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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2008

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

For the transition period from __________ to __________

Commission file number 333-131531

PANGLOBAL BRANDS INC.(Name of small business issuer in its charter)

|Delaware                                                             | 20-8531711                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

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

|Issuers telephone number: | 323 266-6500
|-------------------------- | ------------

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

|Securities registered pursuant to Section 12(b) of the
      Act: |                                          
|----------------------------------------------------------------- | -----------------------------------------
|                                                                  |                                          
|Title of each class                                               | Name of each exchange on which registered
|Nil                                                               | N/A                                      

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

Common Shares, par value $0.0001(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [   ]

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act
from their obligations under those Sections.

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. Yes [X]    No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B 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 [X]

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ii

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

Issuer's revenues for its most recent fiscal year ended
September 30, 2008 is $13,939,264.

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked prices of such
common equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

27,560,641 common shares @ $0.10(1)= $2,756,064.10

(1) Represents the price at January 9, 2009 as
disclosed on Yahoo! Finance. Used only for the purpose of this calculation.

State the number of shares outstanding of each of the issuer's
classes of equity stock, as of the latest practicable date:37,671,710
common shares issued and outstanding as of January 9, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part
I, Part II, etc.) into which the document is incorporated: (1) any annual report
to security holders; (2) any proxy or information statement; and (3) any
prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933
("Securities Act"). The listed documents should be clearly described for
identification purposes (e.g., annual report to security holders for fiscal
year ended December 24, 1990).

None

Transitional Small Business Disclosure Format (Check
one):                                        
Yes [   ]    No [X].

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iii

TABLE OF CONTENTS

|PART
      I                                                                                                                                              | 1 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|                                                                                                                                                          |   
|ITEM
      1. DESCRIPTION OF BUSINESS                                                                                                                     | 1 
|                                                                                                                                                          |   
|RISK
      FACTORS                                                                                                                                        | 5 
|                                                                                                                                                          |   
|ITEM
      2. DESCRIPTION OF PROPERTY                                                                                                                     | 9 
|                                                                                                                                                          |   
|ITEM
      3. LEGAL PROCEEDINGS                                                                                                                           | 10
|                                                                                                                                                          |   
|ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                                                        | 10
|                                                                                                                                                          |   
|PART
      II                                                                                                                                             | 10
|                                                                                                                                                          |   
|ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL
      BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.                    | 10
|                                                                                                                                                          |   
|ITEM
      6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.                                                                                  | 11
|                                                                                                                                                          |   
|ITEM
      7. FINANCIAL STATEMENTS.                                                                                                                       | 18
|                                                                                                                                                          |   
|ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE.                                                 | 19
|                                                                                                                                                          |   
|ITEM
      8A. CONTROLS AND PROCEDURES                                                                                                                    | 19
|                                                                                                                                                          |   
|ITEM
      8B. OTHER INFORMATION                                                                                                                          | 20
|                                                                                                                                                          |   
|PART
      III                                                                                                                                            | 21
|                                                                                                                                                          |   
|ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
      GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT | 21
|                                                                                                                                                          |   
|ITEM
      10. EXECUTIVE COMPENSATION                                                                                                                     | 23
|                                                                                                                                                          |   
|ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
      RELATED STOCKHOLDER MATTERS.                                      | 26
|                                                                                                                                                          |   
|ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE                                                            | 28
|                                                                                                                                                          |   
|ITEM
      13. EXHIBITS.                                                                                                                                  | 29
|                                                                                                                                                          |   
|ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                     | 30
|                                                                                                                                                          |   
|SIGNATURES                                                                                                                                                | 32

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1

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Forward-Looking Statements

This
annual report contains forward-looking statements that relate to future events
or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, should, expects,
plans, anticipates, believes, estimates, predicts, potential or
continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
Risk Factors beginning on page 6 of this report, that may cause our or our
industrys actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

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

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

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

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

Corporate Overview and History

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

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

On
February 2, 2007, we affected a forward stock split of our authorized and issued
and outstanding shares on a six-for-one basis. The forward split resulted in the
increase of our authorized capital from 100,000,000 shares of common stock with
a par value of $0.0001 to 600,000,000 shares of common stock with a par value of
$0.0001.

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

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

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2

Our Current Business

Business Strategy

Our
strategy is to build a series of apparel brands, consisting of mainly womens
apparel, and to build brand recognition by marketing our products to fashion
conscious, affluent consumers who shop in high-end boutiques and department
stores and who want to wear and be seen in the latest and most fashionable
clothing and accessories. We plan to update our product offerings continually to
be seen as a trend setter in fashionable clothing and accessories. We also are
targeting the junior market and design, have manufactured and sell junior denim,
t-shirts, dresses and other apparel. Lastly, based upon our branded products, we
expect to be offered the opportunity to manufacture private label womens
apparel including dresses, skirts and knit and woven tops.

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

Our
divisions are aggregated into three major consumer market product
groupings-Sosik, Scrapbook and Contemporary. The major consumer divisions are as
follows:

SOSIK-Sosik
designs, merchandises and sells junior t-shirts, dresses, skirts and knit and
woven tops and other apparel manufactured in Asia. Junior apparel includes
clothing for girls ages 14-22 as well as products for children ages 6-14. Sales
of Sosik, including products that will be sold under private labels for junior
products commenced in October, 2007 and shipments commenced in January 2008.
Approximately 70% of our revenue for our fiscal year ended September 30, 2008
related to Sosik and junior products. Customers include Charlotte Russe, Forever
21, Wet Seal, Ross and Burlington Coat Factory.

SCRAPBOOK-Scrapbook
and Crafty Couture trademarks were acquired June 18, 2008. The Scrapbook label
is aimed at junior (teen and early 20s) higher-end contemporary markets and is
known for its mix and match prints and comfortable knit fabrics. Scrapbook
products can be found at better department stores and boutiques. Major customers
include Nordstroms, Dillards, Macys, Anthropologie, Top Shop (in London, UK),
Forever 21 and Hot Topic. We have employed Kelly Kaneda, founder of the brand,
to be the new president of the Scrapbook division of Panglobal Brands, Inc.
Crafty Couture is less fashionable and aimed at a younger market, early through
late teens.

The
following four divisions have been consolidated into the Contemporary Group.

TEA AND HONEY-Tea and Honey designs,
merchandises and sells womens mid-priced contemporary dresses. Tea and Honey is
a more casual look for women ages 22-35 with a vintage feel easily convertible
for wear by the working woman by day and for evening wear, as well. Tea and
Honey products commenced sales in June 2008 and will be manufactured in Asia.
Retail customers include Federated department store chains, Anthropologie and
boutiques. Competition includes Velvet, Ella Moss and A Common Thread.

HAVEN and PRIVATE LABEL - Based upon
our branded products, we started offering Haven lower priced dresses with
success and are beginning to be offered the opportunity by major department
stores to design, merchandise and manufacture private label womens apparel
including dresses, skirts and knit and woven tops. Our Haven shipments commenced
July, 2008 and include customers such as Nordsrom, Macys and Dillards.

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

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3

We
anticipate no significant change in our products lines or new apparel industry
divisions during the fiscal year ending on September 30, 2009. In all of our
divisions, we purchase finished goods from numerous contract manufacturers and
to a lesser extent raw materials directly from numerous textile mills and yarn
producers and converters. We have not experienced difficulty in obtaining
finished goods or raw materials essential to our business in any of our apparel
business divisions.

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

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

Consulting Agreement for Sosik Division

On
August 20, 2007 the Company signed a consulting agreement with Lolly Factory,
Inc. and its sole shareholder (Consultant) to provide sales and merchandising
consulting services for the Sosik and Juniors apparel divisions through December
31, 2010. Consulting fees totaling $452,125 were payable between September 2007
and June 2008 and have been fully paid at September 30, 2008. For the full year
ended September 30, 2008, $360,675 in consulting fees were paid. In addition,
under the consulting agreement, the Consultant shall earn a 3.5% commission on
the Sosik/Junior divisions net sales. The Company recorded sales commission
expense of $251,435 for the year ended September 30, 2008. The Consultant also
earns 100,000 of our common shares payable each month from September, 2007 to
June, 2008, up to an aggregate of 1,000,000 common shares which shares are
deemed to be earned and vested each month. The Company recorded an expense to
operations in the amount of $694,000 for 900,000 common shares earned for the
year ended September 30, 2008.

The
Consultant and the Company have established sales targets totaling $30.0 million
for calendar year 2008, $45.0 million for calendar year 2009 and $60.0 million
for calendar year 2010. The Consultant can earn up to 1,500,000 additional
common shares of Panglobal Brands Inc. according to the following schedule:

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

Our
intention is to have the Consultant accept any shares payable for his meeting
the sales target for 2008 in shares transferred to him directly from one of our
directors personal holdings in the common shares of our company. Therefore, we
have not accrued an expense for shares payable to the Consultant for 2008.

Manufacturing

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

Employees

As
of January 9, 2008, we have 53 full-time employees: three (3) are executive, ten
(10) are design staff, seventeen (17) are production staff, nine (9) are sewing
staff, six (6) are sales staff, six (4) are customer service and shipping staff
and four (4) are accounting/administration staff. None of our employees are
subject to a collective bargaining agreement, and we believe that our relations
with our employees are good.

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4

Quality Control

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

Competition

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

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

Government Regulation and Supervision

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

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

Information Systems

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

Trademarks

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

Marketing

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

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5

RISK FACTORS

Much
of the information included in this annual report includes or is based upon
estimates, projections or other forward-looking statements. Such
forward-looking statements include any projections or estimates made by us and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.

Such
estimates, projections or other forward-looking statements involve various
risks and uncertainties as outlined below. We caution readers of this annual
report that important factors in some cases have affected and, in the future,
could materially affect actual results and cause actual results to differ
materially from the results expressed in any such estimates, projections or
other forward-looking statements. In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.

Risks Related to our Business

Our continued operations depend on current fashion trends.
If our products and designs are not considered fashionable or desirable by
enough consumers, then our business could be adversely affected.

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

We may be unable to achieve or sustain growth or manage our
future growth, which may have a material adverse effect on our future operating
results.

We
cannot provide any assurances that our business plan will be successful and that
we will achieve profitable operations. Our future success will depend upon
various factors, including the strength of our brand image, the market success
of our current and future products, competitive conditions and our ability to
manage increased revenues, if any, or implement our growth strategy. In
addition, we anticipate significantly expanding our infrastructure and adding
personnel in connection with our anticipated growth, which we expect will cause
our selling, general and administrative expenses to increase in absolute dollars
and which may cause our selling, general and administrative expenses to increase
as a percentage of revenue. Because these expenses are generally fixed,
particularly in the short-term, operating results may be adversely impacted if
we do not achieve our anticipated growth.

Future
growth may place a significant strain on our management and operations. If we
experience growth in our operations, our operational, administrative, financial
and legal procedures and controls may need to be expanded. As a result, we may
need to train and manage an increasing number of employees, which could distract
our management team from our business. Our future success will depend
substantially on the ability of our management team to manage our anticipated
growth. If we are unable to anticipate or manage our growth effectively, our
operating results could be adversely affected.

---

6

We face intense competition, including competition from
companies with significantly greater resources than ours, and if we are unable
to compete effectively with these companies, our business could be harmed.

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

We
believe that our ability to compete successfully depends on a number of factors,
including the style and quality of our products and the strength of our brand
name, as well as many factors beyond our control. We may not be able to compete
successfully in the future, and increased competition may result in price
reductions, reduced profit margins, loss of market share and an inability to
generate cash flows that are sufficient to maintain or expand our development
and marketing of new products, which would adversely impact the trading price of
our common stock.

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

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

Government regulation and supervision could restrict our
business and decrease our profitability.

Any
negative changes to international trade agreements and regulations such as the
North American Free Trade Agreement or any agreements affecting international
trade such as those made by the World Trade Organization which result in a rise
in trade quotas, duties, taxes and similar impositions or which has the result
of limiting the countries from whom we can purchase our fabric or other
component materials, or limiting the countries where we might market and sell
our products, could decrease our profitability.

Increases in the price of raw materials or their reduced
availability could increase our cost of sales and decrease our profitability.

The
principal fabrics used in our business are cotton, synthetics, wools and blends.
The prices we pay for these fabrics are dependent on the market price for raw
materials used to produce them, primarily cotton. The price and availability of
cotton may fluctuate significantly, depending on a variety of factors, including
crop yields, weather, supply conditions, government regulation, economic climate
and other unpredictable factors. Any raw material price increases could increase
our cost of sales and decrease our profitability unless we are able to pass
higher prices on to our customers. Moreover, any decrease in the availability of
cotton could impair our ability to meet our production requirements in a timely
manner.

---

7

If we are unable to enforce our intellectual property rights
or otherwise protect our intellectual property, then our business would likely
suffer.

Our
success depends to a significant degree upon our ability to protect and preserve
any intellectual property we develop or acquire, including copyrights,
trademarks, patents, service marks, trade dress, trade secrets and similar
intellectual property. We rely on the intellectual property, patent, trademark
and copyright laws of the United States and other countries to protect our
proprietary rights. However, we may be unable to prevent third parties from
using our intellectual property without our authorization, particularly in those
countries where the laws do not protect our proprietary rights as fully as in
the United States. The use of our intellectual property or similar intellectual
property by others could reduce or eliminate any competitive advantage we may
develop, causing us to lose sales or otherwise harm our business. We may need to
bring legal claims to enforce or protect such intellectual property rights. Any
litigation, whether successful or unsuccessful, could result in substantial
costs and diversions of resources. In addition, notwithstanding the rights we
have secured in our intellectual property, other persons may bring claims
against us that we have infringed on their intellectual property rights or
claims that our intellectual property right interests are not valid. Any claims
against us, with or without merit, could be time consuming and costly to defend
or litigate and therefore could have an adverse affect on our business. If any
of these risks arise, our business would likely suffer.

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

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

If
we cannot fund all of our future operations through revenue, we may choose to
raise money through sales of our equity securities. However, many investors have
recently seen large decreases in the value of various investments due to
declining share prices across many economic sectors. Because of this and other
market factors, if we choose to raise funds through the sale of our equity
securities, potential investors may be less likely to buy our equity securities
or we may be need to sell our equity securities at low prices, resulting in
fewer proceeds. This would make it difficult for us to raise adequate amounts to
fund our operations through the sale of our equity securities.

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

If
we cannot fund our planned operations from revenue, the sale of our equity
securities or through incurring debt on acceptable terms, then we will likely
have to scale down or cease our operations. If we scale down our operations, our
share price would likely decrease and if we cease our operations, shareholders
will likely lose their entire investment in our company.

---

8

The recent weakening of economic conditions in the U.S. and
around the world could have harmful effects on the operations of our customers
and suppliers and the confidence of end consumers, all of which could cause our
operations to suffer and our revenues to decrease.

Some
of our customers or suppliers could experience serious cash flow problems due to
the current economic situation. If our customers or suppliers attempt increase
their prices, pass through increased costs, alter payment terms or seek other
relief, our business may suffer from decreased sales to final consumers or
increased costs to us. If any of our vendors or suppliers go out of business, we
may not be able to replace them with other companies of the same quality and
level of service. If the quality of our products and promptness of delivery
deteriorates as a result, our revenue will likely decrease as retailers and
consumers would be less likely to choose our products out of those available to
them.

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

Risks Related to Our Company

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

Our
inception date was February 3, 2006. We have a very short operating history upon
which an evaluation of our future success or failure cannot be made. As of
September 30, 2008, our accumulated losses since inception amount to
$14,371,034. In its audit report dated January 8, 2009, our auditors stated that
we have incurred a loss from operations and negative cash flows from operations
which raise substantial doubt about our ability to continue as a going concern.

We
will continue to incur expenses and may incur operating losses in the future. We
cannot guarantee that we will be successful in becoming or remaining profitable
in the future. Failure to become and remain profitable would cause us to go out
of business.

Our management may be able to control substantially all
matters requiring a vote of our stockholders and their interests may differ from
the interests of our other stockholders and cause investors to lose some or all
potential benefit from their investment.

As
of September 30, 2008, our directors and officers as a group beneficially owned
approximately 25% of our outstanding common stock. Therefore, our directors and
officers may be able to control matters requiring approval by our stockholders.
Matters that require the approval of our stockholders include the election of
directors and the approval of mergers or other business combination
transactions. Our directors and officers also have control over our management
and affairs. As a result of such control, certain transactions are effectively
not possible without the approval of our directors and officers, including,
proxy contests, tender offers, open market purchase programs or other
transactions that could give our stockholders the opportunity to realize a
premium over the then-prevailing market prices for their shares of our common
stock. If the interests of our directors and officers conflict with those of our
investors, investors could lose some or all of the potential benefit of their
investment.

Risks Related to Our Securities

Our stock price is highly volatile and stockholders may be
unable to sell their shares, or may be forced to sell them at a loss.

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

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9

- quarterly variations in our operating results;
- changes in financial estimates by securities analysts;
- changes in market valuations or financial results of apparel companies;
- announcements by us or our competitors of new products, or significant
  acquisitions, strategic partnerships or joint ventures;
- any deviation from projected growth rates in revenues;
- any loss of a major customer or a major customer order;
- additions or departures of key management or design personnel;
- any deviations in our net revenue or in losses from levels expected by
  securities analysts;
- activities of short sellers and risk arbitrageurs; and,
- future sales of our common stock.

The
equity markets have, on occasion, experienced significant price and volume
fluctuations that have affected the market prices for many companies' securities
and that have often been unrelated to the operating performance of these
companies. Any such fluctuations may adversely affect the market price of our
common stock, regardless of our actual operating performance. As a result,
stockholders may be unable to sell their shares, or may be forced to sell them
at a loss.

The U.S. Securities and Exchange Commission imposes
additional sales practice requirements on brokers who deal in our shares which
are penny stocks, some brokers may be unwilling to trade them. This means that
you may have difficulty reselling your shares and this may cause the price of
the shares to decline.

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

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

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

ITEM 2. DESCRIPTION OF PROPERTY

Our
executive and head office is located at 2853 E. Pico Blvd., Los Angeles, CA.
This operating facility functions as our main operating facility and is adequate
for our needs.

Commencing
October 1, 2007, we leased 499 square feet for three years as a sales showroom
for our Sosik division at California Market Center, 110 East Ninth Street, Suite
A0823, Los Angeles, CA 90079.

Commencing
November 1, 2007, we leased 2,609 square feet for 5 years as a sales showroom
for our Nela/Mynk/Tea and Honey divisions at 250 West 39th Street, New York, New
York.

Commencing
December 1, 2007, we leased 1,337 square feet for 3 years, eight months as a
sales showroom for our Sosik division at 530 7th Avenue 27th Floor, New York,
New York.

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10

ITEM 3. LEGAL PROCEEDINGS.

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

On
September 19, 2008 Mynk Corporation, our wholly-owned subsidiary, sued Delias
Inc., a customer in the Superior Court of the State of California, for goods
shipped, but unpaid, in the amount of $604,081.

Elk
Brands Manufacturing Company, Inc. is suing Mynk Corporation for an alleged
payment owing of approximately $70,800. We believe that this claim is unfounded
and we intend to fight it through all reasonable legal means. We believe that we
will not be held liable for or be required to pay the amount claimed by Elk
Brands. The claim was filed in the circuit court for Davidson County, Tennessee
at Nashville on February 16, 2007 and a trial is set for late February 2009.

On
October 19, 2007, a complaint was filed in the Superior Court of the State of
California for the County of Los Angeles by Unger Fabrik, LLC, a Delaware
limited liability company, against our company, Mark Cywinski, Craig Soller and
Stephen M. Soller, our chief executive officer and a director and our company.
The lawsuit was dropped in January 2008.

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

None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

Our
common stock was originally quoted on the OTC Bulletin Board under the symbol
"EZEO", but there had not been a trade of our common stock under that symbol. On
February 6, 2007 the symbol was changed to PNGB. Our CUSIP number is 69841Q 10
0.

Our
common stock is quoted on the Financial Industry Regulatory Authoritys OTC
Bulletin Board under the symbol "PNGB". The following quotations obtained from
Yahoo! Finance reflect the highs and low bids for our common stock based on
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

The
high and low bid prices of our common stock for the previous two fiscal years
are as follows:

Quarter Ended
    High
    LowSeptember 30, 2008
    $0.66
    $0.27June 30, 2008
    $1.30
    $0.52March 31, 2008
    $0.90
    $0.53December 31, 2007
    $1.09
    $0.65September 30, 2007
    $1.05
    $0.55June 30, 2007
    $1.05
    $0.80March 31, 2007
    $3.00
    $0.40December 31, 2006
    $0.65
    $0.25


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11

Transfer Agent

Our
transfer agent for our common stock is the Nevada Agency and Trust Company at 50
West Liberty Street, Suite 880, Reno, NV 89501, Tel: 775-322-0626 Fax:
775-322-5623.

Holders of Common Stock

As
of January 9, 2009, we have 562 registered shareholders holding 37,671,710
shares of our common stock. We have no other classes of securities.

Dividends

We
have not declared any dividends since incorporation and do not anticipate that
we will do so in the foreseeable future. Our directors will determine if and
when dividends should be declared and paid in the future based on our financial
position at the relevant time. All shares of our common stock are entitled to an
equal share of any dividends declared and paid.

Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

Please
refer to our previous filings on our Quarterly Reports on Form 10-QSB, or on our
Current Reports on Form 8-K for information regarding all of our sales of our
equity securities during the fiscal year that ended September 30, 2008.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

The
following discussion should be read in conjunction with our audited consolidated
financial statements and the related notes for year ended September 30, 2008 and
the factors that could affect our future financial condition and results of
operations. Historical results may not be indicative of future performance.

The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this annual report, particularly in the section entitled
"Risk Factors" beginning on page 5 of this annual report.

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

Financial Condition, Liquidity and Capital Resources

At
September 30, 2008, we had negative working capital of ($1,525,575).

At
September 30, 2008, our total assets were $5,157,255.

At September 30, 2008, our total liabilities were $4,783,083.

Assets

Our
current assets totaled $3,257,508 and $1,735,997 at September 30, 2008 and
September 30, 2007, respectively. Total assets were $5,157,255 and $2,014,972 at
September 30, 2008 and September 30, 2007, respectively. The increase in current
assets is primarily due to the growth in accounts receivable, due from factor
and inventory as the Companys sales increased to approximately $13.9 million
for the year ended September 30, 2008.

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12

Liabilities and Working Capital

Our
current liabilities totaled $4,783,083 and $406,988 at September 30, 2008 and
September 30, 2007, respectively. This resulted in negative working capital of
($1,525,575) at September 30, 2008 as accounts payable increased due to
increased purchases of goods for resale and a short-term loan was necessary to
fund losses. We had no long term debt in either year.

Cash Requirements and Additional Funding

On
February 27 and 28, 2007, we raised approximately $4,774,602 through the sale of
our equity securities in private placement transactions. We have also earned
revenues from the sale of our fall product line. With the money we raised
through the private placements and the revenue we earned through the sale of our
products, we were able to pay our operating expenses for approximately the next
nine months. At that point, we anticipated requiring further corporate financing
to carry out our business plan.

On
October 23, 2007, the Company closed a private placement of 2,871,759 units for
gross proceeds of $2,153,819. Each unit was sold for $0.75 and consists of one
common share and one common share purchase warrant. Each common share purchase
warrant entitles the holder to purchase, if exercised, one additional common
share of our company at a price of $1.00 per common share until October 23, 2008
and at $1.50 per common share if exercised during the period from October 24,
2008 until the warrants expire on October 23, 2009.

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

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

At
any time after August 31, 2008, if there is an outstanding amount on the Loan,
the lenders may convert, by written notice, either a portion or the total amount
of the outstanding loan to common shares of the Company at a price per share
equal to the lesser of:

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

At
September 30, 2008 the Company had an outstanding balance of $750,000 on the
loan. During the year ended September 30, 2008, the Company paid $27,328 in
interest expense on the Loan. The loan has not been repaid at November 30, 2008
and may be called or converted into shares at any time.

Private Placement

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

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13

We
issued 560,000 shares pursuant to the exemption from registration under the
United States Securities Act of 1933 provided by Section 4(2), Section 4(6)
and/or Rule 506 of Regulation D promulgated under the 1933 Act to four (4)
investors who are accredited investors within the respective meanings ascribed
to that term in Rule 501(a) under the 1933 Act.

We
issued 7,440,000 shares to eighteen (18) non U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of
1933.

There
are no assurances that we will earn the funds required for our continued
operation. If we do not earn the required revenues, then we will have to seek
another source of financing, likely through the sale of more shares of our
common stock or borrowing money. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain the
additional financing on a timely basis, we will not be able to meet our other
obligations as they become due and we will be forced to scale down or perhaps
even cease the operation of our business.

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

The Year Ended September 30, 2008 Compared to the Year
Ended September 30, 2007

Revenue

Net
sales for the year ended September 30, 2008 totaled $13,939,264 versus $592,046
for 2007. Sales of Sosik/junior apparel totaled $9,345,000, sales of Scrapbook
apparel totaled $3,041,000 and the remainder of the sales were Tea and Honey,
Nela dresses and Hauteur Mynk denim jeans. During the year ended September 30,
2007, the only product sold was Hauteur Mynk Jeans, all of our other brands only
commenced shipping in January of 2008. Gross profit/(loss) was $2,187,542 and
($1,294,334) for the year ended September 30, 2008 and 2007 respectively. Sales
returns for the year ended September 30, 2007 totaled $374,000 causing a
negative gross profit as the Company neared the end of denim jeans being
returned due to earlier manufacturing problems. At this time, we have a backlog
of sales orders in excess $8.5 million for shipments through April 2009. With
the addition of Scrapbook, our sales mix is changing. Approximately 42% of these
orders are for Sosik and junior apparel products including skirts and knit and
woven tops, 35% are for Scrapbook apparel, and the balance is for contemporary
brands. Our Sosik products are sold through in-house sales staff and we have
corporate sales showrooms in Los Angeles and New York. Our Scrapbook apparel is
sold through in-house sales staff and independent sales showrooms in Chicago,
Dallas and Miami. Our Haven/Nela/Tea and Honey products are sold through
in-house sales staff and a corporate sales showroom in New York, and through
contract outside sales showrooms in Los Angeles earning sales commissions of
10-12%.

Expenses

Our
total costs and expenses were $11,716,228 for the year ended September 30, 2008.
This included $3,698,948 in design and development expenses and $2,473,374 in
selling and shipping expenses, $95,589 in depreciation and amortization and
$5,448,317 in general and administrative expenses, of which $2,176,434 consisted
of non-cash compensation expenses. Expenses for the year ended September 30,
2007 totaled $2,703,310. For the year ended September 30, 2007, design and
development expenses totaled $365,719, selling and shipping expenses totaled
$611,591, general and administrative expenses were $1,713,173 and depreciation
and amortization expenses were $12,827. During this period, designers for all of
our product divisions developed collections for shipping into 2008. The increase
for the year ended September 30, 2008 was due to the increase in and expansion
of our operations. Our costs and expenses for the year ended September 30, 2007
related mainly to the original start-up of Mynk Corporation and the development
and sales of Hauteur Mynk jeans.

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14

For
the year ended September 30, 2008 design and development expenses totaled
$3,698.948, of which $1,691,433 was for design expenses and $2,007,515 was for
production and development expenses. Salaries totaled $2,475,000. Purchases of
sample fabric and trims totaled $522,000. Contract labor and consulting totaled
$325,000 and manufacturing and design supplies totaled $123,000. For the year
ended September 30, 2007 all of the expenses were for salaries and consulting.

For
the year ended September 30, 2008 selling and shipping expense totaled
$2,473,374 compared to $611,591 for the year ended September 30, 2007 due to the
increase in sales volume. During the year ended September 30, 2008, travel and
trade show expenses totaled $208,000, sales salaries totaled $582,000 and sales
consulting expenses totaled $368,175. On August 20, 2007 we signed a consulting
agreement with Lolly Factory, Inc. and its principal, Mark Cywinski through
December 31, 2010 to provide sales and merchandising consulting services for the
Sosik and juniors apparel division. Included in sales consulting expenses for
the year ended September 30, 2008 was $360,675 paid to Lolly Factory, Inc.
Selling expenses for the year ended September 30, 2007 consisted of commissions
of $89,000, public relations and consulting of $177,000, and travel and trade
show expense of $258,000. None of the other divisions were in operation during
the year ended September, 2007, only the Hauteur Mynk denim brand, and selling
expenses were considerably lower.

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

For
the year ended September 30, 2008 general and administrative expenses (including
non-cash compensation costs of $2,176,434) totaled $5,348,317. Key components
included salaries for executive, accounting and customer service totaling
$718,000, payroll taxes of $306,000, professional (accounting and legal) fees of
$393,000, postage and delivery of $237,000, insurance, including health,
liability and directors & officers liability of $228,000 and rent of
$131,000. Included in general and administrative expenses is $544,000 of
doubtful debt expense. Not included in general and administrative expenses is
$95,589 in depreciation expense. For the year ended September 30, 2007 general
and administrative expenses totaled $1,713,173, of which $644,230 was non-cash
compensation expenses. Key components included consulting fees of $116,000,
salaries of $186,000 and professional fees of 186,000 as the Company was still
in the development stage.

Off Balance-Sheet Arrangements

The
Company uses what is known as a factor for credit administration and cash flow
purposes. Under the factoring agreement, the factor purchases a portion of the
Companys domestic wholesale sales invoices and assumes most of the credit risks
with respect to such accounts for a charge of 0.75% of the gross invoice amount.
The Company can draw cash advances from the factor based on a pre-determined
percentage, 75% of eligible outstanding accounts receivable. The factor holds as
security substantially all assets of the Company and charges interest at a rate
of prime plus 1.0% on the outstanding advances. At March 31, 2008, the Company
had a cash account in the amount of $400,000 with the factor to be used as
collateral for the loans advanced. On May 5, 2008 the cash collateral was
reduced to $300,000. The Company is liable to the factor for merchandise
disputes and customer claims on receivables sold to the factor. The factoring
agreement expires on March 4, 2009 and automatically renews unless cancelled by
either party.

At
times, our customers place orders that exceed the credit that they have
available from the factor. We evaluate those orders to consider if the customer
is worthy of additional credit based on our past experience with the customer.
If we decide to sell merchandise to the customer on credit, we take the credit
risk for the amounts that are above their approved credit limit with the factor.
As of September 30, 2008, the amount of Due from Factor for which we bear the
credit risk is $157,000.

For
the year ended September 30, 2008 and 2007, the Company paid a total of
approximately $73,515 and $0, respectively, of interest to the factor which is
reported as a component of interest expense in the consolidated statements of
income.

Amounts
from the factor, net of chargebacks and other deductions as presented in the
balance sheet at September 30, 2008 and September 30, 2007 are summarized
below:

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15

|                                                    |   | September  |   |   | September |  
|--------------------------------------------------- | - | ---------- | - | - | --------- | -
|                                                    |   | 30,        |   |   | 30,       |  
|                                                    |   | 2008       |   |   | 2007      |  
|Outstanding factored receivables                    | $ | 3,126,405  |   | $ | 292,119   |  
|Cash collateral reserve                             |   | 303,426    |   |   | ----      |  
|                                                    |   |            |   |   |           |  
|                                                    |   | 3,429,831  |   |   | 292,119   |  
|                                                    |   |            |   |   |           |  
|Less: advances                                      |   | (1,689,387 | ) |   | -----     |  
|Reserves for chargeback and other
      deductibles |   | (328,988   | ) |   | (117,035  | )
|                                                    |   |            |   |   |           |  
|                                                    | $ | 1,411,456  |   | $ | 175,084   |  

Critical Accounting Policies

Our
consolidated financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles used in the United
States. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by managements
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our consolidated financial statements is critical to an understanding of our
financials.

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

Revenue
from product sales is recognized as title passes to the customer upon shipment.
Sales returns and allowances for the year ended September 30, 2008 totalled
$965,256, approximately 7% of sales. We have accrued $329,000 as of September
30, 2008 for estimated sales returns. Sales for the year ended September 30,
2007 were $592,046, net of sales returns of $456,367.

Accounts Receivable

The
Company extends credit to customers whose sales invoices have not been sold to
our factor based upon an evaluation of the customers financial condition and
credit history and generally require no collateral. Management performs regular
evaluations concerning the ability of our customers to satisfy their obligations
and records a provision for doubtful accounts based on these evaluations. Based
on historical losses, existing economic conditions and collection practices, the
Companys allowance for doubtful accounts has been estimated to be $444,000 at
September 30, 2008. The Companys credit losses for the periods presented have
not significantly exceeded managements estimates.

Concentration of Credit Risks

During
the year ended September 30, 2008 sales to two customers accounted for 31% and
17% of the Companys net sales. During the year ended September 30, 2008,
purchases from one supplier totaled approximately $3,853,000. At September 30,
2008, one customer accounted for 56% of the Accounts Receivable, net of
allowance. At September 30, 2008, three customers accounted for 24%, 19% and
14%, respectively, of the Due From Factor.

Inventory

Inventories
are valued at the lower of cost or market, with cost being determined by the
first-in, first-out method. The Company continually evaluates its inventories by
assessing slow-moving product and records

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16

mark-downs as appropriate. At September 30, 2008, inventories
consisted of finished goods, work-in-process and raw materials.

Property and Equipment

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

Depreciation
is computed on the straight-line method based on the estimated useful lives of
the assets of five years. Leasehold improvements are amortized over the
remaining life of the related lease, which has been determined to be shorter
than the useful life of the asset.

Stock-Based Compensation

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

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

Recent Accounting Pronouncements

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS No. 157), which establishes a formal
framework for measuring fair value under generally accepted accounting
principles. SFAS No. 157 defines and codifies the many definitions of fair value
included among various other authoritative literature, clarifies and, in some
instances, expands on the guidance for implementing fair value measurements, and
increases the level of disclosure required for fair value measurements. Although
SFAS No. 157 applies to and amends the provisions of existing FASB and AICPA
pronouncements, it does not, of itself, require any new fair value measurements,
nor does it establish valuation standards. SFAS No. 157 applies to all other
accounting pronouncements requiring or permitting fair value measurements,
except for: SFAS No. 123R, share-based payment and related pronouncements, the
practicability exceptions to fair value determinations allowed by various other
authoritative pronouncements, and AICPA Statements of Position 97-2 and 98-9
that deal with software revenue recognition. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The Company is currently
assessing the potential effect of SFAS No. 157 on its consolidated financial
statements.

In
February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, The Fair Value Option for Financial Assets and Financial Liabilities
(SFAS No. 159), which provides companies with an option to report selected
financial assets and liabilities at fair value. The objective of SFAS No. 159 is
to reduce both complexity in accounting for financial instruments and the
volatility in earnings caused by measuring related assets and liabilities
differently. Generally accepted accounting principles have required different
measurement attributes for different assets and liabilities that can create
artificial volatility in earnings. SFAS No. 159 helps to mitigate this type of
accounting-induced volatility by enabling companies to report related assets and
liabilities at

---

17

fair value, which would likely reduce the need for companies to
comply with detailed rules for hedge accounting. SFAS No. 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities. SFAS No. 159 requires companies to provide additional
information that will help investors and other users of financial statements to
more easily understand the effect of the companys choice to use fair value on
its earnings. SFAS No. 159 also requires companies to display the fair value of
those assets and liabilities for which the company has chosen to use fair value
on the face of the balance sheet. SFAS No. 159 does not eliminate disclosure
requirements included in other accounting standards, including requirements for
disclosures about fair value measurements included in SFAS No. 157 and SFAS No.
107. SFAS No. 159 is effective as of the beginning of a companys first fiscal
year beginning after November 15, 2007. Early adoption is permitted as of the
beginning of the previous fiscal year provided that the company makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157. The Company is currently assessing the potential
effect of SFAS No. 159 on its consolidated financial statements and has not
elected to adopt SFAS 159 at this time..

In
December 2007, the FASB issued SFAS No. 141(revised 2007), Business
Combinations, and SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements. SFAS No. 141R improves reporting by creating greater
consistency in the accounting and financial reporting of business combinations,
resulting in more complete, comparable, and relevant information for investors
and other users of financial statements. SFAS No. 141R requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities assumed in the transaction; establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose to investors and other users all
of the information they need to evaluate and understand the nature and financial
effect of the business combination. SFAS No. 160 improves the relevance,
comparability, and transparency of financial information provided to investors
by requiring all entities to report non-controlling (minority) interests in
subsidiaries in the same wayas equity in the consolidated financial statements.
Moreover, SFAS No. 160 eliminates the diversity that currently exists in
accounting for transactions between an entity and non-controlling interests by
requiring they be treated as equity transactions. The two statements are
effective for fiscal years beginning after December 15, 2008 and management is
currently evaluating the impact that the adoption of these statements may have
on the Companys consolidated financial statements.

In
March 2008, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 161, Disclosures about
Derivative Instruments and Hedging Activities, an Amendment of FASB No. 133,
(SFAS 161). SFAS 161 is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entitys derivative
instruments and hedging activities and their effects on the entitys financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, (SFAS 133). SFAS 161 also
applies to non-derivative hedging instruments and all hedged items designated
and qualifying under SFAS 133. SFAS 161 is effective prospectively for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. SFAS 161 encourages, but does not
require, comparative disclosures for periods prior to its initial adoption. We
will adopt SFAS 161 on November 15, 2008 and are currently evaluating the
potential impact on our financial statements when implemented.

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

Management does not believe that any other recently issued, but
not yet effective, accounting standards, if currently adopted, would have a
material effect on the Company's financial statements.

---

18

Adoption of New Accounting Policies

Effective
January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,
Accounting for Income Taxes (FIN 48). FIN 48 addresses the determination of
whether tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements. Under FIN 48, the Company may recognize
the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits
recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent likelihood of
being realized upon ultimate settlement. FIN 48 also provides guidance on
de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods and requires increased disclosures. The adoption
of the provisions of FIN 48 did not have a material effect on the Companys
financial statements. As of September 30, 2008, no liability for unrecognized
tax benefits was required to be recorded.

The
Company currently files or has in the past filed income tax returns in Canada
and the United States. The Company is subject to tax examinations by tax
authorities for tax years ending in 2006 and subsequently.

The Companys policy
is to record interest and penalties on uncertain tax provisions as income tax
expense. As of September 30, 2008, the Company has no accrued interest or
penalties related to uncertain tax positions.

ITEM 7. FINANCIAL STATEMENTS.

| | Report of Independent
      Registered Public Accounting Firm Crowe Horwath LLP               | F-1
| | --------------------------------------------------------------------------------------------- | ---
| | Report of Independent Registered Public
      Accounting Firm Grobstein Horwath & Company LLP | F-2
| | Consolidated Balance
      Sheets                                                             | F-3
| | Consolidated Statements of Operations                                                         | F-4
| | Consolidated Statement
      of Changes In Stockholders Equity                               | F-5
| | Consolidated Statements of Cash Flows                                                         | F-6
| | Notes To Consolidated
      Financial Statements                                              | F-7

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the StockholdersPanglobal Brands Inc. and Subsidiary

We have audited the accompanying consolidated balance sheets of
Panglobal Brands Inc. and Subsidiary as of September 30, 2008, and the related
statements of operations, changes in stockholders equity and cash flows for the
year then ended. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated 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 controls over financial reporting. Our audit 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 also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Panglobal Brands Inc. and Subsidiary as of September 30, 2008, and the
results of its its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As discussed in
Note 2 to the consolidated financial statements, the Company has incurred a loss
from operations and has negative working capital and negative cash flows from
operations that raise substantial doubt about its ability to continue as a going
concern. Managements plans in regard to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

/s/ Crowe Horwath LLP

Sherman Oaks, California January 8, 2009

F-1

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders

Panglobal Brands Inc. and Subsidiary (a development stage
company)

We have audited the accompanying consolidated balance sheet of
Panglobal Brands Inc. and Subsidiary (a development stage company) as of
September 30, 2007, and the related statements of operations, changes in
stockholders equity (deficiency) and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated 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 controls over financial reporting. Our
audit 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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes 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 consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Panglobal Brands Inc. and Subsidiary as of September 30, 2007, and the
results of their operations and cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As discussed in
Note 2 to the consolidated financial statements, the Company is in the
development stage and has incurred a loss from operations and negative cash
flows from operations that raise substantial doubt about its ability to continue
as a going concern. Managements plans in regard to these matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/Grobstein, Horwath & Company LLP

Sherman Oaks, California January 14, 2008

F-2

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PANGLOBAL BRANDS INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

|                                                                                  |   | September 30, |   |   | September 30, |  
|--------------------------------------------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                                                                  |   | 2008          |   |   | 2007          |  
|                                                                                  |   |               |   |   |               |  
|ASSETS                                                                            |   |               |   |   |               |  
|Current assets:                                                                   |   |               |   |   |               |  
|Cash and cash equivalents                                                         | $ | --            |   | $ | 1,170,214     |  
|Accounts receivable, net of allowance of $544,176 and
      $14,675 as of         |   | 444,291       |   |   | 29,975        |  
|September
      30, 2008 and September 30, 2007, respectively                     |   |               |   |   |               |  
|Due from factor, net                                                              |   | 1,411,456     |   |   | 175,084       |  
|Inventory                                                                         |   | 1,304,407     |   |   | 309,700       |  
|Prepaid expenses and other current assets                                         |   | 97,354        |   |   | 51,004        |  
|Total current assets                                                              |   | 3,257,508     |   |   | 1,735,977     |  
|                                                                                  |   |               |   |   |               |  
|Property and equipment ,net                                                       |   | 587,992       |   |   | 210,930       |  
|Trademarks and intangible assets                                                  |   | 1,177,235     |   |   |               |  
|Deposits                                                                          |   | 134,520       |   |   | 68,065        |  
|Total
      assets                                                                | $ | 5,157,255     |   | $ | 2,014,972     |  
|                                                                                  |   |               |   |   |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                              |   |               |   |   |               |  
|Current liabilities:                                                              |   |               |   |   |               |  
|Bank Overdraft                                                                    | $ | 171,521       |   | $ | --            |  
|Accounts payable and accrued expenses                                             |   | 3,861,562     |   |   | 396,988       |  
|Convertible note payable to shareholders                                          |   | 750,000       |   |   | 10,000        |  
|Total current liabilities                                                         |   | 4,783,083     |   |   | 406,988       |  
|                                                                                  |   |               |   |   |               |  
|Commitments and contingencies                                                     |   |               |   |   |               |  
|                                                                                  |   |               |   |   |               |  
|Stockholders equity :                                                            |   |               |   |   |               |  
|Authorized - 600,000,000 shares; issued and outstanding 
      37,671,710 shares |   |               |   |   |               |  
|and 26,731,771 shares at September 30, 2008                                       |   |               |   |   |               |  
|and September 30, 2007, respectively                                              |   | 3,767         |   |   | 2,673         |  
|                                                                                  |   |               |   |   |               |  
|Additional paid-in capital                                                        |   | 14,741,439    |   |   | 6,363,418     |  
|Accumulated deficit                                                               |   | (14,371,034   | ) |   | (4,758,107    | )
|Total
      stockholders equity                                                  |   | 374,172       |   |   | 1,607,984     |  
|Total liabilities and stockholders equity                                        | $ | 5,157,255     |   | $ | 2,014,972     |  

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

F-3

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PANGLOBAL BRANDS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                              |   | Year Ended    |   |   | Year Ended    |  
|--------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                              |   | September 30, |   |   | September 30, |  
|                                              |   | 2008          |   |   | 2007          |  
|                                              |   |               |   |   |               |  
|Net sales                                     | $ | 13,939,264    |   | $ | 592,046       |  
|Cost of sales                                 |   | 11,751,722    |   |   | 1,886,380     |  
|Gross profit (loss)                           |   | 2,187,542     |   |   | (1,294,334    | )
|                                              |   |               |   |   |               |  
|Costs and expenses:                           |   |               |   |   |               |  
|Design and development                        |   | 3,698,948     |   |   | 365,719       |  
|Selling and shipping                          |   | 2,473,374     |   |   | 611,591       |  
|General and administrative, including         |   |               |   |   |               |  
|$2,176,434 and $644,230 of stock-based        |   |               |   |   |               |  
|compensation for the year ended               |   |               |   |   |               |  
|September 30, 2008 and 2007,                  |   |               |   |   |               |  
|respectively;                                 |   | 5,448,317     |   |   | 1,713,173     |  
|Depreciation and amortization                 |   | 95,589        |   |   | 12,827        |  
|Total costs and expenses                      |   | 11,716,228    |   |   | 2,703,310     |  
|                                              |   | (9,528,686    | ) |   | (3,997,644    | )
|Interest income                               |   | 22,176        |   |   | 72,773        |  
|Interest (expense)                            |   | (106,417      | ) |   | --            |  
|Interest income/(expense), net                |   | (84,241       | ) |   | 72,773        |  
|                                              |   |               |   |   |               |  
|Net loss                                      | $ | (9,612,927    | ) | $ | (3,924,871    | )
|                                              |   |               |   |   |               |  
|Net loss per common share - basic and diluted | $ | (0.31         | ) | $ | (0.27         | )
|Weighted average number of common shares      |   |               |   |   |               |  
|outstanding - basic and diluted               |   | 31,459,500    |   |   | 14,817,000    |  

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

F-4

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PANGLOBAL BRANDS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS
EQUITY

|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   | Total             |  
|---------------------------------------------------- | ------------ |  | - | ------- |  | - | --------------- | - | - | ----------- | - | - | ----------------- | -
|                                                     |              |  |   |         |  |   | Additional      |   |   |             |   |   | **Stockholders** |  
|                                                     | Common Stock |  |   | Paid-in |  |   | **Accumulated** |   |   | Equity      |  
|                                                     | Shares       |  |   | Amount  |  |   | Capital         |   |   | Deficit     |   |   | (Deficiency)      |  
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|Balance, September 30, 2006 (restated)               | 3,749,995    |  | $ | 375     |  | $ | 646,635         |   | $ | (833,236    | ) | $ | (186,226          | )
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|Shares issued to acquire in connection               | 11,396,500   |  |   | 1,140   |  |   | (68,991         | ) |   |            |   |   | (67,851           | )
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|with reverse merger transaction                      |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|Shares issued to related parties for debt            |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|in connection with reverse merger                    |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|transaction                                          | 975,000      |  |   | 97      |  |   | 389,903         |   |   |            |   |   | 390,000           |  
|Shares issued in private placement, net              |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|of offering costs of $21,900                         | 10,610,226   |  |   | 1,061   |  |   | 4,751,641       |   |   |            |   |   | 4,752,702         |  
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|Stock-based compensation                             |             |  |   |        |  |   | 644,230         |   |   |            |   |   | 644,230           |  
|Net loss for the year ended September 30,
      2007 |             |  |   |        |  |   |                |   |   | (3,924,871  | ) |   | (3,924,871        | )
|Balance, September 30, 2007                          | 26,731,771   |  |   | 2,673   |  |   | 6,363,418       |   |   | (4,758,107  | ) |   | 1,607,984         |  
|                                                     |              |  |   |         |  |   |                 |   |   |             |   |   |                   |  
|Shares issued in private placement                   | 10,871,759   |  |   | 1,087   |  |   | 6,152,731       |   |   |             |   |   | 6,153,818         |  
|Shares issued as loan fees                           | 68,180       |  |   | 7       |  |   | 48,856          |   |   |             |   |   | 48,863            |  
|Stock-based compensation                             |             |  |   |        |  |   | 2,176,434       |   |   |            |   |   | 2,176,434         |  
|Net loss for the year ended September 30, 2008       |              |  |   |         |  |   |                 |   |   | (9,612,927  | ) |   | (9,612,927        | )
|Balance, September 30, 2008                          | 37,671,710   |  | $ | 3,767   |  | $ | 14,741,439      |   | $ | (14,371,034 | ) | $ | 374,172           |  

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

F-5

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PANGLOBAL BRANDS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                   |   | Year Ended    |    |   | Year Ended    |  
|-------------------------------------------------- | - | ------------- | -- | - | ------------- | -
|                                                   |   | September 30, |    |   | September 30, |  
|                                                   |   | 2008          |    |   | 2007          |  
|Cash flows from operating activities               |   |               |    |   |               |  
|Net loss                                           | $ | (9,612,927    | )  | $ | (3,924,871    | )
|Adjustments to reconcile net loss to net           |   |               |    |   |               |  
|cash used in operating activities:                 |   |               |    |   |               |  
|Depreciation and amortization                      |   | 95,589        |    |   | 12,827        |  
|Provision for bad debts                            |   | 529,501       |    |   | 14,675        |  
|Provision for returns                              |   | 328,988       |    |   | 117,035       |  
|Stock-based compensation                           |   | 2,176,434     |    |   | 644,230       |  
|Stock issued as loan fees                          |   | 48,863        |    |   | ---           |  
|Loss on abandoned leasehold improvements           |   | 4,243         |    |   |               |  
|Changes in operating assets and
      liabilities: |   |               |    |   |               |  
|(Increase) decrease in -                           |   |               |    |   |               |  
|Accounts receivable                                |   | (943,817      | )) |   | (44,650       | )
|Due from
      factor                              |   | (1,565,360    | )  |   | (292,119      | )
|Inventory                                          |   | (994,707      | )  |   | (309,700      | )
|Prepaid
      expenses and other current assets    |   | (46,350       | )  |   | (40,341       | )
|Deposits                                           |   | (66,455       | )  |   | (68,065       | )
|Increase (decrease) in -                           |   |               |    |   |               |  
|Accounts payable and accrued expenses              |   | 3,464,574     |    |   | 291,326       |  
|Net cash used in operating activities              |   | (6,581,424    | )  |   | (3,599,653    | )
|                                                   |   |               |    |   |               |  
|Cash flows from investing activities               |   |               |    |   |               |  
|Purchase of office equipment                       |   | (476,894      | )  |   | (223,757      | )
|Purchase of trademarks and intangible assets       |   | (1,177,235    | )  |   | ---           |  
|Net cash used in investing activities              |   | (1,654,129    | )  |   | (223,757      | )
|                                                   |   |               |    |   |               |  
|Cash flows from financing activities               |   |               |    |   |               |  
|Increase in bank overdraft                         |   | 171,521       |    |   | -             |  
|Gross proceeds from private placements             |   | 6,153,818     |    |   | 4,752,702     |  
|Loan from related party-officer                    |   | 400,000       |    |   | -             |  
|Proceeds from shareholder note                     |   | 750,000       |    |   | 390,000       |  
|Repayment of related party loans                   |   | (410,000      | )  |   | (300,000      | )
|Net cash provided by financing activities          |   | 7,065,339     |    |   | 4,842,702     |  
|                                                   |   |               |    |   |               |  
|Net increase/(decrease) in cash                    |   | (1,170,214    | )) |   | 1,019,292     |  
|Cash and cash equivalents at beginning of period   |   | 1,170,214     |    |   | 150,922       |  
|Cash and cash equivalents at end of period         | $ | -             |    | $ | 1,170,214     |  

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

F-6

---

PANGLOBAL BRANDS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

|                                                                               |   | Year         |  |   | Year         | 
|------------------------------------------------------------------------------ | - | ------------ |  | - | ------------ | 
|                                                                               |   | Ended        |  |   | Ended        | 
|                                                                               |   | September30, |  |   | September30, | 
|                                                                               |   | 2008         |  |   | 2007         | 
|                                                                               |   |              |  |   |              | 
|Supplemental disclosures of non-cash
      investing and financing activities: |   |              |  |   |              | 
|Liabilities assumed in connection with reverse merger                          | $ | ----         |  | $ | 67,851       | 
|                                                                               |   |              |  |   |              | 
|Common stock issued in payment of debt                                         | $ | ----         |  | $ | 390,000      | 
|                                                                               |   |              |  |   |              | 
|Common stock issued as loan fees                                               | $ | 48,863       |  | $ | ---          | 
|Supplemental disclosures of cash flow
      information:                       |   |              |  |   |              | 
|Cash paid for -                                                                |   |              |  |   |              | 
|Interest                                                                       | $ | 106,417      |  | $ | ---          | 
|                                                                               |   |              |  |   |              | 
|Income taxes                                                                   | $ | ---          |  | $ | ---          | 

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

F-7

---

PANGLOBAL BRANDS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

Organization and Nature of Operations

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

Beginning in December 2006, in
conjunction with a new controlling shareholder acquiring approximately 79% of
the issued and outstanding common shares, EZ English began a program to
discontinue its existing business operations and prepare to enter the fashion
industry. On February 2, 2007, in order to better reflect its future business
operations and prepare for its acquisition of Mynk Corporation, a privately-held
Nevada corporation (Mynk), EZ English completed a merger with its wholly-owned
Delaware subsidiary, in order to effect a name change to Panglobal Brands Inc.
(Panglobal), and effected a six-for-one forward split of its outstanding
common stock. All common share amounts referred to herein are presented on a
post-split basis. All options referred to herein were issued on a post-split
basis.

Mynk was incorporated in Nevada
on February 3, 2006 to engage in the business of design, manufacture and
distribution of clothing and accessories throughout the United States and
Canada.

Unless the context indicates
otherwise, Panglobal and Mynk are hereinafter referred to as the Company.

The Company sells its products
through a network of wholesale accounts. The Company was considered a
development stage company as defined in Statement of Financial Accounting
Standards No. 7, Accounting and Reporting by Development Stage Enterprises
until December 31, 2007, as it had not yet commenced any material
revenue-generating operations, did not have any material cash flows from
operations, and was dependent on debt and equity funding to finance its
operations. The Company recorded approximately $13.9 million in revenue in the
year ended September 30, 2008 and no longer considers itself a development
stage company.

F-8

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Basis of Presentation

On May 11, 2007, Mynk completed a
transaction with Panglobal, whereby Mynk became a wholly-owned subsidiary of
Panglobal (see Note 3). Panglobal was a development stage company and had
terminated its prior operations by that date and was essentially a shell company
seeking a new business opportunity. For financial reporting purposes, Mynk was
considered the accounting acquirer in the merger and the merger was accounted
for as a reverse merger. The determination to account for this transaction as a
reverse merger was based on the fact that the shareholders and officers of Mynk
acquired effective control of Panglobal at the conclusion of the transactions
described herein, through control of the Board of Directors and ownership of
approximately 43% of the issued and outstanding shares of common stock of
Panglobal. Additional factors that Panglobal considered in arriving at this
determination included that through a series of planned and interdependent
transactions beginning in December 2006, as disclosed in Panglobals prior
filings with the Securities and Exchange Commission, Panglobal and its
controlling shareholder (who owned approximately 79% of the outstanding common
shares in December 2006) terminated Panglobals prior business operations,
changed its name, appointed new officers and directors, entered into a series of
stock-based transactions funded by Panglobals controlling shareholder to
facilitate the acquisition and operations of Mynk, and raised approximately
$4,750,000 of equity capital from investors to fund the business operations of
Mynk as a wholly-owned subsidiary of Panglobal.

The controlling shareholder of
Panglobal returned 18,975,000 shares of common stock to the Company for
cancellation immediately prior to the closing of the transaction on May 10,
2007. Of the 11,396,550 shares of common stock retained by the Panglobal
shareholders on May 11, 2007 upon the closing of the transaction, 5,025,000
shares were owned by the controlling shareholder, resulting in the other public
shareholders owning 6,371,550 shares. Of such 5,025,000 shares, 2,025,000 shares
were subject to purchase and escrow agreements transferring such shares to new
management at June 30, 2007, and of the remaining 3,000,000 shares, 1,000,000
were transferred to a consultant to the Company, Lolly Factory and 1,500,000
reserved for Lolly Factory for attainment of performance of certain sales
revenue objectives for 2008-2010 (see Note 8), and 250,000 transferred to the
Chief Financial Officer (see Note 3).

Accordingly, the historical
financial statements presented herein are those of Mynk and do not include the
historical financial results of Panglobal, except for the period subsequent to
May 11, 2007. The stockholders equity section of Panglobal has been
retroactively restated for all periods presented to reflect the accounting
effect of the reverse merger transaction. All costs associated with the reverse
merger transaction were expensed as incurred.

2. Business Operations and Summary of Significant Accounting
Policies

Going Concern and Plan of Operations

The Companys financial
statements have been presented on the basis that it is a going concern, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. Prior to December 31, 2007 the Company had been in
the development stage. It has generated approximately $13.9 million in revenues
from operations for the year ended September 30, 2008, but is still dependent
upon debt and equity financing which raises substantial doubt about its ability
to continue as a going concern. The Companys ability to continue as a going
concern is dependent upon its ability to achieve profitable operations. As of
September 30, 2008, the Company had an accumulated deficit of $14,371,034; and
negative working capital of $(1,525,575) and had incurred a net loss of
$9,612,927 and used net cash in operating activities of $6,581,424 for the year
ended September 30, 2008. The accompanying financial statements do not include
any adjustments that might result from the outcome of these uncertainties.

F-9

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At September 30, 2008, the
Company has had three quarters of material revenue-generating operations.
Principal activity through December 31, 2007 related to the Companys formation,
capital raising efforts and initial product design and development activities.
Revenue generating activities generated approximately $13.9 million in revenue
for the period from January 1-September 30, 2008 and the Company has an order
backlog of approximately $7.5 million in prospective sales as of December 31,
2008. The Company has yet to generate any material cash flows from operations,
and is essentially dependent on debt and equity funding from both related and
unrelated parties to finance its operations.

Prior to February 28, 2007, the
Companys cash requirements were funded by advances from Mynks founders. On
February 27, 2007, the Company completed an initial closing of its private
placement (see Note 3), selling 9,426,894 shares of common stock at a price of
$0.45 per share and receiving net proceeds of $4,220,203. On February 28, 2007,
the Company completed a second closing of its private placement, selling
1,183,332 shares of common stock at a price of $0.45 per share and receiving net
proceeds of $532,499.

On October 23, 2007, the Company
closed a private placement of 2,871,759 units for gross proceeds of $2,153,819.
Each unit was sold for $0.75 and consists of one common share and one common
share purchase warrant. Each common share purchase warrant entitles the holder
to purchase, if exercised, one additional common share of our company at a price
of $1.00 per common share until October 23, 2008 and at $1.50 per common share
if exercised during the period from October 24, 2008 until the warrants expire
on October 23, 2009.

On July 11, 2008, the Company
raised $4,000,000 in a private placement selling 8,000,000 of its common shares
at a price of $0.50 per share which officially closed on July 10, 2008.

The Company issued 560,000 shares
pursuant to the exemption from registration under the United States Securities
Act of 1933 provided by Section 4(2), Section 4(6) and/or Rule 506 of Regulation
D promulgated under the 1933 Act to four (4) investors who are accredited
investors within the respective meanings ascribed to that term in Rule 501(a)
under the 1933 Act.

The Company issued 7,440,000
shares to eighteen (18) non U.S. persons (as that term is defined in Regulation
S of the Securities Act of 1933) in an offshore transaction relying on
Regulation S and/or Section 4(2) of the Securities Act of 1933.

Principles of Consolidation

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

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 the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of expenses during the reporting
period. Actual results could differ from those estimates.

F-10

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Fair Value of Financial Instruments

The carrying amounts of cash and
cash equivalents, accounts receivable, due from factor, prepaid expenses,
accounts payable, accrued expenses, loan from officer and convertible note
payable to shareholders approximate their respective fair values due to the
short-term nature of these items and/or the current interest rates payable in
relation to current market conditions.

Cash and Cash Equivalents

The Company considers all highly
liquid investments with an original maturity of three months or less when
purchased to be cash equivalents. At times, such cash and cash equivalents may
exceed federally insured limits. The Company has not experienced a loss in such
accounts to date. The Company maintains its accounts with financial institutions
with high credit ratings. The cash held by the factor is not included in cash
and cash equivalents (see Note 5).

Accounts Receivable

The Company extends credit to
customers whose sales invoices have not been sold to our factor based upon an
evaluation of the customers financial condition and credit history and
generally require no collateral. Management performs regular evaluations
concerning the ability of our customers to satisfy their obligations and records
a provision for doubtful accounts based on these evaluations. Based on existing
economic conditions and collection practices, the Companys allowance for
doubtful accounts has been estimated to be $544,000 and $14,675 at September 30,
2008 and 2007, respectively. The Companys credit losses for the periods
presented have not significantly exceeded managements estimates.

Concentration of Credit Risks

During the year ended September
30, 2008 sales to two customers accounted for 31% and 17% of the Companys net
sales. During the year ended September 30, 2008, purchases from one supplier
totaled approximately $3,853,000. At September 30, 2008, one customer accounted
for 56% of the Accounts Receivable, net of allowance. At September 30, 2008,
three customers accounted for 24%, 19% and 14%, respectively, of the Due From
Factor.

Inventory

Inventories are valued at the
lower of cost or market, with cost being determined by the first-in, first-out
method. The Company continually evaluates its inventories by assessing
slow-moving product and records mark-downs as appropriate. At September 30,
2008, inventories consisted of finished goods, work-in-process and raw
materials.

Property and Equipment

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

Depreciation is computed on the
straight-line method based on the estimated useful lives of the assets of five
years. Leasehold improvements are amortized over the remaining life of the
related lease, which has been determined to be shorter than the useful life of
the asset.

F-11

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Trademarks and Intangibles

Effective with the Companys
adoption of Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets, since inception of the Company,
intangibles (including trademarks) with indefinite lives are no longer
amortized, but instead tested for impairment. Intangible assets are reviewed for
impairment annually or whenever events or changes in business circumstances
indicate the carrying value of the assets may not be recoverable. Impairment
losses are recognized if future cash flows of the related assets are less than
their carrying values.

Impairment of Long-Lived Assets and Intangibles

Long-lived assets, including
purchased intangible assets, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell. Management has considered the net loss incurred for the year ended
September 30, 2008 and has concluded that there is no impairment of long lived
assets or intangibles at September 30, 2008.

Revenue Recognition

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

Design and Development

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

Advertising

The Company expenses advertising
costs, consisting primarily of placement in publications, along with design and
printing costs of sales materials when incurred. Advertising expense for the
year ended September 30, 2008 and September 30, 2007 amounted to $39,886 and
$3,004, respectively.

Shipping and Handling Costs

The Company records shipping and
handling costs billed to customers as a component of revenue, and shipping and
handling costs incurred by the Company for inbound and outbound freight are
recorded in selling and shipping expenses. Total shipping and handling costs
amounted to $274,457 and $85,185 for the year ended September 30, 2008 and
September 30, 2007, respectively.

F-12

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Stock-Based Compensation

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

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

Income Taxes

The Company accounts for income
taxes under Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which requires the recognition of deferred tax assets and
liabilities for the expected impact of differences between the financial
statements and the tax basis of assets and liabilities.

The Company will provide a
valuation allowance for the full amount of the deferred tax asset since there is
no assurance of future taxable income. Tax deductible losses can be carried
forward for 20 years until utilized.

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

The Companys policy is to record
interest and penalties on uncertain tax provisions as income tax expense. As of
September 30, 2008, the Company has no accrued interest or penalties related to
uncertain tax positions.

Loss per Common Share

Loss per common share is computed
by dividing net loss by the weighted average number of shares of common stock
outstanding during the respective periods. Basic and diluted loss per common
share are the same for all periods presented because all warrants and stock
options outstanding are anti-dilutive. The related party loan may be convertible
to common shares if not repaid by August 31, 2008, but the conversion is also
anti-dilutive. The 2,884,612 shares of common stock issued to the founders of
Mynk in conjunction with the closing of the reverse merger transaction on May
11, 2007 have been presented as outstanding for all periods presented.

F-13

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3. Share Exchange Agreement and Private Placements

As a result of the sale of the
10,610,226 shares of common stock in late February 2007 at a per share price of
$0.45, and the acquisition of Mynk by Panglobal effective May 11, 2007, the
Company has determined that the grant date fair value charge to operations for
all stock options and other similar stock-based compensation that is amortizable
over future periods should begin on May 11, 2007, since that is the date on
which acquisition occurred and the period of benefit therefore began. Since the
Companys common stock traded on a very limited and sporadic basis prior to May
11, 2007, the Company has also determined that the best indicator of fair value
of the Companys common stock on May 11, 2007 was the $0.45 per share cash price
paid by the investors in the recent private placement, who owned approximately
40% of the issued and outstanding shares of common on May 11, 2007.

Share Exchange Agreement

On May 11, 2007, pursuant to a
Share Exchange Agreement dated as of February 15, 2007 (the Share Exchange
Agreement) by and among Panglobal, the shareholders of Mynk Corporation
(Selling Shareholders) and Mynk, Panglobal issued 3,749,995 shares of its
common stock in exchange for all of the issued and outstanding shares of Mynk,
issued 975,000 shares of it common stock in payment of $390,000 of outstanding
loans to Mynk, and agreed to reimburse a shareholder of Mynk up to $100,000 for
outstanding amounts due (the Exchange).

Previously, on February 3, 2006,
Mynk had issued 10,000,000 shares of its common stock to its founders for
$497,700 in cash, and 3,000,000 shares of its common stock valued at $149,310,
as loan fees on June 20, 2006, for a total of 13,000,000 shares, which
constituted all of the issued and outstanding shares of Mynk prior to the
Exchange. The share exchange was conducted on the basis of 0.2884615 common
shares of Panglobal for every one common share of Mynk. As a result of the
Exchange, Mynk became a wholly-owned subsidiary of Panglobal.

The Company also agreed to file
with the Securities and Exchange Commission, within a reasonable time following
the closing of the Share Exchange Agreement, a registration statement on Form
SB-2 to effect the registration of half of the shares of the common stock that
were issued to Mynk shareholders pursuant to the Share Exchange Agreement. There
was no specified filing deadline or financial penalty if the Company failed to
file the registration statement.

Pursuant to the Exchange,
Panglobal issued to the Selling Shareholders 3,749,995 shares of its common
stock. Panglobal had a total of 26,731,771 shares of common stock issued and
outstanding after giving effect to the Exchange and the 10,610,226 shares of
common stock issued in the Companys two private placements.

As a result of the Exchange and
the shares of common stock issued in the two private placements, on May 11,
2007, the stockholders of the Company immediately prior to the Exchange owned
11,396,550 shares of common stock, equivalent to approximately 43% of the issued
and outstanding shares of the Companys common stock, and the Company was
controlled by the former stockholders of Mynk at that time.

Private Placements

On February 27, 2007, in
anticipation of the Exchange, the Company sold an aggregate of 9,426,894 shares
of its common stock to fifty accredited investors in an initial closing of its
private placement at a per share price of $0.45, resulting in aggregate gross
proceeds to the Company of $4,242,103. Net cash proceeds to the Company, after
the deduction of all private placement offering costs and expenses of $21,900,
were $4,220,203.

On February 28, 2007, the Company
sold an aggregate of 1,183,332 shares of its common stock to nine accredited
investors in a second closing of the private placement at a per share price of
$0.45, resulting in aggregate gross proceeds to the Company of $532,499. Net
cash proceeds to the Company were also $532,499.

F-14

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Stephen Soller, the Companys
Chief Executive Officer, purchased 291,666 shares in the private placement for
$131,250. Craig Soller, the brother of Stephen Soller and a consultant to the
Company, purchased 244,444 shares of common stock in the private placement for
$110,000. Three Mynk shareholders also purchased an aggregate of 299,999 shares
in the private placement for $134,500.

On October 23, 2007, the Company
closed a private placement of 2,871,759 units for gross proceeds of $2,153,819.
Each unit was sold for $0.75 and consists of one common share and one common
share purchase warrant. Each common share purchase warrant entitles the holder
to purchase, if exercised, one additional common share of our company at a price
of $1.00 per common share until October 23, 2008 and at $1.50 per common share
if exercised during the period from October 24, 2008 until the warrants expire
on October 23, 2009.

On July 11, 2008, the Company
closed a private placement, selling 8,000,000 shares of common stock at a price
of $0.50 per share for proceeds of $4,000,000. The Company issued 560,000 shares
pursuant to the exemption from registration under the United States Securities
Act of 1933 provided by Section 4(2), Section 4(6) and/or Rule 506 of Regulation
D promulgated under the 1933 Act to four (4) investors who are accredited
investors within the respective meanings ascribed to that term in Rule 501(a)
under the 1933 Act. The Company issued 7,440,000 shares to eighteen (18) non
U.S. persons (as that term is defined in Regulation S of the Securities Act of
1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of
the Securities Act of 1933.

Stock Options

On January 18, 2007, in
anticipation of the closing of the Exchange and Private Placements, the Company
granted to Felix Wasser, the Companys Chief Financial Officer, a stock option
to purchase an aggregate of 250,000 shares of common stock, exercisable for a
period of five years at $0.30 per share, with one quarter vesting every six
months through January 18, 2009. The fair value of this option, as calculated
pursuant to the Black-Scholes option-pricing model, was determined to be $97,500
($0.39 per share), and was being charged to operations ratably from May 11, 2007
through January 18, 2009. Felix Wasser resigned as an officer of the Company on
August 21, 2007 and no further charges to operations were recorded. Vesting has
ceased and the 250,000 options have been cancelled.

On February 12, 2007, in
anticipation of the closing of the Exchange and Private Placements, the Company
granted to Stephen Soller, the Companys Chief Executive Officer, stock options
to purchase an aggregate of 1,800,000 shares of common stock, exercisable for a
period of five years at $0.30 per share, with one-sixth vesting every six months
through February 12, 2010. The fair value of this option, as calculated pursuant
to the Black-Scholes option-pricing model, was determined to be $702,000 ($0.39
per share), and is being charged to operations ratably from May 11, 2007 through
February 12, 2010. During the year ended September 30, 2008 the Company recorded
a charge to operations of $255,272 with respect to this option.

The fair value of these stock
options were calculated using the following Black-Scholes input variables: stock
price on date of grant - $0.45; exercise price - $0.30; expected life  4.67 
4.75 years; expected volatility -125%; expected dividend yield - 0%; risk-free
interest rate  5.0% .

F-15

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On February 12, 2007, in
anticipation of the closing of the Exchange and Private Placements, the Company
granted to two consultants stock options to purchase an aggregate of 375,000
shares of common stock exercisable for a period of five years at $0.45 per
share, with one-third of the options vesting annually on each of February 11,
2008, February 11, 2009 and February 11, 2010. The fair value of these options,
as calculated pursuant to the Black-Scholes option-pricing model, was initially
determined to be $142,500 ($0.38 per share). The fair value of such options is
being charged to operations ratably from May 11, 2007 through February 11, 2010.
In accordance with EITF 96-18, options granted to consultants are valued each
reporting period to determine the amount to be recorded as an expense in the
respective period. On September 30,2008 the fair value of these options, as
calculated pursuant to the Black-Scholes option-pricing model, was determined to
be $0.23 per share, which resulted in a charge to operations of $2,614 during
the three months ended September 30, 2008. During the year ended September 30,
2008, the Company recorded a charge to operations of $23864 with respect to
these options. As the options vest, they will be valued on each vesting date and
an adjustment will be recorded for the difference between the value already
recorded and the then current value on the date of vesting. On October 31, 2007
the relationship of one of the consultants with the Company ended and options to
exercise 250,000 shares of common stock have been cancelled at that time and
previously calculated compensation in the amount of $34,205 had been reversed
during the three months ended December 31, 2007. Accordingly, there will be no
further non-cash compensation expenses charged relating to those 250,000
options.

On February 12, 2007, the fair
value of the aforementioned stock options was calculated using the following
Black-Scholes input variables: stock price on date of grant - $0.45; exercise
price - $0.45; expected life 4.75 years; expected volatility - 125%; expected
dividend yield - 0%; risk-free interest rate  5.0% . On September 30, 2007, the
fair value of the aforementioned stock options was calculated using the
following Black-Scholes input variables: stock price of grant - $1.02; exercise
price - $0.45; expected life  4.625 years; expected volatility - 125%; expected
dividend yield - 0%; risk-free interest rate  5.0%

On August 7, 2007, the Company
granted a consultant a stock option to purchase 100,000 shares of common stock
exercisable for a period of one year at $0.45 per share, all of which were fully
vested upon issuance, for past services through June 2007. The fair value of
this option, as calculated pursuant to the Black-Scholes option-pricing model,
was determined to be $69,000 ($0.69 per share), and was charged to operations at
June 30, 2007. At June 30, 2008, the Company agreed to extend the exercise
period by one year. The fair value of the one year extension, as calculated
pursuant to the Black-Scholes option pricing model, was determined to be $35,000
($0.35 per share), and was fully charged to operations at June 30, 2008.

On October 23, 2007, the Company
granted to Charles Lesser, the Companys Chief Financial Officer, stock options
to purchase an aggregate of 480,000 shares of common stock, exercisable for a
period of five years at $0.75 per share, with 10,000 shares vesting monthly
commencing January 1, 2008 through December 1, 2011. The fair value of this
option, as calculated pursuant to the Black-Scholes option-pricing model, was
determined to be $355,200 ($0.74 per share), and is being charged to operations
ratably from November 1, 2007 through December 1, 2011. During the year ended
September 30, 2008 the Company recorded a charge to operations of $78,154.

The fair value of these stock
options were calculated using the following Black-Scholes input variables: stock
price on date of grant - $0.88; exercise price - $0.75; expected life  4.25 
4.50 years; expected volatility -125%; expected dividend yield - 0%; risk-free
interest rate  5.0% .

On October 23, 2007, the Company
granted to Charles Lesser, the Companys Chief Financial Officer, Incentive
stock options to purchase an aggregate of 660,000 shares of common stock,
exercisable for a period of five years at $0.75 per share, with 132,000 shares
vesting on December 1, 2007 and 11,000 shares vesting monthly commencing January
1, 2008 through December 1, 2011. The fair value of this option, as calculated
pursuant to the Black-Scholes option-pricing model, was determined to be
$488,400 ($0.74 per share), and is being charged to operations ratably from
November 1, 2007 through December 1, 2011. During the year ended September 30,
2008 the Company recorded a charge to operations of $107,448.

F-16

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The fair value of these stock
options were calculated using the following Black-Scholes input variables: stock
price on date of grant - $0.88; exercise price - $0.75; expected life  4.25 
4.50 years; expected volatility -125%; expected dividend yield - 0%; risk-free
interest rate  5.0% .

On April 18, 2008, the Company
granted to 15 employees, stock options to purchase an aggregate of 1,535,000
shares of common stock, exercisable for a period of five years at $1.10 per
share, with twenty five percent of the shares vesting each year through April
18, 2012. The fair value of this option, as calculated pursuant to the
Black-Scholes option-pricing model, was determined to be $1,427,550 ($0.93 per
share). On June 17, 2008 the Company decided to lower the exercise price to
reflect market conditions to $0.75 per share. The fair value of the option at
that date, as calculated by the Black-Scholes option pricing model, was
determined to be $1,473,600 ($0.96 per share) and is being charged to operations
ratably from April 18, 2008 through April 17, 2013. A number of employees have
since left the employee of the Company and the company cancelled 725,000 options
at September 30, 2008. During the year ended September 30, 2008 the Company
recorded a charge to operations of $148,500 with respect to this option.

The fair value of these stock
options were calculated using the following Black-Scholes input variables: stock
price on date of grant - $1.10; exercise price - $0.75; expected life  4.75 
5.00 years; expected volatility -125%; expected dividend yield - 0%; risk-free
interest rate  3.0% .

On June 17, 2008, the Company
granted to 3 employees, stock options to purchase an aggregate of 185,000 shares
of common stock, exercisable for a period of five years at $0.75 per share, with
twenty five percent of the shares vesting each year through June 17, 2012. The
fair value of this option, as calculated pursuant to the Black-Scholes
option-pricing model, was determined to be $111,000 ($0.60 per share and is
being charged to operations ratably from June 17, 2008 through June 17, 2012.
During the year ended September 30, 2008 the Company recorded a charge to
operations of $13,876 with respect to this option.

The fair value of these stock
options were calculated using the following Black-Scholes input variables: stock
price on date of grant - $.71; exercise price - $0.75; expected life  4.75 
5.00 years; expected volatility -125%; expected dividend yield - 0%; risk-free
interest rate  3.0% .

During the period from February
3, 2006 (Inception) through December 31, 2006, the Company did not issue any
stock options.

A summary of stock option
activity for the years ended September 30, 2008 and 2007 is as follows:

| |                                           |  |            |   |   |          |  |  | Weighted           | 
| | ----------------------------------------- |  | ---------- | - | - | -------- |  |  | ------------------ | 
| |                                           |  |            |   |   | Weighted |  |  | Average            | 
| |                                           |  | Number     |   |   | Average  |  |  | Remaining          | 
| |                                           |  | of         |   |   | Exercise |  |  | Contractual        | 
| |                                           |  | Shares     |   |   | Price    |  |  | Life
      (Years) | 
| |                                           |  |            |   |   |          |  |  |                    | 
| | Options outstanding at September 30, 2006 |  | ---        |   | $ | ---      |  |  | ---                | 
| | Granted                                   |  | 2,525,000  |   |   | 0.328    |  |  | 4.59               | 
| | Exercised                                 |  | ---        |   |   | ---      |  |  | ---                | 
| | Cancelled                                 |  | (187,50000 | ) |   | 0.30     |  |  |                    | 
| | Options outstanding at September 30, 2007 |  | 2,337,500  |   | $ | 0.331    |  |  | 4.48               | 
| | Options exercisable at September 30, 2007 |  | 462,500    |   | $ | 0.333    |  |  | 1.00               | 

F-17

---

| |                                           |  |            |   |   |          |  |  | Weighted           | 
| | ----------------------------------------- |  | ---------- | - | - | -------- |  |  | ------------------ | 
| |                                           |  |            |   |   | Weighted |  |  | Average            | 
| |                                           |  | Number     |   |   | Average  |  |  | Remaining          | 
| |                                           |  | of         |   |   | Exercise |  |  | Contractual        | 
| |                                           |  | Shares     |   |   | Price    |  |  | Life
      (Years) | 
| |                                           |  |            |   |   |          |  |  |                    | 
| | Options outstanding at September 30, 2007 |  | 2,337,500  |   | $ | 0.333    |  |  | 4.23               | 
| | Granted                                   |  | 2,860,000  |   |   | 0.750    |  |  | 4.80               | 
| | Exercised                                 |  | ---        |   |   | ---      |  |  | ---                | 
| | Cancelled                                 |  | (1,037,500 | ) |   | 0.652    |  |  |                    | 
| | Options outstanding at September 30, 2008 |  | 4,160,000  |   | $ | 0.540    |  |  | 4.00               | 
| | Options exercisable at September 30, 2008 |  | 1,362,,667 |   | $ | 0.42     |  |  | 3.50               | 

The weighted-average grant-date
fair value of options granted during the years ended September 30, 2008 and 2007
was $0.93 and $0.48, respectively.

The aggregate intrinsic value of
stock options outstanding at September 30, 2008 was $0.

Share Purchase Agreements

In anticipation of the closing of
the Exchange and Private Placements, additional compensatory transactions were
entered into pursuant to various Share Purchase Agreements between Jacques
Ninio, the controlling shareholder of Panglobal at that time, and the Chief
Executive Officer and certain other consultants. Since these transactions were
intended to benefit the Company and were entered into by an affiliate of the
Company, the Company has recorded these transactions on its financial statements
as follows:

On February 12, 2007, Stephen
Soller, the Companys Chief Executive Officer, purchased 519,250 shares of
common stock from two former founding shareholders of Mynk at a price of $0.325
per share. The fair value of this transaction was determined to be in excess of
the purchase price by $64,904 ($0.125 per share), reflecting the difference
between the $0.325 purchase price and the $0.45 private placement price, and was
charged to operations on May 11, 2007.

On February 12, 2007, Stephen
Soller, the Companys Chief Executive Officer, acquired the beneficial rights to
1,800,000 shares of common stock from Jacques Ninio, the controlling shareholder
of Panglobal at that time, at a price of $0.0001 per share. Pursuant to a
related Escrow Agreement, the shares are to vest and be released to Mr. Soller
at the rate of 600,000 shares every six months beginning on August 12, 2007,
provided that Mr. Sollers underlying employment agreement has not been
terminated. The fair value of this transaction, as calculated pursuant to the
Black-Scholes option-pricing model, was determined to be $810,000 ($0.45 per
share), reflecting the difference between the $0.0001 purchase price and the
$0.45 private placement price, and is being charged to operations ratably from
May 11, 2007 through August 11, 2008. During the year ended September 30, 2008,
the Company recorded a charge to operations of $567,000.

On February 12, 2007, the fair
value of the aforementioned share purchases was calculated using the following
Black-Scholes input variables: stock price on date of grant - $0.45; exercise
price - $0.0001; expected life  1.25 years; expected volatility - 125%;
expected dividend yield - 0%; risk-free interest rate  5.0%. On May 11, 2007,
the fair value of the aforementioned share purchases was calculated using the
following Black-Scholes input variables: stock price of grant - $0.45; exercise
price - $0.0001; expected life  3 years; expected volatility - 125%; expected
dividend yield - 0%; risk-free interest rate  5.0%. At June 30, 2007, the fair
value of the aforementioned share purchase was calculated using the following
Black-Scholes input variables: stock price of grant - $1.02; exercise price -
$0.0001; expected life  2.875 years; expected volatility - 125%; expected
dividend yield - 0%; risk-free interest rate  5.0% .

F-18

---

On May 11, 2007, Craig Soller and
David Long, two consultants to the Company, acquired the beneficial rights to
125,000 shares and 100,000 shares of common stock, respectively, from Jacques
Ninio, the controlling shareholder of Panglobal at that time, at a price of
$0.0001 per share. Pursuant to related Escrow Agreements, the 225,000 shares are
to vest and be released to the consultants at the rate of 75,000 shares annually
beginning on May 11, 2008, provided that the underlying consulting agreements
have not been terminated. The fair value of these transactions, as calculated
pursuant to the Black-Scholes option-pricing model, was initially determined to
be $101,250 ($0.45 per share), reflecting the difference between the $0.0001
purchase price and the $0.45 private placement price. In accordance with EITF
96-18, such compensation arrangements granted to consultants are valued each
reporting period to determine the amount to be recorded as an expense in the
respective period. On September 30, 2008, the fair value of the transaction, as
calculated pursuant to the Black-Scholes option-pricing model, was determined to
be $0.62 per share, which resulted in a charge to operations of $3,636 during
the three months ended September 30, 2008 and a charge to operations of $25,511
during the year ended September 30, 2008. As the restricted shares vest, they
will be valued on each vesting date and an adjustment will be recorded for the
difference between the value already recorded and the then current value on the
date of vesting. On October 31, 2007 the relationship of one of the consultants
with the Company ended and the right to acquire 100,000 shares of common stock
has ceased and previously calculated compensation related to this right to
acquire 100,000 shares of common stock in the amount of $14,116 had been
reversed during the three months ended December 31, 2007. Accordingly, there
will be no further non-cash compensation expenses charged relating to those
100,000 shares.

On October 31, 2007, David Long,
as part of a settlement agreement, acquired the beneficial rights to acquire
20,000 shares of common stock from Jacques Ninio, a shareholder of Panglobal, at
a price of $0.0001 per share. The 20,000 shares are to vest immediately. The
fair value of this transaction, as calculated pursuant to the Black-Scholes
option-pricing model, was determined to be $20,000 ($1.00 per share), reflecting
the difference between the $0.0001 purchase price and the $1.00 fair market
value on October 31, 2007 and the amount of $20,000 was charged to operations
during the three months ended December 31, 2007.

On October 23, 2007, Charles
Lesser, the Companys Chief Financial Officer, acquired the beneficial rights to
250,000 shares of common stock from Jacques Ninio, the controlling shareholder
of Panglobal at that time, at a price of $0.0001 per share. Pursuant to a
related Escrow Agreement, the shares are to vest and be released to Mr. Lesser
according to the following schedule: 100,000 shares on June 30, 2008 and 75,000
shares on December 31, 2008 and June 30, 2009, provided that Mr. Lessers
underlying employment status has not been terminated. The fair value of this
transaction, as calculated pursuant to the Black-Scholes option-pricing model,
was determined to be $220,000 ($0.88 per share), reflecting the difference
between the $0.0001 purchase price and the fair market value of $0.88 on October
23, 2007, and is being charged to operations ratably from November 1, 2007
through June 30, 2009. During the year ended September 30, 2008, the Company
recorded a charge to operations of $121,000.

4. Accounts Receivable

The Company also sells goods to
some of its customers and assumes the credit risk. The Company has a receivable
in dispute for which the Company has provided an estimated allowance for
doubtful accounts, however, future events may change that estimate. Accounts
receivable, as presented in the balance sheet at September 30, 2008 and
September 30, 2007 is presented below:

|                                   |   | September 30, |   |   | September 30, |  
|---------------------------------- | - | ------------- | - | - | ------------- | -
|                                   |   | 2008          |   |   | 2007          |  
|Outstanding accounts receivable    | $ | 988,467       |   | $ | 44,650        |  
|Less: allowance for doubtful debts |   | (544,176      | ) |   | (14,675       | )
|                                   |   |               |   |   |               |  
|                                   | $ | 444,291       |   | $ | 29,975        |  

Additions to the allowance for doubtful debt were $529,501 and
$14,675 for the years ended September 30, 2008 and 2007, respectively.

F-19

---

5. Due from Factor

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

At times, our customers place
orders that exceed the credit that they have available from the factor. We
evaluate those orders to consider if the customer is worthy of additional credit
based on our past experience with the customer. If we decide to sell merchandise
to the customer on credit, we take the credit risk for the amounts that are
above their approved credit limit with the factor. As of September 30, 2008, the
amount of Due from Factor for which we bear the credit risk is $157,000.

For the year ended September 30,
2008 and 2007, the Company paid a total of approximately $73,515 and $0,
respectively, of interest to the factor which is reported as a component of
interest expense in the consolidated statements of income.

Due from factor, net of
chargebacks and other deductions as presented in the balance sheet at September
30, 2008 and September 30, 2007 is summarized below:

|                                                    |   | September 30, |   |   | September 30, | 
|--------------------------------------------------- | - | ------------- | - | - | ------------- | 
|                                                    |   | 2008          |   |   | 2007          | 
|Outstanding factored receivables                    | $ | 3,126,405     |   | $ | 292,119       | 
|Cash collateral reserve                             |   | 303,426       |   |   | ----          | 
|                                                    |   |               |   |   |               | 
|                                                    |   | 3,429,831     |   |   | 292,119       | 
|                                                    |   |               |   |   |               | 
|Less: advances                                      |   | (1,689,387    | ) |   | -----         | 
|Reserves for chargeback and other
      deductibles |   | (328,988      | ) |   | (117,035      | 
|                                                    |   |               |   |   |               | 
|                                                    | $ | 1,411,456     |   | $ | 175,084       | 

6. Inventory

Inventory consists of the
following at September 30, 2008 and September 30, 2007:

|                |   | September 30, |  |   | September 30, | 
|--------------- | - | ------------- |  | - | ------------- | 
|                |   | 2008          |  |   | 2007          | 
|Finished goods  | $ | 1,006,116     |  | $ | 135,546       | 
|Work-in-process |   | 156,697       |  |   | 15,896        | 
|Raw materials   |   | 141,594       |  |   | 158,258       | 
|                | $ | 1,304,407     |  | $ | 309,700       | 

F-20

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7. Property and Equipment

A summary of property and
equipment at September 30, 2008 and September 30, 2007 is as follows:

|                                               |   | September 30, |   |   | September 30, |  
|---------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                               |   | 2008          |   |   | 2007          |  
|Machinery and equipment                        | $ | 167,486       |   | $ | 128,585       |  
|Computer hardware and software                 |   | 301,949       |   |   | 56,669        |  
|Furniture and fixtures                         |   | 76,699        |   |   | 18,815        |  
|Leasehold improvements                         |   | 149,583       |   |   | 19,688        |  
|                                               |   | 695,717       |   |   | 223,757       |  
|Less accumulated depreciation and amortization |   | (107,725      | ) |   | (12,827       | )
|                                               | $ | 587,992       |   | $ | 210,930       |  

Depreciation and amortization
expense for the years ended September 30, 2008 and 2007 was $95,589 and $12,827,
respectively.

8. Asset Purchase

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

The Company purchased the
following assets:

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

The Company paid $1,200,000 as
consideration for both the purchase of the purchased assets and the release of
all claims or rights to the two trademarks, Scrapbook and Crafty Couture.
The purchase price was allocated as follows:

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


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

F-21

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Employment of Kelly Kaneda

The Company subsequently hired
Kelly Kaneda, the originator of the Scrapbook label at a salary of $150,000 per
year for the first 12 months, increasing by $25,000 per year for each of three
additional years. In addition, Mr. Kaneda shall receive a commission of one and
one-half percent (1.5%) on the net sales of the Scrapbook Division. Net sales
shall be defined as gross sales less discounts, markdowns, returns, losses for
uncollected accounts, and other allowances actually taken by customers. Mr.
Kaneda has received a signing bonus of 200,000 shares of restricted common
stock. The fair value of this transaction, as calculated pursuant to the
Black-Scholes option-pricing model, was determined to be $128,000 ($0.64 per
share), and, as these shares are fully vested, was charged to operations at June
30, 2008.

In each of the first four (4)
years of Mr. Kanedas employment commencing June, 2008, upon attainment of
specified sales targets, he shall receive restricted common stock in the amounts
set forth below, which stock shall be transferred and shall vest on the last day
of the applicable contract year. In the event that Mr. Kaneda is terminated
other than for cause or Mr. Kaneda resigns for cause, he shall be entitled to a
prorated portion of the annual stock bonus, calculated through the effective
date of termination or resignation.

Year
    Sales Goals
    Shares of 
      StockYear 1
    $20,000,000
    200,000Year 2
    $25,000,000
    250,000Year 3
    $30,000,000
    250,000Year 4
    $40,000,000
    250,000Total:
    
    950,000


9. Related Party Transactions

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

Convertible Note Payable to Shareholders

On March 3, 2008 the Company
entered into a Revolving Loan Agreement with two of the shareholders of the
Company. The loan allows the Company to borrow and repay, on a revolving basis,
up to an outstanding amount of $750,000. The outstanding principal balance of
the Loan bears interest, payable monthly, at a rate of 8% per annum. The loan is
secured by a lien on the assets of the Company, except for factored receivables.

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

At any time after August 31,
2008, if there is an outstanding amount on the Loan, the lenders may convert, by
written notice, either a portion or the total amount of the outstanding loan to
common shares of the Company at a price per share equal to the lesser of:

F-22

---

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

At September 30, 2008 the Company
had an outstanding balance of $750,000 on the loan. During the year ended
September 30, 2008, the Company paid $27,328 in interest expense on the Loan.
The loan has not been repaid at December 31, 2008 and may be called or converted
into shares at any time.

10. Consulting Agreement for Sosik

On August 20, 2007 the Company
signed a consulting agreement with Lolly Factory, Inc. and its sole shareholder
(Consultant) to provide sales and merchandising consulting services for the
Sosik and Juniors apparel divisions through December 31, 2010. Consulting fees
totaling $452,125 were payable between September 2007 and June 2008 and have
been fully paid. For the year months ended September 30, 2008, $360,675 in
consulting fees were paid. In addition, under the consulting agreement the
Consultant shall earn a 3.5% commission on the Sosik/Junior divisions net sales.
The Company recorded sales commission expense of $251,435 for the year ended
September 30, 2008. The Consultant also earns 100,000 of our common shares
payable each month from September, 2007 to June, 2008, up to an aggregate of
1,000,000 common shares which shares are deemed to be earned and vested each
month. The Company recorded an expense to operations in the amount of $694,000
for common shares earned for the year ended September 30, 2008.

The Consultant and the Company
have established sales targets totaling $30.0 million for calendar year 2008,
$45.0 million for calendar year 2009 and $60.0 million for calendar year 2010.
The Consultant can earn up to 1,500,000 additional common shares of Panglobal
Brands Inc. according to the following schedule:

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

The Company has not accrued an
expense for issuing shares for meeting the sales target for 2008.

11. Common Stock

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

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

Mynks initial capitalization
consisted of cash of $497,700 in exchange for the issuance of 10,000,000 shares
of Mynk common stock (equivalent to 2,884,612 shares of Panglobal common stock).

F-23

---

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

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

We issued 560,000 shares pursuant
to the exemption from registration under the United States Securities Act of
1933 provided by Section 4(2), Section 4(6) and/or Rule 506 of Regulation D
promulgated under the 1933 Act to four (4) investors who are accredited
investors within the respective meanings ascribed to that term in Rule 501(a)
under the 1933 Act.

We issued 7,440,000 shares to
eighteen (18) non U.S. persons (as that term is defined in Regulation S of the
Securities Act of 1933) in an offshore transaction relying on Regulation S
and/or Section 4(2) of the Securities Act of 1933.

12. Commitments and Contingencies

The Companys executive and head
office moved on February 15, 2008 to 2853 E. Pico Blvd., Los Angeles, CA 90023.
The Company has signed a three year lease for the new head office measuring
18,200 square feet at a monthly rental of $11,500. The lease began on January 1,
2008 and the Company moved into the new premises on February 15, 2008. Total
rent expense including sales showrooms for the year ended September 30, 2008 and
2007 was $320,040 and $64,947, respectively.

The table below sets forth the
Companys lease obligations through 2013.

Year ending September 30,

|2009 | $ | 342,406   | 
|---- | - | --------- | 
|2010 |   | 353,528   | 
|2011 |   | 222,609   | 
|2012 |   | 123,027   | 
|2013 |   | 10,278    | 
|     |   |           | 
|     | $ | 1,051,849 | 

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

F-24

---

13. Income Taxes

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

The deferred tax benefit is
composed of the following:

|                                   | September 30,
      2008 |  | September 30,
      2007
|---------------------------------- | ------------------------ |  | ------------------------
|Deferred tax benefit: Federal      | $4,913,000               |  | $1,392,000              
|Deferred tax benefit: State        | 1,276,000                |  | 361,000                 
|Total benefit of NOL carry forward | 6,189,000                |  | $1,753,000              
|Valuation allowance                | (6,189,000)              |  | (1,753,000)             
|Total                              | $0                       |  | $0                      

As of September 30, 2008 unused
net operating losses equal to $13,379,000 are available for 17 years to offset
future years federal and state taxable income. SFAS 109 requires that the tax
benefit of such NOLs be recorded using current tax rates as an asset to the
extent management assesses the utilization of such NOLs to be more likely than
not. Based upon the Company's short term historical operating performance, the
Company provided a full valuation allowance against the deferred tax asset.

F-25

---

- 19 -

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

On
January 8, 2009, Panglobal Brands Inc. was notified that effective December 8,
2008, the personnel of Grobstein Horwath & Company LLP have joined with
Crowe Horwath LLP resulting in the resignation of Grobstein Horwath as
independent registered public accounting firm for our company. Crowe was
appointed as our new independent registered public accounting firm.

The audit reports of Grobstein Horwath on the financial statements of our company as of and for the years ended to September 30, 2007 and 2006 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles with the exception of a statement regarding the uncertainty of our company’s ability to continue as a going concern. The decision to engage Crowe was approved by our board of directors on January 8, 2009.

During our company’s most two recent fiscal years ended September 30, 2007 and 2006 and through the date of resignation, January 8, 2009, we did not consult with Crowe regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinion that might be rendered by Crowe on our financial statements, and Crowe  did not provide any written or oral advice that was an important factor considered by our company in reaching a decision as to any such accounting, auditing or financial reporting issue.

In
connection with the audits of our financial statements for the fiscal year ended
September 30, 2007 and 2006 and through the date of this current report, there
were: (i) no disagreements between our company and Grobstein Horwath on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Grobstein Horwath, would have caused Grobstein Horwath to make
reference to the subject matter of the disagreement in their reports on our
financial statements for such years, and (ii) no reportable events within the
meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

We
have provided Grobstein Horwath a copy of the disclosures in this Form 8-K and
have requested that Grobstein Horwath furnish us with a letter addressed to the
Securities and Exchange Commission stating whether or not Grobstein Horwath
agrees with our statements in this Item 4.01(a) . A copy of the letter dated
January 8, 2009, furnished by Grobstein Horwath in response to that request is
filed as Exhibit 16.2 to our Form 8-K filed on January 13, 2009.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

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- 20 -

As
required by SEC Rule 13a-15(b), our management carried out an evaluation, with
the participation of our Chief Executive and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. Based on the
foregoing, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were not effective at the reasonable
assurance level.

Management found the following weakness in our disclosure controls and
procedures:

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

As
an early-stage company, we continually review and revise our internal accounting
policies and procedures. We have instituted a series of manual controls,
including sign-offs and checks and balances, but we recognize that there is
still inadequate division of duties. We intend to determine how to address this
issue by continually reviewing and revising our internal accounting policies and
procedures.

Managements Annual Report on Internal Control over
Financial Reporting

Management
is responsible for establishing and maintaining adequate internal control over
our financial reporting. In order to evaluate the effectiveness of internal
control over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act, management has conducted an assessment, including testing,
using the criteria in Internal Control  Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our
system of internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.

Management
has used the framework set forth in the report entitled Internal
Control-Integrated Framework published by the Committee of Sponsoring
Organizations of the Treadway Commission, known as COSO, to evaluate the
effectiveness of our internal control over financial reporting. Based on this
assessment, management has concluded that our internal control over financial
reporting was not effective as of September 30, 2008.

This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Our internal control over financial reporting was not subject to
attestation by our independent registered public accounting firm pursuant to
temporary rules of the SEC that permit us to provide only managements report in
this annual report.

Changes in Internal Control over Financial Reporting

There
have been no changes in our internal controls over financial reporting during
our most recent fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.

Certificates.

Certificates
with respect to disclosure controls and procedures and internal control over
financial reporting under Rules 13a-14(a) or 15d-14(a) of the Exchange Act are
attached to this Annual Report on Form 10-KSB.

ITEM 8B. OTHER INFORMATION

None.

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- 21 -

PART III

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

Directors and Executive Officers, Promoters and Control
Persons

As at December 30, 2008, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
      Position Held with the Company
      Age
      Date First Elected or AppointedStephen Soller
    Chief Executive Officer,
      Secretary, and Director
    43
    February 12, 2007Charles A. Lesser
    Chief Financial Officer
    62
    October 22, 2007Jacques Ninio
    President(1)and Director
    39
    December 12, 2006


(1)Jacques Ninio resigned as President on January
12, 2009

Business Experience

The
following is a brief account of the education and business experience of each
director and executive officer during at least the past five years, indicating
each persons business experience, principal occupation during the period, and
the name and principal business of the organization by which they were employed.

Stephen Soller, Chief Executive Officer and director

Mr.
Soller received his Bachelor of Arts with a Law Degree at the Stellenbosch
University, South Africa. Mr. Soller has over 15 years experience in the fashion
industry. Mr. Soller was also the owner of Tessuto Inc. and Bella Vetiti, which
are retail/wholesale distributors of fabric supplies and clothing. Mr. Soller
has no previous or other experience as a director or officer of a public
company.

Charles A. Lesser, Chief Financial Officer

Charles
Lesser was the Chief Financial Officer of True Religion Apparel, Inc.
(Nasdaq:TRLG) and its wholly-owned subsidiary, Guru Denim Inc. from 2003 to
March, 2007 and as a consultant to True Religion Apparel, Inc. to September,
2007. Prior to that, Mr. Lesser was Acting President and a Director of Alpha
Virtual Inc., a software development company listed on the OTCBB and from 1997
until 2002, Mr. Lesser was Chief Financial Officer and a Director of CBCom,
Inc., an internet service provider listed on the OTCBB. Mr. Lesser holds a B.A.
degree from the University of Pittsburgh and an M.B.A. from the University of
the Witwatersrand.

Jacques Ninio, Director

Jacques
Ninio is a mechanical engineer specializing in automotive engineering. Mr. Ninio
is also a qualified electrician, and a building manager. He manages and
co-ordinates contractors for all aspects of the maintenance of an office block.
Mr. Ninio has no previous or other experience as a director or officer of a
public company.

Family Relationships

There
are no family relationships among our directors or officers.

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- 22 -

Involvement in Certain Legal Proceedings

Our
directors, executive officers and control persons have not been involved in any
of the following events during the past five years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |    |                                                                                                                                                                                                                                                                                                                                
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.             

Compliance with Section 16(a) of the Exchange
Act

Section
16(a) of the Securities Exchange Act requires our executive officers and
directors, and persons who own more than 10% of our common stock, to file
reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of the copies of such forms received by us,
or written representations from certain reporting persons, we believe that
during fiscal year ended September 30, 2008, all filing requirements applicable
to its officers, directors and greater than 10% beneficial owners were complied
with, with the exception of the following:

Name
    Number of Late Reports
    Number of TransactionsNot
      Reported on aTimely Basis
    Failure to FileRequested
      FormsStephen Soller
      Charles A. Lesser Jacques Ninio(1)
    Nil
      Nil Nil
    Nil
      Nil Nil
    Nil
      Nil Nil


(1)Jacques Ninio resigned as President on January
12, 2009

Code of Ethics

We
have not adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. There is no reason why we
have not adopted such a code of ethics and we intend to do so during the year to
end September 30, 2009.

Nominating Committee

We
do not have standing nominating or compensation committees, or committees
performing similar functions. Our board of directors believe that it is not
necessary to have a standing compensation committee at this time because the
functions of such committee are adequately performed by our board of
directors.

Our
board of directors also is of the view that it is appropriate for us not to have
a standing nominating committee because our board of directors has performed and
will perform adequately the functions of a nominating committee. Our board of
directors has not adopted a charter for the nomination committee. There has not
been any defined policy or procedure requirements for stockholders to submit
recommendations or nomination for directors. Our board of directors does not
believe that a defined policy with regard to the consideration of candidates
recommended by stockholders is necessary at this time because we believe that,
given the early stages of our

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- 23 -

development, a specific nominating policy would be premature
and of little assistance until our business operations are at a more advanced
level. There are no specific, minimum qualifications that our board of directors
believes must be met by a candidate recommended by our board of directors. The
process of identifying and evaluating nominees for director typically begins
with our board of directors soliciting professional firms with whom we have an
existing business relationship, such as law firms, accounting firms or financial
advisory firms, for suitable candidates to serve as directors. It is followed by
our board of directors review of the candidates resumes and interview of
candidates. Based on the information gathered, our board of directors then makes
a decision on whether to recommend the candidates as nominees for director. We
do not pay any fee to any third party or parties to identify or evaluate or
assist in identifying or evaluating potential nominee.

Audit Committee and Audit Committee Financial Expert

We
do not have a standing audit committee at the present time. Our board of
directors has determined that we do not have a board member that qualifies as an
"audit committee financial expert" as defined in Item 401(e) of Regulation S-B,
nor do we have a board member that qualifies as "independent" as the term is
used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of
1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.

We
believe that our board of directors is capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. The board of directors of our company does not believe that
it is necessary to have an audit committee because management believes that the
functions of an audit committee can be adequately performed by the board of
directors. In addition, we believe that retaining an independent director who
would qualify as an "audit committee financial expert" would be overly costly
and burdensome and is not warranted in our circumstances given the stage of our
development and the fact that we have not generated any positive cash flows from
operations to date.

ITEM 10. EXECUTIVE COMPENSATION.

Summary Compensation Table

The
following table summarizes the compensation of our executive officers during the
two years ended September 30, 2008 and 2007. No other officers or directors
received annual compensation in excess of $100,000 during the last three fiscal
years.

Nameand PrincipalPosition
      Year
      Salary($)
      Bonus($)
      StockAwards($)
      OptionAwards($)
      Non-EquityIncentive PlanCompensation($)
      NonqualifiedDeferredCompensationEarnings($)
      AllOtherCompensa-tion($)
      Total($)(a)
    (b)
    (c)
    (d)
    (e)
    (f)
    (g)
    (h)
    (i)
    (j)Stephen Soller, Chief Executive
      Officer(1)
    2007 2008
    117,692 194,538l
    Nil Nil
    810,000 Nil
    702,000 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    829,692 194,538Charles A. Lesser, Chief Financial
      Officer (2)
    2007 2008
    Nil 150,961
    Nil Nil
    Nil 220,000
    Nil 813,400
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 1,049,361Jacques Ninio, President(3)
    2007 2006
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilFelix R. Wasser, former Chief
      Financial Officer(4)
    2007 2006
    107,572 Nil
    Nil Nil
    Nil Nil
    97,500 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    205,072 NilDavid Long, Chief Executive Officer,
      President and a Director of Mynk Corporation (5)
    2007 2006
    76,823 Nil
    Nil Nil
    102,000 Nil
    92,000 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    270,823 Nil


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- 24 -

Edward Margulius, Chief Financial Officer,
      Secretary, Treasurer and a director(6)
    2007 2006
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil


| | (1) | Stephen Soller was appointed as our Chief Executive
      Officer, Secretary and a director on February 12, 2007.                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Charles A. Lesser was appointed as our Chief Financial
      Officer on October 22, 2007.                                                                                                                                                                                   
| | (3) | Jacques Ninio was appointed as our President, Secretary
      and a director on December 12, 2006. He resigned as our Secretary on
      February 12, 2007 and resigned as our President on January 12,
  2009.                                                             
| | (4) | Felix R. Wasser was appointed as our Chief Financial
      Officer, Secretary and a director on January 12, 2007. He resigned as our
      Secretary on February 12, 2007. He resigned as our Chief Financial Officer
      on August 21, 2007.                             
| | (5) | David Long was appointed as Mynk Corporation's Executive
      Officer, President and a Director on February 3, 2007 and resigned on May
      31, 2007. David Long also received $6,300 from us in 2007 as rental
  payments for the use of a property by Mynk Corporation.
| | (6) | Edward Margulius was appointed as Mynk Corporation's
      Chief Financial Officer, Secretary, Treasurer and a director on February
3, 2007 and resigned on May 31, 2007.                                                                                                   

***Outstanding Equity Awards at Fiscal Year-End***

Options
        Awards
      Stock
        AwardsName
      Number of 
        Securities 
        Underlying 
        Unexercised 
        Options (#) 
        Exercisable
      Number of Securities 
        Underlying 
        Unexercised Options 
        (#) Unexercisable
      Equity Incentive 
        Plan Awards: 
        Number of 
        Securities 
        Underlying 
        Unexercised 
        Unearned Options 
        (#)
      Option 
        Exercise Price 
        ($)
      Option Expiration 
        Date
      Number of 
        Shares or 
        Units of Stock 
        That Have 
        Not Vested 
        (#)
      Market Value 
        of Shares or 
        Units of Stock 
        That Have 
        Not Vested 
        ($)
      Equity Incentive 
        Plan 
        Awards: Number 
        of Unearned 
        Shares, Units or 
        Other Rights That 
        Have Not Vested 
        (#)
      Equity
         Incentive Plan 
        Awards: 
        Market or 
        Payout Value 
        of Unearned 
        Shares, Units or 
        Other Rights 
        That Have Not 
        Vested ($)(a)
      (b)
      (c)
      (d)
      (e)
      (f)
      (g)
      (h)
      (i)
      (j)Stephen Soller, 
        Chief Executive 
        Officer(1)
      900,000
      900,000
      Nil
      $0.30
      February 12, 2014
      N/A
      N/A
      N/A
      N/ACharles A. Lesser, 
        Chief Financial 
        Officer (2)
      321,000
      819,000
      0
      $0.75
      October 22, 2012
      N/A
      N/A
      N/A
      N/AJacques Ninio, 
        President(3)
      0
      0
      0
      Nil
      N/A
      N/A
      N/A
      N/A
      N/AFelix R. Wasser, 
        Chief Financial 
        Officer(4)
      N/A
      N/A
      0
      N/A
      
      N/A
      N/A
      N/A
      N/ADavid Long, Chief 
        Executive Officer, 
        President and a 
        Director of Mynk 
        Corporation (5)
      0
      N/A
      0
      N/A
      
      N/A
      N/A
      N/A
      N/AEdward Margulius, 
        Chief Financial 
        Officer, Secretary, 
        Treasurer and a 
        director(6)
      0
      0
      0
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A


| | (1) | Stephen Soller was appointed as our Chief Executive
      Officer, Secretary and a director on February 12, 2007.                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Charles A. Lesser was appointed as our Chief Financial
      Officer on October 22, 2007.                                                                                                                                                      
| | (3) | Jacques Ninio was appointed as our President, Secretary
      and a director on December 12, 2006. He resigned as our Secretary on
      February 12, 2007 and resigned as our President on January 12, 2009.                                  
| | (4) | Felix R. Wasser was appointed as our Chief Financial
      Officer, Secretary and a director on January 12, 2007. He resigned as our
      Secretary on February 12, 2007. He resigned as our Chief Financial Officer
      on August 21, 2007.
| | (5) | David Long was appointed as Mynk Corporation's Executive
      Officer, President and a Director on February 3, 2007 and resigned on May
  31, 2007.                                                                                           
| | (6) | Edward Margulius was appointed as Mynk Corporation's
      Chief Financial Officer, Secretary, Treasurer and a director on February
3, 2007 and resigned on May 31, 2007.                                                                      

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- 25 -

Director Compensation

Employment/Consulting Agreements

We
have not entered into any employment agreement or consulting agreements with our
directors and executive officers. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. Our directors and executive officers may receive stock options at the
discretion of our board of directors in the future. We do not have any material
bonus or profit sharing plans pursuant to which cash or non-cash compensation is
or may be paid to our directors or executive officers, except that stock options
may be granted at the discretion of our board of directors.

We
have no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control, where
the value of such compensation exceeds $60,000 per executive officer.

Long-Term Incentive Plans

There
are no arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers, except that our directors and
executive officers may receive stock options at the discretion of our board of
directors and in accordance with our stock option plan, which was adopted by our
board of directors on January 16, 2007.

Director Compensation

We
reimburse our directors for expenses incurred in connection with attending board
meetings. We did not pay any other directors fees or other cash compensation
for services rendered as a director for the fiscal year ended September 30,
2008.

We have no formal plan for compensating our directors for their service in their
capacity as directors, although such directors are expected in the future to
receive stock options to purchase common shares as awarded by our board of
directors or (as to future stock options) a compensation committee which may be
established. Directors are entitled to reimbursement for reasonable travel and
other out-of-pocket expenses incurred in connection with attendance at meetings
of our board of directors. Our board of directors may award special remuneration
to any director undertaking any special services on our behalf other than
services ordinarily required of a director. No director received and/or accrued
any compensation for their services as a director, including committee
participation and/or special assignments.

Report on Executive Compensation

Our
compensation program for our executive officers is administered and reviewed by
our board of directors. We intend to determine executive compensation based on a
combination of base salary, equity compensation and bonuses.

Base Salary

We
provide base salaries in order to retain executives, with the intention of being
consistent with our business plan and attempting to achieve our financial and
strategic goals. We compensate officers and other key employees within salary
ranges that are generally based on similar positions in companies of comparable
size and complexity to that of our company, based on information gathered by
members of our board of directors. The annual compensation for each officer is
based on our companys performance and individual performance. The performance
markers considered may include but are not limited to the growth of our
companys market capitalization and completion of strategic initiatives as
determined by our board of directors. Our board of directors also takes into
account prevailing general economic conditions, marketplace trends, and other
relevant factors,

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- 26 -

including the fact that our company does not offer a defined
benefit retirement or other similar plans and perquisites to its senior
management employees.

Base
salaries are established upon the commencement of employment with our company
and are adjusted from time to time by our board of directors.

Equity Compensation

We
may grant amounts of stock options that are approved by our board of directors.
We believe that this may provide long-term incentive compensation to its senior
management. In determining the size of the awards, our board of directors will
consider the companys growth in market capitalization, individual performance,
salary level and length of service to the company into account. Our board of
directors believes that employee ownership of our stock may encourage executives
and key employees to continue their employment with our company. We also may use
stock options because our board of directors believes that equity compensation
in this form aligns the interests of stockholders with senior management to
ensure the Companys long-term success.

Discretionary Bonus

We
may pay discretionary bonuses that are approved by our board of directors. We
intend to base any discretionary bonuses to be awarded to senior management
primarily upon the financial and strategic performance of our company or, as the
case may be, on the performance of the operating units for which the individual
in question is directly responsible. To determine the amount of a particular
bonus, our board of directors will consider several factors, including
individual performance, company performance, achievement of strategic goals and
other facets of individual and company achievements and other strategic and
financial goals.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The
following tables set forth certain information concerning the number of shares
of our common stock known by us to be owned beneficially as of December 30, 2008
by: (i) each person (including any group) that owns more than 5% of any class of
the voting securities of our company; (ii) each director and officer of our
company; and (iii) directors and officers as a group. Unless otherwise
indicated, the stockholders listed possess sole voting and investment power with
respect to the shares shown.

Security ownership of Management

Name and
      Address of Beneficial Owner (1)
      Title of Class
      Amount and Nature of Beneficial Owner
      Percent 
        of Class (1) (2)Jacques Ninio(5), President and Director
      104/107 Walker Street North Sydney, NSW 2060 Australia
    Common Stock
    1,500,000 Direct
    4.0%Charles A. Lesser, Chief Financial Officer, 911
      Linda Flora Drive Los Angeles, CA 90049
    Common Stock
    926,000 Direct(3)
    2.4%


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- 27 -

Name and
      Address of Beneficial Owner (1)
      Title of Class
      Amount and Nature of Beneficial Owner
      Percent 
        of Class (1) (2)Stephen Soller, Chief Executive Officer and
      Director 5608 South Soto Street, Suite 102, Huntington Park,
      CA 90255
    Common Stock
    4,410,916 Direct(4)
    11.2%Directors and Officers (as a group)
    Common Stock
    10,111,069
    25.3%


Security ownership of certain beneficial owners

Name and Address of Beneficial Owner (1)
    Title
      of Class
    Amount and Nature of Beneficial Owner
    Percent of Class (1) (2)Peter Hough 5226 Connaught Drive Vancouver, BC
      Canada
    Common Stock
    3,315,653 Direct and Indirect(5)
    8.8%


(1)Regulation S-B under
the Exchange Act, defines a beneficial owner of a security as any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise, has or shares: (i) voting power, which includes the
power to vote, or to direct the voting of shares; and (ii) investment power,
which includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if, for
example, persons share the power to vote or the power to dispose of the shares).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As a
result, the percentage of outstanding shares of any person as shown in this
table does not necessarily reflect the persons actual ownership or voting power
with respect to the number of shares of common stock actually outstanding on
December 30, 2008.. (2)Based upon 37,671,710 issued and
outstanding shares of common stock as of December 31 2008. (3)Charles Lesser holds 500,000 shares of common stock and has the right to
receive 75,000 shares on December 31, 2008. Mr. Lesser has the right to exercise
286,000 Incentive stock options at an exercise price of $0.75 per share by
February 28, 2009. In addition, Mr. Lesser has the right to exercise 140,000
shares of non-qualified stock options at an exercise price of $0.75 by February
28, 2009. (4)Stephen Soller holds 2,610,916 shares of common
stock and has the right to exercise 1,800,000 stock options at an exercise price
of $0.30 per share.(5)Jacques Ninio resigned as President on
January 12, 2009

Cancellation of Shares, Cancelled Debt

On
August 21, 2007 Felix Wasser resigned as Chief Financial Officer. Mr. Wasser had
previously been granted 250,000 stock options, which have subsequently been
cancelled. On October 31, 2007 David Long, formerly President and Chief
Executive of Mynk Corporation resigned from Corporation. Mr. Long had previously
been granted 250,000 stock options which have been cancelled. Additionally, Mr.
Long had been granted 100,000 of restricted stock which had not vested at the
time of his separation. We agreed to grant Mr. Long 20,000 shares as part of his
separation.

Future Changes in Control

We
are unaware of any contract or other arrangement, the operation of which may, at
a subsequent date, result in a change in control of our company.

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Securities authorized for issuance under equity
compensation plans.

We have no long-term incentive plans, other than the Stock Option Plan described
below.

Stock Option Plan

On
January 16, 2007, our directors adopted the 2007 Stock Option Plan for our
employees and consultants, reserving a total of 5,000,000 shares of its common
stock for issuance pursuant to grants to be made under the stock option plan. As
of September 30, 2008, 4,160,000 options are currently issued to employees,
directors and officers of our company and 840,000 options were available for
future grant under this plan.

The
following table summarizes certain information regarding our equity compensation
plan as at September 30, 2008:

Plan Category
    Number of Securities to
      be Issued Upon Exercise of Outstanding Options,
      Warrants and Rights
    Weighted-Average
      Exercise Price of Outstanding Options,
      Warrants and Rights
    Number of Securities Remaining
      Available for Future Issuance Under Equity
      Compensation Plans (Excluding Securities Reflected
      in Column)Equity compensation plans approved by security holders
    not applicable
    not applicable
    not applicableEquity
      compensation plans not approved by security holders
    4,160,000
    $0.54
    840,000Total
    4,160,000
    $0.54
    840,000


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

Transactions with Related Persons

During
our last fiscal year and except as disclosed below, none of the following
persons has had any direct or indirect material interest in any transaction
worth more than $120,000 to which our company was or is a party, or in any
proposed transaction to which our company proposes to be a party:

| | (a) | any director or officer of our company;                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                          
| | (b) | any proposed director of officer of our
company;                                                                                                         
| |     |                                                                                                                                                          
| | (c) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our common
      stock; or,
| |     |                                                                                                                                                          
| | (d) | any member of the immediate family of any of the
      foregoing persons (including a spouse, parents, children, siblings, and
      in-laws).           

Board meetings and committees; annual meeting attendance

The
board of directors of our company held no formal meetings during the year ended
September 30, 2008. All proceedings of the board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to Delaware Corporate Law and our By-laws, as valid and
effective as if they had been passed at a meeting of the directors duly called
and held.

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We
currently do not have standing nominating or compensation committees, or
committees performing similar functions. The board believes that it is not
necessary to have a standing compensation or nominating committees at this time
because the functions of such committees are adequately performed by the entire
board.

The
directors on the board, who perform the functions of audit, nominating or
compensation committees, are not independent because they are also officers of
our company. The determination of independence of directors has been made using
the definition of independent director contained under Nasdaq Marketplace Rule
4200(a)(15).

Audit Committee

Currently
our audit committee consists of our board of directors. We currently do not have
nominating, compensation committees or committees performing similar functions.
There has not been any defined policy or procedure requirements for shareholders
to submit recommendations or nominations for directors.

Our
audit committee currently does not have an audit committee financial expert" as
defined in Item 401(e) of Regulation S-B, and is "independent" as the term is
used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of
1934, as amended. We believe that retaining an independent director who would
qualify as an "audit committee financial expert" would be overly costly and
burdensome and is not warranted in our circumstances given the early stages of
our development and the fact that we have not generated any material revenues to
date.

For
the year ended September 30, 2008, there were no meetings held by the audit
committee. The business of the audit committee was conducted by resolutions
consented to in writing by all the members and filed with the minutes of the
proceedings of the audit committee.

Director Independence

Our
common stock is quoted on the OTC Bulletin Board interdealer quotation system,
which does not have director independence requirements. Under NASDAQ Rule
4200(a)(15), a director is not considered to be independent if he or she is also
an executive officer or employee of the corporation.

We
have two (2) directors: Stephen Soller, and Jacques Ninio. Neither of our
directors are independent directors.

As
a result of our limited operating history and limited resources, our management
believes that we will have some difficulty in attracting independent directors.
In addition, we would likely be required to increase our directors and officers
insurance coverage in order to attract and retain independent directors.

ITEM 13. EXHIBITS.

Exhibits required by Item 601 of Regulation S-B

Exhibit Number
    Description(3)
    Articles of Incorporation and Bylaws3.1
    Articles of Incorporation of Panglobal Brands Inc.
      (formerly EZ English Online) (attached as an exhibit to our Form SB-2
      filed January 3, 2006).3.2
    Bylaws of Panglobal Brands Inc. (formerly EZ English
      Online) (attached as an exhibit to our Form SB-2 filed January 3, 2006).3.3
    Articles of Incorporation of Mynk Corp. (attached as an
      exhibit to our Form SB- 2 filed February 3, 2006).3.4
    Bylaws of Mynk Corp. (attached as an exhibit to our Form
      SB-2 filed February 3, 2006).


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Exhibit Number
      Description3.5
      Certificate of Amendment (attached
          as an exhibit to our Current Report on Form 8-K filed on February 6,
          2007).3.6
      Certificate of Ownership (attached
          as an exhibit to our Current Report on Form 8-K filed on February 6,
          2007).(10)
      Material
          Contracts10.1
      PayPal
          User Agreement (attached as an exhibit to our Form SB-2 filed February
          3, 2006).10.2
      Affiliated Stock Purchase Agreement
          dated December 12, 2006 (attached as an exhibit to our Current Report
          on Form 8-K filed on December 13, 2006).10.3
      Share Exchange Agreement between
          Panglobal Brands Inc. and Mynk Corporation, dated February 15, 2007
          (attached as an exhibit to our Current Report on Form 8-K filed on February
          20, 2007).10.4
      Consulting Agreement between
          our company, Lolly Factory, LLC and Mark Cywinski dated September 16,
          2007 (attached as an exhibit to our Form 8-K filed September 27, 2006).10.5
      Lease Agreement with RFS Investments
          LLC, dated January 11, 2007 (attached as an exhibit to our Current Report
          on Form 8-K filed on February 20, 2007).10.6
      Lease Agreement with YMI Jeanswear
          (attached as an exhibit to our Annual Report on Form 10-KSB filed on
          January 15, 2008)10.7
      Lease Agreement with Jamison
          California Market Center, L.P. (attached as an exhibit to our Annual
          Report on Form 10-KSB filed on January 15, 2008)10.8
      Lease Agreement with Steven
          Goldstein (attached as an exhibit to our Annual Report on Form 10-KSB
          filed on January 15, 2008)10.9
      Lease Agreement with TR 39th
          St. Land Corp. (attached as an exhibit to our Annual Report on Form
          10- KSB filed on January 15, 2008)(31)
      Section
          302 Certifications31.1*
      Certification
          under Sarbanes-Oxley Act of 2002.31.2*
      Certification
          under Sarbanes-Oxley Act of 2002.(32)
      Section
          906 Certifications32.1*
      Certification
          under Sarbanes-Oxley Act of 2002.32.2*
      Certification
          under Sarbanes-Oxley Act of 2002.99.1
      Stock
          Option Plan*


* filed hereto

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

***Audit Fees***

The following table sets forth the fees billed to the Company
for professional services rendered by the Company's independent registered
public accounting firm, for the years ended September 30, 2008 and September 30,
2007:

Fees
    
    2008
    
    
    2007Grobstein Horwath &Company LLPAudit fees
    $
    45,000
    
    $
    114,000Audit Related Fees
    $
    -
    
    $
    -Tax fees
    $
    -
    
    $
    -All other fees
    $
    -
    
    $
    -Crowe Horwath LLPAudit fees
    $
    85,000
    
    $
    -Audit Related Fees
    $
    -
    
    $
    -Tax fees
    $
    -
    
    $
    -All other fees
    $
    -
    
    $
    -Total Fees
    $
    130,000
    
    $
    114,000


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Audit Fees. Consist of fees billed for professional
services rendered for the audits of our financial statements, reviews of our
interim consolidated financial statements included in quarterly reports,
services performed in connection with filings with the Securities and Exchange
Commission and related comfort letters and other services that are normally
provided by Crowe Horwath LLP for the fiscal year ended September 30, 2008 and
Crowe Horwath LLP and Grobstein Horwath & Company LLP for the fiscal year
ended September 30, 2007, in connection with statutory and regulatory filings or
engagements.

Tax Fees. Neither Crowe Horwath LLP nor Grobstein
Horwath & Company LLP provided us with professional services for tax
compliance, tax advice and tax planning. These services include assistance
regarding federal, state and local tax compliance and consultation in connection
with various transactions and acquisitions.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

We have not used Crowe Horwath LLP or Grobstein Horwath &
Company LLP for financial information system design and implementation. These
services, which would include designing or implementing a system that aggregates
source data underlying the financial statements or generates information that is
significant to our financial statements, are provided internally or by other
service providers. We do not engage Crowe Horwath LLP or Grobstein Horwath &
Company LLP to provide compliance outsourcing services. -

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before our independent auditors are engaged by
us to render any auditing or permitted non-audit related service, the engagement
be:

- approved by our audit committee (the functions of which are performed by
  our entire board of directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

Our entire board of directors pre-approves all services
provided by our independent auditors. All of the above services and fees were
reviewed and approved by our directors either before or after the respective
services were rendered.

Our board of directors have considered the nature and amount of
fees billed by Crowe Horwath LLP and Grobstein Horwath & Company LLP and
believe that the provision of services are compatible with maintaining Crowe
Horwath LLPs and Grobstein Horwath & Company LLPs independence.

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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.

Panglobal Brands Inc.

By:/s/ Stephen Soller Stephen Soller Chief
Executive Officer, and Director (Principal Executive Officer ) Dated:
January 13, 2009

By:/s/ Charles Lesser Charles Lesser Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer) Dated: January 13, 2009

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



By:/s/ Stephen Soller Stephen Soller Chief
Executive Officer, and Director (Principal Executive Officer ) Dated:
January 13, 2009

By:/s/ Charles Lesser Charles Lesser Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer) Dated: January 13, 2009

By: /s/Jacques
Ninio Jacques Ninio, Director Dated: January 13, 2009

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