000             |  
|Net cash provided
      by financing activities                                                 |   | 104,703            |  
|Effect of exchange rates on cash                                                                |   | 48,681             |  
|Net increase (decrease) in cash                                                                 |   | (22,158            | )
|Cash, beginning of the period                                                                   |   | 52,991             |  
|Cash, end of the period                                                                         | $ | 30,833             |  
|Supplemental cash flow disclosure:                                                              |   |                    |  
|Interest paid                                                                                   |   | -                  |  
|Taxes paid                                                                                      |   | -                  |  

25

---

DUSSAULT APPAREL INC.NOTES TO THE FINANCIAL
STATEMENTSOctober 31, 2010(Stated in U.S. Dollars)

Note 1  Basis of Presentation and Nature of Operations

These audited financial statements as of and for the year ended
October 31, 2010 reflect all adjustments which, in the opinion of management,
are necessary to fairly state the Companys financial position and the results
of its operations for the periods presented in accordance with the accounting
principles generally accepted in the United States of America. All adjustments
are of a normal recurring nature, with the exception of a prior period
adjustment per Note 3.

Organization

The financial statements presented are those of Dussault
Apparel Inc. (the Company). The Company was incorporated under the laws of the
State of Nevada on August 1, 2006 as Release Your Lease Inc. Business operations
had not commenced when in May, 2007, control of the company changed hands. Jason
Dussault bought 1,500,000 common shares of the majority shareholder and assumed
the offices of President, CEO, CFO, Secretary and Treasurer, and a Director.

On June 11, 2007 Release Your Lease Inc. effected a reverse
forward merger with Dussault Apparel Inc, a Nevada shell company. The name was
changed to Dussault Apparel, Inc. The Company changed its orientation toward the
retail fashion clothing business. The Company opened a retail clothing and
accessory store on Melrose Avenue in Los Angeles in November, 2007. Designs were
produced in the Vancouver, Canada office, manufactured in China and warehoused
in Los Angeles. The Company closed this store in November, 2008 in the wake of
declining sales and deteriorating economic conditions.

Current Business of the Company

The Company moved operations to Vancouver in 2009, where it now
primarily designs apparel for its licensing partners, the Company continues to
wholesale limited collections of its luxury apparel to retail outlets Canada.
Our Apparel is designed and samples manufactured locally. The Company is has
transitioned from being a manufacturer  wholesaler toward licensing its
trademark to other wholesalers in the Canada-U.S. market, while promoting its
marque. The Company also entered into an agreement to purchase the trademark of
a cosmetics line.

Note 2  Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with
generally accepted accounting principles in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of the
Companys financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions and could have a
material effect on the reported amounts of the Companys financial position and
results of operations.

26

---

Fair value of financial instruments

The Financial Accounting Standards Board issued ASC (Accounting
Standards Codification) 820-10 (SFAS No. 157), Fair Value Measurements and
Disclosures" for financial assets and liabilities. ASC 820-10 provides a
framework for measuring fair value and requires expanded disclosures regarding
fair value measurements. FASB ASC 820-10 defines fair value as the price that
would be received for an asset or the exit price that would be paid to transfer
a liability in the principal or most advantageous market in an orderly
transaction between market participants on the measurement date. FASB ASC 820-10
also establishes a fair value hierarchy which requires an entity to maximize the
use of observable inputs, where available. The following summarizes the three
levels of inputs required by the standard that the Company uses to measure fair
value:

| | -                                                                                             | Level 1: Quoted prices in active markets for identical
      assets or liabilities.                                                                                                                                                                                                                                                            
| | --------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                               |                                                                                                                                                                                                                                                                                                                                                
| | -                                                                                             | Level 2: Observable inputs other than Level 1 prices,
      such as quoted prices for similar assets or liabilities; quoted prices in
      markets that are not active, or other inputs that are observable or can be
      corroborated by observable market data for substantially the full term of
      the related assets or liabilities.
| |                                                                                               |                                                                                                                                                                                                                                                                                                                                                
| | -                                                                                             | Level 3: Unobservable inputs that are supported by little
      or no market activity and that are significant to the fair value of the
      assets or liabilities.                                                                                                                                                                           
| |                                                                                               |                                                                                                                                                                                                                                                                                                                                                
| | The carrying amounts of the Companys financial instruments as
    of April 30, 2010, reflect

| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| | - | Cash: Level One measurement based
      on bank reporting.                         
| |   |                                                                                    
| | - | Loans Receivable, Loans Payable:
      Level 2 based on promissory notes and terms.

Income taxes

The Company utilizes FASB ACS 740, Income Taxes, 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 or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.

The Company generated deferred tax credits through net
operating loss carryforwards. However, a valuation allowance of 100% has been
established, as the realization of the deferred tax credits is not reasonably
certain, based on going concern considerations outlined below. The income tax
effect of temporary differences between financial and tax reporting gives rise
to the deferred tax asset of the fiscal years ended October 31, 2010 and 2009 as
follows:

|                                                                              |   | 2010      |  |   | 2009      | 
|----------------------------------------------------------------------------- | - | --------- |  | - | --------- | 
|                                                                              |   |           |  |   |           | 
|Deferred tax asset, beginning                                                 | $ | 1,560,435 |  | $ | 1,512,637 | 
|Benefit (provision of current years operating loss
      carryforward (gain) | $ | 604,685   |  | $ | 47,798    | 
|Deferred tax asset, ending                                                    | $ | 2,166,120 |  | $ | 1,560,435 | 

27

---

|Valuation allowance,
      beginning               | $ | (1,560,435 | ) | $ | 1,512,637   |  
|-------------------------------------------------- | - | ---------- | - | - | ----------- | -
|Current years loss carry forward (provision)      | $ | ( 604,685  | ) | $ | ( 45,798    | )
|Valuation allowance, ending.                       | $ | (2,166,120 | ) | $ | ( 1,560,435 | )
|                                                   |   |            |   |   |             |  
|Deferred tax asset, net                            | $ | -          |   | $ | -           |  
|                                                   |   |            |   |   |             |  
|Tax at blended U.S./Canadian
      statutory rates |   | (35%       | ) |   | (35%        | )
|Loss carryover                                     |   | 35%        |   |   | 35%         |  
|                                                   |   |            |   |   |             |  
|Deferred Tax expense                               | $ | -          |   | $ |             |  

Recent Accounting Pronouncements

In May, 2009, the FASB issued FASB issued ASC 855 (SFAS No.
165), Subsequent Events, which established general accounting standards
and disclosure for subsequent events. In accordance with SFAS No. 165, the
Company has evaluated subsequent events through the date the financial
statements were filed.

In June, 2009, the FASB issued their final SFAS, No. 168,
FASB Accounting Standards Codification, (ASC), and the Hierarchy
of Generally Accepted Accounting Principles. This was reflected in the
codification as FASB ASC 105, Generally Accepted Accounting Principles.
ASC is the single source of authoritative US generally accepted accounting
principles recognized by the FASB to be applied to nongovernmental entities. It
is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The adoption of ASC 105 will not have an impact
on the Companys financial position, results of operations or cash flows.

Going Concern

The Companys financial statements are prepared using
accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company as at
October 31, 2010 had not established an ongoing source of revenues sufficient to
cover its operating costs and to allow it to continue as a going concern.

As shown in the accompanying financial statements, the Company
incurred a net loss of $1,0478,189 in the year ended October 31, 2010. Its
ability to continue as a going concern is dependent on the successful
stimulation of wholesale sales or in other areas in order to fund operating
losses and become profitable. If the Company is unable to make it profitable,
the Company could be forced to cease development of operations. Management
cannot provide any assurances that the Company will be successful in its retail
operation. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.

Development-Stage Company

The Company was considered a development-stage company until
the current fiscal year, having demonstrated consistent ability to generate
sales.

28

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Inventory

Inventory was moved to the Vancouver office after the retail
outlet in Los Angeles was closed in November, 2008. Inventories are stated at
the lower of cost or market value. Market value represents net realizable value.
Inventory is priced according to the FIFO first in first out method, and
counted periodically. Current inventory at October 31, 2010 is $41,548.

Note Receivable

On April 16, 2008 the Company entered into a bridge loan
agreement under a promissory note from Dayton Boot Co. Enterprises Ltd. of
Vancouver, Canada for $300,000 in Canadian funds. The Company co-locates an
office in the Dayton premises. The terms of the note were that the principal
amount, plus 6% simple interest, would be due and payable when a merger
transaction was concluded between the two parties, or December 31, 2008, the
earlier. The note is accompanied by restrictions on Dayton Boot regarding the
acquisition of stock or votes or control of the Company or selling its stock to
the Company.

The anticipated merger did not take place. By mutual agreement
interest is not enforced, and the note is being amortized by rent charged by
Dayton for Company offices at Dayton premises. Management analyzed the note for
impairment and decided to write down the note by approximately 50%, by $109,735
to $112,127, based upon the expected recovery of the note through rent
charges.

Notes Payable

On April 1, 2010 the Company issued a promissory note to Perati
Finance Corporation for $38,000. The note matures in five years and accrues
interest at 8%. The loan is convertible to common stock at a conversion price of
58% of the market price.

On May 12, 2010 the Company issued a promissory note to Asher
Enterprises, Inc., a Delaware corporation, for $50,000. The note matures
February 14, 2011 and accrues interest at 8%, alternately 22% in the event of
default. The loan is convertible to common stock at a conversion price of 58% of
the market price.

Loss Per Share

Net loss per share is calculated in accordance with FASB ASC
260, Earnings Per Share, for the periods presented. Basic net loss per
share is based upon the weighted average number of common shares outstanding.
Diluted net loss per share is based on the assumption that all dilutive
convertible shares and stock options were converted or exercised. The Company
has potentially dilutive securities in a convertible loans payable, however the
conversion would be anti-dilutive and is not considered in the calculation.

29

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The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations for the
years ended October 31, 2010 and 2009:

2010
    
    
    2009Basic and diluted net loss per share:NumeratorNet Earnings (Loss)
    $
    (979,719
    )
    $
    (595,661
    )DenominatorBasic
      and diluted weighted
      average                    number
      of shares outstanding
    
    81,992,186
    
    
    65,101,863Basic and Diluted Net Loss Per Share
    $
    ( 0.01
    )
    $
    (0.01
    )


Note 3  Prior Period Adjustment

The Company corrected a prior year accounting error wherein an
adjustment to the recorded value of Vancouver assets was posted to Contributed
Capital. The $445,966 loss was corrected as an adjustment to 2009 Deficit during
the Development Phase. The 2009 financial statements have been restated
accordingly. There was no effect on the current fiscal years earnings.

Note 4  Capital Structure

Common Stock Transactions during the period from August 1,
2006 through October 31, 2010:

On August 31, 2006, the company issued 1,500,000 shares of its
common stock to a single investor at a price of $0.01 per share for a total of
$15,000. This was the initial issue of stock.

On October 31, 2006 the Company issued a total of 1,550,000
shares of its common stock to 27 investors. The shares were sold at $0.02 for a
total of $31,000.

As of October 31, 2005, the Company had authorized 75,000,000
of $0.001 par common stock, of which 3,050,000 shares were issued and
outstanding.

On November 8, 2006, the Company issued a total of 450,000
shares of its common stock to 5 investors. The shares were sold at $0.02
realizing $9,000.

On June 11, 2007 a fourteen (14) for one (1) forward stock
split was effected of authorized, issued and outstanding common stock.
Authorized capital was increased from 75,000,000 shares to 1,050,000,000 shares.
Issued and outstanding capital was increased from 3,060,000 to 42,840,000
shares. Par value of $0.001 per common share remained the same.

On August 31, 2007, the Company issued a total of 5,272,000
shares of common stock at a price of $1.00 per share for consultants fees
valued at $5,272,000.

On August 31, 2007, the Company issued 2,215,000 shares of
common stock for cash at a price of $1.00 per share, realizing $2,215,000 before
fees.

On November 23, 2007 13,000,000 shares of common stock were
returned to Treasury.

30

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On April 28, 2008 the Company issued 1,275,000 units of its
securities, each unit consisting of one share of common stock and one common
share purchase warrant, for cash at a price of $1.00 per unit, realizing
$1,275,000. Each warrant entitles the holder to purchase one additional common
share of the Company at a price of US $1.25 until 24 months from the closing of
the transaction.

On October 7, 2008 the Company issued 6,925,000 units of its
securities, each unit consisting of one share of common stock and a one half
Series A and a one half series B common share purchase warrant, for cash at a
price of $1.20 per unit, realizing $1,385,000. Each Series A warrant entitles
the holder to purchase one additional common share of the Company at a price of
US $0.30 until 24 months from the closing of the transaction. Each Series B
warrant entitles the holder to purchase one additional common share of the
Company at a price of US $0.60 until 24 months from the closing of the
transaction. The Series B warrants are only exercisable following the exercise
of all the Series A warrants held by such holder.

On October 14, 2008, 1,500,000 shares were returned to Treasury
and cancelled.

On November 13, 2008 the Company issued 8,600,000 shares of
common stock in a private placement for cash at a price of $0.01 per share,
realizing $77,507.

On November 14, 2008, 500,000 shares were returned to Treasury
and cancelled.

On November 24, 2008 the Company issued 425,000 shares of
common stock at a price of $0.01 per share for consultants fees valued at
$4,250.

On November 26, 2008 the Company issued 600,000 shares of
common stock at a price of $0.01 per share for consultants fees valued at
$6,000.

On February 2, 2009 the Company issued 2,900,000 shares of
common stock at a price of $0.01 per share for consultants fees valued at
$29,000.

On February 28, 2009 the Company issued 5,000,000 shares of
common stock at a price of $0.006 per share for consultants fees valued at
$30,000.

On December 4, 2009, 67,212,000 common shares were surrendered
to treasury by a former president of the Company.

On May 18, 2010 15,000,000 shares of common stock were sold to
seven individuals at a price of 1⁄2 cent per share, realizing $75,000.

On May 18, 2010 5,000,000 common shares were issued for
consulting and 8,000,000 shares for compensation at a price of $0.027 per share.
An expense of $351,000 was recorded.

On May 18, 2010 12,750,000 common shares were issued to seven
persons for services at a price of $0.027 per share. An expense of $344,250 was
recorded for consulting.

On July 9, 2010 5,000,000 shares were issued at a price of
$0.028 in a transaction in which the Company received a trademark. A cost of
$140,000 was recorded.

On September 9, 2010 the Company issued $1,000,000 common
shares for services at a price of $0.0226 per share, recording consulting
expense of $22,600.

31

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As of October 31, 2010 the Company had authorized 75,000,000
shares of $0.001 par value common stock, of which 111,990,000 shares were issued
and outstanding.

Note 5  Related Party Transactions

On May 18, 2010, three million shares were issued to the
President of the Company, Jason Dussault, for consulting services related to
marketing, promotion and apparel design, and eight million shares for
compensation. The award offset his contribution of 13 million shares to the
Company April 30, 2008.

Note 6  Legal Proceedings

There were no legal proceedings against the Company with
respect to matters arising in the ordinary course of business. Neither the
Company nor any of its officers or directors is involved in any other litigation
or is involved either as plaintiffs or defendants, and have no knowledge of any
threatened or pending litigation against them or any of the officers or
directors.

Note 7  Subsequent Events

In October 2010 the Company issued 1,423,394 shares to 22
individuals concluding the terms of an asset acquisition agreement for the
purchase of a trade mark related to a line of cosmetics. The initial payment in
stock had been made July 9, 2010.

32

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Item 9.      Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure

There were no disagreements with our accountants related to
accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the two fiscal years and
subsequent interim periods.

Item 9A.   Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that the information disclosed in the reports we file with
the Securities and Exchange Commission under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and forms, and that such information
is accumulated and communicated to our president (our principal executive
officer) and our chief financial officer (our principal financial and accounting
officer), as appropriate, to allow timely decisions regarding required
disclosure.

Management, including our president (our principal executive
officer) and our chief financial officer (our principal financial and accounting
officer), evaluated the effectiveness of our disclosure controls and procedures,
as of October 31, 2010, in accordance with Rules 13a-15(b) and 15d-15(b) of the
Securities and Exchange Act of 1934, as amended are effective to ensure the
information required to be disclosed by us in the reports that we file or submit
under the Securities and Exchange Act of 1934, as amended is recorded,
processed, summarized and reported within the time period specified in SEC rules
and forms.

Our management, including our president (our principal
executive officer) and our chief financial officer (our principal financial and
accounting officer), do not expect that our disclosure controls, and procedures
or internal controls will prevent all possible error and fraud. Our disclosure
controls and procedures are, however, designed to provide reasonable assurance
of achieving their objectives, and our Pre president (our principal executive
officer) and our chief financial officer (our principal financial and accounting
officer) have concluded that our financial controls and procedures are effective
at that reasonable assurance level.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of October 31, 2010. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in Internal
Control-Integrated Framework. Our management has concluded that, as of
October 31, 2010, our internal control over financial reporting is effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with US generally accepted accounting principles. Our management reviewed the
results of their assessment with our Board of Directors.

This annual report does not include an attestation report of
our companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
Companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our Company to provide only
managements report in this annual report.

25

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Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the year ended October 31, 2010 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

Item 9B.   Other Information

None.

PART III

Item 10.   Directors, Executive Officers and
Corporate Governance

The following individuals serve as the directors and executive
officers of our company as of the date of this annual report. All directors of
our company hold office until the next annual meeting of our shareholders or
until their successors have been elected and qualified. The executive officers
of our company are appointed by our board of directors and hold office until
their death, resignation or removal from office.

Name
      Position Held with Our
      Company
      Age
      Date First Elected or AppointedJason Dussault
    Chief Executive Officer,
      President, Treasurer, Secretary and Director
    37
    May 10, 2007Robert Mintak
    Chief Operating Officer and
      Chief Financial Officer
    48
    July 17, 2007Jason Sundar
    Vice President of Corporate
      Finance
    34
    July 11, 2007


Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

26

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Jason Dussault, Chief Executive Officer, President,
Treasurer, Secretary and Director

Creating and collaborating with several companies over the past
15 years, Mr. Dussault has worked to take small start-up companies public,
accessing financing from U.S., Canadian and European sources and providing
corporate guidance. In 2005, after successfully raising hundreds of millions of
dollars in capital for his client companies, he finally decided to pursue his
ultimate passion. From that first inspired leap, Dussault Apparel Inc. was born.
A year later, his first line of fashions sold out almost immediately,
establishing his company and launching Dussault Custom Apparel. As our companys
creative visionary, he works with Head Designer Peter Tsang to expand on a
unique style, honing his creations through an intimate connection to some of the
worlds leading celebrities and elite from the worlds of entertainment and
sports.

Robert Mintak, Chief Operating Officer

Mr. Robert Mintak has over 25 years of experience in the retail
and wholesale industries. His track record in management includes five years
with the Robinson Group, which was named one of the 50 best managed companies in
Canada in 2005, and ten years of management experience in retail. Over the past
7 years Mr. Mintak has worked providing internet technology services and
researchfor several companies.

Jason Sundar, Vice President, Corporate Finance

Mr. Sundar began his career working for the British Columbia
Attorney Generals office, where he developed and promoted youth programs to
protect high-risk youth. At 20 he became the youngest facilitator of corporate
training programs for Peak Performance Systems  a Brian Tracy International
Network focused on the psychology of achievement, goal setting, professional
selling skills, advances selling skills and B2B selling skills. Among their
numerous clients were Yorkton Securities and Crown Packaging. By the age of 23,
Mr. Sundar was the top performer for investor relations specialists PCMI.
Leaving that position, he partnered with Olivia Communications, raising over
five million dollars and taking the organization from three people to a staff of
24. Since founding Sundar Communications Group in 2002, he has personally raised
over $50 million for his clients worldwide.

Family Relationships

There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:

1.      A petition under the Federal
bankruptcy laws or any state insolvency law was filed by or against, or a
receiver, fiscal agent or similar officer was appointed by a court for the
business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing;

2.      Such person was convicted in a
criminal proceeding or is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses);

3.      Such person was the subject of
any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining him
from, or otherwise limiting, the following activities:

| | i. | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or
      dealer in securities, or as an affiliated person, director or employee of
      any investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
  connection with such activity
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                   
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                 
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;

4.     Such person was the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any Federal or State authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any activity described
in paragraph (f)(3)(i) of this section, or to be associated with persons engaged
in any such activity;

5.     Such person was found by a court of
competent jurisdiction in a civil action or by the Commission to have violated
any Federal or State securities law, and the judgment in such civil action or
finding by the Commission has not been subsequently reversed, suspended, or
vacated;

6.     Such person was found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any Federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated;

7.     Such person was the subject of, or a
party to, any Federal or State judicial or administrative order, judgment,
decree, or finding, not subsequently reversed, suspended or vacated, relating to
an alleged violation of:

| | i.   | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or                                                                                                                                                                                                            

8.      Such person was the subject
of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26)
of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined
in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended September 30, 2009, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with.

28

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Code of Ethics

Effective January 24, 2008, our companys board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, members of our board of directors, our companys officers including our
president (being our principal executive officer) and our chief financial
officer (being our principal financial and accounting officer), contractors,
consultants and advisors. As adopted, our Code of Business Conduct and Ethics
sets forth written standards that are designed to deter wrongdoing and to
promote:

(1)   honest and ethical conduct, including the
ethical handling of actual or apparent conflicts of interest between personal
and professional relationships;

(2)   full, fair, accurate, timely, and
understandable disclosure in reports and documents that we file with, or submit
to, the Securities and Exchange Commission and in other public communications
made by us;

(3)   compliance with applicable governmental laws,
rules and regulations;

(4)   the prompt internal reporting of violations of
the Code of Business Conduct and Ethics to an appropriate person or persons
identified in the Code of Business Conduct and Ethics; and

(5)   accountability for adherence to the Code of
Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other
things, that all of our companys personnel shall be accorded full access to our
president with respect to any matter which may arise relating to the Code of
Business Conduct and Ethics. Further, all of our companys personnel are to be
accorded full access to our companys board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our
company officers.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our companys President. If
the incident involves an alleged breach of the Code of Business Conduct and
Ethics by the President, the incident must be reported to any member of our
board of directors. Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our companys Code of
Business Conduct and Ethics by another.

We will provide a copy of the Code of Business Conduct and
Ethics to any person without charge, upon request. Requests can be sent to our
company at the address on the cover of this annual report.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such committees
can be adequately performed by our board of directors.

29

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Item 11.   Executive Compensation

The particulars of the compensation paid to the following
persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were serving
  as executive officers at the end of the years ended October 31, 2010 and 2009;
  and
- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the years ended October 31, 2010 and 2009,

who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock
        Awards ($)
      Option
        Awards ($)
      Non-Equity
        Incentive Plan Compensation ($)
      Change in Pension
        Value and Nonqualified Deferred Compensation Earnings ($)
      All Other
        Compensati on ($)
      Total
        ($)Jason Dussault(1)Chief Executive
        Officer, President, Treasurer, Secretary and
        director
      2010 
        2009
      Nil 
        81,245
      Nil 
        Nil
      216,000 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      216,000 
        81,245Robert Mintak(2)
        Chief Operating 
        Officer and Chief 
        Financial Officer
      2010 
        2009
      Nil 
        26,298
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        26,298Jason Sundar(3)VP Corporate Finance
      2010 
        2009
      Nil 
        38,000
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        38,000Terry Fitzgerald(4)Former Chief
        Executive Officer, President and director
      2010 
        2009
      N/A 
        15,625
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        15,625


(1)          
Jason Dussault was appointed Secretary and Treasurer of our company on May 10,
2007 and as President and Chief Executive Officer on April 9, 2009.

(2)          
Robert Mintak was appointed Chief Operating Officer of our company on July 17,
2007. Mr. Mintak was appointed as our interim Chief Financial Officer on April
1, 2008.

(3)          
Jason Sundar was appointed our VP Corporate Finance on July 11, 2007

30

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(4)         
 Mr. Fitzgerald was appointed our chief executive officer and president on
June 22, 2007 and resigned on April 9, 2009

There are no compensatory plans or arrangements with respect to
our executive officers resulting from their resignation, retirement or other
termination of employment or from a change of control.

On July 19, 2007, we entered into consulting agreements with
Robert Mintak, our Chief Operating Officer, and Jason Sundar, our VP Corporate
Finance. The agreements are for three year terms. Pursuant to the terms of the
agreement with Mr. Mintak, we agreed to issue 1,500,000 restricted shares of
common stock which has been returned to our company and cancelled. Pursuant to
the terms of the agreement with Jason Sundar, we agreed to issue 1,000,000
restricted shares of common stock, which will be released in three equal annual
installments after each year of service. These agreements expired on July 19,
2010.

Stock Option Plan

Currently, we do not have a stock option plan in favor of any
director, officer, consultant or employee of our company.

Stock Options/SAR Grants

During our fiscal year ended October 31, 2010 there were no
options granted to our named officers or directors.

Outstanding Equity Awards at Fiscal Year End

No equity awards were outstanding as of the year ended October
31, 2010.

Option Exercises

During our Fiscal year ended October 31, 2010 there were no options
  exercised by our named officers.

Compensation of Directors

We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.

We have determined that none of our directors are independent
directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the
Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(15) of the NASDAQ Marketplace Rules.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

31

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Compensation Committee Interlocks and Insider Participation

During 2010, we did not have a compensation committee or
another committee of the board of directors performing equivalent functions.
Instead the entire board of directors performed the function of compensation
committee. Our board of directors approved the executive compensation, however,
there were no deliberations relating to executive officer compensation during
2010.

Compensation Committee Report

None.

Family Relationships

There are no family relationships between any of our directors,
executive officers or directors.

Item 12.   Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of January 13, 2011, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

Name and Address of
      Beneficial Owner
      Title of Class
      Amount and Nature of
      Beneficial Ownership
      Percentage of
      Class(1)Jason Dussault Vancouver, British
      Columbia
    Common
    18,000,000
    14.90%Robert Mintak Vancouver, British Columbia
    Common
    Nil
    0%Jason Sundar Vancouver, British Columbia
    Common
    1,000,000
    0.80%Directors and Officers as a group
    Common
    19,000,000
    15.7%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares).In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided .In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on January 13, 2011. As of January 13, 2011,
      there were 122,958,557 shares of our companys common stock issued and
      outstanding.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

32

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Changes in Control

We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.

Item 13.   Certain Relationships and Related
Transactions, and Director Independence

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended October 31, 2010, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year-end for
the last three completed fiscal years.

Related Party Transactions

None.

Director Independence

We currently act with one director, consisting of Jason
Dussault. We have determined that our director is not an "independent director"
as defined in NASDAQ Marketplace Rule 4200(a)(15).

We do not have a standing audit, compensation or nominating
committee, but our entire board of directors acts in such capacities. We believe
that our members of our board of directors are capable of analyzing and
evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The board of directors of our company does
not believe that it is necessary to have an audit committee because we believe
that the functions of an audit committee can be adequately performed by the
board of directors. In addition, we believe that retaining an independent
director who would qualify as an "audit committee financial expert" would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.

Item 14.   Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed
fiscal year ended October 31, 2010 and for the fiscal year ended October 31,
2009 for professional services rendered by the principal accountant for the
audit of our annual financial statements and review of the financial statements
included in our quarterly reports on Form 10-Q and services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for these fiscal periods were as follows:

Year EndedOctober 31, 2010 $
      October 31, 2009 $Audit Fees
      8,300
      8,900Audit Related Fees
      1,200
      NilTax Fees
      3,000
      1,260All Other Fees
      1,500
      800Total
      14,000
      10,960


Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

33

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Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

PART IV

Item 15.   Exhibits, Financial Statement Schedules

|(a) | Financial Statements
|--- | --------------------
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|(b) | Exhibits            

|Exhibit |                                                                                                                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                  
|        |                                                                                                                                                                                                              
|(3)     | Articles of Incorporation and By-laws                                                                                                                                                                        
|        |                                                                                                                                                                                                              
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on January 11, 2007).                                                                          
|        |                                                                                                                                                                                                              
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 Filed on January 11, 2007).                                                                                             
|        |                                                                                                                                                                                                              
|3.3     | Articles of Merger filed with the Nevada Secretary of
      State on May 29, 2007 (incorporated by reference from our Current Report
      on Form 8-K filed on June 16, 2007).                              
|        |                                                                                                                                                                                                              
|3.4     | Certificate of Change filed with the Nevada Secretary of
      State on May 29, 2007 (incorporated by reference from our Current Report
      on Form 8-K filed on June 16, 2007).                           
|        |                                                                                                                                                                                                              
|(10)    | Material Contracts                                                                                                                                                                                           
|        |                                                                                                                                                                                                              
|10.1    | Employment Agreement dated June 22, 2007, between our
      company and Terry Fitzgerald incorporated by reference from our Current
      Report on Form 8-K filed on June 25, 2007).                        
|        |                                                                                                                                                                                                              
|10.2    | Letter of Intent dated June 25, 2007, between our company
      and Dussault Jeans Inc. (incorporated by reference from our Current Report
      on Form 8-K filed on July 2, 2007).                         
|        |                                                                                                                                                                                                              
|10.3    | Letter of Intent dated November 5, 2007 between our
      company and Dussault Jeans Inc. (incorporated by reference from our
      Current Report on Form 8-K filed on November 5, 2007).                   
|        |                                                                                                                                                                                                              
|10.4    | Consulting Agreement dated July 19, 2007, between our
      company and Jason Sundar (incorporated by reference from our Annual Report
      on Form 10-KSB filed on February 13, 2008).                     
|        |                                                                                                                                                                                                              
|10.5    | Consulting Agreement dated July 19, 2007, between our
      company and Robert Mintak (incorporated by reference from our Annual
      Report on Form 10-KSB filed on February 13, 2008).                    
|        |                                                                                                                                                                                                              
|10.6    | Bridge Loan Agreement dated July 19, 2007, between our
      company and Dussault Jeans Inc. (incorporated by reference from our
      Current Report on Form 8-K filed on August 1, 2007).                  
|        |                                                                                                                                                                                                              
|10.7    | Bridge Loan Agreement dated April 16, 2008, between our
      company and Dayton Boot Co. Ent. Ltd. (incorporated by reference from our
      Current Report on Form 8-K filed on April 23, 2008).           
|        |                                                                                                                                                                                                              
|10.8    | Distribution Agreement dated November 10, 2009, between
      our company and EHM Holdings. (incorporated by reference from our
      Quarterly Report on Form 10-Q filed on March 22, 2010)                 
|        |                                                                                                                                                                                                              
|10.9    | Merchandising License Agreement dated October 31, 2009,
      between our company and USPA Accessories, LLC. (incorporated by reference
      from our Quarterly Report on Form 10-Q filed on March 22, 2010)

34

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|Exhibit |                                                            
|------- | -----------------------------------------------------------
|Number  | Description                                                
|        |                                                            
|(31)    | Section 302 Certification                                  
|        |                                                            
|31.1*   | Section
      302 Certification of Chief Executive Officer.
|        |                                                            
|31.2*   | Section
      302 Certification of Chief Financial Officer.
|        |                                                            
|(32)    | Section 906 Certification                                  
|        |                                                            
|32.1*   | Section
      906 Certification of Chief Executive Officer.
|        |                                                            
|32.2*   | Section
      906 Certification of Chief Financial Officer.

* Filed herewith.

35

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                         | DUSSAULT APPAREL INC.                         
|------------------------ | ----------------------------------------------
|                         | (Registrant)                                  
|                         |                                               
|                         |                                               
|Dated: February 14, 2011 | /s/
      Jason Dussault                      
|                         | Jason Dussault                                
|                         | Chief Executive Officer, President, Treasurer,
|                         | Secretary and director                        
|                         | (Principal Executive Officer)                 
|                         |                                               
|                         |                                               
|Dated: February 14, 2011 | /s/
      Robert Mintak                       
|                         | Robert Mintak                                 
|                         | Chief Financial Officer                       
|                         | (Principal Financial Officer and Principal    
|                         | Accounting Officer)                           



Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Dated: February 14, 2011 | /s/
      Jason Dussault                      
|------------------------ | ----------------------------------------------
|                         | Jason Dussault                                
|                         | Chief Executive Officer, President, Treasurer,
|                         | Secretary and director                        
|                         | (Principal Executive Officer)                 

36

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