UNITED ~~STATESSECURITIES~~STATES SECURITIES AND EXCHANGE ~~COMMISSIONWashington~~COMMISSION Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2009[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from __________to __________Commission file number: 333-131531

~~For~~PANGLOBAL ~~the~~BRANDS ~~quarterly period ended June 30, 2009~~INC.

~~[ ]~~(Exact ~~TRANSITION~~name ~~REPORT~~of ~~UNDER~~small ~~SECTION~~business 13issuer ORas ~~15(d)~~specified OFin its ~~THE~~charter) ~~EXCHANGE ACT OF 1934~~

For the transition period from __________ to __________

Commission file number: 333-131531

PANGLOBAL BRANDS INC. (Exact name of small business issuer as specified in its charter)

Delaware	20-8531711
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification Number)
organization)

2853 E. Pico Blvd. Los Angeles, CA ~~90023~~ 90023(Address of principal executive offices)

323.226-6500 (Issuer’s telephone number, including area code)

N/A (Former name, former address and ~~former~~ former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the ~~past~~ past 12 months (or for such shorter period that the registrant was required to ~~file~~ file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes [X] No [ ]~~

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X] No [ ]

Yes [ ] No [ ]

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~Yes~~ ~~[ ] No [X]~~

AsYes of[ ~~September~~] ~~18,~~No ~~2009,~~[X] ~~the Company had 49,016,710 shares of common stock issued and outstanding.~~

iiAs of February 18, 2010 the Company had 49,016,710 shares of common stock issued and outstanding.

~~TABLE OF CONTENTS~~ 2

PART I – FINANCIAL INFORMATION	1
TABLE OF CONTENTS
ITEM 1. FINANCIAL STATEMENTS.	1
PART I – FINANCIAL INFORMATION	2
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.	22
ITEM 1. FINANCIAL STATEMENTS	3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.	4
ITEM 4T. CONTROLS AND PROCEDURES	34
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15
PART II-OTHER INFORMATION	35
ITEM 4T. CONTROLS AND PROCEDURES	15
ITEM 1. LEGAL PROCEEDINGS	35
PART II-OTHER INFORMATION	16
ITEM 1A. RISK FACTORS	35
ITEM 1. LEGAL PROCEEDINGS	16
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEED	39
ITEM 1A. RISK FACTORS	16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	39
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS	39
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	22
ITEM 5. OTHER INFORMATION	40
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS	22
ITEM 6. EXHIBITS.	41
ITEM 5. OTHER INFORMATION	22
SIGNATURES	43
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	22
ITEM 13. EXHIBITS.	22
SIGNATURES	25

PART I – FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

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

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

Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors" beginning on page 3539 of this quarterly report.

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

In this quarterly report, unless otherwise specified, all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our", means Panglobal Brands Inc. and our wholly-owned subsidiary, Mynk Corporation, unless otherwise indicated.

~~ITEM 1. FINANCIAL STATEMENTS.~~3

~~Panglobal~~ITEM ~~Brands Inc~~1. ~~June~~FINANCIAL ~~30, 2009~~ STATEMENTS

	Index
Consolidated Balance Sheets (Unaudited)	F-1
Consolidated Statements of Operations (Unaudited)	F-2
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	F-3
Consolidated Statements of Cash Flows (Unaudited)	F-4
Notes to the Consolidated Financial Statements	F-6

Panglobal Brands Inc.
December 31, 2009

PANGLOBAL BRANDS INC. AND SUBSIDIARY

	Index
Consolidated Balance Sheets (Unaudited)	F-1
Consolidated Statements of Operations (Unaudited)	F-2
Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)	F-3
Consolidated Statements of Cash Flows (Unaudited)	F-4
Notes to the Consolidated Financial Statements	F-6

~~CONSOLIDATED BALANCE SHEETS~~ F-1

		June 30,			September 30,
		2009			2008
		(Unaudited)
ASSETS
Current assets:
Cash	$	268,212		$	---
Accounts receivable, net of allowance of $400,232 and $544,176 as
of June 30, 2009 and September 30, 2008, respectively		510,570			444,291
Due from factor, net		2,206,253			1,411,456
Inventory		1,463,436			1,304,407
Prepaid expenses and other current assets		140,727			97,354
Total current assets		4,589,198			3,257,508
Property and equipment , net		442,193			587,992
Trademarks and intangible assets		1,177,235			1,177,235
Deposits		128,392			134,520
Total assets	$	6,337,018		$	5,157,255
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank overdraft	$	---		$	171,521
Accounts payable and accrued expenses		4,505,885			3,861,562
Convertible notes payable to shareholders		---			750,000
Total current liabilities		4,505,885			4,783,083
Convertible notes payable to shareholders-long term		889,154			---
Commitments and contingencies
Stockholders’ equity :
Authorized - 600,000,000 shares; issued and outstanding –
49,016,710 shares and 37,671,710 shares at
June 30, 2009 and September 30, 2008, respectively		4,903			3,767
Additional paid-in capital		18,165,704			14,741,439
Accumulated deficit		(17,228,628	)		(14,371,034	)
Total stockholders’ equity		941,979			374,172
Total liabilities and stockholders’ equity	$	6,337,018		$	5,157,255

PANGLOBAL BRANDS INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

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

		December			September
		31,			30,
		2009			2009

ASSETS
Current assets:
Cash and cash equivalents	$	8,082		$	16,932
Accounts receivable, net of allowance of $650,000 as of December 31, 2009 and September 30, 2009		213,905			221,661
Due from factor, net		775,556			867,748
Inventory		678,555			821,467
Prepaid expenses and other current assets		202,223			128,722
Total current assets		1,878,321			2,056,530

Property and equipment, net		394,697			428,030
Trademarks, net		1,128,185			1,177,235
Deposits		69,013			75,193
Total assets	$	3,470,216		$	3,736,988

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	3,870,440		$	3,667,085
Note payable to shareholder		290,000			---
Total current liabilities		4,160,440			3,667,085

Convertible notes payable to shareholders-long term		1,251,480			1,070,317

Commitments and contingencies

Stockholders’ deficit :
Common stock $0.0001 par value, 600,000,000 shares authorized, 49,016,710 and 49,016,710 shares issued and outstanding at December 31, 2009 and September 30, 2009, respectively		4,903			4,903

Additional paid-in capital		18,505,799			18,373,670
Accumulated deficit		(20,452,406	)		(19,378,987	)
Total stockholders’ deficit		(1,941,704	)		(1,000,414	)
Total liabilities and stockholders’ deficit	$	3,470,216		$	3,736,988

~~F-1~~The accompanying notes are an integral part of the consolidated financial statements.

~~PANGLOBAL BRANDS INC. AND SUBSIDIARY~~ F-2

~~CONSOLIDATED~~PANGLOBAL BRANDS INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS ~~(UNAUDITED)~~

		Three Months Ended						Nine Months Ended
		Three Months				Three Months
		June 30,						June 30,
		Ended				Ended
		2009			2008			2009			2008
		December 31,				December 31,
Net sales	$	8,585,235		$	5,321,794		$	20,214,494		$	8,405,346
		2009				2008
Cost of sales		6,555,494			4,268,641			15,106,873			6,657,008
Net sales	$	3,529,821 $				6,452,464
Gross profit		2,029,741			1,053,153			5,107,621			1,748,338
Cost of sales		2,306,555				4,936,651
Costs and expenses:
Gross profit		1,223,266				1,515,813
Design and development		707,971			784,967			2,214,211			2,580,354
Costs and expenses:
Selling and shipping		781,854			708,711			2,119,729			1,613,190
Design and development		644,143				818,284
General and administrative, including
Selling and shipping		461,653				769,765
$382,972 and $815,612 of stock-based
General and administrative, including $132,129 and $196,535 of stock-based compensation for the year ended December 31, 2009 and 2008, respectively;		825,041				871,484
compensation for the three months
Depreciation and amortization		82,590				30,498
ended June 30, 2009 and 2008,
Total costs and expenses		2,013,427				2,490,031
respectively; and $784,003 and
Net Loss from operations		(790,161	)			(974,218	)
$1,878,411 for the nine months ended
Interest income		22				3
June 30, 2009 and 2008, respectively		1,109,118			1,890168			3,023,214			4,146,940
Interest expense		(283,280	)			(74,770	)
Depreciation and amortization		32,333			26,862			95,163			62,686
		(283,258	)			(74,767	)
Total costs and expenses		2,631,276			3,410,708			7,452,316			8,403,170
Net loss	$	(1,073,419	)		$	(1,048,985	)
		(601,535	)		(2,357,555	)		(2,344,695	)		(6,654,832	)
Net loss per common share - basic and diluted	$	(0.02	)		$	(0.03	)
Interest income		46			82			51			22,065
Weighted average number of common shares outstanding - basic and diluted		49,016,710				37,671710
Interest (expense)		(309,434	)		(44,679	)		(480,011	)		(53,169	)
Loss on extinguishment of debt		(32,939	)		---			(32,939	)		---
		(342,327	)		(44,597	)		(512,899	)		(31,104	)
Net loss	$	(943,862	)	$	(2,402,152	)	$	(2,857,594	)	$	(6,685,936	)
Net loss per common share - basic and
diluted	$	(0.02	)	$	(0.08	)	$	(0.07	)		(0.23	)
Weighted average number of common
shares outstanding - basic and diluted		46,496,000			29,661,500			41,481,000			29,401,500

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

F-2 3

PANGLOBAL BRANDS INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)


					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance, October 1, 2008	37,671,710	$	3,767	$	14,741,439	$	(14,371,034	)	$	374,172
Shares issued in private placement	3,700,000		370		369,630		---			370,000
Conversion of shareholder loans	6,145,000		616		762,049		---			762,665
Conversion of Accounts Payable	1,500,000		150		149,850		---			150,000
Stock-based compensation	---		---		991,969		---			991,969
Discount on notes payable due to beneficial conversion and warrants	---		---		1,358,733		---			1,358,733
Net loss for the year ended September 30, 2009	---		---		---		(5,007,953	)		(5,007,953	)
Balance, September 30, 2009	49,016,710	$	4,903	$	18,373,670	$	(19,378,987	)	$	(1,000,414	)
Stock-based compensation	---		---		132,129		---			132,219
Net loss for the three months ended December 31, 2009	---		---		---		(1,073,419	)		(1,073,419	)
Balance, December 31, 2009	49,016,710	$	4,903	$	18,505,799	$	(20,452,406	)	$	(1,941,704	)

										Total
					Additional					Stockholders’
	Common Stock				Paid-in		Accumulated			Equity
	Shares		Amount		Capital		Deficit			(Deficit)
Balance, September 30, 2007	26,731,771		2,673		6,363,418		(4,758,107	)		1,607,984
Shares issued in private
placement	10,871,759		1,087		6,152,731		—			6,153,818
Shares issued as loan fees	68,180		7		48,856		—			48,863
Stock-based compensation	—		—		2,176,434		—			2,176,434
Net loss for the year ended
September 30, 2008							(9,612,927	)		(9,612,927	)
Balance, September 30, 2008	37,671,710	$	3,767	$	14,741,439	$	(14,371,034	)	$	374,172
Shares issued in private
placement	3,700,000		370		369,630		—			370,000
Conversion of shareholder
loans	6,145,000		616		614,317					614,933
Conversion of Accounts
Payable	1,500,000		150		149,850					150,000
Stock-based compensation	—		—		784,003		—			784,003
Discount on notes payable due
to warrants and beneficial
conversion					1,506,465					1,506,465
Net loss for the nine months
ended June 30, 2009	—		—		—		(2,857,594	)		(2,857,594	)
Balance, June 30, 2009	49,016,710	$	4,903	$	18,165,704	$	(17,228,628	)	$	941,979

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

~~The accompanying notes are an integral part of the consolidated financial statements.~~F-4

~~F-3~~PANGLOBAL BRANDS INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWS

PANGLOBAL BRANDS INC. AND SUBSIDIARY

		Three Months			Three Months
		Ended			Ended
		December 31,			December 31,
		2009			2008
Cash flows from operating activities
Net loss	$	(1,073,419	)	$	(1,048,985	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization		33,540			30,498
Amortization of trademark		49,050			---
Bad debt expense (recovery)		---			(1,592	)
Provision for sales returns		(65,000	)		179,104
Stock-based compensation		132,129			196,535
Amortization of beneficial conversion		181,163			---
Cancellation of website development contract		---			53,999
Changes in operating assets and liabilities:
(Increase) decrease in -
Accounts receivable		7,756			(36,261	)
Due from factor		157,192			(31,762	)
Inventory		142,912			118,984
Prepaid expenses and other current assets		(73,501	)		(13,304	)
Deposits		6,180			6128
Increase (decrease) in -
Accounts payable and accrued expenses		203,148			655,210
Net cash (used in) provided by operating activities		(298,850	)		108,554

Cash flows from financing activities
Increase in bank overdraft		---			62,967
Proceeds from shareholder notes		290,000			---
Net cash provided by financing activities		290,000			62,967

Net increase (decrease) in cash		(8,850	)		171,521
Cash and cash equivalents at beginning of period		16,932			(171,521	)
Cash and cash equivalents at end of period	$	8,082		$	---

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~CASH~~are ~~FLOWS~~an ~~(UNAUDITED)~~integral part of the consolidated financial statements.

		Nine Months Ended June 30,
		2009			2008
Cash flows from operating activities
Net loss	$	(2,857,594	)	$	(6,685,936	)
Adjustments to reconcile net loss to net
Cash used in operating activities:
Depreciation and amortization		95,163			62,686
Bad debt expense (recovery)		(143,944	)		320,355
Provision for returns		18,702			(76,403	)
Stock-based compensation		784,003			1,878,412
Amortization of beneficial conversion		175,180			---
Loss on extinguishment of debt		32,939			---
Stock issued as loan fees		---			48,863
Loss on abandoned leasehold improvements		---			4,243
Cancellation of website development contract		53,999			---
Changes in operating assets and liabilities:
(Increase) decrease in -
Accounts receivable		77,665			(924,379	)
Due from factor		(813,499	)		(1,504,094	)
Inventory		(159,029	)		(1,129,453	)
Prepaid expenses and other current assets		(43,373	)		(109,787	)
Deposits		6,128			(66,455	)
Increase (decrease) in -
Accounts payable and accrued expenses		644,323			2,494,539
Net cash used in operating activities		(2,129,337	)		(5,687,409	)
Cash flows from investing activities
Purchase of office equipment		(3,363	)		(379,958	)
Purchase of trademarks and intangible assets		---			(1,177,235	)
Net cash used in investing activities		(3,363	)		(1,557,193	)
Cash flows from financing activities
Proceeds from private placements		572,433			6,153,818
Loan from related party-officer		---			400,000
Proceeds from shareholder notes		2,000,000			750,000
Repayment of bank overdraft		(171,521	)		---
Repayment of related party loans		---			(160,000	)
Net cash provided by financing activities		2,400,912			7,143,818
Net increase(decrease) in cash		268,212			(100,784	)
Cash and cash equivalents at beginning of period		---			1,170,214
Cash and cash equivalents at end of period	$	268,212		$	1,069,430

F-5

~~The~~PANGLOBAL ~~accompanying~~BRANDS ~~notes~~INC. ~~are~~AND SUBSIDIARYCONSOLIDATED anSTATEMENTS ~~integral~~OF ~~part~~CASH ~~of the consolidated~~FLOWS ~~financial statements.~~ (CONTINUED)

F-4

		Three		Three
		Months		Months
		Ended		Ended
		December 31,		December 31,
		2009		2008


Supplemental disclosures of non-cash investing and financing activities:
Discount of notes payable due to beneficial conversion feature	$	181,163	$	---



Supplemental disclosures of cash flow information:
Cash paid for -
Interest	$	53,377	$	74,770

Income taxes	$	---	$	---

~~PANGLOBAL~~The ~~BRANDS~~accompanying ~~INC.AND~~notes ~~SUBSIDIARY~~are an integral part of the consolidated financial statements.

~~CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)~~F-6

		Nine Months Ended June 30,
		2009		2008
Supplemental disclosures of non-cash investing and financing activities:
Notes payable subject to beneficial conversion feature	$	1,506,465		---
Non-cash conversion of notes to Common stock		614,933		---
Common stock issued as loan fees	$	---	$	48,863
Supplemental disclosures of cash flow information:
Cash paid for -
Interest	$	304,831	$	53,169
Income taxes	$	---	$	---

PANGLOBAL BRANDS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~1. ~~accompanying~~Organization ~~notes~~and ~~are~~Basis ~~an integral part~~ of ~~the consolidated financial statements.~~ Presentation

~~F-5~~Organization and Nature of Operations

~~PANGLOBAL~~ EZ ~~BRANDS~~English ~~INC~~Online Corp, a Delaware corporation (“EZ English”), was incorporated in the State of Delaware on March 2, 2005. ~~AND~~EZ ~~SUBSIDIARY~~English sold common stock pursuant to a registration statement on Form SB-2 declared effective by the Securities and Exchange Commission on February 28, 2006, and raised gross proceeds of approximately $85,000. Through September 30, 2006, EZ English was a development stage company offering a teacher training course to teach English as a second language over the Internet.

~~NOTES~~ Beginning TOin ~~CONSOLIDATED~~December ~~FINANCIAL~~2006, ~~STATEMENTS~~in conjunction with a new controlling shareholder acquiring approximately 79% of the issued and outstanding common shares, EZ English began a program to discontinue its existing business operations and prepare to enter the fashion industry. On February 2, 2007, in order to better reflect its future business operations and prepare for its acquisition of Mynk Corporation, a privately-held Nevada corporation (“Mynk”), EZ English completed a merger with its wholly-owned Delaware subsidiary, in order to effect a name change to Panglobal Brands Inc. (“Panglobal”). Mynk was incorporated in Nevada on February 3, 2006 to engage in the business of design, manufacture and distribution of clothing and accessories throughout the United States and Canada.

1. Unless ~~Organization~~the context indicates otherwise, Panglobal and ~~Basis~~Mynk ofare ~~Presentation~~hereinafter referred to as the “Company”.

~~Organization~~ The Company has one segment and sells ~~Nature~~its apparel products through a network of ~~Operations~~wholesale accounts.

EZInterim ~~English~~Financial ~~Online~~Information Corp, a Delaware corporation (“EZ English”), was incorporated in the State of Delaware on March 2, 2005. EZ English sold common stock pursuant to a registration statement on Form SB-2 declared effective by the Securities and Exchange Commission on February 28, 2006, and raised gross proceeds of approximately $85,000. Through September 30, 2006, EZ English was a development stage company offering a teacher training course to teach English as a second language over the Internet.

~~Beginning~~The ininterim ~~December 2006, in~~consolidated ~~conjunction~~financial ~~with~~statements aare ~~new~~unaudited, ~~controlling~~but ~~shareholder~~in ~~acquiring~~the ~~approximately~~opinion ~~79%~~ of ~~the~~ ~~issued~~management ~~and~~of ~~outstanding common shares, EZ English began a program to discontinue its existing business operations and prepare to enter~~ the ~~fashion~~ ~~industry. On February 2~~Company, ~~2007,~~contain inall ~~order~~adjustments to(including ~~better~~normal ~~reflect~~recurring ~~its future business~~adjustments), ~~operations~~necessary ~~and~~to ~~prepare~~present ~~for~~fairly ~~its~~the ~~acquisition~~financial ofposition ~~Mynk~~at ~~Corporation,~~December ~~a privately-held Nevada corporation (“Mynk”)~~31, ~~EZ English completed a merger with its wholly-owned Delaware subsidiary~~2009, ~~in order to effect a name change to Panglobal Brands Inc.~~the ~~(“Panglobal”).~~results ~~Mynk~~of ~~was~~operations ~~incorporated~~for inthe ~~Nevada~~three onmonths ~~February~~ended 3,December ~~2006 to engage in the business of design~~31, ~~manufacture~~2009 and ~~distribution~~the ofcash flows ~~clothing~~for ~~and~~the ~~accessories throughout~~three ~~the~~months ~~United~~ended ~~States~~December ~~and~~31, ~~Canada~~2009.

~~Unless~~Operating ~~the~~results ~~context~~for ~~indicates~~the three ~~otherwise,~~months ~~Panglobal~~ended ~~and~~December ~~Mynk~~31, 2009 are ~~hereinafter~~not ~~referred~~necessarily indicative of the results to be asexpected for the ~~“Company”~~full fiscal year ending September 30, 2010.

~~The~~2. ~~Company~~Business ~~sells~~Operations ~~its~~and ~~products through~~Summary ~~a network~~ of ~~wholesale~~Significant ~~accounts.~~Accounting Policies

~~Basis~~Going ofConcern ~~Presentation~~and Plan of Operations

~~Interim~~ The ~~Financial~~Company’s ~~Information~~consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred substantial losses from operations and has negative working capital, a stockholders deficit at December 31, 2009, and has incurred negative cash flows from operating activities. In addition, the Company has been dependent upon debt and equity financing which raises substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations and continue to raise capital through debt or equity financing, to which there is no guarantee. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The interim consolidated financial statements are unaudited, but in the opinion of management of the Company, contain all adjustments (including normal recurring adjustments), necessary to present fairly the financial position at June 30, 2009, the results of operations for the three and nine months ended June 30, 2009 and the cash flows for the nine months ended June 30, 2009. F-7

~~Operating~~The ~~results~~Company ~~for~~has undertaken a number of specific steps to achieve profitable operations in the ~~three~~future. These actions ~~and~~ include ~~nine~~elimination ~~months~~of ~~ended~~highly ~~June~~compensated 30individuals, ~~2009~~streamlining ~~are~~operations, termination ~~not~~of ~~necessarily~~the ~~indicative~~agreement with Lolly Factory LLC, reduction of ~~the~~personnel ~~results~~ costs toby bereducing ~~expected~~headcount ~~for~~and consolidating operations, deciding to eliminate the ~~full~~contemporary ~~fiscal~~dress ~~year~~product ~~ending~~group ~~September~~in 302010, ~~2009~~concentrating on higher margin lines of business, better margin customers and reducing returns and allowances by examining allowances offered, etc. In addition, management will continue to search for additional debt and equity financing.

2.Principles ~~Business Operations and Summary~~ of ~~Significant Accounting Policies~~ Consolidation

~~Going~~ The ~~Concern~~accompanying ~~and~~consolidated financial ~~Plan~~statements include the financial statements of ~~Operations~~Panglobal Brands, Inc. and its wholly-owned subsidiary, Mynk Corporation. All intercompany balances and transactions have been eliminated in consolidation.

~~The~~Use ~~Company’s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization~~ of ~~assets~~Estimates and satisfaction of liabilities in the normal course of business. Prior to December 31, 2007 the Company had been in the development stage. It generated approximately $13.9 million in revenues from operations for the year ended September 30, 2008 and $20.2 million for the nine months ended June 30, 2009 but is still dependent upon debt and equity financing which raises substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations. As of June 30, 2009, the Company had an accumulated deficit of ($17,228,628); and negative working capital of ($805,841) and had incurred a net loss of ($2,857,594) and used net cash in operating activities of ($2,129,337) for the nine months ended June 30, 2009. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

AtThe ~~June~~preparation ~~30,~~of ~~2009,~~financial statements in conformity with accounting principles generally accepted in the United ~~Company~~States ~~had~~of America requires management to make estimates and assumptions ~~six~~that ~~quarters~~affect the reported amounts of ~~revenue-generating~~assets ~~operations.~~and ~~Principal~~liabilities ~~activity~~at ~~through~~the date of the ~~December~~financial ~~31,~~statements ~~2007~~and ~~related~~the toreported amounts of expenses during the ~~Company’s~~reporting period. ~~formation~~Significant estimates include depreciation and the allowance for doubtful accounts and factor receivables, ~~capital~~asset ~~raising~~impairment, ~~efforts~~valuation of warrants and ~~initial~~options, ~~product~~inventory ~~design~~valuation, and ~~development~~the ~~activities.~~determination ~~Revenue~~of ~~generating~~revenue and ~~activities~~costs. ~~generated~~We ~~approximately~~base ~~$34.0~~our ~~million~~estimates inon ~~revenue~~historical ~~for~~experience ~~the~~and ~~period~~on ~~from~~various other ~~January~~assumptions 1,that ~~2008-June~~we 30believe are reasonable under the circumstances, ~~2009~~the ~~and~~results of which form the ~~Company~~basis ~~has~~for anmaking ~~order~~judgments ~~backlog~~about the carrying values of assets ~~approximately~~and ~~$4,500,000~~liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

~~million~~Fair inValue ~~prospective sales as~~ of ~~September~~Financial ~~14,~~Instruments ~~2009. The Company is essentially dependent on debt and equity funding from both related and unrelated parties to finance its operations.~~

~~Principles~~ The fair value of ~~Consolidation~~the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

~~The~~ For ~~accompanying~~certain ~~consolidated~~ financial ~~statements~~instruments, ~~include~~including ~~the~~cash, ~~financial~~accounts ~~statements~~receivable, ofdue ~~Panglobal~~from ~~Brands~~factor, ~~Inc.~~ accounts payable and ~~its~~accrued ~~wholly~~expenses, the Company estimates that the carrying amounts approximate fair value because of the nature of the assets and short-~~owned~~ ~~subsidiary,~~term ~~Mynk~~maturities ~~Corporation~~of the obligations. The ~~All~~carrying value ~~intercompany~~of ~~balances~~short-term and ~~transactions~~ ~~have~~long-term ~~been~~convertible ~~eliminated~~notes inis ~~consolidation~~net of the value of the warrants and the value of the beneficial conversion feature.

~~Use~~The following schedule details the convertible notes payable, discount on notes due to the beneficial conversion and warrant discount and amortization of ~~Estimates~~the discount at December 31, 2009:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Convertible Notes	Sinecure/Capella	Providence Wealth January, 15, 2009	Providence Wealth June 15, 2009	Totals
Face Value of Notes	$375,000	$812,500	$ 1,000,000	$2,187,500
Discount on notes payable due to Beneficial Conversion discount and warrant	($219,992)	($570,986)	($567,755)	($1,358,733)
Accumulated Amortization of Beneficial Conversion	$68,439	$177,637	$176,637	$422,713
Value per Balance Sheet	$223,447	$419,151	$608,882	$1,251,480

~~Fair~~Cash ~~Value~~and ofCash ~~Financial~~Equivalents ~~Instruments~~

The ~~carrying~~Company ~~amounts~~considers all highly liquid investments with an original maturity of ~~cash~~three ~~and~~months or less when purchased to be cash equivalents,. ~~accounts~~At ~~receivable~~times, ~~due~~such ~~from~~cash ~~factor,~~and ~~prepaid~~cash ~~expenses,~~equivalents may ~~accounts~~exceed ~~payable,~~federally ~~accrued~~insured ~~expenses,~~limits. ~~loan~~The ~~from~~Company ~~officer~~has ~~and~~not ~~convertible~~experienced ~~note~~a loss in such ~~payable~~accounts to ~~shareholders~~date. ~~approximate~~The ~~their~~Company ~~respective~~maintains ~~fair~~its ~~values~~accounts ~~due~~with tofinancial ~~the~~institutions ~~short-term~~with ~~nature~~high ofcredit ~~these~~ratings. ~~items~~The ~~and/or~~cash held by the ~~current~~factor ~~interest~~is ~~rates~~not ~~payable~~included in cash ~~relation~~and tocash ~~current~~equivalents ~~market~~(see ~~conditions~~Note 5).

~~Cash~~Accounts ~~and Cash Equivalents~~Receivable

The Company ~~considers~~extends ~~all~~credit ~~highly~~to ~~liquid~~customers ~~investments~~whose ~~with~~sales aninvoices ~~original~~have ~~maturity~~not ofbeen ~~three~~sold ~~months~~to orour ~~less~~factor ~~when purchased~~based toupon bean evaluation ~~cash~~of ~~equivalents.~~the Atcustomer’s ~~times,~~financial ~~such~~condition ~~cash~~ and ~~cash~~credit ~~equivalents~~history ~~may~~and ~~exceed~~generally ~~federally~~require ~~insured~~no ~~limits~~collateral. ~~The~~Management ~~Company~~performs ~~has~~regular ~~not~~evaluations concerning ~~experienced~~the aability ~~loss~~of inour ~~such accounts~~customers to ~~date.~~satisfy ~~The~~their ~~Company~~obligations ~~maintains~~and ~~its~~records a ~~accounts~~provision ~~with~~for ~~financial~~doubtful ~~institutions with~~accounts ~~high~~based ~~credit~~on ~~ratings~~these evaluations. ~~The~~Based ~~cash~~on ~~held~~existing economic byconditions ~~the~~and ~~factor~~collection ispractices, ~~not~~the ~~included~~Company’s inallowance ~~cash~~for ~~and~~doubtful ~~cash~~accounts ~~equivalents~~has ~~(see~~been ~~Note~~estimated 5)to be $650,000 at December 31, 2009 and September 30, 2009.

~~Accounts Receivable~~F-8

~~The~~Concentration ~~Company extends credit to customers whose sales invoices have not been sold to our factor based upon an evaluation~~ of ~~the~~Credit customer’s financial condition and credit history and generally require no collateral. Management performs regular evaluations concerning the ability of our customers to satisfy their obligations and records a provision for doubtful accounts based on these evaluations. Based on existing economic conditions and collection practices, the Company’s allowance for doubtful accounts has been estimated to be $400,232 and $544,176 at June 30, 2009 and September 30, 2008, respectively. The Company’s credit losses for the periods presented have not significantly exceeded management’s estimates. Risks

~~Concentration~~ During the three months ended December 31, 2009 sales to three customers accounted for 30.9%, 22.8% and 9.5% of ~~Credit~~the ~~Risks~~Company’s net sales. During the three months ended December 31, 2009, purchases from one supplier totaled $584,000, or 25% of the cost of sales. During the three months ended December 31, 2008 sales to three customers accounted for 23%, 13% and 12% of the Company’s net sales. During the three months ended December 31, 2008, purchases from one supplier totaled approximately $1,354,000, or 27% of the cost of sales.

During the three months ended June 30, 2009 sales to three customers accounted for 22.0%, 19.7% and 12.4% of the Company’s net sales. During the three months ended June 30, 2009, purchases from two suppliers totaled $2,883,953 and $1,267,157, respectively. At June 30, 2009, one customer accounted for 60% of the Accounts Receivable, net of allowance.Inventory

~~Inventory~~ Inventories are valued at the lower of cost or market, with cost being determined by the first-in, first-out method. The Company continually evaluates its inventories by assessing slow-moving product and records mark-downs as appropriate. At December 31, 2009 and September 30, 2009 , inventories consisted of finished goods, work-in-process and raw materials.

~~Inventories~~Property ~~are valued at the lower of cost or market, with cost being determined by the first-in, first-out method. The Company continually evaluates its inventories by assessing slow-moving product~~ and ~~records~~Equipment ~~mark-downs as appropriate. At June 30, 2009, inventories consisted of finished goods, work-in-process and raw materials.~~

Property and ~~Equipment~~equipment are recorded at cost. Expenditures for major renewals and improvements that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When assets are retired or sold, the property accounts and related accumulated depreciation and amortization accounts are relieved, and any resulting gain or loss is included in operations.

~~Property~~Depreciation ~~and~~is ~~equipment~~computed ~~are~~on the ~~recorded~~straight-line atmethod ~~cost.~~based ~~Expenditures~~on ~~for~~the ~~major~~estimated ~~renewals~~useful ~~and~~lives ~~improvements~~of ~~that extend~~ the ~~useful~~assets ~~lives~~ of ~~property~~five years. ~~and~~Leasehold ~~equipment~~improvements are ~~capitalized.~~amortized ~~Expenditures~~over ~~for~~the remaining life of the ~~maintenance~~related ~~and~~lease, ~~repairs~~which ~~are~~has ~~charged~~been determined to be shorter than the useful life of the asset.

expense as incurred. When assets are retired or sold, the property accounts and related accumulated depreciation and amortization accounts are relieved, and any resulting gain or loss is included in operations. Trademarks

~~Depreciation~~Trademarks isand ~~computed~~intangibles onare ~~the~~tested ~~straight-line~~for ~~method~~impairment ~~based~~but onhad not been amortized. Effective October 1, 2009 the ~~estimated~~company ~~useful~~decided ~~lives~~to ofamortize the ~~assets~~trademarks over a period of ~~five~~72 ~~years~~months. ~~Leasehold~~Intangible ~~improvements~~assets are ~~amortized~~reviewed ~~over~~for impairment annually or whenever events or changes in business circumstances indicate the ~~remaining~~carrying ~~life~~value of the ~~related~~assets ~~lease,~~may ~~which~~not ~~has~~be ~~been~~recoverable. Impairment ~~determined~~losses toare berecognized ~~shorter~~if ~~than~~future ~~the~~cash ~~useful~~flows ~~life~~ of the ~~asset~~related assets are less than their carrying values.

Impairment ~~Trademarks~~of ~~and~~Long-Lived Assets and Intangibles

~~Effective~~Long-lived ~~with~~assets, ~~the~~including purchased ~~Company’s~~intangible ~~adoption~~assets, ofare ~~Statement~~reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of ~~Financial~~an ~~Accounting~~asset ~~Standards~~may ~~(SFAS)~~not be Norecoverable. ~~142,~~Recoverability ~~“Goodwill~~of assets to be held and ~~Other~~used ~~Intangible~~is ~~Assets,”~~measured ~~since~~by ~~inception~~a comparison of the ~~Company,~~carrying ~~intangibles~~amount ~~(including trademarks)~~of ~~with~~an ~~indefinite~~asset ~~lives~~to ~~are~~future nonet ~~longer~~cash ~~amortized,~~flows ~~but~~expected to ~~instead~~be ~~tested~~generated ~~for~~by ~~impairment~~the asset. ~~Intangible~~If such assets are ~~reviewed~~considered ~~for~~to be impaired, the impairment ~~annually~~to orbe ~~whenever~~recognized ~~events~~is ormeasured ~~changes~~by inthe ~~business~~amount ~~circumstances~~by ~~indicate~~which the carrying amount of the assets exceeds the fair value of the assets ~~may~~. ~~not~~Assets to be ~~recoverable~~disposed of are reported at the lower of the carrying amount or fair value less costs to sell. ~~Impairment~~Management has considered the net losses ~~are~~incurred ~~recognized~~for ifthe ~~future~~three ~~cash~~months ended ~~flows~~December 31, 2009 and 2008 and has concluded that there is no impairment of ~~the~~long ~~related~~lived assets ~~are~~or ~~less~~intangibles ~~than~~at ~~their~~December ~~carrying~~31, ~~values~~2009 and 2008.

Revenue ~~Impairment of Long-Lived Assets and Intangibles~~Recognition

~~Long-lived~~The ~~assets,~~Company ~~including~~recognizes ~~purchased~~revenue from ~~intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that~~ the ~~carrying~~sale ~~amount~~ of anmerchandise ~~asset~~to ~~may~~its ~~not~~wholesale beaccounts ~~recoverable.~~when ~~Recoverability~~products ~~of assets~~are ~~to be held~~ shipped and ~~used~~the iscustomer ~~measured~~takes bytitle aand ~~comparison~~assumes of the ~~carrying~~risk ~~amount~~ of anloss, ~~asset~~collection toof ~~future net cash flows expected to be generated by~~ the relevant ~~asset.~~receivable Ifis ~~such~~reasonably ~~assets are considered to be impaired~~assured, ~~the~~pervasive ~~impairment~~evidence toof bean ~~recognized is measured by~~arrangement ~~the~~exists, ~~amount~~and ~~by which~~ the ~~carrying~~sales ~~amount~~price ofis ~~the~~fixed ~~assets~~or ~~exceeds~~otherwise ~~the fair value of the assets~~determinable. ~~Assets~~Sales ~~to be disposed of~~ allowances are ~~reported~~recorded atas ~~the~~a ~~lower~~reduction ~~of the carrying amount or fair value less costs~~ to ~~sell~~revenue. Management has ~~considered~~evaluated the ~~net~~effects ~~loss incurred~~of ~~for~~estimating ~~the three months ended June 30, 2009~~ and ~~has~~accruing ~~concluded~~for ~~that~~sales ~~there~~returns isin nothe ~~impairment~~current ofand ~~long~~prior ~~lived~~periods ~~assets~~and provides orfor ~~intangibles~~an atestimated ~~June~~allowance ~~30,~~for ~~2009~~returns.

~~Revenue Recognition~~F-9

~~The~~Design ~~Company recognizes revenue from the sale of merchandise to its wholesale accounts when products are shipped~~ and ~~the~~Development customer takes title and assumes the risk of loss, collection of the relevant receivable is reasonably assured, pervasive evidence of an arrangement exists, and the sales price is fixed or otherwise determinable. Sales allowances are recorded as a reduction to revenue. Management has evaluated the effects of estimating and accruing for sales returns in the current and prior periods and provides for an estimated allowance for returns.

Design and ~~Development~~development costs related to the development of new products are expensed as incurred.

~~Design and development costs related to the development of new products are expensed as incurred.~~Advertising

The Company expenses advertising costs, consisting primarily of placement in publications, along with design and printing costs of sales materials when incurred. Advertising expense for the three months ended December 31, 2009 and 2008 amounted to $2,460 and $500, respectively.

~~The~~Shipping ~~Company expenses advertising costs, consisting primarily of placement in publications, along with design~~ and ~~printing~~Handling costs of sales materials when incurred. Advertising expense for the three months ended June 30, 2009 and 2008 amounted to $0 and $17,925, respectively. Advertising expense for the nine months ended June 30, 2009 and 2008 amounted to $1,100 and $39,745, respectively.Costs

The Company records shipping and handling costs billed to customers in selling and shipping expenses. Shipping and handling costs incurred by the Company for inbound freight are recorded in cost of sales and ~~Handling~~costs ~~Costs~~for outbound freight are recorded in selling and shipping expenses. Total shipping and handling costs amounted to $24,469 and $54,594 for the three months ended December 31, 2009 and 2008, respectively.

~~The~~Stock-Based ~~Company~~Compensation records shipping and handling costs billed to customers in selling and shipping expenses. Shipping and handling costs incurred by the Company for inbound freight are recorded in cost of sales and costs for outbound freight are recorded in selling and shipping expenses. Total shipping and handling costs amounted to $53,582 and $57,065 for the three months ended June 30, 2009 and 2008, respectively. Total shipping and handling costs amounted to $164,333 and $85,045 for the nine months ended June 30, 2009 and 2008, respectively.

The ~~Stock~~Company grants stock options to employees and stock options and warrants to non-~~Based~~employees ~~Compensation~~in non-capital raising transactions for services and for financing costs. All grants are recorded at fair value at the grant date. The Company utilizes the Black-Scholes option pricing model to determine fair value. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period.

~~Effective~~Income ~~February~~Taxes 3, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”), a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”. SFAS No. 123R requires that the Company measure the cost of employee services received in exchange for equity awards based on the grant date fair value of the awards, with the cost to be recognized as compensation expense in the Company's financial statements over the period of benefit, which is generally the vesting period of the awards. Accordingly, the Company recognizes compensation cost for equity-based compensation for all new or modified grants issued after February 3, 2006 (Inception).

The Company accounts for ~~stock~~income taxes ~~option~~using an asset and ~~warrant~~liability ~~grants~~approach ~~issued~~whereby ~~and~~deferred ~~vesting~~tax toassets ~~non-employees~~and liabilities inare ~~accordance~~recognized ~~with~~for ~~EITF~~the ~~No.~~future ~~96-18,~~tax ~~“Accounting~~consequences ~~for~~attributable ~~Equity~~to differences ~~Instruments~~between ~~that~~the ~~are~~financial ~~Issued~~statement tocarrying ~~Other~~amounts ~~Than~~of ~~Employees~~existing ~~for~~assets ~~Acquiring,~~and orliabilities inand ~~Conjunction~~their ~~with~~respective ~~Selling,~~tax ~~Goods~~bases. orDeferred ~~Services”,~~tax assets and liabilities ~~EITF~~are ~~00-18,~~measured ~~“Accounting~~using ~~Recognition~~enacted ~~for~~tax ~~Certain~~rates ~~Transactions~~applicable ~~involving~~to ~~Equity~~taxable ~~Instruments~~income ~~Granted~~in the toyears ~~Other~~in ~~Than~~which ~~Employees”,~~those ~~whereas~~temporary ~~the~~differences ~~value~~are ofexpected ~~the~~to ~~stock~~be ~~compensation~~recovered or issettled. ~~based~~The ~~upon~~effect ~~the~~on ~~measurement~~deferred ~~date~~tax asassets ~~determined~~and atliabilities ~~either~~of (a) ~~the~~change ~~date~~in attax rates ~~which~~is arecognized ~~performance~~in ~~commitment~~income isin ~~reached~~the orperiod ~~(b)~~that atincludes the enactment date. The atCompany ~~which~~will ~~the~~provide ~~necessary~~a ~~performance~~valuation toallowance ~~earn~~for the ~~equity~~full ~~instruments~~amount of the deferred tax asset since there is ~~complete~~no assurance of future taxable income.

The ~~Income~~Company ~~Taxes~~recognizes a tax benefit associated with an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently measures the tax benefit as the largest amount that it judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management.

~~The~~Loss ~~Company~~per ~~accounts~~Common for income taxes under Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities. Share

~~The~~Loss ~~Company~~per ~~will~~common ~~provide~~share ais ~~valuation~~computed by ~~allowance~~dividing ~~for~~net loss by the ~~full~~weighted ~~amount~~average number of shares of common stock outstanding during the ~~deferred~~respective ~~tax~~periods. ~~asset~~Basic ~~since~~and ~~there~~diluted isloss noper ~~assurance~~common share ofare ~~future~~the ~~taxable~~same ~~income~~for all periods presented because all warrants and stock options outstanding are anti-dilutive. ~~Tax~~The ~~deductible~~related ~~losses~~party ~~can~~loans continues to be convertible ~~carried~~to ~~forward~~common ~~for~~shares 20and ~~years~~are ~~until~~not repaid at December 31, 2009, but the ~~utilized~~conversion is anti-dilutive.

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN 48”). FIN 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on deF-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The adoption of the provisions of FIN 48 did not have a material effect on the Company’s financial statements. The Company currently files or has in the past filed income tax returns in Canada and the United States. The Company is subject to tax examinations by tax authorities for tax years ending in 2006 and subsequently. 10

~~The~~New ~~Company’s~~Accounting ~~policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2009, the Company has no accrued interest or penalties related to uncertain tax positions.~~Pronouncements

Effective ~~Loss~~July ~~per~~1, ~~Common~~2009, ~~Share~~the FASB ASC became the single official source of authoritative, nongovernmental U.S. GAAP. The historical U.S. GAAP hierarchy was eliminated and the ASC became the only level of authoritative U.S. GAAP, other than guidance issued by the SEC. The Company’s accounting policies were not affected by the conversion to ASC. However, references to specific accounting standards in the notes to our consolidated financial statements have been changed to refer to the appropriate section of the ASC.

~~Loss~~In ~~per~~April ~~common~~2008, ~~share~~the FASB issued a pronouncement on what now is ~~computed~~codified byas ~~dividing~~FASB ~~net~~ASC ~~loss~~Topic by350, ~~the~~Intangibles ~~weighted~~— Goodwill ~~average~~and ~~number~~Other. ofThis ~~shares~~pronouncement ofamends ~~common~~the ~~stock~~factors ~~outstanding~~to ~~during~~be considered in determining the ~~respective~~useful ~~periods.~~life ~~Basic~~of ~~and~~intangible ~~diluted~~assets ~~loss~~accounted ~~per~~for ~~common~~pursuant ~~share~~to previous ~~are~~topic guidance. Its intent is to improve the ~~same~~consistency ~~for~~between ~~all~~the ~~periods~~useful ~~presented~~life ~~because~~of ~~all~~an ~~warrants~~intangible asset and ~~stock~~the ~~options~~period ~~outstanding~~of ~~are~~expected ~~anti-dilutive~~cash flows used to measure its fair value. ~~The~~This ~~related~~Company ~~party~~adopted ~~loan~~this ~~continues~~pronouncement toon beOctober ~~convertible~~1, 2009. toThe ~~common~~adoption ~~shares~~of ~~and~~this isstandard did not ~~repaid~~have ata ~~June~~material ~~30,~~effect ~~2009,~~on ~~but~~ the Company’s ~~conversion~~consolidated isfinancial ~~anti-dilutive~~statements.

In 3June 2008, the FASB amended FASB Topic ASC 815, Sub-Topic 40, "Contracts in Entity’s Own Equity” to clarify how to determine whether certain instruments or features were indexed to an entity's own stock under ASC Topic 815. ~~Private~~The ~~Placements~~amendment applies to any freestanding financial instrument (or embedded feature) that has all of the characteristics of a derivative, for purposes of determining whether that instrument (or embedded feature) qualifies for the scope exception. It is also applicable to any freestanding financial instrument (e.g., gross physically settled warrants) that is potentially settled in an entity's own stock, regardless of whether it has all of the characteristics of a derivative, for purposes of determining whether to apply ASC 815. The Company adopted this pronouncement on October 1, 2009. The adoption of this standard did not have a material effect on its financial statements for the quarter ending December 31, 2009.

OnIn ~~October~~April 232009, ~~2007,~~ the ~~Company~~FASB ~~closed~~issued a pronouncement ~~private~~on ~~placement~~what ofis ~~2,871,759~~now ~~units~~codified ~~for~~as ~~gross~~FASB ~~proceeds~~ASC ofTopic $2805,~~153,818.~~ ~~Each unit was sold for $0~~Business Combinations.75 ~~and~~This ~~consists~~pronouncement ofprovides ~~one~~new ~~common~~guidance ~~share~~that ~~and~~changes ~~one common share purchase~~the ~~warrant.~~accounting ~~Each~~treatment ~~common share purchase warrant entitles the holder to purchase, if exercised, one additional common share~~ of ~~our~~contingent ~~company~~assets atand aliabilities ~~price~~in ofbusiness combinations ~~$1.00~~under ~~per~~previous ~~common~~topic ~~share until October 23, 2008 and at $1~~guidance.50 ~~per~~This ~~common~~pronouncement ~~share~~will ifbe ~~exercised~~effective ~~during~~for the ~~period~~Company ~~from~~for ~~October~~any ~~24,~~business ~~2008~~combinations ~~until~~that ~~the~~occur ~~warrants~~on ~~expire~~or onafter October 231, 2009.

OnIn ~~July~~April 112009, ~~2008,~~ the ~~Company closed~~FASB aissued ~~private placement, selling 8,000,000 shares of common stock at~~ a ~~price~~ ofpronouncement ~~$0.50~~on ~~per~~what ~~share~~is ~~for~~now ~~proceeds~~codified ofas ~~$4,000,000.~~FASB ~~The~~ASC ~~Company~~Topic ~~issued 560~~825,~~000~~ ~~shares~~Financial ~~pursuant~~Instruments. toThis ~~the~~pronouncement ~~exemption~~amends ~~from~~previous ~~registration~~topic ~~under~~guidance ~~the~~to ~~United States Securities~~require ~~Act~~disclosures ofabout ~~1933~~fair ~~provided~~value ~~by Section 4(2), Section 4(6) and/or Rule 506~~ of ~~Regulation D~~financial ~~promulgated~~instruments ~~under~~for ~~the~~interim ~~1933 Act to four (4) investors who are “accredited~~reporting ~~investors”~~periods ~~within~~of ~~the~~publicly ~~respective~~traded ~~meanings~~companies, ~~ascribed~~as towell ~~that~~as ~~term~~ in ~~Rule~~annual ~~501(a) under~~financial ~~the 1933 Act~~statements. The ~~Company~~pronouncement ~~issued~~was ~~7,440,000~~effective ~~shares~~for tointerim ~~eighteen~~reporting ~~(18)~~periods ~~non U.S.~~ending ~~persons~~after ~~(as~~June 15, ~~that~~2009 ~~term~~and isits ~~defined~~adoption indid ~~Regulation~~not Shave ofany ~~the~~significant ~~Securities~~effect ~~Act of 1933) in an offshore transaction relying~~ on ~~Regulation S and/or Section 4(2) of~~ the consolidated ~~Securities~~financial ~~Act of 1933~~statements.

OnIn ~~February~~December 62007, ~~2009,~~ the ~~Company~~FASB issued ~~raised~~ASC ~~$370~~805 “Business Combinations” and 810 “Consolidation” (“ASC 810”),~~000~~ which require that ownership interests in asubsidiaries ~~private~~held ~~placement~~by ~~selling~~parties other 3than the parent,~~700,000~~ ~~units~~and ~~consisting~~the amount of consolidated net income, be clearly 3identified,~~700,000~~ ~~common~~labeled ~~shares~~and atpresented ain ~~price~~the ofconsolidated $0financial statements.10 ~~per~~ASC 805 ~~share~~and ~~plus~~ASC ~~1,850,000~~810 ~~warrants~~also torequire that once a subsidiary is deconsolidated, any ~~purchase~~retained ~~common~~non-controlling ~~shares~~equity atinvestment ain ~~price~~the offormer ~~$0.25~~subsidiary ~~per~~be ~~share~~initially measured at fair value. ~~The~~Sufficient ~~warrants~~disclosures are required to clearly identify ~~exercisable~~and ~~for~~distinguish ~~twelve~~between ~~months.~~the ~~The~~interests ~~Company~~of ~~issued~~the ~~3,700,000~~parent ~~shares~~and tothe ~~four~~interests ~~(4)~~of the non-controlling Uowners.S. ~~persons~~ASC ~~(as~~805 and ASC 810 amend ASC 260 to provide that ~~term~~the calculation isof ~~defined~~earnings per share amounts in ~~Regulation~~the Sconsolidated offinancial statements will continue to be based on the ~~Securities~~amounts ~~Act~~attributable to the parent. ofASC ~~1933)~~805 inand anASC ~~offshore~~810 ~~transaction~~are ~~relying~~effective onfor ~~Regulation~~financial Sstatements issued for fiscal years, and~~/or~~ ~~Section~~interim ~~4(2)~~periods within those fiscal years, beginning on or after December 15, 2008, and require retroactive adoption of the ~~Securities~~presentation ~~Act~~and disclosure requirements for existing minority interests. All other requirements are applied prospectively. The Company adopted ASC 805 and ASC 810 on October 1, 2009. The adoption of ~~1933~~this standard did not have a material effect on the Company’s consolidated financial statements.

~~Stock~~ In ~~Options~~May 2009, the FASB issued a pronouncement on what is now codified as FASB ASC Topic 855, Subsequent Events. This pronouncement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. FASB ASC Topic 855 provides guidance on the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The Company has evaluated subsequent events for the period from December 31, 2009, the date of these financial statements, through February 22, 2010, which represents the date these financial statements are filed with the SEC.

On May 29, 2009, the Company granted to Gary Bub, an employee of the company, stock options to purchase an aggregate of 500,000 shares of common stock, exercisable for a period of five years at $0.10 per share, vesting immediately. The fair value of this option, as calculated pursuant to the BlackF-~~Scholes option-pricing model, was determined to be $85,000 ($0.17 per share), and is being charged to operations in the period ending June 30, 2009.~~ 11

~~The~~In ~~fair~~June ~~value~~2009, ofthe ~~these~~FASB ~~stock~~issued ASC ~~options~~Topic ~~were~~810-10, ~~calculated~~"Amendments ~~using~~to ~~the~~FASB ~~following~~Interpretation ~~Black~~No. 46(R)" (“ASC 810-~~Scholes~~10”). ~~input~~ASC ~~variables:~~810-10 ~~stock price~~is intended to (1) address the effects on ~~date~~certain provisions of ~~grant~~FASB -Interpretation $0No.~~19;~~ ~~exercise~~46 ~~price~~(revised -December ~~$0.1075;~~2003), ~~expected~~“Consolidation of ~~life~~Variable –Interest ~~5.00 years;~~Entities,” ~~expected~~as ~~volatility~~a ~~-125%;~~result ~~expected~~of ~~dividend~~the ~~yield~~elimination of the qualifying special-purpose ~~0%;~~entity ~~risk~~concept in ASC 860-~~free~~20, and (2) constituent concerns about ~~interest~~the ~~rate~~application –of 3certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise's involvement in a variable interest entity.0% This statement will be effective for the Company on October 1, 2010. The Company does not expect the adoption of 810-10 to have a material impact on its results of operations, financial condition or cash flows.

OnOther ~~May~~recent ~~29, 2009, the Company~~accounting ~~granted~~pronouncements toissued ~~Dru~~by ~~Narwani, a consultant to~~ the ~~company,~~FASB ~~stock~~(including ~~options~~its toEmerging ~~purchase an~~Issues ~~aggregate~~Task ~~of 500~~Force),~~000 shares of common stock, exercisable for a period of one~~ ~~year~~and ~~at $0.10 per share, vesting immediately. The fair value of this option, as calculated pursuant to~~ the ~~Black-Scholes~~United ~~option-pricing~~States ~~model,~~Securities ~~was determined to be $60,000 ($0.12 per share),~~ and isExchange ~~being~~Commission ~~charged~~did tonot ~~operations~~or ~~during~~are ~~the~~not ~~period~~believed ~~ended~~to ~~June~~have ~~30,~~a ~~2009.~~material ~~The~~impact ~~fair~~on ~~value of these stock options were calculated using~~ the ~~following~~Company's ~~Black-Scholes~~present ~~input~~or ~~variables: stock price on~~future ~~date~~consolidated offinancial ~~grant - $0~~statements.~~19; exercise price - $0.10; expected life – 1.0 year; expected volatility -210%; expected dividend yield - 0%; risk-free interest rate – 3.0% .~~

On May 29, 2009, the Company granted to two directors of the Company, stock options to purchase an aggregate of 750,000 shares of common stock (375,000 per director), exercisable for a period of one year at $03.15 ~~per~~Private share, with 125,000 shares for each director vesting June 30, 2009, September 30, 2009 and December 31, 2009, respectively. The fair value of this option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $75,000 ($0.10 per share), and is being charged to operations in the amount of $25,000 at June 30, September 30, and December 31, 2009, respectively. Placements

~~The~~On ~~fair~~February ~~value~~6, of2009, ~~these~~the ~~stock~~Company ~~options~~raised ~~were~~$370,000 ~~calculated~~in ~~using~~a ~~the~~private ~~following~~placement ~~Black-Scholes~~selling ~~input~~3,700,000 ~~variables:~~units ~~stock~~consisting of ~~price~~3,700,000 oncommon ~~date~~shares ofat ~~grant~~a -price of $0.~~19;~~10 ~~exercise~~per share plus 1,850,000 warrants to purchase common shares at a price -of $0.~~15;~~25 ~~expected~~per ~~life~~share. –The 1warrants are exercisable for twelve months.0 The Company issued 3,700,000 shares to four (4) ~~year;~~non ~~expected~~U.S. ~~volatility~~persons ~~-210%;~~(as ~~expected~~that ~~dividend~~term ~~yield~~is -defined ~~0%;~~in ~~risk-free~~Regulation S of the Securities Act ~~interest~~of ~~rate~~1933) –in ~~3.0%~~an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

OnStock ~~June~~Options 8, 2009, the Company granted to Kelly Fountain, an employee, stock options to purchase an aggregate of 500,000 shares of common stock, exercisable for a period of five years at $0.18 per share, with 100,000 shares vesting monthly commencing June 8, 2009 through November 7, 2009. The fair value of this option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $75,000 ($0.15 per share), and is being charged to operations monthly from June through October, 2009. During the three months ended June 30, 2009 the Company recorded a charge to operations of $15,000 with respect to this option.

~~The~~On ~~fair~~May ~~value~~29, 2009, the Company granted to Gary Bub, an employee of ~~these~~the company, stock options ~~were~~to ~~calculated~~purchase ~~using~~an aggregate ~~the~~of ~~following~~500,000 ~~Black-Scholes~~shares ~~input~~of ~~variables:~~common stock ~~price~~, onexercisable ~~date~~for a period of ~~grant~~five years -at $0.~~18;~~10 ~~exercise~~per ~~price~~share, -vesting $0immediately.~~18;~~ ~~expected~~The ~~life~~fair –value ~~5.0~~of this option, as ~~years;~~calculated ~~expected~~pursuant ~~volatility~~to the Black-~~210%;~~Scholes ~~expected~~option-pricing ~~dividend~~model, ~~yield~~was -determined to be $85,000 ($0%;.17 ~~risk-free interest~~per ~~rate~~share), –and ~~3.0%~~was .charged to operations in the period ending June 30, 2009.

AThe ~~summary~~fair value of ~~stock~~these ~~option~~stock ~~activity~~options ~~for~~were calculated using the ~~nine~~following ~~months~~Black-Scholes ~~ended~~input ~~June~~variables: ~~30,~~stock price ~~2009~~on ~~and~~date ~~2008~~of isgrant as- ~~follows:~~$0.19; exercise price - $0.1075; expected life – 5.00 years; expected volatility -210%; expected dividend yield - 0%; risk-free interest rate – 3.0% .

					Weighted
				Weighted	Average
				Average	Remaining
	Number of			Exercise	Contractual
	Shares			Price	Life (Years)
Options outstanding at September 30, 2008	4,160,000		$	0.540	4.00
Granted	2,250,000		$	0.143	1.66
Exercised	---			---	---
Cancelled	(125,000	)		0.750	4.00
Options outstanding at June 30, 2009	6,285,000		$	0.393	3.52
Options exercisable at June 30, 2009	3,460,834		$	0.332	3.47

On May 29, 2009, the Company granted to Dru Narwani, a consultant to the company, stock options to purchase an aggregate of 500,000 shares of common stock, exercisable for a period of one year at $0.10 per share, vesting immediately. The fair value of this option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $60,000 ($0.12 per share), and was being charged to operations during the period ended June 30, 2009. The fair value of these stock options were calculated using the following Black-Scholes input variables: stock price on date of grant - $0.19; exercise price - $0.10; expected life – 1.0 year; expected volatility -210%; expected dividend yield - 0%; risk-free interest rate – 3.0% .

~~The~~On ~~weighted-average~~May ~~grant-date~~29, 2009, the Company ~~fair~~granted ~~value~~to two directors of the Company, stock options ~~granted~~to ~~during~~purchase ~~the~~an ~~three~~aggregate of ~~months~~750,000 ~~ended~~shares of common stock (375,000 per director), exercisable for a period of one year at $0.15 per share, with 125,000 shares for each director vesting June 30, 2009, September 30, 2009 and December 31, 2009, respectively. ~~2008~~The fair value of this option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $75,000 ($0.~~131~~10 per share), and is being charged to operations in the amount of $~~0.75~~25,000 at June 30, September 30, and December 31, 2009, respectively.

The ~~aggregate~~fair ~~intrinsic~~ value of these stock options were calculated using the following Black-Scholes input variables: stock price ~~options~~on ~~outstanding~~date atof ~~June~~grant ~~30,~~- ~~2009~~$0.19; ~~was~~exercise price - $0.15; expected life – 1.0 year; expected volatility -210%; expected dividend yield - 0%; risk-free interest rate – 3.0% .

~~Share Purchase Agreements~~F-12

On ~~February~~June 128, ~~2007~~2009, ~~Stephen Soller,~~ the Company’s granted ~~Chief~~to ~~Executive~~Kelly ~~Officer~~Fountain, ~~acquired~~an ~~the~~employee, ~~beneficial~~stock ~~rights~~options to purchase an aggregate 1of 500,~~800,~~000 shares of common stock, ~~from~~exercisable ~~Jacques~~for ~~Ninio,~~a ~~the~~period ~~controlling shareholder~~ of ~~Panglobal~~five atyears ~~that time,~~ at ~~a price of~~ $0.~~0001~~18 per share~~. Pursuant to a related Escrow Agreement~~, ~~the~~with ~~shares are to vest and be released to Mr. Soller at the rate of 600~~100,000 shares ~~every~~vesting ~~six~~monthly ~~months~~commencing ~~beginning~~June ~~on August 12~~8, ~~2007,~~2009 ~~provided~~through ~~that~~November ~~Mr.~~7, ~~Soller’s underlying employment agreement has not been terminated~~2009. The fair value of this ~~transaction~~option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $~~810~~75,000 ($0.~~45 per~~15 per share), ~~reflecting the difference between the $0.0001 purchase price~~ and ~~the $0.45 private placement price, and~~ is being charged to operations ~~ratably~~monthly from ~~May~~ ~~11,~~June ~~2007~~ through ~~August 11~~ October, ~~2008~~2009. During the three months ended ~~June~~December 3031, 2009, the Company recorded a charge to operations of $015,000 with respect to this option.

OnThe ~~February 12, 2007, the~~ fair value of ~~the~~these ~~aforementioned~~stock options ~~share~~were ~~purchases was~~ calculated using the following Black-Scholes input variables: stock price on date of grant - $0.4518; exercise ~~price~~ - $0.0001; expected life – 1.25 years; expected volatility - 125%; expected dividend yield - 0%; risk-free interest rate – 5.0% . On May 11, 2007, the fair value of the aforementioned share purchases was calculated using the following Black-Scholes input variables: stock price ~~of grant~~ - $0.4518; ~~exercise price - $0.0001;~~ expected life – ~~3 years; expected volatility - 125%; expected dividend yield - 0%; risk-free interest rate –~~ 5.0~~% . At June 30, 2007, the fair~~ ~~value of the aforementioned share purchase was calculated using the following Black-Scholes input variables: stock price of grant - $1.02; exercise price - $0.0001; expected life – 2.875~~ years; expected volatility - ~~125~~210%; expected dividend yield - 0%; risk-free interest rate – 53.0% .

On A ~~May~~summary ~~11, 2007, Craig Soller and David Long, two consultants to the Company, acquired the beneficial rights to 125,000 shares and 100,000 shares~~ of ~~common~~ stock, respectively, from Jacques Ninio, the controlling shareholder of Panglobal at that time, at a price of $0.0001 per share. Pursuant to related Escrow Agreements, the 225,000 shares are to vest and be released to the consultants at the rate of 75,000 shares annually beginning on May 11, 2008, provided that the underlying consulting agreements have not been terminated. The fair value of these transactions, as calculated pursuant to the Black-Scholes option~~-pricing model, was initially determined to~~ beactivity $101,250 ($0.45 per share), reflecting the difference between the $0.0001 purchase price and the $0.45 private placement price. In accordance with EITF 96-18, such compensation arrangements granted to consultants are valued each reporting period to determine the amount to be recorded as an expense in the respective period. On June 30, 2009, the fair value of the transaction, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $0.015 per share, which resulted in a charge to operations of $1,562 during the three months ended June 30, 2009. As the restricted shares vest, they will be valued on each vesting date and an adjustment will be recorded for the ~~difference~~ between the value already recorded and the then current value on the date of vesting. On October 31, 2007 the relationship of one of the consultants with the Company ended and the right to acquire 100,000 shares of common stock has ceased and previously calculated compensation related to this right to acquire 100,000 shares of common stock in the amount of $14,116 had been reversed during the three months ended December 31, ~~2007.~~2009 ~~Accordingly,~~and ~~there will~~2008 beis ~~no further non-cash compensation expenses charged relating to those~~as ~~100,000 shares.~~follows:

On October 23, 2007, Charles Lesser, the Company’s Chief Financial Officer and Chief Executive Officer at this time, acquired the beneficial rights to 250,000 shares of common stock from Jacques Ninio, the controlling shareholder of Panglobal at that time, at a price of $0.0001 per share. Pursuant to a related Escrow Agreement, the shares are to vest and be released to Mr. Lesser according to the following schedule: 100,000 shares on June 30, 2008 and 75,000 shares on December 31, 2008 and June 30, 2009, provided that Mr. Lesser’s underlying employment status has not been terminated. The fair value of this transaction, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $220,000 ($0.88 per share), reflecting the difference between the $0.0001 purchase price and the fair market value of $0.88 on October 23, 2007, and is being charged to operations ratably from November 1, 2007 through June 30, 2009. During the three months ended June 30, 2009, the Company recorded a charge to operations of $33,000. During the nine months ended June 30, 2009, the Company recorded a charge to operations of $99,000.

				Weighted
			Weighted	Average
	Number		Average	Remaining
	of		Exercise	Contractual
	Shares		Price	Life (Years)

Options outstanding at October 1, 2008	4,160,0000	$	0.540	4.00
Granted	---		--	---
Exercised	---		---	---
Cancelled	---		0.652
Options outstanding at December 31, 2008	4,160,000	$	0.540	4.00
Options exercisable at December 31, 2008	1,425,667	$	0.436	2.50

4. Accounts Receivable

				Weighted
			Weighted	Average
	Number		Average	Remaining
	of		Exercise	Contractual
	Shares		Price	Life (Years)

Options outstanding at October 1, 2009	5,675,000	$	0.360	3.52
Granted	---		--	---
Exercised	---		---	---
Cancelled	190,000		0.652
Options outstanding at December 31, 2009	5,485,000	$	0.343	3.30
Options exercisable at December 31, 2009	4,526,000	$	0.289	2.25

The ~~Company~~weighted-average ~~also sells goods to~~grant-date ~~some~~fair value of ~~its~~options ~~customers~~granted ~~and~~during ~~assumes~~ the ~~credit~~three ~~risk.~~months ~~The~~ended ~~Company~~December ~~has~~31, ~~a receivable~~2009 inand ~~dispute~~2008 ~~for~~was ~~which the Company has provided an estimated allowance for doubtful accounts, however, future events may change that estimate~~$0.00 ~~Accounts receivable, as presented in the balance sheet at June 30, 2009~~ and ~~September 30~~$0.00, ~~2008~~ isrespectively. ~~presented below:~~

		June 30, 2009			September 30,2008
Outstanding accounts receivable	$	910,802		$	988,467
Less: allowance for doubtful debts		(400,232	)		(544,176	)
	$	510,570		$	444,291

The aggregate intrinsic value of stock options outstanding at September 30, 2009 was $0.

~~Changes~~Share toPurchase ~~the allowance for doubtful debts were $0 and $335,030 for the three months ended June 30, 2009 and 2008, respectively.~~ Agreements

5. On ~~Due~~May 11, 2007, Craig Soller and David Long, two consultants to the Company, acquired the beneficial rights to 125,000 shares and 100,000 shares of common stock, respectively, from ~~Factor~~Jacques Ninio, the controlling shareholder of Panglobal at that time, at a price of $0.0001 per share. Pursuant to related Escrow Agreements, the 225,000 shares are to vest and be released to the consultants at the rate of 75,000 shares annually beginning on May 11, 2008, provided that the underlying consulting agreements have not been terminated. The fair value of these transactions, as calculated pursuant to the Black-Scholes option-pricing model, was initially determined to be $101,250 ($0.45 per share), reflecting the difference between the $0.0001 purchase price and the $0.45 private placement price. Compensation arrangements granted to consultants are valued each reporting period to determine the amount to be recorded as an expense in the respective period. On December 31, 2009, the fair value of the transaction, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $0.08 per share.. As the restricted shares vest, they will be valued on each vesting date and an adjustment will be recorded for the difference between the value already recorded and the then current value on the date of vesting. On October 31, 2007 the relationship of one of the consultants with the Company ended and the right to acquire 100,000 shares of common stock has ceased and previously calculated compensation related to this right to acquire 100,000 shares of common stock in the amount of $14,116 had been reversed during the three months ended December 31, 2007. Accordingly, there will be no further non-cash compensation expenses charged relating to those 100,000 shares.

The Company uses a factor for credit administration and cash flow purposes. Under the factoring agreement, the factor purchases a portion of the Company’s domestic wholesale sales invoices and assumes most of the credit risks with respect to such accounts for a charge of 0.75% of the gross invoice amount. The Company can draw cash advances from the factor based on a preF-determined percentage, which is 75% of eligible outstanding accounts receivable. The factor holds as security substantially all assets of the Company and charges interest at a rate of prime plus 1.0% on the outstanding advances. Effective October 27, 2008, the interest charge was increased to prime plus 2%. At March 31, 2008, the Company had cash account in the amount of $400,000 with the factor to be used as collateral for the loans advanced. On May 5, 2008 the cash collateral was reduced to $300,000. The Company is liable to the factor for merchandise disputes and customer claims on receivables sold to the factor. The factoring agreement expired on March 4, 2009, but was automatically renewed for one additional year. 13

AtOn ~~times~~October 23, ~~our~~2007, ~~customers place~~Charles ~~orders~~Lesser, ~~that~~the ~~exceed~~Company’s ~~the~~Chief ~~credit~~Financial ~~that~~Officer ~~they~~and ~~have~~Chief ~~available~~Executive ~~from~~Officer acquired the ~~factor.~~beneficial ~~We evaluate~~rights ~~those~~to ~~orders~~250,000 toshares ~~consider~~of ifcommon ~~the~~stock ~~customer~~from isJacques Ninio, ~~worthy~~the controlling shareholder of ~~additional~~Panglobal ~~credit~~at that time, at a price of ~~based~~$0.0001 onper ~~our~~share. ~~past~~Pursuant ~~experience~~to ~~with~~a related Escrow Agreement, the ~~customer.~~shares Ifare weto vest ~~decide~~and be released to ~~sell~~Mr. ~~merchandise~~ Lesser according to the ~~customer~~following schedule: 100,000 shares on ~~credit~~June 30, we2008 ~~take~~and ~~the~~75,000 ~~credit~~shares ~~risk~~on ~~for~~December ~~the~~31, ~~amounts~~2008 ~~that~~and ~~are~~June 30, ~~above~~2009, ~~their~~provided ~~approved~~that ~~credit~~Mr. ~~limit~~Lesser’s ~~with~~underlying ~~the~~employment ~~factor~~status has not been terminated. AsThe fair value of ~~June~~this 30transaction, ~~2009,~~as calculated pursuant to the ~~amount~~Black-Scholes ofoption-pricing ~~Due~~model, ~~from~~was ~~Factor~~determined ~~for~~to ~~which~~be we$220,000 ~~bear~~($0.88 per share), reflecting the ~~credit~~difference ~~risk~~between isthe $~~123,837~~0.0001 purchase price and the fair market value of $0.88 on October 23, 2007, and was being charged to operations ratably from November 1, 2007 through June 30, 2009.

For the three months ended June 30, 2009 and 2008, the Company paid a total of approximately $97,066 and $30,338, respectively, of interest to the factor which is reported as a component of interest expense in the consolidated statements of income4. ~~For~~Accounts the nine months ended June 30, 2009, 2009 and 2008, the Company paid a total of approximately $218,816 and $35,267, respectively, of interest to the factor which is reported as a component of interest expense in the consolidated statements of income. Receivable

Due from factor, net of reserve for chargebacks and estimated sales returns as presented in the balance sheet at June 30, 2009 and September 30, 2008 is summarized below:

Accounts receivable are as follows:
		December 31,			September 30,
		2009			2009
Outstanding accounts receivable	$	863,905		$	871,661
Less: allowance for doubtful		(650,000	)		(650,000	)
accounts
	$	213,905		$	221,661

		June 30 , 2009			September 30, 2008
Outstanding factored receivables	$	5,260,588		$	3,126,405
Cash collateral reserve		302,249			303,426
		5,562,837			3,429,831
Less: advances		(3,008,894	)		(1,689,387	)
Reserves for chargeback and sales returns		(347,690	)		(328,988	)
	$	2,206,253		$	1,411,456

5. Due from Factor

6 The Company uses a factor for credit administration and cash flow purposes. ~~Inventory~~Under the factoring agreement, the factor purchases a portion of the Company’s domestic wholesale sales invoices and assumes most of the credit risks with respect to such accounts for a charge of 0.75% of the gross invoice amount. The Company can draw cash advances from the factor based on a pre-determined percentage, which is 75% of eligible outstanding accounts receivable. The factor holds as security substantially all assets of the Company and charges interest at a rate of prime plus 2.0% on the outstanding advances. The Company maintains a cash collateral account in the amount of $302,635 with the factor to be used as collateral for the loans advanced. The Company is liable to the factor for merchandise disputes and customer claims on receivables sold to the factor. The factoring agreement expires on March 4, 2010, but is automatically renewed for one year.

~~Inventory~~At ~~consists~~times, our customers place orders that exceed the credit that they have available from the factor. We evaluate those orders to consider if the customer is worthy of additional credit based on our past experience with the customer. If we decide to sell merchandise ~~following~~to atthe ~~June~~customer 30on credit, we take the credit risk for the amounts that are above their approved credit limit with the factor. As of December 31, 2009 and 2008, ~~September~~the 30amount of Due from Factor for which we bear the credit risk was $61,702 ~~2008:~~and $355,249.

		June 30, 2009		September 30, 2008
Finished goods	$	1,180,829	$	1,006,116
Work-in-process		105,910		156,697
Raw materials		176,697		141,594
	$	1,463,436	$	1,304,407

For the three months ended December 31, 2009 and 2008, the Company paid a total of approximately $53,377 and $58,376, respectively, of interest to the factor which is reported as a component of interest expense in the consolidated statements of income. Due from factor, net of reserve for chargebacks and estimated sales returns is summarized below:

~~7. Property and Equipment~~ F-14

A summary of property and equipment at June 30, 2009 and September 30, 2008 is as follows:

		December 31 ,			September 30,
		2009			2009
Outstanding factored receivables	$	1,884,070		$	2,451,702
Cash collateral reserve		302,635			303,426
		2,186,705			2,755,128

Less: advances		(1,161,149	)		(1,572,380	)
Reserves for chargebacks and sales returns		(250,000	)		(315,000	)
	$	775,556		$	867,748

		June 30, 2009			September 30, 2008
Machinery and equipment	$	167,486		$	167,486
Computer hardware and software		251,313			301,949
Furniture and fixtures		76,699			76,699
Leasehold improvements		149,583			149,583
		645,081			695,717
Less accumulated depreciation and amortization		(202,888	)		(107,725	)
	$	442,193		$	587,992

6. Inventory

~~Depreciation~~Inventory ~~and~~consists ~~amortization expense~~of ~~for~~ the three months ended June 30, 2009 and 2008 was $32,333 and $26,862, respectively. Depreciation and amortization expense for the nine months ended June 30, 2009 and 2008 was $95,163 and $62,686, respectively. following:

8. Asset Purchase

		December 31, 2009		September 30, 2009
Finished goods	$	543,075	$	631,478
Work-in-process		85,596		81,281
Raw materials		49,884		108,708
	$	678,555	$	821,467

On June 18, 2008, the Company purchased certain assets, including trademarks and office equipment, originally belonging to a company in foreclosure directly from the financial institution holding a security interest in the foreclosed assets7. ~~The~~Property ~~Company obtained a release of all claims which the financial institution had in any intellectual property~~ and ~~customer~~Equipment ~~information which it purchased.~~

~~The~~A ~~Company~~summary ~~purchased~~of property and equipment consists of the following ~~assets~~:

(a) certain computers, office equipment and furniture; (b) all intangible property, trademarks (or rights or claims therein), copyrights, artwork, designs, graphics, patterns, markers, blocks and designs which were formerly used in marketing apparel products under the “Scrapbook” , “Scrapbook Originals” and “Crafty Couture” labels; (c) all open and unshipped orders relating to Scrapbook and Crafty Couture apparel products, all customer lists, and information regarding customer requirements and specifications.

		December 31,			September 30,
		2009			2009
Machinery and equipment	$	172,025		$	172,025
Computer hardware and software		257,934			257,727
Furniture and fixtures		82,189			82,189
Leasehold improvements		151,988			151,988
		664,136			663,929
Less accumulated depreciation and amortization		(269,439	)		(235,899	)
	$	394,697		$	428,030

The Company paid $1,200,000 as consideration for both the purchase of the purchased assets and the release of all claims or rights to the three trademarks, ‘Scrapbook’, “Scrapbook Originals” and ‘Crafty Couture’8. ~~The~~Asset ~~purchase~~Purchase ~~price was allocated as follows:~~

Office equipment and furniture	$	22,765
Trademarks and intangible assets		1,177,235
Total Purchase price	$	1,200,000

On June 18, 2008, the Company purchased certain assets, including trademarks and office equipment, originally belonging to a company in foreclosure directly from the financial institution holding a security interest in the foreclosed assets. The Company obtained a release of all claims which the financial institution had in any intellectual property and customer information which it purchased.

The Company ~~engaged an independent firm of appraisers to perform a valuation of the~~ purchased ~~assets and determined that~~ the ~~price paid represented a fair price and that no~~following ~~adjustment~~assets: ~~needs to be made.~~

~~Employment~~(a) ofcertain ~~Kelly~~computers, ~~Kaneda~~office equipment and furniture; (b) all intangible property, trademarks (or rights or claims therein), copyrights, artwork, designs, graphics, patterns, markers, blocks and designs which were formerly used in marketing apparel products under the “Scrapbook” , “Scrapbook Originals” and “Crafty Couture” labels; (c) all open and unshipped orders relating to Scrapbook and Crafty Couture apparel products, all customer lists, and information regarding customer requirements and specifications.

The Company ~~subsequently hired~~paid ~~Kelly Kaneda, the originator of the Scrapbook label at a salary of~~ $~~150~~1,~~000 per year for the first 12 months~~200, ~~increasing by $25,~~000 ~~per~~as ~~year~~consideration for ~~each~~both ofthe ~~three additional~~purchase ~~years.~~of Inthe ~~addition,~~purchased ~~Mr.~~assets ~~Kaneda shall receive a commission of one~~ and ~~one-half percent (1.5%) on~~ the ~~net~~release ~~sales~~ of ~~the~~all ~~Scrapbook~~claims ~~Division.~~or ~~Net~~rights ~~sales shall~~to bethe ~~defined~~three ~~as gross sales less discounts~~trademarks, ~~markdowns~~‘Scrapbook’, “Scrapbook ~~returns,~~Originals” ~~losses~~and ~~for uncollected~~‘Crafty ~~accounts,~~Couture’. ~~and~~The ~~other~~purchase ~~allowances~~price ~~actually~~was ~~taken~~allocated byas follows: ~~customers.~~

~~9. Related Party Transactions~~F-15

Craig Soller, the brother of the Company’s Chief Executive Officer, Stephen Soller, is a consultant to the Company. See Note 3 for transactions involving Craig Soller.

Office equipment and furniture	$	22,765
Trademarks and intangible assets		1,177,235
Total Purchase price	$	1,200,000

~~Effective~~The ~~May~~Company ~~21,~~engaged ~~2009, the~~an ~~Company~~independent ~~appointed~~firm ~~Dru~~of ~~Narwani~~appraisers ~~and Charles Shaker~~ to ~~our~~perform ~~board~~a valuation of ~~directors~~the ~~and~~purchased assets toand ~~our~~determined ~~audit~~that ~~committee.~~the ~~Dru~~price ~~Narwani~~paid ~~has~~represented ~~been~~ a ~~consultant~~fair toprice ~~the~~and ~~Company~~that ~~and~~no ~~received~~adjustment ~~500,000~~needs ~~stock~~to ~~options~~be asmade. aOn ~~consultant.~~October ~~See~~1, ~~note~~2009, 3the ~~for~~company ~~transactions involving~~decided ~~Dru~~to ~~Narwani.~~amortize the Wetrademarks ~~have~~and ~~not~~intangible ~~been~~assets ~~party~~over toa ~~any~~period ~~other~~of ~~transaction~~72 ~~with~~months.

~~either~~At ofDecember ~~Dru Narwani or Charles Shaker~~31, ~~since~~2009 the ~~beginning~~value of ~~our~~ ~~last~~the ~~fiscal~~trademarks ~~year, or any currently proposed transaction with either of Dru Narwani or Charles Shaker, in which we were or will be a participant~~ and ~~where~~intangible ~~the amount involved exceeds the lesser of $120,000 or one percent of the average of our total~~ assets ~~at year-end for the last two completed fiscal years. Charles Shaker~~ is aas ~~representative of Providence Wealth Management Ltd., from whom we have borrowed $1,000,000 under the terms of a Convertible Loan Agreement dated for reference January 15, 2009.~~follows:

Convertible Notes Payable

Purchase price of trademarks and intangible assets	$ 1,177,235


Less: Accumulated Amortization	(49,050)
Value of trademarks and intangible assets, net	$ 1,128,185

OnAmortization ~~March~~expense 3,on ~~2008~~ the ~~Company entered~~trademarks ~~into~~and aintangible ~~Revolving~~assets for ~~Loan Agreement with two of~~ the ~~shareholders~~three ofmonths ~~the Company,~~ended ~~Sinecure~~December ~~Holdings~~31, ~~Inc.~~2009 and ~~Capella~~2008 ~~Investments,~~was ~~Inc. (changed to Peter Hough~~$49,050 ~~an individual). The loan allows the Company to borrow~~ and ~~repay, on a revolving basis, up to an outstanding amount of~~ $~~750~~0,~~000. The outstanding~~ ~~principal balance of the Loan bears interest, payable monthly, at a rate of 8% per annum~~respectively. ~~The loan is secured by a lien on the assets of the Company, except for factored receivables.~~

~~The Loan was due to be repaid in full by November 30, 2008~~9. AsRelated ~~consideration~~Party ~~for~~Transactions the loan, the Company agreed to pay 68,180 of its Common shares as loan fees. At March 31, 2008, $500,000 was advanced and the Company recorded an expense of $25,000 included in operating expenses equivalent to the issuance of 45,454 shares of the Company’s common stock at the fair market value of $0.55 per share, the closing price of the Company’s common shares on the first advance date of February 26, 2008. The Company drew a further advance on April 10, 2008 and recorded an expense in general and administrative expenses of $23,863 equivalent to the issuance of 22,726 shares of its common stock at the fair market value of $1.05, the closing price of the Company’s common stock on April 10, 2008.

AtCraig ~~any time after August 31~~Soller, ~~2008,~~ ifthe ~~there~~brother ~~was~~of ~~an outstanding amount on~~ the Company’s ~~Loan,~~Chief ~~the~~Executive ~~lenders may convert~~Officer, by ~~written~~Stephen ~~notice~~Soller, ~~either~~is a ~~portion~~consultant ~~or the total amount of the outstanding loan~~ to ~~common shares of~~ the Company. atSee aNote ~~price~~3 ~~per~~for ~~share~~transactions ~~equal~~involving toCraig ~~the lesser of:~~Soller.

	a)	the average closing bid for the five (5) trading days immediately preceding the first advance date of February 26, 2008; or,
	b)	the average closing bid price for the five (5) trading days immediately preceding the notice of intent to convert.

Effective May 21, 2009, the Company appointed Dru Narwani and Charles Shaker to our board of directors and to our audit committee. Dru Narwani has been a consultant to the Company and received 500,000 stock options as a consultant. See note 3 for transactions involving Dru Narwani. We have not been party to any other transaction with either of Dru Narwani or Charles Shaker, since the beginning of our last fiscal year, or any currently proposed transaction with either of Dru Narwani or Charles Shaker, in which we were or will be a participant and where the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years. Charles Shaker is an owner of Providence Wealth Management Ltd., from whom we have borrowed $1,000,000 under the terms of a Convertible Loan Agreement dated for reference January 15, 2009 and is one of the 15 lenders of a convertible loan agreement dated June 15, 2009.

OnConvertible ~~April~~Notes 9, 2009 the Company agreed to convert $375,000 plus accrued interest to April 30, 2009 into common shares of the Company at a conversion price of $0.10 per share. In addition, the Company agreed to issue one warrant to purchase one Common share for every two shares to be issued at an exercise price of $0.25 per warrant exercisable for twelve months from issuance. The conversion was effective April 30, 2009 and the Company issued 4,025,000 shares of Common stock and 2,12,5000 warrants.Payable

~~The~~Effective ~~Loan~~March ~~was~~3, ~~modified~~2008 ~~on June 15,~~the ~~2009~~Company toentered ~~conform~~into to a ~~new~~Revolving ~~financing~~Loan ~~and~~Agreement ~~now~~with ~~bears~~two ~~interest~~of atthe 9%shareholders ~~per annum,~~of ~~compounded and payable bi-annually, on~~ the ~~outstanding principal~~Company, ~~and~~Sinecure ~~repayable on or before April 30~~Holdings, ~~2011~~Inc. ~~The~~and ~~note~~Capella isInvestments, ~~now convertible into common shares at $~~Inc.10 ~~per share~~ (changed ~~3,7500,000 shares of stock) and when converted the company will issue warrants equal~~ to ~~one half of the shares converted or a maximum of~~ 1Peter Hough,~~875,000~~ ~~warrants~~an ~~exercisable at $~~individual).15 ~~per~~The ~~share~~loan ~~for~~allows ~~a period of 24 months. These features gave rise to~~ the ~~assignment~~Company ~~of value~~ to ~~the~~borrow ~~warrant~~ and ~~the beneficial conversion feature equal to $219~~repay,~~992~~ ~~which is accounted for as~~on ~~discount~~a onrevolving ~~the~~basis, ~~note~~up ~~and a credit~~ to ~~additional~~an ~~paid~~outstanding inamount ~~capital~~of $750,000. The ~~value of~~outstanding ~~the~~principal ~~warrants~~balance ~~were~~of ~~determined by~~ the ~~Black~~Loan ~~Scholes~~bears ~~option pricing method using the current stock price~~ interest, ~~exercise~~payable ~~price of the warrants~~monthly, ~~volatility~~at ~~of 210% and~~ a ~~risk free interest~~ rate of ~~1.1~~8% per annum. The ~~Beneficial~~loan ~~conversion~~is ~~feature~~secured ~~value~~by ~~was set~~a atlien ~~its~~on ~~intrinsic value after consideration of~~ the ~~relative~~assets ~~value~~ of the ~~warrants~~ ~~and~~Company, ~~the notes. The discount is being amortized on the interest method~~except ~~over~~for ~~the~~factored ~~life of the loan~~receivables.

~~Convertible~~ The ~~Revolving~~ Loan ~~Agreement~~was ~~Payable~~due to be repaid in ~~Shareholder~~full by November 30, 2008. As consideration for the loan, the Company agreed to pay 68,180 of its Common shares as loan fees. At March 31, 2008, $500,000 was advanced and the Company recorded an expense of $25,000 included in operating expenses equivalent to the issuance of 45,454 shares of the Company’s common stock at the fair market value of $0.55 per share, the closing price of the Company’s common shares on the first advance date of February 26, 2008. The Company drew a further advance on April 10, 2008 and recorded an expense in general and administrative expenses of $23,863 equivalent to the issuance of 22,726 shares of its common stock at the fair market value of $1.05, the closing price of the Company’s common stock on April 10, 2008.

OnAt ~~January~~any ~~15,~~time ~~2009~~after ~~the~~August ~~Company~~31, ~~entered~~2008, ~~into~~if athere ~~revolving~~was ~~loan~~an ~~agreement~~outstanding ~~with~~amount ~~Providence~~on ~~Wealth~~the ~~Management Ltd~~Loan, ~~a British~~the ~~Virgin~~lenders ~~Islands~~may ~~Company~~convert, by ~~(“Providence”)~~written notice, ~~whereby~~either ~~Providence~~a ~~agreed~~portion toor ~~loan~~ the ~~Company~~total amount of the ~~aggregate~~outstanding ~~principal~~loan to ~~amount~~common shares of ~~$1,000,000~~the ~~for~~Company ~~general~~at ~~corporate purposes.~~a ~~The~~price ~~loan~~per isshare ~~issued~~equal asto ~~follows~~the lesser of:

	(i)	The first advance of $700,000 on the date of execution of the loan agreement;
	(ii)	subject to the fulfillment of certain conditions, by advance of up to an additional US$300,000; and bearing interest at 9% per annum on the outstanding principal, and repayable on or before July 31, 2009.

F-16

The first advance of $700,000 occurred on January 16, 2009 and a second advance of $300,000 occurred on January 27, 2009.

	(a)	the average closing bid for the five (5) trading days immediately preceding the first advance date of February 26, 2008; or,

	(b)	the average closing bid price for the five (5) trading days immediately preceding the notice of intent to convert.

On ~~June~~April 129, ~~2008~~2009 the Company ~~had~~ ~~entered~~agreed ~~into~~to aconvert ~~revolving~~$375,000 ~~loan~~plus ~~agreement~~accrued ~~dated~~interest ~~effective~~to ~~March~~April 330, ~~2008,~~2009 ~~with~~into common ~~Sinecure~~shares ~~Holdings~~of ~~Limited,~~the aCompany ~~British~~at ~~Virgin Islands company, and Capella Investments Inc.,~~ a ~~Nevada~~conversion ~~company,~~price ~~whereby Sinecure and Capella agreed to loan us the aggregate principal amount~~ of US$~~750,000~~0.10 ~~for~~per ~~general corporate purposes, above~~share. ~~Also~~In ~~on June 12~~addition, ~~2008, we entered into a security agreement dated~~the ~~effective~~Company ~~March 3, 2008, with Sinecure and Capella, whereby we~~ agreed to ~~create a~~issue ~~security~~one ~~interest~~warrant byto ~~way~~purchase ofone ~~priority~~Common ~~security~~share ~~interest~~for inevery ~~our present and~~two ~~after-acquired~~shares ~~personal~~to ~~property~~be ~~and~~issued ~~such~~at ~~other~~an ~~collateral~~exercise ~~described~~price ~~in the Security Agreement in favor~~ of ~~Sinecure and Capella~~$0.25 Onper ~~January~~warrant ~~16,~~exercisable ~~2009 we~~for ~~entered~~twelve ~~into~~months afrom ~~pari~~issuance. ~~passu~~The ~~agreement~~conversion ~~with~~was ~~Providence,~~effective ~~Sinecure~~April ~~and Capella~~30, ~~whereby~~ ~~Panglobal,~~2009 ~~Providence, Sinecure~~ and ~~Capella agree that all security~~the ~~interests~~Company issued ~~will have equal priority and that the creation~~4, ~~registration~~025, ~~filing~~000 ~~and~~shares ~~existence~~ of ~~the~~Common ~~security~~stock ~~interests~~and ~~will~~2,125,000 ~~not constitute an event of default under either of the two security agreements~~warrants.

InThe ~~connection~~Loan ~~with~~was ~~the~~modified ~~Providence~~on June 15, ~~loan~~2009 ~~agreement~~to conform to a new financing and now bears interest at 9% per annum, compounded and payable bi-annually, on the ~~Company~~outstanding ~~entered~~principal, ~~into~~and arepayable on ~~security~~or ~~agreement~~before ~~dated~~April to30, be2011. The note is now convertible into common shares at ~~effective~~$.10 ~~back~~per toshare ~~March~~( 3,750,000 ~~2008~~shares of stock) and when converted the company will issue warrants equal to one half of the shares converted or a maximum of 1,875,000 ~~with~~warrants ~~Providence~~exercisable at $0.15 per share for a period of 24 months. These features gave rise to the assignment of the beneficial conversion feature equal to $203,746 ~~whereby~~and the ~~Company~~warrant ~~agreed~~amounting to $16,246 which is accounted for as ~~create~~discount on the note and a ~~security~~credit ~~interest~~to additional paid in capital. The value of the warrants were determined by ~~way~~the Black Scholes option pricing method using the current stock price, exercise price of ~~priority~~the ~~security~~warrants, volatility of 210% and a risk free interest inrate ~~our~~of ~~present~~1.1% . The Beneficial conversion feature value was ~~and~~set at its intrinsic value after~~-acquired~~ ~~personal~~consideration ~~property~~of the relative value of the warrants and ~~other~~the ~~collateral~~notes. ~~described~~The indiscount is being amortized on the ~~security~~ ~~agreement~~interest inmethod over ~~favor~~the life of ~~Providence.~~the loan.

~~The~~Convertible ~~Providence~~Revolving ~~loan~~Loan ~~may~~Agreement ~~be converted~~Payable ~~at any time after the first advance and before the maturity date into common shares of the Company at a conversion price of $0.10 per share. In addition, the Company had agreed~~ to ~~issue one warrant to purchase one Common~~ share for every two shares to be issued at an exercise price of $0.25 per warrant exercisable for twelve months from issuance. On April 9, 2009, Providence offered to convert $187,500 of the loan plus accrued interest to April 30, 2009 into common shares of the Company. The conversion was effective April 30, 2009 and the Company issued 2,120,000 shares of Common stock and 1,060,000 warrants.Shareholder

~~The~~On ~~terms~~January ~~of the Loan were modified on June~~ 15, 2009 tothe ~~conform~~Company entered tointo a ~~new~~revolving ~~financing~~loan ~~and~~agreement ~~now~~with ~~bears~~Providence ~~interest at~~Wealth 9%Management ~~per annum~~Ltd, ~~compounded and payable bi-annually, on the outstanding~~a ~~principal,~~British ~~and~~Virgin ~~repayable~~Islands onCompany ~~or before April 30, 2011. In note is now convertible into common shares at $.10 per share~~ (8“Providence”),~~125,000~~ ~~shares~~whereby ofProvidence ~~stock~~agreed )to ~~and when~~loan ~~converted~~ the ~~company~~Company ~~will issue warrants equal to one half of~~ the ~~shares converted~~aggregate orprincipal aamount ~~maximum~~ of 4$1,~~062~~000,000 ~~warrants exercisable at $.15 per share~~ for ~~a period~~general ~~of 24 months. These features gave rise to the assignment of value to the~~corporate ~~warrant and the beneficial conversion feature equal to $570,986 which is accounted for as discount on the note and a credit to additional paid in capital~~purposes. The ~~value~~loan of the warrants were determined by the Black Scholes option pricing method using the current stock price , exercise price of the warrants, volatility of 210% and an risk free interest rate of 1.1% . The Beneficial conversion feature value was set at its intrinsic value after consideration of the relative value of the warrants and the notes. The discount is ~~being amortized~~issued onas ~~the~~follows: ~~interest method over the life of the loan.~~

~~Convertible~~(i) ~~Loan~~The ~~Agreement~~first advance of $700,000 on the date of execution of the loan agreement; (ii) subject to the fulfillment of certain conditions, by advance of up to an additional US$300,000; and, ~~Subscription~~(iii) ~~Agreements~~bearing interest at 9% per annum on the outstanding principal, and repayable on or before July 31, 2009.

OnThe ~~June~~first ~~15,~~advance ~~2009, the Company entered into a convertible loan agreement, dated for reference April 9, 2009, with 15 new lenders, whereby the lenders agreed to loan the Company the aggregate principal amount~~ of US$1700,000~~,000 bearing interest at 9% per annum,~~ ~~compounded~~occurred ~~and payable bi-annually,~~ on ~~the~~January ~~outstanding principal~~16, 2009 and ~~repayable on~~a orsecond ~~before~~advance ~~April 30, 2011. At the same time, the remaining outstanding balance~~ of US$1300,~~187,500~~000 ~~under~~occurred ~~loan agreements with Sinecure Holdings Limited, Peter~~on ~~Hough~~January ~~and Providence Wealth Management Ltd.~~27, ~~(see above)~~2009.

~~was~~ On ~~conformed~~June ~~from~~12, 2008 the ~~terms~~Company ofhad entered ~~those~~into ~~previous~~a revolving loan ~~agreements~~agreement dated effective March 3, 2008, with Sinecure Holdings Limited, a British Virgin Islands company, and Capella Investments Inc., a Nevada company, whereby Sinecure and Capella agreed to loan us the ~~same~~aggregate ~~terms~~principal asamount ~~the~~of US$750,000 for general corporate purposes. Also on June 1512, ~~2009~~2008, ~~convertible~~we ~~loan~~entered into a security agreement ~~under~~dated ~~the~~effective March ~~Pari~~3, 2008, with Sinecure and Capella, whereby we agreed to create a security ~~Passu~~interest by way of priority security interest in our present and ~~Loan~~after-acquired personal ~~Modification~~property ~~Agreement~~and such other collateral described ~~below~~in the Security Agreement in favor of Sinecure and Capella. On January 16, 2009 we entered into a pari passu agreement with Providence, Sinecure and Capella, whereby Panglobal, Providence, Sinecure and Capella agree that all security interests issued will have equal priority and that the creation, registration, filing and existence of the security interests will not constitute an event of default under either of the two security agreements.

~~Interest~~ In onconnection ~~all~~with ofthe Providence loan agreement, the ~~loans~~Company ~~may~~entered beinto ~~paid~~a insecurity ~~cash~~agreement ordated ~~shares~~to ofbe ~~our~~effective ~~common~~back ~~stock,~~to orMarch ~~any~~3, ~~combination~~2008, ~~thereof~~with Providence, atwhereby ~~our~~the ~~discretion.~~Company Ifagreed to create a security interest ~~is paid~~by way of priority security interest in ~~shares,~~our ~~the~~present and ~~conversion~~after-acquired ~~price~~personal ~~will~~property beand ~~US$0.15~~other collateral described in ~~value~~the security ofagreement ~~interest~~in ~~per share.~~favor of Providence.

At any time on or before April 30, 2011, any of the lenders may give us written notice and convert all or a portion of the loan into units, consisting of one share of our common stock and one common share purchase warrant, at a price per unit of US$0.10 for a potential total of conversion 10,000,0000 shares. Each common share purchase warrant is exercisable into one share of our common stock at a price of US$0.15 per share for a period of 24 months. These features gave rise to the assignment of values to the warrant and the beneficial conversion feature equal to $567,755 which is accounted for as a discount on the note and a credit to additional paid in capital. The value of the warrants were determined by the Black Scholes option pricing method using the current stock price , exercise price of the warrants, volatility of 210% and an risk free interest rate of 1.1% . The Beneficial conversion feature value was set at its intrinsic value after consideration of the relative value of the warrants and the notes. The discount is being amortized on the interest method over the life of the loan. F-17

~~Pari~~ The ~~Passu~~Providence loan may be converted at any time after the first advance and ~~Loan~~before ~~Modification~~the ~~Agreement~~maturity date into common shares of the Company at a conversion price of $0.10 per share. In addition, the Company had agreed to issue one warrant to purchase one Common share for every two shares to be issued at an exercise price of $0.25 per warrant exercisable for twelve months from issuance. On April 9, 2009, Providence offered to convert $187,500 of the loan plus accrued interest to April 30, 2009 into common shares of the Company. The conversion was effective April 30, 2009 and the Company issued 2,120,000 shares of Common stock and 1,060,000 warrants.

On The terms of the Loan were modified on June 15, 2009, ~~the~~to ~~Company~~conform ~~entered~~to ~~into~~ a ~~pari~~new ~~passu~~financing and now bears interest ~~loan~~at ~~modification~~9% ~~agreement~~per annum, ~~dated~~compounded ~~for~~and ~~reference~~payable ~~April~~bi-annually, 9on the outstanding principal, ~~2009~~and repayable on or before April 30, ~~with~~2011. ~~Providence~~The note is now ~~Wealth~~convertible ~~Management~~into ~~Ltd~~common shares at $.10 per share (8,125,000 ~~Sinecure~~shares ~~Holdings~~of ~~Limited~~stock) and when converted the company will issue warrants equal to one half of the shares converted or a maximum of 4,062,000 ~~Peter~~warrants ~~Hough~~exercisable at $.15 per share for a period of 24 months. These features gave rise to the assignment of value to the beneficial conversion feature equal to $535,493 anand ~~individual~~a warrant value of $35,493 which is accounted for as discount on the note and ~~Chelsea~~a ~~Capital~~credit ~~Corporation~~to ~~(representing~~additional paid in capital. In addition, a loss on extinguishment of debt of $32,939 was credited to additional paid in capital. The value of the 15warrants ~~new~~were determined ~~lenders~~by ~~described~~the Black Scholes option pricing method using the current stock ~~above)~~price , ~~whereby~~exercise itprice of the warrants, volatility of 210% and an risk free interest rate of 1.1% . The Beneficial conversion feature value was ~~agreed~~set ~~that:~~at its intrinsic value after consideration of the relative value of the warrants and the notes. The discount is being amortized on the interest method over the life of the loan.

~~(a)~~Convertible ~~US$1,187,500,~~Loan ~~representing~~Agreement ~~the aggregate balance of the outstanding loans to the company pursuant to: (i) the loan agreement dated effective March 4, 2008 with Sinecure Holdings Limited~~ and ~~Capella~~ ~~Investments Inc. (Capella Investments subsequently transferred all its~~Subscription interest under such loan agreement to Peter Hough), and (ii) the loan agreement dated January 16, 2009 with Providence Wealth Management Ltd., would be converted from the terms of the such previous loan agreements to the terms of the convertible loan agreement described above; and Agreements

~~(b)~~ On ~~all~~June ~~security~~15, ~~interests~~2009, ~~created~~the Company ~~pursuant~~entered ~~to:~~into ~~(i)~~a ~~the~~convertible ~~security~~loan agreement, dated for reference April 9, 2009 ~~for~~, ~~the~~with ~~benefit~~15 ofnew ~~Chelsea~~lenders, ~~Capital;~~whereby ~~(ii)~~ the ~~security~~lenders ~~agreement~~agreed ~~dated~~to ~~March~~loan 4,the ~~2008 for~~Company the aggregate ~~benefit~~principal amount of ~~Sinecure~~US$1,000,000 ~~Holdings~~bearing ~~and~~interest ~~Peter~~at ~~Hough;~~9% per annum, compounded and ~~(iii)~~payable bi-annually, on the ~~security~~outstanding principal, and repayable ~~agreement~~on ~~dated~~or ~~January~~before 16April 30, ~~2009~~2011. ~~for~~At the ~~benefit~~same oftime, ~~Providence~~the ~~Wealth~~remaining outstanding balance ~~Management~~of US$1,187,500 ~~will~~under ~~have~~loan ~~equal~~agreements ~~priority~~with Sinecure Holdings Limited, Peter Hough and ~~that~~Providence ~~the~~Wealth ~~creation,~~Management ~~registration~~Ltd., ~~filing and~~(see ~~existence~~above) ofwas conformed from the terms ~~security~~of ~~interests~~those ~~will~~previous ~~not~~loan ~~constitute~~agreements anto ~~event~~the ofsame ~~default~~terms as the June 15, 2009 convertible loan agreement under ~~any~~the ofPari ~~such~~Passu ~~security~~and ~~agreements.~~Loan Modification Agreement described below.

~~Conversion~~ Interest on all of ~~Accounts~~the ~~Payable~~loans tomay be ~~Common~~paid ~~Shares~~in cash or shares of our common stock, or any combination thereof, at our discretion. If interest is paid in shares, the conversion price will be US$0.15 in value of interest per share.

On At any time on or before April 30, 92011, ~~2009~~any of the ~~Company~~lenders ~~agreed~~may togive us written notice and convert anall ~~amount~~or ofa ~~$150~~portion of the loan into units,~~000~~ ~~owed~~consisting toof one share of ~~the~~our ~~Company’s~~common ~~apparel~~stock ~~vendors~~and one ~~into~~ common ~~shares~~share ofpurchase ~~the Company~~warrant, at a ~~conversion~~ price per unit of US$0.10 ~~per~~for ~~share.~~a potential Intotal ~~addition,~~of ~~the~~conversion ~~Company agreed~~10,000,000 toshares. ~~issue~~Each ~~one~~common share purchase warrant tois ~~purchase~~exercisable into one ~~Common~~ share ~~for~~of ~~every~~our ~~two~~common ~~shares~~stock ~~to be issued~~ at ana ~~exercise~~ price of US$0.25 15 per ~~warrant~~share ~~exercisable~~ for ~~twelve months.~~a ~~The~~period ~~conversion is effective April 30, 2009 and the Company authorized the issuance~~ of ~~1,500,000~~24 ~~shares of Common stock and 750,000 warrants~~months.

~~10.~~ These ~~Consulting~~features ~~Agreement~~gave rise to the assignment of values to the warrant and the beneficial conversion feature equal to $533,878 and a warrant value of $33,877 which is accounted for ~~Sosik~~as a discount on the note and a credit to additional paid in capital. The value of the warrants were determined by the Black Scholes option pricing method using the current stock price , exercise price of the warrants, volatility of 210% and an risk free interest rate of 1.1% . The Beneficial conversion feature value was set at its intrinsic value after consideration of the relative value of the warrants and the notes. The discount is being amortized on the interest method over the life of the loan.

OnThe ~~August~~three 20loans that were modified on June 15, ~~2007~~2009 ~~the~~are ~~Company~~repayable on or before April 30, 2011. The notes ~~signed~~are anow ~~consulting~~convertible ~~agreement~~into ~~with~~common ~~Lolly~~shares ~~Factory,~~at ~~LLC~~$.10 per share and ~~its~~when ~~sole~~converted ~~shareholder~~the ~~(“Consultant”)~~company towill ~~provide~~issue ~~sales~~warrants ~~and~~equal ~~merchandising~~to ~~consulting~~one ~~services~~half ~~for~~of the shares converted ~~Sosik~~exercisable ~~apparel~~at ~~division~~$0.15 ~~through~~per ~~December~~share ~~31,~~for ~~2010~~a period of 24 months. ~~Consulting~~These ~~fees~~features ~~totaling~~gave rise to the assignment of value to the warrants and the beneficial conversion feature equal to $~~452~~1,~~125~~358,733 ~~were~~which ~~payable~~is ~~between~~accounted ~~September~~for ~~2007~~as ~~and~~discount ~~June~~on ~~2008~~the notes and a ~~have~~credit ~~been~~to ~~fully~~ additional paid in capital. InThe ~~addition,~~value ~~under~~of the ~~consulting~~warrants ~~agreement~~were determined by the ~~Consultant~~Black ~~shall~~Scholes ~~earn~~option pricing method using the current stock price, exercise price of the warrants, volatility of 210% and a risk free 3interest rate of 1.51% . The Beneficial conversion feature value was set at its intrinsic value after consideration of the relative value of the warrants and the notes. The discount is being amortized on the interest method over the life of the loan.

(reduced to 2.6% in March 2009) commission on the Sosik division’s net sales. The Consultant also earned 100,000 of our common shares payable each month from September, 2007 to June, 2008, up to an aggregate of 1,000,000 common shares which shares were deemed to be earned and vested each month. The Company recorded sales commission expense of $174,564 for the three months ended June 30, 2009.F-18

The ~~Consultant~~following ~~and~~schedule details the ~~Company~~convertible ~~have~~notes ~~established sales targets~~payable, ~~totaling~~discount ~~$30.0~~on ~~million~~notes ~~for~~due ~~calendar~~to ~~year~~the ~~2008,~~beneficial ~~$45.0~~conversion ~~million for calendar year 2009~~ and ~~$60.0~~warrant ~~million~~discount ~~for calendar year 2010. The Consultant can earn up to~~and ~~1,500,000~~amortization ~~additional common shares~~ of ~~Panglobal~~the ~~Brands~~discount ~~Inc.~~at ~~according~~December to31, ~~the following schedule~~2009:

(i) 500,000 shares upon meeting the sales target for calendar year 2008; (ii) 500,000 shares upon meeting the sales target for calendar year 2009; and, (iii) 500,000 shares upon meeting the sales target for calendar year 2010.

Convertible Notes	Sinecure/Capella	Providence Wealth January, 15, 2009	Providence Wealth June 15, 2009	Totals
Face Value of Notes	$375,000	$812,500	$ 1,000,000	$2,187,500
Discount on notes payable due to Beneficial Conversion discount and warrant	($219,992)	($570,986)	($567,755)	($1,358,733)
Accumulated Amortization of Beneficial Conversion	$68,439	$177,637	$176,637	$422,713
Value per Balance Sheet	$223,447	$419,151	$608,882	$1,251,480

~~The~~Pari ~~sales~~Passu ~~target for calendar 2008 was not met~~ and ~~the~~Loan ~~Company~~Modification had not accrued an expense for issuing shares for meeting the sales target for 2008 and at June 30, 2009 has not accrued an expense for issuing shares for meeting the sales target for 2009. On August 19, the Company and Lolly Factory LLC agreed to terminate the consulting Agreement ~~(see subsequent events).~~

11 On June 15, 2009, the Company entered into a pari passu and loan modification agreement, dated for reference April 9, 2009, with Providence Wealth Management Ltd., ~~Common~~Sinecure ~~Stock~~Holdings Limited, Peter Hough, an individual, and Chelsea Capital Corporation (representing the 15 new lenders described above), whereby it was agreed that:

Prior to December 15, 2006, the Company’s Articles of Incorporation authorized the issuance of 100,000,000 shares of the Company’s common stock with a par value of $0.0001 per share. On February 2, 2007 the Company increased the number of its authorized shares of common stock to 600,000,000 shares. The Company does not have any preferred stock authorized.

	(a)	US$1,187,500, representing the aggregate balance of the outstanding loans to the company pursuant to: (i) the loan agreement dated effective March 4, 2008 with Sinecure Holdings Limited and Capella Investments Inc. (Capella Investments subsequently transferred all its interest under such loan agreement to Peter Hough), and (ii) the loan agreement dated January 16, 2009 with Providence Wealth Management Ltd., would be converted from the terms of the such previous loan agreements to the terms of the convertible loan agreement described above; and

	(b)	all security interests created pursuant to: (i) the security agreement dated for reference April 9, 2009 for the benefit of Chelsea Capital; (ii) the security agreement dated March 4, 2008 for the benefit of Sinecure Holdings and Peter Hough; and (iii) the security agreement dated January 16, 2009 for the benefit of Providence Wealth Management, will have equal priority and that the creation, registration, filing and existence of the security interests will not constitute an event of default under any of such security agreements.

OnConversion ~~February 2, 2007, the Company effected a six-for-one forward split~~ of ~~its~~Accounts ~~outstanding~~Payable ~~common stock. All common share amounts referred~~ to ~~herein~~Common ~~are presented on a post-split basis. All options referred to herein were issued on a post-split basis.~~Shares

~~Mynk’s~~On ~~initial~~April ~~capitalization~~9, 2009 the Company ~~consisted~~agreed ofto ~~cash~~convert an amount of $~~497~~150,~~700~~000 inowed ~~exchange~~to ~~for~~one of the ~~issuance~~Company’s apparel vendors into common shares of the Company at a conversion price of $0.10 per share. In addition,~~000,000~~ ~~shares~~the Company agreed to issue one warrant to purchase one ofCommon ~~Mynk~~share ~~common~~for ~~stock~~every ~~(equivalent~~two shares to 2be issued at an exercise price of $0.25 per warrant exercisable for twelve months. The conversion is effective April 30,~~884~~ 2009 and the Company authorized the issuance of 1,~~612~~500,000 shares of ~~Panglobal~~Common ~~common~~ stock) and 750,000 warrants.

On May 11, 2007, pursuant to a Share Exchange Agreement dated as of February 15, 2007 (the “Share Exchange Agreement”) by and among Panglobal, the shareholders of Mynk Corporation (“Selling Shareholders”) and Mynk, Panglobal issued 3,749,995 shares of its common stock in exchange for all of the issued and outstanding shares of Mynk, issued 975,000 shares of it common stock in payment of $390,000 of outstanding loans to Mynk, and agreed to reimburse a shareholder of Mynk up to $100,000 for outstanding amounts due (the “Exchange”). Previously, on February 3, 2006, Mynk had issued 10,000,000 shares of its common stock to its founders for $497,700 in cash, and 3,000,000 shares of its common stock valued at $149,310, as loan fees on June 20, 2006, for a total of 13,000,000 shares, which constituted all of the issued and outstanding shares of Mynk prior to the Exchange. The share exchange was conducted on the basis of 0.2884615 common shares of Panglobal for every one common share of Mynk. F-19

~~The~~Short ~~Company~~Term ~~raised~~Loan ~~$4,000,000~~Payable ~~in a~~to private placement selling 8,000,000 of its common shares at a price of $0.50 per share which officially closed on July 10, 2008; but was reflected at June 30, 2008 as cash had been received by the Company at quarter-end.Shareholder

~~The~~On ~~Company~~November ~~issued~~24, ~~560~~2009,~~000~~ ~~shares~~we entered ~~pursuant~~into toa ~~the~~loan ~~exemption~~agreement ~~from~~with ~~registration~~Providence ~~under~~Wealth ~~the~~Management ~~United~~Ltd., ~~States~~a ~~Securities~~company ~~Act~~incorporated ofunder ~~1933~~the ~~provided~~laws byof ~~Section~~the ~~4(2)~~British Virgin Islands, ~~Section~~whereby ~~4(6)~~Providence agreed ~~and/or~~to ~~Rule~~loan ~~506~~our company the aggregate principal amount of ~~Regulation~~US$290,000 bearing Dinterest ~~promulgated~~9% ~~under~~per ~~the~~annum ~~1933~~calculated ~~Act~~and tocompounded ~~four~~monthly, ~~(4)~~payable ~~investors~~in ~~who~~full ~~are~~30 ~~“accredited~~days ~~investors”~~after ~~within~~advance, unless sooner prepaid or accelerated upon. As of February 22, 2010, the ~~respective~~loan ~~meanings~~has ~~ascribed~~not tobeen ~~that~~repaid. ~~term~~As inof ~~Rule~~December ~~501(a)~~31, 2009 the company recorded ~~under~~interest in the ~~1933~~amount ~~Act~~of $2,646.

~~The~~As ~~Company~~security ~~issued~~for 7the Loan,~~440,000~~ we ~~shares~~entered tointo ~~eighteen~~a ~~(18)~~Trade-Mark ~~non~~Assignment ~~U.S.~~Agreement ~~persons~~dated ~~(as~~November ~~that~~24, ~~term~~2009, iswith Providence ~~defined~~whereby inwe ~~Regulation S~~will ofassign ~~the~~to ~~Securities~~Providence ~~Act~~all of ~~1933)~~our inright, antitle ~~offshore transaction relying on~~and ~~Regulation~~interest Sto ~~and/or~~the ~~Section~~“Scrapbook” ~~4(2)~~trademark ofas ~~the~~a ~~Securities~~secured ~~Act~~charge ofbehind ~~1933~~Merchant Factors Inc.

~~On February 6, 2009, the Company raised $370,000 in a private placement selling 3,700,000 units consisting of 3,700,000 common shares at a price of $0.~~10 ~~per share plus 1,850,000 warrants to purchase common shares at a price of $0~~.25 ~~per~~Consulting ~~share.~~Agreement ~~The warrants are exercisable~~ for ~~twelve~~Sosik months. The Company issued 3,700,000 shares to four (4) non U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

12 On August 20, 2007 the Company signed a consulting agreement with Lolly Factory, LLC and its sole shareholder (“Consultant”) to provide sales and merchandising consulting services for the Sosik apparel division through December 31, 2010. ~~Commitments~~The Consultant and ~~Contingencies~~the Company have established sales targets totaling $30.0 million for calendar year 2008, $45.0 million for calendar year 2009 and $60.0 million for calendar year 2010. The Consultant can earn up to 1,500,000 additional common shares of Panglobal Brands Inc. according to the following schedule:

~~The~~(i) ~~Company’s executive and head office moved on February 15~~500,000 ~~2008~~shares toupon ~~2853~~meeting E.the ~~Pico~~sales ~~Blvd.,~~target ~~Los~~for ~~Angeles,~~calendar ~~CA 90023. The Company has signed a three~~ year ~~lease~~2008; ~~for~~(ii) ~~the new head office measuring 18,200 square feet at a monthly rental of $11,~~500~~. The lease began on January 1~~, ~~2008~~000 ~~and~~shares ~~the~~upon ~~Company~~meeting ~~moved into~~ the ~~new premises on February 15, 2008. Total rent expense including~~ sales ~~showrooms~~target for ~~the~~calendar ~~three~~year ~~months ended June 30,~~ 2009 ~~and~~; ~~2008 was $94~~and,~~428~~ ~~and~~(iii) ~~$92~~500,~~991,~~000 ~~respectively.~~shares ~~Total~~upon ~~rent~~meeting ~~expense~~the ~~including~~ sales ~~showrooms~~target for ~~the~~calendar ~~nine~~year ~~months ended June 30, 2009 and 2008 was $185,549 and $143,334, respectively~~2010.

The ~~table~~sales ~~below~~target ~~sets~~for ~~forth~~calendar 2008 was not met and the Company had not accrued an expense for issuing shares for meeting the sales target for 2008 and at June 30, 2009 had not accrued an expense for issuing shares for meeting the sales target for 2009. On August 19, 2009 the Company’s ~~lease~~and ~~obligations~~Lolly ~~through~~Factory ~~2013~~LLC agreed to terminate the Consulting Agreement. As an inducement to for early termination, the Company :

Year ending September 30,
	(a)	Compensated Lolly Factory LLC for 2009 commissions earned for the difference between the original 3.5% commission rate and the revised commission rate of 2.6% instituted this year. The company agreed to pay 50% of the difference, which amounts to $52,778 in Common shares of the Company at a valuation of $0.20 per share. The amount of $52, 778 was charged to expense and the Company will issue a total of 263,900 shares to Lolly Factory LLC. As of December 31, 2009 the Company had not yet issued the Common shares to Lolly Factory LLC.
2009	$	85,953
	(b)	Compensated Lolly Factory LLC in Common shares of the company based upon the original sales targets set for 2008 and 2009. For the calendar year 2008, Lolly Factory LLC had approximately $12.5 million in net sales versus a target of $30.0 million and the Company agreed to pro-rata compensate Lolly Factory LLC 207,500 shares and recorded an expense of $18,675. For the calendar year 2009, Lolly Factory LLC had approximately $10.2 million in net sales versus a target of $45.0 million and the company agreed to pro-rata compensate Lolly Factory LLC 114,500 shares and recorded an expense of $10,300. As of December 31, 2009 the Company had not yet issued the Common shares to Lolly Factory LLC.
2010		353,528
2011		222,609
2012		123,027
2013		10,278
	$	795,395

~~The~~11. ~~Company~~Commitments ~~is periodically subject to various pending~~ and threatened legal actions that arise in the normal course of business. The Company’s management believes that the impact of any such litigation will not have a material adverse impact on the Company’s financial position or results of operations. On September 19, 2008, Mynk Corporation, our wholly-owned subsidiary, sued Delia’s Inc., a customer, in the Superior Court of the State of California, for goods shipped, but unpaid, in the amount of $604,081.Contingencies

13 The Company’s executive and head office moved on February 15, 2008 to 2853 E. ~~Income~~Pico ~~Taxes~~Blvd., Los Angeles, CA 90023. The Company has signed a three year lease for the head office measuring 18,200 square feet at a monthly rental of $11,500. The lease began on January 1, 2008 and the Company moved into the new premises on

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 “Accounting for Income Taxes” as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.F-20

~~The~~February ~~deferred~~15, ~~tax~~2008. ~~benefit~~Total ~~is composed~~rent ofexpense including sales showrooms for the ~~following:~~three months ended December 31, 2009 and 2008 was $62,767 and $98,749, respectively.

		June 30,2009			September 30, 2008
Deferred tax benefit: Federal	$	4,913,000		$	4,913,000
Deferred tax benefit: State		1,276,000			1,276,000
Total benefit of NOL carry forward		6,189,000			6,189,000
Valuation allowance		(6,189,000	)		(6,189,000	)
Total	$	--		$	--

The table below sets forth the Company’s lease obligations through 2012.

As of June 30, 2009 unused net operating losses equal to $13,379,000 are available for 17 years to offset future year’s federal and state taxable income. SFAS 109 requires that the tax benefit of such NOLs be recorded using current tax rates as an asset to the extent management assesses the utilization of such NOLs to be more likely than not. Based upon the Company's short term historical operating performance, the Company provided a full valuation allowance against the deferred tax asset.

Year ending		Lease
September 30,		Obligation
2010	$	185,554
2011		126,859
2012		24,396
	$	336,809

14 The Company is periodically subject to various pending and threatened legal actions that arise in the normal course of business. ~~Subsequent~~The ~~Events~~Company’s management believes that the impact of any such litigation will not have a material adverse impact on the Company’s financial position or results of operations.

On12. ~~July~~Income ~~31,~~Taxes ~~2009 Jacques Ninio resigned as a director of the Company.~~

On Potential ~~August~~benefits ~~19,~~of ~~2009~~income tax losses are not recognized in the ~~Company~~accounts ~~and~~until ~~Lolly~~realization ~~Factory~~is ~~LLC~~more ~~agreed~~likely tothan ~~terminate~~not. ~~the~~The ~~Consulting~~Company ~~Agreement~~has adopted Accounting Standards Codification (ASC) 740 as of its inception. AsPursuant anto ~~inducement~~ASC 740, the Company is required to compute tax asset benefits for ~~early~~net ~~termination,~~operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company ~~agreed~~cannot ~~to:~~be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

	a)	Compensate Lolly Factory LLC for 2009 commissions earned for the difference between the original 3.5% commission rate and the revised commission rate of 2.6% instituted this year. The company agreed to pay 50% of the difference, which amounts to $42,940 in Common shares of the Company at a valuation of $0.20 per share. The amount of $42,940 will be charged to expense in the period ending September 30, 2009 and the Company will issue 214,700 shares to Lolly Factory LLC.
	b)	Compensate Lolly Factory LLC in Common shares of the company based upon the original sales targets set for 2008 and 2009. For the calendar year 2008, Lolly Factory LLC had approximately $12.5 million in net sales versus a target of $30.0 million and the Company agreed to pro-rata compensate Lolly Factory LLC 207,500 shares and will record an expense of $18,675 for the period ending September 30, 2009. For the calendar year 2009, the Company will calculate the net sales attributed to Lolly Factory LLC and pro rate the number of shares due based upon a target of $45.0 for the full year. Through June 30, 2009, Lolly Factory LLC has approximately $7.7 million in net sales and the Company will issue 85,000 shares and record an expense of $7,650 in the period ending September 30, 2009.

The deferred tax benefit resulting primarily from net operating losses is composed of the following:

The date through which subsequent events have been evaluated is September 21, 2009, which is the date the financial statements were issued.

		December 31, 2009			September 30, 2009
Deferred tax benefit: Federal	$	6,434,000		$	4,913,000
Deferred tax benefit: State		1,673,000			1,276,000
Total benefit of NOL carry forward		8,107,000			6,189,000
Valuation allowance		(8,107,000	)		(6,189,000	)
Total	$	---		$	---

22 As of December 31, 2009 unused net operating losses equal to $18,587,000 are available for 16 years to offset future year’s federal and state taxable income. ASC 740 requires that the tax benefit of such NOLs be recorded using current tax rates as an asset to the extent management assesses the utilization of such NOLs to be more likely than not. Based upon the Company's short term historical operating performance, the Company provided a full valuation allowance against the deferred tax asset.

~~ITEM~~The 2.difference ~~MANAGEMENT’S~~between ~~DISCUSSION~~the ~~AND~~(benefit) ~~ANALYSIS~~provision ORfor ~~PLAN~~income OFtaxes and ~~OPERATION.~~the expected income tax (benefit) provision determined by applying the statutory Federal and state income tax rates to pre-tax accounting loss for the years ended September 30, 2009 and 2008 are as follows:

The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for quarter ended June 30, 2009 and the factors that could affect our future financial condition and results of operations. Historical results may not be indicative of future performance.

	2009	2008
Federal statutory rate	(34.0%)	(34.0%)
State taxes net of Federal benefit	(6.0%)	(6.0%)
Valuation allowance	40.0%	40.0%
	0%	0%

~~Corporate~~ The ~~Overview~~Company is required to file Federal and ~~History~~California income tax returns. All periods subsequent to September 30, 2008 are subject to examination by the taxing authorities. The company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change. Therefore, no reserves for uncertain tax positions have been recorded pursuant to FASB ASC Topic 740 Income Taxes. In addition, the company does not anticipate that the total amount of unrecognized tax benefit related to any particular tax position will change significantly within the next twelve months. The company’s policy for recording interest and penalties if any, associated with tax authority audits, is to record such items as a component of income taxes.

We were incorporated on March 2, 2005, under the laws of the State of Delaware, under the name “EZ English Online Inc.” Since incorporation, we were engaged in the development of an online teacher training course to teach English as a second language.F-21

~~On July~~13. 3,Subsequent ~~2006,~~events ~~our common stock was approved for quotation on the OTC Bulletin Board.~~

~~On February~~ Based 2,upon ~~2007~~insufficient sales, the weCompany ~~affected~~has adecided ~~forward~~to ~~stock~~cease ~~split~~producing two of ~~our~~its ~~authorized~~contemporary ~~and issued~~product ~~and~~lines. ~~outstanding~~Tea ~~shares~~and onHoney adresses ~~six-for-one~~will ~~basis.~~cease ~~The~~production ~~forward~~January ~~split~~1, ~~resulted~~2010 inand ~~the~~Haven ~~increase~~dresses ofwill ~~our~~cease ~~authorized~~production ~~capital~~by ~~from~~June ~~100~~30,~~000,000~~ ~~shares~~2010. ofCarrying ~~common~~amounts ~~stock~~of ~~with~~assets arelating ~~par~~to ~~value~~these ofproduct ~~$0.0001~~lines toas ~~600,000,000 shares~~ of ~~common~~December ~~stock~~31, ~~with~~2009 aare ~~par~~as ~~value of $0.0001.~~follows:

On February 2, 2007, we completed a merger with our wholly owned subsidiary Panglobal Brands Inc. As a result, we changed our name from EZ English Online Inc. to Panglobal Brands Inc. Our subsidiary was incorporated on January 22, 2007, specifically for the purpose of the merger. The six-for-one forward stock split, merger and name change became effective with our listing on NASDAQ’s OTC Bulletin Board on February 6, 2007 and our trading symbol was changed to “PNGB”.

		Haven		Tea and Honey

Accounts receivable, net	$	83,038	$	38,558
Due from factor, net	$	132,476	$	15,658
Inventory	$	103,952	$	54,674

On ~~May~~ ~~11,~~January ~~2007~~17, we2010 ~~acquired~~Stephen ~~all of the issued and outstanding shares of Mynk~~Soller ~~Corporation. Mynk is now our wholly-owned, operating subsidiary. With the acquisition of Mynk, we changed our business focus to that of our newly acquired subsidiary~~ and ~~are~~Dru ~~now~~Narwani ~~engaged~~resigned inas ~~the~~directors ~~business~~ of the ~~design, production and sale of clothing and accessories~~Company. ~~We intend to acquire and create brands for the contemporary apparel market in the U.S. and international markets.~~

~~Our~~ On ~~Current~~September ~~Business~~19, 2008 Mynk Corporation, our wholly-owned subsidiary, sued Delia’s Inc., a customer in the Superior Court of the State of California, for goods shipped, but unpaid, in the amount of $604,081. On January 26, 2010 the Company and Delia’s agreed to a monetary settlement which has been accounted for in accounts receivable and signed a confidentiality agreement.

~~Business~~ On ~~Strategy~~January 29, 2010, we entered into a loan agreement with Charles Lesser, an officer of the Company, whereby Mr. Lesser agreed to loan our company the aggregate principal amount of US$260,000 bearing interest 9% per annum calculated and compounded monthly, payable in full 30 days after advance, unless sooner prepaid or accelerated upon.

~~Our strategy~~ As issecurity tofor ~~build~~the ~~a series of apparel brands~~Loan, ~~consisting of mainly women’s~~we ~~apparel,~~entered ~~and~~into toa ~~build~~Security ~~brand~~Agreement ~~recognition~~January by29, ~~marketing our products to fashion conscious~~2010, ~~affluent~~with ~~consumers~~Charles ~~who~~Lesser ~~shop in high-end boutiques and department~~whereby ~~stores~~we ~~and~~granted ~~who want to wear and be seen in the latest and most fashionable clothing and accessories. We plan to update our product offerings continually to be seen as~~ a ~~trend~~security ~~setter~~interest in ~~fashionable clothing and accessories. We also are targeting~~ the ~~junior~~trademarks ~~market~~“Crafty ~~and~~Couture” ~~design, have manufactured~~ and ~~sell~~“Crafty ~~junior denim,~~by ~~t-shirts,~~Scrapbook” ~~dresses~~behinds ~~and other apparel. Lastly, based upon our branded products, we expect to be offered~~ the ~~opportunity~~interest toof ~~manufacture~~Merchant ~~private~~Factors ~~label women’s apparel including dresses, skirts and knit and woven tops~~Inc.

~~We operate all of our apparel businesses through our wholly-owned subsidiary, Mynk Corporation.~~ 4

~~Our divisions~~ITEM ~~are~~2. ~~aggregated~~MANAGEMENT’S ~~into~~DISCUSSION ~~three~~AND ~~major~~ANALYSIS ~~consumer~~OR ~~market~~PLAN ~~product~~OF ~~groupings: Sosik, Scrapbook and Contemporary~~OPERATION.

The following discussion should ~~major~~be ~~consumer~~read ~~divisions~~in ~~are~~conjunction aswith ~~follows:~~our audited consolidated financial statements and the related notes for year ended September 30, 2009 and the factors that could affect our future financial condition and results of operations. Historical results may not be indicative of future performance.

~~SOSIK~~ The -following ~~Sosik~~discussion ~~designs, merchandises and~~contains ~~sells junior t~~forward-~~shirts,~~looking ~~dresses,~~statements ~~skirts~~that ~~and~~reflect ~~knit~~our ~~and~~plans, ~~woven~~estimates ~~tops~~ and ~~other~~beliefs. ~~apparel~~Our ~~manufactured~~actual inresults ~~Asia.~~could ~~Junior~~differ ~~apparel~~materially ~~includes~~from ~~clothing~~those ~~for~~discussed ~~girls~~in ~~ages~~the ~~14-22 as~~forward ~~well~~looking asstatements. ~~products~~Factors ~~for~~that ~~children~~could ~~ages~~cause ~~6-14.~~or ~~Sales~~contribute ofto ~~Sosik~~such differences include, ~~products~~but ~~that will~~are benot ~~sold~~limited ~~under~~to, ~~private~~those ~~labels~~discussed ~~and~~below ~~commenced in October, 2007~~ and ~~shipments commenced~~elsewhere in ~~January 2008. Approximately 70% of our revenue for our fiscal year~~this ~~ended~~quarterly ~~September 30~~report, ~~2008~~particularly ~~and~~in ~~57% for~~ the ~~three~~section ~~months~~entitled ~~ended~~"Risk ~~June~~Factors" ~~30, 2009~~beginning ~~related~~on topage ~~Sosik.~~39 ~~Customers~~of ~~include~~this ~~Charlotte~~quarterly ~~Russe,~~report ~~Forever~~on ~~21,~~Form ~~Wet Seal, Ross, J~~10-Q.C. ~~Penney, and Burlington Coat Factory.~~

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

~~SCRAPBOOK~~Corporate -Overview ~~Scrapbook, Scrapbook Originals~~ and ~~Crafty~~History Couture trademarks were acquired June 18, 2008. The Scrapbook labels are aimed at junior (teen and early 20’s) higher-end contemporary markets and are known for mix and match prints and comfortable knit fabrics. Scrapbook products can be found at better department stores and boutiques. Major customers include Nordstrom’s, Dillard’s, Macy’s, Anthropologie, Forever 21 and Hot Topic. The Crafty Couture label is lower priced and aimed at a younger market, early through late teens.

~~The~~ We were incorporated on March 2, ~~following~~2005, ~~four~~under ~~divisions~~the ~~have~~laws ~~been~~of ~~consolidated~~the ~~into~~State of Delaware, under the ~~Contemporary~~name ~~Group~~“EZ English Online Inc.” Since incorporation we were engaged in the development of an online teacher training course to teach English as a second language. Our principal offices are located 2853 E. Pico Blvd. Los Angeles, CA 90023, and our telephone number is (323) 266 -6500.

~~TEA~~ On ~~AND~~July ~~HONEY~~3, ~~- Tea and Honey designs~~2006, ~~merchandises~~ ~~and~~our ~~sells~~common ~~women’s mid-priced contemporary dresses. Tea and Honey is~~stock a was ~~more~~approved ~~casual look~~ for ~~women~~quotation ~~ages~~on ~~22-35 with a vintage feel easily convertible for wear by~~ the ~~working~~OTC ~~woman~~Bulletin ~~by day and for evening wear, as well~~Board. ~~Tea and Honey products commenced sales in June 2008. Retail customers include Macy’s, Anthropologie and boutiques. Competition includes Velvet, Ella Moss and A Common Thread.~~

~~HAVEN~~ On ~~and~~February ~~PRIVATE~~2, ~~LABEL - Based upon our branded products~~2007, we ~~started~~affected a ~~offering~~forward ~~Haven~~stock ~~lower~~split ~~priced~~of ~~dresses~~our ~~with success~~authorized and ~~are~~issued ~~beginning~~and tooutstanding beshares ~~offered~~on ~~the~~a six-for-one ~~opportunity~~basis. byThe ~~major~~forward ~~department stores~~split toresulted ~~design,~~in ~~merchandise~~the ~~and~~increase ~~manufacture~~of ~~private~~our ~~label women’s apparel~~authorized ~~including~~capital ~~dresses~~from 100,000,000 ~~skirts~~shares ~~and~~of ~~knit~~common ~~and~~stock ~~woven~~with ~~tops.~~a ~~Our~~par ~~Haven~~value ~~shipments~~of ~~commenced~~$0.0001 to ~~July~~600,000,000 ~~2008~~shares ~~and~~of ~~include~~common ~~customers~~stock ~~such~~with asa ~~Nordsrom,~~par ~~Bloomingdales~~value ~~and~~of ~~Wet Seal~~$0.0001.

~~HAUTEUR~~ On ~~MYNK~~February -2, ~~Hauteur~~2007, ~~Mynk~~we iscompleted a merger with our wholly owned subsidiary Panglobal Brands Inc. As a result, we ~~trademarked~~changed ~~brand~~our name ~~selling~~from ~~premium~~EZ ~~denim~~English ~~jeans,~~Online ~~skirts,~~Inc. ~~dresses~~to ~~and~~Panglobal ~~shorts~~Brands Inc. Our ~~Mynk~~subsidiary ~~had~~was ~~sales~~incorporated ~~during~~on ~~the~~January ~~fiscal~~22, ~~year~~2007, ~~but~~specifically isfor ~~currently~~the ~~dormant~~purpose ~~and only accepts~~of ~~orders~~the ~~on current inventory~~merger. The ~~Company~~six-for-one ~~decided~~forward ~~that~~stock ~~the~~split, ~~premium~~merger ~~denim~~and ~~market was~~name ~~saturated~~change became effective with ~~brands~~our ~~and~~listing ~~decided~~on toNASDAQ’s ~~place~~OTC ~~Hauteur~~Bulletin ~~Mynk~~Board on ~~hold~~February 6, 2007 and our trading symbol was changed to “PNGB”.

~~In all~~ On ofMay ~~our~~11, ~~divisions~~2007, we ~~purchase~~acquired ~~finished~~all of ~~goods~~the ~~from~~issued ~~numerous contract manufacturers~~ and tooutstanding ashares ~~lesser~~of ~~extent~~Mynk ~~raw~~Corporation. ~~materials~~Mynk ~~directly~~is ~~from~~now ~~numerous~~our ~~textile~~wholly-owned, ~~mills~~operating ~~and~~subsidiary. ~~yarn~~With ~~producers~~the ~~and~~acquisition ~~converters.~~of WeMynk, ~~have~~we ~~not~~changed ~~experienced~~our ~~difficulty~~business infocus ~~obtaining~~to ~~finished~~that ~~goods~~of orour ~~raw~~newly ~~materials~~acquired ~~essential~~subsidiary toand ~~our~~are now engaged in the business inof ~~any~~the design, production and sale of ~~our~~clothing and accessories. We intend to acquire and create brands for the contemporary apparel ~~business~~market ~~divisions~~in the U.S. and international markets.

~~We outsource~~Our ~~our~~Current ~~warehousing and shipping functions to a third party warehousing company designed to ship apparel products for multiple companies.~~Business

~~We maintain~~Business aStrategy ~~company website at www.panglobalbrand.com where examples of our products can be seen.~~

~~Consulting~~ Our ~~Agreement~~strategy ~~for~~is ~~Sosik~~to ~~Division~~build a series of apparel brands, consisting of mainly women’s apparel, and to build brand recognition by marketing our products to fashion conscious consumers who shop in high-end boutiques and department stores and who want to wear and be seen in the latest and most fashionable clothing and accessories. We plan to update our product offerings continually to be seen as a trend setter in fashionable clothing and accessories. We also are targeting the junior market and design, have manufactured and sell junior denim, t-shirts, dresses and other apparel. Lastly, based upon our branded products, we expect to be offered the opportunity to manufacture private label women’s apparel including dresses, skirts and knit and woven tops.

~~On August~~ We ~~20,~~operate ~~2007~~all weof ~~signed~~our ~~a consulting agreement with Lolly Factory, Inc. and its sole shareholder,, the Consultant, to provide sales and merchandising consulting services for the Sosik and Juniors~~ apparel ~~divisions~~ businesses through ~~December 31, 2010. Consulting fees totaling $452,125 were payable between September 2007 and June 2008 and have been fully paid at September 30, 2008. The Consultant also earned 100,000 of~~ our ~~common~~wholly-owned ~~shares payable each month from September 2007 to June 2008~~subsidiary, upMynk ~~to an aggregate of 1,000,000 common shares which shares were deemed to be earned and vested each month~~Corporation. In addition, under the consulting agreement, as amended, the Consultant would earn a 2.60% commission on the Sosik/Junior divisions net sales. We recorded sales commission expense of $174,564 for the three months ended June 30, 2009.

We and the Consultant established sales targets totaling $30.0 million for calendar year 2008, $45.0 million for calendar year 2009 and $60.0 million for calendar year 2010. Pursuant to the Consulting Agreement, the Consultant could have earned up to 1,500,000 additional common shares of Panglobal Brands Inc. according to the following schedule: 5

~~(i)~~ Our ~~500,000~~brands ~~shares~~are ~~upon~~aggregated ~~meeting~~into three ~~the~~major ~~sales~~consumer ~~target~~market ~~for~~product ~~calendar~~groupings: ~~year 2008; (ii) 500~~Sosik,~~000~~ ~~shares~~Scrapbook ~~upon meeting the sales target for calendar year 2009;~~ and~~, (iii) 500,000 shares upon meeting the sales target for calendar year 2010~~ Contemporary.

24 The major consumer product groups are as follows:

~~The sales~~SOSIK ~~target~~- ~~for~~Sosik ~~calendar~~designs, ~~year~~merchandises ~~2008~~and sells ~~was~~junior ~~not~~t-shirts, ~~met~~dresses, skirts and, weknit ~~did~~and ~~not~~woven ~~accrue~~tops anand other apparel ~~expense~~manufactured in Asia. Junior apparel includes clothing for ~~shares~~girls ~~payable~~ages to14-22 ~~the~~as well ~~Consultant~~as products for ~~that~~children ~~year~~ages 6-14. AtSales ~~June~~of ~~30,~~Sosik ~~2009~~include weproducts that ~~had~~will ~~not~~be ~~accrued~~sold anunder ~~expense~~private ~~for~~labels ~~shares~~and ~~payable~~commenced ~~for~~in ~~meeting~~October, ~~the~~2007 ~~sales~~and ~~target~~shipments commenced in January 2008. Approximately 52% of our revenue for our fiscal year ended September 30, 2009 related to Sosik. Customers include Charlotte Russe, Forever 21, Wet Seal, Ross, J.C. Penney, and Tilly’s.

OnSCRAPBOOK - Scrapbook, Scrapbook ~~August~~Originals 19and Crafty Couture trademarks were acquired June 18, ~~2009~~2008. ~~the~~The Scrapbook ~~Company~~labels are aimed at junior (teen and ~~Lolly~~early ~~Factory~~20’s) ~~LLC~~higher-end contemporary ~~agreed~~markets toand ~~terminate~~are ~~the~~known for mix and match prints and comfortable knit ~~Consulting~~fabrics. ~~Agreement~~Scrapbook products can be found at better department stores and boutiques. AsMajor ancustomers ~~inducement~~include ~~for~~Nordstrom’s, ~~early~~Dillard’s, ~~termination~~Macy’s, ~~the~~Forever ~~Company~~21 and ~~agreed~~Hot Topic. The Crafty Couture label is lower priced and aimed at a younger tomarket, specifically early through late teens.

	a)	Compensate Lolly Factory LLC for 2009 commissions earned for the difference between the original 3.5% commission rate and the revised commission rate of 2.6% instituted this year. The company agreed to pay 50% of the difference, which amounts to $42,940 in Common shares of the Company at a valuation of $0.20 per share. The amount of $42,940 will be charged to expense in the period ending September 30, 2009 and the Company will issue 214,700 shares to Lolly Factory LLC.
	b)	Compensate Lolly Factory LLC in Common shares of the company based upon the original sales targets set for 2008 and 2009. For the calendar year 2008, Lolly Factory LLC had approximately $12.5 million in net sales versus a target of $30.0 million and the Company agreed to pro-rata compensate Lolly Factory LLC 207,500 shares and will record an expense of $18,675 for the period ending September 30, 2009. For the calendar year 2009, the Company will calculate the net sales attributed to Lolly Factory LLC and pro rate the number of shares due based upon a target of $45.0 for the full year. Through June 30, 2009, Lolly Factory LLC has approximately $7.7 million in net sales and the Company will issue 85,000 shares and record an expense of $7,650 in the period ending September 30, 2009.

The following three product lines have been consolidated into the Contemporary Group.

~~Manufacturing~~TEA AND HONEY - Tea and Honey designs, merchandises and sells women’s mid-priced contemporary dresses. Tea and Honey is a more casual look for women ages 22-35 with a vintage feel easily convertible for wear by the working woman by day and for evening wear, as well. Tea and Honey products commenced sales in June 2008. We have decided to cease producing new styles of Tea and Honey effective January 1, 2010 and all sales subsequent to that date will relate to sales of existing products

~~We outsource~~HAVEN ~~all~~and ofPRIVATE ~~our~~LABEL ~~manufacturing to third parties on an order~~-~~by-order~~ ~~basis.~~Based upon ~~These~~our ~~contract~~branded ~~manufacturers~~products, ~~are~~we ~~found~~started inoffering ~~Asia,~~Haven ~~Mexico~~lower ~~and~~priced ~~the~~dresses ~~United~~with success ~~States~~ and ~~they~~ ~~will~~are ~~manufacture~~beginning ~~our~~to ~~garments~~be onoffered anthe ~~order-~~opportunity by~~-order~~ ~~basis.~~major ~~We believe that~~department westores ~~will be able~~ to ~~meet~~design, ~~our~~merchandise ~~production~~and ~~needs~~manufacture inprivate ~~this~~label ~~way.~~women’s ~~Although the various~~apparel ~~fabrics~~including ~~that~~dresses, weskirts ~~intend~~and toknit ~~use~~and inwoven ~~the~~tops. ~~manufacture~~Our ofHaven ~~our~~shipments ~~products will be of the~~commenced ~~high quality~~July, ~~they~~2008 ~~are~~and ~~available~~include ~~from~~customers ~~many~~such ~~suppliers~~as inNordstrom, ~~the~~Bloomingdales ~~United States~~ and ~~abroad~~ Macy’s.

~~Employees~~HAUTEUR MYNK - Hauteur Mynk is a trademarked brand name which sold selling premium denim jeans, skirts, dresses and shorts. Hauteur Mynk had sales during the prior fiscal year, but is currently dormant and current inventory has been depleted. . The Company decided that the premium denim market was saturated with brands and decided to place Hauteur Mynk on hold.

As In each of ~~August~~our ~~14,~~product ~~2009~~groups, we ~~have 48 full-time employees: three (3) are executive,~~ ~~nine~~purchase ~~(9)~~finished ~~are~~goods ~~design~~from ~~staff,~~numerous ~~fifteen~~contract ~~(15)~~manufacturers ~~are~~and ~~production~~to ~~staff,~~a ~~ten (10) are~~lesser ~~sewing~~extent ~~staff,~~raw ~~three~~materials ~~(3)~~directly ~~are~~from ~~sales~~numerous ~~staff,~~textile ~~five~~mills ~~(5)~~and ~~are~~yarn ~~customer~~producers ~~service~~ and ~~shipping~~converters. ~~staff~~We ~~and~~have ~~three~~not ~~(3)~~experienced ~~are~~difficulty ~~accounting/administration~~in ~~staff.~~obtaining ~~None~~finished ofgoods ~~our~~or ~~employees~~raw ~~are~~materials ~~subject~~essential to aour ~~collective~~business ~~bargaining~~in ~~agreement,~~any ~~and~~of ~~we believe that~~ our ~~relations~~apparel ~~with~~product ~~our employees are good~~groups.

~~Quality~~ We ~~Control~~outsource our warehousing and shipping functions to a third party warehousing company designed to ship apparel products for multiple companies.

We ~~intend~~ tomaintain ~~establish~~ a ~~quality~~company ~~control~~website ~~program to ensure that our products meet~~at ~~our high quality standards~~ www. ~~We intend to monitor the quality of our fabrics prior to the production of garments and inspect prototypes of each product before production runs commence~~panglobalbrand.com Wewhere ~~also~~examples plan to perform random on-site quality control checks during and after production before the garments leave the contractor. We also plan to conduct final random inspections when the garments are received in our distribution centers. We believe that our policy of ~~inspecting~~ our products atcan ~~our distribution centers and at the vendors’ facilities will~~ be ~~important to maintain the quality, consistency and reputation of our products~~seen.

~~Competition~~Consulting Agreement for Sosik Product Group

~~The~~ On August 20, 2007 we signed a ~~apparel~~consulting ~~industry~~agreement iswith ~~intensely~~Lolly ~~competitive~~Factory, Inc. and ~~fragmented~~its sole shareholder, the Consultant, to provide sales and merchandising consulting services for the Sosik and Juniors apparel divisions through December 31, 2010. We ~~compete~~and ~~against~~the Consultant ~~other~~established ~~small~~sales ~~companies~~targets ~~like~~totalling ~~ours~~$30.0 million for calendar year 2008, as$45.0 million ~~well~~for ascalendar ~~large~~year ~~companies~~2009 ~~that~~and ~~have~~$60.0 amillion ~~similar~~for calendar year 2010. ~~business~~Pursuant ~~and~~to ~~large~~the ~~marketing~~Consulting ~~companies~~Agreement, ~~importers~~the ~~and~~Consultant ~~distributors~~could ~~that~~have ~~sell products~~earned ~~similar~~up to 1,500,000 oradditional ~~competitive~~common ~~with~~shares ~~ours~~of Panglobal Brands Inc. according to the following schedule:

~~We believe that our competitive strengths consist of the detailing of the design, the quality of the fabric and the superiority of the fit.~~6

25(i) 500,000 shares upon meeting the sales target for calendar year 2008; (ii) 500,000 shares upon meeting the sales target for calendar year 2009; and, (iii) 500,000 shares upon meeting the sales target for calendar year 2010.

~~Government~~ The ~~Regulation~~sales target for calendar 2008 was not met and ~~Supervision~~the Company had not accrued an expense for issuing shares for meeting the sales target for 2008 and at June 30, 2009 had not accrued an expense for issuing shares for meeting the sales target for 2009. On August 19, 2009 the Company and Lolly Factory LLC agreed to terminate the Consulting Agreement. As an inducement to for early termination, the Company :

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

	(a)	Compensated Lolly Factory LLC for 2009 commissions earned for the difference between the original 3.5% commission rate and the revised commission rate of 2.6% instituted this year. The company agreed to pay 50% of the difference, which amounts to $52,778 in Common shares of the Company at a valuation of $0.20 per share. The amount of $52,778 was charged to expense and the Company will issue a total of 263,900 shares to Lolly Factory LLC. As of December 31, 2009 the Company had not yet issued the Common shares to Lolly Factory LLC.

	(b)	Compensated Lolly Factory LLC in Common shares of the company based upon the original sales targets set for 2008 and 2009. For the calendar year 2008, Lolly Factory LLC had approximately $12.5 million in net sales versus a target of $30.0 million and the Company agreed to pro-rata compensate Lolly Factory LLC 207,500 shares and recorded an expense of $18,675. For the calendar year 2009, Lolly Factory LLC had approximately $10.2 million in net sales versus a target of $45.0 million and the Company agreed to pro-rata compensate Lolly Factory LLC 114,500 shares and recorded an expense of $10,300. As of December 31, 2009 the Company had not yet issued the Common shares to Lolly Factory LLC.

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

~~Information~~ We ~~Systems~~outsource all of our manufacturing to third parties on an order-by-order basis. These contract manufacturers are found in Asia, Mexico and the United States and they will manufacture our garments on an order-by-order basis. We believe that we will be able to meet our production needs in this way. Although the various fabrics that we intend to use in the manufacture of our products will be of the high quality, they are available from many suppliers in the United States and abroad.

~~We believe~~Employees that high levels of automation and technology are essential to maintain our competitive position and support our strategic objectives and we plan to invest in computer hardware, system applications and networks to provide increased efficiencies and enhanced controls.

~~Trademarks~~ As of February 24, 2010, we have 48 full-time employees: two (2) are executive, nine (9) are design staff, fourteen (14) are production staff, thirteen (13) are sewing staff, three (3) are sales staff, four (4) are customer service and shipping staff and three (3) are accounting/administration staff. None of our employees are subject to a collective bargaining agreement, and we believe that our relations with our employees are good.

~~We own~~Quality ~~numerous~~Control trademarks for all of our brands including Sosik, Scrapbook, Scrapbook Originals, Crafty Couture, Tea and Honey, Haven, Nela and Hauteur Mynk and have applications pending for the balance of our branded apparel products.

~~Marketing~~ We intend to establish a quality control program to ensure that our products meet our high quality standards. We intend to monitor the quality of our fabrics prior to the production of garments and inspect prototypes of each product before production runs commence. We also plan to perform random on-site quality control checks during and after production before the garments leave the contractor. We also plan to conduct final random inspections when the garments are received in our distribution centers. We believe that our policy of inspecting our products at our distribution centers and at the vendors’ facilities will be important to maintain the quality, consistency and reputation of our products.

~~We market our products directly through our sales staff as well as through showrooms which carry multiple lines of apparel products. In addition we attend industry trade shows.~~ 7

~~Financial~~Competition ~~Condition, Liquidity and Capital Resources~~

~~Cash~~ The ~~Flows~~apparel industry is intensely competitive and fragmented. We compete against other small companies like ours, as well as large companies that have a similar business and large marketing companies, importers and distributors that sell products similar to or competitive with ours.

~~The~~ We believe that our competitive ~~following~~strengths isconsist aof ~~summary~~the detailing of ~~our~~the ~~cash~~design, ~~flows~~the ~~for~~quality of the ~~periods~~fabric ~~set~~and the ~~forth~~superiority ~~below:~~of the fit.

		Nine Months Ended June 30
							Percent Increase/
		2009			2008		(Decrease)
Net Cash provided by/(used) in Operating				$
Activities	$	(2,129,337	)		(5,687,409	)	(62.6%)
Net Cash used in Investing Activities		(3,363	)		(1,557,193	)	(99.78%)
Net Cash provided by/(used) in Financing
Activities		2,400,912			7,143,818		(66.4%)
Net Increase(decrease) in Cash	$	268,212		$	(100,784	)	---

Government Regulation and Supervision

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

~~At June~~ Labelling ~~30,~~and ~~2009,~~advertising of our products ~~total~~is ~~assets~~subject ~~were $6,337,018 compared~~ to ~~our~~regulation ~~assets~~by ~~of $5,157,255~~the asFederal atTrade ~~September 30, 2008~~Commission. ~~The~~We ~~increase of $1,179,763 results mainly~~believe ~~from~~that ~~the~~we ~~increases~~are in ~~our~~compliance ~~inventory~~with ~~and~~these ~~in our due from factor~~regulations.

~~Our total~~Information ~~current~~Systems assets totaled $4,589,198 at June 30, 2009 and $3,257,508 at September 30, 2008. The increase in our current assets is primarily due to an increase in our inventory and in our due from factor. Our net sales increased to $20,214,494 for the nine months ended June 30, 2009 compared to sales of $8,405,346 for the nine months ended June 30, 2008.

26 We believe that high levels of automation and technology are essential to maintain our competitive position and support our strategic objectives and we plan to invest in computer hardware, system applications and networks to provide increased efficiencies and enhanced controls.

~~Liabilities~~Trademarks ~~and Working Capital~~

~~The following~~ We isown anumerous ~~summary~~trademarks for all of our ~~working~~brands ~~capital~~including atSosik, ~~June~~Scrapbook, 30Scrapbook Originals, ~~2009~~Crafty Couture, ~~September~~Crafty 30by Scrapbook Tea and Honey, ~~2008~~ Haven, Nela and ~~the~~have ~~percent~~applications pending ~~increase~~for orthe ~~decrease~~balance ~~between~~of ~~those~~our ~~dates:~~branded apparel products.

						Percentage
		June 30,		September		Increase
		2009		30, 2008		(Decrease)
Current Assets	$	4,589,198	$	3,257,508		40.9%
Current Liabilities		4,505,885		4,783,083		(5.8%)
Working Capital (Deficit)	$	83,313	$	(1,525,575	)	---

Marketing

~~The increase~~ We inmarket our ~~working~~products ~~capital deficit by $83,313 is primarily due to a~~directly ~~discount~~through ofour ~~$1,298,346~~sales ~~taken~~staff toas ~~the~~well ~~notes~~as ~~payable~~through ~~based~~showrooms ~~upon~~which acarry ~~valuation~~multiple ~~of the~~lines ~~beneficial conversion~~ of ~~the~~apparel ~~notes~~products. toIn ~~Common~~addition ~~stock~~we ofattend ~~the~~industry ~~Company~~trade ~~at a price less than the market value of the stock on June 15, 2009 and the re-classification of the balance of the notes to long-term as the notes are now due in April, 2011~~shows..

~~Cash~~Financial ~~Requirements~~Condition, Liquidity and ~~Additional~~Capital ~~Funding~~Resources

~~Our estimated~~ At ~~cash~~December ~~requirements~~31, ~~for~~2009, ~~the~~we ~~next~~had 12negative working ~~months~~capital ~~are~~of as($2,2812,119). ~~follows:~~

EXPENSE		COST
Design and development	$	2,800,000
Selling and Shipping	$	2,400,000
General and administrative (excludes non-cash compensation)	$	1,800,000
TOTAL	$	7,000,000

At December 31, 2009, our total assets were $3,470,216.

~~As of~~ At ~~June~~December 3031, 2009, ~~we had $268,212 in cash. We estimate that we will require $7,000,000 to carry out~~ our ~~planned~~total ~~operations over the next 12 months. We~~liabilities ~~expect~~were ~~that most of those expenses will be paid by the money we receive from our net sales. However~~$5, ~~the current weakness of the U.S. and world economies could have harmful effects on our business. This year~~411, ~~we expect consumers to spend less money on clothing than they have spent in recent years~~920. Competition for these limited expenditures will likely become more intense. If consumers spend less and do not choose to spend their limited funds on our clothes, we will earn less revenue and we will not be able to fund our future operations through revenues from sales.

~~If we~~Cash ~~are unable to pay for our operations with our revenues, we will need to raise money by the sale of additional equity or debt securities or by borrowing money.~~Flows

~~There can~~ The befollowing nois assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a ~~timely~~summary ~~basis, we~~of ~~will not be able to meet~~ our ~~other~~cash ~~obligations as they become due and we will~~flows befor ~~forced to scale down or perhaps even cease~~ the ~~operation~~periods ofset ~~our~~forth ~~business.~~ below:

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon a combination of our ability to obtain further long-term financing, the successful and sufficient market acceptance of any product offerings that we may introduce, the continuing successful development of our product offerings, and, finally, our ability to achieve a profitable level of operations. At this time, we have a backlog for shipments of our products sales orders in excess $5.0 million for shipments through November 2009. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments.8

Debt

		Three			Three
		Months			Months
		ended			ended
		December			December
		31, 2009			31, 2008

Net Cash provided by(used in) Operating Activities	$	(298,850	)	$	108,554

Net Cash provided by in Financing Activities		290,000			62,967

Net Increase (decrease) in Cash	$	(8,850	)	$	171,521

~~On March~~Assets 3, 2008, we entered into a Revolving Loan Agreement with two of our shareholders. The loan allows us to borrow and repay, on a revolving basis, up to an outstanding amount of $750,000. The outstanding principal balance of the Loan bears interest, payable monthly, at a rate of 8% per annum. The Loan was due to be

27 Our current assets totaled $1,878,321 and $2,056,530 at December 31, 2009 and September 30, 2009, respectively. Total assets were $ 3,470,216 and $3,736,988 at December 31 , 2009 and September 30, 2009, respectively. The decrease in current assets is primarily due to the decrease in inventory and management of factor collections resulting in a lower amount of funds due from the factor.

~~repaid~~Liabilities in full by November 30, 2008. At June 30, 2009, we had an outstanding balance of $750,000 on the loan which may be called or converted into shares at any time. On April 9, 2009 we agreed to convert $375,000 plus accrued interest to April 30, 2009 into our common stock at a conversion price of $0.10 per share. In addition, we agreed to issue one warrant to purchase one Common share for every two shares to be issued at an exercise price of $0.25 per warrant exercisable for twelve months. The conversion is effective April 30, 2009 and weWorking ~~authorized~~Capital ~~the issuance of 4,025,000 shares of Common stock and 2,12,5000 warrants.~~

On January 16, 2009 we entered into a revolving loan agreement with Providence Wealth Management Ltd, a British Virgin Islands company, whereby Providence agreed to loan us the aggregate principal amount of US$1,000,000 for general corporate purposes. The ~~first~~following ~~advance~~is ~~of $700,000 occurred on January 16, 2009 and~~ a ~~second~~summary ~~advance~~ of ~~$300,000 occurred on January 27, 2009. The loan may be converted at any time after the first advance and before the maturity date into~~ our ~~company’s shares of common stock at a conversion price of $0.10 per share.~~working Incapital ~~addition, we agreed to issue one warrant to purchase one Common share for every two shares to be issued~~ at anDecember ~~exercise price of $0.25 per warrant exercisable for twelve months. On April 9~~31, 2009, ~~the~~and ~~borrower~~September ~~converted $187,500 of the loan plus accrued interest to April~~ 30, 2009 ~~into our common shares.~~:

On June 15, 2009, the Company entered into a convertible loan agreement, dated for reference April 9, 2009, with 15 new lenders, whereby the lenders agreed to loan the Company the aggregate principal amount of US$1,000,000 bearing interest at 9% per annum, compounded and payable bi-annually, on the outstanding principal, and repayable on or before April 30, 2011. At the same time, the remaining outstanding balance of US$1,187,500 under loan agreements with Sinecure Holdings Limited, Peter Hough and Providence Wealth Management Ltd., (see above) was conformed from the terms of those previous loan agreements to the same terms as the June 15. 2009 convertible loan agreement under the Pari Passu and Loan Modification Agreement described below.

		December			September
		31, 2009			30, 2009
Current Assets	$	1,878,321		$	2,056,530
Current Liabilities		4,160,440			3,667,085
Working Deficit	$	(2,282,119	)	$	(1,610,555	)

~~The~~ Our ~~Nine~~current ~~Months~~liabilities ~~Ended~~totalled $4,160,440 ~~June~~and $3,667,085 at December 31, 2009 and September 30, 2009, respectively. ~~Compared~~We had negative working capital of ($2,282,119) at December 31, 2009 . Current assets decreased as inventory was decreased and due from factor decreased based on strong collections but we were unable to ~~the~~decrease ~~Nine~~current ~~Months~~liabilities ~~Ended~~and ~~June~~a ~~30,~~short ~~2008~~term loan was necessary to fund losses.

~~Revenue~~Cash Requirements and Additional Funding

~~Net sales~~ Our ~~for~~estimated ~~the~~cash ~~nine~~requirements ~~months ended June 30, 2009 totaled $20,212,494 versus $8,405,346~~ for ~~2008. Sales of Sosik apparel totaled $10,830,000, sales of~~ ~~Scrapbook apparel totaled $6,745,000 and~~ the ~~remainder~~next of12 the sales were Tea and Honey, and Haven dresses. During the year ended September 30, 2007, the only product sold was Hauteur Mynk Jeans, all of our other brands commenced shipping from January of 2008 onwards. Gross profit was $5,107,621 (25.3%) and 1,748,338 (20.8%) for the nine months ended June 30, 2009 and 2008, respectively. At this time, we have a backlog of sales orders in excess $4.5 million for shipments through November 2009. With the addition of Scrapbook, our sales mix is changing. Approximately 38% of these orders are ~~for~~as ~~Sosik~~follows: products including skirts and knit and woven tops, 34% are for Scrapbook apparel, and the balance is for contemporary brands. Our Sosik products are sold through in-house sales staff and we have corporate sales showrooms in Los Angeles and New York. Our Scrapbook apparel is sold through in-house sales staff and independent sales showrooms in Chicago, Dallas and Miami. Our Haven/Tea and Honey products are sold through contract outside sales showrooms in Los Angeles earning sales commissions of 10-12%.

Expenses

Expense		Cost
Design and development	$	2,400,000
Selling and Shipping		2,000,000
General and administrative (excludes non-cash compensation)		1,800,000
TOTAL	$	6,200,000

~~The~~ As of December 31, 2009, we had ~~major~~$8,082 ~~components~~in cash. As a result of our plans to reduce costs, we estimate that we will require $6,200,000 to carry out our planned operations over the next 12 months. We have been able to decrease our future operating expenses ~~are~~by consolidating ~~outlined~~staff inpositions, by terminating our agreement with Lolly Factory LLC, and by dropping the ~~table~~Haven ~~below:~~and Tea and Honey product lines. In addition, we need to decrease our Accounts Payable by $1.0 million with our product vendors. We expect that most of those expenses will be paid by the money we receive from our net sales. However, the current weakness of the U.S. and world economies could have harmful effects on our business. This year, we expect consumers to spend less money on clothing than they have spent in recent years. Competition for these limited expenditures will likely become more intense. If consumers spend less and do not choose to spend their limited funds on our clothes, we will earn less revenue and we will not be able to fund our future operations through revenues from sales. Further, we have $3.7 million in accounts payable and accrued expenses, and vendors are beginning to shorten credit terms and demand paydown of accounts payable, which we may be unable to do without significant profitability or injection of new equity or debt capital.

		Nine Months Ended June 30
					Percent Increase/
		2009		2008	Decrease
Design & Development	$	2,214,211	$	2,580,354	(14.2)%
Selling & Shipping		2,119,729		1,613,190	31.4%
General and Administrative		3,023,214		4,146,940	(27.1)%
Depreciation & Amortization		95,163		62,686	51.8%
Total Expenses	$	7,452,316	$	8,403,170	(11.3)%

28 If we are unable to pay for our operations with our revenues, we will need to raise money by the sale of additional equity or debt securities or by borrowing money.

~~The~~ There can be no assurance that ~~decrease~~additional infinancing ~~our~~will ~~total~~be ~~expenses~~available ~~for~~to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the ~~nine~~additional ~~months~~financing ~~ended~~on ~~June~~a 30timely basis, ~~2009~~we ~~was~~will ~~due~~not be able to meet our other obligations as they become due and we will be forced to ascale ~~reduction~~down ofor perhaps ~~$1,094,408~~even incease ~~non-cash~~the ~~stock~~operation ~~compensation~~of ~~expense~~our business.

~~For~~ There is substantial doubt about our ability to continue as a going concern as the ~~nine~~continuation ~~months~~of ~~ended~~our ~~June~~business is ~~30,~~dependent ~~2009,~~upon a combination of our ~~design~~ability ~~and~~to ~~development~~obtain ~~expenses~~further ~~totaled~~long-term $2financing,~~214,211,~~ ofthe ~~which~~successful ~~$1,133,000~~and ~~was~~sufficient ~~for~~market ~~design~~acceptance ~~expenses~~of ~~and~~any $1product offerings that we may introduce,~~081,000~~ ~~was~~the ~~for~~continuing successful development of our ~~production~~product offerings, and, ~~development~~finally, ~~expenses.~~our Weability ~~paid~~to ~~total~~achieve ~~salaries~~a profitable level of operations. $1At this time,~~470,000. Purchases~~ ofwe ~~sample~~have ~~fabric~~a ~~and~~backlog ~~garments~~for ~~totaled~~shipments ~~$338,000.~~of ~~Contract~~our ~~labor~~products ~~and~~sales ~~consulting~~orders ~~totaled~~in excess $~~184,000~~8.0 ~~and~~million ~~manufacturing~~for ~~and~~shipments ~~design~~through ~~supplies~~June ~~totaled $140,000~~2010. ~~For~~The ~~the~~issuance ~~nine~~of additional ~~months~~equity ~~ended~~securities ~~June~~by ~~30,~~us ~~20008~~could weresult ~~paid~~in ~~total~~a ~~salaries~~significant ofdilution in the ~~$1,753,000.~~equity ~~Purchases~~interests of ~~sample~~our ~~fabric~~current ~~and~~stockholders. ~~garments~~Obtaining ~~totaled~~commercial ~~$521~~loans,~~000. Contract~~ ~~labor~~assuming ~~and~~those ~~consulting~~loans ~~totaled~~would ~~$338~~be available,~~000~~ ~~and~~would ~~manufacturing~~increase ~~and~~our ~~design~~liabilities ~~supplies~~and ~~totaled~~future ~~$69,000~~cash commitments.

~~For the~~Debt nine months ended June 30, 2009, our selling and shipping expense totaled $2,119,729 compared to $1,613,190 for the nine months ended June 30, 20008 due to the increase in sales volume. During the nine months ended June 30, 2009, travel and trade show expenses totaled $218,000, sales showroom expense totaled $211,000, sales salaries totaled $392,000 and sales commissions totaled $681,000. Included in sales commission expenses for the nine months ended June 30, 2009 was $300,000 paid to Lolly Factory, Inc. Selling expenses for the nine months ended June 30, 2008 consisted of travel and trade show expenses totaling $134,000, sales showroom expense totaled $148,000, sales salaries totaled $367,000 and sales consulting totaled $368,175. Included in sales consulting expenses for the nine months ended June 30, 2008 was $360,675 paid to Lolly Factory, Inc. The Scrapbook division commenced operations in the month of June, 2008

~~Our~~ On March 3, 2008, we entered into ~~general~~a ~~and~~Revolving ~~administrative~~Loan ~~expenses~~Agreement ~~consist~~with two of ~~accounting,~~our ~~information~~shareholders. The loan allows us to ~~technology~~borrow and repay, ~~website~~on ~~development~~a revolving basis, ~~marketing~~up ~~and~~to ~~promotion~~an outstanding amount of $750,000. The ~~travel~~outstanding principal balance of the Loan bears interest, ~~meals~~payable ~~and entertainment~~monthly, at ~~rent~~a rate of 8% per annum. The Loan was due to be repaid in full by November 30, 2008. ~~insurances~~On April 9, ~~office~~2009 ~~maintenance~~we agreed to convert $375,000 ~~communication~~plus ~~expenses~~accrued interest to ~~(cellular~~April 30, ~~internet~~2009 into our common stock at a conversion price of $0.10 per share. In addition, ~~fax~~we agreed to issue one warrant to purchase one Common share for every two shares to be issued at an exercise price of $0.25 per warrant exercisable for twelve months. The conversion is effective April 30, 2009 and ~~telephone),~~we authorized ~~office~~the ~~supplies~~issuance of 4,025,000 ~~and~~shares ~~courier~~of Common stock and ~~postage~~ ~~costs~~2,125,000 warrants.

~~For the~~ On ~~nine~~January ~~months ended June 30~~16, 2009, ~~our~~we ~~general~~entered into ~~and~~a ~~administrative~~revolving ~~expenses (including~~loan ~~non-cash~~agreement ~~compensation~~with ~~costs~~Providence ofWealth ~~$784,003)~~Management ~~totaled $3~~Ltd,~~023,214.~~ ~~Key~~a British ~~components~~Virgin ~~included~~Islands ~~salaries~~company, ~~for~~whereby ~~executive,~~Providence ~~accounting~~agreed ~~and~~to ~~customer~~loan ~~service totaling~~us ~~$496,000,~~the ~~payroll~~aggregate principal ~~taxes~~amount of US$~~184~~1,000,000 ~~professional~~for ~~(accounting~~general ~~and legal)~~corporate ~~fees~~purposes. The first advance of $~~340~~700,000, ~~postage~~occurred ~~and~~on ~~delivery~~January ~~of $127~~16,~~000,~~ ~~insurance,~~2009 ~~including health, liability~~ and ~~directors~~a &second ~~officer’s~~advance ~~liability~~ of $~~186~~300,000 ~~and~~occurred ~~rent of~~on ~~$105~~January 27,~~000~~ 2009. ~~Also~~The inloan ~~general~~may ~~and~~be ~~administrative~~converted ~~expenses~~at isany ~~factor fees of~~time ~~$241,000~~after ~~and~~the ~~provision~~first ~~for~~advance ~~doubtful~~and ~~debts~~before ofthe ~~$89,000.~~maturity ~~Not~~date ~~included~~into inour ~~general~~company’s shares ~~and~~of ~~administrative~~common ~~expenses~~stock isat ~~$95,163~~a inconversion ~~depreciation~~price ~~expense~~of $0.10 ~~For~~per ~~the~~share. ~~nine months~~In ~~ended~~addition, ~~June~~we ~~30,,~~agreed to ~~2008~~issue ~~general~~one ~~and~~warrant ~~administrative~~to ~~expenses~~purchase ~~totaled $4,146,940,~~one ofCommon ~~which~~share ~~$1,878,411~~for ~~was~~every ~~non-cash~~two ~~compensation~~shares ~~expenses.~~to ~~Key~~be ~~components~~issued ~~included~~at ~~salaries~~an exercise price of $~~513,000,~~0.25 ~~payroll~~per ~~taxes~~warrant ofexercisable ~~$229,000,~~for ~~postage~~twelve ~~and~~months. ~~delivery~~On ofApril ~~$182~~9,~~000~~ ~~insurance~~the borrower converted $~~120~~187,~~000,~~500 ~~rent~~ of ~~$96,600,~~the ~~bad~~loan ~~debt~~plus ~~expense~~accrued ofinterest to ~~$335~~April 30,~~000~~ ~~and~~2009 ~~professional~~into ~~fees~~our ofcommon ~~$281,000~~shares.

~~For~~ On June 15, 2009, the ~~nine~~Company entered ~~months~~into ~~ended~~a ~~June~~convertible 30loan agreement, dated for reference April 9, 2009, with ~~interest~~15 ~~expense~~new ~~amounted~~lenders, whereby the lenders agreed to ~~$480,011.~~loan ~~This~~the Company the isaggregate ~~comprised~~principal amount of US$~~218~~1,~~818~~000,000 ofbearing ~~factor~~ interest, ~~$86~~at 9% per annum,~~013~~ compounded ofand ~~interest~~payable bi-annually, on ~~notes~~the outstanding principal, and repayable ~~$175~~on or before April 30,~~180~~ of2011. ~~non-cash~~At ~~interest~~the ~~based~~same ~~amortizing~~time, the ~~discount~~remaining onoutstanding ~~notes~~balance of ~~payable~~US$1,187,500 ~~due~~under loan agreements with Sinecure Holdings Limited, Peter Hough and Providence Wealth Management Ltd., (see above) was conformed from the terms of those previous loan agreements to the ~~beneficial~~same ~~conversion~~terms ~~feature~~as ofthe June 15, 2009 convertible loan agreement under the ~~notes.~~Pari Passu and Loan Modification Agreement described below.

~~The~~ On ~~Three~~November ~~Months~~24, ~~Ended~~2009, ~~June~~we 30entered into a loan agreement with Providence Wealth Management Ltd., ~~2009~~a ~~Compared~~company incorporated under the laws of the British Virgin Islands, whereby Providence agreed to loan our company the aggregate principal amount of US$290,000 bearing ~~Three~~interest ~~Months~~9% ~~Ended~~per ~~June~~annum calculated and compounded monthly, payable in full 30 days after advance, ~~2008~~unless sooner prepaid or accelerated upon. As of February 12, 2010, the loan has not been repaid.

~~Revenue~~10

~~Net sales~~ As security for the ~~three months ended June 30~~Loan, ~~2009 totaled $8,585,235 versus~~we ~~$5,321,794~~entered ~~for~~into ~~2008.~~a ~~Sales~~Trade-Mark ofAssignment ~~Sosik~~Agreement ~~apparel~~dated ~~totaled~~November $424,~~897,000,~~ ~~sales of Scrapbook apparel totaled $2~~2009,~~332,000~~ ~~and the remainder of the sales were Tea and~~with ~~Honey,~~Providence ~~and~~whereby ~~Haven~~we ~~dresses.~~will ~~During~~assign ~~the~~to ~~three~~Providence ~~months~~all ~~ended June 30, 2008 sales~~ of ~~Sosik~~ ~~apparel~~our ~~totaled $3~~right,~~828,525,~~ ~~sales~~title ~~of Scrapbook apparel totaled $1,125,227~~ and ~~the remainder of the sales were Nela and Tea and Honey dresses, private~~ ~~label~~interest ~~and~~to ~~Hauteur Mynk denim jeans. Gross profit for~~ the ~~three~~“Scrapbook” ~~months~~trademark ~~ended~~as ~~June 30, 2009 and 2008 amounted to $2,029,741 or23.6% and $1,053,153 or19.8%respectively. At this time, we have~~ a ~~backlog~~secured ofcharge ~~sales~~behind ~~orders in excess~~Merchant ~~$4.5F~~Factors ~~million for shipments through November 2009~~Inc. Our Sosik products are sold through in-house sales staff and we have corporate sales showrooms in Los Angeles and New York. Our Scrapbook apparel is sold through in-house sales staff and independent sales showrooms in Chicago, Dallas and Miami. Our Haven/Tea and Honey products are sold through contract outside sales showrooms in Los Angeles earning sales commissions of 10-12%.

On January 29, 2010, we entered into a loan agreement with Charles Lesser, an officer of the Company, whereby Mr. Lesser agreed to loan our company the aggregate principal amount of US$260,000 bearing interest 9% per annum calculated and compounded monthly, payable in full 30 days after advance, unless sooner prepaid or accelerated upon.

~~Expenses~~ As security for the Loan, we entered into a Security Agreement January 29, 2010, with Charles Lesser whereby we granted a security interest in the trademarks “Crafty Couture” and “Crafty by Scrapbook” behind the interest of Merchant Factors Inc.

The ~~major~~ ~~components~~Three ofMonths ~~our~~Ended ~~operating~~December ~~expenses~~31, ~~are~~2009 ~~outlined~~Compared into the Three ~~table~~Months ~~below:~~Ended December 31, 2008

		Three Months Ended June 30
					Percent Increase/
		2009		2008	Decrease
Design & Development	$	707,971	$	784,967	(9.8)%
Selling & Shipping		781,854		708,711	10.3%
General and Administrative		1,109,118		1,890,168	(41.3)%
Depreciation & Amortization		32,333		26,862	20.4%
Total Expenses	$	2,631,276	$	3,410,708	(22.8)%

Revenue

~~The~~ Net sales for the three months ~~overall~~ended ~~decrease~~December of31, 2009 totaled $~~779~~3,~~000~~529,821 versus $6,452,464 for ~~the~~2008. ~~three~~Sales ~~months~~of Sosik ~~ended~~apparel ~~June~~totaled 30$834,956, ~~2009~~sales ~~was~~of ~~due~~Scrapbook toapparel totaled $2,046,288 and the ~~decrease~~remainder inof ~~non-cash~~the ~~compensation~~sales ~~expenses~~were byTea and Honey, and Haven dresses. During the year ended December 31, 20008, sales of Sosik apparel totaled $~~428~~3,180,000 and sales aof Scrapbook totaled $~~300~~2,664,000. ~~bad~~Most of the decrease in December 31, 2009 ~~debt~~sales ~~expense~~relate ~~taken~~to atsales ~~June~~of 30Sosik apparel and the termination of the agreement with Lolly Factory LLC. Gross profit was $1,223,266 (34.6%) and 1,515,813 (23.5%) for the three months ended December 31, 2009 and 2008, respectively. ~~Further~~At this time, we have a backlog of sales orders in excess $8.0 million for shipments through June, 2010. With the addition of Scrapbook ~~division~~and the re-introduction of Crafty Couture, ~~only~~our ~~had~~sales mix is changing. Approximately 37% of these orders are for ~~expenses~~Sosik products including skirts and knit and woven tops, 15% are for Scrapbook apparel, 42% is for Crafty Couture and the ~~month~~balance ofis ~~June~~for ~~20008~~contemporary brands. Our Sosik products are sold through in-house sales staff and we have corporate sales showrooms in Los Angeles and New York. Our Scrapbook apparel is sold through in-house sales staff and independent sales showrooms in Chicago, Dallas, Atlanta and Miami. Our Haven/Tea and Honey contemporary products are sold through contract outside sales showrooms earning sales commissions of 10-12%.

~~For the~~Expenses three months ended June 30, 2009 design and development expenses totaled $707,971, of which $386,000 was for design expenses and $322,000 was for production and development expenses. Staffing in these departments has been reduced and duties re-assigned, such that staff work across divisional lines. Salaries totaled $415,000. Purchases of sample fabric and garments totaled $117,000. Contract labor and consulting totaled $100,000 and manufacturing and design supplies totaled $44,000. For the three months ended June 30 design and development expenses totaled $784,967. Salaries totaled $628,000. Purchases of sample fabric and garments totaled $49,000. Contract labor and consulting totaled $158,000 and manufacturing and design supplies totaled $20,000.

~~For the~~ The ~~three~~major ~~months~~components ended June 30, 2009 selling and shipping expense totaled $781,854 compared to $708,711 for the three months ended June 30, 20008 due to the increase in sales volume. During the three months ended June 30, 2009, travel and trade show expenses totaled $56,000, sales showroom expense totaled $68,000, sales salaries totaled $96,000 and sales commissions totaled $362,000. Included in sales commission expenses for the three months ended June 30, 2009 was $175,000 paid to Lolly Factory, Inc. Selling expenses for the three months ended June 30, 2008 consisted of ~~travel and trade show expenses totaling~~our ~~$27,000,~~operating ~~sales showroom expense totaled $56,000, sales salaries totaled $150,000 and sales commissions totaled $176,000. Included in sales consulting~~ expenses ~~for~~ ~~the~~are ~~three~~outlined ~~months ended March 31, 2008 was $89,375 paid to Lolly Factory, Inc. Scrapbook was~~ in ~~operation for~~ the ~~month~~table ~~of June only.~~below:

Our general and administrative expenses consist of accounting, information technology, website development, marketing and promotion, travel, meals and entertainment, rent, insurances, office maintenance, communication expenses (cellular, internet, fax, and telephone), office supplies, and courier and postage costs.

		Three Months
		ended		Three Months	Percent
		December 31,		ended December	Increase/
		2009		31, 2008	Decrease
Design & Development	$	644,143	$	818,284	(21.3	)%
Selling & Shipping		461,653		769,765	(40.0%	)
General and Administrative		825,041		871,484	(5.3%	)
Depreciation & Amortization		82,950		30,498	171%
Total Expenses	$	2,013,427	$	2,490,031	(19.4	)%

~~For the~~ The ~~three~~decrease months ended June 30, 2009 general and administrative expenses (including non-cash compensation costs of $382,972) totaled $1,109,118. Key components included salaries for executive, accounting and customer service totaling $165,000, payroll taxes of $49,000, professional (accounting and legal) fees of $75,000, postage and delivery of $47,000, insurance, including health, liability and directors & officer’s liability of $55,000 and rent of $35,000. Also included in ~~general~~our ~~and administrative expenses are factor fees of~~total ~~$118,000 and consulting~~ expenses offor ~~$55,000. Not included in general and administrative expenses is $32,333 in depreciation expense. For~~ the three months ended ~~June~~December 3031, ~~2008~~2009 ~~general~~was ~~and~~due ~~administrative~~to ~~expenses~~a ~~totaled~~reduction ~~$1,890,168,~~ of ~~which~~ $~~815~~300,~~612~~000 ~~was~~in ~~non-cash~~selling ~~compensation~~ expenses. ~~Key~~due ~~components~~to ~~included salaries~~restructuring of ~~$200,000,~~the ~~payroll~~entire ~~taxes~~sales offorce ~~$83,000, postage~~ and ~~delivery of $63,000,~~ ~~insurances of~~ $56170,000, ~~rent~~due ofto ~~$35,000~~a ~~and~~re-organization ~~professional fees~~ of ~~$120,000.~~the ~~Also included~~design ~~in general~~ and ~~administrative~~development ~~expenses was bad debt expense of $335,000~~functions.

For the three months ended December ~~June 30~~31, 2009, ~~interest~~our ~~expense~~design ~~amounted~~and todevelopment ~~$309,434.~~expenses ~~This is~~totaled ~~comprised of~~ $97644,~~077~~143, of which ~~factor interest,~~ $37239,~~187~~000 ofwas ~~interest~~for ondesign ~~notes~~expenses and $~~175~~405,~~180~~000 ofwas ~~non-cash~~for ~~interest~~production ~~based~~and development ~~amortizing~~expenses. ~~the~~Major ~~discount~~expense oncategories ~~notes~~included ~~payable~~salaries, ~~due~~samples, tocontract ~~the~~labor ~~beneficial~~and ~~conversion~~supplies. ~~feature~~We ofpaid ~~the~~total ~~notes.~~salaries of $460,000.

3011

~~Off~~Purchases ~~Balance-Sheet~~of ~~Arrangements~~sample fabric and garments totaled $51,000. Contract labor and consulting totaled $93,000 and manufacturing and design supplies totaled $24,000. For the three months ended December 31, 2008 we paid total salaries of $567,000. Purchases of sample fabric and garments totaled $118,000. Contract labor and consulting totaled $8,000 and manufacturing and design supplies totaled $65,000.

~~We Company~~ For ~~uses~~the athree ~~factor~~months ~~for~~ended December ~~credit~~31, ~~administration~~2009, ~~and~~our ~~cash~~selling ~~flow~~and ~~purposes.~~shipping ~~Under the~~expense ~~factoring~~totalled ~~agreement~~$461,653 ~~the~~compared to ~~factor~~$769,765 ~~purchases~~for ~~a portion of~~ the ~~Company’s domestic~~year ~~wholesale~~three ~~sales~~months ~~invoices~~ended ~~and~~December ~~assumes~~31, ~~most~~2008 ofdue to the decrease ~~credit~~in ~~risks~~sales ~~with respect~~commissions due to ~~such~~volume ~~accounts~~and ~~for~~ a ~~charge~~re-structuring of ~~0.75% of~~ the ~~gross invoice amount. The~~sales ~~Company~~function ~~can~~including ~~draw~~the ~~cash~~termination ~~advances~~of ~~from~~ the ~~factor~~agreement ~~based~~with onLolly aFactory ~~pre-determined~~LLC. ~~percentage,~~Major ~~which~~expense iscategories ~~75%~~include oftravel ~~eligible~~and ~~outstanding~~trade ~~accounts~~show ~~receivable.~~expenses, ~~The factor~~showroom ~~holds~~expenses, assalaries ~~security~~and ~~substantially~~sales ~~all~~commissions. ~~assets~~During of the ~~Company~~three ~~and~~months ~~charges~~ended ~~interest~~December at31, a2009, ~~rate~~travel ofand ~~prime~~trade ~~plus~~show ~~1.0%~~expenses ontotalled ~~the~~$17,000, ~~outstanding~~sales ~~advances.~~showroom expense ~~Effective~~total ~~October~~led 27$45, ~~2008~~000, ~~the~~sales ~~interest~~salaries ~~charge~~total ~~was~~led ~~increased~~$76,000 toand ~~prime~~sales commissions ~~plus~~totalled 2%$153,000. AtIncluded ~~March~~in ~~31,~~sales ~~2008,~~commission expenses for the ~~Company~~three ~~had~~months ~~cash~~ended ~~account~~December in31, ~~the~~2009 ~~amount~~was of $~~400~~38,~~000~~800 ~~with~~paid ~~the factor~~ to beLolly ~~used~~Factory, asInc. ~~collateral~~Selling expenses for the ~~loans~~three ~~advanced.~~months Onended ~~May~~December 531, 2008 ~~the~~consisted ~~cash~~of travel ~~collateral~~and ~~was reduced~~trade toshow expenses totalling $~~300~~93,000., ~~The~~sales ~~Company~~showroom isexpense ~~liable~~total led to$71,000, ~~the~~sales ~~factor~~salaries ~~for~~totalled ~~merchandise disputes~~$177,000 and ~~customer~~sales ~~claims~~commissions ontotalled $202,000. ~~receivables~~Included ~~sold~~in tosales ~~the~~consulting ~~factor.~~expenses ~~The~~for ~~factoring agreement~~the ~~expired~~three onmonths ~~March~~ended December 430, ~~2009,~~2008 ~~but~~was ~~automatically~~$62,500 ~~renewed~~paid ~~unless~~to ~~cancelled by~~Lolly ~~either~~Factory, ~~side~~Inc.

~~At times,~~ Our ~~our~~general ~~customers~~and ~~place orders that exceed the credit that they have~~administrative ~~available~~expenses ~~from~~consist ~~the factor. We evaluate those orders to consider if the customer is worthy~~ of ~~additional~~accounting, ~~credit~~information ~~based~~technology, onwebsite ~~our past experience with the customer.~~development, Ifmarketing weand ~~decide~~promotion, totravel, ~~sell~~meals ~~merchandise~~and toentertainment, ~~the customer on credit~~rent, ~~we take the credit~~insurances, ~~risk~~office ~~for~~maintenance, ~~the~~communication ~~amounts~~expenses ~~that~~(cellular, ~~are~~internet, ~~above~~fax, ~~their approved credit limit with the factor.~~and Astelephone), ofoffice ~~June 30~~supplies, ~~2009,~~and ~~the~~courier ~~amount~~and ofpostage ~~Due from Factor for which we bear the credit risk is $123,837~~costs.

For the three months ended December ~~June 30~~31, 2009, ~~and~~our ~~2008,~~general ~~the~~and ~~Company~~administrative ~~paid~~expenses a(including ~~total~~non-cash compensation costs of ~~approximately~~ $97132,~~066~~219) ~~and~~totalled $30825,~~338,~~041. ~~respectively~~Key components included salaries for executive, ofaccounting ~~interest~~and tocustomer ~~the~~service ~~factor~~totalling ~~which~~$210,000, ispayroll ~~reported~~taxes asof a$61,000, ~~component~~professional (accounting and legal) fees of ~~interest~~$130,000 due ~~expense~~to ina ~~the~~lawsuit, ~~consolidated~~postage ~~statements~~and delivery of $29,000, insurance, including health, ~~income.~~liability ~~For~~and ~~the~~directors ~~nine~~& ~~months~~officer’s ~~ended~~liability ~~June~~of 30$73,000 ~~2009~~and rent of $37,000. ~~2009~~Subsequent ~~and~~to ~~2008~~December 31, ~~the~~2009 ~~Company~~executive ~~paid~~salaries have been reduced. aAlso ~~total~~in general and administrative expenses are factor fees of ~~approximately~~$50,000 and director and consulting fees of $~~218~~17,~~816~~000. Not included in general and administrative expenses is $3533,~~267,~~540 ~~respectively~~in depreciation expense and $49,050 amortization of ~~interest~~trademarks. toFor the three months ended December 31, 2008 general ~~factor~~and administrative expenses totalled $871,484 of which is$196,535 ~~reported~~was asnon-cash compensation aexpenses. ~~component~~Key components included salaries of ~~interest~~$160,000, ~~expense~~payroll taxes inof ~~the~~$67,000, ~~consolidated~~postage and delivery of $35,500 insurance $59,000, rent of ~~statements~~$34,500 and professional fees of ~~income~~$123,100.

~~Due~~ Interest expense for the year ~~from~~three months ended December 31, 2009 amounted to $283,280. This is comprised of $53,000 of factor interest, ~~net~~$49,000 of ~~reserve~~interest ~~for~~on ~~chargebacks~~notes and ~~estimated~~$181,163 ~~sales~~of non-cash ~~returns~~interest asamortizing the discount on notes payable due to the beneficial ~~presented~~conversion infeature of the ~~balance~~notes. ~~sheet~~For atthe ~~June~~three 30months ended December 31, ~~2009~~2008 interest ~~and~~expense ~~September~~was 30$$74,770, ~~2008~~of ~~is summarized~~which ~~below:~~$58,000 related to factor interest.

		June 30 , 2009			September 30, 2008
Outstanding factored receivables	$	5,260,588		$	3,126,405
Cash collateral reserve		302,249			303,426
		5,562,837			3,429,831
Less: advances		(3,008,894	)		(1,689,387	)
Reserves for chargeback and sales returns		(347,690	)		(328,988	)
	$	2,206,253		$	1,411,456

Off Balance-Sheet Arrangements

~~Critical~~ The ~~Accounting~~Company ~~Policies~~uses a factor for credit administration and cash flow purposes. Under the factoring agreement, the factor purchases a portion of the Company’s domestic wholesale sales invoices and assumes most of the credit risks with respect to such accounts for a charge of 0.75% of the gross invoice amount. The Company can draw cash advances from the factor based on a pre-determined percentage, which is 75% of eligible outstanding accounts receivable. The factor holds as security substantially all assets of the Company and charges interest at a rate of prime plus 2.0% on the outstanding advances. The Company maintains a cash collateral account in the amount of $302,635 with the factor to be used as collateral for the loans advanced. The Company is liable to the factor for merchandise disputes and customer claims on receivables sold to the factor. The factoring agreement expires on March 4, 2010, but is automatically renewed for one year.

~~Our consolidated~~ At ~~financial~~times, ~~statements~~our ~~and~~customers ~~accompanying~~place orders ~~notes~~that ~~are~~exceed ~~prepared~~the ~~in accordance~~credit ~~with~~that ~~generally~~they ~~accepted~~have ~~accounting~~available ~~principles~~from ~~used in~~ the ~~United States~~factor. ~~Preparing~~We evaluate ~~financial~~those ~~statements~~orders ~~requires management~~ to ~~make~~consider ~~estimates~~if ~~and assumptions~~the ~~that~~customer ~~affect~~is ~~the~~worthy ~~reported~~of ~~amounts~~additional ofcredit based ~~assets,~~on ~~liabilities,~~our ~~revenue, and~~past ~~expenses.~~experience ~~These~~with ~~estimates~~the ~~and~~customer. ~~assumptions~~If ~~are~~we ~~affected~~decide byto ~~management’s~~sell merchandise ~~application~~to ofthe ~~accounting~~customer ~~policies.~~on Wecredit, ~~believe~~we ~~that~~take ~~understanding~~ the ~~basis~~credit ~~and nature~~risk offor the ~~estimates~~amounts ~~and~~that ~~assumptions~~are above ~~involved~~their approved credit limit with the ~~following~~factor. ~~aspects~~As of December 31, 2009 and ~~our~~2008, ~~consolidated~~the ~~financial~~amount ~~statements~~of isDue ~~critical~~from toFactor anfor ~~understanding~~which ofwe ~~our~~bear the credit risk was ~~financials~~$61,702 and $355,249.

Inventory is valued at the lower of cost or market, cost being determined by the first-in, first-out method. We continually evaluate our inventories by assessing slow moving current product as well as prior seasons’ inventory. Market value of non-current inventory is estimated based on historical sales trends for each category of inventory of our company’s individual product lines, the impact of market trends, an evaluation of economic conditions and the value of current orders relating to the future sales of this type of inventory.12

Revenue from product sales is recognized as title passes to the customer upon shipment. Sales returns and allowances for the three months ended June 30 totaled $795,541, approximately 9.2% of sales. We have accrued an additional $347,000 as of June 30, 2009 for estimated chargebacks and sales returns.

		December 31 ,			September 30,
		2009			2009
Outstanding factored receivables	$	1,884,070		$	2,451,702
Cash collateral reserve		302,635			303,426
		2,186,705			2,755,128

Less: advances		(1,161,149	)		(1,572,380	)
Reserves for chargebacks and sales returns		(250,000	)		(315,000	)
	$	775,556		$	867,748

~~Accounts~~Critical ~~Receivable~~Accounting Policies

~~The Company~~ Our ~~extends~~consolidated ~~credit~~financial statements toand ~~customers~~accompanying ~~whose~~notes ~~sales~~are ~~invoices~~prepared ~~have~~in ~~not~~accordance ~~been~~with ~~sold to~~generally ~~our~~accepted ~~factor~~accounting ~~based~~principles ~~upon~~used anin ~~evaluation of~~ the ~~customer’s~~United ~~financial~~States. ~~condition~~Preparing ~~and~~financial ~~credit~~statements ~~history~~requires ~~and~~management ~~generally~~to ~~require~~make noestimates ~~collateral.~~and ~~Management~~assumptions ~~performs~~that ~~regular evaluations~~affect ~~concerning~~ the reported ~~ability~~amounts of ~~our~~assets, ~~customers~~liabilities, torevenue, ~~satisfy~~and ~~their~~expenses. ~~obligations~~These estimates and ~~records~~assumptions aare ~~provision~~affected ~~for~~by ~~doubtful~~management’s ~~accounts~~application ~~based~~of onaccounting ~~these evaluations~~policies. ~~Based~~ onWe ~~historical~~believe ~~losses,~~that ~~existing~~understanding ~~economic~~the ~~conditions~~basis and ~~collection~~nature ~~practices,~~of ~~our allowance~~the ~~for~~estimates ~~doubtful~~and assumptions ~~accounts~~involved ~~has~~with ~~been~~the ~~estimated~~following toaspects beof ~~$400,232~~our atconsolidated ~~June 30,~~financial ~~2009.~~statements ~~The~~is ~~Company’s~~critical ~~credit~~to ~~losses~~an ~~for~~understanding ~~the~~of ~~periods~~our ~~presented have not significantly exceeded management’s estimates~~financials.

~~Inventory~~Revenues

~~Inventories are~~ Revenue ~~valued~~from atproduct ~~the~~sales ~~lower~~is recognized ofas ~~cost~~title orpasses ~~market,~~to ~~with~~the ~~cost~~customer ~~being~~upon ~~determined~~shipment. bySales ~~the~~returns and ~~first-in,~~allowances ~~first-out~~for ~~method.~~the ~~The~~three ~~Company~~months ~~continually~~ended ~~evaluates~~December ~~its~~31, ~~inventories~~2009 bytotaled $495,728, ~~assessing~~approximately ~~slow-moving~~14% ~~product~~of ~~and~~sales. ~~records~~We ~~mark-downs~~have asaccrued ~~appropriate.~~an Atadditional ~~June 30~~$250, ~~2009,~~000 ~~inventories~~as ~~consisted~~ of December ~~finished goods~~31, ~~work-in-process~~2009 for estimated chargebacks and ~~raw materials~~sales returns.

~~Property~~Stock-Based ~~and Equipment~~Compensation

~~Property and~~ The ~~equipment~~cost ~~are~~of ~~recorded~~employee atservices received ~~cost.~~in ~~Expenditures~~exchange for ~~major~~equity ~~renewals~~awards ~~and improvements~~are ~~that~~based ~~extend~~on the ~~useful~~grant ~~lives~~date offair ~~property~~value ~~and equipment are~~of ~~capitalized.~~the ~~Expenditures~~awards, ~~for~~with ~~maintenance~~the ~~and~~cost ~~repairs are charged~~ to ~~expense~~be recognized as ~~incurred.~~ ~~When~~compensation ~~assets~~expense ~~are~~in ~~retired~~our financial orstatements ~~sold,~~over the ~~property~~period ~~accounts~~of ~~and~~benefit, ~~related accumulated~~which ~~depreciation~~is ~~and~~generally ~~amortization~~the ~~accounts are relieved, and any~~vesting ~~resulting~~period ~~gain~~of orthe ~~loss is included in operations~~awards.

~~Depreciation~~ The Company accounts for stock isoption ~~computed~~and onwarrant ~~the~~grants ~~straight-line~~issued ~~method~~and vesting to non-employees based on the ~~estimated~~fair value ~~useful lives~~ of the ~~assets~~stock ofcompensation ~~five~~at ~~years.~~the ~~Leasehold~~measurement ~~improvements~~date ~~are~~as ~~amortized~~determined ~~over~~at ~~the~~either ~~remaining~~(a) ~~life of~~ the ~~related~~date ~~lease,~~at which ~~has~~a ~~been~~performance ~~determined~~commitment tois bereached ~~shorter~~or (b) at the date at ~~than~~which the ~~useful~~necessary ~~life~~performance ofto earn the ~~asset~~equity instruments is complete.

~~Stock-Based~~Concentration ~~Compensation~~of Credit Risks

~~Effective February~~ During 3,the ~~2006,~~three wemonths ~~adopted Statement of Financial Accounting Standards No. 123~~ended ~~(revised~~December ~~2004)~~31, ~~“Share-Based~~2009 ~~Payment”~~sales ~~(“SFAS No. 123R”), a revision~~ to ~~SFAS~~three ~~No. 123,~~customers ~~“Accounting~~accounted for ~~Stock-Based Compensation”~~30.9%, ~~SFAS No~~22.8% ~~123R~~and ~~requires that we~~9.5% ~~measure~~of the ~~cost~~Company’s ofnet ~~employee~~sales. ~~services~~During ~~received~~the inthree ~~exchange~~months ~~for~~ended ~~equity~~December ~~awards~~31, 2009, ~~based~~purchases onfrom ~~the~~one ~~grant~~supplier ~~date~~totaled ~~fair~~$584,000, ~~value~~or 25% of the ~~awards, with the~~ cost toof ~~be recognized~~sales. asDuring ~~compensation~~the ~~expense~~three inmonths ~~our~~ended ~~financial~~December ~~statements~~31, ~~over~~2008 ~~the~~sales ~~period~~to ofthree ~~benefit,~~customers ~~which~~accounted isfor ~~generally~~23%, ~~the~~13% ~~vesting~~and ~~period~~12% of the ~~awards~~Company’s net sales. ~~Accordingly,~~During wethe ~~recognize~~three ~~compensation~~months ~~cost~~ended ~~for~~December ~~equity-based~~31, ~~compensation~~2008, ~~for~~purchases ~~all~~from ~~new~~one orsupplier ~~modified grants~~totaled ~~issued~~approximately ~~after~~$1,354,000, ~~February~~or 3,27% ~~2006~~of ~~(Inception).~~the cost of sales.

~~The Company~~Accounts accounts for stock option and warrant grants issued and vesting to non-employees in accordance with EITF No. 96-18, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”, and EITF 00-18, “Accounting Recognition for Certain Transactions involving Equity Instruments Granted to Other Than Employees”, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached or (b) at the date at which the necessary performance to earn the equity instruments is complete.Receivable

~~Recent~~ The ~~Accounting~~Company ~~Pronouncements~~extends credit to customers whose sales invoices have not been sold to our factor based upon an evaluation of the customer’s financial condition and credit history and generally require no collateral. Management performs regular evaluations concerning the ability of our customers to satisfy their obligations and records a provision for doubtful accounts based on these evaluations. Based on historical losses, existing economic conditions and collection practices, our allowance for doubtful accounts has been estimated to be $650,000 at December 31, 2009.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which establishes a formal framework for measuring fair value under generally accepted accounting principles. SFAS No. 157 defines and codifies the many definitions of fair value included among various other authoritative literature, clarifies and, in some instances, expands on the guidance for 13

32Inventory

~~implementing~~ Inventory ~~fair~~is ~~value~~valued ~~measurements,~~at ~~and increases~~ the ~~level~~lower of ~~disclosure~~cost ~~required~~or ~~for~~market, ~~fair~~cost ~~value~~being ~~measurements.~~determined ~~Although~~by ~~SFAS No. 157 applies to and amends~~ the ~~provisions~~first-in, offirst-out ~~existing~~method. ~~FASB and AICPA pronouncements,~~We itcontinually ~~does~~evaluate ~~not,~~our ofinventories ~~itself,~~by ~~require~~assessing ~~any~~slow ~~new~~moving ~~fair~~product ~~value~~as ~~measurements,~~well ~~nor does it~~as ~~establish~~prior ~~valuation~~seasons’ ~~standards~~inventory. ~~SFAS~~Market ~~No.~~value ~~157~~of ~~applies~~non-current toinventory ~~all~~is ~~other accounting~~estimated ~~pronouncements~~based ~~requiring~~on orhistorical ~~permitting~~sales ~~fair~~trends ~~value~~for ~~measurements,~~each ~~except~~category ~~for:~~of ~~SFAS No.~~inventory ~~123R,~~of ~~share-based~~our ~~payment~~company’s individual ~~and~~product ~~related pronouncements~~lines, the ~~practicability exceptions~~impact toof ~~fair~~market ~~value~~trends, ~~determinations~~an ~~allowed~~evaluation byof ~~various other authoritative~~economic ~~pronouncements,~~conditions and ~~AICPA~~the ~~Statements~~value of ~~Position~~current ~~97-2~~orders ~~and~~relating ~~98-9~~to ~~that~~the ~~deal~~future ~~with software~~sales ~~revenue~~of ~~recognition.~~this type ~~SFAS~~of Noinventory. ~~157~~At isDecember ~~effective for financial statements issued for fiscal years beginning after November 15~~31, ~~2007~~2009, ~~and~~inventories ~~interim~~consisted ~~periods within those fiscal years. The Company adopted SFAS No. 157 on October 1, 2008 The adoption~~ of ~~SFAS No. 157 did not have a material impact on the Company’s~~finished ~~consolidated~~goods, ~~financial~~work-in-process ~~position~~and orraw ~~results of operations~~materials.

~~In February~~Property ~~2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets~~ and Financial Liabilities” (“SFAS No. 159”), which provides companies with an option to report selected financial assets and liabilities at fair value. The objective of SFAS No. 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Generally accepted accounting principles have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings. SFAS No. 159 helps to mitigate this type of accounting-induced volatility by enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of the company’s choice to use fair value on its earnings. SFAS No. 159 also requires companies to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157 and SFAS No. 107. SFAS No. 159 is effective as of the beginning of a company’s first fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the company makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157. The Company is currently assessing the potential effect of SFAS No. 159 on its consolidated financial statements and has not elected to adopt SFAS 159 at this time. The Company adopted SFAS No. 159 on October 1, 2008 The adoption of SFAS No. 159 did not have a material impact on the Company’s consolidated financial position or results of operations. Equipment

~~In December~~ Property ~~2007, the FASB issued SFAS No. 141(revised 2007), Business Combinations,~~ and ~~SFAS~~equipment ~~No. 160, Noncontrolling Interests in Consolidated~~are ~~Financial~~recorded ~~Statements.~~at ~~SFAS No~~cost. ~~141R~~Expenditures ~~improves reporting by creating greater consistency in the accounting and financial reporting of business combinations, resulting in more complete, comparable, and relevant information~~ for ~~investors and~~major ~~other~~renewals ~~users of financial statements. SFAS No. 141R requires the acquiring entity in a business combination to recognize all (~~and ~~only)~~improvements ~~the~~that ~~assets acquired~~extend ~~and liabilities assumed in~~ the ~~transaction;~~useful ~~establishes~~lives ~~the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all~~ of ~~the~~property ~~information they need to evaluate~~ and ~~understand~~equipment ~~the~~are ~~nature and financial effect of the business combination~~capitalized. ~~SFAS~~Expenditures ~~No. 160 improves the relevance,~~for ~~comparability,~~maintenance and ~~transparency~~repairs ofare ~~financial~~charged ~~information provided~~ to ~~investors by~~expense ~~requiring~~as ~~all~~incurred. ~~entities~~When toassets ~~report non-controlling (minority) interests in~~are ~~subsidiaries~~retired inor ~~the same way—as equity in the consolidated financial statements. Moreover~~sold, ~~SFAS No. 160 eliminates~~ the ~~diversity~~property ~~that~~accounts ~~currently~~and ~~exists~~related ~~in accounting~~accumulated ~~for~~depreciation ~~transactions between an entity~~ and ~~non-controlling interests by~~ ~~requiring~~amortization ~~they~~accounts ~~be treated as equity transactions. The two statements~~ are ~~effective~~ ~~for fiscal years beginning after December 15~~relieved, ~~2008~~ and ~~management~~any ~~is currently~~resulting ~~evaluating~~gain ~~the~~or ~~impact~~loss ~~that~~is ~~the adoption of these statements may have~~included onin ~~our consolidated financial statements~~operations.

~~In March~~ Depreciation ~~2008,~~is ~~the~~computed ~~Financial~~on ~~Accounting Standards Board (“FASB”) issued Statement~~the ofstraight-line ~~Financial~~method ~~Accounting~~based ~~Standards~~on ~~(“SFAS”)~~the ~~No.~~estimated ~~161,~~useful ~~“Disclosures~~lives ~~about Derivative~~of ~~Instruments~~the ~~and~~assets ~~Hedging Activities, an Amendment~~ of ~~FASB No. 133,”~~five ~~(“SFAS 161”)~~years. ~~SFAS~~Leasehold ~~161~~improvements isare ~~intended~~amortized toover ~~improve~~the ~~transparency~~remaining inlife ~~financial reporting by requiring enhanced disclosures~~ of anthe related ~~entity’s~~lease, ~~derivative instruments~~which ~~and~~has ~~hedging~~been ~~activities~~determined ~~and~~to ~~their~~be ~~effects~~shorter onthan the ~~entity’s~~useful ~~financial position,~~life ~~financial performance, and cash flows. SFAS 161 applies to all~~of ~~derivative~~the ~~instruments~~ asset.

33Convertible Notes Payable

~~within~~ Three ~~the~~notes ~~scope~~were ofmodified ~~SFAS~~on ~~No. 133~~June 15, ~~“Accounting~~2009 ~~for~~to ~~Derivative Instruments~~conform ~~and~~to ~~Hedging~~a ~~Activities,”~~new ~~(“SFAS~~financing ~~133”).~~repayable ~~SFAS~~on ~~161~~or ~~also~~before ~~applies~~April to30, 2011. ~~non-derivative~~The ~~hedging~~notes ~~instruments~~are ~~and~~now ~~all~~convertible ~~hedged~~into ~~items~~common ~~designated~~shares at $.10 per share and when ~~qualifying~~converted ~~under~~the ~~SFAS~~company ~~133.~~will ~~SFAS~~issue ~~161~~warrants isequal ~~effective~~to ~~prospectively~~one ~~for~~half ~~financial~~of the shares ~~statements~~converted ~~issued~~exercisable ~~for~~at ~~fiscal~~$0.15 ~~years~~per ~~and~~share ~~interim~~for ~~periods~~a ~~beginning~~period ~~after~~of ~~November~~24 months. These ~~15,~~features ~~2008,~~gave ~~with~~rise ~~early~~to ~~application~~the ~~encouraged.~~assignment ~~SFAS~~of ~~161~~value ~~encourages,~~to ~~but~~the ~~does~~warrants ~~not~~and beneficial ~~require,~~conversion ~~comparative~~feature. ~~disclosures~~which is accounted for ~~periods~~as ~~prior~~discount on the notes and an increase to ~~its~~additional ~~initial~~paid ~~adoption~~in capital. WeThe value of the warrants were ~~will~~determined ~~adopt~~by ~~SFAS~~the ~~161~~Black onScholes ~~November~~option 15pricing method using the current stock price, ~~2008~~exercise price of the warrants, volatility of 210% and ~~are~~a ~~currently~~risk ~~evaluating~~free interest rate of 1.1% . The Beneficial conversion feature value was set at its intrinsic value after consideration of the relative value of the warrants and ~~potential~~the ~~impact~~notes. The discount is being amortized on ~~our~~the ~~consolidated~~interest ~~financial~~method ~~statements~~over ~~when~~the ~~implemented~~life of the loan.

~~In April~~Recent ~~2008,~~Accounting the FASB issued FASB Staff Position (“FSP”) No. 142-3, “Determination of the Useful Life of Intangible Assets”. FSP 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under FASB Statement No. 142, “Goodwill and Other Intangible Assets”. This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Early adoption is prohibited. We are currently evaluating the impact, if any, that FSP 142-3 will have on our consolidated financial statements.Pronouncements

~~As a~~Effective ~~result~~July ~~of the recent credit crisis~~1, ~~on October 10~~2009, ~~2008,~~ the FASB ~~issued~~ASC ~~FSP No.~~became ~~FAS 157-3, “Determining~~ the ~~Fair~~single ~~Value~~official source of aauthoritative, ~~Financial~~nongovernmental ~~Asset in a Market That is Not Active~~U.~~” This FSP clarifies the application of SFAS No~~S. ~~157 in a market that is not active~~GAAP. The ~~FSP~~historical ~~addresses how management should consider measuring fair value when relevant observable date does not exist~~U.S. ~~The FSP also provides~~GAAP ~~guidance~~hierarchy onwas ~~how~~eliminated ~~observable~~and ~~market~~the ~~information~~ASC inbecame athe ~~market~~only ~~that~~level isof ~~not~~authoritative ~~active~~U.S. ~~should be considered when measuring fair value~~GAAP, asother ~~well~~than asguidance ~~how~~issued ~~the~~by ~~use of market quotes should be considered when assessing~~ the ~~relevance of observable and unobservable data available to measure fair value~~SEC. ~~This~~The ~~FSP~~Company’s isaccounting ~~effective upon~~policies ~~issuance,~~were ~~including prior periods for which financial statements have~~ not ~~been issued.~~affected ~~Revisions~~by ~~resulting from a change in~~ the ~~valuation~~conversion ~~technique~~to ~~or its application shall be accounted for as a change in accounting estimate in accordance with SFAS No~~ASC. ~~154~~However, ~~“Accounting~~references ~~Changes~~to ~~and Error Corrections.”~~specific ~~Adoption~~accounting ofstandards ~~this~~in ~~standard~~the ~~had~~notes noto ~~effect on~~ our ~~results~~consolidated ~~of operations, cash flows or~~ financial ~~position.~~statements ~~Management does not believe that any other recently~~have ~~issued,~~been ~~but~~changed ~~not~~to ~~yet~~refer ~~effective,~~to ~~accounting~~the ~~standards,~~appropriate ifsection ~~currently~~of ~~adopted,~~the ~~would have a material effect on our consolidated financial statements~~ASC.

~~Adoption~~ In April 2008, the FASB issued a pronouncement on what now is codified as FASB ASC Topic 350, Intangibles — Goodwill and Other. This pronouncement amends the factors to be considered in determining the useful life of ~~New~~intangible ~~Accounting~~assets ~~Policies~~accounted for pursuant to previous topic guidance. Its intent is to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure its fair value. This Company adopted this pronouncement on October 1, 2009. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements.

~~Effective January~~ In 1,June ~~2007~~2008, wethe ~~adopted~~FASB amended FASB ~~Interpretation~~Topic ~~No.~~ASC 48815, ~~“Accounting~~Sub-Topic ~~for Uncertainty in Income Taxes~~40, an"Contracts ~~interpretation~~in ofEntity’s ~~FASB~~Own ~~Statement~~Equity” ~~No.~~to ~~109,~~clarify ~~Accounting~~how ~~for~~to ~~Income~~determine ~~Taxes”~~whether ~~(“FIN~~certain ~~48”).~~instruments ~~FIN~~or 48features ~~addresses~~were ~~the~~indexed ~~determination~~to ofan ~~whether~~entity's ~~tax~~own ~~benefits~~stock ~~claimed~~under orASC ~~expected~~Topic to815. beThe ~~claimed~~amendment onapplies ato ~~tax return should be~~any ~~recorded~~freestanding ~~in the~~ financial ~~statements.~~instrument ~~Under~~(or ~~FIN~~embedded ~~48,~~feature) wethat ~~may~~has ~~recognize~~all ~~the~~of ~~tax~~the ~~benefit~~characteristics ~~from~~of ana ~~uncertain~~derivative, ~~tax~~for ~~position~~purposes ~~only~~of ifdetermining itwhether ~~is more likely than not~~ that ~~the~~instrument ~~tax~~(or ~~position~~embedded ~~will~~feature) bequalifies ~~sustained~~for onthe ~~examination~~scope byexception. ~~the~~It ~~taxing~~is ~~authorities,~~also ~~based~~applicable onto ~~the~~any ~~technical~~freestanding ~~merits~~financial ofinstrument ~~the position~~(e.g., ~~The~~gross ~~tax benefits recognized in~~physically ~~the~~settled ~~financial~~warrants) ~~statements~~that ~~from~~is ~~such~~potentially asettled ~~position~~in ~~should~~an beentity's ~~measured~~own ~~based on the~~stock, ~~largest~~regardless ~~benefit~~of ~~that~~whether it has aall ~~greater~~of ~~than~~the ~~fifty~~characteristics ~~percent~~of ~~likelihood~~a ofderivative, ~~being~~for ~~realized~~purposes ~~upon~~of ~~ultimate~~determining ~~settlement.~~whether ~~FIN~~to 48apply ~~also~~ASC ~~provides~~815. ~~guidance~~The ~~on de-recognition,~~Company ~~classification,~~adopted ~~interest~~this pronouncement ~~and penalties~~ on ~~income~~October ~~taxes~~1, ~~accounting~~ ~~in interim periods and requires increased disclosures~~2009. The adoption of ~~the provisions~~ of ~~FIN~~this 48standard did not have a material effect on ~~our~~its ~~consolidated~~ financial statements. ~~As of September 30, 2008, no liability~~ for ~~unrecognized tax~~the ~~benefits~~quarter ~~was~~ending ~~required~~December ~~to be recorded~~31, 2009.

~~We currently files or have in the past filed income tax returns in Canada and the United States. We are subject to tax examinations by tax authorities for tax years ending in 2006 and subsequently.~~ 14

~~Our policy~~ In isApril to2009, ~~record~~the ~~interest~~FASB ~~and~~issued ~~penalties~~a pronouncement on ~~uncertain~~what ~~tax~~is ~~provisions~~now codified as ~~income tax~~FASB ~~expense~~ASC Topic 805, Business Combinations. AsThis ofpronouncement ~~June~~provides ~~30,~~new ~~2009,~~guidance wethat ~~have~~changes ~~not~~the accounting ~~accrued~~treatment ~~interest~~of orcontingent ~~penalties~~assets and liabilities in business ~~related~~combinations tounder ~~uncertain~~previous ~~tax~~topic ~~positions~~guidance. This pronouncement will be effective for the Company for any business combinations that occur on or after October 1, 2009

~~ITEM~~ In 3April 2009, the FASB issued a pronouncement on what is now codified as FASB ASC Topic 825, Financial Instruments. ~~QUANTITATIVE~~This ~~AND~~pronouncement ~~QUALITATIVE~~amends ~~DISCLOSURES~~previous ~~ABOUT~~topic ~~MARKET~~guidance ~~RISK~~to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies, as well as in annual financial statements. The pronouncement was effective for interim reporting periods ending after June 15, 2009 and its adoption did not have any significant effect on the consolidated financial statements.

~~Not~~ In ~~applicable~~December 2007, the FASB issued ASC 805 “Business Combinations” and 810 “Consolidation” (“ASC 810”), which require that ownership interests in subsidiaries held by parties other than the parent, and the amount of consolidated net income, be clearly identified, labeled and presented in the consolidated financial statements. ASC 805 and ASC 810 also require that once a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. ASC 805 and ASC 810 amend ASC 260 to provide that the calculation of earnings per share amounts in the consolidated financial statements will continue to be based on the amounts attributable to the parent. ASC 805 and ASC 810 are effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, and require retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements are applied prospectively. The Company adopted ASC 805 and ASC 810 on October 1, 2009. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements.

34 In May 2009, the FASB issued a pronouncement on what is now codified as FASB ASC Topic 855, Subsequent Events. This pronouncement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. FASB ASC Topic 855 provides guidance on the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The Company has evaluated subsequent events for the period from December 31, 2009, the date of these financial statements, through February 24, 2010, which represents the date these financial statements are filed with the SEC.

~~ITEM~~ In 4TJune 2009, the FASB issued ASC Topic 810-10, "Amendments to FASB Interpretation No. ~~CONTROLS~~46(R)" ~~AND~~(“ASC 810-10”). ~~PROCEDURES~~ASC 810-10 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities,” as a result of the elimination of the qualifying special-purpose entity concept in ASC 860-20, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise's involvement in a variable interest entity. This statement will be effective for the Company on October 1, 2010. The Company does not expect the adoption of 810-10 to have a material impact on its results of operations, financial condition or cash flows.

~~Evaluation~~ Other ofrecent ~~Disclosure~~accounting pronouncements ~~Controls~~issued by the FASB (including its Emerging Issues Task Force), and ~~Procedures~~the United States Securities and Exchange Commission did not or are not believed to have a material impact on the Company's present or future consolidated financial statements.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. 15

~~As required~~ITEM by SEC Rule 13a-15(b), our management carried out an evaluation, with the participation of our Chief Executive and 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 report3. ~~Based~~QUANTITATIVE onAND ~~the foregoing,~~QUALITATIVE ~~our~~DISCLOSURES ~~Chief~~ABOUT ~~Executive~~MARKET ~~Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level.~~ RISK

~~Management found~~Not ~~the following deficiencies in our disclosure controls and procedures:~~applicable

~~There is~~ITEM ~~not~~4T. ~~adequate~~CONTROLS ~~division~~AND ~~or segregation of duties in our accounting department that has three staff members, which includes the Chief Financial Officer.~~ PROCEDURES

~~Changes~~Evaluation inof ~~Internal~~Disclosure ~~Control~~Controls ~~over~~and ~~Financial Reporting~~Procedures

We maintain disclosure controls ~~have~~and ~~made~~procedures ~~the~~that ~~following~~are ~~changes~~designed to ensure that information required to be disclosed in our ~~internal~~Exchange ~~controls~~Act ~~over~~reports ~~financial~~is recorded, processed, summarized and ~~reporting~~reported ~~during~~within ~~our~~the ~~most~~time ~~recent~~periods ~~fiscal~~specified ~~quarter~~in the Securities and Exchange Commission’s rules and forms and that ~~have~~such ~~materially~~information ~~affected~~is accumulated and communicated to our management, including our Chief Executive Officer and Chief orFinancial ~~are~~Officer, ~~reasonably~~as ~~likely~~appropriate, to ~~materially~~allow ~~affect~~for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, ~~our~~management ~~internal~~recognizes that any controls ~~over~~and procedures, no matter ~~financial~~how ~~reporting:~~well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives.

~~To compensate~~ As ~~for~~required ~~the~~by ~~inadequate~~SEC ~~segregation~~Rule 13a-15(b), ofour ~~duties,~~management ~~during~~carried ~~the~~out ~~quarter~~an evaluation, ~~we instituted~~with athe ~~system~~participation of our ~~sign-offs~~Chief ~~and~~Executive ~~checks~~ and ~~balances within the accounting department. More specifically, the~~ Chief Financial Officer, ~~and~~of ~~Chief~~the ~~Executive Officer~~effectiveness ~~has~~of athe design ~~series~~and operation of ~~written~~our ~~sign-offs~~disclosure tocontrols ~~ensure~~and ~~that~~procedures aas ~~multiple~~of ~~members~~the end of ~~management~~the ~~have~~period ~~reviewed~~covered ~~and~~by ~~agreed~~this toreport. ~~financial~~Based ~~transactions~~on ~~before~~the ~~they~~foregoing, ~~are recorded.~~our WeChief ~~recognize~~Executive Officer ~~that~~and ~~there~~Chief isFinancial ~~still~~Officer anconcluded ~~inadequate~~that ~~division~~our ofdisclosure ~~duties~~controls and ~~that~~procedures wewere ~~continue~~not toeffective ~~have~~at the ~~weakness~~reasonable ~~stated~~assurance ~~above~~level.

~~We intend~~ Management tofound ~~determine how to address our weaknesses in~~ the ~~future. At this time,~~following we deficiencies doin ~~not~~our ~~know~~disclosure ~~when~~controls weand ~~will~~procedures: ~~take further action to address out weaknesses, what measures we will take or how much it will cost.~~

~~Certifications~~ There is not adequate division or segregation of duties in our accounting department that has three staff members, which includes the Chief Financial Officer.

~~Certifications with~~Changes ~~respect~~in toInternal ~~disclosure~~Control ~~controls and procedures and internal control~~ over ~~financial~~ ~~reporting~~Financial ~~under Rules 13a-14(a) or 15d-14(a) of the Exchange Act are~~Reporting ~~attached to this Quarterly Report on Form 10-Q.~~

35 We have made the following changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting:

~~PART~~ To IIcompensate for the inadequate segregation of duties, during the quarter, we instituted a system of sign-~~OTHER~~offs and ~~INFORMATION~~checks and balances within the accounting department. More specifically, the Chief Financial Officer and Chief Executive Officer has a series of written sign-offs to ensure that a multiple members of management have reviewed and agreed to financial transactions before they are recorded. We recognize that there is still an inadequate division of duties and that we continue to have the weakness stated above.

~~ITEM~~ We 1intend to determine how to address our weaknesses in the future. ~~LEGAL~~At ~~PROCEEDINGS~~this time, we do not know when we will take further action to address out weaknesses, what measures we will take or how much it will cost.

~~Other than~~Management’s asAnnual ~~described~~Report ~~below,~~on weInternal ~~know~~Control ~~of no material, existing or pending legal~~over ~~proceedings~~Financial against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest. The outcome of open unresolved legal proceedings is presently indeterminable. Any settlement resulting from resolution of these contingencies will be accounted for in the period of settlement. We do not believe the potential outcome from these legal proceedings will significantly impact our financial position, operations or cash flows.Reporting

On Management is responsible for ~~September~~establishing ~~19,~~and ~~2008~~maintaining ~~Mynk~~adequate ~~Corporation,~~internal control over our ~~wholly-owned~~financial reporting. ~~subsidiary~~In order to evaluate the effectiveness of internal control over financial reporting, ~~sued~~as ~~Delia’s~~required by Section 404 of the Sarbanes-Oxley Act, ~~Inc.~~management has conducted an assessment, aincluding ~~customer~~testing, using the criteria in Internal Control — Integrated Framework, issued by the ~~Superior~~Committee ~~Court~~of Sponsoring Organizations of the ~~State~~Treadway Commission (“COSO”). Our system of ~~California,~~internal control ~~for~~over ~~goods~~financial reporting is designed to provide reasonable assurance ~~shipped,~~regarding ~~but~~the ~~unpaid,~~reliability inof financial reporting and the ~~amount~~preparation of financial ~~$604~~statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations,~~081~~ internal control over financial reporting may not prevent or detect misstatements.

Elk Brands Manufacturing Company, Inc. was suing Mynk Corporation, our wholly-owned subsidiary, for an alleged payment owing of approximately $70,800, which amount was previously accrued and is included in Accounts Payable and Accrued Expenses. The claim has now been settled on February 2, 2009, with Mynk paying $40,000 to Elk Brands in four monthly payments of $10,000 each commencing February 28, 2009 and ending May 31, 2009. 16

~~ITEM~~ Management 1Ahas used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. ~~RISK~~Based ~~FACTORS~~on this assessment, management has concluded that our internal control over financial reporting was not effective as of December 31, 2009 This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

~~Risks Related to our Business~~ Certificates.

~~Our~~ Certificates ~~continued~~with ~~operations~~respect ~~depend~~to disclosure oncontrols ~~current~~and ~~fashion~~procedures ~~trends. If~~and ~~our~~internal ~~products~~control ~~and~~over ~~designs~~financial ~~are~~reporting under ~~not~~Rules ~~considered~~13a-14(a) ~~fashionable~~ or ~~desirable~~15d-14(a) ~~by enough~~of ~~consumers,~~the ~~then~~Exchange ~~our~~Act ~~business~~are ~~could~~attached beto ~~adversely~~this Quarterly ~~affected.~~Report on Form 10-Q.

~~The acceptance~~PART by consumers of our products and design is important to our success and competitive position, and the inability to continue to develop and offer fashionable and desirable products to consumers could harm our business. We cannot be certain that our highII-~~fashion~~OTHER clothing and accessories will be considered fashionable and desirable by enough consumers to make our operations profitable. There are no assurances that our future designs will be successful, and any unsuccessful designs could adversely affect our business. If we are unable to respond to changing consumer demands in a timely and appropriate manner, we may fail to establish or maintain our brand name and brand image. Even if we react appropriately to changes in consumer preferences, consumers may consider our brand image to be outdated or associate our brand with styles that are no longer popular. Should trends veer away from our style of products and designs, our business could be adversely affected. INFORMATION

WeITEM ~~may~~1. beLEGAL ~~unable to achieve or sustain growth or manage our future growth, which may have a material adverse effect on our future operating results~~PROCEEDINGS.

~~We cannot~~ Other ~~provide~~than ~~any~~as ~~assurances~~described ~~that~~below, ~~our business plan will be successful and that~~ we know ~~will~~of ~~achieve~~no ~~profitable~~material, ~~operations.~~existing ~~Our~~or ~~future~~pending ~~success~~legal ~~will~~proceedings ~~depend~~against ~~upon various~~our ~~factors~~company, nor ~~including~~are ~~the~~we ~~strength~~involved ofas ~~our~~a ~~brand~~plaintiff ~~image,~~in ~~the~~any ~~market~~material ~~success~~proceeding or pending oflitigation. ~~our~~There ~~current~~are ~~and~~no ~~future~~proceedings ~~products,~~in ~~competitive~~which ~~conditions~~any ~~and~~of our ~~ability to manage increased revenues~~directors, ifofficers ~~any~~or affiliates, or ~~implement~~any ~~our~~registered ~~growth~~or ~~strategy.~~beneficial ~~In addition~~stockholder, weis ~~anticipate~~an ~~significantly~~adverse ~~expanding~~party ~~our~~or has ~~infrastructure~~a ~~and~~material ~~adding personnel~~interest inadverse ~~connection~~to ~~with~~ our ~~anticipated~~interest. ~~growth,~~The ~~which~~outcome weof ~~expect~~open ~~will cause~~unresolved ~~our~~legal ~~selling,~~proceedings ~~general~~is ~~and~~presently ~~administrative~~indeterminable. ~~expenses~~Any tosettlement ~~increase~~resulting ~~in absolute dollars~~from ~~and~~resolution ~~which~~of ~~may~~these ~~cause~~contingencies ~~our~~will ~~selling,~~be ~~general~~accounted ~~and~~for ~~administrative~~in ~~expenses~~the toperiod ~~increase as a percentage~~ of ~~revenue~~ settlement. ~~Because~~We ~~these~~do ~~expenses~~not ~~are~~believe ~~generally fixed, particularly in~~ the ~~short-term,~~potential ~~operating~~outcome ~~results~~from ~~may~~these belegal ~~adversely~~proceedings will ~~impacted~~significantly ~~if we~~impact doour ~~not~~financial ~~achieve~~position, ~~our~~operations ~~anticipated~~or ~~growth~~cash flows.

~~Future growth~~ On ~~may~~September ~~place~~19, a2008 ~~significant~~Mynk Corporation, ~~strain~~our onwholly-owned ~~our~~subsidiary, ~~management~~sued ~~and~~Delia’s ~~operations~~Inc., Ifa ~~we experience~~customer ~~growth~~ in ~~our operations, our operational, administrative, financial~~the ~~and~~Superior ~~legal~~Court ~~procedures~~of ~~and~~the ~~controls~~State ~~may~~of ~~need~~California, tofor begoods ~~expanded.~~shipped, Asbut ~~a result~~unpaid, wein ~~may~~the ~~need~~amount ~~to train and manage an increasing number~~ of ~~employees~~$604,081. ~~which~~On ~~could~~January ~~distract our~~26, ~~management~~2010 ~~team~~the ~~from~~Company ~~our~~and ~~business.~~Delia’s ~~Our~~agreed ~~future~~to ~~success will depend~~a ~~substantially~~monetary onsettlement ~~the~~and ~~ability~~signed ofa ~~our~~confidentiality agreement.

36ITEM 1A. RISK FACTORS

~~management~~ Much ~~team~~of tothe ~~manage~~information ~~our~~included in ~~anticipated~~this ~~growth.~~annual Ifreport weincludes ~~are~~or is based upon estimates, projections or other ~~unable~~“forward-looking tostatements”. ~~anticipate~~Such forward-looking statements include any projections or ~~manage~~estimates made by us and our ~~growth~~management ~~effectively~~in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our ~~operating~~current judgment regarding the direction of our business, actual results will almost ~~could~~always bevary, ~~adversely~~sometimes ~~affected~~materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Such estimates, projections or other “forward-looking statements” involve various risks and uncertainties as outlined below. We ~~face~~caution ~~intense~~readers ~~competition,~~of ~~including~~this ~~competition~~annual ~~from~~report that important factors ~~companies~~in ~~with~~some ~~significantly~~cases ~~greater~~have ~~resources~~affected ~~than~~and, ~~ours~~in the future, could materially affect actual results and ifcause weactual ~~are~~results ~~unable~~ to ~~compete~~differ ~~effectively~~materially ~~with~~from ~~these~~the ~~companies~~results expressed in any such estimates, projections or other “forward-looking statements”. In evaluating us, our business ~~could~~and beany ~~harmed.~~investment in our business, readers should carefully consider the following factors.

~~We face~~Risks ~~intense~~Related ~~competition~~to ~~in the apparel industry from other, more established companies. A number of~~ our competitors have significantly greater financial, technological, engineering, manufacturing, marketing and distribution resources than we do. Their greater capabilities in these areas may enable them to better withstand periodic downturns in the apparel industry, compete more effectively on the basis of price and production and to develop new products in less time. In addition, new companies may enter the markets in which we compete, further increasing competition in the apparel industry.Business

~~We believe~~Our ~~that~~continued ~~our~~operations ~~ability~~depend ~~to compete successfully depends~~ on acurrent ~~number~~fashion ~~of factors,~~trends. ~~including~~If ~~the style and quality of~~ our products and ~~the~~designs ~~strength~~are ~~of our brand name, as well as many factors beyond our control. We may~~ not beconsidered ~~able~~fashionable toor ~~compete successfully~~desirable ~~in the future, and increased competition may result in price~~by ~~reductions,~~enough ~~reduced profit margins~~consumers, ~~loss~~then ~~of market share and an inability to generate cash flows that are sufficient to maintain or expand~~ our ~~development and~~business ~~marketing~~could ofbe ~~new products, which would~~ adversely ~~impact the trading price of our common stock~~affected.

~~Our~~ The acceptance by consumers of our products and design is important to our success and competitive position, and the inability to continue to develop and offer fashionable and desirable products to consumers could harm our business. We cannot be certain that our high-fashion clothing and accessories will be considered fashionable and desirable by enough consumers to make our operations profitable. There are no assurances that our future designs will be successful, and any unsuccessful designs could ~~suffer~~adversely ifaffect our ~~manufacturers~~business. doIf ~~not~~we ~~meet~~are unable to respond to changing consumer demands in a timely and appropriate manner, we may fail to establish or maintain our ~~demand~~brand name and brand image. Even if we react appropriately to changes in consumer preferences, consumers may consider our brand image to be outdated or ~~delivery~~associate ~~schedules~~our brand with styles that are no longer popular. Should trends veer away from our style of products and designs, our business could be adversely affected.

Although we design and market our products, we outsource manufacturing to third party manufacturers. Outsourcing the manufacturing component of our business is common in the apparel industry and we compete with other companies for the production capacity of our manufacturers. Because we are a small enterprise and many of the companies with which we compete have greater financial and other resources than we have, they may have an advantage in the competition for production capacity. There is no assurance that the manufacturing capacity we require will be available to us, or that if available it will be available on terms that are acceptable to us. If we cannot produce a sufficient quantity of our products to meet demand or delivery schedules, our customers might reduce demand, reduce the purchase price they are willing to pay for our products or replace our product with the product of a competitor, any of which could have a material adverse effect on our financial condition and operations.17

~~Government~~We ~~regulation~~may ~~and~~be ~~supervision~~unable ~~could~~to ~~restrict~~achieve or sustain growth or manage our ~~business~~future ~~and~~growth, ~~decrease~~which may have a material adverse effect on our ~~profitability~~future operating results.

~~Any~~ We cannot provide any assurances ~~negative~~that ~~changes~~our tobusiness ~~international~~plan ~~trade~~will ~~agreements~~be successful and ~~regulations~~that ~~such~~we aswill achieve profitable operations. Our future success will depend upon various factors, including the ~~North~~strength ~~American~~of ~~Free~~our ~~Trade~~brand ~~Agreement~~image, orthe ~~any~~market ~~agreements~~success ~~affecting~~of ~~international~~our current and future ~~trade~~products, ~~such~~competitive asconditions ~~those~~and ~~made~~our byability ~~the~~to ~~World~~manage ~~Trade~~increased ~~Organization~~revenues, if ~~which~~any, ~~result~~or inimplement aour ~~rise~~growth strategy. In addition, we anticipate significantly expanding our infrastructure and adding personnel in ~~trade~~connection with ~~quotas~~our anticipated growth, ~~duties~~which we expect will cause our selling, ~~taxes~~general and administrative ~~similar~~expenses ~~impositions~~to orincrease in absolute dollars and which ~~has~~may ~~the~~cause ~~result~~our ofselling, ~~limiting~~general ~~the~~and ~~countries~~administrative ~~from~~expenses ~~whom~~to weincrease ~~can~~as ~~purchase~~a ~~our~~percentage ~~fabric~~of revenue. orBecause ~~other component~~these ~~materials~~expenses are generally fixed, orparticularly ~~limiting~~in the short-term, ~~countries~~operating ~~where~~results wemay ~~might~~be ~~market~~adversely ~~and~~impacted ~~sell our~~if ~~products,~~we ~~could~~do ~~decrease~~not achieve our anticipated ~~profitability~~growth.

~~Increases~~ Future growth may place a significant strain on our management and operations. If we experience growth in our ~~the~~operations, ~~price~~our ofoperational, ~~raw~~administrative, ~~materials~~financial orand ~~their~~legal ~~reduced~~procedures ~~availability~~and controls may need to be expanded. As a result, we may need to train and manage an increasing number of employees, which could ~~increase~~distract our ~~cost~~management team from our business. Our future success will depend substantially on the ability of ~~sales~~our ~~and~~management ~~decrease~~team to manage our ~~profitability~~anticipated growth. If we are unable to anticipate or manage our growth effectively, our operating results could be adversely affected.

~~The principal~~We ~~fabrics~~face ~~used~~intense ~~in our business are cotton~~competition, ~~synthetics,~~including ~~wools~~competition ~~and blends.~~from ~~The~~companies ~~prices~~with ~~we pay for these fabrics are dependent on the market price for raw materials used to produce them, primarily cotton. The price and availability of cotton may fluctuate~~ significantly, ~~depending~~greater onresources athan ~~variety of factors~~ours, ~~including crop yields, weather, supply conditions, government regulation, economic climate~~ and ~~other~~if ~~unpredictable factors. Any raw material price increases could increase our cost of sales and decrease our profitability unless~~ we are ~~able~~ unable to ~~pass higher~~compete ~~prices~~effectively onwith tothese ~~our customers. Moreover~~companies, ~~any~~our ~~decrease~~business ~~in the availability of cotton~~ could ~~impair~~be ~~our ability to meet our production requirements in a timely manner~~harmed.

If We face intense competition in the apparel industry from other, more established companies. A number of our competitors have significantly greater financial, technological, engineering, manufacturing, marketing and distribution resources than we ~~are~~do. ~~unable~~Their greater capabilities in these areas may enable them to ~~enforce~~better ~~our~~withstand ~~intellectual~~periodic downturns ~~property~~in ~~rights~~the apparel industry, compete more effectively on the basis of orprice ~~otherwise~~and ~~protect~~production ~~our~~and ~~intellectual~~to ~~property~~develop new products in less time. In addition, ~~then~~new companies ~~our~~may ~~business~~enter ~~would~~the ~~likely~~markets in which we compete, further increasing ~~suffer~~competition in the apparel industry.

~~Our~~ We believe that our ability to ~~success~~compete successfully depends toon a ~~significant~~number ~~degree~~of ~~upon~~factors, ~~our~~including ~~ability~~the tostyle ~~protect~~and quality of our products and ~~preserve~~the strength of our brand name, as well as many ~~any~~factors ~~intellectual~~beyond ~~property~~our wecontrol. ~~develop~~We ormay ~~acquire,~~not ~~including~~be ~~copyrights,~~able to compete successfully in the ~~trademarks~~future, ~~patents,~~and ~~service~~increased ~~marks~~competition may result in price reductions, ~~trade~~reduced ~~dress~~profit margins, ~~trade~~loss ~~secrets~~of market share and ~~similar~~an inability to generate cash flows that are ~~intellectual~~sufficient ~~property.~~to Wemaintain ~~rely~~or onexpand ~~the~~our ~~intellectual~~development ~~property,~~and ~~patent,~~marketing ~~trademark~~of new products, ~~and~~which ~~copyright~~would ~~laws~~adversely ofimpact the trading price of our common stock.

37Our business could suffer if our manufacturers do not meet our demand or delivery schedules.

~~United~~ Although ~~States~~we design and ~~other~~market ~~countries to protect~~ our ~~proprietary~~ ~~rights. However~~products, we ~~may~~outsource bemanufacturing ~~unable~~ to ~~prevent~~ third ~~parties~~party ~~from~~manufacturers. ~~using our~~Outsourcing ~~intellectual~~the ~~property~~manufacturing ~~without~~component of our ~~authorization,~~business ~~particularly~~is common in ~~those countries where~~ the ~~laws~~apparel doindustry and ~~not~~we ~~protect~~compete ~~our~~with ~~proprietary~~other ~~rights~~companies asfor ~~fully~~the asproduction incapacity ~~the~~of ~~United~~our ~~States~~manufacturers. ~~The~~Because ~~use~~we ofare ~~our~~a ~~intellectual~~small ~~property~~enterprise orand ~~similar~~many ~~intellectual~~of ~~property~~the bycompanies with ~~others~~which ~~could~~we ~~reduce~~compete orhave ~~eliminate~~greater ~~any~~financial ~~competitive~~and ~~advantage~~other weresources ~~may~~than ~~develop~~we have, they ~~causing~~may ushave toan ~~lose~~advantage ~~sales~~in orthe ~~otherwise~~competition ~~harm~~for ~~our~~production ~~business~~capacity. WeThere ~~may~~is ~~need to bring~~no ~~legal~~assurance ~~claims~~that tothe ~~enforce~~manufacturing orcapacity ~~protect~~we ~~such~~require ~~intellectual~~will ~~property~~be ~~rights.~~available ~~Any litigation~~to us, ~~whether successful~~ or that ~~unsuccessful,~~if ~~could~~available ~~result~~it inwill ~~substantial costs~~be ~~and~~available ~~diversions~~on ofterms ~~resources.~~that Inare ~~addition,~~acceptable ~~notwithstanding~~to ~~the~~us. ~~rights~~If we ~~have~~cannot ~~secured~~produce ina ~~our~~sufficient ~~intellectual~~quantity ~~property,~~of ~~other~~our ~~persons~~products ~~may~~to ~~bring~~meet ~~claims against~~demand usor ~~that~~delivery schedules, weour ~~have~~customers ~~infringed~~might onreduce ~~their~~demand, ~~intellectual~~reduce ~~property~~the ~~rights~~purchase ~~or claims~~price ~~that~~they ~~our intellectual property right interests~~ are willing ~~not~~to ~~valid.~~pay ~~Any~~for ~~claims against~~our ~~us,~~products ~~with~~ or ~~without~~replace ~~merit,~~our ~~could~~product bewith ~~time~~the ~~consuming~~product ~~and~~of ~~costly to defend~~a orcompetitor, ~~litigate~~any ~~and~~of ~~therefore~~which could have ana material adverse ~~affect~~effect on our ~~business. If any~~financial ofcondition ~~these~~and ~~risks arise, our business would likely suffer~~operations.

The recent weakening of economic conditions in the U.S. and around the world could have harmful effects on our business. If these harmful effects cause us to scale down our operations, then our share price will likely decrease. If these harmful effects cause us to cease our operations, then our shareholders will likely lose their entire investment in our company. 18

~~The recent~~Government ~~weakening~~regulation ~~of economic conditions in the U.S.~~ and ~~around~~supervision ~~the world, including in the financial services and real estate industries,~~ could ~~have harmful~~restrict ~~effects on~~ our business. Weakening economic conditions generally lead to less money being spent on clothing across the industry as a whole. Competition for these limited resources will likely become more intense. If consumers spend less and dodecrease ~~not choose to spend their limited funds on~~ our ~~clothes, we will earn less revenue and we will not be able to fund our future operations through revenues from sales~~profitability.

~~If we~~ Any ~~cannot~~negative ~~fund~~changes ~~all~~to international oftrade ~~our~~agreements ~~future~~and ~~operations~~regulations ~~through~~such ~~revenue,~~as wethe ~~may~~North ~~choose~~American toFree ~~raise~~Trade ~~money~~Agreement ~~through~~or ~~sales~~any ofagreements ~~our~~affecting ~~equity~~international ~~securities.~~trade ~~However,~~such ~~many~~as ~~investors have~~those ~~recently~~made ~~seen~~by ~~large decreases in~~ the ~~value~~World ofTrade ~~various~~Organization ~~investments~~which ~~due~~result ~~to declining~~in ~~share~~a ~~prices~~rise ~~across~~in ~~many~~trade ~~economic sectors. Because of this and other~~quotas, ~~market factors~~duties, iftaxes weand ~~choose~~similar toimpositions ~~raise~~or ~~funds~~which ~~through~~has the ~~sale~~result of ~~our~~limiting ~~equity~~the ~~securities,~~countries ~~potential~~from ~~investors~~whom ~~may~~we becan ~~less~~purchase ~~likely to buy~~ our ~~equity~~fabric ~~securities~~ or weother ~~may~~component ~~be need to sell our equity securities at low prices~~materials, ~~resulting in~~or ~~fewer~~limiting ~~proceeds.~~the ~~This~~countries ~~would~~where ~~make~~we itmight ~~difficult~~market ~~for~~and ussell toour ~~raise~~products, ~~adequate amounts to~~could ~~fund~~decrease our ~~operations through the sale of our equity securities~~profitability.

~~If we~~Increases are unable to fund all of our operations through revenues or the sale of our equity securities, then we may choose to borrow money to pay for some of our operations. A tightening of credit conditions has also been experienced in the ~~economy~~ ~~recently.~~price ~~Because~~ of ~~the~~raw ~~recent~~materials ~~credit~~or ~~crisis,~~their ~~it is possible that we~~reduced ~~would~~availability ~~not~~could beincrease ~~able to borrow adequate amounts to fund~~ our ~~operations~~cost ~~on terms and at rates~~ of ~~interest~~sales ~~we find acceptable~~ and indecrease ~~the best interests of~~ our ~~company.~~ profitability.

~~If we~~ The ~~cannot~~principal ~~fund~~fabrics ~~our~~used ~~planned~~in ~~operations~~our business ~~from~~are ~~revenue~~cotton, ~~the~~synthetics, ~~sale~~wools ofand ~~our~~blends. ~~equity securities~~The orprices ~~through~~we ~~incurring~~pay ~~debt~~for these fabrics are dependent on ~~acceptable~~the ~~terms~~market price for raw materials used to produce them, ~~then~~primarily wecotton. ~~will~~The ~~likely~~price and availability of cotton may fluctuate ~~have~~significantly, todepending ~~scale~~on ~~down~~a orvariety ~~cease~~of ~~our~~factors, ~~operations.~~including Ifcrop weyields, weather, ~~scale~~supply ~~down~~conditions, ~~our~~government ~~operations~~regulation, ~~our~~economic climate and other ~~share~~unpredictable factors. Any raw material price ~~would~~increases ~~likely~~could ~~decrease~~increase our cost of sales and ifdecrease our profitability unless we ~~cease~~are able to pass higher prices on to our ~~operations~~customers. Moreover, ~~shareholders~~any decrease in the availability of cotton could ~~will~~impair ~~likely~~our ~~lose~~ability ~~their~~to ~~entire~~meet ~~investment~~our production requirements in ~~our~~a ~~company~~timely manner.

~~The~~If ~~recent~~we ~~weakening~~are ofunable ~~economic~~to ~~conditions~~enforce inour ~~the~~intellectual ~~U.S.~~property ~~and~~rights ~~around~~or ~~the~~otherwise ~~world~~protect ~~could have harmful effects on the operations of~~ our ~~customers and~~intellectual ~~suppliers and the confidence of end consumers~~property, ~~all~~then ofour ~~which~~business ~~could~~would ~~cause our~~likely ~~operations to~~ suffer ~~and our revenues to decrease~~.

~~Some~~ Our success depends to a ofsignificant degree upon our ~~customers~~ability orto ~~suppliers~~protect ~~could~~and ~~experience~~preserve ~~serious~~any ~~cash~~intellectual property ~~flow~~we ~~problems~~develop ~~due~~or toacquire, including copyrights, trademarks, patents, ~~the~~service ~~current~~marks, ~~economic~~trade ~~situation.~~dress, Iftrade ~~our~~secrets ~~customers~~and orsimilar ~~suppliers~~intellectual ~~attempt~~property. ~~increase~~We ~~their~~rely ~~prices,~~on ~~pass~~the ~~through~~intellectual ~~increased~~property, ~~costs~~patent, ~~alter~~trademark ~~payment~~and ~~terms~~copyright orlaws ~~seek~~of ~~other~~the ~~relief,~~United States and other countries to protect our ~~business~~proprietary rights. However, we may ~~suffer~~be unable to prevent third parties from ~~decreased~~using ~~sales~~our tointellectual ~~final~~property without ~~consumers~~our orauthorization, particularly in those countries where the laws do not ~~increased~~protect ~~costs~~our toproprietary usrights as fully as in the United States. IfThe ~~any~~use of our intellectual ~~vendors~~property or ~~suppliers~~similar gointellectual ~~out~~property ofby ~~business,~~others could reduce or eliminate any competitive advantage we may develop, causing us to lose sales or otherwise harm our business. We may ~~not~~need beto ~~able~~bring legal claims to ~~replace~~enforce ~~them~~or protect ~~with~~such ~~other~~intellectual ~~companies~~property ofrights. ~~the~~Any ~~same~~litigation, ~~quality~~whether ~~and~~successful or ~~level~~unsuccessful, could result in substantial costs and diversions of ~~service~~resources. IfIn addition, notwithstanding the ~~quality~~rights ofwe have secured in our ~~products~~intellectual property, ~~and~~other ~~promptness~~persons ofmay ~~delivery~~bring claims against us that we have infringed on ~~deteriorates~~their asintellectual aproperty ~~result,~~rights or claims that our ~~revenue~~intellectual ~~will~~property right ~~likely~~interests ~~decrease~~are asnot ~~retailers~~valid. ~~and consumers~~Any ~~would~~claims against us, with or without merit, could be ~~less~~time ~~likely~~consuming and costly to ~~choose~~defend or litigate and therefore could have an adverse affect on our ~~products~~business. ~~out~~If any of ~~those~~these ~~available~~risks toarise, our ~~them~~business would likely suffer.

38We do not have sufficient funds to ensure that we can continue our operations. If we do not obtain sufficient cash, we will go out of business and our shareholders will lose their entire investment in our company.

We do ~~not~~rely ~~expect~~on ~~that~~proceeds ~~the~~from ~~difficult~~sales and ~~economic~~loans ~~conditions~~or ~~are~~the ~~likely~~sales toof ~~improve significantly~~equity in ~~the~~our ~~near~~Company ~~future,~~to ~~and~~acquire ~~further~~funds. ~~deterioration~~There ofis ~~the~~no guarantee ~~economy,~~that ~~and even~~we ~~consumer~~will ~~fear~~be ~~that~~able ~~the~~to ~~economy~~earn ~~will~~enough ~~deteriorate~~proceeds ~~further,~~from ~~could~~sales ~~intensify~~or borrow ~~the~~enough ~~adverse~~money ~~effects~~or sell enough shares of ~~these~~our ~~difficult~~company ~~market~~to ~~conditions~~continue to pay for our operations.

We If ~~have~~we acannot ~~high~~fund ~~concentration~~all of ~~sales~~our future operations through revenue, we may choose to araise ~~number~~money through sales of our ~~key~~equity securities. However, many investors have recently seen large ~~department~~decreases ~~stores~~in ~~across~~the ~~all~~value of ~~our~~various ~~divisions~~investments due to declining share prices across many economic sectors. ~~Loss~~Because of ~~one~~this and other market factors, if we choose to raise funds through the sale of ~~these~~our ~~key~~equity securities, potential ~~customers~~investors ~~would~~may ~~take~~be ~~time~~less likely to ~~replace~~buy ~~and~~our ~~have~~equity asecurities ~~short~~or ~~term~~we ~~adverse~~may ~~impact~~be onneed to sell our equity securities at low prices, resulting in fewer proceeds. This ~~results~~would ofmake it difficult for us to raise adequate amounts to fund our operations through the sale of our equity securities.

~~During~~ If we are unable to fund all of our operations through revenues or the ~~three~~sale ~~months~~of ~~ended~~our ~~June~~equity 30securities, ~~2009~~then ~~sales~~we may choose to ~~three~~borrow ~~customers~~money ~~accounted~~to pay for ~~22.0%,~~ ~~19.7%~~some ~~and~~of 12our operations.4% A tightening of credit ~~our~~conditions ~~net~~has ~~sales.~~also ~~The~~been ~~acceptance~~experienced byin ~~consumers~~the ofeconomy ~~our~~recently. Because of ~~products~~the ~~and~~recent ~~design~~credit crisis, it is ~~important~~possible that we would not be able to ~~our~~borrow ~~success~~adequate ~~and~~amounts ~~competitive~~to ~~position,~~fund ~~and the~~our ~~loss~~operations ofon ~~one~~terms ofand ~~these~~at rates ~~key~~of ~~customers~~interest ~~would~~we ~~have~~find aacceptable ~~short-term~~and ~~adverse~~in ~~impact~~the ~~on our~~best ~~results~~interests ~~from~~of ~~operations~~our company.

~~Risks Related to Our Company~~19

We If ~~lack~~we ancannot ~~operating~~fund ~~history~~our ~~and have losses which we expect~~planned tooperations ~~continue~~from ~~into~~revenue, the ~~future.~~sale Weof ~~have~~our ~~incurred~~equity asecurities ~~loss~~or ~~from~~through ~~operations and~~incurring ~~negative~~debt ~~cash~~on ~~flows~~acceptable ~~from~~terms, ~~operations~~then ~~that~~we ~~raise~~will ~~substantial~~likely ~~doubt~~have ~~about our ability~~ to ~~continue~~scale asdown aor ~~going~~cease ~~concern~~our operations. ~~There~~If iswe noscale ~~assurance~~down our ~~future~~ operations, ~~will~~our ~~result~~share inprice ~~profitable~~would ~~revenues.~~likely decrease Ifand if we ~~cannot~~cease ~~generate~~our ~~sufficient revenues~~operations, toshareholders ~~operate~~will ~~profitably,~~lose wetheir ~~may~~entire investment ~~suspend~~in orour ~~cease operations~~company.

~~Our inception~~The ~~date~~recent ~~was~~weakening ~~February~~of 3,economic ~~2006.~~conditions Wein ~~have~~the aU.S. ~~very~~and around ~~short~~the ~~operating~~world ~~history~~could ~~upon which~~have anharmful ~~evaluation~~effects ofon our ~~future success or failure cannot be made~~business. AsIf ofthese ~~June~~harmful ~~30,~~effects ~~2009,~~cause ~~our~~us ~~accumulated losses since inception amount~~ to ~~$17,228,628.~~scale Indown ~~its audit~~our ~~report dated January 8~~operations, ~~2009,~~then our ~~auditors~~share ~~stated~~price ~~that~~will welikely decrease. ~~have~~If ~~incurred~~these ~~a loss~~harmful ~~from~~effects ~~operations~~cause ~~and~~us ~~negative~~to ~~cash~~cease ~~flows~~our ~~from~~ operations, ~~which~~then ~~raise~~our ~~substantial~~shareholders ~~doubt~~will ~~about~~likely ~~our~~lose ~~ability~~their toentire ~~continue~~investment asin aour ~~going concern~~company.

~~We will~~ The ~~continue~~recent toweakening ~~incur~~of ~~expenses~~economic conditions in the U.S. and ~~may~~around ~~incur~~the ~~operating~~world, ~~losses~~including in the ~~future.~~financial Weservices ~~cannot~~and ~~guarantee~~real ~~that~~estate weindustries, ~~will~~could behave ~~successful~~harmful ineffects ~~becoming~~on orour ~~remaining~~business. Weakening ~~profitable~~economic conditions generally lead to less money being spent on inclothing across the ~~future~~industry as a whole. ~~Failure~~Competition tofor these limited resources will likely become ~~and~~more ~~remain~~intense. ~~profitable~~If ~~would~~consumers ~~cause~~spend usless and do not choose to spend gotheir ~~out~~limited funds on our clothes, we will earn less revenue and we will ofnot ~~business.~~be able to fund our future operations through revenues from sales.

~~Our~~The ~~management~~recent ~~found~~weakening ~~the~~of ~~following~~economic ~~deficiencies~~conditions in the U.S. and around the world could have harmful effects on the operations of our customers ~~disclosure~~and ~~controls~~suppliers and ~~procedures~~the confidence of end consumers, all of which could cause our operations to suffer and our revenues to decrease.

~~There is~~ Some ~~not~~of ~~adequate~~our ~~division~~customers or suppliers ~~segregation~~could ofexperience ~~duties~~serious incash flow problems due to the current economic situation. If our ~~accounting~~customers ~~department~~or suppliers attempt increase their prices, ~~that~~pass ~~has~~through ~~three~~increased ~~staff~~costs, ~~members~~alter payment terms or seek other relief, ~~which~~our business ~~includes~~may ~~the~~suffer ~~Chief~~from ~~Financial~~decreased ~~Officer.~~sales Toto final consumers or increased costs ~~compensate~~to ~~for~~us. ~~the~~If ~~inadequate~~any ~~segregation~~of our vendors or suppliers go out of ~~duties~~business, we ~~have~~may ~~instituted~~not abe ~~system~~able ofto ~~sign-offs~~replace ~~and~~them ~~checks~~with ~~and~~other ~~balances~~companies ~~within~~of the ~~accounting~~same ~~department.~~quality ~~Further, we~~and ~~are~~level inof service. If the ~~process~~quality of ~~implementing~~our aproducts ~~series~~and promptness of ~~closing~~delivery ~~procedures~~deteriorates ~~and~~as a ~~checklists~~result, ~~which~~our ~~must~~revenue bewill ~~signed-off~~likely decrease as retailers and ~~verified.~~consumers would be less likely to choose our products out of those available to them.

~~Risks~~ We ~~Related~~do not expect that the difficult economic conditions are likely to ~~Our~~improve ~~Securities~~significantly in the near future, and further deterioration of the economy, and even consumer fear that the economy will deteriorate further, could intensify the adverse effects of these difficult market conditions.

~~Our~~We ~~stock~~have ~~price~~a ishigh ~~highly~~concentration ~~volatile~~of ~~and~~sales ~~stockholders~~to ~~may~~a benumber of key ~~unable~~department tostores ~~sell~~across ~~their~~all ~~shares,~~of orour ~~may~~divisions. beLoss ~~forced~~of one of these key customers would take time to ~~sell~~replace ~~them~~and athave a ~~loss~~short term adverse impact on our results of operations.

~~The~~ During the three months ended ~~trading~~December ~~price~~31, of2009 ~~our~~sales ~~common~~to ~~stock~~three ~~has~~customers ~~fluctuated~~accounted ~~significantly~~for ~~since~~30.9%, ~~our~~22.8% and 9.5% ~~incorporation~~of ~~(March~~the 2Company’s net sales. During the three months ended December 31, ~~2005)~~2009, purchases ~~and~~from isone ~~likely~~supplier tototaled ~~remain~~$584,000, ~~volatile~~or in25% of the ~~future~~cost of sales. ~~The~~During ~~trading~~the ~~price~~three ofmonths ~~our~~ended ~~common~~December ~~stock~~31, ~~could~~2008 besales ~~subject~~ to ~~wide~~three ~~fluctuations~~customers accounted infor 23%, 13% and 12% of the Company’s net sales. During the three ~~response~~months toended ~~many~~December ~~events~~31, or2008, ~~factors~~purchases from one supplier totaled approximately $1,354,000, ~~including~~or 27% of the ~~following:~~cost of sales.

~~quarterly~~Risks ~~variations~~Related into ~~our~~Our ~~operating results;~~ Company

~~changes~~We lack an operating history and have losses which we expect to continue into the future. We have incurred a loss from operations and negative cash flows from operations that raise substantial doubt about our ability to continue as a going concern. There is no assurance our future operations will result in ~~financial~~profitable ~~estimates~~revenues. byIf ~~securities~~we ~~analysts;~~cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.

~~changes~~ As inof ~~market~~December ~~valuations~~31, or2009, ~~financial~~our accumulated ~~results~~losses ofsince ~~apparel~~inception ~~companies;~~amount to $20,452,406. In its audit report dated February 12, 2010, our auditors stated that we have incurred losses from operations and we have negative working capital, stockholders’ deficit and negative cash flows from operations which raise substantial doubt about our ability to continue as a going concern.

~~announcements by us or our competitors of new products, or significant acquisitions, strategic partnerships or joint ventures;~~ 20

~~any~~ We ~~deviation~~will ~~from~~continue ~~projected~~to ~~growth~~incur expenses ~~rates~~and may incur operating losses in ~~revenues;~~the future. We cannot guarantee that we will be successful in becoming or remaining profitable in the future. Failure to become and remain profitable would cause us to go out of business.

~~any~~Our ~~loss~~management offound athe ~~major~~following ~~customer~~weaknesses in our disclosure controls and procedures, which could result in accidental or intentional amisstatements. ~~major~~If ~~customer~~any ~~order;~~of these things happen, we and our investors may lose money.

39 There is not adequate division or segregation of duties in our accounting department that has three staff members, which includes the Chief Financial Officer. Therefore our internal control over financial reporting may not prevent accidental or intentional misstatements. This could cause our financial reporting to be in error and to cause investors to make decisions based on incorrect information. It could also cause us extra expense in having the financial and disclosure documents redone and refilled. It also could allow someone in the company to embezzle or improperly use funds. If any of these things happen, then our company and our investors may lose money.

~~additions~~Risks orRelated ~~departures~~to ofOur ~~key management or design personnel;~~ Securities

~~any~~Our ~~deviations~~stock inprice ~~our~~is ~~net~~highly ~~revenue~~volatile and stockholders may be unable to sell their shares, or inmay ~~losses~~be ~~from~~forced ~~levels~~to ~~expected~~sell ~~by securities~~them ~~analysts;~~at a loss.

~~activities~~ The trading price of ~~short~~our ~~sellers~~common stock ~~and~~has ~~risk~~fluctuated ~~arbitrageurs;~~significantly since our incorporation (March 2, 2005), and is likely to remain volatile in the future. The trading price of our common stock could be subject to wide fluctuations in response to many events or factors, including the following:

~~future~~quarterly ~~sales~~variations ofin our ~~common~~operating ~~stock.~~results;
~~The equity~~changes ~~markets~~in ~~have,~~financial onestimates ~~occasion,~~by ~~experienced significant price and volume fluctuations that have affected the market prices for many companies'~~ securities ~~and~~ ~~that~~analysts; have often been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.
~~The~~changes ~~U.S. Securities and Exchange Commission imposes additional sales practice requirements on brokers who deal~~ in ~~our~~market ~~shares~~valuations ~~which are~~or ~~penny~~financial ~~stocks,~~results ~~some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price~~ of ~~the~~ ~~shares~~apparel ~~to decline.~~ companies;
~~Our shares~~announcements ~~are classified as penny stocks and are covered~~ by ~~Section~~us ~~15(g)~~or ~~of the Securities Exchange Act of 1934 and the Rules which impose additional sales practice requirements on brokers/dealers who sell~~ our ~~securities~~competitors ~~in this offering or in the aftermarket. For sales~~ of ~~our~~new ~~securities~~products, ~~the~~or ~~broker/dealer~~significant ~~must make a special suitability determination and receive from you a written agreement prior to making a sale for you. Because of the imposition of the foregoing additional sales practices~~ acquisitions, itstrategic ispartnerships ~~possible~~or ~~that~~joint ~~brokers~~ventures; ~~will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.~~
Weany dodeviation ~~not~~from ~~intend~~projected togrowth ~~pay~~rates ~~dividends and there will be less ways~~ in ~~which~~revenues; ~~you can make a gain on any investment in our company.~~
~~We have never paid~~ any ~~cash~~loss dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a ~~dividend.~~major ~~Because~~customer weor doa ~~not~~major ~~intend~~customer ~~to declare~~order; ~~dividends, any gain on an investment in our company will need to come through appreciation of the stock’s price.~~
~~ITEM~~additions 2.or ~~UNREGISTERED~~departures ~~SALES~~of OFkey ~~EQUITY~~management ~~SECURITIES~~or ~~AND~~design ~~USE~~personnel; ~~OF PROCEEDS~~
~~On February~~any 6,deviations ~~2009, we raised $370,000~~ in aour ~~private~~net ~~placement~~revenue ~~selling~~or ~~3,700,000 units~~in ~~consisting~~losses offrom ~~3,700,000~~levels ~~common~~expected ~~shares at a price of $0.10 per share plus~~by ~~1,850,000~~ securities ~~warrants~~analysts; ~~to purchase common shares at a price of $0.25 per share. The warrants are exercisable for twelve months.~~
~~We issued~~activities ~~3,700,000 shares to four (4) non U.S. persons (as that term is defined in Regulation S~~ of ~~the~~short ~~Securities~~sellers ~~Act~~and ofrisk ~~1933)~~arbitrageurs; ~~in an offshore transaction relying on Regulation S~~ and~~/or~~, ~~Section 4(2) of the Securities Act of 1933.~~
~~ITEM~~future 3.sales ~~DEFAULTS~~of ~~UPON~~our ~~SENIOR~~common ~~SECURITIES~~stock.

~~None~~ The equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies' securities and that have often been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.

~~ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS~~21

~~None~~The U.S. Securities and Exchange Commission imposes additional sales practice requirements on brokers who deal in our shares which are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price of the shares to decline.

40 Our shares are classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 and the Rules which impose additional sales practice requirements on brokers/dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale for you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.

~~ITEM~~We 5.do ~~OTHER~~not ~~INFORMATION~~intend to pay dividends and there will be less ways in which you can make a gain on any investment in our company.

~~Convertible~~ We ~~Loan~~have ~~Agreement~~never paid any cash dividends and ~~Subscription~~currently do not intend to pay any dividends for the foreseeable ~~Agreements~~future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through appreciation of the stock’s price.

~~On June~~The ~~15,~~recent ~~2009,~~weakening ~~the~~of ~~Company~~economic ~~entered~~conditions ~~into~~in athe ~~convertible~~U.S. ~~loan agreement, dated for~~and ~~reference~~around ~~April~~the 9,world ~~2009,~~could ~~with~~have 15harmful ~~new~~effects ~~lenders,~~on ~~whereby~~ the ~~lenders~~operations ~~agreed to loan the Company the aggregate principal amount~~ of ~~US$1,000,000~~our ~~bearing interest at~~customers ~~9% per annum, compounded~~ and ~~payable~~suppliers ~~bi-annually, on the outstanding principal,~~ and ~~repayable on or before April 30, 2011. At~~ the ~~same~~confidence ~~time, the remaining outstanding balance~~ of ~~US$1,187,500~~end ~~under loan agreements with Sinecure Holdings Limited~~consumers, ~~Peter~~all ~~Hough~~of ~~and~~which ~~Providence~~could ~~Wealth~~cause ~~Management Ltd., (see above) was~~our ~~conformed~~operations ~~from the terms of those previous loan agreements~~ to ~~the~~suffer ~~same terms as the June 15. 2009 convertible loan agreement under the Pari Passu~~ and ~~Loan Modification~~our ~~Agreement~~revenues ~~described~~to ~~below~~decrease.

~~Interest on~~ Some ~~all~~ of ~~the~~our ~~loans~~customers ~~may~~or suppliers becould ~~paid~~experience inserious cash orflow ~~shares~~problems ofdue ~~our~~to ~~common~~the ~~stock,~~current economic situation. If our customers or ~~any~~suppliers attempt increase their prices, ~~combination~~pass ~~thereof~~through increased costs, atalter payment terms or seek other relief, our business ~~discretion~~may suffer from decreased sales to final consumers or increased costs to us. If ~~interest~~any isof ~~paid~~our invendors ~~shares~~or suppliers go out of business, we may not be able to replace them with other companies of the same quality and level of service. ~~conversion~~If ~~price~~the quality of our products and promptness of delivery deteriorates as a result, our revenue will likely decrease as retailers and consumers would be less ~~US$0.15~~likely into ~~value~~choose our products out of ~~interest~~those ~~per~~available ~~share.~~to them.

~~At any~~ We ~~time~~do onnot orexpect ~~before~~that ~~April~~the difficult ~~30,~~economic ~~2011,~~conditions ~~any~~are oflikely ~~the~~to ~~lenders~~improve ~~may~~significantly ~~give~~in usthe ~~written~~near ~~notice~~future, and ~~convert~~further ~~all~~deterioration ~~or a portion~~ of the ~~loan into units~~economy, ~~consisting of one share of our common stock~~ and ~~one~~even ~~common~~consumer ~~share~~fear ~~purchase warrant, at a price per~~that ~~unit~~the ofeconomy ~~US$0.10.~~will ~~Each~~deteriorate ~~common~~further, ~~share~~could ~~purchase~~intensify ~~warrant~~the isadverse ~~exercisable~~effects ~~into one~~of ~~share~~these ofdifficult ~~our~~market ~~common stock at a price of US$0~~conditions.~~15 per share for a period of 24 months.~~

~~Pari~~Our ~~Passu~~management ~~and~~beneficially ~~Loan~~own ~~Modification~~approximately ~~Agreement~~15% of the shares of common stock may be able to control matters requiring approval by our stockholders. The interests of management could conflict with those of other investors, which could cause investors to lose all or part of their investments in our company.

~~On June~~ As 15of December 31, 2009, ~~the~~our directors ~~Company~~and ~~entered~~officers ~~into~~as a ~~pari~~group ~~passu~~beneficially ~~and~~owned ~~loan~~approximately ~~modification~~11% of our ~~agreement~~outstanding common stock. Therefore, ~~dated~~our ~~for~~directors ~~reference~~and ~~April~~officers 9,may ~~2009,~~be ~~with~~able ~~Providence~~to control ~~Wealth~~matters ~~Management~~requiring approval by our stockholders. Matters that require the ~~Ltd~~approval of our stockholders include the election of directors and the approval of mergers or other business combination transactions. Our directors and officers also have control over our management and affairs. As a result of such control, ~~Sinecure~~certain ~~Holdings~~transactions ~~Limited~~are effectively not possible without the approval of our directors and officers, ~~Peter~~including, ~~Hough~~proxy contests, antender ~~individual~~offers, ~~and~~open market ~~Chelsea~~purchase ~~Capital~~programs or other transactions that could give our stockholders ~~Corporation~~the ~~(representing~~opportunity to realize a premium over the 15then-prevailing ~~new~~market ~~lenders~~prices ~~described~~for their ~~above)~~shares of our common stock. If the interests of our directors and officers conflict with those of our investors, ~~whereby~~investors itcould ~~was~~lose some or all of the ~~agreed~~potential ~~that:~~benefit of their investment.

~~(a)~~ITEM US$1,187,500, representing the aggregate balance of the outstanding loans to the company pursuant to: (i) the loan agreement dated effective March 4, 2008 with Sinecure Holdings Limited and Capella Investments Inc2. ~~(Capella~~UNREGISTERED ~~Investments~~SALES ~~subsequently~~OF ~~transferred~~EQUITY ~~all~~SECURITIES ~~its interest~~AND ~~under~~USE ~~such~~OF loan agreement to Peter Hough), and (ii) the loan agreement dated January 16, 2009 with Providence Wealth Management Ltd., would be converted from the terms of the such previous loan agreements to the terms of the convertible loan agreement described above; and PROCEEDS

~~(b)~~None all security interests created pursuant to: (i) the security agreement dated for reference April 9, 2009 for the benefit of Chelsea Capital; (ii) the security agreement dated March 4, 2008 for the benefit of Sinecure Holdings and Peter Hough; and (iii) the security agreement dated January 16, 2009 for the benefit of Providence Wealth Management, will have equal priority and that the creation, registration, filing and existence of the security interests will not constitute an event of default under any of such security agreements.

~~Changes in Directors and Officers~~22

~~On May~~ITEM ~~21, 2009 we appointed Dru Narwani and Charles Shaker as Directors of the Company~~3. OnDEFAULTS ~~July~~UPON ~~31,~~SENIOR ~~2009, Jacques Ninio resigned as a Director of the Company.~~ SECURITIES

~~Subsequent events~~Short ~~note~~Term ~~regarding~~Loan ~~Changes~~Payable into Directors and Officers: On August 20, 2009, we announced the resignation of Stephen Soller as our Chief Executive Officer and the appointment of Charles Lesser as Chief Executive Officer effective August 17, 2009. There were no disagreements between Mr. Soller and our company. Mr. Soller remains on our board of directors along with Dru Narwani and Charles Shaker. Charles Lesser is now our CEO and our CFO. Shareholder

41On November 24, 2009, we entered into a loan agreement with Providence Wealth Management Ltd., a company incorporated under the laws of the British Virgin Islands, whereby Providence agreed to loan our company the aggregate principal amount of US$290,000 bearing interest 9% per annum calculated and compounded monthly, payable in full 30 days after advance, unless sooner prepaid or accelerated upon. As of February 22, 2010, the loan has not been repaid. As of December 31, 2009 the company recorded interest in the amount of $2,646.

~~ITEM~~ As 6.security ~~EXHIBITS~~for the Loan, we entered into a Trade-Mark Assignment Agreement dated November 24, 2009, with Providence whereby we will assign to Providence all of our right, title and interest to the “Scrapbook” trademark as a secured charge behind Merchant Factors Inc.

~~Exhibits~~ITEM ~~required~~4. bySUBMISSIONS ~~Item~~OF ~~601~~MATTERS ofTO ~~Regulation~~A ~~S-B~~VOTE OF SECURITY HOLDERS

Exhibit Number	Description
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation of Panglobal Brands Inc. (formerly EZ English Online) (attached as an exhibit to our Form SB-2 filed January 3, 2006).
3.2	Bylaws of Panglobal Brands Inc. (formerly EZ English Online) (attached as an exhibit to our Form SB-2 filed January 3, 2006).
3.3	Articles of Incorporation of Mynk Corp. (attached as an exhibit to our Form SB- 2 filed February 3, 2006).
3.4	Bylaws of Mynk Corp. (attached as an exhibit to our Form SB-2 filed February 3, 2006).
3.5	Certificate of Amendment (attached as an exhibit to our Current Report on Form 8-K filed on February 6, 2007).
3.6	Certificate of Ownership (attached as an exhibit to our Current Report on Form 8-K filed on February 6, 2007).
(10)	Material Contracts
10.1	PayPal User Agreement (attached as an exhibit to our Form SB-2 filed February 3, 2006).
10.2	Affiliated Stock Purchase Agreement dated December 12, 2006 (attached as an exhibit to our Current Report on Form 8-K filed on December 13, 2006).
10.3	Share Exchange Agreement between Panglobal Brands Inc. and Mynk Corporation, dated February 15, 2007 (attached as an exhibit to our Current Report on Form 8-K filed on February 20, 2007).
10.4	Consulting Agreement between our company, Lolly Factory, LLC and Mark Cywinski dated September 16, 2007 (attached as an exhibit to our Form 8-K filed September 27, 2006).
10.5	Lease Agreement with RFS Investments LLC, dated January 11, 2007 (attached as an exhibit to our Current Report on Form 8-K filed on February 20, 2007).
10.6	Lease Agreement with YMI Jeanswear (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.7	Lease Agreement with Jamison California Market Center, L.P. (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.8	Lease Agreement with Steven Goldstein (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.9	Lease Agreement with TR 39th St. Land Corp. (attached as an exhibit to our Annual Report on Form 10- KSB filed on January 15, 2008)
10.10	Loan Agreement dated January 16, 2009 with Providence Wealth Management Ltd (attached as an exhibit to our current report on Form 8-K filed on January 22, 2009)
10.11	Security Agreement dated January 16, 2009 with Providence Wealth Management Ltd (attached as an exhibit to our current report on Form 8-K filed on January 22, 2009)
10.12	Pari Passu Agreement dated January 16, 2009 with Providence Wealth Management, Sinecure Holdings Limited and Capella Investments Inc Ltd (attached as an exhibit to our current report on Form 8-K filed on January 22, 2009)
10.13	Loan Agreement dated March 4, 2008 with Sinecure Holdings Limited and Capella Investments Inc Ltd (attached as an exhibit to our current report on Form 8-K filed on January 22, 2009)
10.14	Security Agreement dated March 4, 2008 with Sinecure Holdings Limited and Capella Investments Inc Ltd. (attached as an exhibit to our current report on Form 8-K filed on January 22, 2009)
16	Letter re change in certifying accountant
16.1	Grobstein Horwath & Company LLP resignation dated January 8, 2009.(attached as an exhibit to our current report on Form 8-K filed on February 3, 2009)
16.2	Letter of Grobstein Horwath & Company LLP, dated January 30, 2009 (attached as an exhibit to our current report on Form 8-K filed on February 3, 2009)

None

42ITEM 5. OTHER INFORMATION

Exhibit Number	Description
(31)	Section 302 Certifications
31.1*	Certification under Sarbanes-Oxley Act of 2002.
(32)	Section 906 Certifications
32.1*	Certification under Sarbanes-Oxley Act of 2002.

Changes in Directors and Officers

* On ~~filed~~May ~~hereto~~21, 2009 we appointed Dru Narwani and Charles Shaker as Directors of the Company. On July 31, 2009, Jacques Ninio resigned as a Director of the Company.

43 On August 20, 2009, we announced the resignation of Stephen Soller as our Chief Executive Officer and the appointment of Charles Lesser as Chief Executive Officer effective August 17, 2009. Charles Lesser is now our CEO and our CFO. There were no disagreements between Mr. Soller and our company. Mr. Soller remained on our board of directors along with Dru Narwani and Charles Shaker. On January 17, 2010 Stephen Soller and Dru Narwani resigned as directors of the Company.

~~SIGNATURES~~ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. None

~~PANGLOBAL~~ITEM ~~BRANDS~~13. ~~INC~~EXHIBITS.

~~By:~~Exhibits ~~/s/~~required ~~Charles~~by A.Item ~~Lesser~~601 ~~Charles~~of A.Regulation ~~LesserChief Executive Officer, Chief Financial Officer(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) Dated: September 21, 2009~~ S-K

Exhibit Number	Description
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation of Panglobal Brands Inc. (formerly EZ English Online) (attached as an exhibit to our Form SB-2 filed January 3, 2006).
3.2	Bylaws of Panglobal Brands Inc. (formerly EZ English Online) (attached as an exhibit to our Form SB-2 filed January 3, 2006).
3.3	Articles of Incorporation of Mynk Corp. (attached as an exhibit to our Form SB- 2 filed February 3, 2006).
3.4	Bylaws of Mynk Corp. (attached as an exhibit to our Form SB-2 filed February 3, 2006).

Exhibit Number	Description
3.5	Certificate of Amendment (attached as an exhibit to our Current Report on Form 8-K filed on February 6, 2007).
3.6	Certificate of Ownership (attached as an exhibit to our Current Report on Form 8-K filed on February 6, 2007).
(10)	Material Contracts
10.1	PayPal User Agreement (attached as an exhibit to our Form SB-2 filed February 3, 2006).
10.2	Affiliated Stock Purchase Agreement dated December 12, 2006 (attached as an exhibit to our Current Report on Form 8-K filed on December 13, 2006).
10.3	Share Exchange Agreement between Panglobal Brands Inc. and Mynk Corporation, dated February 15, 2007 (attached as an exhibit to our Current Report on Form 8-K filed on February 20, 2007).
10.4	Consulting Agreement between our company, Lolly Factory, LLC and Mark Cywinski dated September 16, 2007 (attached as an exhibit to our Form 8-K filed September 27, 2006).
10.5	Lease Agreement with RFS Investments LLC, dated January 11, 2007 (attached as an exhibit to our Current Report on Form 8-K filed on February 20, 2007).
10.6	Lease Agreement with YMI Jeanswear (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.7	Lease Agreement with Jamison California Market Center, L.P. (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.8	Lease Agreement with Steven Goldstein (attached as an exhibit to our Annual Report on Form 10-KSB filed on January 15, 2008)
10.9	Lease Agreement with TR 39th St. Land Corp. (attached as an exhibit to our Annual Report on Form 10- KSB filed on January 15, 2008)
10.10	Loan Agreement dated November 24, 2009 with Providence Wealth Management Ltd. (attached as an
	exhibit to our Current Report on Form 8-K filed on February 16, 2010)
10.11	Trade-Mark Assignment Agreement dated November 24, 2009 with Providence Wealth Management Ltd. (attached as an exhibit to our Current Report on Form 8-K filed on February 16, 2010)
10.12	Guarantee dated February 15, 2010 with Mr. Charles Lesser (attached as an exhibit to our Current Report on Form 8-K filed on February 16, 2010)
(31)	Section 302 Certifications
31.1*	Certification under Sarbanes-Oxley Act of 2002.
31.2*	Certification under Sarbanes-Oxley Act of 2002.

Exhibit Number	Description
(32)	Section 906 Certifications
32.1*	Certification under Sarbanes-Oxley Act of 2002.
32.2*	Certification under Sarbanes-Oxley Act of 2002.

* filed hereto

SIGNATURES

Panglobal Brands Inc.

By: /s/ Charles Lesser
Charles Lesser
Chief Executive Officer and Financial Officer
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Dated: February 24, 2010

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.

By: /s/ Charles Lesser
Charles Lesser
Chief Executive Officer and Financial Officer
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Dated: February 24, 2010

By: /s/ Charles Shaker
Charles Shaker
Director
Dated: February 24, 2010

Filing Compare · Panglobal Brands Inc.