UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549



FORM 10-KSB



xANNUAL REPORT UNDER TO SECTION 13 or 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended:     September 30, 2008



oTRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the transition period   from    to



Commission File No.:     0-2661



NORAM CAPITAL HOLDINGS, INC.

(Name of small business issuer in its charter)



|                                         |  |                                  
|---------------------------------------- |  | ---------------------------------
|Delaware                                 |  | 13-1946181                       
|(State of jurisdiction of incorporation) |  | (IRS Employer Identification No.)



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|P. O. Box 9250, Dallas, Texas            |  | 75209     
|(Address of principal executive offices) |  | (Zip Code)



Issuer's telephone number: (888) 886-6726



Securities registered pursuant to Section 12(b) of the Act:  None



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



Class A Common Stock, Par Value $.002

(Title of Class)



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



(1)  YES x   NO o

(2)  YES x   NO o



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-KSB or any amendment to this Form 10-KSB. o



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES o  NO x



State issuers revenues for its most recent fiscal year: $2,698,013.



The aggregate market value of the registrant's Class A Common Stock held by non-affiliates of the registrant, computed by reference to the average bid and asked prices of such stock as of December 26, 2008, the last available quotation date:  Approximately$1,021,937



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practical date.  The number of shares of the registrant's Class A, $.002 par value Common Stock outstanding as of December 29, 2008 was 14,599,101.





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PART I



Forward-looking Statements



In addition to historical information, this annual report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are not based on historical facts, but rather reflect managements current expectations concerning future results and events.  These forward-looking statements generally can be identified by the use of phrases and expressions such as believe, expect, anticipate, intend, plan, foresee, likely, will, or other similar words or phrases.  Forward-looking statements include, without limitation, statements related to the Companys plans, objectives, expectations, and intentions, and market and general economic conditions.  These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect managements opinions only as of the date hereof.  The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.



Item 1. Description of Business



(A)Business Development:



History of the Company



NORAM CAPITAL HOLDINGS, INC. (Formerly HARRELL HOSPITALITY GROUP, INC.) (the "Company") is a Delaware corporation which was originally incorporated in 1959 in Massa­chusetts under the name of Formula 409, Inc.  In 1967, the Company's name was changed to The Harrell Corporation, in 1968 to Harrell International, Inc., and in 2000 to Harrell Hospitality Group, Inc.  The Company changed its state of incorporation from Massachusetts to Delaware in March, 1987.  The Company originally manufactured and sold a multi-purpose household spray cleaner under the registered trademark "Formula 409."  In 1970, the Company sold the rights to "Formula 409" to Clorox Corporation.  During the period 1970 to 1983 the Company was primarily engaged in the business of acquiring and operating food and non-food brokers which represented the products of various unrelated manufacturers to either the U. S. domestic civilian market or to the U. S. military resale system.  In 1983, the Company completed the divestiture of its consumer products broker­age businesses and entered a phase during which its revenues were derived primarily from the collection of receivables acquired in connection with such divestitures.



From 1983 to 1990 the Company was largely inactive, and Wilson Harrell, the president of the Company at that time, sought possible merger candidates. In 1991 and 1992 the Company entered into agreements with Xenex, Inc., now known as Businesship International (BI), to make an equity investment in the Company and fund certain loans to the Company.





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In 1992 the Company acquired Hotel Management Group, Inc., a Texas corporation ("HMG"). The principals of HMG, Paul L. Barham and Norman L. Marks, had significant experience in hotel operations and management, and the business of the Company changed to hotel acquisition and management.   The Company managed two hotels in California and made a number of attempts to acquire hotels in the United States.  The small size and lack of financial resources made such acquisitions difficult, and despite attempts to join with equity partners and financing partners in the acquisition and development of hotels, the Company was unsuccessful in establishing additional long term management contracts or ownership of hotels in the U.S. The Company opened an office in the United Kingdom in 1999 to seek hotel acquisition opportunities and management opportunities, but these efforts did not result in hotel ownership or management contracts, and in 2005 the Company sold its UK subsidiary to Red Leopard Holdings, plc (RLH), a UK company traded on the AIM London Stock Exchange.



The Company needed additional capitalization to remain a going concern, and the Board sought investors who would invest in the Company and support it in its existing hospitality business. However, the Board, in discussions with potential investors, only found those that were interested in taking the Company in a different direction, away from the hospitality business.   Therefore, the Company sold HMG and all other hospitality assets on September 29, 2006 and , shortly thereafter, divested itself of the RLH stock.



New Investors



On November 2, 2006, Global Trek Property Holdings, L.P. (Global Trek), a company affiliated with Anthony Renteria, and Square Rock, Ltd. (Square Rock), a company affiliated with Daniel Cofall, as new investors, purchased 12,644,290 shares of  Class A Common Stock issued by the Company, and thus acquired control of the Company.  Anthony Renteria and Daniel Cofall were appointed as the new Board of Directors. One Board of Directors position remains unfilled at this time.



Change of Business to Financial Receivable Management



The Board changed the business of the Company from the hospitality industry to financial receivables management and debt collection.  These types of services are rendered for credit issuers or other holders of debt portfolios.  The Company actively reviews acquisition opportunities in these areas.



Name Change



On January 5, 2007, the name of the Company was changed to NorAm Capital Holdings, Inc.  The name change is designed to help distinguish the business of the Company from its previous course of business in the hospitality industry.



(B) Business of the Issuer:



For the fiscal year ended September 30, 2008, the period covered by this Annual Report, the business of the Company was in financial receivables management and debt collection management.  These services were rendered for credit issuers or other holders of debt portfolios.  In addition, the Company is engaging in the purchase and resale of portfolios of defaulted debt and may engage in the collection of debt portfolios for its own account.



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The Company provides services to its clients to allow the clients to maximize their returns on their charged-off debt and accounts receivable.  These client companies include debt issuers, such as banks, credit card companies, short term payday lenders, automobile lenders and other creditors, secondary resellers of charged-off debt portfolios, and buyers of debt portfolios.  Clients may be domestic or international, although to date the Company has focused on domestic clients.  In addition to services for client companies, the Company engages in charged-off debt trading and debt buying and collection for its own account.  The Company plans to add its own debt collection services through a proposed debt service center that the Company may acquire or build.  For the most part, the debt involved is individual consumer debt, although other types of commercial debt may be considered.



Revenue Sources and Revenue Models



The Company provides its services in several ways that are distinct but complementary revenue models.   The first of these is client services.  Client services includes providing collection agency management services to companies to help them maximize returns from their use of third-party debt collection companies, strategic advisory and consulting services to review their portfolios of delinquent debt and provide counsel on ways to maximize returns to the client companies from their receivables.  The Company plans to provide debt collection services itself once it has acquired the call center facilities and licenses necessary.  Through the proposed call center, the Company will also offer pre-chargeoff services to client companies such as customer reminder calls and follow-up calls.   The client advisory services are provided by contract on an hourly rate basis or may be negotiated on a monthly fee basis.  Typically, the debt collection management work would be billed to the client based on a contingency recovery fee basis from actual recoveries made by the collectors, although the management supervision may be by fixed monthly fee as well.  Debt collection services, once instituted, will generally be on a contingent fee based on a percentage of actual gross collections.



The second revenue model the Company uses is that of charged-off debt trading.  This consists of contemporaneously purchasing and reselling debt portfolios acquired from debt issuers and other debt owners without first collecting or scoring the portfolios.  The Company profits from the margin between the price it purchases a portfolio from a seller and the resale price to a buyer.  At times a large national portfolio of debt, such as defaulted auto loans, might be acquired from a single debt issuer and broken up and sold in smaller portfolios such as individual states or groups of states.  This repackaging can increase profit margins to the Company depending on the demand for smaller portfolios and particular states.  In addition to acting as a principal in debt trading transactions, for a fee, the Company may, in other transactions serve as a broker to locate debt portfolios for buyers or locate debt buyers for sellers.  The debt trading revenue model requires the Company to have funds available to purchase a portfolio, but only for a very limited amount of time since the resale generally occurs the same day, the next day or within a few days of the purchase.



The third revenue model for the Company is buying charged-off debt portfolios for its own account, holding those portfolios and working the portfolios to collect the accounts.  Under this model, the Company purchases debt portfolios it believes will return a high yield and immediately begins the collection process.  At present, the Company utilizes one or more third-party collection agencies to collect the debt, provides liquidation strategies and closely monitors their progress.  Depending on the portfolio, legal actions may also be instituted to collect the debt.  The Company plans to establish its own call center and obtain licensing to have its own consumer debt collection operations.  At that time, the Company would also collect accounts on its own behalf for portfolios it owns, as well as provide services for other clients.  Typically, though not always, after the Company has held and collected a portfolio for some period of months, the remaining uncollected accounts will be repackaged and resold on the secondary market for a lump sum.  The debt buying and collecting revenue model requires the Company to have substantial funds available for an indefinite period of time.  Often, to have an opportunity to acquire promising debt portfolios the buyer must commit to the debt issuer to buy all monthly charge-offs of that issuer for a specified time period of six months or a year.  For this reason, the Company needs substantial financial liquidity or financial partners to undertake large scale debt buying.



Competitive Business Conditions and the Companys Position in the Industry



The overall market for delinquent debt recovery services is increasing rapidly.  The amount of consumer credit outstanding nationally is at record levels, and charged-off consumer debt is increasing dramatically, both in dollar volume and in absolute number of accounts.  Consumer lenders are seeking to maximize their recoveries on the credit extended.   The lenders are using several different strategies to maximize their cash flow.



Collection of delinquent accounts is the first and most obvious way creditors make recoveries on defaulted debt.  Many employ internal collectors as the first method to collect past due accounts.  If internal collection efforts



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do not succeed, traditionally consumer lenders, such as credit card issuers, have engaged third-party collection agencies to assist for a relatively short period of time, usually 60 to 120 days. There are a large number of collection agencies throughout the United States, most offering similar services of collection of accounts in exchange for a percentage of collections received.  The Company does not have its own call center at present and does not perform collection services directly, although it plans to acquire or develop a collection agency within the next twelve months or so. The Company does offer to manage the distribution and placement of accounts to third-party collectors for the client creditor, using a competitive model among collectors and seeking niche collectors for very specific types of debt portfolios in order to increase the returns to the client creditor.  The Company can also monitor the liquidation rates being obtained and advise the creditor regarding optimal timing and selling strategies.  The Company believes this approach of providing  a value added service of optimizing recoveries from third-party collectors  and providing consulting services if desired, allows it to distinguish itself from the many other collection agency options that are available to the client creditor.



The second major way the creditor produces cash from the delinquent accounts is to recall all uncollected accounts from the collection agency, make the determination that the accounts are not quickly collectible and label them as charge-off accounts and put them in a portfolio for resale for a discounted lump sum.  Large established credit issuers, such as credit card companies, routinely charge-off portfolios of uncollected accounts on a monthly basis and sell them for a negotiated or bid price.  Generally, such a creditor, sells all charge-offs for that month for the entire national portfolio for a particular credit card in one lump sale, and usually contracts are negotiated in which the buyer must commit to purchase all charge-offs at a stated rate for a period of six months or a year, called a forward flow contract.  There is strong competition to purchase forward flow charge-offs direct from the issuer of the debt.   This direct-from-issuer debt is generally considered by professional collectors to be among the most predictable and highest liquidating debt on the market, and returns high, stable yields.  There are therefore many buyers who would like to purchase at least a portion of these types of portfolios.  However, the major credit issuers desire not only to receive the best price from the sale of the charged-off portfolios, but are also concerned with their brand reputation and are thus concerned about the identity and reputation of the final holder of the debt and the collection procedures that will be used.   Therefore, in the major issuer direct sales market, competition is fierce and there are only a comparatively few companies that have both the financial ability to make the purchases and are acceptable to the issuers.  The Company believes that the contacts in the industry, experience and reputation of its senior management give it the ability to successfully compete for the purchase of these types of products.  Financially, the ability of the Company to purchase a particular forward flow of debt would depend on a number of factors such as the size of the portfolio, the price, the duration of the flow, whether the purchase was for resale or for holding by the Company, whether the Company had a financial partner or financing available for the purchase or a buyer located for resale.





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Credit markets, both nationally and globally are facing extraordinary pressures.  As debt delinquencies increase, lenders are focused on generating recoveries from the charge-offs, and the volume and varieties of bad debt being sold has increased.  With the increases in supply, there is general pressure on the prices of debt portfolios, and with respect to many areas of defaulted debt, the prices are falling.  This negatively impacts companies that have locked in forward flow purchases at historically high rates, and some credit issuers are being forced by market conditions to reprice their portfolios to lower levels.  Both debt buyers and debt sellers are in the process of re-pricing to adjust for changing risk tolerance, liquidation curves and economic expectations.  Buyers change their expectations more rapidly than do sellers, and the markets are currently adjusting to these changes.  The Company does not hold significant portfolios of debt that are affected by these market pricing changes nor does it hold any forward flow purchase commitments, thus its loss exposure is very limited during this period of transition.  However, debt trading can be difficult as sellers are reluctant to sell for lower prices and buyers are wary of liquidation projections and offer even lower prices. The Company expects that the debt trading market will be priced lower in fiscal year 2009, with volumes of debt on the market increasing as charge off levels increase.



Sources of Debt Portfolios



As discussed above, consumer debt portfolios are regularly sold as charge-offs by major banks and credit card companies.  While the Company seeks such issuer direct portfolios, the Company is also pursuing a number of other sources of debt.  Through business development, education and counseling of clients, the Company is locating various companies that have never pooled the debt and sold it to buyers.  This represents entirely new sources of fresh issuer-direct debt that may have high value to debt buyers.   There are many different debt issuers that are potential sources, including automobile lenders, rent-to-own lenders, retail installment lenders, payday lenders, and internet lenders, among others.



In addition to the issuer direct market, the Company also participates in secondary resales of uncollected debt portfolios by debt collectors and other debt buyers.  Trading in the secondary market for charged-off debt is not fully established for all types of debt, and the Company is helping develop various niches of secondary debt resales.



Customers



There are many potential clients for the Company in that there are thousands of lenders and debt issuers who need financial receivable management services.  The Company is actively expanding the number of its seller and buyer sources, as well as its collection agency relationships.



Licensing



Generally no licensing is required to trade or own debt portfolios or provide financial receivable management services to lenders.  However, in order to collect debts owing to individuals or consumers, most states require certain licenses or bonds, or both.  At present, the Company does not conduct debt collection services itself, and thus generally no licensing is required.  The Company utilizes fully licensed third-party collection agencies to handle its collections at this time. A few states, however, such as West Virginia, have taken more extreme positions that a company must itself obtain a separate collectors license even if its debts are only collected through licensed third-party collectors.   As a consequence, the Company will refrain from and does not have plans to have accounts collected on its behalf in West Virginia.  If and when the Company enters the contingency collection market with its own facilities, it will be required to obtain the necessary state licenses and bonds.





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Effect of Government Regulation on the Business



All companies or entities that originate, service, collect or maintain consumer loans are subject to federal regulations regarding privacy of financial records and the fraudulent access to financial information.  Various statutes, such as the Fair Debt Collection Practices Act (the FDCPA), the Gramm-Leach-BlileyAct (the GLB Act), the Patriot Act, and the Fair Credit Reporting Act (the FCRA) regulate lenders, holders of debt and collectors of debt.  As a holder of debt, and as a liaison with debt collectors and lenders, the Company is affected by the governmental regulations.  The FDCPA imposes restrictions on debt collectors on the procedures and tactics that can be used in the debt collection process and prescribes certain notices that must be provided to debtors in a timely fashion.  Failure to adhere to the FDCPA can result in liability to the collector and to the creditor or holder of the debt for the violation, and the FDCPA gives a right to the debtor to bring legal action directly against these parties for violation of the regulations.  The GLB Act requires banks, financial institutions and debt collectors to provide annual privacy notices to debtors, to develop written security plans to safeguard non-public personal financial information, and to take precautions against pretexting and other fraudulent access to financial records of debtors.



The consumer protection regulations are a fact of the business of consumer debt management, and the Company views the rules and regulations as something positive for the industry that should be embraced.  Too often the business of debt collection and defaulted debt trading is viewed negatively by the public, and the Company believes it is in its best interest and the best interest of its clients and the industry as a whole to raise the standards and elevate business ethics.  While legal compliance and security measures have a significant cost, the Company believes it is essential to the integrity of the business and the ultimate financial success of the business.   The Company works with industry trade groups such as the Debt Buyers Association (DBA) and the American Collectors Association (ACA) to stay current and advice on these topics.



Because of perceived lending practices abuses, individual states are continually reviewing consumer laws and consumer lending regulations.  This type of state regulation can create risk that various loans and the collection of certain loans can become more restricted, licensed or even banned.  For example, some states have enacted legislation banning certain high interest loans to individuals, and several states are restricting or prohibiting payday loans.



Business Development



The business of the Company does not require extensive product development or software development, and the Company does not anticipate large commitments of time, money or personnel towards such development.  However, a large amount of the executive management time is spent toward developing new client relationships and seeking new loan portfolios, new sellers of products and new buyers.



Employees



At September 30, 2008, the Company had 3 full time employees,  and 1 person providing contract assistance.



Item 2. Description of  Property



(A)

Principal Offices



The Company has not owned or leased any real estate during the fiscal year ending September 30, 2008.  In conducting its operations this year, the Companys staff has used home offices and a post office box address.  At the date of filing this Annual Report, management of the Company is not considering the lease of office space to meet its needs for the coming year.





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(B)

Investment Policies



The Board has not set any limit on the Companys investments in real estate or real estate mortgages.  While the Company does not have plans at present to acquire real estate, interests in real estate or real estate mortgages, the Board may consider investment in real estate, and first or second mortgages or portfolios of mortgages, either for income or for long term investment, on a case by case basis.



(C)

Real Estate



The Company does not own or lease any real estate.





Item 3.  Legal Proceedings



(1)

On January 22, 2008, the Company filed an action in the Circuit Court of the 17th Judicial Circuit for Palm Beach County, Florida, styled NorAm Capital Holdings, Inc., as Plaintiff, against Goldberg & Associates, LLC, a Florida limited liability company (Goldberg LLC) and Steven D. Goldberg, individually, as Defendants.



The Company alleges that on December 17, 2007 it entered into a contract with Goldberg LLC to purchase a portfolio of charged off debt from Goldberg LLC for a purchase price of $431,229.00 and wired funds to Goldberg LLCs account on that date for the purchase.  However, despite representing and warranting to the Company that it owned the portfolio free and clear of all liens and encumbrances, Goldberg LLC did not in fact  own the portfolio of accounts, and apparently fraudulently diverted the Companys funds for use as part of a purchase of real estate in Boca Raton, Florida.  Subsequent to the filing of the action,  upon demand by the Company, Goldberg LLC executed a promissory note to the Company and granted the Company a mortgage lien on its real estate in Florida.



In the action filed, the Company has sought compensatory damages, pre-judgment interest, costs and attorneys fees from the Defendants in connection with its claims for fraud, conversion and breach of contract.  The Company has also sought to impose a constructive trust over the Florida real estate owned by Goldberg LLC and for an equitable lien on the real estate and against Goldberg LLC, and has asked the court for foreclosure of its mortgage on the real estate, along with costs, attorney fees and such other relief as the court may find appropriate.  On December 2, 2008, the court granted the Company a default judgment, and at the filing date of this report, the Company is awaiting the clerk of the court to hold the foreclosure sale.



(2)

On September 17, 2008, a complaint was filed by Avatar Income Fund II, LLC (Avatar) against Goldberg LLC, the Company and others in the 15th Judicial Circuit Court of Palm Beach County Florida.  Avatar alleges that Goldberg LLC defaulted in payment of its mortgage note to Avatar.  The purpose of the suit was to seek foreclosure of  the mortgage lien held by Avatar against certain real estate in Boca Raton, Florida owned by Goldberg LLC.  The real estate is same real estate that the Company is asserting its lien upon and seeking foreclosure of in the legal proceeding described  in (1) above.  The Company is named in this Avatar proceeding solely because of the Companys position as lienholder.  The Company is contesting Avatars foreclosure action, asserting that the Companys lien is equal or superior to Avatars lien by reason of Avatars negligence and constructive knowledge of the fraud involved in the purchase by Goldberg & Associates, LLC.



(3)

On August 13, 2008, Express Check Advance, LLC, filed a complaint against the Company,  Global Trek Property Holdings, L.P., and Anthony J. Renteria  in the Circuit Court of Hamilton County, Tennessee.   The Plaintiff alleges breach of contract. In connection with the sale of a portfolio of accounts to the Company, and is alleging damages in the amount of $59,965.26 for failure to complete payment on the sale.  At the date of filing this report, the parties are negotiating in an effort to settle the case.



Item 4.  Submission of Matters to a Vote of Security Holders



No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.



PART II



Item 5.  Market for Common Equity and Related Stockholder Matters



(A)

Market Investments



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During the fourth quarter of Fiscal 2000, the Companys Common Stock commenced trading on the NASD Over-the-Counter Bulletin Board (the Bulletin Board) under the symbol HLTLA.  The trading symbol was changed to HLHGA in connection with the reverse split that occurred on September 29, 2006.  Following the Companys name change on January 5, 2007, the trading symbol was changed to NRMH.  There has been no material market for the Company stock from 1991 until this time.  The following table shows the range of closing bid prices for the Company's Common Stock in the over-the-counter market for the fiscal quarters indicated, as reported by the Bulletin Board.  The quotations represent limited or sporadic trading and, therefore, do not constitute an "established public trading market".  The quotations represent inter-dealer prices, without retail markup, markdown or commission and may not necessarily represent actual transactions.



|               |                        |                        |       |      
|-------------- | ---------------------- | ---------------------- | ----- | -----
|               | Fiscal 2008 Bid Prices | Fiscal 2007 Bid Prices
|               | High                   | Low                    | High  | Low  
|First Quarter  | $0.60                  | $0.52                  | $5.50 | $1.00
|Second Quarter | $0.75                  | $0.35                  | $3.00 | $1.05
|Third Quarter  | $0.75                  | $0.75                  | $6.00 | $1.05
|Fourth Quarter | $0.75                  | $0.11                  | $1.40 | $0.55



(B)

Holders



As of September 30, 2008, there were approximately 1,060 record holders of the Company's Class A Common Stock.



(C)

Dividends



There were no cash dividends paid on the Companys Class A common stock in the last two fiscal years.    No express limits have been set on payment of dividends, other than those imposed by state corporate law statutes.  Delaware corporate law permits payment of dividends only out of surplus, or if there is no surplus, out of net profit from the current fiscal year and the preceding fiscal year.



(D)

Securities Authorized for Issuance Under Equity Compensation Plan



As of September 30, 2008, there were no securities authorized for issuance under equity compensation plans.  All outstanding stock options had been cancelled by mutual agreement between the option holders and the Company.



(E)

Recent Sales of Unregistered Securities



Recent sales of securities by the Company within the past three years that have been made without registration under the Securities Act of 1933 have been disclosed in previous Form 10-QSB reports or Form 8-K reports.





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Item 6.  Management's Discussion and Analysis of Financial Condition and Results of Operation.



Critical Accounting Policies



Managements discussion and analysis of its financial condition and results of operations are based upon the Companys financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities.  On an on-going basis, the Company evaluates its estimates, including those related to revenue recognition, accounts receivable and allowance for doubtful accounts, deferred tax assets, property and equipment, investments, accrued expenses, contingencies and litigation.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from these sources.  Actual results may differ from these estimates under different assumptions or conditions.



We have identified the policies below as critical to the Companys business operations and the understanding of the Companys results of operations.  For a detailed discussion on the application of these and other accounting policies, see Note B in the Notes to Financial Statements.



Revenue Recognition



The Company has three principal categories of revenue:  portfolio collection revenue, portfolio liquidation revenue, and consulting fee revenue.  Portfolio collection revenue is money collected from debtors on the defaulted accounts.  Presently this collection would be through licensed third party collection agencies that the Company uses to collect portfolios; in the future, once the Company has established its in-house collection capabilities, the Company may make these collection efforts itself, or through a licensed subsidiary or affiliate. The portfolio collection revenues may pertain to portfolios owned by others, in which case the collection function is performed by the Company as a service for the owner of the portfolio in exchange for a portion of the funds collected, or it may relate to the outright collecting of debt portfolios owned by the Company.  Portfolio liquidation revenue is money the Company receives from reselling a portfolio of debt to another debt buyer.  Portfolio liquidation revenue may come from either of two types of transactions: a purchase and almost immediate resale transaction, with no collection activity against account debtors while the Company owns the portfolio, or portfolio liquidation revenue may come from resale of remaining uncollected accounts in a portfolio that the Company has owned and collected for some period of time. Consulting fee revenues are monies that the Company charges for rendering services advising other companies on how to manage their receivables or maximize liquidation of existing portfolios of debt they may own, or how to implement strategies in the debt collection or acquisition business.  These revenues may be charged on a variety of bases, ranging from fixed fees to hourly charges to contingency recovery fees. The Company has adopted the cost recovery method of recognizing revenue on the collection of funds on its acquired portfolio. The cost recovery method is appropriate when collections on a particular pool or pools of accounts cannot be reasonably predicted. The Company adopted the cost recovery method due to (1) a lack of operating history, (2) no assurance that the Company will be able to raise the necessary capital to sustain operations, (3) the sole reliance on third party agencies to conduct collection activities, (4) no proven models to (a) reasonably determine the probability of collecting against any of the portfolios acquired to date or, (b) reasonably estimate the amount of funds collected therefrom. Under the cost recovery method, no revenue is recognized until the net acquisition cost of the pool or pools of accounts have been fully collected.  The Company will continue to use the cost recovery method until such time that it considers the collections of its portfolio of pools to be probable and estimable. At that point, and if applicable, the Company will begin to recognize income based on the interest method pursuant to the interest method under the guidance of Statement of Position 03-3, Accounting for Loans or Certain Securities Acquired in a Transfer (SOP 03-3).



Under the guidance of SOP 03-3 (and the amended Practice Bulletin 6), static pools of accounts are established. Pools purchased during a given period are aggregated based on certain common risk criteria. Each static pool is recorded at cost, which includes certain direct costs of acquisition paid to third parties, and is accounted for as a single unit for the recognition of income, principal payments and loss provision. Once a static pool is established, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). SOP 03-3 (and the amended Practice Bulletin 6) requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. SOP 03-3 initially freezes the internal rate of return, referred to as IRR, estimated when the finance receivables are purchased as the basis for subsequent impairment testing. Significant increases in expected future cash flows may be recognized prospectively through an upward adjustment of the IRR over a portfolios remaining life. Any increase to the IRR then



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becomes the new benchmark for impairment testing. Effective for fiscal years beginning after December 15, 2004 under SOP 03-3 and the amended Practice Bulletin 6, rather than lowering the estimated IRR if the collection estimates are not received, the carrying value of a pool would be written down to maintain the then current IRR. Income on finance receivables is accrued periodically based on each static pools effective IRR and shown net of allowance charges on the income statement. Cash flows greater than the interest accrual will reduce the carrying value of the static pool. Likewise, cash flows that are less than the accrual will accrete the carrying balance. The IRR is estimated and periodically recalculated based on the timing and amount of anticipated cash flows using our proprietary collection models. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all cash collections are recognized as revenue when received.



The provisions of SOP 03-3 are generally applicable to the acquirers of long term financing instruments such as corporate notes payable, home loans, etc. The Company focuses exclusively on the acquisition of portfolios of small, sub-prime, defaulted consumer debt obligations. It is the Companys intent to resell the uncollected balances of these portfolios within six to nine months of acquiring them.



Portfolio Reserves



The Company acquires portfolios of defaulted consumer debt obligations at a substantial discount to the contractual value of the obligations. The negotiated discount is based on the Companys determination of the deterioration of the credit quality of the obligations between the time of origination and acquisition by the Company. If the Company determines subsequent to the acquisition of the portfolios that it may be unable to recover its investment in its acquired portfolios, it will establish in the period of determination, a valuation allowance sufficient to provide for the expected losses. The valuation allowance subsequently will be reviewed periodically for changes in the expected losses and adjusted accordingly.  The Company established a valuation allowance on debt portfolios held for sale of $45,209.27 at September 30, 2008.



Income Taxes



Deferred income taxes are determined using the liability method in accordance with Statement of Accounting Standard No. 109 (SFAS No. 109"), Accounting for Income Taxes.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.





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Foreign Currency Translation



All assets and liabilities in the balance sheet whose functional currency is other than the U.S. dollar are translated at year-end exchange rates.  All revenues and expenses in the statement of operations, are translated at average exchange rates for the year.  Any translation gains and losses are not included in determining net income (loss) but would be shown in accumulated other comprehensive income (loss) within the stockholders equity or redeemable preferred stock section of the balance sheet.  The Company did not incur any foreign currency translation gains or losses for the period ended September 30, 2008.  Foreign currency transaction gains and losses are included in determining net income (loss) and were not significant in 2007 or 2008.



Earnings (Loss) Per Common Share



The Company computes earnings per common share in accordance with SFAS No. 128, Earnings Per Share.  SFAS No. 128 provides for the calculation of basic and diluted earnings per share.  Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period.  Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company.  Because the Companys potential dilutive securities are anti-dilutive, the accompanying presentation is only of basic earnings per share.



Stock Options



The Company adopted Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment, as of October 1, 2006, using the modified prospective application method. This statement requires the recognition of compensation expense when an entity obtains employee services in stock-based payment transactions.



Prior to October 1, 2006, the Company recognized compensation cost associated with stock-based awards under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Under APB 25, the difference between the quoted market price as of the date of the grant and the contractual purchase price of shares was charged to operations over the vesting period on a straight-line basis. No compensation cost was recognized for fixed stock options with exercise prices equal to or greater than the market price of the stock on the dates of grant.



Pro forma net loss and earnings per share disclosures as if the Company recorded compensation expense based on fair value for stock-based awards have been presented in accordance with the provisions of SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure.



Accounts Receivable



The Company performs periodic credit evaluations of its clients financial condition and extends credit to virtually all of its clients on an uncollateralized basis.  Credit losses to date have been insignificant and within managements expectations.  Management will establish a bad debt reserve to cover managements estimate of uncollectible accounts.  In the event of complete non-performance by the Companys clients, the maximum exposure to the Company is the outstanding accounts receivable balance at the date of non-performance.





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PLAN OF OPERATION FOR NEXT 12 MONTHS



Cash Requirements



Currently, the Company has transactions in negotiation and transactions in development which, if successfully concluded, should allow the Company to fund its day-to-day cash requirements without the need for borrowing or additional cash infusion.  The Company is exploring the acquisition of an existing collection agency or building a call center, and depending on the operating cash flow at the time, may be able to fund these expenditures without additional capital.  More likely, however, such an acquisition would require the Company to seek additional capital through borrowing or issuance of its securities to one or more investors, most likely in a private negotiated transaction.  In addition, the Company is considering the expansion of its operations to provide back office support and service to third party call center agencies.  The successful conclusion of this expansion will result in additional cash flow to aid in the funding of its day-to-day cash requirements.



Expected Purchase of Assets or Equipment



Until the Company acquires or builds a debt collection call center, it does not expect major purchases of assets or equipment.  The Company may purchase certain office equipment and furniture as it obtains permanent offices.  Once a debt collection call center is being acquired or developed, the Company would be acquiring computer servers, workstations, telephone equipment, debt collection and management software and security equipment, as well as office facilities for the collectors.  The expected cost for the equipment is undetermined at this time, but would likely be several thousand dollars.



Product Development



The business of the Company does not require extensive product development or software development, and the Company does not anticipate large commitments of time, money or personnel towards such development during the next twelve months.



Changes in Number of Employees



The debt trading business can be increased significantly without corresponding increases in the number of employees.  Employee increases can be modest, with certain administrative and sales personnel being the likely additions.  Once a debt collection facility is added, the number of employees may change dramatically, and the number of employees is quite scalable in proportion to the volume of accounts being collected.  Collectors are typically paid on a contingent fee basis and increased on an as needed basis as new portfolios are added.



RESULTS OF OPERATIONS



A.

Revenues



A comparison of current year operations to prior year operations would not produce meaningful analysis as prior year revenue and income results are for the period January 1, 2007 through September 30, 2007.  There was no revenue generated during the first quarter of fiscal year 2007.



Revenues for the year ended September 30, 2008 were $2,698,013.  This revenue was generated from the sale of portfolios purchased for resale, collections from portfolios placed with third party agencies for collection and consulting and advisory services.  Cost of revenues for the year ended September 30, 2008, were $2,009,382.  The gross profit for the year was $688,631 or 25.5% of revenues.





13





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B.

Operating expenses



Total operating expenses for the fiscal year ended September 30, 2008 were $874,432 or 32.4% of revenues.  This balance primarily consists of $462,440 in compensation expenses, $67,772 in legal fees, $60,056 in computer and internet expenses, and $69,465 in travel & entertainment expenses.



C.

Other income (expense)



Interest income for the year ending September 30, 2008 was $77,780.  This balance primarily consists of interest received of $22,835 on the $250,000 promissory note from the Buying Group, and $51,361 of interest accrued on the Goldberg promissory note.  Total interest expense for the year was $27,805 which primarily consists of $25,360 of interest incurred on the $225,000 working capital facility.



D.

Off-Balance sheet arrangements.



The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial condition, revenues or expenses, liquidity, capital expenditures or capital resources.



LIQUIDITY AND CAPITAL RESOURCES



The Goldberg LLC litigation, described above, has had a significant negative impact on the liquidity of the Company since January 2008.   The transaction with Goldberg LLC represents an  unexpected net cash outflow of over $450,000 that has strained Company resources.  This has caused the Company to reduce, or in some cases stop, payments to vendors and make efforts to reduce employee compensation.



On May 6, 2008 the Company executed an unsecured line of credit demand note with Global Trek, an affiliate of Anthony J. Renteria, in the amount of $100,000 for working capital purposes, of which $90,000 has been advanced to the Company.  The note bears interest of five percent (5%) annually on the outstanding principal balance.  All principal and interest shall be due in full within thirty (30) days after written notice by the noteholder. The note may be paid  in whole or in part without penalty or premium.



On May 6, 2008, the Board authorized the Company to borrow up to $100,000 from Square Rock, an affiliate of Daniel Cofall, of which $11,000 has been advanced to the Company.  The borrowing is evidenced by a promissory note bearing an interest of five percent (5%) annually on the outstanding principal balance.  All principal and interest shall be due in full within thirty (30) days written notice by the noteholder. The note may be paid in whole or in part without penalty or premium.



Because of declining revenues, the Company has implemented a number of cost cutting measures to reduce expenses.  The Company negotiated a permanent reduction in licensing fees from our software vendor.  In addition, the Company modified the contract with its legal counsel from a flat monthly fee to an hourly rate as our usage for counsel has reduced dramatically over the last year.  Anthony J. Renteria, CEO, and Daniel Cofall, CFO have temporarily reduced their salaries effective August, 2008 to the legal minimum wage established in the state of Texas for exempt employees and have elected to not defer the difference in their salary.



Management believes that the Companys existing cash, together with anticipated cash flows from operations, borrowings, and sales of the Companys securities, will be sufficient to meet its cash requirements during the next twelve months.  In the event the Company requires additional funds, the Company will have to seek loans or equity placements to cover cash needs.  There is no assurance additional capital will be available to the Company on acceptable terms.  If adequate funds are not available or not available on acceptable terms, the Company may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict its business operations.



The foregoing statement regarding the Companys expectations for continued liquidity is a forward-looking statement, and actual results may differ materially depending on a variety of factors, including variable operating results, difficulty borrowing or selling securities or presently unexpected uses of cash, such as for acquisitions, or to fund losses.



SUBSEQUENT EVENTS





14





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On December 18, 2008, the Company has successfully concluded the purchase of charged off credit card accounts from a Tier One Credit Card issuer over a multi-month period.  The Company expects this transaction to yield sufficient cash flows to the Company to cover operating expenses.



The Company has a $100,000 line of credit pursuant to an agreement, which was entered into with Chase Bank, NA on December 1, 2006.  The full $100,000 was drawn on November 14th 2008 for working capital purposes.   The daily outstanding line balance bears interest at the rate of prime plus 1% which is payable monthly.  As of the date of this filing, $90,343 of outstanding principle has been repaid.



Item 7.  Financial Statements



The financial statements are filed as a part of this report:



See the Index to Financial Statements on page F-1 immediately following page 32 of this report. All such financial statements, schedules and supplementary data are incorporated herein by this reference.



Item 8.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



NONE



Item 8A. Controls and Procedures



Evaluation of Disclosure Controls and Procedures



Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of September 30, 2008. 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.



Based on our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission 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 timely decisions regarding required disclosure.



Changes in Internal Controls over Financial Reporting



There was no change in the internal controls or in other factors that could affect these controls since the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.



PART III



ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT



Set forth below is information with respect to the directors and executive officers as of September 30, 2008.



|                    |                                                                |    
|------------------- | -------------------------------------------------------------- | ---
|NAME                | POSITION WITH COMPANY                                          | AGE
|Anthony J. Renteria | Director , President and Chief Executive Officer               | 39 
|Daniel M. Cofall    | Director, Executive Vice President and Chief Financial Officer | 53 



Each of these directors are elected to serve until the next annual meeting of shareholders and until their successors have been elected and qualified.  The board of directors is composed of three persons, but one position remains unfilled.  At the present time there are two directors.



15





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ANTHONY J. RENTERIA was appointed the Chief Executive Officer, President and a Director of the Company in November 2006.  Mr. Renteria is also President and Chief Executive Officer of Global Trek, a partnership he founded in 2004 to provide debt management consulting services to U.S.-based debt buyers.  Prior to joining the Company, he was Executive Vice President and Chief Operating Officer for Forward Properties International, Inc. (FPII), a buyer and seller of portfolios of charged-off indebtedness.  While at FPII, Mr. Renteria was responsible for all North American acquisitions for FPII and oversaw the companys day to day operations.  Mr. Renteria joined FPII in 2004 after spending nearly eleven years within the recovery and loss mitigation departments of the credit card banking industry.  From 2001 to 2004 Mr. Renteria was Recovery Manager for HSBC Bank (formerly known as Household Bank).  Mr. Renteria holds no director positions with other public companies.



DANIEL M. COFALL was appointed the Chief Financial Officer, Executive Vice President and a Director of the Company in November 2006.  Mr. Cofall is also the managing director of Square Rock, a company he founded in 2004 to provide financial advisory services to U.S.-based debt buyers. Prior to joining the Company, Mr. Cofall was the Executive Vice President and Chief Financial Officer for FPII.  In that capacity, Mr. Cofall was responsible for the administration, finance, and operations for all FPIIs activities in North America.  Mr. Cofall joined FPII in 2004.  From 2001 to 2004, Mr. Cofall served as a partner in Opes Partners, a private Dallas-based financial advisory firm.  In May 2008 Mr. Cofall accepted a position, with approval from the board, to serve as a radio personality for a local business radio station providing economic and financial analysis on the markets and news items.   This engagement is contract work only without significant time requirements with the purpose of creating publicity for the Company as well as source additional funding.   Mr. Cofall holds no director positions with other public companies.



Audit Committee Financial Expert



The Board of the Company has determined that it does not have at least one audit committee financial expert serving on its audit committee.



Compliance with Section 16(a) of the Exchange Act



Section 16(a) of the Securities Exchange Act of 1934 requires the Companys officers and directors, and persons who own more than ten percent of its Common Stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission (SEC) and each exchange on which the Companys securities are registered.  Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all ownership forms they file.  All such persons informed the Company that no filings were necessary during the year as there were no changes in their holdings.





Item 10.  Executive Compensation



The following table contains information concerning the annual compensation and long-term compensation payable to named executive officers during each of the last three fiscal years.



|                                                                   |                     |          |                        |                           |                               |                       
|------------------------------------------------------------------ | ------------------- | -------- | ---------------------- | ------------------------- | ----------------------------- | ----------------------
|Summary Compensation Table                                        
|                                                                   | Annual Compensation |          | Long term Compensation
|Name and Principal Position                                        | Year                | Salary   | Bonus                  | Other Annual Compensation | Securities Underlying Options | All Other Compensation
|Daniel M Cofall, Chief Financial Officer, Executive Vice President | 2008                | $165,500 | $25,000                | $6,3001                   |                               |                       
|                                                                   | 2007                | $121,500 | $50,000                | $8,4001                   |                               |                       
|Anthony J. Renteria, Chief Executive Officer, President            | 2008                | $158,000 | $25,000                | $6,3001                   |                               |                       
|                                                                   | 2007                | $117,000 | $50,000                | $8,4001                   |                               |                       



1Car allowance of $700 per month.



At the present time the Company has, and at all times during the past three fiscal years, the Company had no pension, retire­ment, annuity, deferred compensation, incentive or stock purchase, thrift or profit-sharing plan.





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Item 11.  Security Ownership of Certain Beneficial Owners and Management



(A) Five percent shareholders. The following table sets forth the persons who, as of December 29, 2008, who were known to the Company to be beneficial owners of more than five percent of each class of the voting securities of the Company­:



|                    |                                                                                |                                       |                 
|------------------- | ------------------------------------------------------------------------------ | ------------------------------------- | ----------------
|Class of Securities | Name and Address of Beneficial Owner                                           | Amount and Nature of Beneficial Owner | Percent of Class
|Class A Common      | Global Trek Property Holdings, L.P.(1)
6675 Gatewick Drive
Frisco, Texas 75035 | 6,322,145                             | 44.0%           
|Class A Common      | Square Rock Ltd. Pension Plan (2)
2213 High Pointe
Corinth, Texas 76210        | 6,322,145                             | 44.0%           



(1)  Global Trek Property Holdings, L.P. is controlled by Anthony J. Renteria, the president, chief executive officer and a director of the Company.



(2) Square Rock, Ltd. Pension Plan is an affiliate of Square Rock, Ltd., which is controlled by Daniel Cofall, executive vice president, chief financial officer and director of the Company.



(B) Security ownership of management.  The following table sets forth each class of equity securities owned by the executive officers and directors of the Company as of December 29, 2008 individually and as a group.



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|                    |                                                                                |                                       |                 
|------------------- | ------------------------------------------------------------------------------ | ------------------------------------- | ----------------
|Class of securities | Name and address of beneficial owner                                           | Amount and nature of beneficial owner | Percent of class
|Class A Common      | Global Trek Property Holdings, L.P.(1)
6675 Gatewick Drive
Frisco, Texas 75035 | 6,322,145                             | 44.0%           
|Class A Common      | Square Rock Ltd. Pension Plan (2)
2213 High Pointe
Corinth, Texas 76210        | 6,322,145                             | 44.0%           
|Class A Common      | All Executive Officers and Directors as a group                                | 12,644,290                            | 88.0%           



(1)  Global Trek Property Holdings, L.P. is controlled by Anthony J. Renteria, the president, chief executive officer and a director of the Company.



(2) Square Rock, Ltd. Pension Plan is an affiliate of Square Rock, Ltd., which is controlled by Daniel Cofall, executive vice president, chief financial officer and director of the Company.



Item 12.  Certain Relationships and Related Transactions



Certain transactions involving related parties in the last two years are described in Item 1 of this report.



On February 26, 2007 Daniel M. Cofall, Chief Financial Officer and director of the Company and an affiliate of the New Investors, loaned the Company $35,000 evidenced by a demand promissory note bearing 5% per annum interest.   On February 26, 2007 Anthony J. Renteria, Chief Executive Officer and director of the Company and an affiliate of the New Investors, loaned the Company $130,000 evidenced by a demand promissory note bearing 5% per annum interest.  In order that J.P Morgan Chase Bank would extend credit to the Company, Mr. Cofall and Mr. Renteria also personally guaranteed a $100,000 line of credit to the Company, and the line of credit was fully funded to the Company on February 26, 2007.  In addition, on February 28, 2007 Mr. Renteria loaned an additional $33,000 to the Company, evidenced by a demand promissory note bearing 5% per annum interest.  The funding of these loans and the making of the guaranty represent the New Investors additional consideration for the issuance of the Company stock to the New Investors under the Stock Acquisition Agreement of September 29, 2006.  These loans and the advance under the Chase line of credit were repaid by the Company in early July 2007 out of proceeds from its portfolio sales discussed below.



Other revenue for the year ending September 30, 2008 represents consulting fees passed through to the Corporation by Dan Cofall, Executive Vice-President and CFO for his services to Biz Radio as an on air personality providing economic and financial analysis of the markets and news items.  This agreement was canceled on August 15th 2008 and all monies owed to the Company have been received.



On May 6, 2008 the Company executed an unsecured line of credit demand note with Global Trek., an affiliate of Anthony J. Renteria, in the amount of $100,000 for working capital purposes, of which $90,000 was advanced by Global Trek to the Company.  The note bears interest at an annual rate of interest of 5% on the outstanding principal balance. All principal and interest shall be due in full within thirty (30) days written notice by the noteholder. The note may be paid in whole or in part without penalty or premium.



Similarly, on May 6, 2008, the Board authorized the Company to borrow up to $100,000 from Square Rock, an affiliate of Daniel Cofall, on a line of credit demand note bearing 5% interest, of which $11,000 has been advanced to the Company for working capital purposes.   All principal and interest shall be due in full within thirty (30) days written notice by the noteholder. The note may be paid in whole or in part without penalty or premium.





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Item 13.  Exhibits



(b.)

Exhibits -



The following exhibits, as required by Item 601 of Regu­la­tion SB, are attached hereto or incorporated herein by this reference:



(3)

Charter and bylaws:



(a)

Restated Certificate of Incorporation as last amended, effective as of March 31, 2000, a copy of which was filed with the Company's Form 14-C report February 14, 2000.

(b)

Certificate of Amendment of Restated Certificate of Incorporation, effective as of October 23, 2000, a copy of which was filed with the Companys 14-C report on October 3, 2000.

(c)

Bylaws as amended July 19, 2000 and filed with the Form 10-Q report for the quarter ended June 30, 2000



(4)

Instruments defining rights of security holders:

(a)

Certificate of Designations, Preferences and Rights of Class B Redeemable Preferred Stock Series 1, as filed with the Delaware Secretary of State on October 9, 2001.



(b)

Certificate of Designations, Preferences and Rights of Class B Redeemable Preferred Stock Series 2, as filed with the Delaware Secretary of State on October 18, 2006.



(10)

Material Contracts:





(a)

Preferred Stock Purchase and Release of Debt Agreement between the Company and Businesship International, Inc. dated September 1, 1996, a copy of which was attached to the Companys Form 10-KSB for the fiscal year ended September 30, 1996.

(b)

Stock Acquisition and Option Agreement between the Company and Merchant Capital Holdings, Ltd., dated November 23, 1999.

(c)

Employment Agreements (2) between the Company and Messrs. Marks and Barham dated November 23, 1999.

(d)

Shareholders Agreement dated November 23, 1999 by and among the Company, Merchant Capital Holdings, Ltd., Messrs. Marks and Barham, Barham Family Interests, Inc., and Marks & Associates, Inc.

(e)

Agreement between the Company and London & Boston Investments dated October 8, 2001 regarding sale and repurchase of ET Stock

(f)

Loan Agreement between the Company and Netcentric dated November 7, 2001

(g)

Hotel Acquisition Agreement between the Company and Galway Financial Group, Inc.  dated December 10, 2001.





(h)

Loan Agreement between the Company and London & Boston Investments dated April 2002.



(i)

Termination Agreement between Galway Financial Group, Inc.  dated  August 22, 2002.



(j)

Loan Agreement between the Company and Merchant House Group dated December 20, 2002.



(k)

Hotel Acquisition and Services Agreement between the Company and Northshore Capital, Ltd.  dated as of May 1, 2003.



(l)

Hotel Acquisition and Services Agreement between the Company and RP Corporate Strategies, Ltd.  dated as of July 1, 2003.





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(m)

Hotel Acquisition and Services Agreement between the Company and Apsley Estates, Ltd.  dated as of July 1, 2003



(n)

Settlement Agreements between the Company and certain officers and directors of the Company dated as of September 29, 2003.



(o)

Loan Agreement between the Company and Michael Connell dated November 24, 2003.





(p)

Directors Loan Agreements dated June 2004.

(q)

Directors Loan Agreements dated December 2004.

(r)

Share Purchase Agreement between RLH and the Company dated March 25, 2005.

(s)

Compromise and Settlement Agreement and Stock Purchase and Option Cancellation Agreement between the Company and Norman Marks regarding his resignation and separation from the Company April 1, 2005.

(t)

Agreement between RPC and the Company of April 1, 2005.



(u)

Stock Purchase Agreement by and between the Company and the Buying Group dated August 28, 2006.



(v)

Promissory Note in the amount of $250,000 made by the Buying Group payable to the Company dated as of September 29, 2006.



(w)

Security Agreement between the Buying Group and the Company dated September 29, 2006.



(x)

Bill of Sale and Assignment made by the Company as assignor dated September 29, 2006.



(y)

Release of Claims and Assumption of Liabilities by and between the Buying Group and the Company dated September 29, 2006.



(z)

Closing Agreement by and between the Company, HMG, and joined in by Paul Barham individually, dated September 29, 2006.



(aa)

Stock Acquisition Agreement by and among the Company, Global Trek and Square Rock dated September 29, 2006.



(ab)

Capital Commitment made by Global Trek and Square Rock dated November 2, 2006.



(14)

Code of Ethics



(31)

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



(32)

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





(99)

Audit Committee Charter







20





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Item 14.  Principal Accountants Fees and Services



The following table discloses accounting fees and services that were billed by the Companys independent registered public accounting firms, which for the year ending September 30, 2007 and for the year ending September 30, 2008 was Lightfoot Guest Moore & Co., PC:



|                          |                  |                 
|------------------------- | ---------------- | ----------------
|Type of Services Rendered | 2008 Fiscal Year | 2007 Fiscal Year
|(a) Audit Fees            | $20,000          | $20,000         
|(b) Audit related Fees    | $14,000          | $14,000         
|(c) Tax Fees              | $0               | $0              
|(d) All Other Fees        | $0               | $0              



Before an accountant is engaged by the Company to render audit or non-audit services, the audit committee of the Company approves the engagement.  The audit committee does not have a pre-approval procedure for engaging auditors.





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SIGNATURES



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.



|                          |  |                                     
|------------------------- |  | ------------------------------------
|                          |  | NORAM CAPITAL HOLDINGS, INC.        
|                          |  |                                     
|                          |  | By: /s/ Anthony J. Renteria         
|                          |  | Anthony J. Renteria                 
|Date:   December 29, 2008 |  | Chief Executive Officer and Director



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



|                                     |  |                          
|------------------------------------ |  | -------------------------
|/s/ Daniel M. Cofall                 |  | Date:   December 29, 2008
|Daniel M. Cofall                     |  | Date                     
|Director                             |  |                          
|                                     |  |                          
|/s/ Anthony J. Renteria              |  | Date:   December 29, 2008
|Anthony J. Renteria                  |  | Date                     
|Director and Chief Executive Officer |  |                          
|                                     |  |                          





22





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







The Board of Directors and Stockholders

NorAm Capital Holdings, Inc.

Dallas, Texas





We have audited the accompanying balance sheet of NorAm Capital Holdings, Inc. as of September 30, 2008, and the related statements of operations, redeemable preferred stock and stockholders equity (deficit), and cash flows for the years ended September 30, 2008 and 2007.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NorAm Capital Holdings, Inc. at September 30, 2008 and the results of its operations and its cash flows for the years ended September 30, 2008 and 2007 in conformity with accounting principles generally accepted in the United States of America.





/s/ Lightfoot Guest Moore & Co., PC



Dallas, Texas

December 29, 2008



F-1





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|                                                                                                                                                                                  |               |            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -----------
|NORAM CAPITAL HOLDINGS, INC.
BALANCE SHEET                                                                                                                                       
|                                                                                                                                                                                  | Sept 30,
2008
|ASSETS                                                                                                                                                                            |               |            
|Current assets:                                                                                                                                                                   |               |            
|Cash and cash equivalents                                                                                                                                                         | $             | 25,317     
|Accounts receivable                                                                                                                                                               |               | 1,011      
|Interest receivable                                                                                                                                                               |               | 49,199     
|Note receivable  current portion                                                                                                                                                 |               | 23,175     
|Debt portfolios held for resale (net of allowance of $45,209)                                                                                                                     |               | 36,488     
|Goldberg receivable (net of allowance  of $79,532)                                                                                                                                |               | 387,765    
|Total current assets                                                                                                                                                              |               | 522,955    
|Notes receivable                                                                                                                                                                  |               | 965,591    
|Property and equipment (net of accumulated depreciation of $12,569)                                                                                                               |               | 22,144     
|Total assets                                                                                                                                                                      | $             | 1,510,690  
|                                                                                                                                                                                  |               |            
|LIABILITIES, REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY                                                                                                                    |               |            
|Current liabilities:                                                                                                                                                              |               |            
|Accounts payable                                                                                                                                                                  | $             | 195,408    
|Accrued liabilities                                                                                                                                                               |               | 86,267     
|Short-term notes payable and current portion of long-term notes payable                                                                                                           |               | 18,827     
|Loans from shareholders                                                                                                                                                           |               | 81,732     
|Total current liabilities                                                                                                                                                         |               | 382,234    
|Long-term liabilities:                                                                                                                                                            |               |            
|Accrued undeclared redeemable preferred series B dividend                                                                                                                         |               | 34,979     
|Long-term notes payable                                                                                                                                                           |               | 187,444    
|Total liabilities                                                                                                                                                                 |               | 604,657    
|                                                                                                                                                                                  |               |            
|Commitments and contingencies                                                                                                                                                     |               | -          
|                                                                                                                                                                                  |               |            
|Redeemable preferred stock:                                                                                                                                                       |               |            
|Class B, $0.01 par, 1,500,000 shares authorized, 1,404,920 shares issued and outstanding, £0.26 per share voluntary liquidation preference ($0.55 per share @ September 30, 2008) |               | 766,760    
|                                                                                                                                                                                  |               |            
|Stockholders equity:                                                                                                                                                             |               |            
|Preferred stock:                                                                                                                                                                  |               |            
|Class A, $1.00 par, 1,000,000 shares authorized, 243,331 shares issued and outstanding, $1.00 per share involuntary liquidation preference                                        |               | 243,331    
|Common stock:                                                                                                                                                                     |               |            
|Class A, $0.002 par value, 100,000,000 shares authorized, 14,599,070 shares issued and outstanding                                                                                |               | 29,199     
|Additional paid-in capital                                                                                                                                                        |               | 3,177,417  
|Accumulated deficit                                                                                                                                                               |               | (3,310,674)
|Total stockholders equity                                                                                                                                                        |               | 139,273    
|Total liabilities, redeemable preferred stock & stockholders equity                                                                                                              | $             | 1,510,690  



See Accompanying Notes To Financial Statements



F-2





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NORAM CAPITAL HOLDINGS, INC.

STATEMENTS OF OPERATIONS



|                                                               |                     |  |           
|-------------------------------------------------------------- | ------------------- |  | ----------
|                                                               | For the years ended
|                                                               | Sept 30,           
|                                                               | 2008                |  | 2007      
|                                                               |                     |  |           
|Revenue:                                                       |                     |  |           
|Debt portfolio collection revenue                              | $94,785             |  | $520,327  
|Debt portfolio liquidation revenue                             | 2,354,228           |  | 2,873,436 
|Other revenue                                                  | 249,000             |  | 25,547    
|Total revenue                                                  | 2,698,013           |  | 3,419,310 
|                                                               |                     |  |           
|Cost of services:                                              |                     |  |           
|Finance receivables recovery                                   | 146,622             |  | 450,388   
|Liquidated pool recovery                                       | 1,817,122           |  | 2,503,268 
|Collection fees                                                | 29,997              |  | 151,107   
|Commissions                                                    | 15,641              |  | 9,405     
|Total cost of services                                         | 2,009,382           |  | 3,114,168 
|Gross profit                                                   | 688,631             |  | 305,142   
|                                                               |                     |  |           
|Operating expenses:                                            |                     |  |           
|Compensation expense                                           | 462,440             |  | 394,576   
|Legal and professional fees                                    | 175,154             |  | 313,487   
|Other operating expenses                                       | 236,838             |  | 166,792   
|Total expenses                                                 | 874,432             |  | 874,855   
|Operating income (loss)                                        | (185,801)           |  | (569,713) 
|                                                               |                     |  |           
|Other income (expense):                                        |                     |  |           
|Interest expense                                               | (27,805)            |  | (42,569)  
|Interest income                                                | 77,781              |  | 31,265    
|Total other income (expense)                                   | 49,976              |  | (11,304)  
|Net income (loss)                                              | $(135,825)          |  | (581,017) 
|                                                               |                     |  |           
|Net income (loss) attributable to common stockholders  basic  | $(0.01)             |  | $(0.04)   
|Net income (loss) attributable to common stockholders diluted | $(0.01)             |  | $(0.04)   
|                                                               |                     |  |           
|Weighted average number of common shares outstanding:          | 14,539,923          |  | 13,153,151



See Accompanying Notes To Financial Statements





F-3





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NORAM CAPITAL HOLDINGS, INC.

STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY

For the Years Ended September 30, 2008 and 2007



|                              |                                              |                           |                             |                             |                            |                     |                                      |          
|----------------------------- | -------------------------------------------- | ------------------------- | --------------------------- | --------------------------- | -------------------------- | ------------------- | ------------------------------------ | ---------
|                              | Redeemable Preferred Stock  Class A         | Preferred Stock  Class A | Common Stock classA
Shares | Common Stock class-A
Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders Equity (Deficit)
|Balance at September 30, 2006 | $-                                           | $243,331                  | 1,405,101                   | $2,810                      | $4,048,558                 | $(2,593,832)        | $1,700,867                          
|                              | Net loss attributable to common stockholders | -                         | -                           | -                           | -                          | -                   | (581,017)                            | (581,017)
|                              | Fractional shares redeemed                   | -                         | -                           | (321)                       | -                          | -                   | -                                    | -        
|                              | Preferred stock class B purchase             | 790,001                   | -                           | -                           | -                          | -                   | -                                    | -        
|                              | Foreign currency adjustments                 | 73,870                    | -                           | -                           | -                          | -                   | -                                    | -        
|                              | Preferred stock dividend                     | -                         | -                           | -                           | -                          | (24,331)            | -                                    | (24,331) 
|                              | Common stock dividend                        | -                         | -                           | -                           | -                          | (651,220)           | -                                    | (651,220)
|                              | Preferred stock dividend                     | -                         | -                           | -                           | -                          | (790,001)           | -                                    | (790,001)
|                              | Common stock issued for cash                 | -                         | -                           | 12,644,290                  | 25,289                     | 224,711             | -                                    | 250,000  
|                              | Common stock issued for cash                 | -                         | -                           | 300,000                     | 600                        | 299,400             | -                                    | 300,000  
|                              | Common stock issued for cash                 | -                         | -                           | 50,000                      | 100                        | 49,900              | -                                    | 50,000   
|Balance at September 30, 2007 | 863,871                                      | 243,331                   | 14,399,070                  | 28,799                      | 3,157,017                  | (3,174,849)         | 254,298                             
|                              |                                              |                           |                             |                             |                            |                     |                                     
|                              | Net loss attributable to common stockholders | -                         | -                           | -                           | -                          | -                   | (135,825)                            | (135,825)
|                              | Common stock issued for services             | -                         | -                           | 200,000                     | 400                        | 20,400              | -                                    | 20,800   
|                              | Fractional shares correction                 |                           |                             | 31                          |                            |                     |                                      |          
|                              | Foreign currency adjustments                 | (97,111)                  |                             |                             |                            |                     |                                      |          
|                              |                                              |                           |                             |                             |                            |                     |                                      |          
|Balance at September 30, 2008 | $     766,760                                | $243,331                  | 14,599,101                  | $29,199                     | $3,177,417                 | $(3,310,674)        | $139,273                            



See Accompanying Notes To Financial Statements





F-4





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NORAM CAPITAL HOLDINGS, INC.

STATEMENTS OF CASH FLOWS

|                                                                                       |                     |  |             
|-------------------------------------------------------------------------------------- | ------------------- |  | ------------
|                                                                                       | For the years ended
|                                                                                       | Sept 30            
|                                                                                       | 2008                |  | 2007        
|Cash Flow from Operating Activities:                                                   |                     |  |             
|Net loss                                                                               | $    (135,825)      |  | $(581,017)  
|Adjustments to reconcile net income (loss) from net cash used by operating activities: |                     |  |             
|Depreciation                                                                           | 12,569              |  | 2,992       
|Issuance of common stock for services                                                  | 20,800              |  | -           
|Provision for debt portfolio collection                                                | 45,209              |  |             
|Allowance for debt recovery                                                            | 79,532              |  | -           
|Changes in assets and liabilities:                                                     |                     |  |             
|Accounts receivable                                                                    | 24,190              |  | (25,201)    
|Other receivables                                                                      | 12,688              |  | (12,688)    
|Finance receivables purchased                                                          | 2,088,704           |  | (2,744,578) 
|Proceeds from collections and sales of finance receivables                             | (2,115,449)         |  | 2,717,833   
|Debt portfolios held for resale                                                        | (81,697)            |  | -           
|Prepaid expenses                                                                       | 714                 |  | (714)       
|Other assets                                                                           | -                   |  | 1,848       
|Accounts payable and accrued liabilities                                               | (62,219)            |  | 324,944     
|Net cash used by operating activities                                                  | (106,493)           |  | (316,581)   
|                                                                                       |                     |  |             
|Investing activities:                                                                  |                     |  |             
|Proceeds from issuance of note receivable Goldberg                                     | (467,137)           |  | -           
|Collections on notes receivable                                                        | 12,592              |  | 15,401      
|Purchase of property and equipment                                                     | -                   |  | (37,704)    
|Net cash (used)/provided by investing activities                                       | (454,705)           |  | (22,303)    
|                                                                                       |                     |  |             
|Financing activities:                                                                  |                     |  |             
|Proceeds from notes payable  related parties                                          | 81,732              |  | 198,000     
|Proceeds from line-of-credit                                                           | -                   |  | 100,000     
|Payment from line-of-credit                                                            | -                   |  | (100,000)   
|Payment on notes payable                                                               | (10,029)            |  | (471,700)   
|Proceeds from notes payable                                                            | -                   |  | 490,000     
|Collection on series B preferred stock                                                 | 25,008              |  | 9,971       
|Proceeds from sales of common stock                                                    | -                   |  | (51,220)    
|Net cash provided by financing activities                                              | 96,711              |  | 801,940     
|                                                                                       |                     |  |             
|Net increase (decrease) in cash and cash equivalents                                   | (464,487)           |  | 463,056     
|                                                                                       |                     |  |             
|Cash and cash equivalents at beginning of period                                       | 489,804             |  | 26,748      
|Cash and cash equivalents at end of period                                             | $      25,317       |  | $   489,804 
|                                                                                       |                     |  |             
|Non-cash transactions:                                                                 |                     |  |             
|Dividend to stockholders  redeemable preferred class B stock                          | $                 - |  | $   790,001 
|Supplemental cash flow information:                                                    |                     |  |             
|Interest paid                                                                          | $         27,805    |  | $     42,569



See Accompanying Notes To Financial Statements



F-5





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NOTES TO FINANCIAL STATEMENTS



A.

Nature of Business



NorAm Capital Holdings, Inc. (the Company or NorAm) is a Delaware corporation.  The Company was formerly known as the Harrell Hospitality Group, Inc. (HHG), and was originally incorporated in 1959 in the state of Massachusetts under the name of Formula 409, Inc.  HHG was primarily involved in the management and development of hotels, mainly in the states of California and Texas, and the United Kingdom.  In February 2003, HHG began operations in the United Kingdom with the formation of Harrell Hotels Europe, Ltd. (HHE), a wholly-owned subsidiary of HHG.  HHGs United Kingdom offices were located in London, England.  HHG sold HHE on March 31, 2005.   Therefore, the Company sold HMG and all other hospitality assets on September 29, 2006 and , shortly thereafter, divested itself of the RLH stock.  On January 5, 2007, the name of the Company changed to NorAm Capital Holdings, Inc.  The name changed to help distinguish the business from its previous course of business in the hospitality industry.



The Company commenced operations in January, 2007.  New controlling shareholders of the Company, Global Trek Property Holdings, L.P. (Global Trek) and Square Rock, Ltd. Pension Plan (Square Rock) (together, Global Trek and Square Rock, the New Investors) changed the focus of the Company and instituted new operations in financial receivables management and debt collection.  These types of services are expected to be rendered for credit issuers or other holders of debt portfolios.  In addition, the Company is engaging in the purchase and resale of portfolios of debt and may engage in the collection of debt portfolios for its own account.



B.

Summary of Significant Accounting Policies



A summary of the Company's significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:



Basis of Accounting



The accounts are maintained and the financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.



Use of Estimates



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 certain reported amounts in the financial statements and accompanying notes.  Actual results could differ from these estimates and assumptions.



Cash and Cash Equivalents



The Company considers all highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents.  At September 30, 2008 and 2007, the Company had no such investments included in cash and cash equivalents.



The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits.  Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $100,000.  At September 30, 2008, the Company had approximately $75,000 in shortage of FDIC insured limits. The Company has not experienced any losses in such accounts.





F-6





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B.

Summary of Significant Accounting Policies (continued)



Accounts Receivable



The Company performs periodic credit evaluations of its customers' financial condition and extends credit to virtually all of its customers on an uncollateralized basis.  Credit losses to date have been within management's expectations.  Management will establish an allowance for bad debts to cover management's estimate of uncollectible accounts.  In the event of complete non-performance by the Company's customers, the maximum exposure to the Company is the outstanding accounts receivable balance at the date of non-performance.



Property and Equipment



Property and equipment are stated at cost.  Depreciation is computed on the straight-line method over the estimated lives of the assets.  Expenditures for major renewals and betterments that extend the useful lives are capitalized.  Expenditures for normal maintenance and repairs are expensed as incurred.  The cost of assets sold or abandoned and the related accumulated depreciation were eliminated from the accounts and any gains or losses were charged or credited to other income (expense) of the respective period. Estimated useful lives for property and equipment were as follows:



|                   |        
|------------------ | -------
|Computer software  | 3 years
|Computer equipment | 3 years



Property and equipment consisted of computer software at September 30, 2008.



Revenue Recognition



The Company has three principal categories of revenue:  portfolio collection revenue, portfolio liquidation revenue, and consulting fee revenue.  Portfolio collection revenue is money collected from debtors on the defaulted accounts.  Presently this collection would be through licensed third party collection agencies that the Company uses to collect portfolios; in the future, once the Company has established its in-house collection capabilities, the Company may make these collection efforts itself, or through a licensed subsidiary or affiliate.  The portfolio collection revenues may pertain to portfolios owned by others, in which case the collection function is performed by the Company as a service for the owner of the portfolio in exchange for a portion of the funds collected, or it may relate to the outright collecting of debt portfolios owned by the Company.



Portfolio liquidation revenue is money the Company receives from reselling a portfolio of debt to another debt buyer.  Portfolio liquidation revenue may come from either of two types of transactions: a purchase and almost immediate resale transaction, with no collection activity against account debtors while the Company owns the portfolio, or portfolio liquidation revenue may come from resale of remaining uncollected accounts in a portfolio that the Company has owned and collected for some period of time.



F-7





---



B.

Summary of Significant Accounting Policies (continued)



The Company has adopted the cost recovery method of recognizing revenue on the collection of funds on its acquired portfolio.  The cost recovery method is appropriate when collections on a particular pool or pools of accounts cannot be reasonably predicted.  The Company adopted the cost recovery method due to (1) a lack of operating history, (2) no assurance that the Company will be able to raise the necessary future capital to sustain operations, (3) the sole reliance on third party agencies to conduct collection activities, (4) no proven models to (a) reasonably determine the probability of collecting against any of the portfolios acquired to date or, (b) reasonably estimate the amount of funds collected therefrom.  Under the cost recovery method, no revenue is recognized until the net acquisition cost of the pool or pools of accounts have been fully collected.  The Company will continue to use the cost recovery method until such time that it considers the collections of its portfolio of pools to be probable and estimable.  At that point, and if applicable, the Company will recognize income based on the interest method pursuant to the interest method under the guidance of Statement of Position 03-3, Accounting for Loans or Certain Securities Acquired in a Transfer (SOP 03-3).



Consulting fee revenues are monies that the Company charges for rendering services advising other companies on how to manage their receivables or maximize liquidation of existing portfolios of debt they may own, or how to implement strategies in the debt collection or acquisition business.  These revenues may be charged on a variety of bases, ranging from fixed fees to hourly charges to contingency recovery fees.  The Company recognizes consulting fee revenue upon rendering the consulting services.



Under the guidance of SOP 03-3 (and the amended Practice Bulletin 6), static pools of accounts are established. Pools purchased during a given period are aggregated based on certain common risk criteria.  Each static pool is recorded at cost, which includes certain direct costs of acquisition paid to third parties, and is accounted for as a single unit for the recognition of income, principal payments and loss provision.  Once a static pool is established, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). SOP 03-3 (and the amended Practice Bulletin 6) requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. SOP 03-3 initially freezes the internal rate of return, referred to as IRR, estimated when the finance receivables are purchased as the basis for subsequent impairment testing. Significant increases in expected future cash flows may be recognized prospectively through an upward adjustment of the IRR over a portfolios remaining life.  Any increase to the IRR then becomes the new benchmark for impairment testing.  Effective for fiscal years beginning after December 15, 2004 under SOP 03-3 (and the amended Practice Bulletin 6), rather than lowering the estimated IRR if the collection estimates are not received, the carrying value of a pool would be written down to maintain the then current IRR.  Income on finance receivables is accrued periodically based on each static pools effective IRR and shown net of allowance charges on the income statement.  Cash flows greater than the interest accrual will reduce the carrying value of the static pool.  Likewise, cash flows that are less than the accrual will accrete the carrying balance.  The IRR is estimated and periodically recalculated based on the timing and amount of anticipated cash flows using proprietary collection models.  A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all cash collections are recognized as revenue when received.





F-8





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B.

Summary of Significant Accounting Policies (continued)



Debt Portfolio Reserves



The Company acquires portfolios of defaulted consumer debt obligations at a substantial discount to the contractual value of the obligations.  The negotiated discount is based on the Companys determination of the deterioration of the credit quality of the obligations between the time of origination and acquisition by the Company.  If the Company determines subsequent to the acquisition of the portfolios that it may be unable to recover its investment in its acquired portfolios, it will establish in the period of determination, a valuation allowance sufficient to provide for the expected losses.  The valuation allowance subsequently will be reviewed periodically for changes in the expected losses and adjusted accordingly.  At September 30, 2008 the Company had established a portfolio valuation allowance of $45,209.



Income Taxes



Deferred income taxes are determined using the liability method in accordance with SFAS No. 109, Accounting for Income Taxes.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that includes the enactment date.  In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.



Foreign Currency Translation



All assets and liabilities in the balance sheet whose functional currency is other than the U.S. dollar are translated at year-end exchange rates.  All revenues and expenses in the statement of operations are translated at average exchange rates for the year.  Any translation gains or losses are not included in determining net income (loss) but would be shown in accumulated other comprehensive income (loss) within the stockholders' equity or redeemable preferred stock section of the balance sheet.  The Company did not incur any translation gains or losses for the periods ended September 30, 2008 or 2007.  Foreign currency transaction gains and losses are included in determining net income (loss) and were not significant in 2008 or 2007.



Earnings (Loss) Per Common Share



The Company computes earnings per common share in accordance with SFAS No. 128, Earnings Per Share.  SFAS No. 128 provides for the calculation of basic and diluted earnings per share.  Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period.  Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company.  Because the Company's potential dilutive securities are anti-dilutive, the accompanying presentation is only of basic earnings per share.





F-9





---

B.

Summary of Significant Accounting Policies (continued)



Fair Value of Financial Instruments



In accordance with the reporting requirements of SFAS No. 107, Disclosures About Fair Value of Financial Instruments, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this statement and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments.  The estimated fair value of cash equivalents, accounts payable and accrued liabilities approximates their carrying amounts due to the relatively short maturity of these instruments.  The carrying value of notes receivable also approximates fair value since they bear market rates of interest.  None of these instruments are held for trading purposes.



C.

Notes Receivable



The Company has three notes receivable as of September 30, 2008.



One is a promissory note in the amount of $250,000 from a purchasing group made up of Paul Barham, Clive Russell, Geoffrey Dart, and Apsley Estates, Ltd. (collectively, the Buying Group) that purchased the Companys subsidiaries, including Hotel Management Group, Inc. (HMG) and other hospitality assets, on September 29, 2006. The makers of the note are Paul Barham, Clive Russell, Geoffrey Dart and Apsley Estates, who are held jointly and severally liable.  The note is collateralized by the shares of HMG. The note bears interest at 10% per annum and is amortized quarterly with the final payment being due September 30, 2016.  This note is pledged by the Company as collateral to secure the Companys obligations on three notes payable by the Company that total $225,000. The note balance at September 30, 2008 is $222,006.



The second is a loan note due from Red Leopard Holdings, plc (RLH), received by the Company as the final consideration for the sale of HHE.  The loan note is valued at £421,874, or $766,760 at September 30, 2008. The note bears interest at 3% per annum payable annually which began on March 31, 2007, on the outstanding principal balance. Any interest or principal proceeds received under this loan agreement are effectively dividend obligations of the Class B Redeemable Preferred shares and are payable when declared but generally not later than the full liquidation of the RLH note.  The note, due in full on March 31, 2015, is convertible into RLH common stock at the mid-market price on the day of conversion at the option of RLH. The Company considers its position to be similar to that of a fiduciary and, as such, will not recognize income from the interest proceeds.



The final is a promissory note in the amount of $439,000 from Goldberg & Associates, LLC and Steven Goldberg individually.  The note bears interest at 18% per annum, accruing from February 5th, 2008 on the outstanding principal balance, and a mortgage has been signed by Goldberg & Associates, LLC with respect to certain real estate in Boca Raton, Florida to secure the note.   The note has matured and remains unpaid.  The note is currently in default status and due to the cost of recovering the principle of the note, an allowance of $79,532 was created.  In addition, accrued legal expenses of $28,298 have been accrued on the note in accordance with the civil lawsuit filed.





F-10





---

D.

Finance Receivables



The company entered into a purchase agreement with a community financial services corporation in September 2007 for the acquisition of defaulted debt obligations at a predetermined rate times the gross face value of the portfolios. As of September 30, 2008 the company has collected 64.4% of the receivable balance leaving a remaining receivable balance of $13,858.  The Company has recalled this portfolio from its third party collection agency and is currently available for sale. See Note E.



The company entered into a purchase agreement with a national financial services corporation in December 2007 for the acquisition of defaulted debt obligations at a predetermined rate times the gross face value of the portfolios.  As part of the purchase agreement, all proceeds received net of collection agency fees will be distributed to Seller and a final payment, which shall be the difference between the purchase price and what has been recovered, will be due at the end of the liquidation period.  As of September 30, 2008 the company has collected 55.9% of the receivable balance leaving a remaining receivable balance of $51,013.  The Company has recalled this portfolio from its third party collection agency and is currently available for sale. See Note E.



The Company entered into a purchase agreement with a regional banking institution in March 2008 for the acquisition of defaulted mortgage debt obligations at a predetermined rate times the gross face value of the portfolio.  As of September 30th, 2008 the company collected 57.8% of the receivable balance leaving a remaining balance of $14,236.  The remaining portfolio was recalled from a third party collection agency and sold resulting in a gain of $15,764.



E.

Debt portfolios available for sale



The company has $81,698 in debt portfolios available for sale with a face value of $3,648,842.  Due to the uncertainty that a successful sale of these debt portfolios will be able to recoup the acquisition costs a valuation allowance of $45,209 has been established.



F.

Line of Credit



The Company has a $100,000 line of credit pursuant to an agreement, which was entered into with Chase Bank, NA on December 1, 2006. As of September 30, 2008 no part of this facility is outstanding.



G.

NOTES PAYABLE



At the end of April, 2007 and at the beginning of May, 2007, the Company entered into three virtually identical $75,000 installment loan agreements with three private individuals. The aggregate loan amount of $225,000 will be used for working capital for the purchase of defaulted debt obligations. These notes bear interest at the annual rate of 12% and are payable in quarterly installments of principal and interest of $3,245 each which began June 30, 2007. The notes are payable in full on June 30, 2010.  These notes are secured by the $250,000 note receivable from the Buying Group and its collateral. The balance of these notes at September 30, 2008 is $206,271.





F-11





---

G.

NOTES PAYABLE (continued)



NOTES PAYABLE  RELATED PARTIES



On May 6, 2008 the Company executed a line of credit demand note with Global Trek., an affiliate of Anthony J. Renteria, in the amount of $100,000 for working capital purposes, of which $90,000 was advanced by Global Trek to the Company during the year.  The borrowings are evidenced by the promissory notes bearing interest at an annual rate of interest of 5% on the outstanding principal balance. All principal and interest shall be due in full within thirty (30) days written notice by the note holder. The note may be paid in whole or in part without penalty or premium. The principle balance of this note at September 30, 2008 is $70,732.



Similarly, on May 6, 2008, the Board authorized the Company to borrow up to $100,000 from Square Rock, an affiliate of Daniel Cofall, on a line of credit demand note bearing 5% interest, if such borrowings are necessary for working capital purposes.  As of the date of this filing $11,000 was advanced by Square Rock to the Company.



H.

Preferred Stock



Class A preferred stock is non-voting, non-convertible and pays a 10% annual non-cumulative dividend. The Company has the right, but not the obligation, to redeem the shares at any time at par value and the shares have a $1.00 involuntary liquidation preference.



Class B preferred stock is non-voting, redeemable and pays a 3% cumulative dividend.  These shares are uncertificated and have dividend preferences and redemption rights that have the effect of passing certain economic benefits to shareholders that the Company receives from a promissory note in the amount of £421,874 (approximately US$766,760 at September 30, 2008) made by RLH that the Company holds. These were issued through a dividend to all common stockholders on October 20, 2006.  The Company valued these shares based on the value of the note amount on the dividend date of October 20, 2006.



I.

Common Stock



As of October 19, 2006, the Company effected a 1 for 10 reverse split of its Class A Common stock.  The reverse stock split reduced the number of shares of Common Stock of the Company outstanding on that date by tenfold, and affected all shareholders uniformly.  It did not affect any shareholders percentage in the Company, except to the extent that the reverse stock split resulted in the computation of a fractional share.  Shareholders holding fractional shares were entitled to cash payment in lieu of such fractional share.  Such cash payment eliminated shareholders holding fewer than 10 shares prior to the effective date of the reverse split.  The effect of the reverse stock split has been reflected throughout the financial statements and notes for all periods presented.



On September 29, 2006, the Company entered into a stock acquisition agreement to issue shares of the Companys class A common stock to the New Investors.  The sale of stock contemplated by the agreement was closed on November 2, 2006.  Square Rock Ltd. was issued 6,322,145 shares of Common Stock, and Global Trek was issued 6,322,145 shares of Common Stock in exchange for the aggregate consideration of (a) $250,000 cash plus (b) capital commitments upon demand of the board of directors of an additional $250,000, plus (c) best efforts to contribute to the Company certain revenue producing contracts controlled by the New Investors.





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I.

Common Stock (continued)



On December 29, 2006, the Company issued 300,000 shares of its common stock to Turtle Creek Assets, Ltd., a Texas limited partnership (TCA) in exchange for the aggregate consideration of (a) $300,000 cash plus (b) the assignment of a portfolio of approximately 5,387 defaulted and charged-off unsecured loans owned by TCA having an approximate aggregate outstanding principal balance of $1.9 million (the Portfolio).  The Portfolio had a purchase value to TCA of approximately $60,000 based on the price paid by TCA in November 2006.  Ultimate value to the Company of the Portfolio based on actual collections received by the Company and the ultimate resale of the Portfolio has totaled approximately $68,215.



On March 31, 2007, Rudy Ced, a member of the management of the Company subscribed to 50,000 shares of the Companys common stock at $1.00 per share.  The Company received the cash proceeds of $50,000 on April 3, 2007.



In January 2008, the Company issued 200,000 shares of its common stock to Stonegate Investors relation group as payment for services related to raising additional operating capital for the Company.



J.

Income Taxes



Income tax expense for the years presented differs from the "expected" federal income tax expense computed by applying the U.S. federal statutory rate of 34% to income (loss) before income taxes for the years ended September 30.  The Company has established a valuation allowance to fully reserve the net deferred tax assets at September 30, 2007 and 2006 due to the uncertainty of the timing and amounts of future taxable income.  As a result of the change in ownership and change in line of business, any net operating loss carryforwards prior to September 30, 2006, are not available to offset future taxable income of the Company.  At September 30, 2008, the Company had an aggregate net operating loss carryforward of approximately $1,975,000 from operations which will begin to expire in 2021.



K.

Related Parties



The Companys primary management consists of Anthony Renteria, President and CEO, and Daniel Cofall, Executive Vice-President and CFO.  Mr. Renteria owns a controlling interest of Global Trek Property Holdings, LP which owns approximately 45% of the outstanding shares of the Company.



Mr. Cofall owns a controlling interest of Square Rock Ltd., which is affiliated with Square Rock Pension Plan which owns approximately 45% of the outstanding shares of the Company.



Other revenue for the year ending September 30 2008 represents consulting fees passed through to the Corporation by Dan Cofall, Executive Vice-President and CFO for his services to Biz Radio as an on air personality providing economic and financial analysis of the markets and news items. As of September 30, 2008 this contract has been terminated and all monies owed to the Company have been collected.



During the year ended September 30, 2008, the Company paid rent expense in the amount of $7,500 to Dan Cofall for use of his home as an office.





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L.

Commitments and Contingencies



Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Companys management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Companys legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.



If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.



Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.



There were no future annual minimum lease obligations as of September 30, 2008.



M.

Recent Accounting Pronouncements



In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions.  This interpretation requires that companies recognize in their financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.  The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings.  The Company does not expect the adoption of this interpretation to have a material effect on its financial condition or results of operations.



In September 2006, the FASB issued Statement of Financial Accounting Standards SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value under accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.  SFAS No. 157 applies to other accounting pronouncements that require or permit fair value measurements.  The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, and for interim periods within those fiscal years.  The Company is currently evaluating the potential impact, if any, of the adoption of FASB Statement No. 157 on the financial position, results of operations and cash flows.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115.  This statement permits an entity to choose to measure many financial instruments and certain other items at fair value.  A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.  The fair value option 1) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method, 2) is irrevocable (unless a new election date occurs) and 3) is applied only to entire instruments and not to portions of instruments.  The statement is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007.  The Company is currently evaluating the impact of this pronouncement.



N.

Subsequent Events



On December 18, 2008, the Company has successfully concluded the purchase of charged off credit card accounts from a Tier One Credit Card issuer over a multi-month period .  The Company expects this transaction to yield sufficient cash flows to cover the operating expenses of the company.



The Company has a $100,000 line of credit pursuant to an agreement, which was entered into with Chase Bank, NA on December 1, 2006.  The full $100,000 was drawn on November 14th 2008 for working capital purposes.   The daily outstanding line balance bears interest at the rate of prime plus 1% which is payable monthly.  As of the date of this filing, $90,343 of outstanding principle has been repaid.



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