10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended April 30, 2012
[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

000-52452
Commission File Number
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.)
1308 Factory Place, Suite 311, Los Angeles, CA	90013
(Address of principal executive offices)	(Zip Code)
(323) 843-2186
(Registrant’s  telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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 [ X ]  No [  ]

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [ X ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [  ]  No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

200,099,844  shares of common stock issued and outstanding as of June 11,  2012.

(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.)

2

DUSSAULT APPAREL INC.

TABLE OF CONTENTS

		Page
	PART I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4.	Controls and Procedures	7
	PART II – Other Information
Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3.	Defaults Upon Senior Securities	10
Item 4.	Mine Safety Disclosures	10
Item 5.	Other Information	10
Item 6.	Exhibits	11
	Signatures	12

3

ITEM 1.  FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the six month period ended April 30, 2012, are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2012.  For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2012.

	Page
Unaudited Financial Statements
Balance Sheets	F-1
Statements of Operations	F-2
Statements of Cash Flows	F-3
Notes to Financial Statements	F-4 to F-8

DUSSAULT APPAREL INC.

Balance Sheets

	April 30,  2012 (Unaudited)			October 31, 2011 (Audited)
ASSETS
Current assets
Cash	$	18,852		$	8,449
Accounts receivable		1,161			16,089
Other receivable		4,016			4,016
Sales tax  receivable		5,189			5,711
Total current assets		29,218			34,265
Property and Equipment, net		826			2,489
Trademark		4,786			4,786
Damage deposits		1,933			1,933
Total assets	$	36,763		$	43,473
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		58,876			77,555
Convertible promissory note, net		45,612			-
Total current liabilities		104,488			77,555
Other Liabilities
Loan payable – related party		12,566			12,603
Loan payable		38,000			38,000
Total Liabilities		155,054			128,158
Stockholders’ Equity
Common stock  -  $0.001 par value, authorized 1,050,000, 000 shares; 183,530,198 and 180,954,893 shares issued and outstanding as at April 30, 2012 and October 31, 2011, respectively		183,530			180,954
Additional paid in capital		12,219,791			12,163,327
Accumulated deficit during the development stage		(10,656,773	)		(10,656,773	)
Deficit		(1,877,814	)		(1,785,168	)
Accumulated other comprehensive income (loss)		12,975			12,975
Total Stockholders' Equity		(118,291	)		(84,685	)
Total Liabilities and Stockholders' Equity	$	36,763		$	43,473

The accompanying notes are an integral part of these financial statements

F-1

DUSSAULT APPAREL INC.

Statements of Operations and Comprehensive Loss

	Three months ended April 30,						Six months ended April 30,
	2012			2011			2012			2011
Revenue	$	3,485		$	7,660		$	22,129		$	30,904
Cost of Sales		-			1,844			-			27,602
Gross Profit		3,485			5,816			22,129			3,302
General and Administrative Expenses
Professional Fees		2,413			11,702			25,255			27,227
Consulting		648			19,785			3,078			61,170
Advertising		-			(44	)		-			2,797
Depreciation		857			1,601			1,662			2,819
Other Administrative Expenses		20,645			18,114			40,177			74,957
Total Expenses		24,563			51,158			70,172			168,970
Operating Income (Loss)		(21,078	)		(45,342	)		(48,043	)		(165,668	)
Other Income (expense)
Trademark impairment charge		-			-			(7,468	)		-
Interest expense		(19,305	)		(28,246	)		(37,135	)		(72,505	)
Net Income (Loss)	$	(40,383	)	$	(73,588	)	$	(92,646	)	$	(238,173	)
Loss Per Common Share, basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted Average Number of Common Shares		183,530,198			129,351,425			182,426,496			122,759,605
Comprehensive loss
Loss	$	(40,383	)	$	(73,588	)	$	(92,646	)	$	(238,173	)
Foreign currency translation adjustment		-			(15,413	)		-			(11,312	)
Comprehensive income (loss)	$	(40,383	)	$	(89,001	)	$	(92,646	)	$	(249,485	)

The accompanying notes are an integral part of these financial statements

F-2

DUSSAULT APPAREL INC.

Statements of Cash Flows

	For the six months ended April 30,
	2012			2011
Cash flows from operating activities:
Net (loss)	$	(92,646	)	$	(238,173	)
Adjustments to reconcile net loss to net cash used by operating activities:
Consulting services issued by shares		-			38,342
Depreciation		1,663			2,819
Accrued interest		2,951			72,505
Amortization of discount on convertible promissory note		34,184			-
Impairment on trademark		7,468			-
Occupancy fee against loan receivable		-			23,755
Change in operating assets and liabilities:
Accounts receivable		14,928			-
Account payable		(21,629	)		31,732
Inventory		-			6,797
GST receivable		521			7,017
Net cash flows used by operating activities		(52,560	)		(55,206	)
Cash From Investing Activities:
Net cash  (used by) investing activities		-			-
Cash flows from financing activities:
Proceeds from related party loan		-			9,978
Loan payable		63,000			40,000
Net cash flows from financing activities		63,000			49,978
Effect of exchange rates on cash		(37	)		(3,905	)
Net increase (decrease) in cash		10,403			(9,133	)
Cash and equivalents, beginning of period		8,449			30,833
Cash, end of period	$	18,852			21,700
Supplemental cash flow disclosures:
Cash paid for interest	$	-			-
Cash paid for income taxes	$	-			-
Non cash transactions:
Purchase trademark by issuance of common stock	$	7,468		$	-
Convert loan payable to common stock		-			47,000
	$	7,468		$	47,000

The accompanying notes are an integral part of these financial statements

F-3

DUSSAULT APPAREL INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED APRIL 30, 2012

(Unaudited – prepared by Management)

Note 1 – Basis of Presentation and Nature of Operations

These audited financial statements 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.

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. In the spring of 2011 its design and head office moved to Los Angeles California where it now primarily designs apparel for its licensing partner, the Company continues to wholesale in very limited collections its luxury apparel to retail outlets and to individuals in Canada. Our Apparel is designed in Los Angeles and samples manufactured by our licensing partner in North America. The Company has transitioned from being a manufacturer–wholesaler toward licensing its trademark to other wholesalers in the primarily in the Canadian market, while promoting its marque. The Company also entered into an agreement to purchase the trademark of a cosmetics line. Currently no sales, production or sampling of the cosmetic line has occurred or is planned.

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.

F-4

DUSSAULT APPAREL INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED APRIL 30, 2012

(Unaudited – prepared by Management)

Note 2 – Summary of Significant Accounting Policies (continued)

Foreign Currency Translation

The functional currency of the Company is the Canadian Dollar. The Company uses the United States dollar as its reporting currency. All transactions initiated in Canadian Dollars are translated to U.S. Dollars in accordance with ASC 830-10-20 “Foreign Currency Translation” as follows:

· Revenue and expense items at the average rate of exchange in effect on the transaction date;

· Non-monetary assets and liabilities at historical exchange rates, unless such items are carried at market, in which case they are translated at the exchange rate in effect on the balance sheet date; and

· Monetary assets and liabilities at the exchange rate at the balance sheet date.

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income but reported as other comprehensive income.

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.

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 January 31, 2012, reflect

· Cash: Level One measurement based on bank reporting.

· Loans Receivable, Loans Payable: Level 2 based on promissory notes and terms.

F-5

DUSSAULT APPAREL INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED APRIL 30, 2012

(Unaudited – prepared by Management)

Note 2 – Summary of Significant Accounting Policies (continued)

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 convertible loans payable; however the conversion would be anti-dilutive and is not considered in the calculation.

Royalty Income

The Company receives royalty income from licensing third parties to use its intellectual property.  Presently this is the Company’s sole revenue stream.  We  present the royalty income as revenue offset to the related royalty expense and commission fees, in the financial statements. Previously, royalty income and offset expenses were shown within other income. Royalty income was not material to revenue in periods prior to the current fiscal year and was considered incidental. However, as a result of a change in our business model for this fiscal year and future periods, we expect royalty income to increase and to become the sole source of the Company’s recorded revenue. For this reason, the Company considers that the revised income statement presentation, which reflects royalty income as revenue, will provide more reliable and relevant information than the presentation adopted previously. The 2011 income statements for the three and six month period ended April 30, 2011 have been adjusted to reflect the new presentation. During the three and six month periods ended April 30, 2011 there was no income related to royalties included in revenue. During the current period presentation, all income presented has been derived from royalties or commissions on sales under license agreements.

Recent Accounting Pronouncements

ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment is applicable to fiscal years beginning after December 15, 2011. Early application is permitted. The Company does not expect this ASU has a material impact on its financial position or carrying value of its intangible assets at this time.

The Company does not expect the adoption of any other recent accounting pronouncements will have a material impact on its financial statements.

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 April 30, 2012 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 continues to incur losses. 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.

F-6

DUSSAULT APPAREL INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED APRIL 30, 2012

(Unaudited – prepared by Management)

Note 3 - Trademarks

On April 9, 2010 the Company entered into an asset acquisition agreement (the “Agreement”) with Open Sundaes Ventures Ltd. (“Open Sundaes”) for the acquisition of certain assets relating to the business of the production and development of beauty and bath products including inventory, intellectual property and business knowhow. In consideration for the acquisition of these assets, the Company paid $43,860 and agreed to issue an aggregate of 9,000,002 shares of its common stock to the shareholders of Open Sundaes and certain creditors. The Agreement was approved by the shareholders of Open Sundaes at a special meeting held on April 22, 2010. As of October 31, 2011, the Company had issued a total of 6,424,697 shares pursuant to the Agreement, 1,424,697 shares to the shareholders of Open Sundaes  and 5,000,000 shares to a creditor of Open Sundaes in settlement of certain debt related to Open Sundaes that was agreed to be paid between the parties.  The Company recorded the fair value of Trade Mark based on the fair value of shares issued and cash payments, which amount totaled $197,000. On October 31, 2011, in accordance with corporate policies, the Company assessed the Trademark for impairment and determined the book value was no longer recoverable. As a result we have recorded a loss on impairment relating to the Trademark of $192,214, leaving a value of $4,786 on the balance sheets of the Company as at October 31, 2011.  On January 17, 2012, the Company issued the remaining 2,575,305 shares pursuant to the Agreement, fully satisfyng the terms of the acquisition.  As at the date of these financial statements, the Company has issued a total of 9,000,002 shares; 4,000,002 shares to the shareholders of Open Sundaes and 5,000,000 shares to a creditor of Open Sundaes.

The Company capitalized the fair value of the 2,575,305 shares issued on January 17, 2012 in the amount of $7,468. On April 30, 2012, in accordance with corporate policies, the Company assessed the Trademark value for impairment and determined to fully impair the $7,468, leaving a total of $4,786 on the balance sheet as at April 30, 2012.

Note 4 - Inventory

The Company receives royalty income from licensing third parties to use its intellectual property. The cost of goods sold related to the online sale is offset by royalty income. The company does not carry inventory for future.

Note 5 - 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. The balance on this note as at April 30, 2012 is $38,000 plus accrued interest totaling $4,663, which is reflected in accounts payable and accrued liabilities.

Note 6 – Convertible Promissory Note, Net

On November 10, 2011 Asher Enterprises Inc. funded a promissory note executed by the Company on October 25, 2011 in the total amount of $63,000. The note matures July 27, 2012 and accrues interest at 8% or alternately 22% in the event of default. The loan is convertible to common stock at a conversion price of 58% of the market price.

The beneficial conversion feature resulting from the discounted conversion price on agreement date compared to market price on date of grant was valued at $51,571. This value was recorded as a discount on debt and offset to additional paid in capital. Amortization of the discount over the six month period ended April 30, 2012 totaled $34,184, which amount has been recorded as interest expense.

	April 30, 2012		November 10, 2011
Convertible Promissory Note – face value	$	63,000	$	63,000
Less: beneficial conversion feature		17,388		51,571
	$	45,612	$	11,429

As of April 30, 2012, accrued interest on the note totaled $2,383.

F-7

DUSSAULT APPAREL INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED APRIL 30, 2012

(Unaudited – prepared by Management)

Note 7 – Common Stock

On January 17, 2012, the Company issued the remaining 2,575,305 shares pursuant to the agreement with Open Sundaes. This issuance completed the consideration to be provided under the agreement with Open Sundaes (Note 3 – Trademarks, above).

As at April 30, 2012 there were a total of 183,530,198 shares issued and outstanding.

Note 8 – Related Party Transactions

As of October 31, 2011, the President of the Company, Jason Dussault advanced funds in the amount of $12,603 (CAD$12,500) to the Company for working capital. During the six month period ended April 30, 2012, The Company did not make any cash payment to Jason Dussault, leaving $12,566 (CAD$12,500) on the balance sheet as loan payable – related parties. The amounts are unsecured, non-interest bearing and due on demand.

Note 8 – Subsequent Events

On May 11, 2012,  $5,500 of the original balance of the Convertible Promissory note referenced above in Note 6 was retired by the issuance of 8,461,538 common shares at a deemed price of $0.00065.  The remaining principal balance was $57,500 following the conversion.

On May 24, 2012, $3,000 of the remaining balance of a Convertible Promissory note  referenced above in Note 6 was retired by the issuance of 8,108,108 common shares at a deemed price of $0.00037. The remaining principal balance was $54,500 following the conversion.

The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional events to disclose.

F-8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements relating to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "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 which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance.  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.

Given these uncertainties, readers of this Quarterly Report on Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements.  The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

All dollar amounts stated herein are in US dollars unless otherwise indicated.

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended October 31, 2011, together with notes thereto.

As used in this quarterly report, the terms "we", "us", "our", and the "Company" mean Dussault Apparel Inc.

Background

We were incorporated on October 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. A decision was made by new management, to change the corporate direction of the Company and to pursue opportunities in the retail fashion industry and effective June 11, 2007; we completed a merger with our wholly subsidiary Dussault Apparel Inc. We currently operate in the retail fashion industry.

Liquidity & Capital Resources

As of April 30, 2012, our cash balance was $18,852, which is an increase from our cash balance of $8,449 as of October 31, 2011. We have a decrease to accounts receivable to $1,161 as at April 30, 2012 as compared to $16,089 in October 31, 2011, other receivables of $4,016 as at April 30, 2012 remain unchanged from October 31, 2011, and a tax receivable of $5,189 as at April 30, 2012, which is decreased from $5,711 as at October 31, 2011. During the six month period ended April 30, 2012 we entered into a convertible promissory note in the amount of $63,000 for operating expenses related to the ongoing management of the Company.

5

Presently, our revenues are not 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. However based on our expenditures from prior years we have estimated that we will require $400,000 over the next twelve months to pay down our existing liabilities and to continue to grow our operations. 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 fiscal year ending October 31, 2012. 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.

Our ability to meet our financial commitments is primarily dependent upon the continued issuance of equity to new stockholders, the ability to borrow funds, and ultimately upon our ability to achieve and maintain profitable operations. There are no assurances that we will be able to obtain required funds for our continued operations or 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, 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 the operation of our business.

There is substantial doubt about our ability to continue as a going concern, as the continuation of our business is dependent upon obtaining further short and long-term financing and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholder. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Results of Operations

The discussion and financial statements contained herein are for three and six months ended April 30, 2012 and April 30, 2011. The following discussion regarding our financial statements should be read in conjunction with our financial statements for our fiscal year ended October 31, 2011 as filed with the Securities and Exchange Commission on February 14, 2012.

We have suffered recurring losses from operations. The continuation of our Company is dependent upon us attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have successfully raised additional capital through equity offerings and loan transactions in the past and presently believe we will be able to do so in the future, though we can offer no assurance of this outcome as no specific arrangements are in place.

Comparison of the Three Months Ended April 30, 2012 and 2011

During the three months period ended April 30, 2012 and 2011 respectively, we earned gross revenues of $3,485 as compared to $7,660, with gross profit of $3,485 for the three months ended April 30, 2012 as compared to gross profit of $5,816 for the comparable period ended April 30, 2011.

For the three months ended April 30, 2012, our general and administrative expenses decreased substantially to $24,563, from $51,158 for April 30, 2011. This decrease was mainly due to a substantial reduction in consulting fees from $19,785 for the three months ended April 30, 2011 to $648 for the three months ended April 30, 2012, as well as a substantial decrease in professional fees from $11,702, for the three months ended April 30, 2011 as compared to $2,413 for the three months ended April 30, 2012, as our overall operational activity was substantially decreased.  Other administrative expenses increased slightly to $20,645 for the three months ended April 30, 2012 as compared to $18,114 for the three months ended April 30, 2011.

Interest expenses for the three months ended April 30, 2012 decreased to $19,305 from $28,246 for the three months ended April 30, 201.  During the three months ended April 30, 2012 the Company recorded a net loss of $40,383 as compared to a net loss of $73,588 for the three months ended April 30, 2011.

6

Comparison of the Six Months Ended April 30, 2012 and 2011

During the six month periods ended April 30, 2012 and 2011 respectively, we earned gross revenues of $22,129 as compared to $30,904, with gross profit of $22,129 as at April 30, 2012 as compared to gross profit of $3,302 as at April 30, 2011.   The increase in gross profit is related to a change in the Company’s revenue model where by at the close of the fiscal year ended October 31, 2011, the Company determined to cease all direct sales of products and move to a license based revenue model whereby the Company licenses its brands and receives royalty income from the sale of licensed products, with no other direct sales costs.  As a result as of this change, as at April 30, 2012 there were no costs of sales, as compared to the period ended April 30, 2011 where costs of sales on products sold totaled $27,602.

For the six months ended April 30, 2012, our general and administrative expenses decreased substantially to $70,172, from $168,970 for April 30, 2011. This decrease was mainly due to a substantial reduction in consulting fees from $61,170 for the six months ended April 30, 2011 to $3,078 for the six months ended April 30, 2012, as well as a substantial decrease in other administrative expenses from $74,957, for the six months ended April 30, 2011 as compared to $40,177 for the six months ended April 30, 2012, as our overall operational activity was substantially decreased. As a result, our costs for advertising declined from $2,797 for the six months ended April 30, 2011 to $Nil for the six months ended April 30, 2012.  Professional fees remained relatively constant and $25,255 for the six months ended April 30, 2012 as compared to $27,227 for the six months ended April 30, 2011 due to the costs related to maintaining our reporting status.

Other income and expenses reflect a trademark impairment charge of ($7,468) in the six month period ended April 30, 2012 with no comparative entry in the same period ended April 30, 2011, as the Company evaluated its capitalized trademark costs for recoverability and determined the recoverability of the asset to be impaired.

During the six months ended April 30, 2012 the Company recorded a net loss of $92,646 as compared to a net loss of $238,173 for the six months ended April 30, 2011.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements.

Off- Balance Sheet Arrangements

The Company presently does not have any off-balance sheet arrangements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this Item.

ITEM 4.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under supervision and with the participation of the Mr. Jason Dussault, Principal Executive Officer and Mr. Robert Mintak, Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).  Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of April 30, 2012, because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective.

7

Disclosure controls and procedures are controls and other procedures that are designed to ensure that required information to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that required information to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f).  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation.  In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of January 31, 2012.  In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.   Based on its assessment, management concluded that, as of April 30, 2012, our internal control over financial reporting was not effective and that material weaknesses in ICFR existed as more fully described below.

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.  In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of April 30, 2012:

1)   Lack of an independent audit committee or audit committee financial expert, and no independent directors.  We do not have any members of the Board who are independent directors and we do not have an audit committee.  These factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management;

2)   Inadequate staffing and supervision within our bookkeeping operations.  We have a consulting firm involved in bookkeeping functions.  The fact that the accounting staffs providing bookkeeping functions are all from the same firm of consultants prevents us from segregating duties within our internal control system.  The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. This may result in a failure to detect errors in spreadsheets, calculations or assumptions used to compile the financial statements and related disclosures as filed with the SEC;

3)   Outsourcing of our accounting operations.  Because there are no employees in our administration, we have outsourced all of our accounting functions to an independent firm.  The employees of this firm are managed by supervisors within the firm and are not answerable to the Company’s management.  This is a material weakness because it could result in a disjunction between the accounting policies adopted by our Board of Directors and the accounting practices applied by the independent firm;

4)   Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

8

Changes in Internal Control over Financial Reporting

As of April 30, 2012, management assessed the effectiveness of our internal control over financial reporting.  Based on that evaluation, it was concluded that during the quarter ended and to date, the internal controls and procedures were not effective due to deficiencies that existed in the design or operation of our internal controls over financial reporting.  However, management believes these weaknesses did not have an effect on our financial results.  During the course of their evaluation, management did not discover any fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures or internal controls over financial reporting.

Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses.  We will not be able to do so until, if ever, we acquire sufficient financing and staff to do so.  We will implement further controls as circumstances, cash flow, and working capital permits.  Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the period ended April 30, 2012, fairly present our financial position, results of operations, and cash flows for the periods covered, as identified, in all material respects.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and intrinsic to our small size.  Management also believes that these weaknesses did not have an effect on our financial results.

We are committed to improving our financial organization.   As part of this commitment, we will, as soon as funds are available to the Company (1) appoint outside directors to our board of directors sufficient to form an audit committee and who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and to increase our personnel resources.  We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary, and as funds allow.

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

During the quarter ended April 30, 2012, there were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

9

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None

ITEM 1A.  RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 11, 2012,  $5,500 of the original balance of a Convertible Promissory note entered into on October 25, 2011 was  retired by the issuance of 8,461,538 common shares at a deemed price of $0.00065.

On May 24, 2012, $3,000 of the remaining balance of a Convertible Promissory note entered into on October 25, 2011 was retired by the issuance of 8,108,108 common shares at a deemed price of $0.00037.

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended, for the issuance of shares to Asher Enterprises, Inc. pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5.  OTHER INFORMATION

None

10

ITEM 6.  EXHIBITS

NO.	IDENTIFICATION OF EXHIBIT
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	Incorporated by reference from our Form 8-K filed on June 16, 2007.
3.4	Certificate of Change	Incorporated by reference from our Form 8-K filed on June 16, 2007
10.1	Employment Agreement dated June 22, 2007, between our company and Terry Fitzgerald	Incorporated by reference from our 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 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 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 January 19, 2007, between our company and Dussault Jeans Inc	Incorporated by reference from our 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 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
31.1	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

11

SIGNATURES

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

		DUSSAULT APPAREL INC.
Date:	June 19, 2012	By:	/s/ Jason Dussault
		Name:	Jason Dussault
		Title:	Chief Executive Officer and President (Principal Executive Officer)
		By:	/s/ Robert Mintak
		Name:	Robert Mintak
		Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

12

EX-31.1

Exhibit 31.1

RULE 13A-14(A)/15D-14(A) CERTIFICATION

I, Jason Dussault, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Dussault Apparel Inc.;

(2) Based on my knowledge, this  report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 19, 2012	By:	/s/ Jason Dussault
		Name: Jason Dussault
		Title: Principal Executive Officer

EX-31.2

Exhibit 31.2

RULE 13A-14(A)/15D-14(A) CERTIFICATION

I, Robert Mintak, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Dussault Apparel Inc.;

(2) Based on my knowledge, this  report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 19, 2012	By:	/s/Robert Mintak
		Name: Robert Mintak
		Title: Principal Financial and Principal Accounting Officer

EX-32.1

EXHIBIT 32

DUSSAULT APPAREL INC.

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dussault Apparel Inc. (the “Company”) on Form 10-Q for the period ending April 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jason Dussault, as Principal Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 19, 2012	By:	/s/Jason Dussault
	Name:	Jason Dussault
	Title:	Principal Executive Officer

A signed original of this written statement required by Section 1350 of Title 18 of the United States Code has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing.)

EX-32.2

EXHIBIT 32

DUSSAULT APPAREL INC.

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dussault Apparel Inc. (the “Company”) on Form 10-Q for the period ending April 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Mintak, as Principal Financial Officer and Principal Accounting Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  June 19, 2012	By:	/s/Robert Mintak
	Name:	Robert Mintak
	Title:	Principal Executive Officer

A signed original of this written statement required by Section 1350 of Title 18 of the United States Code has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing.)

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Inventory

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Inventory

Note 4 - Inventory

The Company receives royalty income from licensing third parties to use its intellectual property. The cost of goods sold related to the online sale is offset by royalty income. The company does not carry inventory for future.

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Trademarks

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Trademarks

Note 3 - Trademarks

On April 9, 2010 the Company entered into an asset acquisition agreement (the “Agreement”) with Open Sundaes Ventures Ltd. (“Open Sundaes”) for the acquisition of certain assets relating to the business of the production and development of beauty and bath products including inventory, intellectual property and business knowhow. In consideration for the acquisition of these assets, the Company paid $43,860 and agreed to issue an aggregate of 9,000,002 shares of its common stock to the shareholders of Open Sundaes and certain creditors. The Agreement was approved by the shareholders of Open Sundaes at a special meeting held on April 22, 2010. As of October 31, 2011, the Company had issued a total of 6,424,697 shares pursuant to the Agreement, 1,424,697 shares to the shareholders of Open Sundaes  and 5,000,000 shares to a creditor of Open Sundaes in settlement of certain debt related to Open Sundaes that was agreed to be paid between the parties.  The Company recorded the fair value of Trade Mark based on the fair value of shares issued and cash payments, which amount totaled $197,000. On October 31, 2011, in accordance with corporate policies, the Company assessed the Trademark for impairment and determined the book value was no longer recoverable. As a result we have recorded a loss on impairment relating to the Trademark of $192,214, leaving a value of $4,786 on the balance sheets of the Company as at October 31, 2011.  On January 17, 2012, the Company issued the remaining 2,575,305 shares pursuant to the Agreement, fully satisfyng the terms of the acquisition.  As at the date of these financial statements, the Company has issued a total of 9,000,002 shares; 4,000,002 shares to the shareholders of Open Sundaes and 5,000,000 shares to a creditor of Open Sundaes.

The Company capitalized the fair value of the 2,575,305 shares issued on January 17, 2012 in the amount of $7,468. On April 30, 2012, in accordance with corporate policies, the Company assessed the Trademark value for impairment and determined to fully impair the $7,468, leaving a total of $4,786 on the balance sheet as at April 30, 2012.

XML

Balance Sheets (Unaudited) (USD $)	Apr. 30, 2012	Oct. 31, 2011
Current assets
Cash	$ 18,852	$ 8,449
Accounts receivable	1,161	16,089
Other receivable	4,016	4,016
Sales tax receivable	5,189	5,711
Total current assets	29,218	34,265
Property and Equipment, net	826	2,489
Trademark	4,786	4,786
Damage deposits	1,933	1,933
Total assets	36,763	43,473
Current liabilities
Accounts payable and accrued liabilities	58,876	77,555
Convertible promissory note, net	45,612
Total current liabilities	104,488	77,555
Other Liabilities
Loan payable, related party	12,566	12,603
Loan payable	38,000	38,000
Total Liabilities	155,054	128,158
Stockholders Equity
Common stock: $0.001 par value, authorized 1,050,000, 000 shares; 183,530,198 and 180,954,893 shares issued and outstanding as at April 30, 2012 and October 31, 2011, respectively	183,530	180,954
Additional paid in capital	12,219,791	12,163,327
Accumulated deficit during the development stage	(10,656,773)	(10,656,773)
Deficit	(1,877,814)	(1,785,168)
Accumulated other comprehensive income (loss)	12,975	12,975
Total Stockholders Equity	(118,291)	(84,685)
Total Liabilities and Stockholders Equity	$ 36,763	$ 43,473

XML

Basis of Presentation and Nature of Operations

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Basis of Presentation and Nature of Operations

Note 1 – Basis of Presentation and Nature of Operations

These audited financial statements 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.

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. In the spring of 2011 its design and head office moved to Los Angeles California where it now primarily designs apparel for its licensing partner, the Company continues to wholesale in very limited collections its luxury apparel to retail outlets and to individuals in Canada. Our Apparel is designed in Los Angeles and samples manufactured by our licensing partner in North America. The Company has transitioned from being a manufacturer–wholesaler toward licensing its trademark to other wholesalers in the primarily in the Canadian market, while promoting its marque. The Company also entered into an agreement to purchase the trademark of a cosmetics line. Currently no sales, production or sampling of the cosmetic line has occurred or is planned.

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Summary of Significant Accounting Policies

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Summary of Significant Accounting Policies

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.

Foreign Currency Translation

The functional currency of the Company is the Canadian Dollar. The Company uses the United States dollar as its reporting currency. All transactions initiated in Canadian Dollars are translated to U.S. Dollars in accordance with ASC 830-10-20 “Foreign Currency Translation” as follows:

· Revenue and expense items at the average rate of exchange in effect on the transaction date;

· Non-monetary assets and liabilities at historical exchange rates, unless such items are carried at market, in which case they are translated at the exchange rate in effect on the balance sheet date; and

· Monetary assets and liabilities at the exchange rate at the balance sheet date.

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income but reported as other comprehensive income.

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.

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 January 31, 2012, reflect

· Cash: Level One measurement based on bank reporting.

· Loans Receivable, Loans Payable: Level 2 based on promissory notes and terms.

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 convertible loans payable; however the conversion would be anti-dilutive and is not considered in the calculation.

Royalty Income

The Company receives royalty income from licensing third parties to use its intellectual property.  Presently this is the Company’s sole revenue stream.  We  present the royalty income as revenue offset to the related royalty expense and commission fees, in the financial statements. Previously, royalty income and offset expenses were shown within other income. Royalty income was not material to revenue in periods prior to the current fiscal year and was considered incidental. However, as a result of a change in our business model for this fiscal year and future periods, we expect royalty income to increase and to become the sole source of the Company’s recorded revenue. For this reason, the Company considers that the revised income statement presentation, which reflects royalty income as revenue, will provide more reliable and relevant information than the presentation adopted previously. The 2011 income statements for the three and six month period ended April 30, 2011 have been adjusted to reflect the new presentation. During the three and six month periods ended April 30, 2011 there was no income related to royalties included in revenue. During the current period presentation, all income presented has been derived from royalties or commissions on sales under license agreements.

Recent Accounting Pronouncements

ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment is applicable to fiscal years beginning after December 15, 2011. Early application is permitted. The Company does not expect this ASU has a material impact on its financial position or carrying value of its intangible assets at this time.

The Company does not expect the adoption of any other recent accounting pronouncements will have a material impact on its financial statements.

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 April 30, 2012 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 continues to incur losses. 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.

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Balance Sheets (Parenthetical) (USD $)	Apr. 30, 2012	Oct. 31, 2011
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock shares authorized	1,050,000,000	1,050,000,000
Common stock, shares issued	183,530,198	180,954,893

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Document and Entity Information	6 Months Ended
	Apr. 30, 2012	Jun. 11, 2012
Document And Entity Information
Entity Registrant Name	Dussault Apparel Inc.
Entity Central Index Key	0001383756
Document Type	10-Q
Document Period End Date	Apr. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		200,099,844
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2012

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Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Apr. 30, 2012	Apr. 30, 2011	Apr. 30, 2012	Apr. 30, 2011
Income Statement [Abstract]
Revenue	$ 3,485	$ 7,660	$ 22,129	$ 30,904
Cost of Sales		1,844		27,602
Gross Profit	3,485	5,816	22,129	3,302
General and Administrative Expenses
Professional Fees	2,413	11,702	25,255	27,227
Consulting	648	19,785	3,078	61,170
Advertising		(44)		2,797
Depreciation	857	1,601	1,662	2,819
Other Administrative Expenses	20,645	18,114	40,177	74,957
Total Expenses	24,563	51,158	70,172	168,970
Operating Income (Loss)	(21,078)	(45,342)	(48,043)	(165,668)
Other Income (expense)
Trademark impairment charge			(7,468)
Interest expense	(19,305)	(28,246)	(37,135)	(72,505)
Net Income (Loss)	(40,383)	(73,588)	(92,646)	(238,173)
Loss Per Common Share, basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted Average Number of Common Shares	183,530,198	129,351,425	182,426,496	122,759,605
Comprehensive loss
Loss	(40,383)	(73,588)	(92,646)	(238,173)
Foreign currency translation adjustment		(15,413)		(11,312)
Comprehensive income (loss)	$ (40,383)	$ (89,001)	$ (92,646)	$ (249,485)

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Common stock

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Common stock

Note 7 – Common Stock

On January 17, 2012, the Company issued the remaining 2,575,305 shares pursuant to the agreement with Open Sundaes. This issuance completed the consideration to be provided under the agreement with Open Sundaes (Note 3 – Trademarks, above).

As at April 30, 2012 there were a total of 183,530,198 shares issued and outstanding.

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Convertible Promissory Note, Net

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Convertible Promissory Note, Net

Note 6 – Convertible Promissory Note, Net

On November 10, 2011 Asher Enterprises Inc. funded a promissory note executed by the Company on October 25, 2011 in the total amount of $63,000. The note matures July 27, 2012 and accrues interest at 8% or alternately 22% in the event of default. The loan is convertible to common stock at a conversion price of 58% of the market price.

The beneficial conversion feature resulting from the discounted conversion price on agreement date compared to market price on date of grant was valued at $51,571. This value was recorded as a discount on debt and offset to additional paid in capital. Amortization of the discount over the six month period ended April 30, 2012 totaled $34,184, which amount has been recorded as interest expense.

	April 30, 2012		November 10, 2011
Convertible Promissory Note – face value	$	63,000	$	63,000
Less: beneficial conversion feature		17,388		51,571
	$	45,612	$	11,429

As of April 30, 2012, accrued interest on the note totaled $2,383.

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Related Party Transactions

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Related Party Transactions

Note 8 – Related Party Transactions

As of October 31, 2011, the President of the Company, Jason Dussault advanced funds in the amount of $12,603 (CAD$12,500) to the Company for working capital. During the six month period ended April 30, 2012, The Company did not make any cash payment to Jason Dussault, leaving $12,566 (CAD$12,500) on the balance sheet as loan payable – related parties. The amounts are unsecured, non-interest bearing and due on demand.

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Subsequent Events

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Subsequent Events

Note 8 – Subsequent Events

On May 11, 2012,  $5,500 of the original balance of the Convertible Promissory note referenced above in Note 6 was retired by the issuance of 8,461,538 common shares at a deemed price of $0.00065.  The remaining principal balance was $57,500 following the conversion.

On May 24, 2012,  $3,000 of the remaining balance of the Convertible Promissory note referenced above in Note 6 was retired by the issuance of 8,108,108 common shares at a deemed price of $0.00037.  The remaining principal balance was $54,500 following the conversion. 

The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional events to disclose.

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Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Apr. 30, 2012	Apr. 30, 2011
Cash flows from operating activities:
Net (loss)	$ (92,646)	$ (238,173)
Adjustments to reconcile net loss to net cash used by operating activities:
Consulting services issued by shares		38,342
Depreciation	1,663	2,819
Accrued interest	2,951	72,505
Amortization of discount on convertible promissory note	34,184
Impairment on trademark	7,468
Occupancy fee against loan receivable		23,755
Change in operating assets and liabilities:
Accounts receivable	14,928
Account payable	(21,629)	31,732
Inventory		6,797
GST receivable	521	7,017
Net cash flows used by operating activities	(52,560)	(55,206)
Cash From Investing Activities:
Net cash (used by) investing activities
Cash flows from financing activities:
Proceeds from related party loan		9,978
Loan payable	63,000	40,000
Net cash flows from financing activities	63,000	49,978
Effect of exchange rates on cash	(37)	(3,905)
Net increase (decrease) in cash	10,403	(9,133)
Cash and equivalents, beginning of period	8,449	30,833
Cash, end of period	18,852	21,700
Supplemental cash flow disclosures:
Cash paid for interest
Cash paid for income taxes
Non cash transactions:
Purchase trademark by issuance of common stock	7,468
Convert loan payable to common stock		47,000
[TotalNonCashTransactions]	$ 7,468	$ 47,000

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Notes payable

6 Months Ended

Apr. 30, 2012

Notes to Financial Statements

Notes payable

Note 5 - 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. The balance on this note as at April 30, 2012 is $38,000 plus accrued interest totaling $4,663, which is reflected in accounts payable and accrued liabilities.