<PAGE>

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


                                 FORM 10-QSB/A2


            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended JUNE 30, 2005


         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


                For the transition period from ________to________


                        Commission File Number 000-33389
                                               ---------

                              MORGAN BEAUMONT, INC.
                              ---------------------
        (Exact name of small Business Issuer as specified in its charter)


             NEVADA                                         65-1071956
-------------------------------                 --------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


       6015 31ST STREET EAST
         BRADENTON, FLORIDA                                    34203
  -------------------------------                           -----------
  (Address of principal executive                           (Zip Code)
              offices)


     Issuer's telephone number,
        including area code:                   (941) 753-2875
                                               --------------

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


YES  x          NO
   -----           -------


State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:  60,376,153 SHARES OF $0.001 PAR VALUE
COMMON STOCK OUTSTANDING AS OF JULY 31, 2005.


--------------------------------------------------------------------------------


<PAGE>


                              MORGAN BEAUMONT, INC.

                         A DEVELOPMENT STAGE ENTERPRISE
                         ------------------------------

                                TABLE OF CONTENTS
                                -----------------

                                                                        PAGE NO.

PART I - FINANCIAL INFORMATION
------------------------------
    ITEM 1. FINANCIAL INFORMATION:
    -----------------------------
       Consolidated Balance Sheet as of June 30, 2005                          3

       Consolidated Statements of Operations for the three and nine
         months ended June 30, 2005 and 2004, and the period July 10,
         2000 (date of incorporation) to June 30, 2005                         4

       Consolidated Statements of Cash Flows for the nine months ended
          June 30, 2005 and 2004, and the period July 10, 2000 (date of
          incorporation) to June 30, 2005                                      5

       Notes to Consolidated Financial Statements                              6

    ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS        15
    ------------------------------------------------------------------
          Forward Looking Statements                                          15
          --------------------------
          Overview                                                            15
          --------
          Plan of Operations                                                  16
          ------------------
          Results of Operation                                                17
          ---------------------
          Liquidity and Capital Resources                                     20
          -------------------------------
    ITEM 3: CONTROLS AND PROCEDURES.                                          20
    --------------------------------
PART II - OTHER INFORMATION                                                   21
---------------------------
    ITEM 1. LEGAL PROCEEDINGS                                                 21
    -------------------------
    ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS       22
            -----------------------------------------------------------
    ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                   23
    ---------------------------------------
    ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               23
    -----------------------------------------------------------
    ITEM 5. OTHER INFORMATION                                                 23
    -------------------------
    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                  26
    ----------------------------------------

SIGNATURES                                                                    27
----------


<PAGE>

WE ARE AMENDING OUR FORM 10-QSB/A FOR THE PERIOD ENDED JUNE 30, 2005, AS
PREVIOUSLY FILED ON AUGUST 31, 2005 AS A RESULT OF COMMENTS RECEIVED FROM THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE FILING OF
OUR REGISTRATION STATEMENT ON FORM S-2. WE HAVE EXPANDED THE FOOTNOTE DISCLOSURE
RELATED TO THE TERMS OF OUR OPTIONS. IN ADDITION, WE HAVE MODIFIED THE
ACCOUNTING FOR CERTAIN OPTIONS ISSUED TO NON-EMPLOYEES (SEE NOTE B) IN ALL OTHER
MATERIAL RESPECTS, THIS AMENDED QUARTERLY REPORT ON FORM 10-QSB/A IS UNCHANGED
FROM THE QUARTERLY REPORT ON FORM 10-QSB/A PREVIOUSLY FILED BY THE COMPANY ON
AUGUST 31, 2005.



PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION.


                              MORGAN BEAUMONT, INC.
                              ---------------------
                        (A DEVELOPMENT STAGE ENTERPRISE)
                        --------------------------------

                           CONSOLIDATED BALANCE SHEET
                               AS OF JUNE 30, 2005
                                   (UNAUDITED)

================================================================================
                                                                    as restated)
ASSETS
------

CURRENT ASSETS:
Cash and cash equivalents                                           $ 3,062,742

Accounts receivable (net of allowance for doubtful
  accounts of ($20,000)                                               1,192,750
Inventory                                                                73,277
Prepaid expenses and other current assets                                35,820
                                                                    -----------
       Total current assets                                           4,364,589

PROPERTY AND EQUIPMENT - NET                                          1,257,501

OTHER ASSETS                                                            102,781
                                                                    -----------

TOTAL                                                               $ 5,724,871
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES -
Accounts payable and accrued liabilities                            $   737,655
   Deferred revenue                                                     615,961
   Accrued stock-based compensation                                     179,532
                                                                    -----------
               Total current liabilities                              1,533,148

OBLIGATION UNDER CAPITAL LEASE                                           18,186
                                                                    -----------

               Total liabilities                                      1,551,334
                                                                    -----------

STOCKHOLDERS' EQUITY:
 Common stock - $0.001 par value: 150,000,000 shares
     authorized; 47,150,017 shares issued and outstanding                47,150
  Additional paid-in capital                                          6,833,689
  Common stock subscribed                                             3,798,200
  Deficit accumulated during the development stage                   (6,505,502)
                                                                    -----------
        Total stockholders' equity                                    4,173,537
                                                                    -----------

  TOTAL                                                             $ 5,724,871
                                                                    ===========

================================================================================

See notes to consolidated financial statements.


                                       3

<PAGE>

<TABLE>
                                                     MORGAN BEAUMONT, INC.
                                                     ---------------------
                                                (A DEVELOPMENT STAGE ENTERPRISE)
                                                --------------------------------
                                             CONSOLIDATED STATEMENTS OF OPERATIONS
                                                          (UNAUDITED)

===============================================================================================================================

                                                                                                                   For the
                                                                                                                   period
                                                                                                                July 10, 2000
                                                For the        For the                           For the           (date of
                                             three months       three         For the nine         nine         incorporation)
                                              ended June        months        months ended        months             to
                                               30, 2005       ended June      June 30, 2005     ended June      June 30, 2005
                                            (as restated)      30, 2004       (as restated)      30, 2004       (as restated)
                                            ------------     ------------     ------------     ------------     --------------
<S>                                         <C>              <C>              <C>              <C>              <C>
REVENUES (NET OF RETURNS AND ALLOWANCES)    $    481,611     $      2,951     $    672,649     $     28,811     $    1,265,194

COST OF REVENUES                                 381,564              436          478,806           33,730            797,294
                                            ------------     ------------     ------------     ------------     --------------

GROSS PROFIT (DEFICIENCY)                        100,047            2,515          193,843           (4,919)           467,900
                                            ------------     ------------     ------------     ------------     --------------

OTHER OPERATING EXPENSES:
Stock based compensation and
  consulting fees                                168,000           64,400        1,120,833          327,545          2,133,119
Purchased in process research and
development                                           --               --               --          153,190            153,190
Impairment of assets                              10,000               --          212,000               --            255,154
Other employee compensation and benefits         540,797          165,120        1,602,809          376,818          2,677,924
Other professional and consulting fees           222,813           69,169          678,855           76,770            862,550
Selling and marketing                             11,033           22,142           71,542           26,297            167,123
Occupancy and equipment                          148,158           33,903          245,160           62,051            430,235
Travel and entertainment                          28,026            7,328           61,090            7,509             89,183
Other                                             59,101           22,828          123,967           54,761            244,245
                                            ------------     ------------     ------------     ------------     --------------
     Total other operating expenses            1,187,928          384,890        4,116,256        1,084,941          7,012,723
                                            ------------     ------------     ------------     ------------     --------------

NET OPERATING LOSS                            (1,087,881)        (382,375)      (3,922,413)      (1,089,860)        (6,544,823)
                                            ------------     ------------     ------------     ------------     --------------

OTHER INCOME (EXPENSE):
Gain (loss) from litigation                           --               --           60,000               --              4,000
Interest income                                      531               --           11,861               --             48,070
Interest expense                                      --           (1,841)             (13)          (9,784)           (12,749)
                                            ------------     ------------     ------------     ------------     --------------
     Total other income (expense)                    531           (1,841)          71,848           (9,784)            39,321
                                            ------------     ------------     ------------     ------------     --------------

NET LOSS                                    $ (1,087,350)    $   (384,216)    $ (3,850,565)    $ (1,099,644)    $   (6,505,502)
                                            ============     ============     ============     ============     ==============

NET LOSS PER SHARE -  Basic and Diluted     $      (0.02)    $      (0.03)    $      (0.08)    $      (0.09)
                                            ============     ============     ============     ============

Weighted Average Number of Shares
    Outstanding                               47,150,017       12,559,523       45,401,391       12,544,407
                                            ============     ============     ============     ============

===============================================================================================================================

See notes to consolidated financial statements.


                                                               4

<PAGE>

                                                        MORGAN BEAUMONT, INC.
                                                        ---------------------
                                                  (A DEVELOPMENT STAGE ENTERPRISE)
                                                  --------------------------------
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                             (UNAUDITED)

====================================================================================================================================

                                                                                                                     For the period
                                                                                                                     July 10, 2000
                                                                                     For the          For the          (date of
                                                                                   Ended June 30,   nine months      incorporation)
                                                                                       2005          ended June     to June 30, 2005
                                                                                   (as restated)      30, 2004       (as restated)
                                                                                    -----------      -----------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                        $(3,850,565)     $(1,099,644)     $(6,505,502)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                     68,656           25,077          130,706
       Amortization of intangible assets                                                  6,638            4,424           13,273
       Stock based compensation and consulting                                        1,120,833          327,545        2,133,119
       Purchase in process research and development                                          --          153,190          153,190
       Impairment of assets                                                             212,000               --          255,154
       Forgiveness of indebtedness as a result of litigation settlement                 (50,000)              --          (50,000)
    Changes in assets and liabilities, net:
        Decrease (increase)  in receivables                                          (1,186,885)          (4,520)      (1,192,750)
        Decrease (increase) in inventories                                              (73,277)              --          (73,277)
        Decrease (increase) in prepaid expenses and other assets                        (99,997)           2,300         (136,390)
        Increase (decrease) in accounts payable and accrued and other
        liabilities                                                                     342,809          202,376          706,656
        Increase (decrease) in deferred revenue                                         615,961               --          615,961
                                                                                    -----------      -----------      -----------
NET CASH USED IN OPERATING ACTIVITIES                                                (2,893,827)        (389,252)      (3,949,860)
                                                                                    -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                                                (450,538)         (29,350)        (598,787)
    Notes Receivable                                                                   (202,000)              --         (202,000)
    Purchase of assets from MTEL, Inc.                                                 (100,000)              --         (100,000)
    Initial investment in Financial Services International, Inc.                        (10,000)              --          (10,000)
    Purchase of assets from Typhoon Voice Technologies, Inc.                                 --           (5,000)          (5,000)
                                                                                    -----------      -----------      -----------
NET CASH USED IN INVESTING ACTIVITIES                                                  (662,538)         (34,350)        (815,787)
                                                                                    -----------      -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from borrowings under notes payable                                            --            3,912           97,912
     Repayments of notes payable                                                             --          (25,200)         (47,912)
     Repayments of capital lease payable                                                 (6,674)                           (6,674)
     Collection of subscription receivable                                            2,028,949          599,988        3,000,000
     Proceeds from commons stock subscribed                                           3,050,000               --        3,050,000
     Proceeds from the issuance of common stock                                       1,425,000           77,700        1,735,063
                                                                                    -----------      -----------      -----------
NET CASH  PROVIDED BY FINANCING ACTIVITIES                                            6,497,275          656,400        7,828,389
                                                                                    -----------      -----------      -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                             2,940,910          232,798        3,062,742

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                          121,832          (31,174)              --
                                                                                    -----------      -----------      -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                            $ 3,062,742      $   201,624      $ 3,062,742
                                                                                    ===========      ===========      ===========

  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                                                       $        13      $     7,782      $    12,738
                                                                                    ===========      ===========      ===========
Income taxes paid                                                                   $        --      $        --      $        --
                                                                                    ===========      ===========      ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING  ACTIVITIES:
Purchase of Typhoon Voice Technology assets by issuance of stock                    $        --      $    70,000      $    70,000
                                                                                    ===========      ===========      ===========
Purchase of MTEL property and equipment by issuance of sock                         $   748,200      $        --      $   748,200
                                                                                    ===========      ===========      ===========
Common stock subscribed                                                             $ 3,050,000      $        --      $ 3,050,000
                                                                                    ===========      ===========      ===========
Net increase in additional paid-in capital and deferred compensation from
issuance of stock options                                                           $   434,850      $        --      $   434,850
                                                                                    ===========      ===========      ===========
Purchase of equipment with capital lease obligation                                 $    24,860                       $    24,860
                                                                                    ===========      ===========      ===========

====================================================================================================================================

See notes to consolidated financial statements.


                                                                 5
</TABLE>

<PAGE>

                              MORGAN BEAUMONT, INC.
                              ---------------------
                        (A DEVELOPMENT STAGE ENTERPRISE)
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


================================================================================

NOTE A - FORMATION AND OPERATIONS OF THE COMPANY

Morgan Beaumont, Inc. (the "Company") was incorporated under the laws of the
state of Florida on July 10, 2000, formerly known as Pan American Energy Corp
("PAEC"), a publicly traded company that was incorporated under the laws of the
State of Nevada on May 26, 2000, Because the Company did not generate
significant revenues through June 30, 2005, it is considered to be in the
development stage as defined in Financial Accounting Standards Board Statement
No. 7. Accordingly, some of the Company's accounting policies and procedures
have not yet been established.

The accompanying consolidate consolidated financial statements include the
accounts of the Company and MBI Services Group, LLC. All significant
intercompany accounts and balances have been eliminated in consolidation.

The Company is headquartered in Bradenton, Florida, and also has offices located
in Temecula, California and Miami, Florida. The Company's primary products are
the Morgan Beaumont ATM and Debit Cards, Morgan Beaumont Stored Value VISA cards
and Morgan Beaumont Stored Value MasterCard which are re-loadable financial
products primarily for the sub-prime credit market. The Company has been
providing these cards to consumers in the sub-prime credit market sector since
the third quarter of 2002. The sub-prime market is generally made up of
consumers that do not have checking accounts and/or the ability to obtain debit
or credit cards. The Company has also provided these products to third party
companies for co-branding with their company name and logo, and marketing these
products under its brand name.

On August 26, 2004, the Company consummated a merger and recapitalization with
PAEC. From a legal perspective, PAEC is the surviving company and thus continues
its public reporting obligations, however for financial statement purposes, the
transaction was treated as a reverse merger and a recapitalization whereby the
Company was deemed to be the acquirer, and no goodwill or other intangible
assets were recorded. As a result, the accompanying results of operations and
cash flows for each of the periods prior to August 24, 2004 represent the
results of operations and cash flows of the accounting acquirer (i.e. Morgan
Beaumont, Inc.).

In connection with this transaction, the Company received a $3,000,000 note
receivable from a PAEC representative of a shareholder group. Through June 30,
2005, the Company had received complete payment of the principal amount of the
note.


                                       6

<PAGE>

Immediately prior to the transaction, the Company reduced its outstanding shares
via a reverse stock split whereby its outstanding shares were reduced at the
rate of 7.8513 to one. In addition, on June 1, 2004, the Company amended its
Articles of Incorporation to change the par value of common stock from $1.00 to
$0.001. All references to the number of shares, and related par values, in the
accompanying consolidated financial statements and notes thereto have been
adjusted to reflect the changes as though they occurred at the date of the
Company's incorporation.

Basis of Presentation
---------------------

The Company's accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and the instructions
to Form 10-QSB and Rule 10-1 of Regulation S-X of the Securities and Exchange
Commission (the "SEC"). Accordingly, these consolidated financial statements do
not include all of the footnotes required by accounting principles generally
accepted in the United States of America. In the Company's opinion, all
adjustments (consisting of normal and recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the
three and nine months ended June 30, 2005 are not necessarily indicative of the
results that may be expected for the year ended September 30, 2005. The
accompanying consolidated financial statements and the notes thereto should be
read in conjunction with our audited consolidated financial statements as of
September 30, 2004 and for the periods ended September 30, 2004 and December 31,
2003 included in our Form 10-KSB filing.

The accompanying consolidate consolidated financial statements include the
accounts of the Company and MBI Services Group, LLC. All significant
intercompany accounts and balances have been eliminated in consolidation.

Use of Estimates
----------------

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the Company to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements. The
reported amounts of revenues and expenses during the reporting period may be
affected by the estimates and assumptions the Company is required to make.
Estimates that are critical to the accompanying consolidated financial
statements arise from the Company's belief that all receivables and long-lived
assets are recoverable and that the resolution of various contingencies will not
materially impact its consolidated financial statements. In addition, the
markets for the Company's products are characterized by intense competition,
rapid technological development, evolving standards, short product life cycles
and price competition, all of which could impact the future realization of its
assets. Estimates and assumptions are reviewed periodically and the effects of
revisions are reflected in the period that they are determined to be necessary.
It is at least reasonably possible that the Company's estimates could change in
the near term.


                                       7

<PAGE>

Recognition of Revenue
----------------------

The Company recognizes revenue in accordance with accounting principles in the
United States of America by recognizing revenues when title to products has been
transferred or services rendered. Revenue for the Company's stored value cards
are recognized when shipped; revenue for the Company's prepaid telephone card
sales are recognized when the products are used. Costs of revenue are recorded
at the time revenue is recognized. The cost of printing the prepaid cards is
recognized when the cards are shipped to the customer.

Net Loss Per Share
------------------

The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss for
the period by the number of common and common equivalent shares outstanding
during the period. During the periods when they would be anti-dilutive, common
stock equivalents (consisting of common stock options) are not considered in the
computations.

Stock - Based Compensation
--------------------------

The Company accounts for equity instruments issued to employees for services
based on the intrinsic value of the equity instruments issued and account for
equity instruments issued to those other than employees based on the fair value
of the consideration received or the fair value of the equity instruments,
whichever is more reliably measurable.

The Company has adopted Statement of Financial Accounting Standards No. 148
"Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS No.
148"). This statement amends FASB statement No. 123, "Accounting for Stock Based
Compensation." It provides alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for employee
stock based compensation. It also amends the disclosure provisions of FASB
statement No. 123 to require prominent disclosure about the effects on reported
net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. Until such time that the Company is required
to apply SFAS 123 (R) (see "Recent Pronouncements"), as permitted by SFAS No.
123 and amended by SFAS No. 148, the Company continues to apply the intrinsic
value method under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," to account for its stock-based employee compensation
arrangements.

Concentration of Credit Risk
----------------------------

Financial instruments, which potentially subject the Company to significant
concentrations of credit risk, consist primarily of accounts receivable and cash
and cash equivalents. The Company frequently maintains cash and cash equivalents
balances in excess of federally insured limits. The Company has not experienced
any losses in such accounts.


                                       8

<PAGE>

With respect to accounts receivable, approximately 91% of the Company's accounts
receivable arise from five customers, and these customers accounted for
approximately 69% of the Company's revenues during the nine months ended June
30, 2005.

New Pronouncements
------------------

In December 2004, the Financial Accounting Standards Board issued Statement
Number 123 ("FAS 123 (R)"), Share-Based Payments. FAS 123 (R) requires all
entities to recognize compensation expense in an amount equal to the fair value
of shared-based payments such as stock options granted to employees. The Company
will be required to apply FAS 123 (R) on a modified prospective method. Under
this method, the Company is required to record compensation expense (as previous
awards continue to vest) for the unvested portion of previously granted awards
that remain outstanding at the date of adoption. In addition, the Company may
elect to adopt FAS 123 (R) by restating previously issued financial statements,
basing the amounts on the expense previously calculated and reported in the pro
forma disclosures that had been required by FAS 123. FAS 123 (R) is effective
for the Company, as a Small Business filer, with the start of the 2007 fiscal
year. The Company has not yet definitively determined the effect that FAS 123
(R) will have on its financial statements; however, the Company believes the
effect will be immaterial based on currently outstanding employee options.

NOTE B - Restatement

Previously we valued non-employee options at the date of grant and amortized
them ratably over the expected service period. However, in connection with the
SEC's review of our registration statements, we have determined that we should
apply EITF 96-18 to those options that have vesting periods, no significant
disincentives and no specific performance commitments. We now follow the
guidance in issue 3 of EITF 96-18. As a result, for each group of options, the
value is finally measured at their vesting date and estimated at reporting dates
prior to that time. The expense for each group of options is recognized ratably
over the vesting period for each group.

Accordingly, the financial statements presented now reflect this accounting
treatment. The change had no impact on our liquidity or cash flows; and the
summarized effect of the adoption of this accounting treatment is reflected
below:


                                       9

<PAGE>

<TABLE>
                                           As Originally       As Restated      As Originally
                                          Reported Three       Three Months     Reported Nine     As Restated Nine
                                         Months ended June    ended June 30,     Months ended     Months ended June
                                             30, 2005              2005         June 30, 2005         30, 2005
<S>                                             <C>               <C>               <C>               <C>
Stock-based compensation and
consulting fees                                 92,417            168,000           270,934           1,120,833

Net loss                                    (1,011,767)        (1,087,350)       (3,000,666)         (3,850,565)
Net loss per share - basic and diluted
                                                 (0.02)             (0.02)            (0.07)              (0.08)

</TABLE>

NOTE C - GOING CONCERN

The Company's consolidated financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a
going concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. The Company has incurred
significant losses since its inception, and has experienced and continues to
experience negative cash flows from operations. In addition, the Company expects
to have ongoing requirements for additional capital investment to implement its
business plan As such, the Company's ability to continue as a going concern is
contingent upon its ability to attain profitable operations by securing
financing and implementing it's business plan and successfully integrating
another possible operating business. In addition, the Company's ability to
continue as a going concern must be considered in light of the problems,
expenses and complications frequently encountered by entrance into established
markets and the competitive environment in which it operates. Since inception,
the Company's operations have been funded through private equity and debt
financing, and the Company expects to continue to seek additional funding
through private or public equity and debt financing. Finally, the Company
expects that operating revenues from the sales of its products and other related
revenues will increase. However, there can be no assurance that the funds the
Company has in place will be adequate to meet its cash flow needs through June
30, 2006 or that the Company will be able to fund any cash shortfalls through
additional debt or equity capital and/or any cash generated by its operations.
These factors, among others, indicate that the Company may be unable to continue
as a going concern for a reasonable period of time.

The Company's consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

NOTE D - SIGNIFICANT EVENTS

Purchase of Property and Equipment from MTEL
--------------------------------------------

The Company purchased certain property and equipment from MTEL Communications,
Inc ("MTEL") on May 6, 2005. MTEL is a telecommunications provider that used the
equipment to be purchased to service its prepaid phone cards that were sold in
foreign markets for calls back to the United States. The Company intends to
utilize the equipment to offer United States based prepaid phone cards and
eventually offer a phone card feature with its debit card products. In addition
to the equipment, the Company intends to license certain telecommunications
routes from MTEL until it establishes its own routes. Under the terms of the
agreement, as consideration for the purchased assets, MTEL is to receive
$200,000 over a period of four months, and 863,636 shares of the Company's
common stock. The total value of the cash and stock paid for these assets at the
date of closing was approximately $948,000. The Company has also entered a
consulting agreement with the founder and president of MTEL that requires, at a
minimum, monthly payments of $6,000 for a period of at least eighteen months.

Establishment of MBI Services Group, LLC
----------------------------------------


                                       10

<PAGE>

The Company established MBI Services Group, LLC (the "Services Group"), a wholly
owned limited liability company registered with the state of Florida, and named
Erik Jensen, the Company's President, as the Managing Member. The assets
purchased from MTEL were transferred to the Services Group with $50,000 being
designated as contributed capital and the remaining $898,200 payable to the
Company.

Extension of eChex Note
-----------------------

On April, 25, 2005, the Company entered into an Accord, Mutual Release and
Non-Disparagement Agreement. Under this agreement, the Company assumed all
rights and obligations of eChex under their Broker-Client Agreement with Acosta,
Inc. ("Acosta") in return for an extension of its note receivable due from
eChex. Both companies mutually released each other and Acosta from litigation
concerning the past relationships between the parties.

Letter of Intent to Purchase Financial Services International, Inc.
-------------------------------------------------------------------

The Company entered into a Letter of Intent ("LOI") with Financial Services
International, Inc. ("FSI") dated May 10, 2005 to acquire FSI for approximately
$600,000 in cash and stock. FSI, based in Covington, Kentucky, is a financial
services provider specializing in membership services centered on stored value
debit cards. The closing of the acquisition was contingent upon satisfactory due
diligence of FSI and the successful completion of an audit of FSI financial
statements as well as approval by the Company's board of directors. After
completing substantial due diligence, the Company's board of directors elected
not to proceed with the acquisition.

2005 Options Issued to Employees
--------------------------------

During the nine months ended June 30, 2005, the Company granted 10,175,000
options to purchase the Company's stock to various employees at exercise prices
equal to the trading value of its stock on the date the options were granted
(prior to June 30, 2005, 733,333 of these options were canceled when certain
employees left the employ of the Company). Accordingly, the Company is not
currently required to record any stock based compensation for the issuance of
these options. However, as mentioned at Note A under Recent Pronouncements, the
adoption of SFAS 123 (R) may ultimately result in the Company having to record
stock based compensation as a result of the issuance of these options.

Key Personnel
-------------

Retention of Scott Matthews
---------------------------

The Company hired Scott Matthews as its Vice President of Business Development.
Prior to his joining the Company Mr. Matthews was the founder and Chief
Executive Officer of Platinum Financial Group, a marketing company that managed
six stored value MasterCard programs. Prior to his founding of Platinum
Financial, Mr. Matthews was the Chief Executive Officer and Co-founder of
International Gateway Exchange, LLC, which developed and marketed debit card
products.


                                       11

<PAGE>

Re-assignment of Michael Rejbeni
--------------------------------

On April 26, 2005 Michael Rejbeni tendered a 30 day notice of resignation under
his contract as Vice President of Sales. During the 30 day period the Company
renegotiated the services of Mr. Rejbeni as Vice President of Operations and a
new employment contract was agreed upon.

Kenneth Craig
-------------

Kenneth Craig has assumed the day to day operational responsibilities of the
Services Group. He also still serves as the Company's Chief Operating Officer.
At an undetermined point in the future Mr. Craig may relinquish his
responsibilities as Chief Operating Officer and focus entirely on the Services
Group.

Theodore Misiewicz
------------------

The Company's Chief Executive Officer and President reviewed Mr. Misiewicz's
employment agreement and determined that Mr. Misiewicz was due an adjustment in
compensation. They made a recommendation of increased compensation to the
Compensation Committee of the Board of Directors who voted to increase Mr.
Misiewicz's compensation effective June 1, 2005.

Roderick Braido
---------------

Roderick Braido, the Company's Vice President of Western Operations, resigned
effective June 30, 2005. The Company does not plan on replacing the position at
this time.

Material Agreements
-------------------

Agreement with Western Union
----------------------------

The Company entered a Swift Pay Service Agreement with a division of Western
Union to allow the Company's cardholders to load funds on to their Morgan
Beaumont cards at all of Western Unions' approximately 45,000 locations within
the United States. The Company believes the integration of its programs with
Western Union infrastructure will take between 30 to 60 days and will be
complete late in the fourth fiscal quarter 2005 or early in the first fiscal
quarter of 2006. The Company expects the integration and technical costs to be
nominal and does not believe the integration with Western Union to adversely
impact the Company's technical or operational capacity. Western Union will
charge the Company's customers a fee for loading their cards and will pay a
commission on those fees to the Company. The Company has guaranteed to Western
Union a minimum monthly volume of 500 transactions in the first year and 1500
transactions per month thereafter. The Company will pay to Western Union $4.95
for each transaction less than the monthly minimum.

Agreement with Network Management Inc.
--------------------------------------


                                       12

<PAGE>

The Company entered into a distribution agreement with Network Management Inc.
(NMI), a telecommunications company that distributes prepaid calling cards in
many of the Company's target markets, pursuant to which NMI will supply Morgan
Beaumont's Stored Value and Debit card products as well as deploy the SIRE
Network technology to NMI's sales channel of 6000 retail locations.

Agreement with CGS Services, Inc.
---------------------------------

The Company entered into a Strategic Partnership with CGS Financial Technologies
("CGS") in which CGS will distribute the Company's card products through its
retail channels initially representing approximately 2,000 Points of Presence
("POPS").

Agreement with Virtual Card Services
------------------------------------

The Company entered into an exclusive Stored Value Card Distribution Agreement
with Virtual Card Services, LLC ("VCS") dated May 19, 2005 pursuant to which VCS
will market the Company's debit cards to automotive dealers nationwide who are
focused on serving the sub-prime market, as well as to its own base of sub prime
consumers.

VCS acts as the intermediary between a vendor and financial institutions via its
'Virtual Vendor' system. Bin Sponsor Agreement with First Gulf Bank On March 23,
2005, the Company completed an agreement with First Gulf Bank. First Gulf Bank
agreed to become a Bin sponsor for some of the Company's branded Visa cards for
prepaid programs approved by Visa in return for fees based on transactions on
the cards. The company has been approved as an Independent Sales Organization
("ISO") for the First Gulf Bank.

Licensing of Software for Switching Solutions, Inc.
---------------------------------------------------

The Company entered into a licensing agreement with Switching Solutions, Inc.,
("SSI") a software developer, for a perpetual, nonexclusive and non-transferable
license to use certain software from SSI. The licensed software will be used to
increase the Company's ability to manage its distribution network and reconcile
commissions. The licensed software also enhances the Company's POS terminal
software products.

NOTE E -CONTINGENCIES

In the normal course of business, the Company is involved in certain litigation
and other contingencies. In the opinion of management, these matters will not
have a material effect on the Company's financial position or results or
operations.

NOTE F - OTHER SUBSEQUENT EVENTS

Consummation of Common Stock Private Placement
----------------------------------------------


                                       13

<PAGE>

In July 2005, the Company completed the private placement of 12,362,500 shares
of common stock and warrants to purchase 12,362,500 shares of common stock. The
common stock and warrants were sold to certain accredited investors (the
"Purchasers") in an offering made pursuant to Rule 506 of Regulation D. The
Purchasers paid $0.40 in cash for each share of common stock, and also received
a warrant to purchase one share of common stock, resulting in aggregate proceeds
of $4,945,000. The Company incurred approximately $20,000 in legal fees but paid
no commissions, discounts, rebates or other incentives or compensation in
association with this offering. The net proceeds from the sale will be used for
general working capital purposes.

The Purchasers received certain anti-dilution protection entitling the
Purchasers to price adjustments in the event the Company sells shares for a
lower price. The Company also agreed to register the shares and the shares
underlying the warrants and has agreed to file, within 15 calendar days of the
effective date of the Company's S-2 Registration Statement, a registration
statement with the SEC, covering the resale of the shares and the shares of
common stock underlying the warrants.

The warrants are exercisable, in whole or in part, at any time until July 1,
2007 at a price of $0.60 per share, payable in cash. Beginning 30 days after the
shares underlying the warrants have been registered; the Company may redeem or
cancel the warrants if they have not been exercised in full by the tenth
business day which the Company's shares are traded for in excess of $1.20 per
share.

Lease Commitment for Additional Office Space
--------------------------------------------

On August 7, 2005 the Company signed a lease for an additional 20,000 square
feet of office space within the same building that houses its current corporate
headquarters. The Company intends to occupy the space in its fiscal fourth
quarter and sublease its existing space. Once the Company's plan is successful,
the Company's total office space will be 20,000 square feet at a lower cost per
square foot than its currently paying.

Agreement with Symmetrex
------------------------

On July 5, 2005, the Company signed a service agreement with Symmetrex. Under
the terms of the agreement, Symmetrex will provide processing services for the
Company in relation to one or more of the Company's products issued by Meta
Bank.

Daniel Davis
------------

On July 18, 2005, the Company hired Daniel Davis as its Vice President of
Engineering.

Celeste Brey
------------

On July 18, 2005, Celeste Brey's title was changed to Senior Systems Engineer
with the hiring of Daniel Davis.

================================================================================

                                       14

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

FORWARD-LOOKING STATEMENTS
--------------------------

The information in this Quarterly Report on Form 10-QSB contains 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 involve risks and uncertainties, including
statements relative to Morgan Beaumont's (formerly Pan American Energy
Corporation) capital needs, business plans and expectations. Such
forward-looking statements involve risks and uncertainties regarding the market
price of natural resources, availability of funds, government regulations,
common share prices, operating costs, capital costs and other factors.
Forward-looking statements are made, without limitation, in relation to
operating plans, property exploration and development, availability of funds and
operating costs. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may",
"will", "should", "expect", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential" or "continue", the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined below, and, from time to time, in other reports Morgan Beaumont
files with the SEC, including Morgan Beaumont's Annual Report on Form 10-KSB for
the year ended September 30, 2004 and quarterly and special reports filed since
then. These factors may cause Morgan Beaumont's actual results to differ
materially from any forward-looking statement. Morgan Beaumont disclaims any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking
statements.

OVERVIEW
--------

The Company's primary products and services include: two re-loadable debit
cards, prepaid telephone calling cards and the Company's networking software
named the SIRE Network ("SIRE"). Debit Cards, Stored Value Cards, and prepaid
calling cards are the primary card products. The Company began providing these
debit cards to consumers in the sub-prime credit market sector in the third
quarter of 2002, but did not begin to conduct constant or meaningful sales until
January 2005.

The Company was originally formed as Pan American Energy Corp. ("Pan American"
or "PAEC") incorporated under the laws of Nevada on May 26, 2000.

On May 10, 2004, Pan American entered into a Merger Agreement with former Morgan
Beaumont, Inc., a Florida corporation ("Morgan Beaumont"), which became
effective with the State of Nevada as of August 6, 2004 (the "Merger"); however,
the Merger was not completed until August 26, 2004. Morgan Beaumont merged with
and into Pan American, the separate existence of Morgan Beaumont ceased and Pan


                                       15

<PAGE>

American continued as the Surviving Corporation under the name Morgan Beaumont,
Inc., a Nevada corporation. The business of the Company changed from oil and gas
exploration and development to the business of Morgan Beaumont, as described in
this Report.

On January 27, 2005 the Company established MBI Services Group, LLC. A wholly
owned limited liability company organized in the state of Florida. Assets
purchased from MTEL, Inc. were placed into the Services Group as the Company's
initial investment. The Company markets and provides prepaid calling cards and
wholesale telecommunications through MBI Services Group, LLC.

PLAN OF OPERATIONS
------------------

Information prior to August 26, 2004, the effective date of the Merger, related
exclusively to Pan American, has been omitted. From a legal perspective, Pan
American is the surviving company and thus continues its public reporting
obligations. From an accounting perspective, however, Morgan Beaumont is treated
as though it acquired Pan American. Therefore, all financial information
presented in this 10-QSB includes Morgan Beaumont's standalone results from the
period July 10, 2000 (date of incorporation) to June 30, 2005.

In 2004 the Company changed its year end from December 31 to September 30. As a
result of this change, information contained herein is for the three and nine
months ended June 30, 2005 and 2004.

In the third fiscal quarter of 2005 ended June 30, 2005, management's
operational goals were to ship the Company's stored value products in more
substantial quantities and capitalize on customer relationships established in
the last three quarters. The Company sought to finalize the purchase of MTEL
assets and to begin to utilize and leverage those assets to generate additional
revenue in both prepaid phone cards and to cross over and pull stored value card
revenue into the new distributor relationships the phone products established.

The Company also sought to improve upon its technology to facilitate greater
opportunities for its products and expand its POPs and to continue bolstering
the infrastructure of the Company by hiring individuals with significant
experience in the areas of the Company's existing and planned operations. With
the agreement signed with Western Union late in the quarter, as well as less
material contracts signed during the quarter, the Company increased the number
of POP's from approximately 20,000 at the beginning of the quarter to over
72,000 as of June 30, 2005. Many of these POP's are still in the implementation
phase and the Company believes that their effect on revenue will not be felt
until at least late in the Company's fourth fiscal quarter ended September 30,
2005.

During the current quarter, the Company shipped over 70,000 debit cards compared
to 30,000 from the previous quarter. The Company has begun to receive income
from usage fees. The revenue from usage fees received during the quarter ended
June 30, 2005 was approximately $5,000. The Company anticipates that this
revenue source will grow substantially in the following quarters.


                                       16

<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE
THREE MONTHS ENDED JUNE 30, 2004

In June 1975, the Financial Accounting Standards Board, in its Statement No. 7,
set forth guidelines for identifying an enterprise in the development stage and
the standards of financial accounting and reporting applicable to such an
enterprise. In the opinion of management of the Company, the Company and its
activities from its inception through June 30, 2005 fall within the referenced
guidelines. Accordingly, the Company has reported its activities in accordance
with the aforesaid Statement of Financial Accounting Standards No. 7.

The Company generates income from the sale of the Morgan Beaumont Money Card and
the Morgan Beaumont Stored Value Mastercard. Its monthly maintenance fees are
associated with keeping the either card active and from transaction fees. The
Company anticipates that income may also be generated by or through the SIRE
Network when consumers load cash into their card account so the card can be used
for day to day purchases. The Company anticipates additional revenue to be
generated at the IVR System when consumers activate their card and/or purchase
promotional products or services that the Company hopes to offer in the future
such as Discount Health Benefits, Discount Medical Benefits, Road Side
Assistance and Vacation offers. The Company is not currently generating revenue
from the offering of these other services.

Hosting and Licensing Fees are charged for the use of proprietary Morgan
Beaumont technology. In a Hosted Agreement, the customer is not required to
purchase the technology; rather they only pay transaction fees for each use.
These fees are defined in a service agreement with the customer that stipulates
a minimum monthly fee for the use of the technology and is typically a 2-year
term. In a licensing agreement, the customer pays a fee for each product sold,
(the product can be sold under the Morgan Beaumont brand, or can be private
labeled for the customer), and also pays for any minor changes to the technology
required to meet the specific market the customer wishes to address. At June 20,
2005, the Company had one service agreement and one licensing agreement that it
was actively servicing. Transaction fees are derived from the use and loading of
cash for ATM, debit or Stored Value Cards and monthly maintenance fees
associated with keeping ATM, debit or Stored Value Cards active.

SALES AND REVENUES - Revenues for the three months ("the quarter") ended June
30, 2005 and 2004, were $481,611 and $2,951, respectively. Revenue in the
quarter ended June 30, 2005 reflected the acceleration of shipments of the
Company's card programs, telecommunications products and increased transaction
fees. During the quarter ended June 30, 2004 the Company was not actively
shipping any cards and revenue consisted primarily of transaction fees. The
addition of the new products provided the increase in revenue. The Company began
to realize revenue from transaction fees on the cards shipped in the current
quarter; the Company anticipates theses revenues to increase in subsequent
quarters. Cost of Revenue for the quarters ended June 30, 2005 and 2004 were
$381,564 and $436, respectively. Cost of revenue in 2005 related primarily to
the issuance of the new cards, and telecommunications products, while in 2004
cost of revenue was related primarily to transaction fees. The higher cost
revenue related to card sales as opposed to transaction fees combined with the
increased revenue were the reasons for the increase of cost revenue sold at a
higher rate than that of revenue.


                                       17

<PAGE>

DEFERRED REVENUE - In May of 2005 the Company began shipping prepaid phone
cards. These cards represent a promise to provide telecommunications services
when the end user uses the card on our telecommunications network. In accordance
with generally accepted accounting principles the Company defers the revenue
from the sales of these cards until the cards are used. During the quarter ended
June 30, 2005, the Company deferred revenue of approximately $621,000 and
recognized approximately $5,000 in revenue leaving a deferred revenue balance of
approximately $616,000.

On June 30, 2005, the Company had approximately 25,000 POP's active in the
United States where one or all of its products can be loaded. The Company was
also in the process of implementing the technology under contracts for
approximately 50,000 additional POPs. During the remainder of fiscal year 2005,
the Company intends to expand the number of access points. The Company has in
place contracts that management believes have the potential to grow its access
points to over 100,000 POPs. These POPs may now sell or load (or both) debit/ATM
and stored value hologram cards to the public. The Company is continuing to seek
additional relationships in order to further expand the POPs in the fiscal year.

OTHER OPERATING EXPENSES - Other operating expenses for the quarter ended June
30, 2005 and 2004, were $1,187,928 and $384,890 respectively. The Company's
product development activities, increased staffing and sales efforts combined
with additional reporting requirements were the primary causes of the increase
in operating expenses.

These expenses included stock-based non-cash expenses of approximately $168,000
and $64,400, respectively. Additional non-cash expenses in addition to
stock-based compensation and depreciation were $10,000 for impaired assets in
the quarter ended June 30, 2005. The Company recognized other employee
compensation of $540,797 and $165,120, in the quarters ended June 30, 2005 and
2004 respectively due to increase in staffing. Professional and consulting fees
in the quarters ended June 30, 2005 and 2004 were $222,813 and $69,169
respectively. The approximate 190% increase is due primarily to the added
compliance efforts due to the Company's public reporting requirements that were
not required in the quarter ended June 30, 2004.

Occupancy and equipment costs increased $114,255, approximately 350%, to
$148,158 for the quarter ended June 30, 2005, from $33,093 for the quarter ended
June 30, 2004. This increase is due to the additional office space and equipment
the Company is utilizing to support its efforts in the development, marketing,
and sale of its products and the related staffing. The Company will continue to
upgrade its technology to maintain what it believes is its lead in technology
within the market.

NET LOSS - During the quarters ended June 30, 2005 and 2004, the Company
incurred losses of $1,087,350 and $384,216 respectively. Operating results were
impacted by the increase in personnel, legal, and accounting costs they have not
been compensated for by additional revenue.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE
NINE MONTHS ENDED JUNE 30, 2004


                                       18

<PAGE>

SALES AND REVENUES - Revenues for the nine months ended June 30, 2005 and 2004,
were $672,649 and $28,811, respectively. This increase of greater than 2000% is
indicative of the Company's marketing effort in stored value cards as well as
the additional revenue source through telecommunications products. Cost of Sales
for the nine months ended June 30, 2005 and 2004, were $478,806 and $33,730,
respectively. Cost of revenues in 2005 related primarily to the issuance of the
new cards and telecommunication product cost, while in 2004 cost of revenues was
related primarily a write-off of obsolete inventory as well as transaction
costs.

DEFERRED REVENUE - In May of 2005 the Company began shipping prepaid phone
cards. These cards represent a promise to provide telecommunications services
when the end user uses the card on our telecommunications network. In accordance
with generally accepted accounting procedures the Company defers the revenue
from the sales of these cards until the cards are used. During the six months
ended June 30, 2005, the Company deferred revenue of approximately $621,000 and
recognized approximately $5,000 in revenue leaving a deferred revenue balance of
approximately $616,000.

OTHER OPERATING EXPENSES - Other operating expenses for the nine months ended
June 30, 2005 and 2004, were $4,116,256 and $1,084,941, respectively. The
Company's activity in preparing for new product releases as well as its
increased sales efforts combined with additional reporting requirements were the
primary causes of the increase of over 200% in operating expenses.

These expenses included non-cash, stock based compensation of $1,120,833 and
$327,545 in the nine months ended June 30, 2005 and 2004 respectively, a 17%
decrease, as well as other employee compensation of $1,602,809 and $376,818, in
2005 and 2004, respectively an increase approximately 325%. The net increase of
266% in compensation expense is due primarily to increased staffing. The
Company's cash position has accounted for the shift from stock-based to cash
compensation as it no longer is required to pay its consultants and some
employees with stock.

Other professional fees incurred in the nine months ended June 30, 2005 and
2004, were $678,855 and $76,770, respectively a 784% increase. The increase in
other professional fees is primarily attributable to legal and accounting fees
related to external reporting, the process of offering and registration of
certain shares of the Company, acquisitions and completion of certain agreements
and contracts, as well as the Company's improved cash position which allowed the
Company to compensate consultants in cash in lieu of stock issuances.

The Company also recorded non-cash charges to income for asset impairment of
$212,000 during the nine months ended June 30, 2005 and purchased in process
research and development of $153,190 for the quarter ended June 30, 2004. In the
nine ended June 30, 2005, the impaired assets related to the note receivable of
$202,000 due the Company from eChex and $10,000 paid to the shareholders of
Financial Services International ("FSI") at the signing of the letter of intent
to purchase FSI which was not consummated. The purchased in process research and
development expense for nine months ended June 30, 2004, related to the excess
purchase price of Typhoon Technologies over their book value.


                                       19

<PAGE>

Occupancy and equipment costs increased $183,109 or approximately 295% to
$245,160 for the nine months ended June 30, 2005, from $62,051 for the nine
months ended June 30, 2004. This increase is due to the additional office space
and equipment the Company is utilizing to support its efforts in the
development, marketing, and sale of its products and related staffing.

The Company intends to continue to upgrade its technology to maintain what it
believes is its lead in technology within the market.

NET LOSS - During the nine months ended June 30, 2005 and 2004, the Company
incurred losses of $3,850,565 and $1,099,644, from operations respectively.
Operating results for the nine months ended June 30, 2005, were impacted by the
increase in personnel, legal, and accounting costs, as well as the asset
impairment that have not been compensated for by additional revenue as compared
to the same period in the prior year.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

From inception to June 30, 2005, the Company generated cash from financing
activities of $7,828,389. This amount arose primarily from sales of the
Company's common stock, and collections under a note receivable from a
stockholder that was acquired at the time of the Pan American merger discussed
above. The Company has used a significant portion of this capital to fund cash
outflows for operating and investing activities of approximately $3,949,860 and
$815,787, respectively, and as of June 30, 2005, the Company currently has cash
on hand of approximately $3,062,742. Since the Company has not attained
profitable operations and is dependent upon obtaining financing to pursue its
plan of operations, there is no assurance that it will not require additional
resources in the future or that it will be able to obtain financing in the
amount required or terms satisfactory to the Company.

ITEM 3. CONTROLS AND PROCEDURES.

As required by Rule 13a-15 under the Exchange Act, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of September 30, 2004, (the date of the
Company's year ended) and updated that evaluation as of June 30, 2005. This
evaluation was carried out under the supervision and with the participation of
its Company's Chief Executive Officer and Chief Financial Officer. Based upon
that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures were
effective in timely alerting management to material information relating to the
Company required to be included in its periodic SEC filings.

Based on the evaluation, management has not identified any material deficiencies
or material weaknesses that need to be addressed.

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in its reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,


                                       20

<PAGE>

without limitation, controls and procedures designed to ensure that information
required to be disclosed in the Company's reports filed under the Exchange Act
is accumulated and communicated to management, including its Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.

During the nine months ended June 30, 2005, the Company has added accounting
personnel as well as an inventory control manager that has strengthened
controls. An Accounting Policy and Procedures Manual has been drafted to address
many of the internal control issues related to financial reporting and is
currently being implemented. The Company feels the Financial Reporting issues
are being addressed and will continue to improve.

The term "internal control over financial reporting" is defined as a process
designed by, or under the supervision of, the registrant's principal executive
and principal financial officers, or persons performing similar functions, and
effected by the registrant's board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external purposes
in accordance with generally accepted accounting principles and includes those
policies and procedures that:

         (1)      Pertain to the maintenance of records that in reasonable
                  detail accurately and fairly reflect the transactions and
                  dispositions of the assets of the registrant;

         (2)      Provide reasonable assurance that transactions are recorded as
                  necessary to permit preparation of consolidated financial
                  statements in accordance with generally accepted accounting
                  principles, and that receipts and expenditures of the
                  registrant are being made only in accordance with
                  authorizations of management and directors of the registrant;
                  and

         (3)      Provide reasonable assurance regarding prevention or timely
                  detection of unauthorized acquisition, use or disposition of
                  the registrant's assets that could have a material effect on
                  the consolidated financial statements.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is a party to an ongoing legal proceeding as described in the annual
report on Form 10-KSB, as filed with the Securities and Exchange Commission on
December 29, 2004, as amended on form 10KSB/A filed June 7, 2005. Accordingly,
readers are encouraged to review the full disclosure regarding these legal
proceedings, as disclosed in Item 3 of the Annual Report on Form 10-KSB. The
Company does not believe the resolution of these matters will have a material
adverse effect on its financial position or results of operations. Since the
effective date of the Company's annual report, the Company has entered into
settlement agreements described in our quarterly report filed on February 8,
2005.

Litigation with Wade Cloud
--------------------------


                                       21

<PAGE>

The Company's attorneys in the Wade Cloud litigation have advised the Company
that subsequent to Mr. Cloud's counterclaim being dismissed in Florida state
court, Mr. Cloud re-filed his suit in April 2005 and the case is proceeding. The
Company is reviewing the complaint and will be filing motions to dismiss the
second amended complaint. The Company believes that Mr. Cloud's allegations are
without merit.

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

The Company recently completed the private placement of an aggregate of
12,362,500 of shares of common stock to certain accredited investors (the
"Purchasers") in an offering made pursuant to Rule 506 of Regulation D. The
aggregate purchase price was $4,945,000 cash. The Purchasers paid $0.40 per
share and received a two year warrant to purchase one (1) share of common stock
for $0.60 per share for each share of common stock purchased. The transaction
was consummated pursuant to a Securities Purchase Agreement by and between the
Company and the Purchasers (the "Purchase Agreement"). The net proceeds from the
sale will be used for general working capital. The shares and warrants sold are
restricted from transfer and may only be transferred in compliance with state
and federal securities laws.

The Purchasers received certain anti-dilution protection entitling the
Purchasers to price adjustments in the event the Company sells shares for a
lower price within the next year. The Purchase Agreement contains various
representations, warranties and covenants of the parties customary for a
transaction of this type. The Company has agreed to indemnify the Purchasers
against various liabilities.

The Company also agreed to register the shares and the shares underlying the
warrants, pursuant to a Registration Rights Agreement (the "Registration Rights
Agreement") and has agreed to file, within 15 calendar days of the effective
date of the Company's S-2 Registration Statement, a registration statement with
the SEC, covering the resale of (i) the shares and (ii) the shares of common
stock underlying the warrants (the "Registrable Securities") for an offering to
be made on a continuous basis pursuant to Rule 415. The Company will use its
reasonable best efforts to have the registration statement declared effective by
the SEC as soon as practicable thereafter. The Company and Purchasers each
agreed with the other to indemnify the other for certain liabilities arising
under the Securities Act. Pursuant to the Registration Rights Agreement and
subject to certain other provisions therein, if the Company fails to timely
perform or provide in accordance with its responsibilities under the
Registration Rights Agreement and certain Securities Act provisions, then, in
addition to any other rights the holder or holders of the Registrable Securities
(the "Purchaser") may have pursuant to the Registration Rights Agreement or
under applicable law: (x) on each such date when the Company has failed to
timely perform or provide under the Registration Rights Agreement (an "Event
Date"), the Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty, equal to 12.0% of the aggregate
purchase price paid by such Purchaser pursuant to the Purchase Agreement for any
Registrable Securities then held by such Purchaser; and (y) on each monthly
anniversary of each such Event Date (if the applicable event shall not have been
cured by such date) until the applicable event is cured, Company shall pay to


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<PAGE>

each Purchaser an amount in cash, equal to 2.0% of the aggregate purchase price
paid by such Purchaser pursuant to the Purchase Agreement for any Registrable
Securities then held by such Purchaser. If Company fails to pay any partial
liquidated damages pursuant to Section 2(b) of the Registration Rights Agreement
as summarized above in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 18% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Purchaser,
accruing daily from the date such partial liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. The partial
liquidated damages pursuant to the terms of the Registration Rights Agreement
shall apply on a daily pro-rata basis for any portion of a month prior to the
cure of an event.

The Company paid no commissions, discounts, rebates or other incentives or
compensation in association with this offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of the Company's shareholders during the
three months ended June 30, 2005. The Company intends to hold an annual meeting
of its Shareholder's and an election of Directors prior to or immediately after
its fiscal year end.

ITEM 5. OTHER INFORMATION.

Completion of Purchase of Certain property and equipment From MTel.
-------------------------------------------------------------------

The Company closed on its acquisition of telephone switches equipment and
related rights from MTel Communications, Inc. ("MTel"). A copy of the Asset
Purchase Agreement with MTel and a Consulting Agreement with Mike Vazquez are
attached as Exhibit 8.2. and 8.3. to the Company's Form 8-K filed on May 20,
2005.

Establishment of MBI Services Group, LLC
----------------------------------------

The Company established MBI Services Group, LLC (the "Services Group"), a wholly
owned limited liability company registered with the state of Florida, and named
Erik Jensen, the Company's President, as the Managing Member. The assets
purchased from MTel were transferred to the Services Group with $50,000 being
designated as contributed capital and the remaining $898,200 payable to the
Company.

Extension of eChex Note
-----------------------

The Company entered into an Accord, Mutual Release and Non-Disparagement
Agreement with eChex. Under this agreement, the Company assumed all rights and
obligations of eChex under their Broker-Client Agreement with Acosta, Inc.
("Acosta") in return for an extension of its note receivable due from eChex.
Both companies mutually released each other and Acosta from litigation
concerning the past relationships between the parties and the Company also


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<PAGE>

extended the term of the Note an additional six (6) months.. In exchange for
releasing the personal guarantees of the three principal officers and
shareholders of eChex, eChex assigned all revenue under the Broker-Client
Agreement to the Company. A copy of this agreement is attached as Exhibit 8.1.1.
to the Company's Form 8-K filed on May 3, 2005.

2005 Options Issued to Employees
--------------------------------

The Company granted 10,175,000 options to purchase the Company's stock to
various employees at exercise prices equal to the trading value of its stock on
the date the options were granted (subsequently and before June 30, 2005,
733,333 of these options were canceled when employees left the employ of the
Company). A copy of this stock option plan is attached hereto as Exhibit 5.1.

EMPLOYMENT AGREEMENTS
---------------------

Scott Matthews
--------------

The Company hired Scott Matthews as its Vice President of Business Development.
Prior to his joining the Company Mr. Matthews was the founder and Chief
Executive Officer of Platinum Financial Group, a marketing company that managed
six stored value MasterCard programs.

Michael Rejbeni
---------------

On April 26, 2005 Michael Rejbeni tendered a 30 day notice of resignation under
his contract as Vice President of Sales. During the 30 day period the Company
renegotiated the services of Mr. Rejbeni as Vice President of Operations and a
new employment contract was agreed upon.

Roderick Braido
---------------

Roderick Braido, the Company's Vice President of Western Operations, resigned
effective June 30, 2005. The Company does not plan on replacing the position at
this time.

MATERIAL AGREEMENTS
-------------------

Agreement with Virtual Card Services
------------------------------------

The Company entered into that certain, exclusive Stored Value Card Distribution
Agreement with Virtual Card Services, LLC ("VCS") dated May 19, 2005 pursuant to
which VCS will market the Company's debit cards to automotive dealers nationwide
who are focused on serving the sub-prime market, as well as to its own customer
of sub prime consumers. VCS acts as the intermediary between a vendor and
financial institutions via its 'Virtual Vendor' system. A copy of this agreement
is attached as Exhibit 8.1.1. to the Company's Form 8-K filed on June 3, 2005.

Agreement with Network Management Inc.
--------------------------------------


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<PAGE>

The Company entered into that certain distribution agreement with Network
Management Inc. (NMI) pursuant to which NMI will supply Morgan Beaumont's Stored
Value and Debit card products as well as deploy the SIRE Network technology to
NMI's sales channel of 6000 retail locations. A copy of this agreement is
attached as Exhibit 8.1.1. to the Company's Form 8-K filed on June 21, 2005.

Agreement with Western Union
----------------------------

The Company entered into that certain Swift Pay Service Agreement with Western
Union to allow the Company's cardholders to load funds on to their Morgan
Beaumont cards at all of Western Unions' approximately 45,000 locations within
the United States. The Company believes the integration of its programs with
Western Union infrastructure will take between 30 to 60 days and will be
complete late in the fourth fiscal quarter 2005 or early in the first fiscal
quarter of 2006. The Company expects the integration and technical costs to be
nominal and does not consider the integration with Western Union to adversely
impact the Company's technical or operational capacity. Western Union will
charge the Company's customers a fee for loading their cards and will pay a
commission on those fees to the Company. The Company has guaranteed to Western
Union a minimum monthly volume of 500 transactions in the first year and 1500
transactions per month thereafter. The Company will pay to Western Union $4.95
for each transaction less than the monthly minimum. A copy of this agreement is
attached as Exhibit 8.1.1. to the Company's Form 8-k filed on June 24, 2005.

Distribution Agreement with CGS Financial Technologies
------------------------------------------------------

The Company entered into that certain Strategic Partnership with CGS Financial
Technologies ("CGS") in which CGS will distribute the Company's card products
through its retail channels. A copy of this agreement is attached as Exhibit
8.1.1. to the Company's Form 8-K filed on July 7, 2005.

Distribution Agreement with Symmetrex Inc.
------------------------------------------

The Company entered into that certain Distribution Agreement with Symmetrex Inc.
("Symmetrex") in which Symmetrex will distribute the Company's card products
through its retail channels. A copy of this agreement is attached hereto as
Exhibit 5.2.

Bin Sponsor Agreement with National Bank of Commerce
----------------------------------------------------

The Company entered into that certain Bin Sponsor Agreement with National Bank
of Commerce ("NBAC") in which NBAC will sponsor bins for certain Visa Card
products produced by the Company. A copy of this agreement is attached hereto as
Exhibit 5.3.

Sublease Agreement with GEBO Corporation USA
--------------------------------------------

The Company entered a certain Sublease Agreement with GEBO Corporation USA
("GEBO") in which GEBO will sublease to the Company certain premises consisting
of 20,000 square feet in the same building as 6015, LLC located at 6015 31st
Street East, Bradenton, Florida 34203, for the purpose of office space and
related uses of the business to be operated by the Company . During the term of
the sublease, the Company shall pay base rent in the sum of $8,333.33 per month.
A copy of this agreement is attached hereto as Exhibit 5.4.


                                       25

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

      EXHIBIT NUMBER       DESCRIPTION OF EXHIBIT

           5.1             2004 Stock Option Plan

           5.2             Distribution Agreement with Symmetrex Inc

           5.3             Bin Sponsor Agreement with National Bank of Commerce

           5.4             Sublease Agreement with GEBO Corporation USA


REPORTS ON FORM 8-K

On April 27, 2005, the Company filed a report on Form 8-K announcing under Item
8.01 the acquisition of certain assets of Mtel Communications and the issuance
of its recent press releases.

On May 3, 2005, the Company filed a report on Form 8-K/A announcing Item 8.01
the agreement and loan with eChex.

On May 20, 2005, the Company filed a report on Form 8K announcing the signing of
a letter of intent to purchase all outstanding stock of Financial Services
International, Inc.

On June 3, 2005 the Company filed a report on Form 8K announcing that it had
entered into an exclusive Stored Value Card Distribution Agreement with Virtual
Card Services, LLC

On June 21, 2005 the Company filed a report on Form 8K announcing that it had
entered into that certain distribution agreement with Network Management Inc.

On June 24, 2005 the Company filed a report on Form 8K announcing that it had
entered into an agreement with Western Union to allow the Company's card holders
to load value onto their cards at Western Union locations.

On July 1, 2005 the Company filed a report on Form 8K announcing that it had
signed a distribution agreement with CGS Financial, Inc. The Company also
announced that it had canceled the acquisition of Financial Services
International, Inc.

On July 22, 2005 the Company filed a report on Form 8K announcing that it had
completed the private placement of 12,362,500 shares of stock.


                                       26

<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              MORGAN BEAUMONT, INC.

Date:   November 14, 2005     By:  /S/ CLIFFORD WILDES
                                   -----------------------------------------
                                   Clifford Wildes, Chief Executive Officer,
                                   Treasurer and Director


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