DUESENBERG TECHNOLOGIES INC. - Annual Report: 2019 (Form 10-K)

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements”.  These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry.  Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “may,” and other similar expressions identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed in the sections of this annual report titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as the following:

·general economic conditions, because they may affect our ability to raise money; 

·our ability to raise enough money to continue our operations; 

·changes in regulatory requirements that adversely affect our business; and 

·other uncertainties, all of which are difficult to predict and many of which are beyond our control. 

You are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made.  Except as required by applicable securities laws, we undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this annual report.  You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

General

We were incorporated on August 4, 2010, under the laws of the State of Nevada under the name “SOS Link Corporation”.  On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to Venza Gold Corp.  The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.  On January 6, 2014, we changed our name to CoreComm Solutions Inc. and on February 11, 2015, we changed our name to VGrab Communications Inc. to reflect our current business.

On February 10, 2015, we completed an acquisition of the VGrab software application (the “VGrab Application”) pursuant to the terms of a software purchase agreement dated January 8, 2015 (the “Software Purchase Agreement”) between us and Hampshire Capital Limited (“Hampshire”). The VGrab Application is a free mobile voucher application developed for smartphones using the Android and Apple iOS operating systems and allows users to redeem vouchers on their smartphones at a number of retailers and merchants.

On June 24, 2015, we formed a subsidiary, VGrab International Ltd., (“VGrab International”) under the Labuan Companies Act 1990 in Federal Territory of Labuan, Malaysia. The initial focus of the VGrab International was to continue development of the VGrab Application and continue its market penetration in Southeast Asia.  As of the date of this Annul Report on Form 10-K, VGrab International is used as a holding company as all the business operations were moved to VGrab Communications Malaysia Sdn Bhd (“VGrab Malaysia”), which we incorporated on May 17, 2018, under the Malaysia Companies Act 2016 in Malaysia. The main business objective of Vgrab Malaysia is to facilitate online promotions, advertising and e-commerce.

Since its incorporation, VGrab Malaysia has been working on the development of its SMART System prototype. VGrab's new SMART System will consist of several modules, including VGrab Memberships system, which will allow its users to sign up via internet or quick response code, also known as "QR Code", VGrab Cloud Management System ("VCMS"), and VGrab Database Management System ("VDMS"). VCMS and VDMS will form the backbone of VGrab's SMART System, integrating each future developed VGrab SMART System's module into the platform. The Company is currently testing the development of the VGrab SMART System before deployment to potential clients.

-1-

On February 18, 2019, we formed another subsidiary, VGrab Asia Limited (“Vgrab Asia”). The main business objective of Vgrab Asia is to facilitate online promotions, advertising and e-commerce to its potential customer based in P.R.China. In addition, Vgrab Asia is going to position itself as commodities trader to capture the current market trends in P.R.China.

On March 5, 2019, VGrab Asia entered into a mobile application development agreement with a group of private software developers from China (the “Vendor”) to develop a mobile software application (“VGrab WeChat Application”). VGrab WeChat Application is developed for use with smartphones in P.R.China using the WeChat Android and Apple iOS operating systems allowing users to sign up for memberships, deposit money, purchase products, redeem vouchers, upload media promotions onto the smartphones, etc... On August 14, 2019, the VGrab WeChat Application was tested and completed for client usage.

Entry into a Cooperation Agreement with Hampshire Motor Group (China) Ltd.

On June 25, 2018, our wholly-owned subsidiary, Vgrab International Ltd., entered into a cooperation agreement on a profit-sharing basis (the “Agreement”) with Hampshire Motor Group (China) Ltd. (“HMGC”), a related corporation, for the development and marketing of Duesenberg brand (the “Brand”) licensed to HMGC by the original Duesenberg trademark owner. Pursuant to the Agreement, Vgrab International agreed to work with HMGC on developing marketing, advertising and customer relation programs for Duesenberg’s brands, with newly-developed sub-brand, Duesey, and its Duesey Coffee being the initial product offering. Vgrab International is also expected to participate in the development of new products utilizing Duesenberg Trademark.

The term of the Agreement is 10 years, with an option to extend the Agreement for an additional 10-year period. Based on the Agreement, we will be entitled to a percentage of revenue generated from the sales of any new products developed by Vgrab International or jointly with HMGC, which percentage will be determined as follows: (i) 94% from revenue of up to $100,000, and (ii) 95% from revenue of over and above $100,000. In addition, we will also be entitled to a percentage of revenue generated from the sales of the products developed by HMGC prior to the entry into the Agreement based on the following schedule: (i) 20% from revenue of up to $100,000, (ii) 15% from revenue of up to $500,000, (iii) 10% from revenue of up to $1,000,000, and (iv) 5% from revenue of over and above $1,000,000.

As of the date of this Annual Report on Form 10-K, we have not recorded any revenue associated with the Agreement.

On July 2, 2019, in an attempt to increase possible business synergies with HMGS, we entered into a Memorandum of Understanding (“MOU”) with HMGC, to acquire the Duesey Coffee and Chocolates outlets in China and Malaysia (“Duesey Coffee”). Pursuant to the MOU, we had six months from the signing of the MOU to conduct our due-diligence of Duesey Coffee and to negotiate the terms of the acquisition.

Based on the due-diligence and further negotiations we had with HMGC and the shareholders of the individual outlets operating under the Duesenberg brand, we have decided not to extend the MOU, and instead are working on integration of our Vgrab WeChat Application throughout the Brand.

Business of VGrab Communications

Our original business model was based on the development of mobile applications for merchant and consumer use which were based on original VGrab Application we acquired from Hampshire Capital Limited. As our business developed our corporate strategy continued to evolve to incorporate additional new technologies and trends, thus allowing VGrab to strive to become a global advertising and ecommerce conglomerate trough expanding our products portfolio, investing into new and emerging technologies and creating strategic partnerships in a niche market.

Our goal is to provide integrated solutions and to create unique value for both brand owners and consumers, which we plan to achieve by focusing on developing our current and new networks and strategic partnerships.

We are planning to achieve our vision through development and implementation of Vgrab Smart Systems (“SMART Systems”), which will integrate leading-edge information technologies with existing or new products and processes across multiple operating platforms, thus reducing substantial costs for our clients  

-2-

Our initial plan is to introduce two new main lines of services, SMART Systems and Product Development, with the primary focus on social media delivery platforms, advertising & promotions platforms, membership’s facilities, real-time stock inventory, data collections, ERP and financial data through cloud storage and management.

SMART Systems are software entities that carry out a set of operations on behalf of a user or another program with some degree of independence or autonomy, and in so doing, employ some knowledge or representation of the user’s goals or desires and the environment within which they act in order to achieve those goals.

SMART Systems incorporate functions of sensing, actuation, and control in order to describe and analyze a situation and make decisions based on the available data in a predictive or adaptive manner, thereby performing smart actions. In most cases the “smartness” of the system can be attributed to autonomous operation based on closed loop control, energy efficiency, and networking capabilities.

VGrab SMART Systems will initially consist of the following modules:

·VGrab Cloud Management System  

·VGrab Database Management System  

·VGrab Membership System  

·VGrab Enterprise Resources Planning  

·VGrab Cloud Point of Sales System  

·VGrab Online Transactions Management System  

·VGrab Ad Rotational Management System  

·Online Directories & Apps Software (Software Updates) 

VGrab Cloud Management System

VGrab is developing a cloud management platform (the “VCMS”), which, once ready, will allow its users to integrate various software tools and applications to monitor and maintain control over dynamic and scalable cloud environments. The integration of the VCMS platform will be achieved through enabling an access to IT systems that are both internal and external VGrab SMART Modules.

VGrab Database Management System

VGrab is developing a general database management system (the “VDBMS”). The VDBMS is software that can be used across all platforms for creating and managing databases. The VDBMS will provide its users with a systematic way to create, retrieve, update and manage data via dedicated interface or specially designed applications. VDBMS will also facilitate additional administrative operations such as change management, disaster recovery, compliance and performance monitoring, among others.

VGrab Membership System

VGrab membership system (the “VMS”) is a cloud-based software solution that will allow complete management of membership registrations, which could be used for anything from football season tickets, gym memberships, car parking, hospitality, coffee clubs, beer clubs, discounted club purchases, to any other promotional program that may develop in the future.

The VMS is designed to be easy to use and  will provide the functionality needed to manage any size venue in a single application, at a fraction of the cost of combining separate applications such as Microsoft Dynamics, SAP or Sage. With VMS all the customers’ data will be held securely in a single place. The VMS will enable VGrab’s clients to provide their customers with a full range of membership schemes with flexible payment options.

VGrab Enterprise Resources Planning

Traditional ERP solutions are often housed within a company’s own server infrastructure and require updating and servicing to stay current. VGrab Enterprise Resource Planning (the “VERP”) software would be hosted in a cloud environment much like SaaS (Software as a Service.) Unlike traditional ERP platforms, the VERP will rely on the Internet rather than a proprietary server infrastructure to help companies share information across departments.

-3-

The VERP software will integrate some or all of the essential functions required to run a business, e.g. accounting, vendor lists, inventory and order management, human resources, customer relationship management, etc. Unique to the VERP system is a shared database that supports multiple functions used by different business units, which will allow the clients in different types of businesses to customize the VERP to their specific needs without requiring an extensive on-premises server presence.

Cloud-based point of sale software (“POS”) is the latest trend in POS software and is increasing in popularity every day. VGrab’s cloud point of sales system (the “VPOS”) will be directly accessed from the Internet and be compatible with most point of sale hardware, including printers, cash register drawers, etc. The key benefits of the VPOS are immediate centralization of information, which is strategically important for chain retailers, less expensive start-up costs, and the ability to access key data from virtually anywhere an Internet connection exists.

VGrab Online Transactions Management System

VGrab online transactions management system (the “VOTMS”) is being developed as a class of software programs capable of supporting transaction-oriented applications on the Internet with the support and integration of various existing online banks and e-wallet systems. Typically, online transactions processing systems are used for order entry, financial transactions, customer relationship management (“CRM”) and retail sales. Such systems have a large number of users who conduct short transactions.

The VOTMS advantage will be its capability to process each transaction immediately, without need to accumulate transactions into batches, allowing for immediate updates of all affected records. The VOTMS i) holds current data; ii) stores details of each transaction; iii) dynamically updates data based on each transaction; and iv) supports day to day decision making. The VOTMS is being developed to optimize concurrency allowing multiple users to be making multiple transactions at the same time in real time.

VGrab Ad Rotational Management System

VGrab advertising rotational management system software (the “VARMS”) would cater to multiple advertisers in a single location either online or offline. It will allow a client to have their business, product or promotion advertisement to rotate with each new page load or advertising space allotted. A publishing site implementing the VARMS will be able to serve ads for multiple advertisers per page load instead of just one, thereby keeping advertising "fresh" and relevant.

The VARMS will allow greater image management through control of the frequency and duration of individual ads, which can then be analyzed by utilizing a reporting capability of the VARMS, which will allow advertisers to see how often ads were displayed, clicked, accessed, etc.

Online Directories & Apps Software (Software Updates)

VGrab’s original VGrab Technology had been previously developed as an online directory and information provider to hundreds of businesses in various industry sectors that ranged from the food and beverage outlets, merchandisers, hotels, to local attractions, etc. The Company developed two separate but integrated mobile applications for merchants, the VGrab Merchant Application, and for consumers, the VGrab Application. These platforms and applications were to sell online goods, online video service portal, and marketing services to merchants, including advertising on the Company’s website and in its newsletters. The Company's primary market for its VGrab Applications was located in Asia, focusing mainly on Malaysia.

VGrab intends to update the directories and mobile applications by using the currently being developed SMART Systems to the latest trend and technology which are; Social Software and Social Network Search Engines. VGrab will integrate and work alongside with current Social Software applications like WhatsApp, WeChat, Telegram, etc. By updating the existing platform, VGrab would be able to widen its network coverage extensively for its clients.

-4-

Our Strategy and Distribution

Our main strategy is the continued development, improvement, innovation and marketing of our VGrab SMART Systems. Once the development is finished and refined, our marketing strategy will be based mainly on ensuring our customers’ business, products and brands are fully integrated with our SMART Systems.

We intend to implement a market penetration strategy that will ensure that our services are well known and respected in our industry. Our marketing strategy will concentrate on quality, reliability, and customization of our SMART Systems with customer satisfaction being the key performance indicator.

Our promotional strategy will involve integrating traditional advertising, seminars, events, internet marketing, personal selling, public relations, and direct marketing.

Our expenditures for the next fiscal year will primarily be associated with the continuous development and testing of our SMART Systems and their modules, elements and functionalities. For some specific or highly specialized components, including but not limited to statistical analysis, data protection, software development and web utilization, we may have to seek a top end professional assistance from third parties both in Malaysia and in the North America.

Additional funding will be required in order to start expansion of the current business platforms in accordance with the new strategic plan and the goals introduced by our new management team.

Competition

The online marketing and data management industry is rapidly growing and competitive industry. We do not have a strong position in Asia or in Malaysia. We also compete with traditional marketing providers and traditional database solution providers. Our competitors include companies that have substantially greater financial resources, staff and facilities than us. Our failure to obtain and maintain a competitive position within the market could have a materially adverse effect on our business, financial condition and results of operations.

Government Regulations

We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet. Additionally, these laws and regulations may be interpreted differently across domestic and foreign jurisdictions. As a company in a new and rapidly growing industry, we are exposed to certain risks that many of these laws may change and are subject to uncertain interpretations. These laws and regulations may involve intellectual property, product liability and consumer protection, distribution, competition, online payment and point of sale services, employee, merchant and customer privacy and data security, taxes or other areas.

Patents and Trademarks

Our VGrab name has been trademarked under the registration certificate no 2014002852. The registration gives us non-exclusive right to use a letter “V”. The trademark is valid until March 14, 2024.

Dependence on Major Customers

As further described in Entry Into a Cooperation Agreement with Hampshire Motor Group (China) Ltd., as at the date of this Annual Report on Form 10-K, we have entered into the Cooperation Agreement for our marketing, promotion, and E-Commerce services. As of the date of this Annual Report on Form 10-K, we have not been able to generate revenue from the Cooperation Agreement, as the services have not started yet.

Aside from the Cooperation Agreement with HMGC, we do not rely on any other major customers.

Research and Development

-5-

Number of Total Employees and Number of Full Time Employees

IN ADDITION TO THE FACTORS DISCUSSED ELSEWHERE IN THIS ANNUAL REPORT, THE FOLLOWING RISKS AND UNCERTAINTIES COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.  ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.

We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease our operations and if we do not obtain sufficient financing, our business will fail.

We were incorporated on August 4, 2010, however as of the date of the filing of this Annual Report on Form 10-K we were not successful in achieving profitability through our operations.

In order to continue our operations, we will be required to raise additional capital through financing, which would be subject to a number of factors, including market fluctuations, customer confidence, and general economic condition.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.  Since our inception, we have used our common shares to raise money for our operations. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.

Because we are in a development stage of our operations, our business has a high risk of failure.

As of the date of the filing of this Annual Report on Form 10-K we are in a development stage of our operations and have incurred net losses since our inception. We have yet to attain profitable operations and are dependent upon obtaining adequate financing to carry out our business activities.  The success of our business operations will depend upon our ability to obtain further financing to complete our planned development and marketing programs and to attain profitable operations. Companies in development stage of their operations often encounter difficulties in generating revenue from services that are provided based on the applications installed on smart phones, and the risk of failure of these companies is high.  If we are not able to complete a successful development and marketing programs and attain sustainable profitable operations, then our business will fail.

We have determined there is substantial doubt about our ability to continue as a going concern; as a result, we could have difficulty finding additional financing.

Our interim consolidated financial statements have been prepared assuming that we will continue as a going concern. We have not generated any revenue from our main operations since inception and have accumulated losses. Our ability to continue our operations depends on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that could result from the outcome of this uncertainty.

-6-

Because our largest shareholder, Hampshire Avenue SDN. BHD. (“Hampshire Avenue”) controls over 55% of our outstanding common stock, investors may find that corporate decisions influenced by Hampshire are inconsistent with the best interests of other stockholders.

Hampshire Capital Limited controls 47.49%, Hampshire Avenue Sdn. Bhd. controls 3.48%, and Hampshire Infotech Sdn. controls 4.50% of the issued and outstanding shares of our common stock. Hampshire Avenue is a parent company of Hampshire and Hampshire Infotech and, accordingly, beneficially controls 55.47% or our common stock (for greater clarity, Hampshire Avenue and its subsidiaries are referred to in this Form 10-K as “Hampshire Group”). In accordance with our Articles of Incorporation and Bylaws, Hampshire Group is able to control who is elected to our board of directors and thus could act, or could have the power to act, as our management.

The interests of Hampshire Group may not be, at all times, the same as those of other shareholders. Hampshire Group has the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including the merger of our company with or into another company, the sale of all or substantially all of our assets and amendments to our Articles of Incorporation. This concentration of ownership with Hampshire Group may also have the effect of delaying, deferring or preventing a change in control of VGrab which may be disadvantageous to minority shareholders.

We face intense competition.

Our business is evolving and intensely competitive, and is subject to changing technology, shifting user needs, and frequent introductions of new products and services.

We expect competition in e-commerce generally, and group buying in particular, to continue to increase. Our current and potential competitors range from large and established companies to emerging start-ups. Established companies have longer operating histories and more established relationships with customers and users, and they can use their experience and resources against us in a variety of competitive ways, including acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites.

If our competitors are more successful than we are in developing compelling products or in attracting and retaining users, advertisers, and content providers, our potential for generating revenues and growth rates could decline.

Our success is dependent upon our ability to provide a superior mobile experience for our customers and merchants.

In order to continue to grow our mobile transactions, it is critical that our application works well with a range of mobile technologies, systems, networks and standards. Our business may be adversely affected if our customers choose not to access our offerings on their mobile devices or use mobile devices that do not offer access to our mobile applications. Similarly, our business may suffer if our merchants choose not to advertise through our applications or choose not to use our SMART Systems services.

We may be subject to claims that we violated intellectual property rights of others, which claims are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.

Companies in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. We acquired the VGrab Application from an original developer, however, there may be intellectual property rights held by others, including patents, copyrighted works and/or trademarks, which cover significant aspects of our technology. Any intellectual property claims against us, regardless of merit, could be time consuming and expensive to settle or litigate and could divert management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology or content found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, or content, which could require significant effort and expense and make us less competitive in the relevant market. Any of these results could harm our business and financial performance.

-7-

We have a limited number of products.

We are reliant on the marketing and sale of our VGrab Applications, Vmore Platform and SMART Systems.  If these products do not achieve sufficient market acceptance, it will be difficult for us to achieve consistent profitability.

If our software is defective, it will adversely affect our business.

Our VGrab Applications, Vmore Platform, and SMART Systems may contain undetected errors, defects or bugs. Although we have not suffered significant harm from any errors, defects or bugs to date, we may discover significant errors, defects or bugs in the future that we may not be able to correct or correct in a timely manner.

It is possible that errors, defects or bugs will be found in our existing or future software products and related services with the possible results of delays in, or loss of market acceptance of, our products and services, diversion of our resources, injury to our reputation, increased service and warranty expenses and payment of damages.

We have limited brand awareness and there is no assurance that we will be able to achieve brand awareness.

We have achieved limited brand awareness with respect to our VGrab Applications, Vmore Platform., and SMART Systems.  There is no assurance that we will be able to achieve brand awareness.  In addition, we must develop a successful market for our products in order to complete sales. If we are not able to develop successful markets for our products, then such failure will have a material adverse effect on our business, financial condition and operating results.

We sometimes hold a significant portion of our cash in United States dollars, which could weaken our purchasing power in other currencies and limit our ability to conduct our development programs.

Currency fluctuations could affect the costs of our operations and affect our operating results and cash flows.  The appreciation of Canadian dollar against the U.S. dollar can increase the costs of our operations.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.

Our success will largely depend on our ability to hire highly qualified personnel with experience in marketing, programming, data architecture and design. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business.

The JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations and reduces the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.

We are and we will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Exchange Act. For so long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" as described in further detail in the risk factors below. There may be a situation where investors may find our common stock less attractive because we rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, we may experience decreased trading market for our common stock making our stock price more volatile. Since we avail ourselves of certain exemptions from various reporting requirements, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.

-8-

Our election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, our company, as an “emerging growth company”, can adopt the standard for the private company. This may make comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible, as possible different or revised standards may be used.

The JOBS Act also allows our company to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. We meet the definition of an “emerging growth company” and so long as we qualify as an “emerging growth company,” we will, among other things:

·be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting; 

·be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers; 

·be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and 

·be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements. 

We have been implementing all of the reduced regulatory and reporting requirements that are available to the Company under the JOBS Act. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm is not required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as we qualify as an “emerging growth company”, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to be provided in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of our common stock may be adversely affected.

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent

-9-

registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.  Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

Because majority of our directors are not independent, they can make and control corporate decisions that may be disadvantageous to other common shareholders.

Our shares of common stock are listed on OTC Markets inter-dealer quotation system, which does not have director independence requirements. For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a director’s independent judgment. Only one of our current directors, Mr. Ong, See-Ming can be considered independent.  Lim Hun Beng is not an independent director because of his controlling position with Hampshire Avenue, our majority shareholder. Jacek (Jack) Skurtys is not an independent director because of his former position as CEO, CFO and President of the Company. Mr. Liong Fook Weng is not an independent director because of his current position as CFO and Secretary of the Company.

We do not expect to declare or pay dividends in the foreseeable future.

We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future. We intend to retain any earnings to develop, carry on, and expand our business.

“Penny stock” rules may make buying or selling our common stock difficult, and severely limit its marketability and liquidity.

Because our securities are considered a penny stock, shareholders will be more limited in their ability to sell their shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

1.contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; 

2.contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; 

3.contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; 

4.contains a toll-free telephone number for inquiries on disciplinary actions; 

5.defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and 

6.contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special

-10-

written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.

None.

We currently do not own any real property.  Our executive office is located at 820-1130 Pender Street West, Vancouver, British Columbia, V6E 4A4, and consists of approximately 25 square feet, which are provided to us free of charge.

VGrab International registered and records office is located at Kensington Gardens, No. U1317, Lot 7616, Jalan Jumidar Buyong, 87000 Federal Territory of Labuan, Malaysia. VGrab Malaysia’s  registered and records office is located at  Level 33A, Menara 1MK, Kompleks 1 Mont Kiara N0.1 Jalan Kiara, Mont Kiara, 50480 Kuala Lumpur, Malaysia, and VGrab Asia’s registered and records office is located at Room 2401, 24/Fl., CC Wu Building, 302-308 Hennessy Road, Wanchai, Hong Kong.

Other than these offices, we do not currently maintain any other facilities, and do not anticipate the need for maintaining other facilities at any time in the foreseeable future.

We are not a party to any pending legal proceedings and, to the best of our knowledge, none of our claims or assets are the subject of any pending legal proceedings.

Not applicable.

-11-

PART II

Market Information

Our common stock commenced trading on OTC Markets inter-dealer quotation system under the symbol VZAGF on March 8, 2013. On January 8, 2014, we changed our name to CoreComm Solutions Inc., and our stock symbol changed to COCMF; on February 11, 2015, we changed our name to VGrab Communications Inc., and our stock symbol changed to VGRBF effective February 13, 2015.

The table below gives the high and low bid information for each fiscal quarter for the last two fiscal years. The bid information was obtained from OTC Markets Group Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Table 1: High and low bids

Holders

As of January 29, 2020, we had 41 shareholders of record according to a shareholders’ list provided by our transfer agent. This number does not include an indeterminate number of shareholders whose shares are held by brokers in street name. Our transfer agent is Empire Stock Transfer with an address at 1859 Whitney Mesa Dr. Henderson, Nevada, 89014 and their phone number is 702-818-5898.

Dividend Policy

We have never declared, nor paid, any dividend since our incorporation and do not foresee paying any dividends in the near future since all available funds will be used to develop and market our business.  Any future payment of dividends will depend on our financing requirements and financial condition and other factors which the board of directors, in its sole discretion, may consider appropriate.

Under the Business Corporations Act, we are prohibited from declaring or paying dividends if there are reasonable grounds for believing that we are insolvent, or the payment of dividends would render us insolvent.

Recent Sales of Unregistered Securities

On November 4, 2019, we issued 133,333 shares of our common stock to our director, Mr. Ong See-Ming. The shares were issued as consideration for Mr. Ong’s services and were valued at $29,333, fair market value as at October 31, 2019, the date the Company resolved to grant the shares.

The shares were issued to Mr. Ong in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Regulation S of the Securities Act, on the basis of representations made by Mr. Ong that he is not a "US Person" (as that term is defined in Regulation S) and was not in the United States at the time he received the shares. The Company did not engage in any form of “directed selling efforts” (as that term is defined in Regulation S) in connection with the issuance of the shares to Mr. Ong.

-12-

On January 8, 2020, we issued a total of 3,000,000 shares of our common stock at a deemed value of $0.10 per shares and a total of 3,465,546 shares of our common stock at a deemed value of $0.18 per share to settle outstanding indebtedness of $923,798 with certain creditors of the Company.

The shares were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Regulation S of the Securities Act, on the basis of representations that the debt holders were not "US Persons" (as that term is defined in Regulation S) and were not in the United States at the time they received the shares. The Company did not engage in any form of “directed selling efforts” (as that term is defined in Regulation S) in connection with the issuance of the shares for debt.

Not applicable.

Summary of financial condition

Table 2: Comparison of financial condition

Results of operations

YEARS ENDED OCTOBER 31, 2019 AND 2018

Our operating results for the years ended October 31, 2019 and 2018 and the changes in our operating results between them are summarized in the Table 3 below.

Table 3: Summary

Revenue

During the years ended October 31, 2019 and 2018 we did not have any revenue generating operations.  We are presently in the early development stage of our operations, with our main business goal being software application development, marketing, and distribution. Our Cooperation agreement with HMGC has yet to start generating revenue, therefore we can provide no assurances that we will be able to generate enough cash flow from our operations to support our ongoing operations.

-13-

Operating Expenses

Our operating expenses for the years ended October 31, 2019 and 2018 consisted of the following:

Table 4: Changes in operating expenses

Our operating expenses increased by $154,869, or 28%, from $561,569 for the year ended October 31, 2018, to $716,438 for the year ended October 31, 2019. The most significant expense item that contributed to increase in our operating expenses was associated with salaries and wages we incurred through our subsidiaries in Malaysia, which totaled $338,119 and were mainly associated with salaries and reimbursable expenses we accrued to our CEO and CFO (2018- $206,825). The second largest expense was associated with software development costs of $200,333, which were required to develop the VGrab WeChat Application for use by Vgrab Asia; in comparative Fiscal 2018 we spent $183,427 developing SMART Systems for use by Vgrab Malaysia.

In addition to the above expenses, we incurred $29,333 in management fees we recorded on issuance of 133,333 common shares to Mr. Ong, our director, to recognize his past services; the management fees decreased by $32,705, or 53%, in comparison to $62,038 we recognized for the year ended October 31, 2018, which were associated with 500,000 common shares we issued to our former CEO and CFO, Mr. Skurtys, as consideration for his past services. During our Fiscal 2019, we recorded $56,437 in general and administrative expenses, which increased by $6,298, as compared to $50,139 we incurred during the year ended October 31, 2018. Our travel and entertainment expenses increased by $16,282 to $27,732 we incurred during the year ended October 31, 2019, as compared to $11,450 we incurred in our Fiscal 2018; these increases were associated with increased operating activity in VGrab Malaysia, and Vgrab Asia. In addition to the above expenses, our regulatory and filing fees as well as professional fees increase by $7,473 and $5,085, respectively, from $21,426 to $28,899 in regulatory and filing fees, and from $7,058 to $12,143 in professional fees. During the year ended October 31, 2019, we recorded $4,901 in amortization on equipment that we purchased for Vgrab Malaysia’s operations (expense that did not exist during the year ended October 31, 2018). Our accounting fees remained relatively steady decreasing by $665, from $19,206 we incurred during the year ended October 31, 2018, to $18,541 we incurred during the year ended October 31, 2019.

Other Items

During the year ended October 31, 2019, we recorded $1,856 in realized foreign exchange gains associated with the fluctuation in foreign exchange rates between the US, Canadian, Malaysian and Hong Kong currencies. During the year ended October 31, 2018, we recorded $7,376 in realized foreign exchange gains associated with the fluctuation in foreign exchange rates between the US, Canadian, and Malaysian currencies.

During the year ended October 31, 2019, we recorded $11,674 (2018 - $2,976) in interest associated with our liabilities under the notes payable we issued to our debt holders.

During the year ended October 31, 2019, we concluded negotiations with certain debt holders to convert a total of $923,798 we owed on account of services and cash advances provided to us into 6,465,546 shares of our common stock. A total of $623,798 was converted at a deemed value of $0.18 per share with remaining $300,000 converted at a deemed valued of $0.10 per share. We recorded $115,000 as loss on conversion of $660,000 debt with third-party service providers and a lender. Remaining $263,798 in converted debt was owed to Hampshire Avenue, our

-14-

major shareholder. Hampshire Avenue agreed to convert the debt at a deemed price of $0.18 per share. At the time the agreement was executed, our shares were trading at $0.105 per share, resulting in $109,916 gain associated with conversion of this debt, which we recorded as an increase to an additional paid-in capital.  We did not have similar transactions during the year ended October 31, 2018.

Translation to Reporting Currency

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

Liquidity

GOING CONCERN

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

Based upon our current plans, we expect to incur operating losses in future periods. At October 31, 2019, we had a working capital deficit of $608,524 and accumulated losses of $7,264,164 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. The consolidated financial statements included with this Annual Report on Form 10-K do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern. Therefore, we may be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.

INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY

Table 5: Working Capital

During the year ended October 31, 2019, our working capital deficit decreased by $286,417, from $894,941 at October 31, 2018, to $608,524 at October 31, 2019. The decrease in working capital deficit was primarily related to the conversion of $560,000 we owed to our vendors, $100,000 we owed pursuant to a non-interest-bearing loan agreement, and $263,798 we owed to Hampshire Avenue under 4% notes payable into 6,465,546 shares of our common stock; in addition, increase in prepaid expenses of $23,121 further contributed to decrease in working capital deficit. These changes were in part offset by increased amounts due to our CEO and CFO on account of their salaries, which increased by $212,941.

Table 6: Cash Flows

-15-

Net cash used in operating activities. During the year ended October 31, 2019 we used $236,594 to support our operating activities. This cash was used to cover our cash operating expenses of $683,147, and to pay $23,128 towards our future expenses. These uses of cash were offset by $34,044 increase in amounts due to related parties for reimbursable expenses, and by $212,941 increase to accrued salaries payable to our CEO and CFO. In addition, a $222,541 increase to our accounts payable and accrued liabilities and $154 decrease in GST recoverable further decreased cash used in operations.

During the year ended October 31, 2018, we used $101,046 to support our operating activities. This cash was used to cover our cash operating expenses of $497,898, to increase our GST recoverable and prepaid expenses by $203 and $1,577, respectively. These uses of cash were offset by increases in accounts payable and accrued liabilities of $190,186, amounts due to related parties of $27,481 and accrued salaries to our CEO and CFO of $180,965.

Non-cash operating activities. During the year ended October 31, 2019, we recorded $115,000 loss on conversion of third-party debt (the shares were issued on January 8, 2020). We recorded $29,333 in management fee associated with the fair value of 133,333 shares we issued to our director, and $4,901 in amortization expense associated with the computers and other office equipment we acquired for the operations of Vgrab Malaysia. In addition, we accrued $10,720 in interest on our notes payable to Hampshire Avenue, and $954 in interest on $64,259 we reclassified from current debt to long-term debt. These non-cash transactions were in part offset by $2,799 in foreign exchange fluctuations between the US, Canadian, Malaysian, and Hong Kong currencies.

During the year ended October 31, 2018, we recorded $3,705 in foreign exchange fluctuations between the US, Canadian, and Malaysian currencies, and $2,976 in interest we accrued on the notes payable we issued to Hampshire Avenue. In addition, we recorded $60,000 as a one-time management fee associated with the fair value of 500,000 shares we issued to our former CEO, CFO and director on his resignation.

Net cash used in investing activities. During the year ended October 31, 2019, we used $5,515 to acquire computer and office equipment for our operations in Malaysia (2018 - $3,931).

Net cash provided by financing activities. During the year ended October 31, 2019, we received $243,948 under loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand.

During the year ended October 31, 2018, we received $107,205 in proceeds from the loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand.

Non-cash financing activities. On October 3, 2019, we agreed to convert $100,000 we owed to a third-party lender under a non-interest-bearing loan agreement into 1,000,000 shares of our common stock at a deemed price of $0.10 per share. At the time of conversion our shares traded at $0.205, therefore we recognized $105,000 in loss on conversion. In addition, we converted $263,798 we owed to Hampshire Avenue under 4% notes payable into 1,465,546 shares of our common stock at a deemed price of $0.18 per share. Since at the time of conversion our shares traded at $0.105, we recognized $109,916 as increase to our paid-in capital. Furthermore, during our fourth quarter ended October 31, 2019 we agreed to convert $560,000 we owed to third-party vendors for services they provided to us into 4,000,000 shares of our common stock. The conversion resulted in $10,000 loss, which we expensed as part of loss on conversion of debt.

On July 31, 2019, we reached an agreement with one of our service providers to extend repayment of $64,259 we owed to the vendor until December 31, 2021. The vendor agreed to extend the repayment in exchange for 6% annual interest accrued on the principal and compounded monthly. As at October 31, 2019, the principal converted to long-term advance accrued $954 in interest.

Capital Resources

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

-16-

As of October 31, 2019, we had cash on hand of $19,806 and working capital deficit of $608,524, which raises substantial doubt about our continuation as a going concern. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking new distribution channels for our VGrab Applications. We cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Contingencies and Commitments

We had no contingencies at October 31, 2019.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

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

Our significant accounting policies are disclosed in the notes to the audited consolidated financial statements for the year ended October 31, 2019. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:

Principles of Consolidation

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

Internal-Use Software

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

-17-

Foreign Currency Translation and Transaction

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

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

Fair Value of Financial Instruments

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

Concentration of Credit Risk

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

At October 31, 2019, we had $5,841 in cash on deposit with a large chartered Canadian bank, $12,745 in cash on deposits with a bank in Malaysia, and $1,220 in cash on deposits with a bank in Hong Kong. As part of our cash management process, we perform periodic evaluations of the relative credit standing of these financial institutions.  We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.

Not Applicable.

-18-

To the shareholders and the board of directors of VGrab Communications Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of VGrab Communications Inc. (the "Company") as of October 31, 2019 and 2018, the related consolidated statements of operations, stockholders’ deficit and cash flows, for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has not generated revenues to date, has accumulated losses of $7,264,164 since inception, and requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion in accordance with the standards of the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DMCL

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

We have served as the Company’s auditor since 2010

Vancouver, Canada

January 29, 2020

F-1

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

F-2

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

VGRAB COMMUNICATIONS INC.

OCTOBER 31, 2019

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Nature of Operations

On January 8, 2015, the Company entered into a software purchase agreement with Hampshire Capital Limited (the “Vendor”) to acquire the Vgrab Software Application (“Vgrab Application”). The Vgrab Application is developed for use with smartphones using the Android and Apple iOS operating systems allowing users to redeem vouchers on their smartphones at a number of retailers and merchants.

As of the date of these consolidated financial statements, the Company has the following subsidiaries:

The Company’s consolidated financial statements are prepared on a going concern basis in accordance with US generally accepted accounting principles (“GAAP”) which contemplate the realization of assets and discharge of liabilities and commitments in the normal course of business. The Company has not generated operating revenues to date, and has accumulated losses of $7,264,164 since inception.  The Company has funded its operations through the issuance of capital stock and debt.  Management plans to raise additional funds through equity and/or debt financing.  There is no certainty that further funding will be available as needed.  These factors raise substantial doubt about the ability of the Company to continue operating as a going concern.  The Company’s ability to continue its operations as a going concern, realize the carrying value of its assets, and discharge its liabilities in the normal course of business is dependent upon its ability to raise new capital sufficient to fund its commitments and ongoing losses, and ultimately on generating profitable operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with US GAAP and are presented in United States dollars.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain of the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Significant areas of estimate include the carrying value of the intangible assets and deferred income tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassifications

Certain prior period amounts in the accompanying audited consolidated financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the results of operations or financial position for any period presented.

F-6

Principles of Consolidation

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

Internal-Use Software

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

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts payable, amounts due to related parties, and loans payable. The carrying value of these financial instruments approximates their fair value based on their short-term nature. The Company is not exposed to significant interest, exchange or credit risk arising from these financial instruments.

The fair value hierarchy under US GAAP is based on the following three levels of inputs, of which the first two are considered observable and the last unobservable:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Observable inputs other than Level I, quoted prices for similar assets or liabilities in active prices whose inputs are observable or whose significant value drivers are observable; and;

Level 3: Assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).  There were no assets or liabilities measured at fair value on a nonrecurring basis during the periods ended October 31, 2019 and 2018.

Foreign Currency Translation and Transaction

The Company’s functional currency is the Canadian dollar and reporting currency is the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on translation to the reporting currency are included in the other comprehensive income.

Vgrab International Ltd’s functional currency is the United States dollar, Vgrab Communications Malaysia Sdn Bhd’s functional currency is Malaysian Ringgit, and VGrab Asia Limited’s functional currency is Hong Kong Dollar. Reporting currency for all subsidiaries is the United States dollar.

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

The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

F-7

Income Taxes

Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment.  In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.

The Company accounts for uncertainty in income taxes by applying a two-step method. First, it evaluates whether a tax position has met a more likely than not recognition threshold, and second, it measures that tax position to determine the amount of benefit, if any, to be recognized in the financial statements. The application of this method did not have a material effect on the Company's consolidated financial statements.

Loss per Share

The Company presents both basic and diluted loss per share (“LPS”) on the face of the consolidated statements of operations. Basic LPS is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during the year. Diluted LPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted LPS excludes all dilutive potential shares if their effect is anti-dilutive.

Equipment

Equipment is stated at cost and is amortized over its estimated useful life on a straight-line basis over 2 years.

NOTE 3 - RELATED PARTY TRANSACTIONS

The following amounts were due to related parties as at:

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

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

During the year ended October 31, 2019, the Company recorded $10,720 (2018 - $2,976) in interest expense associated with its liabilities under the notes payable issued to the major shareholder.

During the year ended October 31, 2019, the Company incurred $119,798 (2018 - $100,536) in wages and salaries to Mr. Lim Hun Beng, the Company’s CEO, President and director, in addition, the Company incurred $28,798 (2018 - $24,076) in reimbursable expenses with Mr. Lim.

During the year ended October 31, 2019, the Company incurred $95,838 (2018 - $80,429) in wages and salary to Mr. Liong Fook Weng, the Company’s CFO and director, in addition, the Company incurred $5,247 (2018 - $7,326) in reimbursable expenses with Mr. Liong.

F-8

On October 31, 2019, the Company granted Mr. Ong See-Ming, the Company’s director, 133,333 shares of the Company’s common stock in recognition of Mr. Ong’s services during the Fiscal 2019. The fair value of these shares was calculated to be $29,333, and was recorded as management fees. The shares were issued on November 4, 2019 (Note 6).

On May 31, 2018, the Company entered into a release agreement with its then current director, Mr. Skurtys. As consideration for Mr. Skurtys’s past services, the Company agreed to issue to Mr. Skurtys 500,000 shares of its common stock. The fair value of these shares was calculated to be $60,000, which the Company recorded as management fees. The shares were issued on September 4, 2018 (Note 6).

Memorandum of Understanding with Related Party

According to the MOU, the Company may agree to profit sharing arrangements as contemplated under the Cooperation Agreement between the Company and HMGC, which specify the Company’s entitlement to a percentage of revenue generated from the sales of any new products developed by Vgrab International or jointly with HMGC, which percentage will be determined as follows: (i) 94% from revenue of up to $100,000, and (ii) 95% from revenue of over and above $100,000. In addition, the Company will also be entitled to a percentage of revenue generated from the sales of the products developed by HMGC prior to the entry into the definitive agreement based on the following schedule: (i) 20% from revenue of up to $100,000, (ii) 15% from revenue of up to $500,000, (iii) 10% from revenue of up to $1,000,000, and (iv) 5% from revenue of over and above $1,000,000.

Based on the due-diligence and further negotiations with HMGC and the shareholders of individuals outlets that are operating under the Duesenberg brand, the Company decided not to extend the MOU.

NOTE 4 - EQUIPMENT

Changes in the net book value of the equipment at October 31, 2019 and 2018 are as follows:

NOTE 5 - LONG-TERM DEBT

On July 31, 2019, one of the vendors of the Company agreed to defer repayment of the amounts owed to the vendor on the following terms:

During the year ended October 31, 2019, the Company accrued $954 in interest on the long-term debt. As at October 31, 2019, the Company owed a total of $64,259 under its long-term debt obligation to the vendor (2018 - $Nil).

F-9

NOTE 6 - COMMON STOCK

Shares issued during the year ended October 31, 2019

During the year ended October 31, 2019, the Company’s board of directors resolved to grant 133,333 shares of its common stock to Mr. Ong See-Ming for services he has provided to the Company. The fair value of these shares was calculated to be $29,333, and was recorded as management fees. The shares were issued on November 4, 2019. (Note 3).

During the year ended October 31, 2019, the Company’s debt holders agreed to convert a total of $923,798, representing a part or all of the debt owed to them by the Company into shares of the Company’s common stock (Note 3).

The conversion of debt to shares was as follows:

(1)  The gain on conversion of debt to shares with related party was recorded as part of additional paid-in capital; therefore the Company expensed $115,000 as loss on conversion of debt.

(2)  The above shares were issued on January 8, 2020.

Share issuances during the year ended October 31, 2018

During the year ended October 31, 2018, the Company issued 500,000 shares of its common stock to Mr. Skurtys (Note 3). The shares were issued as consideration for Mr. Skurtys’s past services. The shares had a fair market value of $60,000 and were recorded as management fees.

During the years ended October 31, 2019 and 2018, the Company did not have any warrants or options issued and exercisable.

NOTE 7 - INCOME TAXES

The Company has established a valuation allowance against its federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through October 31, 2019. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit.

A reconciliation of income taxes at statutory rates is as follows:

F-10

The Company’s tax-effected deferred income tax assets are estimated as follows:

The Company has non-capital losses carried forward of approximately $2,492,000 which will expire from 2031 to 2039.

NOTE 8 - SUBSEQUENT EVENTS

Subsequent to October 31, 2019, the Company’s subsidiaries entered into series of loan agreements with Hampshire Avenue to borrow approximately $18,000 (MYR75,000). The loans bear 4% compound interest calculated monthly from the date the funds were advance (Note 3).

F-11

Not applicable.

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report.  The evaluation was undertaken in consultation with our accounting personnel. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to limited segregation of duties, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit 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.

Report on Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, 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 and includes those policies and procedures that:

·pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; 

·provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and 

·provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. 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.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of October 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on the assessment, our Chief Executive Officer and Chief Financial Officer determined that, as of October 31, 2019, our internal control over financial reporting was not effective due to limited segregation of duties.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the fourth quarter of the last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

None.

-19-

Table 7 contains certain information regarding our directors, executive officers and key personnel.

Table 7: Directors and officers

Below is a brief description of the background and business experience of our executive officers and directors:

Mr. Lim, Hun Beng started his career in his early twenties. His main focus throughout the years has been strategic business and property development in the Asia, more specifically, Malaysia and China. In 1992, Mr. Lim set up a joint-venture company with the local government of the city of Zhuhai, China to develop a 3.6 km2 property, which includes Formula One standard race circuit, a 36-hole golf course, and a mix of residential and commercial buildings. In 2006, Mr. Lim founded Hampshire Group, the Company actively involved in green energy, environmentally-friendly property development and agriculture. In 2010 Mr. Lim took over Linear Group, a Malaysian corporation specializing in manufacturing and operating industrial HVAC projects.

Mr. Liong, Fook Weng was born in Malaysia and received his master’s degree in Business Administration from the University of Durham, the United Kingdom, he also has his business certificate in hospitality from Michigan State University, USA. Since 1991, Mr. Liong has held many senior management positions in several publicly listed and privately-owned companies within the manufacturing, and ecommerce industries. He has more than 20 years’ experience in managing the companies and contributing to their expansion plans through streamlining their financial strategies or corporate restructuring.

Mr. Ong, See-Ming was born in Singapore but spent his formative years in the U.K. After going to school in London and graduating from Oxford University with a degree in Oriental Studies, Mr. Ong started his banking career in the City of London. Initially, he worked as a portfolio manager, but later relocated back to Singapore and specialized in wealth management. Mr. Ong has held senior positions with Standard Chartered, Barclays and Societe Generale. He now travels extensively throughout South East Asia providing corporate advisory services to start up businesses and holds personal stakes in some of these companies.

Term of Office

Our directors are elected to hold office until the next annual meeting of the shareholders and until their respective successors have been elected and qualified. Our executive officers are appointed by our board of directors and hold office until removed by our board of directors or until their successors are appointed.

Family Relationships

There are no family relationships between our executive officers and directors.

Other Significant Employees

Other than our executive officers, we do not currently have any significant employees.

Legal Proceedings

During the past ten years none of our directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

-20-

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act and the rules thereunder require our officers and directors, and persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and to furnish us with copies.  To our knowledge, based solely upon review of the copies of such reports received or written representations from the reporting persons, the following persons have, during the fiscal year ended October 31, 2019, failed to file, on a timely basis, the reports required by Section 16(a) of the Exchange Act:

·Mr. Ong, a member of our Board of Directors was appointed as our director on August 14, 2017.  Mr. Ong has not filed his Form 3 reflecting his status as a director of VGrab Communications Inc. 

·Mr. Ong acquired 100,000 shares of our common stock in a private transaction on January 22, 2018. Mr. Ong has not filed his Form 4 reflecting this acquisition. 

·Mr. Ong acquired further 50,000 shares of our common stock in a private transactions. Mr. Ong has not filed his Form 4 reflecting this acquisition of shares. 

·On November 4, 2019, Mr. Ong was issued 133,333 shares of our common stock in recognition of his past services as director of the Company. Mr. Ong has not filed his Form 4 reflecting issuance of these shares. 

·Mr. Lim, a member of our Board of Directors, CEO and President, is a beneficial owner of the shares held in the name of Hampshire Avenue, Hampshire Infotech, and Hampshire Capital Limited (collectively Hampshire Group). Hampshire Group did not file Form 4 reflecting the following private transactions:  

·May 29, 2019 - sale of 500,000 shares by Hampshire Infotech SDN BHD 

·October 31, 2019 - conversion of $263,798 to 1,465,546 shares at $0.18/share. The shares were issued on January 8, 2020 

Corporate Governance

Our board of directors does not have a compensation committee or a nominating committee.  We believe this is appropriate, given the small size of our company and the stage of our development.  We have not adopted any procedures by which our security holders may recommend nominees to our board of directors and that has not changed during the last fiscal year.

Our audit committee consists of Liong Fook Weng, the Company’s CFO and a director, and Mr. Lim Hun Beng, the Company’s CEO, presidents and a director. None of the members of the Company’s Board of Directors qualify as an “audit committee financial expert”, as defined by Item 407 of Regulation S-K promulgated under the Securities Act and the Exchange Act. We are dependent on financial advice from external financial consulting firm, which we believe is appropriate, given the small size of our company and the stage of our development.

Code of Ethics

We adopted a Code of Ethics applicable to our officers and directors which is a “code of ethics” as defined by applicable rules of the SEC.  If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our officers or directors, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K filed with the SEC.

-21-

ITEM 11: EXECUTIVE COMPENSATION

Table 8 summarizes all compensation for the 2019 and 2018 fiscal years received by our Chief Executive Officer, our two most highly compensated executive officers who earned more than $100,000 and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of the last completed fiscal year (collectively, the “Named Executive Officers”).

Table 8: Summary Compensation Table

Notes:

1.Mr. Lim was appointed as a member of our Board of Directors on July 19, 2016 and President and CEO on December 5, 2017.  

2.Mr. Liong was appointed as a member of our Board of Directors, CFO, Corporate Secretary and Treasurer on December 5, 2017.  

3.Mr. Skurtys was appointed as a member of our Board of Directors, President, CEO and CFO on February 10, 2015. Mr. Skurtys resigned as the Company’s President, CEO, CFO, Secretary and Treasurer on December 5, 2017, and as director on June 22, 2018. On May 31, 2018, as consideration for the past services, we agreed to issue to Mr. Skurtys 500,000 shares of our common stock at $0.12 per share as fully paid and non-assessable, the shares were issued on September 4, 2018. 

Employment Agreements

Mr. Lim, Hun Beng, provides his services as the Chief Executive Officer and President of the Company under an employment agreement. Under the terms of the employment agreement, the Company agreed to hire Mr. Lim as the Company’s CEO and President and agreed to pay Mr. Lim an annual salary of USD$120,000. The terms of the employment agreement provide that in addition to the annual salary, the Company will pay Mr. Lim a monthly out-of-pocket allowance of approximately $2,400 (RM10,000), and an annual bonus equivalent to a minimum 100% annual base salary, which bonus will be based on the achievement of certain performance milestones predetermined by the Company’s board of directors. As of the date of the filing of this Annual Report on Form 10-K, the performance milestones were not attained, therefore the Company did not record any bonuses payable to Mr. Lim.

Mr. Liong, Fook Weng, provides his services as the Chief Financial Officer, Secretary and Treasurer of the Company under an employment agreement. Under the terms of the employment agreement, the Company agreed to hire Mr. Lim as the Company’s CFO and agreed to pay Mr. Liong an annual salary of USD$96,000. The terms of the employment agreement provide that in addition to the annual salary, the Company will reimburse Mr. Liong for all reasonable out of pocket expenses, and an annual bonus equivalent to a minimum 100% annual base salary, which bonus will be based on the achievement of certain performance milestones predetermined by the Company’s board of directors. As of the date of the filing of this Annual Report on Form 10-K, the performance milestones were not attained, therefore the Company did not record any bonuses payable to Mr. Liong.

-22-

Outstanding Equity Awards at Fiscal Year End

As at October 31, 2019, we did not have any outstanding equity awards.

We have no plans that provide for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.

We do not have a compensation committee.

DIRECTOR COMPENSATION

During the year ended October 31, 2019, Mr. Ong, See-Ming served as an independent director of the Company. Table 9 summarizes all compensation for the 2019 and 2018 fiscal years received by Mr. Ong. Compensation paid to directors who were also named executive officers during our October 31, 2019, fiscal year is set out in the Table 8 above.

Table 9: Summary Director Compensation Table

⁽¹⁾ During the year ended October 31, 2019, we issued Mr. Ong 133,333 shares of our common stock in recognition of his services as a director of the Company.

Table 10 presents, as of January 29, 2020, information regarding the beneficial ownership of our common stock with respect to each of our executive officers, each of our directors, each person known by us to own beneficially more than 5% of the common stock, and all of our directors and executive officers as a group.  Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities.  Each individual or entity named has sole investment and voting power with respect to the shares of common stock indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted.

Table 10: Security ownership

-23-

Notes:

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 our shares actually outstanding on January 29, 2020.  As of January 29, 2020, there were 42,112,717 common shares issued and outstanding. 

2.Hampshire Capital Ltd (“Hampshire”) is the direct beneficial owner of 20,000,000 shares of our common stock. Hampshire Infotech Sdn (“Hampshire Infotech”) is the direct beneficial owner of 1,894,951 shares of our common stock. Hampshire Avenue is direct beneficial owner of 1,465,546 shares of our common stock. Hampshire Avenue is the parent company of Hampshire and Hampshire Infotech, and Mr. Lim, as the executive officer and director of Hampshire Avenue, are the indirect beneficial owners of our securities held directly by Hampshire and Hampshire Infotech, with shared voting and dispositive power over those securities.   

Changes in Control

Director Independence

Our common shares are quoted on the OTC Markets inter-dealer quotation system, which does not have director independence requirements.  For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the

-24-

exercise of a director’s independent judgment. Mr. Ong, See-Ming qualifies as independent director. Lim, Hun Beng is not an independent director as he beneficially holds 55.47% of our common stock. Mr. Lim is also our CEO and President. Mr. Liong, Fook Weng is not an independent director because of his position as CFO, Secretary and Treasurer.

As a result of our limited operating history and minimal resources, our management believes that it will have difficulty in attracting additional independent directors.  In addition, we would likely be required to obtain directors and officers insurance coverage in order to attract and retain additional independent directors.  Our management believes that the costs associated with maintaining such insurance are prohibitive at this time.

Transactions with Related Parties

Except as disclosed below, none of the following parties has, during our last two fiscal years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, in which the Company is a participant and the amount involved exceeds the lesser of $120,000 or 1% of the average of the Company’s total assets for the last two completed fiscal years:

(i)Any of our directors or officers; 

(ii)Any person proposed as a nominee for election as a director; 

(iii)Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding common shares; 

(iv)Any of our promoters; and 

(v)Any relative or spouse of any of the foregoing persons who has the same house as such person. 

During the past two fiscal years and up to the date of the filing of this Annual Report on Form 10-K, we have entered into the following related party transactions with Hampshire Avenue SDN BHD, a parent company of Hampshire Infotech, our direct shareholder, controlled by Mr. Lim:

·During the year ended October 31, 2018, we received $107,205 as proceeds from the loan agreements with Hampshire Avenue SDN BHD. The loans bear interest at 4% per annum, are unsecured and payable on demand. 

·During the year ended October 31, 2019, we received $313,663 as proceeds from the loan agreements with Hampshire Avenue SDN BHD. The loans bear interest at 4% per annum, are unsecured and payable on demand. During the same period we repaid $69,601 under notes payable issued to Hampshire Avenue. 

·On October 31, 2019, our board of directors approved conversion of $263,798 we owed to Hampshire Avenue under the 4% notes payable into 1,465,546 shares of our common stock at a deemed price of $0.18 per share. The shares were issued on January 8, 2020 

·Subsequent to the year ended October 31, 2019, and up to the date of the filing of this Annual Report on Form 10-K, we received $18,000 as proceeds from the loan agreements with Hampshire Avenue SDN BHD. The loans bear interest at 4% per annum, are unsecured and payable on demand. 

During year ended October 31, 2018, we entered into an employment agreement with Mr. Lim. Under the terms of the employment agreement, we agreed to pay Mr. Lim an annual salary of $120,000, and provide him with a monthly allowance for out-of-pocket expenses of $2,400 (RM10,000); in addition to the salary we agreed to pay Mr. Lim an annual bonus equivalent to a minimum 100% annual base salary, which bonus will be based on the achievement of certain performance milestones predetermined by the Company’s board of directors. During the year ended October 31, 2019 we expensed $148,595 (2018 - $124,612) in salary and reimbursable expenses with Mr. Lim. As at October 31, 2019, we owed Mr. Lim a total of $269,381 (2018 - $121,156) in salary and reimbursable expenses. Subsequent to October 31, 2019, we continue to accrue Mr. Lim’s salary based on the above described employment agreement.

-25-

Liong, Fook Weng

During the year ended October 31, 2018, we entered into an employment agreement with Mr. Liong, Fook Weng. Under the terms of the employment agreement, we agreed to pay Mr. Lim an annual salary of $96,000 and to reimburse Mr. Liong for all reasonable out-of-pocket expenses; in addition to the salary we agreed to pay Mr. Liong  an annual bonus equivalent to a minimum 100% annual base salary, which bonus will be based on the achievement of certain performance milestones predetermined by the Company’s board of directors. During the year ended October 31, 2019 we expensed $101,085 (2018 - $84,131) in salary and reimbursable expenses with Mr. LIong. As at October 31, 2019, we owed Mr. Liong a total of $184,965 (2018 - $84,131) in salary and reimbursable expenses. Subsequent to October 31, 2019, we continue to accrue Mr. Liong’s salary based on the above described employment agreement.

(1) Audit Fees and Related Fees

The aggregate fees billed and accrued for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual consolidated financial statements and for the review of our financial statements or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were:

2019 - $20,134 - Dale Matheson Carr-Hilton Labonte LLP

2018 - $21,231 - Dale Matheson Carr-Hilton Labonte LLP

(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

2019 - $0 - Dale Matheson Carr-Hilton Labonte LLP

2018 - $0 - Dale Matheson Carr-Hilton Labonte LLP

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

2019 - $1,500 - Dale Matheson Carr-Hilton Labonte LLP

2018 - $2,039 - Dale Matheson Carr-Hilton Labonte LLP

(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2) and (3) was:

2019 - $0 - Dale Matheson Carr-Hilton Labonte LLP

2018 - $0 - Dale Matheson Carr-Hilton Labonte LLP

Our board of directors pre-approves all audit and permissible non-audit services provided by the independent auditors.  These services may include audit services, audit-related services, tax services and other services.

-26-

The following table sets out the exhibits either filed herewith or incorporated by reference.

-27-

Notes:

(1)Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012. 

(2)Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012. 

(3)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013. 

(4)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013. 

(5)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 4, 2013. 

(6)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 9, 2014. 

(7)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 14, 2015. 

(8)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 17, 2015. 

(9)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on February 9, 2016. 

(10)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September 14, 2016. 

-28-

(11)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 15, 2016. 

(12)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 22, 2016. 

(13)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September14, 2016. 

(14)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on February 13, 2018. 

(15)Filed with the SEC as an exhibit to our Annual Report on Form 10-Q filed on March 16, 2018. 

(16)Filed with the SEC as an exhibit to our Annual Report on Form 10-Q filed on June 15, 2018. 

(17)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 22, 2018. 

(18)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 2, 2018. 

(19)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 30, 2019. 

-29-

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.

Dated: January 29, 2020

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

-30-