UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 
 QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 For the
quarterly period ended September 30, 2009
 Commission
file number: 333-144973
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 (Exact
name of small business issuer as specified in its charter)
 
 DELAWARE
                56-2646797(State
      of incorporation)
                (IRS
      Employer Identification No.)
  
 2470 St.
Rose Parkway
 Henderson,
NV  89074
 (Address
of principal executive offices)
 
 702-914-4300
 (Issuer’s
telephone number)
  Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
 x o
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 o x
  State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:  As of September 30, 2009, the
registrant had 9,487,779 shares of common stock, $.0001 par value, issued and
outstanding.
 
 Transitional
Small Business Disclosure Format (Check one):
 o x
 
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 TABLE
OF CONTENTS
 
 PAGEPART
      I FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements
              3Item
      2.
              Management’s
      Discussion and Analysis or Plan of Operation
              11Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              15Item
      4T.
              Controls
      and Procedures
              16PART
      II OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              18Item
      2.
              Unregistered
      Sale of Equity Securities and Use of Proceeds
              18Item
      3.
              Defaults
      Upon Senior Securities
              18Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              18Item
      5.
              Other
      Information
              18Item
      6.
              Exhibits
              18SIGNATURES
              19
 
  
 
 
 PART
I   FINANCIAL INFORMATION
 
 Item
1.  Financial Statements (unaudited)
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 CONSOLIDATED
BALANCE SHEETS
 SEPTEMBER
30, 2009
 (Unaudited)
  September
      30,
                
                
                March
      31,2009
                
                
                2009ASSETS:Current
      assets:Cash
                
                $
                1,897
                
                
                $
                20,304Loan
      receivable
                
                
                653,897
                
                
                
                775,820Loans
      held for investment
                
                
                3,262,868
                
                
                
                4,494,598Accounts
      receivable
                
                
                42,074
                
                
                
                42,074Total
      current assets
                
                
                3,960,736
                
                
                
                5,332,795Property
      and equipment, net
                
                
                229,031
                
                
                
                261,914TOTAL
      ASSETS
                
                $
                4,189,767
                
                
                $
                5,594,710LIABILITIES
      AND STOCKHOLDERS' EQUITYLIABILITIES:Current
      liabilities:Accounts
      payable and accrued expenses
                
                $
                867,074
                
                
                $
                478,172Notes
      payable
                
                
                356,028
                
                
                
                356,028Notes
      payable related party
                
                
                142,236
                
                
                
                192,236Total
      current liabilities
                
                
                1,365,337
                
                
                
                1,026,436TOTAL
      LIABILITIES
                
                
                1,365,337
                
                
                
                1,026,436Stockholders'
      equity:Common
      stock, par value $0.0001, 75,000,000 shares authorized,
                  9,487,779
      and 7,100,000 issued and outstanding, as
      of September 30, 2009 and 2008, respectively
                
                
                949
                
                
                
                858Additional
      paid-in capital
                
                
                5,382,046
                
                
                
                5,290,737Accumulated
      earnings
                
                
                (2,558,566
                )
                
                
                (723,321
                )Total
      stockholders' equity
                
                
                2,824,429
                
                
                
                4,568,274TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                
                $
                4,189,767
                
                
                $
                5,594,710
 
 See
accompanying notes to consolidated financial statements
 
 3
  LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 CONSOLIDATED
STATEMENT OF OPERATIONS
 FOR
THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (Unaudited)
 
 For
      the Three
                  Months
      Ended
                
                
                For
      the Three
                  Months
      Ended
                
                
                For
      the Six
                  Months
      Ended
                
                
                For
      the Six
                  Months
      EndedSeptember
      30,
                
                
                September
      30,
                
                
                September
      30,
                
                
                September
      30,2009
                
                
                2008
                
                
                2009
                
                
                2008Revenues:Asset
      liquidation revenue
                
                $
                173,252
                
                
                $
                791,068
                
                
                $
                475,370
                
                
                $
                1,831,472Cost
      of Sales
                
                
                95,536
                
                
                
                46,907
                
                
                
                113,743
                
                
                
                147,639Gross
      Profit
                
                
                77,717
                
                
                
                744,161
                
                
                
                361,627
                
                
                
                1,683,833Expenses:Salary
      & wages & payroll taxes
                
                
                126,999
                
                
                
                271,173
                
                
                
                269,364
                
                
                
                585,129Selling,
      general and administrative
                
                
                390,672
                
                
                
                222,399
                
                
                
                473,295
                
                
                
                603,934Professional
      fees
                
                
                88,542
                
                
                
                134,524
                
                
                
                150,320
                
                
                
                185,024Depreciation
      expense
                
                
                18,530
                
                
                
                -
                
                
                
                36,813
                
                
                
                -Total
      expenses
                
                
                624,743
                
                
                
                628,096
                
                
                
                929,791
                
                
                
                1,374,088(Loss)
      income from operations
                
                
                (547,027
                )
                
                
                116,066
                
                
                
                (568,164
                )
                
                
                309,746Other
      (expense) incomeInterest
      expense
                
                
                (17,400
                )
                
                
                (11,477
                )
                
                
                (35,350
                )
                
                
                (11,902
                )Write
      down of investment
                
                
                (1,231,730
                )
                
                
                -
                
                
                
                (1,231,730
                )
                
                
                -Total
      other (expense) income
                
                
                (1,249,130
                )
                
                
                (11,477
                )
                
                
                (1,267,080
                )
                
                
                (11,902
                )Net
      (loss) income
                
                $
                (1,796,156
                )
                
                $
                104,589
                
                
                $
                (1,835,245
                )
                
                $
                297,844Net
      (loss) per share basic and diluted
                
                $
                (0.20
                )
                
                $
                0.01
                
                
                $
                (0.23
                )
                
                $
                0.05Weighted
      average number of common sharesshares
      outstanding, basic and diluted
                
                
                9,085,557
                
                
                
                7,100,000
                
                
                
                7,856,306
                
                
                
                6,383,347
 See
accompanying notes to consolidated financial statements
 
 4
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 CONSOLIDATED
STATEMENT OF CASH FLOWS
 FOR
THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (Unaudited)
 
 September
      30,
                    
                    
                    September
      30,2009
                    
                    
                    2008Cash
      flows from operating activities:Net
      (loss) income
                    
                    $
                    (1,835,245
                    )
                    
                    $
                    297,844Adjustments
      to reconcile net loss from operations to net cash used in
      operations:Depreciation
      and amortization
                    
                    
                    36,813
                    
                    
                    
                    -Write
      down of investment
                    
                    
                    1,231,730
                    
                    
                    
                    -Stock
      issued for services
                    
                    
                    91,400
                    
                    
                    
                    -Changes
      in operating assets and liabilities:(Increase)
      decrease in loan receivable
                    
                    
                    121,924
                    
                    
                    
                    (562,163
                    )(Increase)
      decrease in accounts receivable
                    
                    
                    -
                    
                    
                    
                    (24,589
                    )(Increase)
      decrease in stock subscription receivable
                    
                    
                    -
                    
                    
                    
                    (86,500
                    )Increase
      (decrease) in accounts payable and accrued expenses
                    
                    
                    388,902
                    
                    
                    
                    (13,965
                    )Net
      cash provided by (used in)  operating activities
                    
                    
                    35,524
                    
                    
                    
                    (389,373
                    )Cash
      flows from investing activities:Purchase
      of fixed assets
                    
                    
                    (3,930
                    )
                    
                    
                    (3,499
                    )Net
      cash used in investing activities
                    
                    
                    (3,930
                    )
                    
                    
                    (3,499
                    )Cash
      flows from financing activities:Proceeds
      from Notes Payable
                    
                    
                    -
                    
                    
                    
                    376,028Payments
      for related notes payable
                    
                    
                    (50,000
                    )
                    
                    
                    -Net
      cash (used in) provided by financing activities
                    
                    
                    (50,000
                    )
                    
                    
                    376,028Net
      decrease in cash and cash equivalents
                    
                    
                    (18,406
                    )
                    
                    
                    (16,844
                    )Cash
      and cash equivalents, beginning of period
                    
                    $
                    20,304
                    
                    
                    $
                    34,210Cash
      and cash equivalents, end of period
                    
                    $
                    1,897
                    
                    
                    $
                    17,365Supplemental
      disclosure of cash flow informationInterest
      paid
                    
                    $
                    2,500
                    
                    
                    $
                    -
  
 See
accompanying notes to consolidated financial statements
 
 5
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 (1)           Description
of Business:
 
 Liberty
Capital Asset Management, Inc. (the “Company”) was formed in 2003 as CD Banc LLC
with the purpose of acquiring real estate assets and holding them for long-term
appreciation. In
August of 2007, CD Banc LLC acquired an interest in HCI, a mortgage banking
company with 50 FHA lending branches.  On September 30, 2008, the
Company’s Board of Directors rescinded the transaction retroactively to January
1, 2008, as consideration for the transaction was never duly executed by the
parties..In September of 2007, CD Banc acquired 4,426 non
performing sub-prime mortgage loans from South Lake Capital for a total
consideration of $5,015,485. Liberty Capital Asset Management, a Nevada
corporation, was formed in July of 2008 as a holding company for certain assets
of CD Banc LLC in contemplation of the company going public via a reverse merger
into a publicly trading corporation. On November 3 2008, Liberty Capital Asset
Management completed a share exchange and asset purchase agreement with
Corporate Outfitters Inc., a publicly-traded Delaware corporation which
subsequently changed its name to Liberty Capital Asset Management
Inc.  The Company has been actively engaged in generating revenues
from reperforming, sale of loans and fee revenue since July 1,
2007.
 
 (2)           Summary
of Significant Accounting Policies:
 
 Basis
of Presentation:
  The
accompanying unaudited consolidated interim financial statements of the Company
have been prepared in accordance with accounting principles generally accepted
in the United States of America. Our consolidated financial
statements include the accounts of the parent and all subsidiaries. Intercompany
transactions and accounts are eliminated in consolidation.The
Company's policy is to prepare its financial statements on the accrual basis of
accounting. The fiscal year end is March 31.
 
 Going Concern:
  For the six months ended September 30, 2009, the
Company has suffered losses from operations of approximately $1,835,245.  A
substantial portion of the Company's cumulative net loss is attributable to
non-cash operating expenses of $1,231,730; however until the Company can sustain
its profitability, a substantial doubt exists about the Company's ability to
continue as a going concern.
 
 Risks
and Uncertainties:
 
 The
Company operates in a highly competitive industry that is subject to intense
competition and potential government regulations.  Significant changes
in interest rates or the underlying economic condition of the United States or
any specific region of the United States real estate market could have a
matrially adverse impact on the Company’s operations.
 
 Use
of Estimates:
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make 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, and
the reported amounts of revenues and expenses during the reported
periods.  Significant estimates made by the Company’s management
include, but are not limited to, the realizability loans held for investment,
mortgage servicing rights, and the recoverability of property and equipment
through future operating profits.  Actual results could materially
differ from those estimates.
 
 Cash
and Cash Equivalents:
 
 For the
purpose of the statement of cash flows, the Company considers all highly liquid
holdings with maturities of three months or less at the time of purchase to be
cash equivalents.
 
 Property
and Equipment:
 
 Property
and equipment are stated at cost, less accumulated
depreciation.  Depreciation is recorded using the straight-line method
over the estimated useful lives of the related assets, ranging from three to
thirty years. Maintenance and repairs are charged to operations when
incurred.  Major betterments and renewals are
capitalized.  Gains or losses are recognized upon sale or disposition
of assets.
 
 6
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 Long-Lived
Assets:
 
 The
Company accounts for its long-lived assets in accordance with SFAS No. 144,
“Accounting For The Impairment or Disposal of Long-Lived Assets” which requires
that long-lived assets and certain identifiable intangibles to be held and used
by any entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  Pursuant to SFAS 144, management of the Company assesses
the recoverability of property and equipment by determining whether the
depreciation of such assets over their remaining lives can be recovered through
projected undiscounted cash flows.  The amount of impairment, if any,
is measured based on fair value (projected discounted cash flows) and is charged
to operations in the period in which such impairment is determined by
management.  To date, management has not identified any impairment of
property and equipment.  There can be no assurance, however, that
market conditions or demands for the Company’s services will not change which
could result in future long-lived asset impairment.
 
 Intangible
Assets:
 
 The
Company has adopted FASB 142.  Under guidance of SFAS 142, net assets
of companies acquired in purchase transactions are recorded at fair value at the
date of acquisition, as such, the historical cost basis of individual assets and
liabilities are adjusted to reflect their fair value.  Identified
intangibles are amortized on an accelerated or straight-line basis over the
period benefited.  Goodwill is not amortized, but is reviewed for
potential impairment on an annual basis at the reporting unit
level.  The impairment test is performed in two phases.  The
first step of the goodwill impairment test, used to identify potential
impairment, compares the fair value of the reporting unit with its carrying
amount, including goodwill.  Of the fair value of the reporting unit
exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired; however, if the carrying amount of the reporting unit exceeds its fair
value, an additional procedure must be performed.  That additional
procedure compares the implied fair value of the reporting units’ goodwill (as
defined in SFAS 142) with the carrying amount of that goodwill.  An
impairment loss is recorded to the extent that the carrying amount of goodwill
exceeds its implied fair value.  As of September 30, 2009, the Company
did not have any Goodwill recorded.
 
 Revenue
and Cost Recognition:
 
 Revenue
from liquidation of loans is recognized at the time the loans are
sold.  At this point, all of the services required to be performed for
such revenues have been completed.  Loan liquidation costs and
incremental direct costs are recognized as incurred.  Incremental
direct costs include credit reports, appraisal fees, document preparation fees,
wire fees, tax and filing fees, funding fees and commissions.  Revenue
from the servicing of loans are recognized as earned.
 
 Basic
and Diluted Loss Per Share:
 
 In
accordance with SFAS No. 128, “Earnings Per Share,” the basic loss per common
share is computed by dividing net loss available to common stockholders after
reducing net income by preferred stock dividend, by the weighted average common
shares outstanding during the period.  Diluted earnings per share
reflect per share amounts that would have resulted if diluted potential common
stock had been converted to common stock.  Common stock equivalents
have not been included in the earnings per share computation as the amounts are
anti-dilutive.
 
 Income
Taxes:
 
 The
Company accounts for income taxes under SFAS No. 109, “Accounting for Income
Taxes.”  Under the asset and liability method of SFAS No. 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  Under
SFAS No. 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period the enactment
occurs.  A valuation allowance is provided for certain deferred tax
assets if it is more likely than not that the Company will not realize tax
assets through future operations.
 
 7
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 Stock
Issued for Services:
 
 The
Company accounts for equity instruments issued to non-employees in accordance
with the provisions of SFAS No. 123 and Emerging Issues Task Force (“EITF”)
Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services”. All transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity
instrument issued whichever is more reliably measurable. The measurement date of
the fair value of the equity instrument issued is the earlier of the date on
which the counter party’s performance is complete or the date on which it is
probable that performance will occur.
 
 The
amounts that have been charged against income for those services were
approximately $91,400 and $0 for the six months ended September 30, 2009 and
2008, respectively.
 
 Fair
Value of Financial Instruments:
 
 The
Company has adopted SFAS No. 107, “Disclosures About Fair Value of Financial
Instruments.”  SFAS No. 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate that
value. For certain of the Company’s financial instruments including cash,
receivables, and accounts payable and accrued expenses, the carrying amounts
approximate fair value due to their short maturities.  The amounts
shown for notes payable also approximate fair value because current interest
rates and terms offered to the Company for similar debt are substantially the
same.
 
 New
Accounting Pronouncements:
  In
November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of
ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No. 43, Chapter
4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handing costs, and spoilage. This statement requires
that those items be recognized as current period charges regardless of whether
they meet the criterion of "so abnormal" which was the criterion specified in
ARB No. 43. In addition, this Statement requires that allocation of fixed
production overheads to the cost of production be based on normal capacity of
the production facilities. This pronouncement is effective for the Company
beginning October 1, 2005. The Company does not believe adopting this new
standard will have a significant impact to its financial
statements.
 
 In
December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment,
which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation.
SFAS No. 123(R) effective December 15, 2005, supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of
Cash Flows.  Generally, the approach in SFAS No. 123(R) is similar to
the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. As of September 30, 2009,
the Company has 2,000,000 outstanding employee stock
options.
 
 (3) Mortgage
Loans Held for Investment:
 
 The
Company acquired a portfolio of 4,466 mortgage loans of  for a value
of $5,015,485 with a face value in excess of $108 million dollars on December
31, 2007. The loans were purchased at a discount and are scheduled to be re-
performing or sold at foreclosure and liquidated for cash. Management
intends to resale the loans or work with a borrower to conform the loan into
performing status.
 For the
six months ended September 30, 2009, the Company sold a total of 118 loans for
approximately $266,981 in revenue which includes the revenue for performing
loans before liquidation.   The balance of the revenue earned of
$208,389 was attributable income relating to the active performing loans,
resulting in total revenue of $475,370.  The recovery rate for the
performing loans is 28.4% of the Acquired Principal Value, “APV”.  As
of September 30, 2009, the Company had a balance of 465 performing loans with an
APV of $13.1 million with an estimated historical recovery of 28.4% or
$3,712,000 and 2,519 of non performing loans with a value of $0.  The
recorded balance of the Loans Held for Investment for September 30, 2009 is
$3,262,868.  The Company elected to value the remaining asset at a
lower cost as a reserve allowance.  The total write down of investment
for the period ended September 30, 2009 was $1,231,730.
 
 For the
years ended March 31, 2009 and 2008, the Company sold a total of 1,292 loans for
approximately $4.9 million in revenue which includes the revenue for performing
loans before liquidation.  As of March 31, 2009, the Company had a
balance of 557 performing loans with an APV of $16.3 million with an estimated
historical recovery of 28.4% or $4,634,387 and 2,614 non performing loans valued
at $0.
 
 8
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 (4)           Notes
Payable:
 
 On June
25, 2008 the Company entered into two short term promissory notes with investors
totaling $382,000.  The Company repaid $25,972 of the notes, leaving a
balance of $356,028.  The notes carry an interest rate of 16% per
annum.
 
 (5)           Derivative
Instruments:
 
 The
Company accounts for debt with embedded conversion features and warrant issues
in accordance with EITF 98-5: Accounting for convertible
securities with beneficial conversion features or contingency adjustable
conversionand EITF No. 00-27: Application of issue No 98-5 to
certain convertible instruments.  Conversion features
determined to be beneficial to the holder are valued at fair value and recorded
to additional paid in capital.  The Company determines the fair value
to be ascribed to the detachable warrants issued with the convertible debentures
utilizing the Black-Scholes
method.  Any discount derived from determining the fair value to the
debenture conversion features and warrants is amortized to financing cost over
the life of the debenture.  The unamortized discount, if any, upon the
conversion of the debentures is expensed to financing cost on a pro rata
basis.
 
 Debt
issue with the variable conversion features are considered to be embedded
derivatives and are accountable in accordance with FASB 133; Accounting for Derivative
Instruments and Hedging Activities.  The fairs value of the
embedded derivative is recorded to derivative liability.  This
liability is required to be marked each reporting period.  The
resulting discount on the debt is amortized to interest expense over the life of
the related debt.  As of September 30, 2009 the Company did not have
any value relating to its issued options and warrants, See footnote (6) and
(7).
 
 (6)           Equity:
 
 Common Stock The
Company is authorized to issue 75,000,000 shares of common stock.  
There were 9,487,779 shares of common stock outstanding as of September 30,
2009.  The holders of common stock are entitled to one vote per share
on all matters submitted to a vote of stockholders and are not entitled to
cumulate their votes in the election of directors.  The holders of
common stock are entitled to any dividends that may be declared by the Board of
Directors out of funds legally available therefore subject to the prior rights
of holders of any outstanding shares of preferred stock and any contractual
restrictions we have against the payment of dividends on common stock. In the
event of our liquidation or dissolution, holders of common stock are entitled to
share ratably in all assets remaining after payment of liabilities and the
liquidation preferences of any outstanding shares of preferred
stock.  Holders of common stock have no preemptive or other
subscription rights and no right to convert their common stock into any other
securities.
  Warrants As of
September 30, 2009, there are warrants outstanding to purchase a total of
2,853,175 shares of our common stock.  The warrants may be exercised
at price of $1.50 and expire on November 1, 2013 The fair value for these
options was estimated at the date of grant using a Black-Scholes pricing model
with the following weighted-average assumptions for the six months ended
September 30, 2009: risk free rate of 3.5%; no dividend yield and volatility
factors of the expected market price of the Company's common stock of
(465%).  For the six months ended September 30, 2009 and September 30,
2008, the Company had no value associated with the warrants and has not recorded
an expense relating to such.
  9
 
 LIBERTY
CAPITAL ASSET MANAGEMENT, INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 
 (7)           Stock
Option Plan:
 
 In
December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment,
which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation.
SFAS No. 123(R) effective December 15, 2005, supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of
Cash Flows.  Generally, the approach in SFAS No. 123(R) is similar to
the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. As of September 30, 2009,
the Company has 2,000,000 outstanding employee stock
options.
 
 We
generally recognize compensation expense for grants of restricted stock units
using the value of a share of our stock on the date of grant. We estimate the
value of stock option grants using the Black Scholes valuation model. Stock
compensation is recognized straight line over the vesting period.
 
 2008
Stock Option Plan provides for the grant of 4,000,000 incentive or non-statutory
stock options to purchase common stock. Employees, who share the responsibility
for the management growth or protection of the business of the Company and
certain Non-Employee (“Selected Persons”), are eligible to receive options which
are approved by a committee of the Board of Directors.  These options
primarily vest over five years and are exercisable for a ten-year period from
the date of the grant.
 
 The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for the six
months ended September 30, 2009 and September 30, 2008: risk free rate of 3.5%;
no dividend yield; volatility factors of the expected market price of the
Company's common stock of (465%); and weighted-average expected life of the
option of five years.
 
 The
Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable.  In addition, option valuation models require the input
of highly subjective assumptions including the expected stock price
volatility.  Because the Company’s employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management’s opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee
stock options.
 
 For the
six months ended September 30, 2009 and September 30, 2008, the Company had no
value associated with the options and has not recorded an expense relating to
such.
 
 (8) Related-Party
Transactions:
 
 The
Company’s CEO and Director, Michael A. Barron has advanced $192,236 in the form
of a note. The Company made a payments of $50,000 towards the advance leaving a
balance at September 30, 2009 of $142,236.  The indebtness bears
interest at 12% per annum and is secured by substantially all the assets of the
corporation.
 
 10
  Item 2. Management's Discussion and
Analysis of Financial Condition and Plan of Operations.
 
 Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995
 
 Information
set forth herein contains "forward-looking statements" which can be identified
by the use of forward-looking terminology such as "believes," "expects," "may,”
“should" or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy. No assurance can be given
that the future results covered by the forward-looking statements will be
achieved. The Company cautions readers that important factors may affect the
Company’s actual results and could cause such results to differ materially from
forward-looking statements made by or on behalf of the Company. These include
the Company’s lack of historically profitable operations, dependence on key
personnel, the success of the Company’s business, ability to manage anticipated
growth and other factors identified in the Company's filings with the Securities
and Exchange Commission.
 
 General
 
 Liberty
Capital Asset Management, Inc. (the “Company”) was formed in 2003 as CD Banc LLC
with the purpose of acquiring real estate assets and holding them for long-term
appreciation. In September of 2007, CD Banc acquired 4,426 non performing
sub-prime mortgage loans from South Lake Capital for a total consideration of
$5,015,485. Liberty Capital Asset Management, a Nevada corporation, was formed
in July of 2008 as a holding company for certain assets of CD Banc LLC in
contemplation of the company going public via a reverse merger into a publicly
trading corporation. On November 3 2008, Liberty Capital Asset Management
completed a share exchange and asset purchase agreement with Corporate
Outfitters Inc., a publicly-traded Delaware corporation which subsequently
changed its name to Liberty Capital Asset Management Inc.
 
 The
Company maintains offices at 2470 Saint Rose Parkway, Suite 314, Henderson,
Nevada 89074.
 
 Critical
Accounting Policies
 
 The
preparation of our consolidated financial statements and notes thereto requires
management to make estimates and assumptions that affect the amounts and
disclosures reported within those financial statements. On an ongoing basis,
management evaluates its estimates, including those related to revenue
recognition, workers' compensation costs, collectibles of accounts receivable,
and impairment of goodwill and intangible assets, contingencies, litigation and
income taxes. Management bases its estimates and judgments on historical
experiences and on various other factors believed to be reasonable under the
circumstances. Actual results under circumstances and conditions different than
those assumed could result in differences from the estimated amounts in the
financial statements. There have been no material changes to these policies
during the fiscal year.
 
 Disclosure,
pursuant to SFAS No. 107, is required of the fair value of financial
instruments.  However, since most of the Company’s financial
instruments turn over within a very short time period, management discloses that
the net book value approximates fair value at the balance sheet
date.
 
 Capital
Environment in 2008
 
 A key
component to the company’s business plan for growth is the attraction of new
investment partners to provide capital such that new pools of toxic assets may
be purchased.  As investor confidence began to wane during 2008, the
capital markets which Liberty depends upon to supply it with new capital for
acquisitions began to dry up. Hedge funds are traditional resources for capital
asset firms such as Liberty, to source for investment capital to acquire new
assets at a discount and then restore those assets to a more valuable status
& thus a potential for profit for the company could be made. During the
first part of 2008, the company visited with numerous hedge funds and received
general commitments for funding to acquire pools of mortgages according to the
Liberty formula. Liberty actually executed an agreement with Silar Advisors to
fund up to $50 million in capital for pool acquisitions. Market conditions have
retarded Silar’s
 investment
ability and only a nominal amount of the allocation has been used.
 
 11
 
 Item
2. Management's Discussion and Analysis of Financial Condition and Plan of
Operations (Continued).
 
 Axiom
Capital was hired by Liberty on a referral by a Liberty shareholder and meetings
were set up and attended. Following is a listing of the companies Liberty
management visited with from April of 2008 through March of 2009.
 
 Silar
      Advisors
              Centrecourt
      Asset Mgt
              TAIB
      SecuritiesBryant
      Park Capital
              Angelo
      Gordon
              EOS
      PartnersJCAM
              Chicago
      Investment Group
              Amherst
      Holdings LLCLion
      Partners Ltd
              Sheridan
      Capital Advisors LLC
              Guggenheim
      PartnersAristeia
      Capital
              Platinum
      Partners
              CenturionMahler
      & Emerson Inc.
              Quarry
      Capital Partners
              Gilford
      SecuritiesContego
      Capital Partners
              Meyers
      Associates L.P.
              Opus
      Capital LLCDME
      Capital LLC
              Somerset
      Capital Advisors
              Rockmore
      Capital
 
 The
company secured several letters of intent & term sheets which totaled in
excess of $100 million in funding to be delivered to Liberty Capital during 2008
& 2009. None of the funds were placed with the company.  Silar
purchased shares of stock in the company comprising 4.9% of the company and has
purchased a small amount of pools from Liberty.
 
 With the
hedge funds weighted down with non-performing toxic assets and calls for
redemptions by their investors, the hedge fund sources for capital dried up last
year. Economic uncertainty and the doubt of a new national election put capital
expenditures on hold.
 
 Federal Regulation and
“Bail-Out” Effects
 
 With the
election of the new Democratic President and Congress came additional impacts to
the business environment Liberty operated in last fiscal year. The government’s
announcement of cash aid to purchase toxic mortgage assets from ailing lenders
virtually dried up the source of cheap product to Liberty’s business model. Many
lenders who were willing to sell toxic mortgage pools suddenly withdrew their
sales and opted to hang on to the assets so they could sell them to the
government at better prices than the free market was willing to
pay.  In addition to this practice, the government also began to pass
legislation which forced lenders who held foreclosed or soon to be foreclosed
properties to extend the time it would take them to recover their assets. The
effect of this is that any pool which Liberty would be bidding on would have
typically 30% of those assets go to foreclosure. Once foreclosed, Liberty would
resell the property for a profit. Historically and prior to this legislation,
Liberty had been yielding approximately 70+% returns on REO (foreclosed and
recaptured) properties. With the new legislation, recapture periods went from an
average of six months to over two years. That turns a 70% return into a 17%
return. Investors considered this type of asset too risky given the government
interference and capital for toxic assets dried up. Further, assets the
government had acquired at premium prices were made available to be repurchased
by institutions if qualified. To qualify for Federal sharing funds for these
purchases, a company must prove tangible liquid assets of at least $100 million.
Liberty could never qualify having only $ 5 million.
 
 The new
administration also changed the FHA financing requirements for borrowers. Before
2009, FHA did not require a minimum FICO score (a rating system which
establishes credit worthiness) for new borrowers, but rather only required that
a new borrower had remained current with his payments for the previous twelve
months. This allowed borrowers with sub standard credit to continue to receive
home loans to purchase or refinance even if their credit profile was impaired.
Most of the borrowers who are in the Liberty pool of assets fall into this
category. The administration now requires that new borrowers must have at least
a 600 FICO score to be considered for approval by FHA. This is a substantial
change in the regulations governing FHA loans and a severe blow to the Liberty
business model. The Liberty model assumes sub standard credit borrowers would
still be able to re-finance out of their loans into new FHA loans once the
Liberty modified loans had been held for twelve months.
 
 12
 
 Item
2. Management's Discussion and Analysis of Financial Condition and Plan of
Operations (Continued).
 
 In
addition to the restrictive credit requirements, FHA also changed their minimum
refinance limit to a minimum of $50,000. Many of the loans Liberty owns are less
than $50,000 which means that this new requirement forces Liberty borrowers who
wish to refinance will need to find sources elsewhere than FHA.
 
 It is the
company’s assessment that the combination of economic uncertainty, bankruptcies
of major financial institutions such as Bear Stearns, Lehman Bros. Countrywide
and AIG, together with harsh government regulations for mortgage holders, has
led to the operating environment where it has taken much longer to execute on
Liberty’s operating model.
 
 Results of
Operations:
 
 The
Company acquires pools of non performing loans and then re-performs those loans
by restructuring the financial parameters such that the defaulted borrower can
return to making payments in a timely manner again. The loans are held for six
months to one year and the new re-performing payment history creates loans
having much more value than the partnership paid for it. The Company then either
sells the loan or pool of reconditioned loans to a bulk purchaser or refinances
the borrower out of the loan
 
 For the Three Months Ended
September 30, 2009 as Compared to the Three Months Ended September 30,
2008
  Revenues generated from
reperforming, sale of loans and fee revenue decreased $618,000, or 78% to
$173,000, as compared to $791,000 for the three months ended September 30, 2008.
The decrease is attributable tothe depletion of the bulk of performing
loans left in the active portfolio as well as restrictive credit availability
for borrowers to refinance out of the existing loans. Also, governmental
regulations have retarded borrower incentives to pay on time and have extended
the foreclosure recovery period thus reducing revenue.
 
 Selling,
general and administrative, (SG&A), expenses increased $168,000 or 76%, to
$391,000 for the three  month period ended September 30, 2009, as
compared to $222,000 for the same period in the prior year. The variance is
attributable to $309,000 of expenses relating to maintenance fees associated
with loans held for investment offset by decreases due to the reduction in
revenues.  Salary and payroll taxes were $127,000 for the three month
period ended September 30, 2009 as compared to $271,000, a decrease of 53% or
$144,000, for the same period in the prior year.  Due to the 78%
reduction in revenue, the Company reduced its work
force.  Professional fees were $86,000 for the three month period
ended September 30, 2009 as compared to $135,000, a decrease of 34% or $46,000,
during the same period of the prior year. The decrease is primarily due to a
reduction in consulting fees.  For the three months ended September
30, 2009, depreciation expense was $19,000 as compared to $0, for the same
period of the prior year.  The decrease in expenses is directly
attruibutable to the 78% reduction in revenue generated.
 
 Interest
expense was $17,400 and $11,500 for the three month period ended September 30,
2009, respectively, relating to the increase in borrowings.
 
 Loss from operations was
$547,000, for the three month ended September 30, 2009 as compared to income of
$116,000 from the same period in the prior year.  For the three months
ended September 30, 2009, the Company had loss of operations of $1.8 million as
compared to income of $105,000, during the same period in the prior
year.  The decrease in revenue and its related costs are attributable
tothe impact of loan refinances declining due to the government's
tightening of borrower requirements for FHA refinancing as well as restrictive
credit scoring. Our loans & borrowers are sub-standard to conventional
credit scoring and the added restrictions impair the ability for the company to
sell individual loans. The delay in liquidation has caused the operating
losses.  The Company expensed $1.2 million associated with its
valuation of its loans held for investment.
 
 13
 
 Item
2. Management's Discussion and Analysis of Financial Condition and Plan of
Operations (Continued).
 
 For the Six Months Ended
September 30, 2009 as Compared to the Six Months Ended September 30,
2008
 
 Revenues generated from
reperforming, sale of loans and fee revenue decreased $1.4 million, or 74% to
$475,000, as compared to $1.8 million for the six months ended September 30,
2008. The decrease is attributable tothe depletion of the bulk of
performing loans left in the active portfolio as well as restrictive credit
availability for borrowers to refinance out of the existing loans. Also,
governmental regulations have retarded borrower incentives to pay on time and
have extended the foreclosure recovery period thus reducing
revenue.
 
 Selling,
general and administrative, (SG&A), expenses decreased $131,000 or 22%, to
$473,000 for the six  month period ended September 30, 2009, as
compared to $604,000 for the same period in the prior year. Salary and payroll
taxes were $269,000 for the six month period ended September 30, 2009 as
compared to $585,000, a decrease of 54% or $316,000, for the same period in the
prior year.  Professional fees were $150,000 for the six month period
ended September 30, 2009 as compared to $185,000, a decrease of 18% or $35,000,
during the same period of the prior year. For the six months ended September 30,
2009, depreciation expense was $37,000 as compared to $0, for the same period of
the prior year.  The decrease in expenses is directly attruibutable to
the 74% reduction in revenue generated.
 
 Interest
expense was $35,000 and $12,000 for the six month period ended June 30, 2009,
respectively, relating to the increase in borrowings.
 
 Loss from operations was
$568,000, for the six month ended September 30, 2009 as compared to income of
$310,000 from the same period in the prior year.  For the six months
ended September 30, 2009, the Company had loss of operations of $1.8 million as
compared to income of $298,000, during the same period in the prior
year.The Company expensed $1.2 million associated with its
valuation of its loans held for investment.  The decrease in revenue
and its related costs are attributable tothe impact of loan refinances
declining due to the government's tightening of borrower requirements for FHA
refinancing as well as restrictive credit scoring. Our loans & borrowers are
sub-standard to conventional credit scoring and the added restrictions impair
the ability for the company to sell individual loans. The delay in liquidation
has caused the operating losses
  Liquidity
and Capital Resources
 
 Liquidity
is the ability of a company to generate funds to support asset growth, satisfy
disbursement needs, maintain reserve requirements and otherwise operate on an
ongoing basis. The company has maintained sufficient operating cash to maintain
its operations and holds reserves to service its assets. These reserves have
been generated from operating cash flow.
 
 Management
sought to adjust the company’s position in the market and given the operating
environment, opted to raise capital in order to keep the staff on board until
the capital markets loosened up and assets could again be purchased properly.
The company hired Grant Bettingen, Inc to raise a $1 million private placement
of the company’s stock. Uses of proceeds were to keep operations going and to
market new pools to purchase. If the company could raise $20 million from high
net worth investors, it could continue to be successful. The offering was not
successful although in excess of twenty companies were visited, primarily in New
York. The offering was terminated in June.
 
 Management
cut staff positions and salaries were reduced to 54% of their previous levels.
Company principals advanced money to the company from time to time for working
capital needs. The company still has a pool of toxic mortgage loans on its books
which it continues to work off to create cash.
  14
 
 Item
2. Management's Discussion and Analysis of Financial Condition and Plan of
Operations (Continued).
 
 Cash Flows
 
 Net cash
provided by operating activities for the six months ended September 30, 2009 was
$36,000, as compared to net cash used for operating activities for the six
months ended September 30, 2008 of $389,000. The primary sources of net cash
provided by operating activities the six months ended September 30, 2009 was net
loss of $1.8 million, depreciation of $36,800, write down of investment of $1.2
million, stock issued for services of $91,400, decrease in loan receivable of
$122,000 and an increase in accounts payable and accrued expenses of
$389,000.  The primary sources of cash used for operating activities
the six months ended September 30, 2008, was from a net income of $298,000,
increase in loan receivable of $562,000, increase in accounts receivable of
$25,000, increase in stock subscription receivable $86,000 and an decrease in
accounts payable of $14,000.
 
 Net cash
used for investing activities during the six months ended September 30, 2009 and
September 30, 2008 was $3,900 and $3,500, respectively.  Net cash used
for investing activities was primarily for the purchase of
software.
 
 Net cash
used in financing activities for the six months ended September 30, 2009 was
$50,000, consisting primarily of payments of notes payable. Net cash provided by
financing activities for the six months ended September 30, 2008 was $376,000,
which were proceeds of notes payable.
 
 Management currently believes that cash flows from
operations will be sufficient to meet the Company’s current liquidity and
capital needs at least through fiscal 2010.
   Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
 
 The
Company operates in a volatile and fragmented marketplace which recently has
been subject to new financial regulation by the Federal Government. As such,
these proposed changes in the law may have an impact on the liquidity of the
Company’s business plan and time frames to liquidate assets may be extended.
These proposed regulatory changes have not been fully introduced into the
marketplace and the final legislation provisions have not been determined. The
Company continues to operate under its current business plan which involves the
process of foreclosure and liquidation of toxic assets under the current laws of
each state. If legislation changes the current regulatory environment, returns
of capital and gains from liquidation of assets may take longer and gains may be
lost over such extended time.
 
 We
Have a Limited Operating History and Consequently Face Significant Risks and
Uncertainties.
 
 As a
result of our limited operating history, our recent growth and our reporting
responsibilities as a public company, we may need to expand operational,
financial and administrative systems and control procedures to enable us to
further train and manage our employees and coordinate the efforts of our
accounting, finance, marketing, and operations departments.
  Our
Quarterly Financial Results are Vulnerable to Significant Fluctuations and
Seasonality, Which Could Adversely Affect Our Stock Price.
 
 Our
revenues and operating results may vary significantly from quarter to quarter
due to a number of factors. Certain months or quarters have historically
experienced a greater volume of loan applications and funded
loans.  As a result, we believe that quarter-to-quarter comparisons of
our operating results are not a good indication of our future performance. It is
possible that in some future periods our operating results may be below the
expectations of public market analysts and investors. In this event, the price
of our common stock may fall.
 
 Our
Business Will be Adversely Affected if We Are Unable to Safeguard the Security
and Privacy of Our Customers’ Financial Data.
 
 We retain
on our premises personal financial documents that we receive from prospective
borrowers in connection with their loan applications.  These documents
are highly sensitive and if a third party were to misappropriate our customers’
personal information; customers could possibly bring legal claims against us. We
cannot assure you that our privacy policy will be deemed sufficient by our
prospective customers or compliant with any federal or state laws governing
privacy, which may be adopted in the future.
 
 15
  Item
3.  Quantitative and Qualitative Disclosures About Market Risk
(Continued).
 
 If
We Fail To Comply With The Numerous Laws And Regulations That Govern Our
Industry, Our Business Could Be Adversely Affected.
 
 Our
business must comply with extensive and complex rules and regulations of, and
licensing and examination by, various federal, state and local government
authorities.  These rules impose obligations and restrictions on our
residential loan brokering and lending activities.  In particular,
these rules limit the broker fees, interest rates, finance charges and other
fees we may assess, require extensive disclosure to our customers, prohibit
discrimination and impose on us multiple qualification and licensing
obligations.  We may not always have been and may not always be in
compliance with these requirements.  Failure to comply with these
requirements may result in, among other things, revocation of required licenses
or registrations, loss of approved status, voiding of loan contracts or security
interests, rescission of mortgage loans, class action lawsuits, administrative
enforcement actions and civil and criminal liability.
  The
Loss Of Any Of Our Executive Officers Or Key Personnel Would Likely Have An
Adverse Effect On Our Business.
 
 Our
future success depends to a significant extent on the continued services of our
senior management and other key personnel, particularly Michael A.
Barron.  The loss of the services of Mr. Barron or other key employees
would also likely have an adverse effect on our business, results of operations
and financial condition.  We do maintain “key person” life insurance
for our key personnel.
 
 We
do not anticipate paying dividends.
 
 We have
never paid any cash dividends on our common stock since our inception, and we do
not anticipate paying cash dividends in the foreseeable future.  Any
dividends, which we may pay in the future, will be at the discretion of our
Board of Directors and will depend on our future earnings, any applicable
regulatory considerations, our financial requirements and other similarly
unpredictable factors.  For the foreseeable future, we anticipate that
earnings, if any, will be retained for the operation and expansion of our
business.
 
 Possible
conflicts of interest exist in related party transactions.
 
 Our Board
of Directors consists of Michael A. Barron, Joseph A. Cosio-Barron, Lee Shorey,
Gary Cusamano, and Justin Yorke, three of whom are executive officers and
principal shareholders of the Company.  Thus, there has in the past
existed the potential for conflicts of interest in transactions between the
Company and such individuals or entities in which such individuals have an
interest.  We have attempted to ensure that any such transactions were
entered into on terms that were no less favorable than could have been obtained
in transactions with unrelated third parties.
 
 
 Item
4T.   Controls and Procedures.
 
 Evaluation of Disclosure
Controls and Procedures and Changes in Internal Control over Financial
Reporting
 
 Our
management, with the participation of our chief executive officer and chief
financial officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2007.
In designing and evaluating our disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving their objectives
and management necessarily applied its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Based on this evaluation, our
chief executive officer and chief financial officer concluded that, as of
September 30, 2009, our disclosure controls and procedures were (1) effective in
that they were designed to ensure that material information relating to us is
made known to our chief executive officer and chief financial officer by others
within the Company, as appropriate to allow timely decisions regarding required
disclosures, and (2) effective in that they provide that information required to
be disclosed by us in our reports that we file or submit 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.
 
 16
  Management’s Responsibility
for Financial Statements
 
 Our
management is responsible for the integrity and objectivity of all information
presented in this Quarterly Report on Form 10-Q. The consolidated financial
statements were prepared in conformity with accounting principles generally
accepted in the United States of America and include amounts based on
management’s best estimates and judgments. Management believes the consolidated
financial statements fairly reflect the form and substance of transactions and
that the financial statements fairly represent the Company’s financial position
and results of operations.
 
 Management’s Report on
Internal Control Over Financial Reporting
 
 Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting and for the assessment of the effectiveness of
internal controls over financial reporting. The Company's internal control
system over financial reporting is a process designed under the supervision of
the Company's chief executive officer and chief financial officer to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of the consolidated financial statements in accordance with U.S.
generally accepted accounting principles.
 
 The
Company's management, including its principal executive officer and principal
financial officer, conducted an evaluation of the effectiveness of its internal
control over financial reporting based on the framework in "Internal
Control-Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on its evaluation under the
framework in "Internal Control-Integrated Framework", the Company's management
concluded that the Company's internal control over financial reporting was
effective as of September 30, 2009.
 
 All
internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions.
 
 This
quarterly report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the company's
registered public accounting firm pursuant to temporary rules of the SEC that
permit the company to provide only management's report in this quarterly
report.
 
 Changes
in Internal Control Over Financial Reporting
 
 There
were no changes during the quarter ended September 30, 2009 in our internal
control over financial reporting or in other factors that materially affected,
or are reasonably likely to materially affect, our internal controls over
financial reporting.
 
 17
  PART
II - OTHER INFORMATION
 
 Item
1. Legal Proceedings
 
 We may
become involved in a lawsuit or legal proceeding at any time in the ordinary
course of business. Litigation is subject to inherent uncertainties, and an
unexpected adverse result may arise that may adversely affect our business. We
are currently aware of litigation pending which involves two lawsuits which have
been inherited by the company. They involve The Law Offices of John D. Clunk,
Co., L.P.A, 5601 Hudson Drive, Hudson OH, 44236 and Professional Law Office of
Kleinsmith & Associates, P.C., 6035 Erin Park Drive, Suite 203, Colorado
Springs, CO 80918. Both of these attorney offices were involved with various
transactions for FCI Lender Services, Inc. and CDBANC, LLC related to the loan
pool. We are not aware of any additional legal proceeding or claims that we
believe will have, individually or in the aggregate, a material adverse affect
on our business, financial condition or operating results.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 During
the six months ended September 30, 2009, the Company issued shares of its common
stock to the following:
  ·
              910,000
      shares issued to individuals for services for a total value of
      $91,400.
 
 Item
3. Defaults Upon Senior Securities.
 
 None.
 
 Item
4. Submission of Matters to Vote of Security Holders
 
 None.
 
 
 Item
5. Other Information
 
 None.
 
 Item  6.
Exhibits.
 
 Exhibit
      No.
              
              Description31.1
              
              Section
      302 Certification of Chief Executive31.2
              
              Section
      302 Certification of Chief Financial Officer32
              
              Certification
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 Of
      The Sarbanes-Oxley Act Of 2002
  18
  SIGNATURES
 
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
 
 Date:
      November 16, 2009
              Liberty
      Capital Asset Management, Inc.By: /s/ Michael A.
      BarrronChief
      Executive Officer
 
  19