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

                                  FORM 10KSB/A

       [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the fiscal year ended SEPTEMBER 30, 2004

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
            For the transition period from _________ to ____________

                          Commission File No. 000-33389

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

              NEVADA                                          65-1071956
              ------                                          ----------
 (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                        Identification Number)

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

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

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

          Securities registered pursuant to Section 12 (g) of the Act:
              170,000,000 common shares par value $0.001 per share

Check whether the issuer (l) has 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. X Yes [ ] No

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


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Revenues for the fiscal year ending September 30, 2004 were $58,602. The
aggregate market value of the voting stock held by non-affiliates computed by
reference to the last reported sale price of such stock as of December 28, 2004,
the date of original filing, was $32,616,080 and as of the date of the filing of
this Amendment on May 20, 2005, it was $38,191,556.

The number of shares of the issuer's Common Stock outstanding as of December 22,
2004 is 47,150,070.

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


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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Certain statements contained in this Form 10-KSB constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934 (the "Exchange Act"). These statements, identified by words such as
"plan", "anticipate," "believe," "estimate," "should," "expect" and similar
expressions, include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Management's Discussion
and Analysis or Plan of Operation" and elsewhere in this Form 10-KSB. The
Company does not intend to update the forward-looking information to reflect
actual results or changes in the factors affecting such forward-looking
information. The Company advises you to carefully review the reports and
documents it files from time to time with the Securities and Exchange Commission
("SEC"), particularly its quarterly reports on Form 10-QSB and its current
reports on Form 8-K, and the exhibits filed with or referred to in those
reports.

As used in this annual report, the terms "we", "us", "our", "MBI", "Morgan
Beaumont", and the "Company" mean Morgan Beaumont, Inc. unless otherwise
indicated. All dollar amounts in this annual report are in U.S. dollars unless
otherwise stated.

Morgan Beaumont, Inc. (the "Company") filed a definitive information Statement
on Schedule 14C with the Securities and Exchange Commission on July 6, 2004 (the
"Information Statement"). Reference is also made to the Information Statement
for a description of the business of the Company, the new Board of Directors and
management of the resulting corporation.

DESCRIPTION OF BUSINESS
-----------------------

The Company's primary products and services include: two re-loadable financial
products for the sub-prime credit market, an Interactive Voice Response ("IVR")
activation system, the Customer Relationship Management ("CRM") technology and
the Value Load Network ("SIRE"). Debit Cards, Stored Value Cards, and the
processing of transactions related thereto are the primary card products. With
the technology of Typhoon Voice Technology, subsequently acquired by the Company
on December 31, 2003, the Company has been providing these two cards to
consumers in the sub-prime credit market sector since the third quarter of 2002.

The Company generates income from the sale of the Morgan Beaumont Money Card and
the Morgan Beaumont Stored Value MasterCard. Its monthly maintenance fees are
associated with keeping the either card active and from transaction fees. Income
is also generated at the SIRE Network when consumers load cash into their card
account so the card can be used for day to day purchases. Additional revenue


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will be generated at the IVR System when consumers activate their card and/or
purchase promotional products or services such as Discount Health Benefits,
Discount Medical Benefits, Road Side Assistance and Vacation offers. The Company
is also developing "hosting" programs to businesses that wish to utilize its
technology without purchasing or licensing the technology.

DESCRIPTION OF PRODUCTS AND SERVICES
------------------------------------

PRODUCTS
--------

The Company offers a comprehensive range of its branded products and services to
the sub-prime consumer, as well as the ability to offer private labeling or
custom card programs to third party users and resellers. The two primary
financial instruments that the Company supplies to the sub-prime community are
the Morgan Beaumont Money Card and the Morgan Beaumont Stored Value MasterCard.
The main difference between the two cards is that the Morgan Beaumont Money Card
is a non-personalized ATM/ Debit card which does not have the consumer name on
it and is a PIN based transaction. The Morgan Beaumont Stored Value Card will
have the consumer name embossed on the card, will include a Visa or MasterCard
hologram on the front of the card, and the transaction can be either be
signature based (in the same way a credit card is used) or it can be PIN based.
The Company has provided both these products to third party companies for
co-branding with their company name and logo or to marketing these products
under the Morgan Beaumont brand name. Either of the Products can be issued and
processed from several different banks or processors and the features or dollar
limits may be vary for each. The common thread is that the cards will fall into
the non-personalized PIN based transaction ATM/ Debit card or a personalized,
hologram, signature based transaction Stored Value card. The consumer fees and
usage of either product will have similar effects on the Company's revenue
stream and usage is primarily a consumer choice.

THE MORGAN BEAUMONT MONEY CARD (THE "MONEY" CARD) IS AN ATM AND DEBIT CARD. The
Morgan Beaumont Money Card is a true ATM/Debit card that allows the
user/consumer to withdraw cash at over 750,000 ATM's or make purchases at more
than 5,500,000 merchants worldwide. Morgan Beaumont refers to these merchants as
Points of Sales ("POPS"). The Morgan Beaumont Money Card can be used at
literally any location on the Cirrus or Maestro ATM network: restaurants, gas
stations, car rentals, etc. Key Features include:

         o        the cards are PIN activated and balances/transactions can be
                  checked at any ATM on the Cirrus and Maestro network, as well
                  as via the Internet or by a toll free phone call;
         o        the cards are anonymous; they do not require a name to be
                  embossed on the card;
         o        the cards are available in a one or two card set;
         o        the cards can be used for money transfers or to withdraw cash
                  via ATM network; a debit card at retail locations worldwide or
                  as a payroll card;


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         o        the cards can be loaded with money from anywhere in the world
                  via the Internet or by Cashier's Check or Money Orders via
                  mail. Management of the Company anticipates that the Morgan
                  Beaumont Money card retail load locations will be available
                  throughout the United States in 2004; and
         o        the transaction accounts are registered and FDIC insured.

Many in the sub prime market have a need to transfer money from the United
States to their homes and families in Mexico, Asia and South America. Funds may
be transferred from one card to another with just a phone call and a small
transaction fee. Billions of dollars are being sent out of the country every
year, typically at a high cost to the person sending the money. Transfers via
Western Union can cost upwards of $59. With the Morgan Beaumont Money Card, this
transfer may be executed from one card to another for $2 or less. The Company
has targeted several key markets for distribution of the Money Card, such as
convenient stores, check cashing stores and payroll services. With the Company's
ability to penetrate the sub-prime Market which mainstream commerce has
historically overlooked, it anticipates processing millions of transactions
monthly.

Management of the Company believes that the Morgan Beaumont Money Card has the
potential of being adapted as a standard with employers and Payroll Services,
both domestically and internationally, due to the "ease of use" and the cost
savings. Employees can enjoy the world-wide acceptance of the card and the
elimination of the cost of check cashing services.

THE MORGAN BEAUMONT STORED VALUE CARD (THE "STORED VALUE" CARD) IS A "PAY AS YOU
GO" CARD. The Morgan Beaumont Stored Value MasterCard and Visa is a "pay as you
go" card that can be used anywhere MasterCard is displayed worldwide. The
cardholder determines the spending limits by the amount loaded on the card. This
product is being widely accepted in the sub-prime market by those unable to
receive an unsecured MasterCard or Visa Card. The Company is currently
negotiating various large sales and distribution opportunities to supply Morgan
Beaumont branded product as well as private labeled or co-branded product to
companies that sell to the sub prime market place. The Key Features are:

         o        the card includes either a VISA or MasterCard hologram on the
                  front of the card and can be used worldwide anywhere Master
                  Card and Visa are accepted;
         o        the card is not anonymous. The holders name is embossed on the
                  card and is widely recognized as an instrument of payment for
                  goods and services;
         o        the card is primarily a charge card, but can be used as an ATM
                  card, charge card or debit card (i.e. either pin based or
                  signature based);
         o        the card can be used as a payroll card; and
         o        the card is PIN activated and balances can be checked at any
                  ATM, by a toll free phone call or via the Internet.

The Company currently is one of the few companies that can provide a Stored
Value Master Card and Stored Value Visa in volume and has the experience of
being in the sub-prime card solution business for several years.


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SERVICES
--------

MORGAN BEAUMONT, INTERACTIVE VOICE RESPONSE ("IVR") FARM AND SOFTWARE SOLUTIONS.
The Company acquired Typhoon Technologies, Inc. ("Typhoon") in December 2003 and
merged it into the Company. Typhoon had proprietary technology that is currently
an integral part of the Company's development and operation of an IVR "farm" for
the service of its customers, as well as competitive companies. The Company
currently hosts IVR programs for competitor's card programs; however, this
technology has broad appeal in all sectors of business and is not limited to
financial services.

The IVR Activation System is the most common method of providing first level
customer service for products which the consumer calls to receive information
regarding card balance, recent activity and other commonly asked questions. To
insure a greater level of availability for callers to access the system,
multiple IVR servers with calls distributed among those servers ("IVR Farm") are
used. The IVR Farm is the use of the Company's IVR equipment and technology to
host IVR activities, programs and support by other customers and charge fees.

The Company has entered a contract with a Private Barter network, linking more
than 180 barter exchanges with over 50,000 merchants and members to conduct
transactions on its private network via the IVR or the Internet.

SOFTWARE SOLUTIONS. The Company is currently in development of custom and
proprietary database software and POS software. The Company anticipates that its
software and technology solutions not only offer support solutions for its
customers and program, but will also allow it to license and/or sell the
technology to a broad spectrum of companies at a significant profit.

CUSTOMER RELATIONSHIP MANAGEMENT ("CRM") TECHNOLOGY. The purpose of Customer
Relationship Management ("CRM") is to enable the Company to better serve its
customers through the introduction of reliable processes and procedures for
interacting with those customers. A successful CRM strategy is usually
implemented through a software package designed to support these processes.

Major areas of CRM focus on service automated processes, personal information
gathering and processing and self-service. The CRM attempts to integrate and
automate the various customer serving processes within the Company.

It typically involves three general areas of business. They are a customer
service system, a marketing information system and a sales force management
system. The marketing information part provides information about the business
environment, including competitors, industry trends, and macroenviromental
variables. The sales force management part automates some of the Company's sales
and sales force management functions. It keeps track of customer preferences,
buying habits, and demographics, and also sales staff performance. The customer
service part automates some service requests, complaints, product returns and
information requests.

Integrated CRM software is often also known as "front office solutions." This is
because they deal directly with the customer. Many call centers use CRM
technology to store all of their customer's details on. When a customer calls,
the system can be used to retrieve and store information relevant to the
customer. By serving the customer quickly, efficiently and also keeping all
information on a customer in one place, the Company aims to make cost savings,
and also encourage new customers.


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CRM technology can also be used to allow customers to perform their own service
via a variety of communication channels. For example, a customer might be able
to check his or her bank balance via a telephone without ever having to talk to
a person, saving money for the Company and saving the customer time. The
Company's CRM technology logs all customer events and activities to a database
and the CRM application uses this data to present mission critical data views
including credit summaries and status reports. Additionally this data drives
responsive automatic functionality, such as credit management and other
applications.

The CRM technology is characterized by the following functionality:

         o        SCALABILITY - the ability to be used on a large scale, and to
                  be reliably expanded to what ever scale is necessary.
         o        MULTIPLE COMMUNICATION CHANNELS - the ability to interface
                  with users via many different devices (phone, WAP, internet,
                  etc)
         o        WORKFLOW - the ability to automatically route work through the
                  system to different people based on a set of rules.
         o        DATABASE - the centralized storage (in a data warehouse) of
                  all information relevant to customer interaction
         o        CUSTOMER PRIVACY CONSIDERATIONS - e.g. data encryption and the
                  destruction of records to ensure that they are not stolen or
                  abused.

Competitive pricing and an extremely high-level of Integration compliance,
throughout the SFML platform and with other platforms, allows the Company's
Customer Relationship Management System to deliver real value. Customer service
representatives are empowered by clear views of the customer's account history
and preference indicators, increasing customer service levels and success in the
market. The key features are:

         o        EVENT MANAGEMENT - Define types, create, edit and suspend
                  events and manage event types.
         o        FULL AUDIT TRAIL - Complete data management, including
                  multiple views and view configuration.
         o        IMPORT/EXPORT CSV/XML - Ability to import/export customer
                  lists, orders, pricelists etc.
         o        SEARCH AND DISPLAY RESULTS- Configure internal search engine,
                  define views and advanced search.
         o        REQUEST TRACKING - Customers can post requests online,
                  wireless or through the telephone.
         o        CONTRACT MANAGEMENT - Create relationship accounts and
                  profiles.
         o        CUSTOMER ACCOUNT HISTORY - View a customers account history.
         o        AUTO POST EVENTS - configure system to automatically post
                  critical tasks or events for reminders or later viewing.


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VALUE LOAD ("SIRE") NETWORK. The Company's national platform of cash loading and
payment locations has been branded as the SIRE Network. The SIRE Network
provides a brand name, look and feel for our proprietary technology platform and
network of retail load locations. This will increase the Company's visibility
and name recognition for cardholders and merchants when they seek out our
secure, convenient, national cash loading and payment network. Now consumers
will see the SIRE Network logo displayed prominently at merchants in our
network, as well as in other marketing collateral they may receive. In addition,
the Company will certify merchants and distributors with a formal training
curriculum, to ensure that they have the support, tools and knowledge they need
to be successful as members of the Network."

It is the Company's goal to establish the SIRE Network as the de facto standard
Debit/ATM platform and payment network in the nation. The Company believes this
can be achieved because its network is open technology that allows multiple card
issuers, once certified, to load cards onto a national platform and ultimately
as a national payment platform for goods and services. The Company is
establishing certification standards so that competing card programs can
participate with the Company on its network. So far, interest in certification
has been high because the industry desires a national, inter-operable platform
that supports repeated card usage and localized services to consumers."

As part of the branding initiative, the Company's network of Point of Presence
("POP") locations, targeted to reach at least 100,000 locations by year-end
2005, will receive marketing materials highlighting the SIRE brand.
Distributors, agents, and independent sales organizations will receive complete
training and marketing collateral about the SIRE Network, its benefits to
merchants, and its ease of use.

Also, the Company will issue formal certification to all merchant and
distributor members of the SIRE Network, pending completion of a training
curriculum. Certification will include different levels, depending on
merchant/distributor size, volume, and marketing commitment. More benefits will
accrue to higher levels of certification.

MATERIALITY OF PRODUCTS AND SERVICES

The relative materiality of the Company's products and services beginning with
the most important is as follows:

         1.       CARD PRODUCTS. With the value load network in place, it is
                  important for consumers to have the Money Card and Stored
                  Value Card in their hands so the recurring revenue from the
                  consumer fees is realized. The revenue stream is purely a
                  function of how many cards are in use and the consumer's
                  willingness to use the card. The Company derived approximately
                  9% of its gross revenue from this activity in the nine months
                  ended September 30, 2004. However, approximately 73% of the
                  Company's gross revenue was generated from this activity in
                  the quarter ended December 31, 2004. The Company anticipates
                  that the card products will generate the bulk of its revenue
                  in first quarter of 2005.


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         2.       CUSTOMER SERVICE PLATFORM. The IVR and CRM system has the
                  ability to generate revenue as a standalone product, but since
                  the Company also has the ability to utilize an outsourced
                  service for these functions, the product line cannot be
                  considered crucial to the company's growth. The Company
                  received approximately 91% of its revenue in the nine months
                  ended September 30, 2004 from this activity and approximately
                  16% in the quarter ended December 31, 2004.

         3.       VALUE LOAD ("SIRE") NETWORK. The ability to provide value load
                  services to consumers is the building block upon which all
                  other service will be launched. By developing a national
                  footprint of these value load service centers, consumers are
                  able to quickly and cost effectively get cash in to card
                  account so the card can be used for day to day purchases. The
                  Company received no revenues from this activity in the nine
                  months ended September 30, 2004 and approximately 11% of its
                  gross revenue in the quarter ended December 31, 2004.

         4.       PREPAID PHONE CARD FUNCTION. An idea of the Company in
                  development is to add a prepaid phone card feature to its
                  Money Card which would allow the card to be multi-functional
                  functioning as a phone card as well.

         5.       DISCOUNT HEALTH AND PRESCRIPTION BENEFITS FUNCTION. Another
                  idea of the Company in development is to add a discount health
                  and prescription benefits function to its Money Card and Store
                  Value Cards which would allow the cards to be used to pay
                  those benefits.

The materiality of the Company's products and services is difficult to
prioritize or project since the products and services of the Company such as the
prepaid phone card function could generate the bulk of the Company's revenue if
the Company completes the acquisition of its own switches.

MECHANICS OF PRODUCTS AND SERVICES

The Morgan Beaumont Money and Stored Value Card are printed at a facility that
has been authorized by the card association which the card is issued under such
as MasterCard or Visa. The printing of the cards can only take place once the
card program has received approval from: (1) the card association (the "Card
Association"), (2) issuing bank (the "Issuing Bank") and (3) issuing processor
(the "Issuing Processor").

The cards are provided to consumers using one of two methods. The specific
method will depend on the type of card the consumer obtains. The two methods
utilized to provide the cards to consumers are as follows:

         1.       PERSONAL SPEND CARD - This card product is one the consumer
                  will purchase over the counter at a retail merchant such as a
                  convenience store, grocery store or similar merchant. This
                  type of card product is readily available and will be packaged
                  in a manner that allows the product to be displayed to the
                  consumer so they are able to clearly understand the basic
                  features and benefits of the card product prior to purchase.

         2.       PAYROLL CARD - This card product is typically not purchased by
                  the consumer, but is provided by an employer as a means for
                  the employer to directly deposit a consumer's paycheck for
                  them, rather than writing a paycheck. The packaging of this
                  card product will be less informative, but it will contain
                  documents clearly outlining the usage of the card as a payroll
                  device.


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There are fees the consumer will pay for use of these card products. The fees
for the Payroll Card may be lower for certain types of activities than for a
Personal Spend Card. In all cases, the Issuing Processor will be responsible for
debiting the cardholder account for the correct fees. These fees will be
distributed to the Company and other entities to pay for the services rendered
for those fees.

All record keeping for this activity is kept at the Issuing Processor's data
center and is sent to the Company's data center for monthly reconciliation.

The functions for loading value to the card, including banking functions, money
movement, and other details are described below:

COMSUMER VALUE LOAD PROCESS
---------------------------
Consumer to Merchant Transaction:

1. PRESENTATION. Consumer presents card to merchant, merchant swipes card
through magnetic reader and is presented with a menu.

2. LOADING. Merchant selects "load" option, and indicates the load amount. POS
sends information to Data Center to verify the POS device is authorized for use.

3. VERIFICATION AND AUTHORIZATION. Data Center checks POS device ID to verify
that the device is valid.

If the above POS device login is authorized, the Data Center does propriety
functions to verify the card is valid: (i) card active Y/N, (ii) Load velocity
check within program parameters Y/N and (iii) Load amount within min/max
parameters for program Y/N.

4. APPROVAL. If the POS device receives an "accept" message, the merchant
accepts the cash from the consumer and is presented with another menu choice. If
the device receives a "decline" message, the merchant is given some kind of
detail on why the transaction was declined.

If the error message was POS device or merchant specific, the message will
indicate the consumer should attempt to locate another load location or return
later. If the error message due to a velocity issue on the card account, or
other Processor related issue, the message indicates the consumer should call
the Processor Customer Service Group. If the error message was of a technical
nature, the message indicates the merchant should attempt the load again, or
should contact the technical support group at the number they have been
instructed to use.

5. LOAD AMOUNT VERIFICATION. The menu presented asks the merchant to verify the
cash load amount by viewing the dollar amount shown on the POS device, and
pressing a key to ACCEPT or RE-ENTER.


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6. TRANSMISSION. If the merchant chooses RE-ENTER, they are asked to re-key the
dollar amount of the load, then verify as indicated above. If the merchant
chooses ACCEPT, the data is sent to the Data Center.

7. RECEIPT. The merchant prints a receipt for the consumer with load value, load
location address and name, and time and date stamp of the transaction.

The consumer is responsible for reviewing the load receipt to verify accuracy of
the load value prior to leaving the merchant location. The merchant assumes
responsibility for accuracy of the load value entered by their employees. If the
consumer has a dispute at the time of load, the merchant will use the standard
procedure for balancing their cash drawer against possible inaccurate entries.
If the consumer has a dispute after the fact, (checking balance hours or days
later, reviewing the receipt after leaving the store, etc.), the consumer and
merchant are responsible for resolving the disputed transaction.

8. TRANSACTION REGISTRATION. The merchant rings the cash value of the load into
their cash drawer.

9. DEPOSIT. The merchant deposits the receipts from the daily loads.

VALUE LOAD SETTLEMENT/RECONCILATION
-----------------------------------

The following deals only with the data and cash flow for the remittance process,
with other detail in the load function addressed in other documents:

1. VERIFICATION AND AUTHORIZATION. Once a load transaction has been approved at
the POS device by the Data Center and the card load has been authorized, the
merchant will accept the cash from the consumer and place that cash into their
cash drawer.

3. APPROVAL. Once the consumer accepts the accuracy of the receipt, the
transaction is finalized.

         (a) ISSUING PROCESSOR. The POS device transmits the load detail to the
Data Center.

         (b) REMITTANCE PROCESSOR. The POS device transmits the load detail to
the processor using Morgan Beaumont proprietary process.

3. APPROVAL. Either the Issuing Processor accepts the load data and passes this
information to Morgan Beaumont or Morgan Beaumont uses proprietary process
using logic to route the transaction information to the correct Processors based
on the POS device Terminal ID.

4. TRANSFER. At the pre-determined time, the Processor electronically moves the
funds defined in the daily POS activity reports from the Morgan Beaumont
Settlement Account to the Processor Settlement Account so that the card accounts
can be charged with the value indicated. The Processor uses the data sent by the
POS device to electronically move the funds from the merchant account to the
Morgan Beaumont Settlement Account.


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STAGE IN DEVELOPMENT

With the technology of Typhoon Voice Technology, subsequently acquired by the
Company on December 31, 2003, the Company has been providing the Morgan Beaumont
Money Card and Stored Value Card to consumers in the sub-prime credit market
sector since the third quarter of 2002.

The Company is currently in the process of the development and the deployment of
the services required for customers to load cards and access the basic customer
questions such as card balance and recent transactions using either a telephone
or a computer connected to the Internet. The reporting functions for our sales
and distribution partners to view the real time sales and service activity is in
the alpha testing with general availability expected in the fiscal third quarter
of 2005.

The Company is currently in negotiation with several companies for large private
labeled co-brand opportunities for the Morgan Beaumont Money Card, the Morgan
Beaumont Stored Value VISA Card, and the Morgan Beaumont Stored Value
MasterCard. The representatives and agents for these companies and opportunities
have come to the Company for the development and support of these projects due
to the its strategic relationships with Banks and Processors, its in-house and
outsourced bi-lingual customer service and its ability to track transactions,
card activity, and inventory for the payment of commission. These companies or
representatives are also seeking the Company's "turn-key" retail solutions,
which enable consumers to "load" money onto the Morgan Beaumont Money Card and
the Morgan Beaumont Stored Value MasterCard at retail locations nation-wide.

The Company is currently in development of a licensing program for its retail
"loading" software for banks and competitive card programs.

The Company is in the process of "rolling out" a comprehensive program to
retailers in the United States, allowing a retail location to become a local
"loading" or "deposit point" for placing cash on the Morgan Beaumont Money Card,
Morgan Beaumont Stored Value MasterCard, Morgan Beaumont Stored Value Visa and
approved Morgan Beaumont co-branded programs. The Company will be expanding this
feature to include a fee structure for its competitor's cards for cash loads at
the Company's retail locations, as well as a re-loadable pre-paid phone cards.

FINANCIAL TERMS OF PRODUCTS AND SERVICES

The process of getting the Company's products into the hands of consumers
involves contractual relationships at several levels: (1) the Bank that issues
and owns the card, (2) the processor responsible for accepting transaction
information and keeping the card account up to date, and (3) the Company's
distribution partners. Each of these relationships plays a different role.

         A)       CARD ASSOCIATIONS: MASTERCARD/ VISA. The Company obtains its
                  access to the network of financial institutions and linked
                  ATM's and point of sale systems through an arrangement among
                  banks and MasterCard and Visa, as third party providers. The


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                  MasterCard and Visa relationship allow the Company to come
                  with a package of other networks such as Star(TM) and Plus(TM)
                  and Cirrus(TM) and similar networks. If the Company loses its
                  third party provider licenses with both MasterCard and Visa,
                  it would be forced to separately negotiate access to each of
                  the individual networks separately. Any down time associated
                  with the loss of access in the networks could render the
                  Company system's and cards useless. Even if the Company was
                  then able to negotiate third party processor agreements with
                  the individual networks, it might not be able to do so in time
                  to preserve its business name and customer relationships.
                  Thus, the loss of third party processor relationships with
                  both Visa and MasterCard could put the Company out of
                  business. Examples of other card associations the Company has
                  arrangements with are Transcend, Wildcard and Card One.

         B)       BANKS. The Bank is the entity with the direct relationship to
                  the card Association (MasterCard or Visa), and is responsible
                  for sponsoring the Company in a TPP (Third Party Processor),
                  or ISO (Independent Sales Organization), relationship to the
                  card Association. Without a TPP or ISO relationship with the
                  card Association, the Company would not be able to produce the
                  card products for sale to consumers. The terms of these
                  contracts will articulate the Company's responsibility to
                  supply adequate customer service to answer consumer questions,
                  and will define the card account parameters, i.e. the maximum
                  amount the consumer can have on the card, and daily usage
                  parameters for ATM withdrawals, etc. The bank has a schedule
                  of fees for services provided to the card holder. The Company
                  is charged these fees, and passes them on to the consumer each
                  time a transaction that incurs a fee takes place. The Company
                  currently has arrangements with 5 various banks, but this is
                  subject to change.

         C)       PROCESSORS. Banks require an approved processor have a
                  relationship with the TPP or ISO so that all of the consumer
                  transactions are tracked and debits/credits to the consumer
                  card accounts are properly adjusted. The terms of these
                  contracts will articulate how the Company will work with the
                  processor to address fraudulent use of the cards, how any
                  potential shortfall is addressed for a legitimate consumer
                  load, and the availability of customer service information.
                  Fraud risk is minimized in the US due to lower floor limits,
                  (the ability of a store to process a transaction without a
                  'real time' verification of the card balance), and the fact
                  that these cards are intended to be used in the US. With the
                  checks and velocity use parameters in place, the Company has
                  not experienced significant fraudulent use of cards to date.
                  The processor has a schedule of fees for services provided to
                  the card holder. The Company is charged these fees, and passes
                  them on to the consumer each time a transaction that incurs a
                  fee takes place. The Company currently has arrangements with 4
                  or 5 various processors, but this is subject to change.

         D)       DISTRIBUTION PARTNERS. The relationship to the entities
                  responsible for selling the card products to the retail store
                  is a standard wholesale sales model. The Company sells the
                  cards to the distributor at a wholesale price; the distributor
                  then adds their margin and sells the card to the retail store.
                  The retail store typically adds a margin, and sells the card
                  to the consumer. Each entity in this chain is free to
                  establish their own margins; the Company simply offers
                  suggestions regarding market trends.


                                       13


<PAGE>

         E)       AFFILIATIONS INVOLVED OR PARTICIPATING IN THE SIRE NETWORK.
                  Morgan Beaumont currently has an agreement in place is In
                  Person Payment ("IPP") that allows IPP to load cards that can
                  be loaded on the SIRE network. The Company also has an
                  agreement with IPrePay which is in the process of implementing
                  the ability to load cards that can be loaded on the SIRE
                  network through many of its 160,000 locations. Morgan Beaumont
                  is also currently negotiating with several other money
                  transmitters to allow them to load SIRE network loadable
                  cards.

         F)       OUTSOURCE/DESIGN/ PACKAGING SERVICES. Morgan Beaumont designs
                  the majority of its products internally with the help of
                  outside vendors experienced in the industry. These vendors
                  also provide production and packaging services for the
                  company. By using both internal and external sources for this
                  activity, Morgan Beaumont uses this redundancy to reduce
                  dependence on individual sources for its product's design and
                  manufacture.

FEE ALLOCATION. Because the banks and processors charge the consumer fees for
certain transactions, the Company is obligated to pass these fees through to the
consumer. In some cases, this is a direct pass through with no added margin. In
other cases, the standard fees charged to the consumer allow a small margin to
be added prior to passing along to the consumer. The risks associated with these
certain transactions are dependent of the type of program between the bank, the
processors and the Company; some programs expose the Company to risk. Controls
are placed on by each to manage and minimize the risk to each party. Below is a
table of average fees paid by the consumer, but each bank and processor will set
their own fee structure, so the table may vary to some degree for each bank.

               -------------------------------------------------------------
               CARDHOLDER FEE SCHEDULE PAYROLL                FEE'S
               -------------------------------
               -------------------------------------------------------------
               MONTHLY MAINTENANCE                            $4.95
               ATM DOMESTIC                                   $1.75
               ATM INTERNATIONAL                              $5.00
               ATM DECLINE/INQUIRY                            $1.00
               POS DOMESTIC                                   $0.75
               POS DOMESTIC DECLINE                           $0.75
               POS INTERNATIONAL                              $0.80
               POS INTERNATIONAL DECLINE                      $0.80
               BALANCE INQUIRY ONLINE                         FREE
               LIVE CALL WITH CSR                             $1/MINUTE
               LOST OR STOLEN CARD                            $20.00
               CARD LIQUIDATION                               $10.00
               RESEARCH REQUESTS                              UP TO $25/HR
               DORMANCY FEE                                   $7.50
               RETAIL LOAD                                    $4.95
               ACH CREDIT/DEBIT                               $1.25
               TRANSFER FROM                                  $1.00
               TRANSFER TO                                    $1.00


                                       14


<PAGE>

The above table is representative of a typical fee arrangement of the Company.
There is no standard arrangement; the fees vary from program and arrangements
the Company has with its third party processors.

ALLOCATION OF RISKS. Risks to the Company are limited. For some programs and
arrangements of the Company, the risks are limited to the associated bank. For
other programs and arrangements, the Company may be exposed to the risks
associated with the card products as more fully described below. In each program
and arrangement, controls are placed at each level of the transaction to
minimize the risk to each individual party. Each program and arrangement has a
different method of managing risk to each individual party.

FRAUD. The Company has experienced very little fraud. On debit cards, it is a
cash-on-cash transaction. The debit card requires possession of the card and the
actual personal identification number. Unless the bank processor makes a
mistake, there is very little known risk with the debit cards at the time. In
the event of a processor error, risk is on the processor. On a hologram card,
the risk of fraud is primarily on the Company where the possibility of people
purchasing the card products with intent to defraud.

If a bank fails to pay or do proper paperwork with the processor, MasterCard or
Visa could turn off bank and all cards issued, even if the cards have credit
balances loaded onto them.

MATERIAL RELATIONSHIPS

The Company's business plan requires interaction with a number of strategic
partners to fully implement. These will primarily be banking and financial
relationships to issue our card products, and distribution relationships to
place our products into stores for sale to consumers.

Card Associations
-----------------

         All of the cards the Company produces which have a hologram logo on the
         front will require approval from the Card Association holding the trade
         mark for the hologram logo. The Company currently has approved
         products, and the requisite relationships with Visa and MasterCard. The
         Company is in the final stages of an agreement with Discover that will
         allow the Company to produce a Discover card. The Company pays an
         annual fee to the Card Association to maintain the program approvals.

Issuing Bank
------------

         Once an approval from a Card Association is obtained, the Company will
         require a relationship with an issuing bank. The banking relationship
         is structured in a manner that the Bank owns the card product produced
         by the Company, and also is the depository of the funds the consumer
         deposits to their individual card account for use in making purchases.


                                       15


<PAGE>

         The Company currently has this type of banking relationship with First
         Federal Bank of Ralls, Texas and Merrick Bank in Salt Lake City, Utah.
         The bank charges the issuing processor a fee for certain transactions
         the consumer conducts, which is collected at the time of the
         transaction by the processor and distributed to the bank. The bank also
         charges the Company a monthly fee to keep the card account active. This
         fee is collected by the issuing processor who distributes those funds
         to the bank and to the Company.

Issuing Processor
-----------------

         The issuing processor has necessary regulatory and banking approvals to
         conduct transactions from point of sale terminals and banks to apply
         credits and debits to the consumer cards. The Company has direct
         relationships with the processor to facilitate the consumer
         reconciliation of purchase and value loads to their card. WildCard
         Systems and National Card Services would be examples of our current
         relationships. The Company pays a fee to the processor for the initial
         set up of the card program and the processor charges a fee to the
         consumer for certain transactions performed by the consumer. These fees
         are collected by the processor and distributed to the appropriate
         party.

Distribution Partners
---------------------

         To place the Company's card products into the retail establishments
         that will sell them to the consumer, the Company formed strategic
         relationships with a variety of distribution partners that are
         currently selling a product or service to the stores the Company wishes
         to do business with. The Company's current strategy is to use pre-paid
         phone card distributors and agents that wish to add additional products
         to their line. Radiant Communications and iPrePay are examples of these
         companies. The financial arrangement between the Company and the
         distributor is a fairly typical wholesale situation. The distributor
         purchases the cards from the Company at a wholesale price and then
         sells the card products to the store with a margin added. There are
         some fees collected form the consumer, (the monthly maintenance is the
         most common) that the Company will pay the distributor a commission
         for. This is to encourage the distributor to continue providing service
         to the store so the consumer is satisfied with the features of the card
         product.

LICENSING REQUIREMENTS. The Company has obtained a National Association of
Securities Dealer ("NASD") Federal Money Services Business License ("MSB"),
which some states require. Additionally, due to the nature of the business the
Company conducts, some states may require the company to obtain some type of
Money Services Business License to sell or service the card products in that
particular state. There is currently no clearly defined policy at a Federal or
State level defining which segment of the business would require that type of
licensing and which states will participate in requiring the license. The
Company has engaged a law firm familiar with the current and emerging regulatory
climate to provide guidance in obtaining all necessary licenses. Due to the
changing regulatory situation, it is possible that a state we are doing business
in that does not require a license, may change its opinion to say we do require


                                       16


<PAGE>

a license. The Company has no ability to predict if that will happen, or what
the period of time to obtain a license may be if it should occur. However, the
Company has taken a proactive approach to this by regularly contacting the State
agency in charge of those matters, and requesting updates on their policies. The
Company anticipates this will provide adequate time to obtain any license that
may be required.

The Company initially believed that its present and intended operations were not
governed by specific state regulations and license requirements since the
Company was never handling money itself, only providing a card and an electronic
communications system for others to utilize. This was the Company's belief at
the time it first filed this 10-KSB. Thereafter, the Company engaged a law firm
in Nebraska which purported to be the national authority on debit card
regulation. That firm advised the Company that it would need to file
applications with State regulators in over 40 states. The Company learned this
just prior to filing its S-2 registration statement and therefore included three
risk factors related to this topic. Shortly thereafter, the Company began
getting inconsistent and contradictory advice from its outside counsel. When the
Company began inquiring about the inconsistencies, the law firm abruptly
resigned.

The Company then conducted a search for counsel experienced in state banking and
debit card regulations and ultimately chose and retained the national law firm
of Pillsbury, Winthrop et. Al. The initial advice from new counsel has been
substantially different than that of the prior firm and the Company no longer
anticipates immediately seeking licenses in states that regulate debit cards.
The firm is presently researching applicable state laws and regulations in
preparation of the issuance of an opinion as to what states, if any, will
require the Company to obtain a license.

ACQUISITIONS
------------

In December 2003, the Company acquired Typhoon (as defined above) for less than
$200,000 and merged it into the Company. The Company acquired Typhoon for its
IVR technology which the Company has incorporated into its business, as
described in Item 1 of this report. The Company also acquired the employment of
Erik Jensen, formerly the President of Typhoon. The Company issued stock as the
purchase price for the acquisition of Typhoon.

HISTORY OF BUSINESS OPERATIONS OF THE COMPANY
---------------------------------------------

Pan American Energy Corp. ("Pan American" or "PAEC") was incorporated under the
laws of Nevada on May 26, 2000 and planned principal operations of the Company
commenced in 2000. Pan American was an exploration stage company engaged in the
acquisition, exploration and development of mineral properties. Pan American's
business plan was to carry out exploration work on a mineral claim referred to
as the Flint mineral claim in order to ascertain whether it possessed
commercially developable quantities of gold, silver, lead or zinc.

Morgan Beaumont, Inc., a Florida corporation ("Morgan Beaumont"), was formed on
July 10, 2000, as a sales and marketing company providing debit card products to
the sub-prime consumer. Morgan Beaumont developed a strategy that launched a
successful sales campaign, and shipped the first cards to consumers in late
2001. Morgan Beaumont had a relationship with only one Bank and one processor at
that time. The Bank discontinued support of the debit card products in mid 2003
which prevented the company from engaging in any sales activities. Morgan


                                       17


<PAGE>

Beaumont began to cultivate multiple Banking and processing relationships, as
well as undertake the development of value loading technology to bolster the
company's ability to produce debit card products, and provide the services for
these products the consumer was requesting. Sales of debit card products resumed
in late 2004, and have continued into 2005.

On May 10, 2004, Pan American entered into a merger agreement pursuant to the
Agreement with former Morgan Beaumont, which became effective with the State of
Nevada as of August 6, 2004 (the "Merger"), however, since Pan American had not
satisfied all of the conditions precedent under the Merger Agreement, the Merger
was not completed until August 2004. Morgan Beaumont merged with and into Pan
American, the separate existence of Morgan Beaumont ceased and Pan American
continued as the Surviving Corporation under the name Morgan Beaumont, Inc., a
Nevada corporation. The business of the Company changed from oil and gas
exploration development to the business of Morgan Beaumont, as described in this
Report.

INDUSTRY OVERVIEW
-----------------

The acceptance of credit and debit cards by consumers in the United States has
steadily increased over the past ten years. According to the Nilson Report, the
use of credit-based card systems in the United States grew from $0.5 trillion in
1992 to $1.9 trillion in 2002. In order to remain competitive, small and larger
businesses have embraced credit and debit cards as a necessity to their future
success. Consumer expenditures using card-based payment methods are expected to
grow to $4.6 trillion by 2012, or 50% of all U.S. payments, representing a
compound annual growth rate of 9% from 2002 levels, according to the Nilson
Report.

ACCEPTANCE BY SMALL BUSINESS. Small businesses are a vital component of the U.S.
economy and are expected to contribute to the increased use of card-based
payment methods. In 1997, the U.S. Census Bureau estimated that approximately 20
million businesses, which average less than $1.0 million in annual sales in the
United States or which had no payroll, generated an aggregate of $1.7 trillion
in annual sales. Management of the Company believes that the lower costs
associated with card-based payment methods are making these services more
affordable to a larger segment of the small business market. In addition, the
Company believes these businesses are experiencing increased pressure to accept
card-based payment methods in order to remain competitive and to meet consumer
expectations. As a result, many of these small businesses are seeking to provide
customers with the ability to pay for merchandise and services using credit or
debit cards, including those in industries that have historically accepted cash
and checks as the only forms of payment for their merchandise and services.

SUB-PRIME CREDIT CONSUMERS. According to CARDWEB.com, trade publications and the
United States payment Card Information Network, "there are perhaps as many as 60
million un-banked consumers in the United States. Analysts estimate this group
of un-banked consumers spends over $15 billion annually in check cashing and
other financial services." These individuals may be unable to avail themselves
of traditional credit and banking channels or to obtain a debit or credit card
for a number of reasons such as, recent immigration to the US, bad credit
history, lack of credit history due to divorce or age (i.e. students) or recent
emergence from bankruptcy etc. Prepaid debit and cash cards are attractive
alternatives to these individuals.


                                       18


<PAGE>

SERVICES OFFERED TO SMALL BUSINESS AND SUB-PRIME CREDIT CONSUMERS. Small
businesses and sub-prime credit consumers have traditionally been under-served
or ignored by traditional financial institutions. When services have been
available to this market segment, it has been made available at a premium price
given the perceived heightened risk potential for liability for fraud,
charge-backs and other losses. Stored value cash cards and money cards
substantially reduce that risk and allow for more competitive terms to be
offered to small businesses and sub-prime credit consumers alike.

BUSINESS STRATEGY
-----------------

The Company's goal is to become a market leader in the provision of card-based
products and services to small businesses and sub-prime credit customers by:

         o        EXPANDING IN EXISTING SMALL BUSINESS MERCHANT MARKET. The
                  Company believes it can expand its business by focusing on the
                  small merchant market. The Company intends to focus its
                  efforts towards merchants who are considered small businesses
                  and who belong to certain key ethnic groups and which have not
                  historically accepted electronic payment methods.

         o        FOCUSING ON SUB-PRIME CREDIT CUSTOMERS LOCATED IN CERTAIN
                  REGIONS. The Company intends to direct its advertising and
                  sales efforts towards certain regions and ethnic groups it
                  believes have been under-served by traditional financial
                  institutions. The Company believes by focusing first on these
                  groups it will rapidly build a base of loyal customers.

SALES AND MARKETING
-------------------

The Company primarily markets its products to consumers that for a variety of
reasons do not have a traditional banking relationship. The reasons are
primarily, but not exclusively, due to a credit score banks are uncomfortable
with.

To conduct the necessary transactions for bill payments, these consumers rely on
alternative financial products, such as money orders, to pay their bills. The
Company has established marketing tools and information it provides to the
various retail merchants that sell money orders and similar products to provide
information to consumers about the use of Money/Stored Value cards. The consumer
can then make an informed decision about the alternatives to using money orders
for some of their transactions. The demographic of the average customer for the
Money/Stored Value card products offered by the Company will not be defined by
age or the geographic region they reside, but will most frequently be targeted
on individuals with a lower income and credit challenged.

The Company uses a distribution methodology to get its products into the retail
locations where they can be purchased by consumers. This requires the Company to
identify companies selling other products or services into the types of retail
establishments commonly used by its target consumer. iPrePay and eCHEX/Acosta
are examples of these companies. The Company's contracts with iPrePay calls for


                                       19


<PAGE>

the roll out of 10,000 locations, and its contract with Acosta calls for the
roll out of 450 locations in the first wave of deployment. These locations may
be convenience stores, gas stations, grocery stores and may be individually
owned stores, or small to medium sized chains. These merchants are located in
the 48 contiguous states, with a slightly higher concentration in the southern
half of the USA. The Company currently has sold approximately 55,000 cards to
its consumers as of December 2004, but expects this number to increase. The
Company's sales and marketing will pivot around five key strategies:

         o        public relations;
         o        customer relations;
         o        press advertising;
         o        television and radio advertising; and
         o        the Internet.

PUBLIC RELATIONS. The Company intends to put considerable effort into preparing
and disseminating a regular flow of press releases on its current and future
products and services available to both current and prospective customers. When
funding of the Company has occurred, it will be attending and participating in
various trade shows through-out the United States.

INTERNET WEB SITE. This is rapidly becoming a major promotional channel and the
Company believes it will increase over time. The Company is expanding the
content on its web site and developing an on-line ordering and customer service
system.

CUSTOMER RELATIONS. The Company out-sources first contact customer service for
all members. The Company's content providers provide all back up and product
related customer service, interfacing with its support team. The Company will
keep detailed records of every sales contact, including source of inquiry,
client needs, employment and income. Having superior information on its clients
and prospects will allow the Company to offer a truly personalized service. The
Company intends to leverage sales data to encourage its satisfied customers to
recommend its services to friends, relatives, colleagues and employers.

TELEVISION, RADIO AND PRESS. Once adequate funding has been secured, the Company
will launch advertising to enhance public relations activity. There is
considerable research to support the argument that the more often a potential
clients hears about you, the more likely they are to approach you when they have
a need for your type of service.

TARGET MARKETS. Based on a July 2004 article published on the Federal Reserve
Bank of New York's website, "the stored value card market is growing and
evolving rapidly. According to industry estimates, more than 2,000 stored value
programs are available, with roughly 7 million Visa- or MasterCard-branded
stored value cards in the marketplace. There are approximately 20 million users
and that figure is expected to more than double to 49 million users by 2008. In
2003, stored value cards were used to make $42 billion in transactions. By 2006,


                                       20


<PAGE>

over $72 billion in stored value transactions are expected. Experts put this
industry in the introductory or early growth stage of the product life cycle,
suggesting that there is substantial growth potential in the years ahead. These
industry figures include all stored value cards, such as multipurpose general
spending cards, payroll cards, government benefit cards, child support payment
cards, merchant gift cards and telephone cards."

MARKETING EMPLOYEES
-------------------

The function of the Company's marketing employees is to ensure the adequate
exposure to each of the channels discussed above in the foregoing section. The
Company's sales efforts target all market segment audiences through these direct
and indirect channels. The Company maintains its own direct sales force
targeting consumers that for a variety of reasons do not have a traditional
banking relationship. The reasons are primarily, but not exclusively, due to a
credit score banks are uncomfortable with. The indirect sales channel will use
the sales force of the Company's partners to offer its products and services to
its end-users. The Company shares revenue with its partners to achieve this
purpose. To gain market presence and market share overseas, the Company plans to
team with leading distributors, resellers and system integrators that have
strong industry backgrounds and market presence in their respective markets and
geographic regions.

CUSTOMER RELATIONSHIP MANAGEMENT
--------------------------------

Excellent selling skills and professional customer service are vital in the
Company's type of business. Therefore, the Company has, and will, continue to
contract with the most professional direct sales and internet marketing
organizations in the United States, Mexico and South America, to handle its
direct sales activity.

The Company's handling of all bilingual customer service is currently shared
between in-house and outsource customer service. Its customer service department
is scaleable to handle one or multiple programs. The Company also has
relationships with third party firms who wish to provide its customer service,
as needed.

The Company's customer service department currently uses a custom proprietary
Structured Query Language ("SQL") database, in conjunction with an IVR solution.
The database has approximately 100,000 records and can handle upward of
10,000,000 records. The IVR is scaleable by the number of phone lines and
customer service representatives, and can handle over 16,000 customer service
inquiries per day.

CUSTOMER SUPPORT
----------------

The Company provides customer support 24 hours a day, seven days a week by
contractual agreement. The Company's customer support service consists of two
tiers. In an effort to improve customer satisfaction, the Company is currently
in deployment of new tools designed to allow customers to access standard
reported metrics through a secure Web interface. These tools will also
facilitate the Company's ability to track recurring customer issues that will
identify opportunities for service improvements.


                                       21


<PAGE>

COMPETITION
-----------

The markets for the financial products and services offered by the Company are
intensely competitive. The Company competes with a variety of companies in
various segments of the financial service industry and its competitors vary in
size, scope and breadth of products and services they offer. Certain segments of
the financial services industry tend to be highly fragmented, with numerous
companies competing for market share. Highly fragmented segments currently
include financial account processing, customer relationship management
solutions, electronic funds transfer and card solutions. The Company faces a
number of competitors in the debit card and payment market. It also faces
competition from in-house technology departments of existing and potential
clients who may develop their own product offerings. The Company believes it
competes with other providers of money and stored value cards services on the
basis of the following factors:

         o        quality of service;
         o        reliability of service;
         o        ability to evaluate, undertake and manage risk;
         o        speed in approving merchant applications; and
         o        price.

The Company believes its focus on smaller merchants and sub-prime credit clients
gives it a competitive advantage over larger competitors that have a broader
market perspective, and over competitors of a similar or smaller size that may
lack its extensive experience and resources in this market sector.

PROPRIETARY RIGHTS
------------------

To protect its intellectual property rights, the Company intends to rely on a
combination of trademark, patent and copyright law, trade secret protection,
confidentiality agreements and other contractual arrangements with their
employees, affiliates, clients, strategic partners, acquisition targets and
others. Effective trademark, copyright and trade secret protection may not be
available in every country in which the combined company intends to offer its
services. The steps taken to date by the Company to protect its intellectual
property rights may not be adequate. The Company has not patented or trademarked
any of its works through the U.S. Patent and Trademark Office, nor has the
Company copyrighted any of its work through the U.S. Copyright Office. Third
parties may infringe or misappropriate the Company's intellectual property
rights or the Company may not be able to detect unauthorized use and take
appropriate steps to enforce its rights. In addition, other parties may assert
infringement claims against the Company. Such claims, regardless of merit, could
result in the expenditure of significant financial and managerial resources.
Further, an increasing number of patents are being issued to third parties
regarding money and debit card processes. Future patents may limit the Company's
ability to use processes covered by such patents or expose the combined company
to claims of patent infringement or otherwise require the Company to seek to
obtain related licenses. Such licenses may not be available to the Company on
acceptable terms. The failure to obtain such licenses on acceptable terms could
have a negative effect on the Company's business.


                                       22


<PAGE>

Management of the Company believes that its products, trademarks and other
proprietary rights do not infringe on the proprietary rights of third parties
and that it has licensed proprietary rights from third parties. The Company's
proprietary intellectual property consists of:

         (1)      Interactive Voice Response ("IVR") software, to provide access
                  to information in a database using a telephone and DTMF or
                  voice for queries;
         (2)      Customer Relationship Management ("CRM") software, for use in
                  customer service applications that require tightly integrated
                  and customizable interaction;
         (3)      Software for various Point of Sale ("POS") terminals, with
                  functionality to facilitate non-cash transactions for barter
                  exchanges using either IVR or magnetic card transactions; and
         (4)      Application server and Web server software, to provide the
                  business logic necessary for proper data transmission of all
                  transactions that may be initiated for any of the applications
                  listed above. This software is a very complex set of
                  technologies with many distinct components, but requires the
                  use of all parts.


The Company believes that most of its proprietary software is protected by
common law copyright, but none have been registered with the United States
Copyright Office.

EMPLOYEES
---------

As of September 30, 2004, the Company had fourteen (14) full time employees:
four (4) Executives, three (3) Administrative, three (3) Sales and four (4)
Technical Personnel. The Company anticipates that the development of its
business will require the hiring of additional employees. Beginning January 1,
2005, the Company will have seventeen (17) full time employees. None of its
current employees are covered by any collective bargaining agreement and it has
never experienced a work stoppage. The Company considers its employee relations
to be good. The Company believes its future success will depend in large part on
its continuing ability to attract, train and retain highly skilled technical,
sales, marketing and customer support personnel.

INVESTMENT RISKS
----------------

An investment in the Company's stock involves a high degree of risk. Investors
considering investing in the Company should carefully consider the risks
described below and other risks inherent in doing business before investing in
its common stock. If any of the following risks or other risks occur, the
Company's business, operating results and financial condition could be seriously
harmed. The trading price of its common stock could decline due to any of these
or other risks.

MOST STATES REQUIRE THE COMPANY TO UNDERGO A DIFFICULT AND COSTLY PROCESS OF
OBTAINING LICENSES TO LOAD OUR STORED VALUE CARDS. Approximately 40 states have
established laws or regulations requiring entities taking or loading money on
cards or processing such transactions, to be licensed by the state unless that
entity has a federal banking charter and is operating from a licensed bank


                                       23


<PAGE>

branch. The Company has engaged counsel to contact the authorities of each state
in which it conducts business to determine its compliance needs. In the interim,
the Company intends to continue to rely upon the licenses of its affiliated
banks. Some states may require the Company to obtain its own license to conduct
money loading operations. This may mean that in order for the Company to be able
to conduct its card loading operations, it will be required to apply for and
obtain licenses in nearly every state in which the Company loads money on to
cards. This process will include the Company retaining special attorneys to
assist it in the application process. The Company will have to file an extensive
license application in each such state. The Company will have to post bonds to
operate in those states and pay filing fees which range from $1,000 to $100,000
per state. The Company will also have to qualify to do business in each such
state and thereafter file tax returns and be subject to service of process in
each state. In the best case scenario it will take at least 9 months to obtain
all of the necessary licenses. The Company does not presently know if it will be
able to obtain all of the licenses the Company needs to fulfill existing and
proposed contracts. The Company also does not know if it will be able to obtain
the funding necessary to purchase the approximately $6,000,000 in bonds
necessary to secure all of the licenses. In most states the Company will have to
obtain the bonds prior to applying for the license.

OTHER STATES MAY ADOPT EVEN MORE STRINGENT LICENSING RULES AND REGULATIONS. The
Company anticipates that many of those states will later adopt regulations or
laws with which it will be required to comply. There were over one hundred
stored value bills introduced in state legislatures in the first half of 2004
alone. The Company expects regulation of this industry to only increase and
become more complicated. Regulatory and tax intensive states such as California
will likely adopt a typically complex and heavily regulated scheme. The lack of
license requirements in states such as California is more likely a result of
their legislature's inability to function effectively rather than the lack of
desire to tax and regulate. It may be even more costly or difficult for the
Company to comply with the new state regimes and more stringent rules and
regulations adopted by state and federal government agencies. These regulatory
structures could prove too expensive or complicated for the Company to comply
with on a cost effective basis or at all.

THE COMPANY'S STOCK IS MORE DIFFICULT TO TRADE SINCE IT IS CLASSIFIED AS A PENNY
STOCK. The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are generally equity
securities with a price of less than $5.00, other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the Commission, that: (a)
contains a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading; (b) contains a
description of the broker's or dealer's duties to the customer and of the rights
and remedies available to the customer with respect to a violation to such
duties or other requirements of Securities' laws; (c) contains a brief, clear,
narrative description of a dealer market, including bid and ask prices for penny
stocks and the significance of the spread between the bid and ask price; (d)
contains a toll-free telephone number for inquiries on disciplinary actions;


                                       24


<PAGE>

(e) defines significant terms in the disclosure document or in the conduct of
trading in penny stocks; and (f) contains such other information and is in such
form, including language, type, size and format, as the Commission shall require
by rule or regulation. The broker-dealer also must provide, prior to effecting
any transaction in a penny stock, the customer with: (a) bid and offer
quotations for the penny stock; (b) the compensation of the broker-dealer and
its salesperson in the transaction; (c) the number of shares to which such bid
and ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for the Company's stock.

RISKS RELATED TO THE BUSINESS OF THE COMPANY
--------------------------------------------

The following is a summary of some of the risk factors which may have an impact
on the Company's business efforts:

THE COMPANY HAS A LIMITED OPERATING HISTORY IN A NEW AND RAPIDLY CHANGING
INDUSTRY. The Company was formed in May of 2000. Accordingly, the Company has
only a limited operating history on which an evaluation of its prospects can be
made. Such prospects must be considered in light of the substantial risks,
expenses and difficulties encountered by new entrants into the sub-prime credit
industry. Significant on-going risks include the Company's ability to:

         o        expand its subscriber base and increase subscriber revenues;
         o        compete favorably in a highly competitive market;
         o        access sufficient capital to support its growth;
         o        recruit, train and retain qualified employees;
         o        introduce new products and services; and
         o        upgrade network systems and infrastructures.

The Company cannot be certain that it will successfully address any of these
risks. In addition, its business is subject to general economic conditions,
which may not be favorable for the Company's business in the future.

THE COMPANY HAS NOT BEEN PROFITABLE AND EXPECTS FUTURE LOSSES. The Company
incurred a net loss of $1,031,335 for the nine months ended September 30, 2004.
Operating expenses for the nine months ended September 30, 2004, including
non-cash items of $92,677, were $2,896,467. The Company has not achieved
profitability in any quarterly or annual period since inception and expects to
continue to incur net losses for the foreseeable future. Although revenues have
grown in recent quarters, the Company cannot be certain that it will be able to
sustain these growth rates or that it will obtain sufficient revenues to achieve


                                       25


<PAGE>

profitability. Even if the Company does achieve profitability, it cannot be
certain that it can sustain or increase profitability on a quarterly or annual
basis in the future. The Company expects that costs and expenses will continue
to increase in future periods, which could negatively affect future operating
results.

THE COMPANY COULD BE REQUIRED TO CUT BACK OR STOP ITS OPERATIONS IF IT LATER
NEEDS MONEY BUT IS UNABLE TO OBTAIN NEEDED FUNDING. The Company will need to
raise additional capital to expand its business, repay indebtedness incurred in
connection with upgrading its facilities and meet pre-existing cash obligations
through the 2005 fiscal year. Should the Company be unsuccessful in its efforts
to raise capital, it will be required to curtail its expansion plans or it may
be required to cut back or stop operations. There can be no assurance that the
Company will raise additional capital or generate funds from operations
sufficient to meet its obligations and planned requirements. As with its
November 2004 private sale of securities, the Company might have to sell shares
at a time when its stock price is unusually low. In such an event, the Company's
shareholders could experience substantial dilution. The purchases in the
Company's recent offering also have anti-dilution protection.

THE LOSS OF KEY PERSONNEL COULD WEAKEN THE COMPANY'S TECHNICAL AND OPERATIONAL
EXPERTISE, DELAY ENTRY INTO NEW MARKETS AND LOWER THE QUALITY OF ITS SERVICE.
The Company's success depends on the continued efforts of its senior management
team and its technical, marketing and sales personnel. The Company also believes
that to be successful, it must hire and retain highly qualified personnel.
Competition in the recruitment of highly qualified personnel in the sub-prime
credit industry is intense. Hiring employees with the skills and attributes
required to carry out its strategy can be time consuming. The Company may not be
able to retain or successfully integrate existing personnel or identify and hire
additional qualified personnel. If the Company loses the services of key
personnel or is unable to attract additional qualified personnel, its business
could be materially and adversely affected. The Company does not have key-man
life insurance.

SECURITY AND PRIVACY BREACHES OF THE COMPANY'S ELECTRONIC TRANSACTIONS MAY
DAMAGE CUSTOMER RELATIONS AND INHIBIT THE COMPANY'S GROWTH. Any failures in the
Company's security and privacy measures could have a material adverse effect on
its business, financial condition and results of operations. The Company
electronically transfers large sums of money and stores personal information
about consumers, including bank account and credit card information, social
security numbers and merchant account numbers. If the Company is unable to
protect or consumers perceive that it is unable to protect, the security and
privacy of its electronic transactions, the Company's growth and the growth of
the electronic commerce market in general could be materially adversely
affected. A security or privacy breach may:

         o        cause the Company's customers to lose confidence in its
                  services;
         o        deter consumers from using the Company's services;
         o        harm the Company's reputation;
         o        expose the Company to liability;
         o        increase the Company's expenses from potential remediation
                  costs; and


                                       26


<PAGE>

         o        decrease market acceptance of electronic commerce
                  transactions.

While management of the Company believes that it has utilized proven
applications designed for premium data security and integrity to process
electronic transactions, there can be no assurance that the Company's use of
these applications will be sufficient to address changing market conditions or
the security and privacy concerns of existing and potential subscribers.

THE MARKET FOR ELECTRONIC COMMERCE SERVICES IS EVOLVING AND MAY NOT CONTINUE TO
DEVELOP OR GROW RAPIDLY ENOUGH FOR THE COMPANY TO REMAIN CONSISTENTLY
PROFITABLE. If the number of electronic commerce transactions does not continue
to grow or if consumers or businesses do not continue as projected to adopt the
Company's products and services, it could have a material adverse effect on the
Company's business, financial condition and results of operations. Management
believes future growth in the electronic commerce market will be driven by the
cost, ease-of-use and quality of products and services offered to consumers and
businesses. In order to consistently increase and maintain the Company's
profitability, consumers and businesses must continue to adopt its products and
services.

IF THE COMPANY DOES NOT RESPOND TO RAPID TECHNOLOGICAL CHANGE OR CHANGES IN THE
INDUSTRY STANDARDS, ITS PRODUCTS AND SERVICES COULD BECOME OBSOLETE AND IT COULD
LOSE ITS EXISTING AND FUTURE CUSTOMERS. If competitors introduce new products
and services embodying new technologies, or if new industry standards and
practices emerge, the Company's existing product and service offerings,
proprietary technology and systems may become obsolete. Further, if the Company
fails to adopt or develop new technologies or to adapt its products and services
to emerging industry standards, it may lose current and future customers, which
could have a material adverse effect on the Company's business, financial
condition and results of operations. The electronic commerce industry is
changing rapidly. To remain competitive, the Company must continue to enhance
and improve the functionality and features of its products, services and
technologies.

CHANGES IN BANKING REGULATIONS COULD HURT THE COMPANY'S ABILITY TO CARRY OUT ITS
BUSINESS PLAN. The Company has designed its systems and card programs to comply
and work in association with applicable banking rules and regulations. A change
of those rules and regulations could require the Company to dramatically alter
its software programs, the hardware upon which it operates and its
implementation and operation of debit cards and stored value cards. Such changes
could be costly or impractical and the Company may not be able to modify its
operations and technology to comply with dramatic changes in banking
regulations.

CHANGES IN THE PATRIOT ACT COULD IMPEDE THE COMPANY'S ABILITY TO CIRCULATE CARDS
THAT CAN BE EASILY LOADED OR ISSUED. The Company's current screening process is
designed to comply with the Patriot Act requirements that financial institutions
know their cardholders. If the Patriot Act or subsequent legislation increases
the level of scrutiny that the Company or its affiliated banks are required to
adopt to know their customers, it may be costly or impractical for the Company
to continue to profitably issue and load cards for its customers or even comply
with new regulation schemes.


                                       27


<PAGE>

IF MAJOR BANKS BEGIN TO TARGET THE SUB-PRIME MARKET, IT WILL CREATE SUBSTANTIAL
COMPETITION FOR THE COMPANY AND ITS PRODUCTS AND SERVICES. The Company operates
among major financial institutions, providing products and services designed to
service the sub-prime credit market. Large and small banks alike have
traditionally not sought the typically unprofitable and undesirable sub-prime
market. This allows the symbiotic relationship between banks and the Company,
where the banks get access to the cumulative deposits of the cardholders,
without the trouble of administering thousands of very small individual accounts
of less reliable depositors. If banks decide to directly target the sub-prime
market before the Company is able to establish a strong foothold, the Company
will not be able to compete with established banks which have substantially
greater resources.

CREDIT CARD FRAUD OR COMPUTER HACKING COULD SUBSTANTIALLY HARM THE COMPANY AND
ITS OPERATORS. As with any technology company, the Company is always at risk of
computer fraud, hacking or other electronic crime. While the Company believes
that it has substantial systems in place to recognize and prevent computer fraud
and hacking, the relentlessness of hackers means no system is absolutely secure.
Due to the limited financial resources of the Company, any substantial computer
crime and particularly an electronic embezzlement would adversely affect the
Company's ability to continue as a going concern.

INTERNAL PROCESSING ERRORS COULD RESULT IN THE COMPANY FAILING TO APPROPRIATELY
DEDUCT TRANSACTIONS FROM CUSTOMER ACCOUNTS. In the event of a system failure by
the Company that went undetected for a substantial period of time, the Company
could allow transactions on blocked accounts, false authorizations, fail to
deduct charges from accounts or fail to detect systematic fraud or abuse. Errors
or failures of this nature could immediately adversely impact the Company, its
credibility and its financial standing.

A CHANGE IN LICENSING LAWS COULD IMPAIR THE COMPANY'S ABILITY TO MOVE MONEY OVER
A BANKING NETWORK. The Company is dependent upon the use of electronic banking
networks owned by major financial services institutions and major banks to load
value on the cards and record deductions against cardholders' accounts. If the
Company loses access to such networks by virtue of contact issues or changes in
the laws or regulations governing their use, it could render the Company's
products useless.

THE REQUIREMENTS TO MAINTAIN HIGHER RESERVE ACCOUNTS COULD IMPAIR THE COMPANY'S
GROWTH AND PROFITABILITY. The Company is required to maintain reserve deposit
accounts with the financial institutions serving the cardholders. If the Company
is required to deposit higher than normal reserves with the financial
institutions it works with, it could have a material impact on the Company's
cash available for operations and impede the Company's expansion of business.


                                       28


<PAGE>

IF THE COMPANY WERE TO LOSE ITS THIRD PARTY PROCESSOR LICENSE FROM MASTERCARD OR
VISA, THE LOSS WOULD SUBSTANTIALLY INTERFERE WITH THE COMPANY'S ABILITY TO
TRANSACT BUSINESS. The Company obtains its access to the network of financial
institutions and linked ATM's and point of sale systems through an arrangement
among banks and MasterCard and Visa, as a third party provider. MasterCard and
Visa relationship allow the Company to come with a package of other networks
such as Star(TM) and Plus(TM) and Interlink(TM) and Cirrus(TM) and similar
networks. If the Company loses its third party provider licenses with both
MasterCard and Visa, it would be forced to separately negotiate access to each
of the individual networks. Any down time associated with the loss of access in
the networks could render the Company's systems and cards as issued useless.
Even if the Company was then able to negotiate third party processor agreements
with the individual networks, it might not be able to do so in time to preserve
its business name and customer relationships. Thus, the loss of third party
processor relationships with both Visa and MasterCard could put the Company out
of business.

SECURITY AND PRIVACY BREACHES IN THE COMPANY'S ELECTRONIC TRANSACTIONS COULD
DAMAGE CUSTOMER RELATIONS AND INHIBIT ACCEPTANCE BY THE MARKET OF THE COMPANY'S
PRODUCTS. Any failures in the Company's security and privacy measures could have
a material adverse affect on the Company's business, financial condition and
results of operations. The Company is built upon electronic storage and transfer
of money in transactions handled by both the Company and associated financial
institutions. The Company also retains a great deal of information about its
customers including bank account, other credit card information, social security
information, where applicable, as well as merchant account numbers and similar
information. If the Company or the financial institutions with which it does
business are not able to protect the security and privacy of this information or
if they are merely perceived to be unable to protect such information it could
cause customers to lose confidence in the Company's services and deter customers
from using the Company's services. It could also expose the Company's liability
or increase the Company's expenses to police such problems and rehabilitate
public perception of the Company after a mistake occurs. While the Company
believes it utilizes proven applications designed for data security and
integrity, there can be no assurance that the use of these applications by both
the Company and its financial institution contractors will be sufficient to
address changing market conditions or security and privacy concerns of existing
and potential customers.

ITEM 2. DESCRIPTION OF PROPERTY

FACILITIES
----------

The Company's corporate headquarters is located in a 3,200 square foot facility
at 2280 Trailmate Drive, Suite 101, Sarasota, Florida 34243, telephone number:
941-753-2875. This facility is leased, with a base monthly rent of $2,813.
This lease expires on November 2006. The Company anticipates that its current
facilities may soon be inadequate for its operations and it may need to seek
additional space as it expands its operations and employee base.


                                       29


<PAGE>

The Company has established a branch office located in a 1,200 square foot
facility at 41892 Enterprise Circle South, Temecula, California 92590. This
facility is leased with a base monthly rent of $1050. The lease expires on
June 30, 2005.

The Company currently maintains its database, software and operations at 1
Wilshire Blvd in Los Angeles, California 90017, as a "mirrored" location for
security and redundancy in the case of an emergency or power outage.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in certain litigation in the normal course of business.
The Company does not believe the resolution of these matters will have a
material adverse effect on its financial position or results of operations.
Listed below is a list of litigation active on September 30, 2004:

MORGAN BEAUMONT, INC. V. ROBERT W. CLOUD, CASE NO. 2004-CA-4392 (SARASOTA
-------------------------------------------------------------------------
COUNTY, FLORIDA):
-----------------

Wade Cloud was a former short-term employee of the Company, hired to be a sales
person. He was terminated for cause by the Company after only a few months. In
an attempt to settle this dispute without litigation, the Company offered to pay
all compensation due to Mr. Cloud under his employment agreement through the
date he was terminated and the offer was refused. The compensation offered to
Mr. Cloud has been placed in escrow with the Company's attorney in the case and
is not included on its balance sheet.

The Company filed suit against Mr. Cloud in May 2004 in order to invalidate his
employment contract. Subsequently, as a counter to the lawsuit, Mr. Cloud has
alleged that he has ownership rights to software developed by Typhoon Voice
Technology for Morgan Beaumont. The two cases were consolidated under the case
name, Robert W. Cloud v. Morgan Beaumont, Inc., Case No. 2004-CA-4392. The
Company additionally filed suit in September 2004 in Federal Court in Sarasota
County, Florida against Mr. Cloud, Cloud Consulting, which as of November 2004
has gone unanswered. Mr. Cloud has since through his attorney requested
arbitration in Tampa, Florida for resolution in December of 2004. The Company's
attorneys have submitted a written opinion that Mr. Cloud's counter suit is not
material. Management believes they have a strong likelihood of success in this
matter.

MORGAN BEAUMONT, INC. V. FIRST NATIONAL BANK OF CENTRAL TEXAS, FISCRIP,
-----------------------------------------------------------------------
TRANSEND, SUPERIOR BANK, FINANCIAL SERVICES INTERNATIONAL, VIRTUAL MONEY,
-------------------------------------------------------------------------
OPTIMUM PAY, CASE NO. 8:03-CV-2499-T-17MAP (MIDDLE DISTRICT OF FLORIDA):
------------------------------------------------------------------------

Suit was filed by the Company in Federal Court in Tampa, Florida in April 2004,
against the defendants named above, maintaining that the banks and processors
named failed to submit paperwork to MasterCard on Morgan Beaumont card programs
while approving the programs and advising the Company that MasterCard authorized
the shipment of Morgan Beaumont cards to its customers. The card program was
canceled by MasterCard due to the bank's failure to properly submit the
appropriate applications. The Company is seeking recovery of costs as well as
damages in excess of $75,000. No trial date has been set.


                                       30


<PAGE>

In November 2004, the Company had reached a settlement in the referenced lawsuit
with two defendants, FSI and TranSend, pursuant to which FSI and TranSend will
pay the Company $10,000, forgive approximately $50,000 in notes and debt, grant
the Company a royalty free license to use its software and provide the Company
with 10,000 cards free of charge. FSI has also agreed to use the Company's
software to load cards. The Company's action against First National Bank of
Central Texas, the primary defendant, is not settled and remains pending.

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

On May 10, 2004, a majority of the security holders of the Company voted
affirmatively for the following:

         1.       To approve a .66956 for one reverse split of the issued and
                  outstanding shares of common stock;

         2.       To approve the amendment of the Articles of Incorporation to:

                  a.       change the name of Pan American from "Pan American
                           Energy Corp." to "Morgan Beaumont, Inc."; and

                  b.       Restore the authorized share capital of Pan American
                           after the reverse split back to:

                           i        170,000,000 shares of common stock with a
                                    par value of 0.001 per share; and

                           ii.      25,000,000 shares of preferred stock with a
                                    par value of $0.001 per share.

         3.       To approve the change of business of Pan American to oil and
                  gas exploration and development to the business of Morgan
                  Beaumont;

         4.       To elect five persons to Pan American's Board of Directors to
                  serve until the next annual general meeting of stockholders
                  and until their respective successors are elected or
                  appointed.

APPROVAL OF REVERSE SPLIT. The primary purpose of the .66956 for one reverse
split was to decrease the number of total shares issued and outstanding of Pan
American's common stock. Pan American affected a five for one forward split of
its stock on March 22, 2004. At the time, management of Pan American believed
this forward split was in the best interest of Pan American and its
stockholders. Management on negotiation with the principals of Morgan Beaumont,
agreed to reduce the issued and outstanding share capital of Pan American to
what the parties believed was a more realistic level.

The principal effect of the reverse stock split was that the number of shares of
common stock issued and outstanding was reduced from 60,325,000 shares as of
June 25, 2004 to approximately 40,391,207 shares, which include the shares
issued as part of the August 24, 2004 Merger. The actual number of shares
outstanding depended on the number of fractional shares which have either been
cancelled or rolled up to the next whole share.


                                       31


<PAGE>

Approval of the reverse split required the affirmative consent of at least a
majority of the outstanding shares of common stock of Pan American. Majority
Stockholders holding a total of 34,000,000 shares of common stock (56.36%), had
agreed to this action.

APPROVAL OF THE CHANGE OF BUSINESS DIRECTION. The change of business of Pan
American from oil and gas exploration and development to the business of Morgan
Beaumont would move Pan American into a new business direction. Ratification and
approval of the new business direction of Pan American required the affirmative
consent of at least a majority of the outstanding shares of common stock of Pan
American. Majority Stockholders, holding a total of 34,000,000 shares of common
stock (56.36%), had agreed to this action.

APPROVAL OF THE NAME CHANGE. The proposed change of Pan American's name to
"Morgan Beaumont, Inc." was intended to convey more clearly a sense of Pan
American's business as to the business of Morgan Beaumont. Approval of the name
change required the affirmative consent of at least a majority of the
outstanding shares of common stock of Pan American. Majority Stockholders
holding a total of 34,000,000 shares of common stock (56.36%), agreed to this
action.

ELECTION OF NEW DIRECTORS. The election of new directors was proposed because
the Change of Business Direction would effect a change of control of Pan
American and the new business direction would have required a board of directors
familiar with Morgan Beaumont's business. The Merger Agreement between Pan
American and Morgan Beaumont required that new directors be appointed. Approval
of the appointment of the new slate of directors required the affirmative
consent of at least a majority of the outstanding shares of common stock of Pan
American. Majority Stockholders holding a total of 34,000,000 shares of common
stock (56.36%), agreed to this action.

The previous officers of Pan American resigned their positions with Pan American
at the closing of the Merger and five new directors were elected by the
stockholders pursuant to the Information Statement filed on a Schedule 14D with
the Securities Exchange Commission on July 6, 2004. The previous directors and
officers of Pan American were as follows:

Name                          Age      Position                            Since
----                          ---      --------                            -----

Scott C. Houghton             35       President and                       2000
                                       Director

Korina Houghton               35       Secretary/Treasurer and             2002
                                       Director

Arnold Howardson              58       Senior Vice-President               2002

The following nominees of Morgan Beaumont were elected as the executive officers
and directors of Pan American at the closing of the Merger:


                                       32


<PAGE>

NAME                              AGE                EXPECTED POSITION
----                              ---                -----------------

Erik Jensen                       46                 COO and Director
Kenneth Craig                     50                 CFO, Secretary and Director
Cliff Wildes                      54                 CEO and Director
Rod Braido                        59                 Director
Mark Brewer                       46                 Director

Detailed background information on the new officers and directors is discussed
in Item 9 on Page 44.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

MARKET INFORMATION
------------------

The Company's shares are currently trading on the OTC Bulletin Board under the
stock symbol MBEU. Formerly the Company's shares traded under the symbol AGBM
from May 16, 2002 through March 22, 2004 and PAEY from March 23, 2004, until it
began trading as MBEU on August 9, 2004 as a result of the merger between Pan
American and Morgan Beaumont. The high and the low prices for the Company's
shares for each quarter of its last two fiscal years:

FISCAL QUARTER ENDED                                        HIGH           LOW
--------------------------------------------------------------------------------
August 31, 2002                                             $4.75         $0.35
November 30, 2002                                           $6.90         $2.75
February 28, 2003                                           $7.40         $3.00
May 31, 2003                                                $4.05         $1.65
August 31, 2003                                             $0.90         $0.41
November 30, 2003                                           $0.49         $0.41
February 28, 2004                                           $1.45         $1.45
May 31, 2004                                                $0.75         $0.75
August 31, 2004                                             $0.52         $0.42
September 30, 2004                                          $0.44         $0.34

The source of the high and low bid price information is the OTC Bulletin Board.
The market quotations provided reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not represent actual transactions. The
market information for the Company's shares for the periods after August 2004
relate exclusively to the business as presently operated. The Company is not
aware of any sales or transfer of shares of the Company in any private
transactions.


                                       33


<PAGE>

The Company's shares are also currently trading on the Berlin Bremen and
Frankfurt Stock Exchanges. However, the trading on these German-based markets is
involuntary and not authorized by the Company. Please see a more detailed
discussion in Item 8B on page 43 of this report.

HOLDERS OF COMMON STOCK
-----------------------

As of September 30, 2004, there were sixty-six (66) registered shareholders of
the Company's common stock.

DIVIDENDS
---------

There are no restrictions in the Company's Articles of Incorporation or bylaws
that restrict it from declaring dividends. The Nevada Revised Statutes, however,
prohibits the Company from declaring dividends where, after giving effect to the
distribution of the dividend:

         A.       The Company would not be able to pay its debts as they become
                  due in the usual course of business; or

         B.       The Company's total assets would be less than the sum of its
                  total liabilities, plus the amount that would be needed to
                  satisfy the rights of shareholders who have preferential
                  rights superior to those receiving the distribution.

The Company has neither declared nor paid any cash dividends on its capital
stock and do not anticipate paying cash dividends in the foreseeable future. The
Company's current policy is to retain any earnings in order to finance the
expansion of its operations. The Company's board of directors will determine
future declaration and payment of dividends, if any, in light of the
then-current conditions they deem relevant and in accordance with the Nevada
Revised Statutes.

RECENT SALES OF UNREGISTERED SECURITIES
---------------------------------------

The Company has not completed any sales of unregistered securities during the
period covered by this report not previously reported in the Company's quarterly
reports filed on Form 10-QSB. As part of the Merger, the Company issued
13,000,017 shares of restricted common stock to the 39 shareholders of Morgan
Beaumont, Inc., in exchange for their shares of the then privately held Florida
corporation. The issuance of shares of common stock of the Company under the
merger was done without registration under the Securities Act of 1933, amended,
or qualification under the securities or "blue sky" laws of any jurisdiction.
The issued shares of common stock bear a restrictive legend stating that the
securities have not been registered under the Securities Act of 1933 and set out
the restrictions on transferability and sale of the securities.

The exemption which the Company relied on to issue the common stock in the
merger was Rule 506 of Regulation D of the Securities Exchange Act. Rule 506
requires the Company to inform unaccredited investors about the lack of
registration and resale restrictions of these securities and to provide these
investors with certain information about the Company which includes financial
and other information. The detailed information concerning the issuance has been
included in the Form 14C of the Company filed with the Securities and Exchange
Commission in connection with the merger on July 6, 2004.


                                       34


<PAGE>

AMENDMENT OF NOTE AGREEMENT WITH PAUL MARSHALL
----------------------------------------------

The former controlling shareholders of Pan American defaulted on certain
provisions of the Merger Agreement which resulted in a modification of the
Merger Agreement and the transfer of approximately 1,000,000 shares from the
former controlling shareholders to the original shareholders of Morgan Beaumont.
Copies of this Agreement were filed with and described in the Company's 8-K
dated December 7, 2004.

Marshall's default under the Promissory Note (the "Note") would entitle the
original shareholders of the Morgan Beaumont ("Original Shareholders") and
Morgan Beaumont to rescind the merger. As part of the partial rescission of the
merger, Marshall has agreed to deliver to the Original Shareholders a total of
1,000,000 free trading shares of the Company's stock acquired by the Pan
American shareholders in the merger, which will be divided pro-rata by the
Original Shareholders based upon their pre-merger stock ownership of the
Company.

The Company and Marshall agreed to modify the Promissory Note to provide for
extended payment terms on the remaining principal balance of the Note and, in
further consideration of and exchange for the Note and the waiver of past
penalties and default interest, Marshall agreed to pledge 2,400,000 shares of
common stock (the "Pledged Shares") of the Company to be used at the discretion
of the Company, subject to Board approval as security for the performance of
Marshall's obligation under the Note. In exchange for the partial rescission,
the Note and the other terms set forth above, including the Pledged Shares, the
Company and the Original Shareholders agreed to waive the right to fully rescind
the merger and to enforce the terms of the original Promissory Note.

The legal costs to the Company in the event of a default are approximately
$6,000. Additionally the default caused a six-month delay the issuance of card
programs and by so doing delayed revenue generation from these card programs.
The Company estimates that the additional cost of this delay was approximately
$300,000.

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

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

SUMMARY.

Information prior to August 24, 2004 (the date of the reverse acquisition)
related to or predecessor entity, Pan American, has been omitted. From a legal
perspective, Pan American is the surviving company and thus continues its public
reporting obligations. However, from an accounting perspective, Morgan Beaumont
is treated as though it acquired Pan American. Therefore, all financial
information presented in this 10KSB includes Morgan Beaumont's standalone
results from the period July 10, 2000 (date of incorporation) to September 30,
2004.



                                       35


<PAGE>

As part of the merger, Morgan Beaumont changed its year end from December 31 to
September 30. As a result of this change information contained herein includes
the year ended September 30, 2004 (nine months) and the year ended December 31,
2003.

RESULTS OF OPERATIONS. Planned principal operations of the Company commenced in
2000, however, to this date it has received limited revenues. In June 1975, the
Financial Accounting Standards Board, in its Statement No. 7, set forth
guidelines for identifying an enterprise in the development stage and the
standards of financial accounting and reporting applicable to such an
enterprise. In the opinion of management of the Company, the Company and its
activities from its inception through September 30, 2004 fall within the
referenced guidelines. Accordingly, the Company has reported its activities in
accordance with the aforesaid Statement of Financial Accounting Standards No. 7.

LACK OF PROFITABILITY OF BUSINESS OPERATIONS SINCE 2001. The Company was
initially focused exclusively on the sales of the Products. It became apparent
there was a flaw in solely focusing on the sales of the products, so management
made the decision to expand its focus to include the development of a process to
allow the consumer to perform value loads in a retail environment. The time and
expense of developing the process and associated technology kept the Company
from achieving profitability.

Moreover, when the Company started some sales in 2001, those efforts were halted
due to an issue involving MasterCard and the issuing bank programming deviancies
that the bank had in supply paperwork to MasterCard on Morgan's programs; Morgan
stopped shipping the Products and had been working with multiple banks
processors to develop a program with the bank, MasterCard and Visa approval. The
Company instituted a suit against that issuing bank as described in Item 3 of
this report. During that time, the Company had also been developing processes
and technology to allow cards to be loaded on the cards. Additionally, the
Company's revenues were initially used to maintain operations. The Company
needed to raise additional revenue to proceed with operations and launch the
Company's programs, products and services.

However, this process is now well defined and the technology has been rolled out
in a limited release and is now ready for all of our strategic partners to
commence rolling out in a general availability mode. We anticipate profitability
will occur when we have approximately no less 50,000 retail load locations
operational and approximately 100,000 to 150,000 cards actively used by
consumers and a sufficient number of POP in the geographic location which are
higher in density in cardholders. Profitability is also dependent on the
expansion of load stations and the expansion of the programs for the card
products.

SALES AND REVENUES. Revenues for the nine months ended September 30, 2004, the
year ended December 31, 2003 and the period July 10, 2000 (date of
incorporation) to September 30, 2004 were $58,602, $355,872, and $590,219
respectively. Revenue was down in the nine months ended September 30, 2004 by
eighty-three percent because MasterCard cancelled the Company's program through
First National Bank of Central Texas as disclosed in Item 3 Litigation. The
program was not replaced until July and therefore sales were not made nor were
significant revenue earned from April 2004 to July of 2004. During the nine


                                       36


<PAGE>


months ended September 30, 2004 the Company had an average of approximately
5,800 Points of Presence ("POPS") excluding the approximate 15,000 Bank of
America locations that can load some of the Company's products. These POPS were
restricted to loading our cards and did not market the Company's cards. Cost of
Sales for the nine months ended September 30, 2004, the year ended December 31,
2003 and the period July 10, 2000 (date of incorporation) to September 30, 2004
were $35,833, $186,245, and $316,162 respectively. The eighty-one percent
decline in 2004 was the result of reduced revenue in the reporting period.

During fiscal year 2005 the Company intends to expand the number of access
points; Morgan Beaumont has in place contracts that management believes have the
potential to grow its access points to over 100,000 POPS. These POPS will now
sell or load (or both) debit/ATM and stored value hologram cards to the public.
The Company has four sources of sales and revenue: initiation fees, subscription
fees, transaction fees and financial "float." It generates income from the sale
of the Morgan Beaumont Money Card, the Morgan Beaumont Stored Value MasterCard,
its monthly maintenance fees associated with keeping the card active and from
transaction fees. Income is also generated at the SIRE Network when consumers
load cash into their card account so the card can be used for day to day
purchases. Additional revenue is generated at the IVR when consumers activate
their card and "up sell" opportunities at the IVR level. Future potential
products for consumers to purchase at this level include Discount Health
Benefits, Discount Medical Benefits, Road Side Assistance and Vacation offers.

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

DECLINE IN REVENUE THROUGH DECEMBER 2004. As described in Item 1 of this report,
Morgan Beaumont merged with and into Pan American in August 2004, the separate
existence of Morgan Beaumont ceased and Pan American continued as the Surviving
Corporation under the name Morgan Beaumont, Inc. However, the Company incurred
additional expenditures with the Pan American shell during the period ending
December 2004, because the money to purchase the shell was late and the
structure shell was not what represented.

During the development of the processes and technology for the retail based SIRE
Network as described above, there was a decreased emphasis on sales of new cards
due to the market research showing consumers unwillingness to actively use the
card products without a suitable value load solution. The decline in revenue is
attributable to the decreased sales effort and the merger with Pan American. The


                                       37


<PAGE>

Company also had difficulty obtaining a quality issuing bank. In August 2003,
the Company lost its issuing bank when the bank lost its MasterCard
certification. The Company was not able to ship cards products until the first
quarter of 2005. In this period of time, the Company was focusing with on the
approval of processes, establishment of bank relationships, development of the
Company's technology and the approval by the banks institutions. The Company
filed a lawsuit with the responsible bank for damages as described in Item 3 of
this report on page 18.

OPERATING EXPENSES. Selling, General and Administrative expenses for the nine
months ended September 30, 2004, the year ended December 31, 2003 and the period
July 10, 2000 (date of incorporation) to September 30, 2004 were $1,029,125,
$1,118,753 and $2,896,467, respectively. The decline in operating expenses of
eight percent for the period ended September 30, 2004 compared to the year ended
December 31, 2003, was primarily attributable to the reduced period of time
covered in the reporting period. When comparing the average expenses per month
during the reporting period, they actually increased twenty-three percent to a
$114,347 average per month versus an average of $93,229 per month in the prior
period as a result of the following significant expense items.

STOCK BASED COMPENSATION AND OTHER NON CASH EXPENSES was $92,677, $772,030 and
$1,277,315 for the nine months ended September 30, 2004, the year ended December
31, 2003 and the period July 10, 2000 (date of incorporation) to September 30,
2004, respectively. The eighty-eight percent decrease in 2004 compared to 2003
in these expenses were primarily related to the fact that employee compensation
in 2004 was primarily paid with cash as opposed to 2003 when a significant
portion of its salary and wages was paid with stock.

EMPLOYEE COMPENSATION AND BENEFITS increased from $248,430 to $624,972 for the
twelve months ended December 31, 2003 compared to the nine months ended
September 30,2004 respectively. The increase of one hundred and fifty two
percent was due to the addition of Typhoon employees as well as the payment of
many employees with cash who had been paid with stock in the twelve months ended
December 31, 2003.

PROFESSIONAL AND CONSULTING FEES increased seven hundred ninety-three percent
from $15,796 for the year ended December 31, 2003 to $141,116 for the nine
months ended September 30, 2004, because of the professional services related to
the business combination with Pan American and the Company's filings with the
SEC.

PURCHASE OF IN PROCESS RESEARCH AND DEVELOPMENT was $153,190 during the year
ended December 31, 2003, which was related to the excess of the purchase price
paid over the fair value of the net assets acquired of Typhoon Voice
Technologies, Inc.

IMPAIRMENT OF LONG LIVED ASSETS amounted to approximately $43,200 for the nine
months ended September 30, 2004. Statement of Financial Accounting Standards
(SFAS) 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
requires that long-lived assets, including certain identifiable intangibles, be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value of the assets in question may not be recoverable. The
Company evaluated its long-lived assets during the nine months ended September
30, 2004 and determined that certain impairment losses were necessary.

LOSS FROM OPERATIONS. As a result of the above, the Company's net losses
increased eight percent to $1,031,335 in the nine months ended September 30,
2004 from $954,974 in the twelve months ended December 31, 2003. From inception
the Company has lost $2,654,937. The average loss per month in the twelve months
ended December 31, 2003 was $79,581 compared to $114,593 for the nine months
ended September 30, 2004, a forty-four percent increase. The increase in the
loss related to the lack of an actively shipping product during the
majority of the period ended September 30, 2004 while the Company increased
staffing and marketing activities.  The Company also spent a substantial amount
of its time securing adequate funding and completing the merger with PAEC.


                                       38


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES.

From inception to September 30, 2004, the Company raised $310,063 from sales of
its common stock, borrowed on notes payable a total of $97,912 and received
$971,051 of payments under a note receivable from Paul Marshall, a stockholder.
The Company used these proceeds to fund operating activities of $1,056,035, to
purchase property and equipment of $148,249 and to purchase certain assets of
Typhoon Voice Technologies for $5,000. On September 30, 2004, the Company had a
cash balance of $121,832 which was not sufficient to operate the Company in
fiscal year 2005. Management under took efforts to raise additional capital to
enable the Company to continue to operate. Subsequent to September 30, 2004 and
through May 15, 2005, the Company received an additional approximate $2,075,000
under the aforementioned note receivable from Paul Marshall and approximately
$1,425,000 from the sale of the Company's common stock. After paying outstanding
liabilities, financing operations and additional investments in technology, the
Company has approximately $606,000 of cash available at May 15, 2005.

Management does not believe these funds will be sufficient to fund operations
for the foreseeable future and the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which it operates. Since inception, the Company's operations have
primarily been funded through private equity, and the Company expects to
continue to seek additional funding through private or public equity and/or debt
financing. Finally, the Company expects that operating revenues from the sales
of its products and other related revenues will increase. However, there can be
no assurance that the funds the Company has in place will be adequate to meet
its cash flow needs for the year ended September 30, 2005 or that the Company
will be able to fund any cash shortfalls through additional debt or equity
capital and/or any cash generated by its operations. These factors, among
others, indicate that the Company may be unable to continue as a going concern
for a reasonable period of time. Management will require additional capital
resources for the expansion of the Company's marketing and further improvement
of its technology as well as to improve the financial controls over the Company.
The Company is adding additional experienced personnel in Marketing,
Technological and Finance in order improve market penetration and profitability.

CHANGES IN NUMBER OF EMPLOYEES. To support the expansion of POPS, the
substantial marketing effort, and the increased administrative needs, the
Company anticipates that the development of its business will require the hiring
of additional employees. Over the course of 2005 and beginning in January, the
Company will add additional programmers and sales personnel to enable it to meet
its marketing and operational objectives. Beginning January 1, 2005, the Company
has identified four experienced individuals that it will add to its senior
management team.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.



                                       39


<PAGE>

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with United States
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The Company's management routinely makes judgments and estimates about the
effects of matters that are inherently uncertain.

Internal-Use Software
---------------------

The Company accounts for costs incurred for internal-use software in accordance
with Statement of Position No. 98-1 "Internal Use Software" ("SOP No. 98-1").
Under SOP No. 98-1, the Company is required to capitalize certain development
costs related to internal-use software. The externally purchased developer kits
for use in the development of Point of Sale (POS) software are being amortized
over the useful life.

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

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

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

Additional accounting policies are disclosed in Note A to the consolidated
financial statements included in this annual report.

                                       40


<PAGE>

ITEM 7. FINANCIAL STATEMENTS

The following consolidated financial statements of the Company as of and for the
various periods ended September 30, 2004, and for the year ended December 31,
2003 are included in this report following page 59 at the pages indicated:

<TABLE>
                                                                                            Page
                                                                                            ----
<S>                                                                                          <C>
Report of Independent Registered Public Accounting Firm.................................... F-1

Financial Statements as of and for various periods ended September 30, 2004, and
   for the year ended December 31, 2003:

         Balance Sheet....................................................................  F-2

         Statements of Operations.......................................................... F-3

         Statements of Stockholders' Equity (Deficit)...................................... F-4

         Statements of Cash Flows.......................................................... F-6

         Notes to Financial Statements..................................................... F-7
</TABLE>

ITEM 8. CHANGES IN CERTIFYING ACCOUNTANTS.

Dismissal of Previously Engaged Accountant
------------------------------------------

On September 28, 2004, Morgan & Company Chartered Accountants, the former
principal accountant for the Company, was dismissed in anticipation of a merger
and reorganization and change of control of the Company. The former accountant's
report on the financial statement of the Company for either of the past two
years did not contain an adverse opinion or a disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
The decision to change accountants for the Company was approved by the Board of
Directors on September 28, 2004.

During the Company's two most recent fiscal years and any subsequent interim
period preceding such dismissal, there were no disagreements with the former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which would have caused it
to make reference to the subject matter of the disagreement in connection with
its report.

The Company was not involved in any events within its two most recent fiscal
years and any subsequent interim period preceding the former accountant's
dismissal which are the reportable kind as required by Item 304(a)(1) of
Regulation S-K.

The Company had provided the former accountant with a copy of the disclosures it
is making in the Form 8-K of October 4, 2004 in response to Item 304(a) of
Regulation S-K that the former accountant received no later than the day that
the disclosures were filed with the Commission. The former accountant had
furnished to the Company a letter addressed to the Commission, a copy of which
is attached as an Exhibit to the Company's report on Form 8-K describing the
change stating that he agreed with the statements made by the Company in
response to this Item 304(a).


                                       41


<PAGE>

Engagement of New Independent Accountant
----------------------------------------

On September 28, 2004, the Company engaged Kingery & Crouse, P.A. ("Kingery &
Crouse") as the new principal accountants for the Company. During the Company's
two most recent fiscal years, and any subsequent interim prior to engaging the
accountant, the Company did not consult Kingery & Crouse regarding either: (i)
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements; or (ii) any matter that was either subject
of a disagreement or a reportable event.

ITEM 8A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of September 30, 2004, being the date of
the Company's fiscal year end covered by this Annual Report. This evaluation was
carried out under the supervision and with the participation of its Chief
Executive Officer and its Chief Financial Officer. Based upon that evaluation,
the Company's Chief Executive Officer and Chief Financial Officer concluded that
its disclosure controls and procedures were not effective in timely alerting
management to material information relating to the Company required to be
included in its periodic SEC filings. There have been no significant changes in
the Company's internal controls or in other factors that could significantly
affect internal controls subsequent to the date it carried out its evaluation.

Based on the evaluation, which disclosed no significant deficiencies or material
weaknesses that are not being addressed in the actions currently being taken to
improve its disclosure controls and procedures, the Company has identified
certain deficiencies and issues with its internal controls that occurred in
fiscal year end 2004. These deficiencies and issues include, but are not limited
to:

         o        Deficiencies related to inadequate or ineffective policies for
                  documenting transactions. The Company identified deficiencies
                  in its controls relating to certain non-accounting
                  documentation. The Company discovered instances where certain
                  corporate documents were not filed or otherwise properly
                  processed.

         o        Deficiencies related to the internal control environment. The
                  Company has determined that for the period ended September 30,
                  2004, it had deficiencies due to inadequate staffing in its
                  accounting department and the lack of a full-time Chief
                  Financial Officer. The Company has hired a Chief Financial
                  Officer subsequent to year end and expects these controls
                  will improve during the fiscal year end 2005.


                                       42


<PAGE>

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in its reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in the Company's reports filed under the Exchange Act
is accumulated and communicated to management, including its Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.

During the nine months ended September 30, 2004, there were no changes in the
Company's internal control over financial reporting that have materially
affected, or are reasonably likely to affect, its internal control over
financial reporting. An Accounting Policy and Procedures Manual has been drafted
to address many of the internal control issues related to financial reporting
and is currently being implemented. The Company feels the Financial Reporting
issues are being addressed and will improve in the fiscal year of 2005.

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

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

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

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

ITEM 8B. OTHER INFORMATION

Unauthorized Listing on Berlin and Frankfurt Exchanges
------------------------------------------------------

The Company believes that the price of our shares has been affected by short
sales by unknown groups and by the involuntary listing of our shares in the
unregulated Berlin Stock Exchange and the Frankfurt stock Exchange. Those
exchanges are known to permit "naked shorts" Shortly after the Merger, the
Company learned that its shares had been listed for trading on the Berlin Bremen
Stock Exchange and Frankfurt Stock Exchange, without the Company's consent by a
man named Rainer Bergmann. In one instance, Mr. Bergman identified himself as
working for RG Securities AG in Frankfurt, Germany, in the listing of the
Company's shares on the Frankfurt Exchange. In the other instance he identified
himself as working for European Investment Services in Griesheim, Germany. In
both instances he tried to bill the Company for his services and pretended to


                                       43


<PAGE>

have had prior instructions and communications from the Company's CEO, however
the Company's CEO had never heard of him or spoken with him before and never
sought to list the Company's shares on any other exchange. Shortly after the
Company learned of the listings on those exchanges, the Company's share price
experienced a significant drop. The Company thereafter learned that the Berlin
Bremen Stock Exchange is known as a facility that permits "naked shorts" and
create an environment for the speculation in shares that is not permitted under
US Law. Naked short selling has been perceived as a problem in the United States
because of the short-selling financial strategies implemented by hedge funds and
others that were financing cash-strapped OTC Bulletin Board Companies. A hedge
fund would reach an agreement to buy a certain number of shares from a company
based on, say, 20 percent discount of the trading price for the last five days
prior to a funding short selling of that company's shares, with the idea it
didn't need to borrow shares for its short selling because it could provide the
shares once it received them from the company on the funding date. Meanwhile,
the naked short selling would force the price of the company's stock down far
below what it was on the agreement date. So the hedge fund would receive the
shares at a 20 percent discount of a much lower share price. The Company has no
direct evidence however that listing its shares these exchanges had any impact
on the price of the Company's shares, but our shares have also experienced a
significant increase in price since October 1, 2004. The Company and its
attorneys contacted Mr. Bergmann and instructed him to cause the Company's
shares be de-listed from the exchanges. Mr. Bergmann and the Frankfurt Stock
Exchange have not responded to the Company's demands. The Berlin Bremen Stock
Exchange responded by twice refusing to de-list the shares. The Company intends
to continue to seek the de-listing of its shares on those exchanges. The Company
has also lodged a complaint with the Securities and Exchange Commission, the
NASD-OTC Bulletin Board, the United States Embassy in Germany and the German
Embassy in Washington, D.C. It may be necessary for the Company to bring an
action against the Berlin and Frankfurt exchanges.

The Company does not believe that it is reasonable to expect the unauthorized
listing to negatively impact the financial statements of the Company or its
shareholders.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the names, ages, and positions with the Company
for each of the directors and officers of the Company as of September 30, 2004.
As described below, certain officers and directors have resigned or assumed new
positions.

<TABLE>
<S>     <C>
Name                                  Age    Position                                             Since
----                                  ---    --------                                             -----

Clifford Wildes                       54     Chief Executive Officer, Treasurer and               2001
                                             Director

Kenneth Craig (1)                     50     Chief Financial Officer, Secretary and               2002
                                             Director


                                                      44
</TABLE>


<PAGE>

<TABLE>
<S>         <C>
Erik Jensen (2)                       46     President, Chief Operating Officer and Director      2003

James Smith III                       38     Chief Technical Officer                              2004

Rod Braido (2)                        59     Vice-President and Director                          2001

Mark Brewer                           46     Director                                             2002

Virgil "Brother" Sandifer, Jr.        49     Director                                             2004

Benjamin J. Bond                      63     Director                                             2004

Theodore Misiewicz (2)                45       Director and Chief Financial Officer               2005
</TABLE>

(1) Effective January 2005, Ken Craig became Chief Operating Officer of the
Company and Theodore Misiewicz took over as Chief Financial Officer.

(2) Effective January 2005, Rod Braido resigned as a member of the Board of
Directors and Theodore Misiewicz was appointed to the board to fill the vacancy.

CLIFFORD WILDES - Chief Executive Officer, Director and Founder. Mr. Wildes has
been with Morgan Beaumont since it was commenced operations in 2001. Mr. Wildes
has over 20 years of executive management experience in private and public
companies. Prior to serving in roles as CEO, COO, CFO, President and Founder of
the Company, Mr. Wildes was CEO and Founder of several companies within the
hi-tech sector, as well as business consulting services. Mr. Wildes is the
former founder and CEO of Microtech International Inc., a private company that
he sold to a Japanese public company in 1995. He was also the founder and CEO of
Nova Interactive Inc., which he sold to a public company in 1997. From 1997 to
2001, Mr. Wildes consulted, or has been employed with, various public companies
holding positions as their CEO, COO and Vice President, interfacing with SEC and
managing the operations of those companies. Mr. Wildes was the founder and
President of Meridian Capital, Inc. from 1997 to 2004, which is currently still
open but inactive. In January to November 2000, Mr. Wildes was a member of
MacKenzie Shea, a business consultant firm active in consultation. As such, Mr.
Wildes was placed as officer or director of several companies in need of
management or operational guidance on a temporary basis. Mr. Wildes received a
Bachelor of Science degree in Political Science and Economics from the
University of Massachusetts (formerly "Boston State College") at Boston in 1972.

KENNETH CRAIG - Chief Financial Officer and Director; effective January 2005,
Chief Operations Officer and Director. Mr. Craig has an extensive background in
the operations of public and private companies, having served as CEO and
President, or Vice President of various companies, for the past 20 years. These
companies include, ICT Worldwide, Inc. where he acted as Vice President, which
required extensive international travel and interface with Foreign Governmental
Ministries and the Business and Trade Divisions of the U.S. Embassy; Global
Resources Group, Inc. where he served as CEO for their public registration, PPM,
as well as conducted in-depth interface with SEC. Additionally, he is the past


                                       45


<PAGE>

CEO and President of Divot Golf Corporation, Miller Golf Products and
Renaissance Golf Products, Inc. Mr. Craig was Division President of Wiltel
Communications, a Williams Company, and is a licensed attorney in Mississippi
and Texas. Mr. Craig received a Bachelor in Business Administration (Accounting
Area) from Stetson University in 1976 and a Juris Doctorate from University of
Mississippi in 1980.

ERIK JENSEN - President, Chief Operating Officer and Director; effective January
2005, President and Director. Mr. Jensen has co founded and sold a number of
technology start up companies over the past 15 years. Prior to joining the
Company, Mr. Jensen was President, Director and Co-Founder of Typhoon Voice
Technology from 2001 to 2003, a software development company described in Item 1
of this report, which was acquired by the Company. From 1999 to 2002, Mr. Jensen
was Technology marketing manager for all VoIP solutions. He has extensive
experience in the telecommunications industry and related technology. He has
held executive positions at Callware Technologies and Comdial Corporation, which
is currently active. Mr. Jensen has studied Business Administration and
Management Information Systems from 1977 to 1988.

JAMES SMITH III - Chief Technical Officer. Mr. Smith has over 15 years
experience creating world class software solutions in various arenas. Prior to
starting with the Company, Mr. Smith co-founded Typhoon Voice Technologies,
which was acquired by the Company, where he was the Chief Technology Officer and
Chief Technical Architect of the Activate Manager IVR system. From 2000 to 2003,
Mr. Smith was the Senior Internet Software Engineer of Comdial, which is
currently active. From 1999 to 2000, Mr. Smith was the Team Leader/ Internet
Software Engineer of Merant Interactive, which is currently active, where he
created complex innovated Internet Solutions. From 1992 to 1999, he was TSM
Engineer IV, TSM Engineer III, and TSM Engineer II of Alcatel Network Systems,
which is currently active, where he developed software for SONET Telecom gear.
>From 1989 to 1992, Mr. Smith was the Associate Programmer of International
Business Machines and from 1986 to 1988, he was the College Co-op of
International Business Machines, which is currently active. Mr. Smith received a
Bachelor of Science in Computer Science from Michigan State University in 1989
and is expecting to receive his Masters of Business Administration at Ellis
College in 2006. Mr. Smith resigned from the Company January 2005.

ROD BRAIDO -Vice President, and Director; effective January 2005, Vice
President. Mr. Braido has over 25 years of experience in the Computer Hardware
and Semiconductor Industries. Mr. Braido heads up the Company's west coast
office. Mr. Braido was most recently Vice President of Strategic Programs at
Bell Microproducts (NASDAQ:BELM). Mr. Braido was a partner in Meridian Capital,
Inc. Mr. Braido served as a Chief Executive Officer of the Company in its start
up stage. In 1998, Mr. Braido, as the founder, held the positions of President
and Chief Executive Officer of NetAttach, Inc. VA Linux System of Santa Clara,
Ca, acquired NetAttach in April of 2000, (NASDAQ: LNUX). Prior to founding
NetAttach, Mr. Braido was Senior Vice President of computer product sales and
Senior Vice President and general manager of Bellstor Memory Systems, a division
of Bell Microproducts. From 1989 to 1996, Mr. Braido was Vice President of World
Wide Sales and General Manager of the systems division of SyQuest Technology.
Mr. Braido worked with Mr. Wildes when he was Vice President of Sales and Chief
Operating Officer with Microtech International Inc. Prior to 1987 Mr. Braido
served with National Semiconductor (NASDO: NSM), for over 10 years, in a number
of sales management roles.


                                       46


<PAGE>

MARK BREWER - Director. Mr. Brewer has served as the Marketing Director for One
World Nutrition, a nutritional supplement company, since January 2003. He is the
Managing Director of Novus Capital Investment Fund. Since May of 2002, he has
served as Vice President of Lighthouse II, Inc., a marketing company. From 1997
to 2002, he has also served as President of HydroMaid International,
manufacturers of water-powered disposal units. Mr. Brewer attended the
University of Phoenix where he received a Bachelor of Arts in Business
Administration in 1985.

BENJAMIN J. BOND - Director, Audit Committee Member, Compensation Committee
Member. Mr. Bond is a certified public accountant. For the past 10 years, Mr.
Bond has been in private accounting practice specializing in tax and consulting.
Mr. Bond received a Bachelor of Science in Business Administration from the
University of Florida in 1966.

VIRGIL LEE "BROTHER" SANDIFER, JR. - Director, Audi Committee Member,
Compensation Committee Member. Mr. Sandifer is a certified public accountant and
managing partner of the accounting firm of Sayle, Sandifer & Associates, LLP,
where he has practiced since 1980. Mr. Sandifer attended the University of
Mississippi where he received a Bachelor of Arts in Accounting in 1977 and a
Master of Business Administration in 1979.

THEODORE MISIEWICZ - Effective January 2005, Director and Chief Financial
Officer. Mr. Misiewicz is a certified public accountant. He is a financial and
operations professional with more than twenty years of extensive operational
responsibilities in a wide variety of industries including computer
manufacturing, Licensing Financial Services, Affinity Marketing, the Gift
Market, Collectibles, Syndication and Consulting. Mr. Misiewicz was director and
manager of corporate accounting for QMS, Inc. from 1985 through 1994. During the
course of his employment, that Company grew from approximately $50 million in
sales to over $300 million as a public corporation. From 1994 through 1995, Mr.
Misiewicz was Vice President of Finance & Administration for Jordan American
Holdings, Inc. where he was responsible for all corporate financial and
administration of the publicly traded holding company including accounting and
budgeting. He accomplished the tax-free spin-off of an unprofitable division
that served to materially reduce the shares and increase the book value per
share. From 1996 through 2000, he was secretary and treasurer for Mill Pond
Press, Inc. Mr. Misiewicz was Chief Financial Officer of Atlantic Syndication
from 2000 through 2004 and Senior Executive Analyst for American Management
Services from March 2004 through May 2004. Mr. Misiewicz attended Western
Michigan University where he received a Bachelor of Business Administration.

TERM OF OFFICE
--------------

The Company's directors are appointed for a three-year term to hold office until
the next annual general meeting of its shareholders or until removed from office
in accordance with its bylaws. The Company's officers are appointed by its board
of directors and hold office until removed by the board, subject to the terms of
their respective employment agreements.


                                       47


<PAGE>

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
----------------------------------------

To the best of the Company's knowledge, during the past five years, no present
or former director, executive officer or person nominated to become a director
or executive officer of the Company:

         o        filed a petition under federal bankruptcy laws or any state
                  insolvency law, nor had a receiver, fiscal agent or similar
                  officer appointed by a court for the business or property of
                  such person, or any partnership in which he was a general
                  partner at or within two years before the time of such filing
                  ,or any corporation or business association of which he was an
                  executive officer at or within two years before the time of
                  such filing;
         o        was convicted in a criminal proceeding or being subject to a
                  pending criminal proceeding (excluding traffic violations and
                  other minor offenses);
         o        was the subject of any order, judgment or decree, not
                  subsequently reverse, suspended, or vacated, of any court of
                  competent jurisdiction, permanently or temporarily enjoining
                  him or her from or otherwise limiting his/ her involvement in
                  any type of business, securities, or banking activities; or
         o        was found by court of competent jurisdiction in a civil
                  action, by the EC or the Commodity Futures Trading Commission,
                  to have violated any federal or state securities law, and the
                  judgment in such civil action or finding by the SEC has not
                  been subsequently reversed, suspended, or vacated.

SIGNIFICANT EMPLOYEES
---------------------

The Company has no significant employees other than its officers and directors.
The Company conducts its business through agreements with consultants and
arms-length third parties.

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

The Company's Executive Officers each have employment agreements that were
renegotiated after the end of the Company's fiscal year end, under thee terms
set forth below:

CLIFFORD WILDES

Cliff Wildes entered into a three (3) year employment agreement pursuant to
which he will receive an annual salary of $185,000 for the first year, $205,000
for the second year and $225,000 for the third year. Mr. Wildes will receive
options to purchase 3,250,000 shares of common stock at $0.20 per share, vesting
1,625,000 as of October 1, 2004, vesting 812,500 as of September 30, 2005, and
vesting 812,500 as of September 30, 2006 (a significant portion of such grants
served as consideration for him agreeing to cancel benefits and protections set
forth in his prior employment agreement). He will also receive a $750 per month
automobile reimbursement, a performance-based bonus and bonus upon sale of the
Company and certain medical and other benefits. Mr. Wildes also received a
signing bonus of $75,000 in exchange for cancellation of the antidilution
protections set forth in his prior employment agreement. A copy of the
employment agreement is attached hereto as Exhibit 9.1.


                                       48


<PAGE>

KENNETH CRAIG

Kenneth Craig entered into a three (3) year employment agreement pursuant to
which he will receive an annual salary of $165,000 for the first year, $180,000
for the second year and $195,000 for the third year. Mr. Craig will receive
options to purchase 2,500,000 shares of common stock at $0.20 per share, vesting
1,250,000 as of October 1, 2004, vesting 625,000 as of September 30, 2005, and
vesting 625,000 as of September 30, 2006 (a significant portion of such grants
served as consideration for him agreeing to cancel benefits and protections set
forth in his prior employment agreement). Mr. Craig will also receive a $650 per
month automobile reimbursement, a performance-based bonus and bonus upon sale of
the Company and certain medical and other benefits. Mr. Craig also received a
signing bonus of $75,000 in exchange for cancellation of the antidilution
protections set forth in his prior employment agreement. A copy of the
employment agreement is attached hereto as Exhibit 9.2.

ERIK JENSEN

Erik Jensen entered into a two (2) year employment agreement pursuant to which
he will receive an annual salary of $125,000 for the first year and $145,000 for
the second year. Mr. Jensen will receive options to purchase 750,000 shares of
the common stock at $0.20 per share, vesting 250,000 as of October 1, 2004,
vesting 250,000 as of September 30, 2005, and vesting 250,000 as of September
30, 2006. Mr. Jensen will also receive a signing bonus of $15,000, a
performance-based bonus and a bonus upon sale of the Company and certain medical
and other benefits. If Mr. Jensen is terminated without cause, he will be paid
in full for all pay, benefits, overrides, commission, vacation pay, personal
days, bonus and stock or options. A copy of the employment agreement is attached
hereto as Exhibit 9.3.

JAMES F. SMITH III

James F. Smith III entered into a two (2) year employment agreement pursuant to
which he will receive an annual salary of $95,000 for the first year and
$102,000 for the second year. Mr. Smith will receive options to purchase 150,000
shares of the common stock at $0.20 per share, vesting 50,000 as of October 1,
2004, vesting 50,000 as of September 30, 2005, and vesting 50,000 as of
September 30, 2006. Mr. Smith will also a signing bonus of $10,000, a car
allowance of $400 per month, a bonus upon sale of the Company and certain
medical and other benefits. If Mr. Smith is terminated without cause, he will be
paid in full for all pay, benefits, overrides, commission, vacation pay,
personal days, bonus and stock or options. A copy of the employment agreement is
attached hereto as Exhibit 9.4. Mr. Smith resigned from the Company in January
2005.

CONSULTING AGREEMENTS
---------------------

The Company has engaged several financial consultants to assist it in its
operations, since the date of its fiscal year end, under the following
agreements and terms:


                                       49


<PAGE>

CONSULTING AGREEMENT WITH SCOTT CHRISTIE

The Company has entered into a Consulting Agreement with Scott Christie to
advise the Company on Financial business and investor matters. The Agreement is
for a term of two (2) years, it is terminable by either party on 30 days notice
and provides for the Company to pay Scott Christie a monthly fee of $4,000 and
issue 500,000 nonqualified stock options to Mr. Christie exercisable at $0.20
per share on a cashless basis, vesting 100,000 options immediately and 100,000
for the following four quarters. A copy of the Consulting Agreement was attached
to the Company's Form 8-K dated December 12, 2004 and is incorporated herein by
this reference. Effective April 1, 2005, the consulting agreement with Mr.
Christie was terminated.

CONSULTING AGREEMENT WITH ANDREW NEITLICH

The Company has entered into a Consulting Agreement with Andrew Neitlich to
advise the Company on Financial business and investor matters. The Agreement is
for a term of two (2) years, it is terminable by either party on 30 days notice
and provides for the Company to pay Andrew Neitlich a monthly fee of $2,000 and
issue 240,000 nonqualified stock options to Mr. Neitlich exercisable at $0.20
per share on a cashless basis, vesting 40,000 options immediately and 40,000 for
the following four quarters. A copy of the Consulting Agreement was attached to
the Company's Form 8-K dated December 12, 2004 and is incorporated herein by
this reference. Mr. Neitlich resigned from the Company on March 2005.

CONSULTING AGREEMENT WITH CASCADE PARTNERS

The Company entered into a Consulting Agreement with Cascade Partners
("Cascade") pursuant to which Cascade will provide advisory services to the
Company. Cascade will receive $8,000 per month plus options to purchase
1,200,000 shares of the Company's common stock for $0.20 per share on a cashless
basis. The Company's CEO, Clifford Wildes, is a former business partner of two
of Cascade's principles and one of Cascade's principals has and continues to
provide legal services to or on behalf of Mr. Wildes and the Company's CFO,
Kenneth Craig. A copy of the Consulting Agreement is attached hereto as Exhibit
9.5.

COMMITTEES OF THE BOARD OF DIRECTORS
------------------------------------

The Company presently has an audit committee and compensation committee of its
board of directors, each of which are controlled by a majority of outside
directors.

AUDIT COMMITTEE FINANCIAL EXPERT
--------------------------------

The Company's Audit Committee consists of two practicing accounting
professionals.

PAST RELATIONSHIPS AMONG OFFICERS, DIRECTORS AND CONSULTANTS
------------------------------------------------------------

The inside directors, the executive officers and certain consultants have
advised the Company's Board of Directors of certain existing and past business
relationships among the parties. Cliff Wildes was formerly in partnership with
the two principal partners of Cascade Partners. Cascade Partners is now a
consultant to the Company. Prior to the Company engaging Cascade Partners as a


                                       50


<PAGE>

consultant, one of Cascade Partners principal partners represented Cliff Wildes
and Ken Craig in the negotiation of their employment agreements with the
Company, and he is also indebted to Clifford Wildes for certain loans that Mr.
Wildes extended to him in 2000. One of the Cascade partners has represented Mr.
Wildes as personal legal counsel since 2000. Additionally, certain members of
the audit committee and Board of Directors have acted as accountants or tax
advisors to certain other officers and directors of the Company. The Board of
Directors of the Company has been advised of the details of these relationships.
Cliff Wildes and Rod Briado have been involved in a business relationship/ in
business with Meridian Capital Inc.

Cliff Wildes, Ken Craig and Erik Jensen acquired West Coast Construction
Management, LLC, a building restoration and painting company, in Florida, in
which Mr. Wildes is a member and Mr. Jensen is a managing member. Within a year
since the acquisition, this company received 100% of its members investment back
in revenue.

Ben Bond was past accountant for Meridian Capital Inc. Erik Jensen's wife, who
is an attorney, previously worked for a firm that did legal work for Mr. Wildes
personally and for his companies, including Morgan Beaumont. Erik Jensen and
James Smith were previously in business together and the shareholders of Typhoon
Voice Technology. VL "Brother" Sandifer had filed the Company's past tax
returns. The Board of Directors of the Company has been advised of the details
of these relationships.

CODE OF ETHICS
--------------

The Company has not yet adopted a corporate code of ethics. The Company's board
of directors is considering, over the next year, establishing a code of ethics
to deter wrongdoing and promote honest and ethical conduct; provide full, fair,
accurate, timely and understandable disclosure in public reports; comply with
applicable laws; ensure prompt internal reporting of code violations; and
provide accountability for adherence to the code.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's executive officers and
directors, and persons who own more than 10% of a registered class of its equity
securities ("Reporting Persons"), to file reports of ownership and changes in
ownership with the SEC. Reporting Persons are required by SEC regulations to
furnish the Company with copies of all forms they file pursuant to Section
16(a). Based solely on the Company's review of the copies of such reports
received by it, the representations in the Merger Agreement between the former
Morgan Beaumont and Pan American Energy Corporation, and the written
representations from certain Reporting Persons that no other reports were
required for those persons, the Company believes that, during the nine months
ended September 30, 2004, the Reporting Persons complied with all Section 16(a)
filing requirements applicable to them.

The Company has become aware of a shareholder in possession at one point of
approximately 9,060,000 shares of the 40,000,000 of the Company's total shares
outstanding. This represents 22.6 % of the Company's total share outstanding
shares, thus exceeding 10% of the then outstanding number of shares. The Company


                                       51


<PAGE>

contacted the shareholder and informed him of his obligations under Section 16
of the Exchange Act. The Shareholder failed to respond to the Company's
inquiries and subsequently informed the Company that he did not control over 5%
of the Company's shares. The Company is continuing to investigate the
shareholder's response and at the suggestion of the SEC, the Company will file
an unverified Form 3 on behalf of the shareholder.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The table below summarizes all compensation awarded to, earned by, or paid to
the following individuals, the Company's "named executive officers and
directors" for the two most recently completed fiscal years ended December 31,
2003 and September 30, 2004. This table does not reflect changes that went into
effect after the end of the Company's fiscal year.

<TABLE>
                                                   ANNUAL COMPENSATION                         LONG TERM COMPENSATION
                                      --------------------------------------------     ----------------------------------
                                                                                       RESTRICTED
                                                                      OTHER ANNUAL       STOCK           OPTIONS/*
NAME                  TITLE           YEAR      SALARY     BONUS      COMPENSATION      AWARDED           SARS (#)
-------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>      <C>                       <C>                              <C>
Clifford Wildes       Chief           2004     $150,000     -            $ 5,941           -              100,000
(1) (3)               Executive       2003     $150,000     -            $ 9,350           -              Options-
                      Officer,        2002     $100,000     -            $ 8,410           -
                      Treasure
                      and
                      Director
-------------------------------------------------------------------------------------------------------------------------
Erik Jensen (1) (3)   President,      2004     $ 96,000     -            $ 4,800         12,737           100,000
                      Chief           2003            -     -                  -         shares           Options-
                      Operating       2002            -     -                  -           -                 -
                      Officer,                                                             -
                      and
                      Director
-------------------------------------------------------------------------------------------------------------------------
Kenneth Craig (1)     Chief           2004     $150,000     -            $12,593           -              100,000 Options
(3)                   Financial       2003     $150,000     -            $18,860           -                 -
                      Officer,        2002     $100,000     -            $11,565           -                 -
                      Secretary,                                                                             -
                      and
                      Director
-------------------------------------------------------------------------------------------------------------------------
James Smith III       Chief           2004     $ 78,000     -            $ 4,800         12,737              -
                      Technical       2003            -     -                  -         shares              -
                      Officer         2002            -     -                  -           -                 -
                                                                                           -
-------------------------------------------------------------------------------------------------------------------------


                                                           52
</TABLE>


<PAGE>
<TABLE>
                                                   ANNUAL COMPENSATION                         LONG TERM COMPENSATION
                                      --------------------------------------------     ----------------------------------
                                                                                       RESTRICTED
                                                                      OTHER ANNUAL       STOCK           OPTIONS/*
NAME                  TITLE           YEAR      SALARY     BONUS      COMPENSATION      AWARDED           SARS (#)
-------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>      <C>                       <C>                              <C>
Rod Braido (1)        Senior          2004     $ 90,000     -         $ 3,000               -             100,000 Options
                      Vice-Preside    2003            -     -               -               -                -
                      Director        2002            -     -               -               -                -
                                                      -                                                      -
-------------------------------------------------------------------------------------------------------------------------
Virgil "Brother"      Audit           2004     $  5,000     -            $ 1,000            -             100,000 Options
Sandifer, Jr. (1)     Committee       2003            -     -            $   250            -                -
(2)                   Member,         2002            -     -                  -            -                -
                      Compensation
                      Committee
                      Member,
                      and
                      Director
-------------------------------------------------------------------------------------------------------------------------
Benjamin J. Bond      Audit           2004     $  5,000      -           $ 1,000            -             100,000 Options
(1) (2)               Committee       2003            -      -           $   250            -                -
                      Member,         2002            -      -                 -            -                -
                      Compensation
                      Committee
                      Member,
                      and
                      Director
-------------------------------------------------------------------------------------------------------------------------
Mark Brewer (1) (2)   Director;       2004     $  5,000      -           $ 1,000                          100,000 Options
                      Audit           2003     $  5,000                  $   250
                      Committee;
                      Compensation
                      Committee
-------------------------------------------------------------------------------------------------------------------------
                                      2004     $574,000      0           $31,134         25,474                  $140,000
                                                                                         shares

</TABLE>

         (1)      Outside Directors receive $5,000 per year to serve on the
                  Board, plus an additional $1,000 if they attend the annual
                  meeting of the Company's Shareholders. They also receive
                  100,000 options, which vest 20,000 upon grant and the


                                       53


<PAGE>

                  remaining vesting 20,000 per quarter. Employee Directors
                  receive 100,000 options, which vest 20,000 upon grant and the
                  remaining vesting 20,000 per quarter.

         (2)      Also a Committee Member. Committee members receive an
                  additional $250 for each Committee Meeting they attend.

         (3)      The executive officers entered into new employment agreements
                  with the Company effective after the period covered in this
                  report. A description of the terms and copies of the
                  agreements are set forth in this report.

STOCK OPTION GRANTS

The Company did not grant any stock options to the executive officers or
directors during the period ended September 30, 2004. Officers and
directors were granted nonqualified options as set forth in the description of
their employment agreements.

EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES

No stock options were exercised by the Company's officers, directors or
employees during the period ended September 30, 2004.

OUTSTANDING STOCK OPTIONS

As of September 30, 2004 there are no stock options outstanding. In October,
2004, the Company granted the officers the stock options set forth in the
description of their employment agreements.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of September 30, 2004, the number and
percentage of the outstanding shares of common stock which, according to the
information supplied to the Company, were beneficially owned by (i) each person
who is currently a director of the Company, (ii) each executive officer, (iii)
all current directors and executive officers of the Company as a group and (iv)
each person who, to the knowledge of the Company is the beneficial owner of more
than 5% of the outstanding common stock. Except as otherwise indicated, the
persons named in the table have sole voting and dispositive power with respect
to all shares beneficially owned, subject to community property laws where
applicable. This table does not reflect options granted to the Company's
executive officers after the period covered in this report, which are listed in
the description of their employment agreements.

<TABLE>
Title of class         Name and address                       Amount of                         Percent
--------------         ----------------                       ---------                         -------
class(1)               of beneficial owner                    beneficial ownership              of class
-----                  -------------------                    --------------------              --------

<S>                    <C>                                    <C>                               <C>
Common Stock           Clifford Wildes                        4,405,464 shares(2)               11.0%
                       7436 Myrica Drive
                       Sarasota, FL  34241


                                                  54
</TABLE>


<PAGE>
<TABLE>

<S>                    <C>                                    <C>                               <C>
Common Stock           Carole L. Wildes                       4,405,464 shares(3)               11.0%
                       7436 Myrica Drive
                       Sarasota, FL  34241

Common Stock           Kenneth Craig                          3,148,072 shares(4)                7.9%
                       612 Downs Avenue
                       Tampa, FL  33617

Common Stock           Rosie Craig                            3,148,072 shares(5)                7.9%
                       612 Downs Avenue
                       Tampa, FL  33617

Common Stock           Erick Jensen                             773,757 shares                   1.9%
                       5105 Sunnydale Circle
                       Sarasota, FL  34233

Common Stock           James Smith III                          855,599 shares                   2.1%
                       9903 Old Hyde Park Pl
                       Bradenton, FL  34202

Common Stock           Rod Braido                               703,450 shares                   1.8%
                       1 Golden Meadow Lane
                       Fallbrook, CA  92028

Common Stock           Virgil "Brother" Sandifer, Jr.           100,000 shares                  .002%
                       2037 Hwy 82 E.
                       Greenville, MS 38703

Common Stock           Benjamin J. Bond                         100,000 shares                  .002%
                       1001 N. Washington Blvd., Suite 106
                       Sarasota, Florida 34236

Common Stock           All Officers and Directors            10,086,342 shares                  25.2%
                       as a Group that consists of
                       three people

</TABLE>

(1)      The percent of class is based on 40,025,017 shares of common stock
         issued and outstanding as of September 30, 2004.

(2)      Of the shares represented, 3,993,989 are in the name of Cliff Wildes
         and 96,800 shares are in the name of his wife, Carole L. Wildes, of
         which he is deemed to be the beneficial owner.

(3)      Of the shares represented, 96,800 are in the name of Carole L. Wildes
         and 3,993,989 shares are in the name of her husband, Cliff Wildes, of
         which she is deemed to be the beneficial owner.


                                       55


<PAGE>

(4)      Of the shares represented, 1,932,928 are in the name of Ken Craig,
         990,282 shares are in the name of his wife, Rosie Craig.

(5)      Of the shares represented, 990,282 are in the name of Rosie Craig and
         1,932,928 shares are in the name of her husband, Kenneth Craig, of
         which she is deemed to be the beneficial owner.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There have been two transactions by the Company within the last two years where
a director, officer or shareholder of the Company, had a direct or indirect
interest.

         o        Erik Jensen, current President and COO, was an officer and
                  director of Typhoon Voice Technologies in 2003. Typhoon had
                  contracts with the Company for the development of the Morgan
                  Beaumont Network and database. The Company has since acquired
                  Typhoon and all assets thereof.
         o        At December 31, 2003, the Company has a $36,500 note payable
                  to Cliff Wildes. The note, which required interest at the rate
                  of 12% per annum, was paid during the nine months ended
                  September 30, 2004.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Reports on Form 8-K:

(b) Exhibits:

Exhibits included or incorporated by reference herein are set forth in the
Exhibit Index.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES
----------

The aggregate fees billed for the nine months ended September 30, 2004 for
professional services rendered by the principal accountant for the audit of the
Company's annual financial statements and review of the financial statements
included in the Company's Form 10-KSB or services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were estimated at $35,000.

AUDIT RELATED FEES
------------------

None.


                                       56


<PAGE>

TAX FEES
--------

None.

ALL OTHER FEES
--------------

None.

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


MORGAN BEAUMONT

By: /S/CLIFFORD WILDES
    ---------------------------------------------------
    Clifford Wildes, Chief Executive Officer, Treasurer
    Director
    Date: May 23, 2005


In accordance with the Securities Exchange Act, 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/CLIFFORD WILDES
    ------------------------------------------------------
    Clifford Wildes, Chief Executive Officer and Treasurer
    (Principal Executive Officer)
    Director
    Date: May 23, 2005


By: /S/KENNETH CRAIG
    --------------------------------------------------------------
    Kenneth Craig, Secretary and Chief Financial Officer
    (Principal Financial Officer and Principal Accounting Officer)
    Director
    Date: May 23, 2005


                                 EXHIBITS INDEX

                 EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-B


EXHIBIT           DESCRIPTION OF EXHIBIT
NUMBER

3.1               Articles of Incorporation

3.2               Bylaws


                                       57


<PAGE>

4.1               Share Certificate

9.1               Employment Agreement with Clifford Wildes
9.2               Employment Agreement with Kenneth Craig
9.3               Employment Agreement with Erik Jensen
9.4               Employment Agreement with James Smith III
9.5               Consulting Agreement with Cascade Partners

19.1              Definitive Information on Schedule 14C

31.a              Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002 (1)

31.b              Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002 (1)

32.a              Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 (1)

32.b              Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 (1)

         (1) Filed as an Exhibit to this Quarterly Report on Form 10-KSB.

REPORTS ON FORM 8-K
-------------------

On September 1, 2004, the Company filed a Report on Form 8-K announcing under
Item 1 of that report changes in control of Registrant, under Item 2 of that
report the acquisition or distribution of assets, under Item 5 of that report
other events, and under 6 of that report the resignation of directors, as more
particularly described elsewhere in this Form 10-KSB.

On October 4, 2004, the Company filed a Report on Form 8-K announcing under Item
1.01 of that report the entry into a definitive agreement, under Item 2.01 of
that report the acquisition or distribution of assets, under Item 4.01 of that
report the changes in the Company's certifying accountant, under Item 5.01 of
that report the changes in control of Registrant, under 5.02 of that report the
resignation of directors, under Item 5.03 of that report the change in fiscal
year, under Item 8.01 of that report other events, and under Item 9.01 the
Financial Statements of the Company, as more particularly described elsewhere in
this Form 10-KSB.

On October 12, 2004, the Company filed a Report on Form 8-K announcing under
Item 1.01 of that report note payment and under Item 8.01 of that report other
events, as more particularly described elsewhere in this Form 10-KSB.

On October 27, 2004, the Company filed a Report on Form 8-K announcing under
Item 3.01 of that report unauthorized listing and trading of securities, under
Item 3.03 of that report the stop transfer, under Item 5.02 of that report the
additions to the Board of Directors and formation of compensation and audit
committees, and under Item 8.01 of that report other events, as more
particularly described elsewhere in this Form 10-KSB.

On December 7, 2004, the Company filed a Report on Form 8-K announcing under
1.02 of that report the amendment of note agreement with Paul Marshall, under
Item 5.02 of that report the additions to the Company's Board of Directors,
under Item 7.01 of that report the consummation of common stock private
placement and under Item. 8.01 the renegotiation of employment contracts with
Cliff Wildes and Kenneth Craig, the Consulting Agreement with Scott Christie and
Andrew Neitlich and a partial settlement on the First National Bank of Central
Texas case.


                                       58



<PAGE>

ITEM 7. FINANCIAL STATEMENTS


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

                         FINANCIAL STATEMENTS AS OF AND
                               FOR VARIOUS PERIODS
                            ENDED SEPTEMBER 30, 2004,
                             AND FOR THE YEAR ENDED
                                DECEMBER 31, 2003
                            AND REPORT OF INDEPENDENT
                        REGISTERED PUBLIC ACCOUNTING FIRM




<PAGE>


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

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


                                                                                               Page
                                                                                               ----

<S>                                                                                              <C>
Report of Independent Registered Public Accounting Firm........................................ F-1

Financial Statements as of and for various periods ended September 30, 2004,
   and for the year ended December 31, 2003:
     Balance Sheet............................................................................. F-2

     Statements of Operations.................................................................. F-3

     Statements of Stockholders' Equity (Deficit).............................................. F-4

     Statements of Cash Flows.................................................................. F-6

   Notes to Financial Statements............................................................... F-7


</TABLE>


<PAGE>

[KINGERY & CROUSE PA]
---------------------
CERTIFIED PUBLIC ACCOUNTANTS


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------

To the Board of Directors and Stockholders of Morgan Beaumont, Inc.:

We have audited the accompanying balance sheet of Morgan Beaumont, Inc. (the
"Company"), a development stage enterprise, as of September 30, 2004, and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the nine months then ended, the year ended December 31, 2003 and the period
July 10, 2000 (date of incorporation) to September 30, 2004. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that has plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
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 financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of September 30,
2004, and the results of its operations and its cash flows for the nine months
then ended, the year ended December 31, 2003 and the period July 10, 2000 (date
of incorporation) to September 30, 2004, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes A and B to the
financial statements, the Company is in the development stage, has suffered
recurring loss from operations and will have ongoing requirements for additional
capital investment. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note A. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Kingery & Crouse, P.A.
--------------------------

Tampa, Florida
November 26, 2004 (Except for the Last Two Paragraphs of Note J
as to Which the Date is May 19, 2005)


           2801 WEST BUSCH BOULEVARD, SUITE 200, TAMPA, FLORIDA 33618
           PHONE: 813.874.1280 | FAX: 813.874.1292 | WWW.TAMPACPA.COM


                                      F-1


<PAGE>

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

                     BALANCE SHEET AS OF SEPTEMBER 30, 2004

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

ASSETS
------

CURRENT ASSETS:
Cash and cash equivalents                                           $   121,832
Note receivable from stockholder                                        644,535
Other receivables                                                         5,865
Prepaid expenses and other current assets                                 5,868
                                                                    -----------
       Total current assets                                             778,100

PROPERTY AND EQUIPMENT - NET                                            102,559

OTHER ASSETS                                                             39,375
                                                                    -----------

TOTAL                                                               $   920,034
                                                                    ===========

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

CURRENT LIABILITIES:
Accounts payable and accrued liabilities                            $   394,846
Notes payable                                                            50,000
                                                                    -----------
        Total current liabilities                                       444,846
                                                                    -----------

STOCKHOLDERS' EQUITY:
  Common stock - $0.001 par value: 150,000,000 shares
     authorized; 40,025,017 shares issued and outstanding                40,025
  Additional paid-in capital                                          4,474,514
  Note receivable from stockholder                                   (1,384,414)
  Deficit accumulated during the development stage                   (2,654,937)
                                                                    -----------
        Total stockholders' equity                                      475,188
                                                                    -----------

TOTAL                                                               $   920,034
                                                                    ===========

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

                       See notes to financial statements.


                                      F-2


<PAGE>

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

                                                   STATEMENTS OF OPERATIONS

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

                                                                                                          For the period
                                                                                                          July 10, 2000
                                                   For the nine months                                       (date of
                                                          ended               For the year ended         incorporation) to
                                                   September 30, 2004          December 31, 2003         September 30, 2004
                                                  ---------------------      ---------------------      ---------------------
<S>                                               <C>                        <C>                        <C>
REVENUES (NET OF RETURNS AND ALLOWANCES)          $              58,602      $             355,872      $             590,219

COST OF REVENUES                                                 35,833                    186,245                    316,162
                                                  ---------------------      ---------------------      ---------------------

GROSS PROFIT                                                     22,769                    169,627                    274,057
                                                  ---------------------      ---------------------      ---------------------

OTHER OPERATING EXPENSES:
Stock based compensation and consulting                          14,200                    594,465                  1,012,286
Other employee compensation and benefits                        624,972                    248,430                  1,075,115
Other professional and consulting fees                          141,116                     15,796                    183,695
Purchased in-process research and development                        --                    153,190                    153,190
Impairment of long lived assets                                  43,154                         --                     43,154
Occupancy and equipment                                          88,951                     63,292                    185,075
Selling and marketing                                            28,301                     27,274                     95,581
Travel and entertainment                                         24,073                      4,020                     28,093
Other                                                            64,358                     12,286                    120,278
                                                  ---------------------      ---------------------      ---------------------
   Total other operating expenses                             1,029,125                  1,118,753                  2,896,467
                                                  ---------------------      ---------------------      ---------------------

LOSS FROM OPERATIONS                                         (1,006,356)                  (949,126)                (2,622,410)
                                                  ---------------------      ---------------------      ---------------------

OTHER INCOME (EXPENSE):
Loss from litigation                                            (56,000)                        --                    (56,000)
Interest income                                                  36,211                         --                     36,211
Interest expense                                                 (5,190)                    (5,848)                   (12,738)
                                                  ---------------------      ---------------------      ---------------------
    Total other income (expense)                                (24,979)                    (5,848)                   (32,527)
                                                  ---------------------      ---------------------      ---------------------

NET LOSS                                          $          (1,031,335)     $            (954,974)     $          (2,654,937)
                                                  =====================      =====================      =====================

NET LOSS PER SHARE - Basic and diluted            $                (.08)     $                (.13)
                                                  =====================      =====================

Weighted average number of shares outstanding                12,697,400                  7,216,359
                                                  =====================      =====================

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

                                              See notes to financial statements.


                                                             F-3

</TABLE>


<PAGE>


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

                                          STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

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

                                                                                                        Deficit
                                                                                          Note        Accumulated
                                   Common Stock            Additional     Common       Receivable     During the
                             -------------------------       Paid-In      Stock           from        Development
                              Shares         Par Value     Capital      Subscribed     Stockholder       Stage          Total
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
<S>                                        <C>           <C>            <C>            <C>            <C>            <C>
Balances, July 10, 2000
  (date of incorporation)             --   $        --   $        --    $        --    $        --    $        --    $        --

Common stock subscription             --            --            --            100             --             --            100
Net loss                              --            --            --             --             --             --             --
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
Balances, December 31,
  2000                                --            --            --            100             --             --            100

Issuance of common stock
  for cash:
     At $0.0069 per share         50,947            51           399           (100)            --             --            350
     At $0.0063 per share        796,047           796         4,204             --             --             --          5,000
Issuance of common stock
  for services -
     At $0.0785 per share      1,557,067         1,557       120,693             --             --             --        122,250
Net loss                              --            --            --             --             --       (216,982)      (216,982)
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
Balances, December 31,
  2001                         2,404,061         2,404       125,296             --             --       (216,982)       (89,282)

Issuance of common stock
  for cash:
     At $0.0785 per share         26,747            27         2,073             --             --             --          2,100
     At $0.1309 per share      1,295,327         1,295       168,205             --             --             --        169,500
     At $0.157 per share         318,419           318        49,682             --             --             --         50,000
Issuance of common stock
  for services:
     At $0.0785 per share        928,254           928        71,952             --             --             --         72,880
     At $0.13111 per share     1,509,304         1,509       196,382             --             --             --        197,891
     At $0.157 per share          67,505            68        10,532             --             --             --         10,600
Net loss                              --            --            --             --             --       (451,646)      (451,646)
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
Balances, December 31,
  2002                         6,549,617         6,549       624,122             --             --       (668,628)       (37,957)

Issuance of common stock
  for cash:
     At $0.0785 per share        284,195           284        22,029             --             --             --         22,313
     At $0.157 per share         254,735           255        39,745             --             --             --         40,000
Issuance of common stock
  for services:
     At $0.157 per share       3,785,774         3,786       590,679             --             --             --        594,465

================================================================================================================================
(CONTINUED)

                                               See notes to financial statements.

                                                               F-4

</TABLE>


<PAGE>

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

                                     STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)(CONTINUED)

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

                                                                                                        Deficit
                                                                                          Note        Accumulated
                                   Common Stock            Additional     Common       Receivable     During the
                             -------------------------       Paid-In      Stock           from        Development
                              Shares         Par Value     Capital      Subscribed     Stockholder       Stage          Total
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
<S>                                        <C>           <C>            <C>            <C>            <C>            <C>
Issuance of common stock
  for assets of Typhoon
  Technologies at $0.157
  per share                    1,421,357         1,421       221,769             --             --             --        223,190
Net loss                              --            --            --             --             --       (954,974)      (954,974)
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------
Balances, December 31,
  2003                        12,295,678        12,295     1,498,344             --             --     (1,623,602)      (112,963)

Issuance of common stock
  for cash ($.0785 per
  share)                         263,651           264        20,436             --             --             --         20,700
Issuance of common stock
  held in escrow                 350,260           350          (350)            --
Issuance of common stock
  for services at $0.157
  per share                       90,428            91        14,109             --             --             --         14,200
Issuance of common stock
  in exchange for net
  assets in a
  recapitalization            27,025,000        27,025     2,941,975             --     (3,000,000)            --        (31,000)
Collections on note
  receivable from
  stockholder
  through September 30,
  2004                                --            --            --             --        971,051             --        971,051
Collections on note
  receivable from
  stockholder
  after September 30,
  2004 (reflected as a
  current asset)                      --            --            --             --        644,535             --        644,535
Net loss                              --            --            --             --             --     (1,031,335)    (1,031,335)
                             -----------   -----------   -----------    -----------    -----------    -----------    -----------

Balances, September 30,
  2004                        40,025,017   $    40,025   $ 4,474,514    $        --    $(1,384,414)   $(2,654,937)   $   475,188
                             ===========   ===========   ===========    ===========    ===========    ===========    ===========

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

                                               See notes to financial statements.

                                                               F-5

</TABLE>


<PAGE>

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

                                                    STATEMENTS OF CASH FLOWS

================================================================================================================================
                                                                                                                    For the
                                                                                                                    period
                                                                                                                 July 10, 2000
                                                                                                                    (date of
                                                                        For the nine         For the year        incorporation)
                                                                        months ended            ended                 to
                                                                          September          December 31,          September
                                                                          30, 2004               2003              30, 2004
                                                                      ---------------      ---------------      ---------------
<S>                                                                   <C>                  <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                            $    (1,031,335)     $      (954,974)     $    (2,654,937)
  Adjustments to reconcile net loss to net cash used
   in operating activities:
    Depreciation and amortization                                              28,688               24,375               62,050
    Amortization of intangible assets                                           6,635                   --                6,635
    Stock based compensation and consulting                                    14,200              594,465            1,012,286
    Purchased in-process research and development                                  --              153,190              153,190
    Impairment of long-lived assets                                            43,154                   --               43,154
  Changes in assets and liabilities, net:
    Decrease (increase)  in receivables                                        (5,865)              19,956               (5,865)
    Decrease (increase) in inventories                                             --               19,632                   --
    Decrease (increase) in prepaid expenses and
      other current assets                                                     27,432                2,500               (5,868)
    Decrease (increase) in other assets                                       (30,525)                  --              (30,525)
    Increase (decrease) in accounts payable and
      accrued  liabilities                                                    137,637               42,997              363,847
                                                                      ---------------      ---------------      ---------------
NET CASH USED IN OPERATING ACTIVITIES                                        (809,979)             (97,859)          (1,056,033)
                                                                      ---------------      ---------------      ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                         (45,551)             (12,141)            (148,249)
  Purchase of assets from Typhoon Voice
    Technologies, Inc.                                                             --               (5,000)              (5,000)
                                                                      ---------------      ---------------      ---------------
 CASH USED IN INVESTING ACTIVITIES                                            (45,551)             (17,141)            (153,249)
                                                                      ---------------      ---------------      ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings under notes payable                                     --               53,912               97,912
  Repayments of notes payable                                                 (36,500)              (1,200)             (47,912)
   Proceeds from the issuance of common stock                                  20,700               62,313              310,063
   Collections on note receivable from stockholder                            971,051                   --              971,051
                                                                      ---------------      ---------------      ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                     955,251              115,025            1,331,114
                                                                      ---------------      ---------------      ---------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                      99,721                   25              121,832

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                 22,111               22,086                   --
                                                                      ---------------      ---------------      ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                              $       121,832      $        22,111      $       121,832
                                                                      ===============      ===============      ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:
Interest paid                                                         $         3,031      $           200      $         3,231
                                                                      ===============      ===============      ===============
Income taxes paid                                                     $            --      $            --      $            --
                                                                      ===============      ===============      ===============

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
   FINANCING ACTIVITIES:

Acquisition of assets by issuance of stock - see Note E               $            --      $        70,000      $        70,000
                                                                      ===============      ===============      ===============


Issuance of common stock for net assets of Pan American
  Energy Corporation in a recapitalization  - see Note A              $     2,969,000      $            --      $     2,969,000
                                                                      ===============      ===============      ===============

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

                                               See notes to financial statements.


                                                              F-6
</TABLE>


<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS

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

NOTE A - FORMATION, BACKGROUND AND OPERATIONS OF THE COMPANY

Morgan Beaumont, Inc., (the "Company"), which is headquartered in Sarasota,
Florida, was incorporated under the laws of the state of Florida on July 10,
2000. Because the Company did not generate significant revenues through
September 30, 2004, it is considered to be in the development stage as defined
in Financial Accounting Standards Board Statement No. 7.

The Company's primary products are debit cards and stored value cards which are
re-loadable financial products for the sub-prime credit market. The Company has
been providing these cards to consumers in the sub-prime credit market sector
since the third quarter of 2002. The sub-prime market is generally made up of
consumers that do not have checking accounts and/or the ability to obtain
standard debit or credit cards. The Company has also provided these products to
third party companies for co-branding with their company name and logo, and
marketing these products under its brand name (e.g. the stored value cards are
issued under the following certifications with MasterCard International -
Independent Sales Organization (ISO), Member Service Provider (MSP) and Third
Party Processor (TPP)). The Company also received the ISO certification with
VISA on September 29, 2004.

On August 24, 2004, the Company acquired the net assets of Pan American Energy
Corp, a publicly traded company ("PAEC") for 27,025,000 shares of its common
stock (which number of shares was subsequently reduced by 1,000,000 shares - see
Note J) and the assumption of $31,000 of accounts payable and accrued
liabilities. For financial statement purposes, the transaction was treated as a
reverse merger and a recapitalization whereby the Company was deemed to be the
acquirer, and no goodwill or other intangible assets were recorded.

In connection with this transaction, the Company received a $3,000,000 note
receivable from a PAEC stockholder. Through September 30, 2004, the Company had
received $971,051 under this note, and during the period October 1, 2004 to
November 26, 2004, the Company collected an additional $644,535. In accordance
with generally accepted accounting principles, the unpaid balance of the note as
of November 26, 2004 has been reflected as a deduction from stockholders'
equity, and the amount paid during the period October 1, 2004 to November 26,
2004 has been reflected as a current asset.

Immediately prior to the acquisition, the Company reduced its outstanding shares
via a reverse stock split whereby the Company's outstanding shares were reduced
at the rate of 7.8513 to one. All references to the number of shares in the
accompanying financial statements and notes thereto have been adjusted to
reflect the stock split as though it occurred at the date of the Company's
incorporation.

Change in Year End
------------------

The Company changed its year end from December 31 to September 30, 2004.
Accordingly, the accompanying financial statements are as of and for various
periods ended September 30, 2004, and for the year ended December 31, 2003.

Revenue Recognition and Accounts Receivable
-------------------------------------------

The Company generates the following types of revenues:

         o        Sales of the physical card products to both distributors, and
                  retailers.

         o        Initiation fees, which arise from sales of the Company's debit
                  cards and stored value.

         o        Subscription fees, which arise from hosting or licensing fees.
                  Under a hosted agreement, the Company's customers are not
                  charged for the use of the Company's proprietary software;


                                      F-7


<PAGE>

                  rather they pay a per minute or per transaction fee for each
                  use whereas under a licensing agreement, the Company's
                  customer pays monthly fees for the use of its software at each
                  of their loading stations.

         o        Transaction fees, which arise from the use and loading of cash
                  for ATM, debit or stored value cards.

         o        Maintenance fees, which arise from charges for keeping the
                  cards active.

         o        Financial float fees, which arise from charges for the instant
                  load of cash and convenience of stored value, ATM and debit
                  cards.

The Company's revenue recognition policy for fees and services arising from its
products is consistent with the criteria set forth in Staff Accounting Bulletin
104 - Revenue Recognition in Financial Statements ("SAB 104") for determining
when revenue is realized or realizable and earned. In accordance with the
requirements of SAB 104 the Company recognizes revenue when, (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the Company's
price to the buyer is fixed or determinable; and (4) collectibility of the
receivables is reasonably assured. During the nine months ended September 30,
2004, one customer accounted for approximately 61% of the Company's revenues and
for the year ended December 31, 2003 two customers accounted for approximately
70% of the Company's revenues. .

Revenues are recognized on an accrual basis of accounting. Card sales are
recognized upon shipment to the customer. Goods may not be returned except for
defects. Management from time to time may authorize the return of product or
special discounts and allowances under unique circumstances in order to retain
customer loyalty. Fees for services are recognized at the time the service is
rendered and revenue for the sale of Stored Value and Money Cards is recognized
when the card is swiped. All sales are final; however, for business reasons,
management on a case by case basis can allow a customer an allowance against the
purchase price or allow a partial return of the product for credit.

The Company's payment terms are normally net 30 days. The Company performs
ongoing credit evaluations of all of its customers and generally does not
require collateral.

Allowance for Doubtful Accounts
-------------------------------

The Company evaluates the allowance for doubtful accounts on a regular basis for
adequacy. The level of the allowance account, and related bad debts are based
upon its review of the collectibility of its receivables in light of historical
experience, adverse situations that may affect the Company's customers' ability
to repay, estimated value of any underlying collateral and prevailing economic
conditions. This evaluation is inherently subjective as it requires estimates
that are susceptible to significant revision as more information becomes
available.

Cash and Cash Equivalents
-------------------------

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with an original maturity of three months or less to be cash
equivalents.

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

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Company to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. The reported amounts of revenues and expenses during
the reporting period may be affected by the estimates and assumptions the
Company is required to make. Actual results could differ from the Company's
estimates.


                                      F-8


<PAGE>

Advertising Costs
-----------------

The Company expense advertising costs as they are incurred. Advertising costs
were $27,301, $632 and $34,797 during the nine months ended September 30, 2004,
the year ended December 31, 2003 and the period July 10, 2000 (date of
incorporation) to September 30, 2004, respectively.

Financial Instruments
---------------------

The Company believes the book value of its cash and cash equivalents and
accounts payable and accrued and other liabilities approximates their fair
values due to their short-term nature. The Company also believes the book value
of its notes payable approximates their fair values as the interest rates as
such obligations approximates rates that could currently be negotiated and
because of their short term nature. It was not practicable to estimate the fair
value of the portion of the note receivable from stockholder reflected as a
deduction from stockholders' equity because of the lack of similar type
arrangements in the marketplace.

Property and Equipment
----------------------

Property and equipment are stated at cost. Major additions are capitalized,
while minor additions and maintenance and repairs, which do not extend the
useful life of an asset, are expensed as incurred. Depreciation and amortization
are provided using the straight-line method over the assets' estimated useful
lives, which range from three to seven years.

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

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

Goodwill and Other Intangibles
------------------------------

In July 2001, the FASB issued Financial Accounting Standards Statement No. 142
("SFAS 142"), "Accounting for Goodwill and Other Intangibles," which was
required to be adopted effective January 1, 2002. Under SFAS 142 goodwill and
indefinite lived intangible assets are no longer amortized but are reviewed, at
a minimum, annually for impairment. Separable intangible assets that are not
deemed to have an indefinite life will continue to be amortized over their
useful lives.

Long-Lived Assets
-----------------

Statement of Financial Accounting Standards (SFAS) 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" requires that long-lived assets,
including certain identifiable intangibles, be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of the
assets in question may not be recoverable. The Company evaluated its long-lived
assets and determined that certain impairment losses were necessary.
As a result, the Company charged operations for approximately $43,200 during
2004.

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

The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss for
the period by the number of common and common equivalent shares outstanding
during the period. There were no common equivalent shares outstanding at any
time since the Company's inception; accordingly basic and diluted net loss per
share are identical for each of the periods in the accompanying financial
statements.


                                      F-9


<PAGE>

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

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

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

Income Taxes
------------

The Company computes income taxes in accordance with Financial Accounting
Standards Statement No. 109 "Accounting for Income Taxes" ("SFAS 109"). Under
SFAS 109, deferred taxes are recognized for the tax consequences of temporary
differences by applying enacted statutory rates applicable to future years to
differences between the financial statement carrying amounts and the tax basis
of existing assets and liabilities. Also, the effect on deferred taxes of a
change in tax rates is recognized in income in the period that included the
enactment date. Significant temporary differences arise from accounts payable
and accrued liabilities that are not deductible for tax reporting until they are
paid.

Research and Development
------------------------

Research and development costs, which approximated $73,600, $216,200 and
$310,600 for the nine months ended September 30, 2004, the year ended December
31, 2003, and the period July 10, 2000 (date of incorporation) to September 30,
2004, respectively, are expensed as incurred.

Recent Pronouncements
---------------------

The Company does not expect that the adoption of any recent accounting
pronouncements will have a material impact on its financial statements.

Reclassifications
-----------------

Certain amounts in the December 31, 2003 financial statements, and the financial
statements for the period July 10, 2000 (date of incorporation) to September 30,
2004 have been reclassified to conform to the presentation in the September 30,
2004 financial statements.

NOTE B - GOING CONCERN

The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. The Company has incurred
significant losses since its inception, and the Company expects to have ongoing
requirements for additional capital investment to implement the Company's
business plan. In addition, the Company's ability to continue as a going concern
must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which it operates. Since inception, the Company's operations have
primarily been funded through private equity, and the Company expects to
continue to seek additional funding through private or public equity and/or debt
financing. As discussed in Note A, on August 24, 2004, the Company acquired the
net assets of Pan American Energy Corp. a publicly traded company that it
believes will help the Company raise additional equity capital. In connection
with this merger, the Company acquired a $3,000,000 note receivable from a
stockholder that had a remaining balance of approximately $1,385,000 as of
November 26, 2004. In addition, as discussed at Note J, subsequent to September
30, 2004, the Company raised approximately $1,425,000 under a private placement


                                      F-10


<PAGE>

of the Company's common stock. Finally, the Company expects that operating
revenues from the sales of its products and other related revenues will
increase. However, there can be no assurance that the funds the Company has in
place will be adequate to meet its cash flow needs for the year ended September
30, 2005 or that the Company will be able to fund any cash shortfalls through
additional debt or equity capital and/or any cash generated by its operations.
These factors, among others, indicate that the Company may be unable to continue
as a going concern for a reasonable period of time.

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

NOTE C - INCOME TAXES

The Company recognized losses for both financial and tax reporting purposes
during each of the periods in the accompanying statements of operations.
Accordingly, no provisions for income taxes and/or deferred income taxes payable
have been provided for in the accompanying financial statements.

Assuming the Company's net operating loss carryforwards are not disallowed by
taxing authorities because of certain "change in control" provisions of the
Internal Revenue Code, at September 30, 2004 the Company has net operating loss
carryforwards of approximately $1,095,000 for income tax purposes (the
significant difference between the Company's net operating carryforwards and its
deficit arises primarily from certain stock based and impairment expenses of
approximately $1,165,500 that are considered to be permanent differences between
book and tax reporting). These carryforwards expire in various years through the
year ended December 31, 2024. Components of the Company's current and
non-current deferred income tax assets, assuming an effective income tax rate of
39.5%, are approximately as follows at September 30, 2004:

Current deferred income tax asset:
    Accounts payable and accrued liabilities                     $    175,700
    Less valuation allowance                                         (175,700)
                                                                 ------------

Net current deferred income tax asset                            $         --
                                                                 ============

Non-current deferred income tax asset:
    Net operating loss carry forward                             $    414,300
    Less valuation allowance                                         (414,300)
                                                                 ------------

Non-current deferred income tax asset                            $         --
                                                                 ============

The Company's net current and non-current deferred income tax assets are not
recorded in the accompanying balance sheet because the Company established a
valuation allowance to fully reserve such assets as their realization did not
meet the required asset recognition standard established by SFAS 109. The total
valuation allowance increased by approximately $405,200 during the nine months
ended September 30, 2004

NOTE D - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at September 30, 2004:

Computer software                                                     $  22,086
Computer hardware                                                        64,741
Furniture, equipment and leasehold improvements                          36,339
                                                                      ---------
                                                                        123,166
Less accumulated depreciation and amortization                           20,607
                                                                      ---------

Property and equipment - net                                          $ 102,559
                                                                      =========


                                      F-11


<PAGE>

NOTE E - PURCHASE OF ASSETS OF TYPHOON VOICE TECHNOLOGIES, INC.

On December 31, 2003, primarily for the purpose of acquiring certain technology,
the Company acquired substantially all of the assets of Typhoon Voice
Technologies, Inc. ("TVT") in exchange for 1,421,357 shares of the Company's
common stock. The purchase price of $228,190 was allocated as follows:

Computer software                                                        19,615
Computer hardware                                                        28,847
In process research and development                                     153,190
Other assets                                                             26,538
Common stock                                                           (223,190)
Cash                                                                     (5,000)
                                                                      ---------

Total                                                                 $      --
                                                                      =========

The excess of the purchase price paid over the fair value of the net assets
acquired of $153,190 was recorded as in process research and development.

Since the transaction was accounted for as a purchase, the Company's 2003
results of operation only include the results of operations of TVT since the
date of acquisition. The Company's 2003 revenues, expenses, net loss and net
loss per share would not have changed significantly if the Company had included
such amounts for TVT for the entire year ended December 31, 2003.

NOTE F - OTHER NOTES PAYABLE

At September 30, 2004, other notes payable consisted of two unsecured notes
payable to a vendor. As discussed at Note J, the balance of these notes were
forgiven when the Company settled certain litigation with this vendor in
November 2004.

NOTE G - RELATED PARTY TRANSACTION

At December 31, 2003, the Company has a $36,500 note payable to an officer. The
note, which required interest at the rate of 12% per annum, was paid during the
nine months ended September 30, 2004.

At December 31, 2004, accounts payable and accrued liabilities include
approximately $163,800 owed to various officers for accrued payroll and
vacation.

NOTE H - COMMITMENTS AND CONTINGENCIES

Operating Leases
----------------

In April 2002, the Company entered a three year operating lease for its
facility. The Company then transferred that lease with the same landlord to a
larger facility effective in December 2003 under a new operating lease. Unless
it is sooner terminated and/or extended, the Company's lease agreement expires
November 30, 2006. Future minimum lease payments under this lease, and one other
operating lease entered in July 2004, are approximately as follows at September
30, 2004:


                                      F-12


<PAGE>

   Years ending
   September 30,                                                     Amounts
   --------------                                                 -------------
      2005                                                        $      37,500
      2006                                                               29,050
      2007                                                                4,900
                                                                  -------------

      Total                                                       $      71,450
                                                                  =============

Rent expense under the above leases for the nine months ended September 30, 2004
and the year ended December 31, 2003 approximated $31,800 and $15,900,
respectively.

Consulting Agreements
---------------------

Effective October 1, 2004, the Company entered into three consulting agreements
having terms ranging from one to two years and terminable by either party on 30
days notice. As consideration for various services to be rendered, the Company
has agreed to pay the consultants total monthly fees of (i) $14,000 during the
period October 1, 2004 to September 30, 2005 and (ii) $6,000 for the period
October 1, 2005 to September 30, 2006. In addition, the Company has granted
1,900,000 nonqualified stock options to these consultants, which options are
exercisable at $0.20 per share and may be exercised on a cashless basis. The
options vest as follows:

     Vesting Dates                                                   Amounts
     --------------                                                ------------
     On October 1, 2004                                                 380,000
     On December 31, 2004                                               380,000
     On March 31, 2005                                                  380,000
     On June 30, 2005                                                   380,000
     On September 30, 2005                                              380,000
                                                                   ------------

     Total                                                            1,900,000
                                                                   ============

Because the fair values of these options, using the Black-Scholes option pricing
model, was estimated to be $0.27 per share on the date they were granted, the
Company estimates that it will recognize approximately $133,000 of stock based
compensation expense over the terms of these consulting agreements beginning
with the first quarter of fiscal year ended September 30, 2005.

Employment Agreements
---------------------

The Company has obligated itself under non-cancelable employment agreements with
its chief executive officer and its chief financial officer. The significant
terms of the agreements are as follows:

         o        CHIEF EXECUTIVE OFFICER - This officer is to receive base
                  annual compensation of $185,000 for the year ending September
                  30, 2005, $205,000 for the year ending September 30, 2006 and
                  $225,000 for the year ending September 30, 2007, as well as
                  various vacation and medical benefits, a car allowance of $750
                  per month, an initial bonus of $75,000 and annual bonuses
                  ranging from 2.5 to 3.0% of net income. In addition, the
                  Company agreed to grant him options to purchase 3,250,000
                  shares of its common stock at a price of $.20 per share (a
                  significant portion of such grants served as consideration for
                  him agreeing to cancel benefits and protections set forth in
                  his prior employment agreement). The agreement, which is
                  subject to automatic renewal unless the Company exercises its
                  rights to terminate it at the end of the initial, or any
                  succeeding, terms, contains a takeover provision that requires
                  the Company to pay the greater of $750,000, or an amount equal
                  to 7.5% of any sale price in excess of $25,000,000 to him in
                  the event a change in control occurs.


                                      F-13


<PAGE>

         o        CHIEF FINANCIAL OFFICER - This officer is to receive base
                  annual compensation of $165,000 for the year ending September
                  30, 2005, $180,000 for the year ending September 30, 2006 and
                  $195,000 for the year ending September 30, 2007, as well as
                  various vacation and medical benefits, a car allowance of $650
                  per month, an initial bonus of $75,000 and annual bonuses
                  ranging from 2.5 to 3.0% of net income. In addition, the
                  Company agreed to grant him options to purchase 2,500,000
                  shares of its common stock at a price of $0.20 per share (a
                  significant portion of such options served as consideration
                  for him agreeing to cancel benefits and protections set forth
                  in his prior employment agreement). The agreement, which is
                  subject to automatic renewal unless the Company exercises its
                  rights to terminate it at the end of the initial, or any
                  succeeding, terms, contains a takeover provision that requires
                  the Company to pay the greater of $500,000, or an amount equal
                  to 5.0% of any sale price in excess of $25,000,000 to him in
                  the event a change in control occurs.

One half of the stock options mentioned above (or 2,875,000 options) vested on
October 1, 2004. Assuming a change in control does not occur (at which time all
options would vest immediately), one half of the remaining options (or 1,437,500
options) vest on September 30, 2005 and one half on September 30, 2006. The
option price was effectively the same as the trading value of the Company's
stock on the date the options were granted and the options therefore had no
intrinsic value as calculated in the Black-Scholes option pricing model. The
Company does not believe that it will be required to record any stock based
compensation for the issuance of these options as it does not begin reporting
under SFAS No. 123(R) until all of these options have vested.

The Company is also obligated under various other cancelable employment
agreements, including two that require it to pay different amounts of severance
if the Company terminates the respective employees without cause. Future
required payments for base compensation under all of the employment agreements
discussed herein are approximately as follows:

     Years ending
     September 30,                                                 Amounts
     -------------                                            ----------------

           2005                                               $        553,000
           2006                                                        530,000
           2007                                                        420,000
                                                              ----------------

           Total                                              $      1,503,000
                                                              ================

Service and Purchase Agreements
-------------------------------

The Company has entered into one to three year contracts with various
contractors to provide certain marketing, technology and customer support
services to expand the money card program. Since the fees to be paid are
contingent primarily on sales volume, it is not possible to calculate the amount
of the future commitment on these contracts.

Contingencies
-------------

In the normal course of business, the Company is involved in certain litigation.
In the Company's opinion, this litigation will not have a material effect on its
financial position or results or operations.

NOTE I - STOCK-BASED COMPENSATION

During the period July 10, 2000 (date of incorporation) to September 30, 2004,
the Company issued the following shares of the Company's common stock as
consideration for various services, which were provided by employees or
consultants:


                                      F-14


<PAGE>

Description of Service                         Value of Service   Shares Issued
----------------------                         ----------------   -------------
Business planning and development              $        949,663       7,395,048
Information technology services                          57,123         505,075
Legal services                                            5,500          38,209
                                               ----------------   -------------

Totals                                         $      1,012,286       7,938,332
                                               ================   =============

The value of these services, which was based on the number, and fair value, of
shares issued has been included in stock based compensation and consulting
expense in the accompanying statements of operations. For periods when the
Company was trading, the Company used the stock price on the date of issuance to
determine fair value. Prior to the Company having a market in its stock, fair
value of the shares was determined as the approximate average cash sale price
for company stock sold in the year of the share grant date.

NOTE J - OTHER SUBSEQUENT EVENTS

Gain Contingency
----------------

On November 8, 2004, the Company settled certain litigation in which it was the
plaintiff. As consideration for such settlement, the Company received
forgiveness of notes payable totaling $50,000, cash of $10,000 and process
management software certified for use by MasterCard International. The proceeds
of the settlement will be reflected as other income in the first quarter of the
Company's fiscal year ending September 30, 2005.

Settlement of Litigation
------------------------

The Company settled certain litigation by agreeing to pay cash of $48,000
subsequent to year end. In accordance with generally accepted accounting
principles, the Company has recognized this amount as an expense and accrued
liability in the accompanying September 30, 2004 financial statements.

Other Option Issuances
----------------------

In addition to the options mentioned in Note H above, the Company has granted
options purchase 1,825,000 shares of its common stock to various employees at a
price of $0.20 per share. Assuming a change in control does not occur (at which
time all options would vest immediately) the options vest as follows:

     Vesting Dates                                               Amounts
     --------------                                          -------------
     On October 1, 2004                                           610,000
     On September 30, 2005                                        607,500
     On September 30, 2006                                        607,500
                                                             -------------

     Total                                                      1,825,000
                                                             =============

Because the option price was effectively the same as the trading value of the
Company's stock on the date the options were granted, the Company does not
believe that it will be required to record any stock based compensation for the
issuance of these options.

The Company also granted options to purchase 700,000 shares of its common stock
for $0.20 per share to the members of its Board of Directors as consideration
for their service during the upcoming fiscal year (i.e. the year ended September
30, 2005). The options, which vested on the date of grant, had a fair value of
approximately $0.27 (based on the trading value at the date of grant) each on
the date they were granted; accordingly the Company estimates that it will
recognize approximately $49,000 of stock based compensation expense during the
fiscal year ended September 30, 2005 as a result of the issuance of these
options.


                                      F-15


<PAGE>

Note Receivable from Stockholder
--------------------------------

As mentioned at Note A, the Company received a $3,000,000 note receivable from a
PAEC stockholder at the date of the merger with PAEC. Because of various
delinquencies in making payments under such note, in November 2004, this
stockholder agreed to return 1,000,000 shares of the common stock issued to the
PAEC shareholders at the date of the merger. The shares will be divided pro-rata
by the stockholders of Morgan Beaumont immediately before the merger occurred.
In addition, the stockholder has agreed to pledge 2,700,000 shares of his common
stock as security for the performance of his remaining obligations under the
note receivable. The pledged shares are to be returned to the stockholder as
required payments are made on the note, which is due in various installments
through March 31, 2005.

Private Placement of Stock
--------------------------

The Company completed a private placement of 7,125,000 of shares of its common
stock (the "Shares) to certain accredited investors the (the "Purchasers") for
$1,425,000. The transaction was consummated pursuant to a Securities Purchase
Agreement by and among the Company and the Purchasers.

The Purchasers received (i) certain anti-dilution protection entitling them to
price adjustments in the event the Company sells shares for an effective price
of less than $0.20 per share within one year from the date of the completion of
the private placement, and (ii) the rights to participate in any subsequent
filings for a specified period of time.

In addition, the Company has also agreed to file, within 45 calendar days of the
date of the filing of its current 10-KSB, a registration statement with the SEC,
covering the resale of (i) the Shares and (ii) any shares of common stock issued
or issuable upon a stock split, dividend or other distribution, recapitalization
or similar event. If the Company fails to timely perform its responsibilities
relative to the registration of the Shares, the Company will be subject to
various monetary penalties (as defined in the Private Placement Memorandum).

Loan Receivable
---------------

On January 15, 2005, the Company loaned $202,000 to eChex, Inc. (the
"Borrower"), an independent entity, to assist them with their working capital
needs. The loan, which was initially secured by substantially all of the
Borrower's assets, and the personal guaranty and 53% stock ownership of three of
the Borrower's shareholders, bears interest at a fixed rate of 10% and was
initially due in full, along with all accrued interest, on March 30, 2005.

Subsequent to March 31, 2005 and in exchange for mutual releases related to the
Borrower's customer, Acosta, we have agreed to release the Borrower's
shareholders from their personal guaranties and extend the due date of the note
to September 30, 2005. Because of these changes, and for various other reasons,
we have determined that collectibility of this note is doubtful. Therefore, we
charged an impairment loss to operations for the entire balance of the loan as
of March 31, 2005.


                                      F-16


<PAGE>

NOTE K - GROSS AND NET REVENUE AMOUNTS

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

                                                                For the period
                                                                 July 10, 2000
                           For the           For the nine          (date of
                         year ended          months ended      incorporation) to
                          December             September         September 30,
   Description            31, 2003             30, 2004              2004
-------------------   ----------------    ----------------    ----------------
Gross revenues                  357,785              59,128             601,798

Returns & allowances             (1,913)               (526)             (7,579)
                       ----------------    ----------------    ----------------

NET REVENUES                    355,872              58,602             594,219
                       ================    ================    ================

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


                                      F-17