The results of our quarter ended February 28, 2022 reflect the continuation of the business process being experienced in the incubation of our premier start-up subsidiary in the Transportation Services segment of the Trucking Industry. Daniels continued to umbrella its subsidiary, Payless Truckers, Inc.'s expansion through financing sources expensive in nature. Parent Company Management believes the capital costs incurred were warranted and helped produce results in a very challenging quarter for its key growth engine. After months of negotiations, a number of financing options are in final review with some having very favorable terms including long-term financing.

For the three months - December 1, 2021, through February 28, 2021 - Total Revenue was $582,769 compared to $1,212,942 for the corresponding quarter of the previous fiscal year. This was comprised of $377,042 from the Flip business and $205,727 in fleet rental and repairs income. While both businesses continue to produce high margins, our activities were severely limited by (1) the substantial increase in prices of used trucks which we acquire to build our business, (2) the lack of completed financing transactions to continue our growth. Our program rental fleet has the potential to be scale-able and provide significant growth because of its predictable gross cash flow / potential earnings stream. We are confident that the industry will soon start coping with the changes in the above factors. We are receiving increasing interest in our products and are confident that the financing alternatives being discussed will allow us to meet the increasing demand in the near future. For example, we have recently been able to find trucks for our flip business at reasonable prices that allow us to maintain our margins. Further, demand for our rental trucks remain strong as drivers pass their increased costs on to their contract customers. The demand is growing, and our new financing arrangements will allow us to meet that demand.

In response to the inflationary affect on truck prices, we have begun selling some of our rent truck inventory in order to capitalize on their increased values. This not only provides us with substantial profits on the sales (our depreciated costs are relatively low), but it also allows us to rebuild our fleet from trucks that are aging to newer and more reliable units as we invest these profits back into the fleet.

During the February quarter, in-house financing potential of aged management award shares - while available and already counted in the outstanding shares total - continued to be held in check in favor of continuing negotiations with financing options which continue to multiply because of proved operating results. The grants were created for a specific purpose - for Senior oversight financial management. operations managers and retained consultants - to participate individually and voluntarily in the in-house control and timing of funding as needed. The eventual use of the award shares could provide selective management of the growth of Payless.

Negotiations with long term straight debt lenders and Preferred Stock financiers continued through the February quarter. More creative approaches were developed, and options continue to be studied. The main objective - which continued to take more time than expected - is to create alternatives that (a) that are repaid out of cash flows and/or (b) with equity participation that is accretive. Daniels' senior management believes levered financing - supported by the equity and layered finance options mentioned - will allow Payless to achieve the first plateau of 100 rental fleet trucks in a measured amount of time. We realize that we will need to acquire a larger operating facility so we can accelerate the build out of Payless. Current capital negotiations now include a real estate component so we can accelerate our fleet expansion. Our current operating facility has limited capacity and can only add five to six truck additions to our rental fleet each month.

The funding options being discussed will eliminate the need for the continuation of expensive private investor funding. Blended Public market-rates for financing, will allow Daniels / Payless to service a larger debt load and accelerate growth prospects. Our cost of capital should drop significantly from current levels.

As used in this interim report, the terms "we", "us", "our", the "Company", the "Registrant", "Daniels Corporate Advisory", "DCAC" and "Daniels" mean Daniels Corporate Advisory Company, Inc. unless otherwise indicated.





Overview

Daniels Corporate Advisory creates and implements corporate strategy alternatives for the mini-cap public or private company client. The addition of new business opportunities and the location of professional talent for implementation is anticipated through the full-time efforts of our senior management. These efforts are to be expanded in the United States and in foreign capitals by an expanding advisory board and through the networks of independent consultants. Principals of the respective client company will open their networks to augment professional access for specialties the Daniels corporate strategy consultants believe are needed in a joint-venture, jointly-controlled undertaking created for the client's optimum growth.

Daniels may provide the client with multiple corporate strategies/opportunities including joint-ventures, marketing opportunity agreements and/or potential acquisitions structured in leveraged buyout format. One or a combination of these strategies would allow the client to enter new market niches or expand further into existing ones.





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Recent Business Developments

The Company is operating through the corporate strategy segment of its business. It is attempting to build its own critical mass by creation of start-up subsidiaries it believes have promise/potential. The stated goal is for the parent (DCAC) company to consolidate the critical mass of the subsidiary/start-ups with that of the parent for eventually listing on a major stock exchange. We have continued to focus our efforts on the build out of the Daniels corporate strategy model. We adjusted our strategy as it relates to the development of subsidiary start-ups and potential acquisitions for common stock in light of the Coronavirus outbreak with its changes in how people and businesses operate as well as the inflationary trend in the US economy. However, in light of these new circumstances, we concentrate on identifying projects that have the potential to produce significant earnings on the leveraged capital base of both the parent and the subsidiary/start-up within an expedited time period.

We formed Payless Truckers, Inc. ("Payless"), a wholly-owned subsidiary which was incorporated in the State of Nevada, on April 11, 2018. Payless is a start-up, service company in the trucking industry. It has two business segments with its launch and current results coming from the "flip" segment, whose principal business is to acquire class 8 heavy duty trucks, refurbish them, add location electronics, advertise and sell to independent drivers and operators. The second segment is the "credit rebuilding segment" where class 8 heavy duty trucks, owned by Daniels/Payless, are rented to experienced independent drivers. These independent drivers rent for a period of up to five years and have the option to buy the vehicle at retail value every six months. In an effort to grow quickly and profitably, Daniels entered into an operating agreement with a senior operating management team in an effort to drive the business and better realize its earnings and growth potential.

The Payless two-segment trucking model represents a streamlined Transportation Services Company; one Daniels believes can be restructured/redirected to survive any potential future slow-downs in the economy. The model was developed to allow for the maximum utilization of each truck as it is put into immediate service in numbers that are manageable without causing excess capacity. Top brand/model Tractors with low mileage are handpicked by our operations team - a family with three generations in automotive/trucking. Our drivers continue to be handpicked for their driving skills and their established hauling networks. They rent/switch trailers to meet the available work on Load Boards or haul for major hauling companies using hauling company trailers. Due to the current dislocations in every industry due to the Coronavirus, our independent contractor drivers are constantly on the road.

We hope to further enhance our plan for growth beginning in future years by forming joint-ventures and/or partnerships with truck maintenance companies across the United States in key traffic hubs. This will potentially afford independent drivers and operators the opportunity to be serviced by trusted maintenance facilities under our warranty program. This growth plan is a natural result of our ability to build our truck rental fleet.

Business Strategy - Current Operational Strategy & Current Client Projects

Daniels creates and implements corporate strategy alternatives for the mini-cap public or private company client. The addition of new business opportunities and the location of professional talent for implementation is anticipated through the full-time efforts of our senior management. These efforts are to be expanded in the US and in Foreign capitals by an expanding advisory board and through the networks of independent consultants. Principals of the respective client company will open their networks to augment professional access for specialties the Daniels corporate strategy consultants believe are needed in a joint venture, (jointly-controlled) undertaking created for the client's optimum growth.

Daniels may provide the client with multiple corporate strategies /opportunities including joint-ventures, marketing opportunity agreements and/or potential acquisitions structured in a leveraged buyout format. One or a combination of these strategies would allow the client to enter new market niches or expand further into existing ones.

One of the Company's primary objectives is to be listed on a major exchange listing. Senior management is estimating at least twenty-four months from commencement of a corporate strategy assignment. Financial results, aided by all participating players, should be forthcoming and recorded in SEC filings. At the same time, a senior management team and Board expanded with highly-credible interim (or permanent) professionals (directors) will be organized in order to successfully navigate the listing process of a major stock exchange. While Daniels believes this process should be successful in the above-noted time period, there is some uncertainty in the process which is dependent upon any past issues the listing committee of a specific exchange may deem necessary to be addressed prior to uplifting. In addition, it may take added time to find the appropriate outside directors that can not only satisfy the listing committee of the exchange but who can also provide added networking/services to build the parent's and subsidiary's potential for accelerated growth.





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A similar effort will be provided to tailor an optimum growth program for the private company client, whether it chooses to remain private or to become a public company through alternative merger opportunities.

Growth Strategy - Short-Term Objectives

Daniels believes that the validity of its corporate strategy model is proven through the success of its initial subsidiary incubation, Payless Truckers, Inc. The fast growth experience of this startup is generating the interest of long-term financing sources. They recognize the obvious - the cash flows from the fleet truck program can cover significant debt service on longer term financing which can accelerate the levered growth of the Company. Daniels has used and will continue to use its publicly-traded common stock in a variety of securities packages, including convertible preferred stock, to launch its premier subsidiary start-up, (Payless Truckers) and will do so for other start-up opportunities being reviewed. Initial subsidiaries (start-up clients) are those that can generate significant return on invested capital so that growth acceleration comes from generic sales/profit growth. Alternative growth options - joint-ventures, marketing agreements, acquisitions/LBO's - will be applied secondarily as external growth opportunities are entered into to bring the start-up (now considered an early-stage company) to critical mass for stability.

Senior management believes our corporate strategy business model - as an incubator of subsidiary / spin-off companies - to be scalable. Based upon the potential success of the initial corporate strategy consulting assignments creating Daniels' uplifting to a major stock exchange, Daniels (the publicly traded Exchange listed parent incubator with sophisticated senior advisory and capital raised at very advantageous rates) - may entertain the creation of a franchising program for key US cities and foreign finance centers.





Sales and Marketing

Daniels' senior management will concentrate its efforts to expand its corporate strategy and financial advisory services and related specialties in the mini-cap segment of the private and public markets, where Daniels believes it will be effective. Marketing efforts will increase through social and print media efforts and will be in addition to those methods already mentioned herein.

Daniels' objective is to create and help manage implementation of accelerated expansion strategies and in so doing, aid in the creation of financing alternatives to accomplish client goals.





Competition

Existing and new competitors will continue to improve their services and introduce new services with competitive price and performance characteristics.

In periods of reduced demand for our services, we can either choose to maintain market share by reducing our prices to meet competition or maintain prices and choose only those assignments with new clients that have pressing goals to be met that offer Daniels optimum potential for profits and growth.

The "collective" corporate financial services, direct and referral, including merchant banking/private equity, are very competitive and fragmented in the Company's market niche. There are limited barriers to entry and new competitors frequently enter the market. A significant number of our competitors possess substantially greater resources. We will continue to offer equity compensation to our team in order to keep a stable, cohesive team of professionals, which is necessary and key to the creation of operating and capital solutions in a timely fashion.

The above competitive considerations are no longer considered by senior advisory/oversight management to be as important as they once were. More importantly, we are now known for the success of our visionary growth strategies and their execution in the development and launch of our premier subsidiary - Payless Truckers Inc. The return on investment on early stages of our developing 100 truck fleet should generate the positive cash flow that will eventually create excess profits and help launch other promising new candidates (start-up clients) as subsidiary deals. The challenges of the past year have caused management to rededicate its mission to find creative ways to serve our customers in ways that allow us to regain our growth momentum from satisfied customers.





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General

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our most significant judgments and estimates used in preparation of our financial statements. which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.





Critical Accounting Policies

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations and we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

The accounting policies identified as critical are as follows:





Revenue and Cost Recognition

We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We recognize revenue from class 8 heavy duty truck sales to customers when we satisfy our performance obligation, at a point in time, when title to the truck is transferred to the customer. Delivery or shipping charges billed to customers, if applicable, are included in product sales and the related shipping costs are included in cost of goods sold.





Fair Value of Assets

The Company has adopted the standard FASB Accounting Standards Codification (ASC 820) "Fair Value Measurements and Disclosures" which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:





  ? Level 1-Unadjusted quoted prices in active markets that are accessible at the
    measurement date for identical, unrestricted assets or liabilities.
  ? Level 2-Inputs other than quoted prices included within Level 1 that are
    observable for the asset or liability; either directly or indirectly,
    including quoted prices for similar assets or liabilities in active markets;
    quoted prices for identical or similar assets or liabilities in markets that
    are not active; inputs other than quoted prices that are observable for the
    asset or liability (e.g. interest rates); and inputs that are derived
    principally from or corroborated by observable market data by correlation or
    other means.
  ? Level 3-Inputs that are both significant to the fair value measurement and
    unobservable.




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The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include investments in available-for-sale securities and accounts payable and accrued expenses. The Company has also applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company's financial statements.





Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates.





COVID-19

On January 30, 2020, the World Health Organization ("WHO") announced a global health emergency in response to a new strain of a coronavirus (the "COVID-19 outbreak"). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its effects on the Company's industry, financial condition, liquidity, and operations. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2022. However, if the pandemic continues, it may have a material adverse effect on the Company's results of future operations, financial position, and liquidity in fiscal year 2022.

Liquidity and Capital Resources





                             February 28,      November 30,            Changes
Working Capital Data:            2022              2021            Amount         %

Current Assets               $     341,365     $     403,584     $  (62,219 )     (15 )%

Current Liabilities $ (4,184,421 ) $ (3,967,120 ) (217,301 ) 5 % Working Capital Deficiency $ (3,843,056 ) $ (3,563,536 ) (279,520 ) 8 %

As of February 28, 2022, we had $104,493 in cash and cash equivalents and a working capital deficit of $3,834,056.

Our working capital deficit at February 28, 2022 was $3,843,056 as compared to working capital deficit of $3,563,536 as of November 30, 2021. The increase in working capital deficit was mainly attributed to an increase in derivative liabilities, a decrease in cash and cash equivalents and an increase in accounts payable to the related party.

The following table sets forth certain information about our cash flow during the three months ended February 28, 2022 and February 28, 2021:





                                       Three Months Ended
                                          February 28,                      Changes
Cash Flows Data:                      2022            2021           Amount           %

Cash Flows provided by (used in)
Operating Activities               $  (126,091 )   $   190,422     $ (316,513 )         (166 )%
Cash Flows used in Investing
Activities                                   -        (265,257 )      265,257              0 %
Cash Flows provided by Financing
Activities                              49,496         114,468        (64,972 )          (57 )%
Net increase (decrease) in cash
during period                      $   (76,595 )   $    39,633     $ (116,228 )         (293 )%




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Net cash used in operating activities was $126,091 for the three months ended February 28, 2022, compared to net provided by operating activities of $190,422 during the three months ended February 28, 2021. The decrease in net cash provided by operating activities is attributable to the change in our working capital assets and reduced revenues compared to the three months ended February 28, 2021.

Net cash used in investing activities was $0 for the three months ended February 28, 2022, compared to $265,257 during the three months ended February 28, 2021. The decrease in net cash used is directly attributable to not purchasing trucks for use in our credit rebuilding business line during the period.

Net cash provided by financing activities was $49,496 for the three months ended February 28, 2022, compared to net cash provided of $114,468 during the three months ended February 28, 2022. The decrease in net cash provided by financing activities is directly related to the increased repayments of loans payable used to finance vehicle purchases. During the three months ended February 28, 2022, we received $150,000 in proceeds from loans payable and repaid $140,504 of principal on the loans.

Our primary source of liquidity has been proceeds received from the issuance of Series B convertible preferred stock, convertible debt and commercial loans. In addition, cash flow generated by our subsidiary Payless Truckers has helped to sustain the consolidated group.





Financing Activities

We will have to raise capital by means of borrowings or through a private placement or a subsequent registered offering. At present, we do not have any commitments with respect to future financings. If we are unable to raise adequate capital, in the near term, to finance all phases of a client corporate consulting assignment, our proposed business will experience slow growth because it will be very hard to compete for business without a sound capital base to support advisory and implementation efforts on our suggested corporate growth strategies.

At present, we do not have sufficient capital on hand to fund operations for the immediate future. Management estimates that it will need up to $2.0 million to fund its PayLess Truckers subsidiary. It is possible that we can still achieve our objectives by use of asset-based lending whereby we can leverage our truck purchases. However, because of the start-up nature of the subsidiary this financing may be harder to achieve than normal. Even if limited funds are raised, PayLess will still be able to register profits from its "flip" program while cost-effective funding for the "credit enhancement" program can be arranged. The Company does have funding available under a commitment letter but these funds are very expensive; management is trying to avoid their use.

It is the Company's intention to concentrate its efforts on the build-out of its PayLess Truckers, Inc. subsidiary. Once solidly on its growth path, meeting projections and generating positive operating cash flows, additional subsidiary/start-up businesses will be entertained be the parent company.

Senior Management believes it will have sufficient cash flows to continue in business for the foreseeable future. While legal and accounting expenses are significant for a reporting company, we will cover them out of operating cash flows.

Comparison of the Three Months Ended February 28, 2022 to the Three Months Ended February 28, 2021 Results of Operations





Our operating results for the three months ended February 28, 2022 and February
28, 2021, and the changes between those periods for the respective items are
summarized as follows:



                                    Three Months Ended
                                       February 28,                  Changes
Statement of Operations Data:      2022           2021           Amount         %

Revenue                         $  582,769     $ 1,212,942     $ (630,173 )     (52 )%
Cost of services                  (336,615 )      (823,274 )      486,659       (59 )%
Gross profit                       246,154         389,668       (143,514 )     (37 )%
Total operating expenses          (352,983 )      (375,582 )       22,599        (6 )%
Other expense                     (766,069 )      (998,485 )      232,416       (23 )%
Net loss                        $ (872,898 )   $  (984,399 )   $  111,501       (11 )%




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Sales

Sales totaled $582,769 which were comprised of (i) $377,042 from the resale of refurbished trucks and (ii) $187,473 from vehicle rental agreements, (iii) $12,396 from repair income and (iv) $5,858 from other miscellaneous sources for the three months ended February 28, 2022, compared to sales of $1,212,942 which were comprised of (i) $998,007from the resale of refurbished trucks, (ii) $209,640 from vehicle rental agreements, and (iii) $5,295 from other miscellaneous sources during the three months ended February 28, 2021.





Gross Profit

Gross profit is calculated by subtracting cost of goods sold from sales. Gross profit percentage is calculated by dividing gross margins by revenue. Current gross profit percentages may not be indicative of future gross profit performance. Gross profit totaled $246,154 for the three months ended February 28, 2022, compared to $389,668 during the three months ended February 28, 2021, respectively. Gross profit percentage was 42.2% and 32.1% for the three months ended February 28, 2022 and 2021, respectively. The decrease in gross profit is due to reduced trucks available for sale from increased purchase prices, but included an increase in gross profit percentage attributable to a higher percentage mix of revenues from truck rental agreements, which typically yield higher profit margins, and relatively consistent profit margins from the resale of our trucks compared to the quarter ended February 28, 2021.





Operating Expenses

Operating expenses are primarily comprised of compensation, facilities costs and outsourced services. Operating expenses totaled $352,983 for the three months ended February 28, 2022, compared to operating expenses of $375,582 during the three months ended February 28, 2021 representing a decrease of $22,599 or 6%. The decrease in operating expenses is generally related to the increase in our use of outsourced services, and reductions in consulting and professional services for corporate matters and financing efforts, and wages.





Other Expenses

Other expense totaled $766,069 for the three months ended February 28, 2022, compared to other expense of $998,485 during the three months ended February 28, 2021 representing a decrease in other expense of $232,416 or 23.3%. Interest expense increased to $235,948 for the three months ended February 28, 2022 from $165,624 during the three months ended February 28, 2021. The increase in interest expense is due to debt utilized to purchase trucks for our leasing program and financing costs. We recorded a loss from the change in fair value of derivative liabilities of $530,121 during the three months ended February 28, 2022, compared to a loss from the change in fair value of derivative liabilities of $832,861 during the three months ended February 28, 2021.

Net Income Attributable to Common Stockholders

The Company realized net loss attributable to common stockholders of $877,125 for the three months ended February 28, 2022, compared to net loss of $1,099,063 realized during the three months ended February 28, 2021. The decrease in our net loss attributable to common stockholders is largely attributable to the decrease in our loss associated with the change in fair value of derivative liabilities.

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