FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   (Mark One)

(X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                       For the fiscal year ended August 31, 2008.
OR

(  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

             For the transition period from _________ to __________.

                           Commission file number None

                          LIQUOR GROUP WHOLESALE, INC.
                   ------------------------------------------
             (Exact name of registrant as specified in its charter)

         Colorado                                    84-1039267
-------------------------------                  -------------------
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                  Identification No.)

             4600 Touchton Road
             Building 100, Suite 150
             Jacksonville, FL                                  32246
     ------------------------------------------------    -----------------
       (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (904) 285-5885
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]

Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [ ]                      Accelerated filer  [ ]

Non-accelerated filer  [ ] (Do not check if a     Smaller reporting company  [X]
                            smaller reporting
                            company)

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

The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the common stock on February
29, 2008, was $ -0- .

As of December 15, 2008, the Registrant had 9,512,851 issued and outstanding
shares of common stock.

Documents Incorporated by Reference:   None


<PAGE>


                                     PART I

ITEM 1.  BUSINESS

BACKGROUND

      We are a Colorado corporation formed in 1986. In 1998 and 1999 we did
business under the name USA Service Systems, Inc. Between November 1998 and July
1999 we provided retail stores and manufacturers with product assembly, product
demonstrations, and inventory counts and audits. In July 1999 we discontinued
this business since it was not profitable.

      In August 1999 we acquired all of the issued and outstanding shares of
East Coast Beverage Corp. in exchange for 5,040,000 shares of our common stock.
After August 31, 1999 we changed our name to East Coast Beverage Corp. and our
business involved the development, production and distribution of bottled coffee
drinks.

      We sold our products through distributors and wholesalers to supermarkets,
mass-marketers, convenience stores, drug store chains and oil company
convenience stores. However, we were never able to generate a profit, suffered
substantial losses and discontinued our bottled coffee operations in October
2001.

      On April 11, 2002 we filed a petition for reorganization under Chapter 11
of the Federal Bankruptcy Code.

      Our Plan of Reorganization was approved by a majority of our creditors and
confirmed by the Federal Bankruptcy Court in July 2003.

      Among other things, the Plan of Reorganization provided for the following:

      1. The reverse split of our common stock so that each outstanding share
was converted into 1/15th of one share. Since there were 15,704,469 outstanding
shares prior to the bankruptcy, 1,046,965 shares were retained by our
shareholders after the reverse split. In addition, each common shareholder
received one warrant for each share held after the reverse split. Each warrant
entitles the holder to purchase one share of our common stock at a price of
$1.75 per share at any time prior to January 1, 2008.

      2. The issuance of 2,000,000 shares of our common stock to Royal Brokerage
Group in exchange for 10% of the gross revenues which may be received by Royal
from the sale of olive oil products. At the time our bankruptcy plan was
confirmed Royal Brokerage Group had the right to distribute in the Eastern
United States, olive oil, olives, wine vinegar, and related products which were
manufactured by Carbonell de Cordoba, S.A. of Spain. In consideration for
2,000,000 shares of our common stock, Royal agreed to pay us 10% of the gross
amount received by Royal from the sale of Carbonell products.



                                       2
<PAGE>

      3. Unsecured creditors (Class 4 creditors) could either obtain payment of
their claims, up to a maximum of $3,500,000 from a percentage of our profits
over time or convert their debt into shares of our common stock at a conversion
rate of $1.75 per share.

       4. The change of our name to North American Food and Beverage Corp.

      When it became apparent that commissions from the sale of olive oil would
generate little, if any, revenues which could be used to pay our creditors, we
began to look for a privately held corporation which would be interested in a
merger to take advantage of our shareholder base and, for income tax purposes,
make use of our net operating losses, which amounted to approximately
$25,472,000 as of August 31, 2008.

ACQUISITION OF LIQUOR GROUP WHOLESALE

      In 2006 we began discussions with Liquor Group Holdings LLC, a Florida
limited liability company, which, since 2002, has been engaged in the wholesale
and state level distribution of liquor and wine.

      The discussions began with the introduction in May 2006 of C.J. Eiras, the
Managing Member of Liquor Group Holdings to Arnold Rosen, one of our directors.

      Prior to the signing of this Agreement no other agreements existed between
us, or any person controlling us, and Liquor Group Holdings, or any person
controlling Liquor Group Holdings. The terms of January 2007 Agreement were
negotiated directly between William R. Smith, our former President and a
director, Mr. Rosen and Mr. Eiras. No other parties, with the exception of our
attorneys and the attorneys for Liquor Group Holdings, were involved in the
negotiations.

      In January 2007 we signed an agreement to acquire Liquor Group Wholesale,
Incorporated in return for shares of our common and Series A preferred stock.

      The consideration to be given to the shareholders of Liquor Group
Wholesale was determined by multiplying the number of our outstanding shares by
44% and allocating that number between shares of common stock and shares of
Series A Preferred stock. The Series A Preferred stock was used to prevent a
large number of common shares from being available for public sale at any one
time. See "Description of Securities" for information concerning the terms of
the Series A preferred stock.

      Liquor Group Wholesale is a Florida corporation which was recently formed
to take over the wholesale alcohol distribution operations of Liquor Group
Holdings. Pursuant to an agreement between Liquor Group Wholesale and Liquor
Group Holdings, Liquor Group Wholesale, as of September 1, 2007, manages all
wholesale operations and receives all net profits generated from the wholesale
distribution of liquor to the customers of Liquor Group Holdings. Liquor Group
Holdings was organized in Florida in 2002 and distributes alcohol products on
behalf of manufacturers in 31 US States.


                                       3
<PAGE>


      The acquisition of Liquor Group Wholesale was contingent upon the
following:

1.         The return and cancellation of up to 2,000,000 shares of our common
           stock so that the number of our outstanding shares following the
           acquisition would be less than 10,000,000.

2.         Persons holding Class 4 creditor claims of not less than $3,250,000
           agreeing to waive any right they may have to any distributions
           contemplated by the Plan of Reorganization and accepting one share of
           our common stock in full settlement of each $24.50 which we owed to
           them.

      On August 31, 2007 we met these contingencies and acquired all of the
outstanding shares of Liquor Group Wholesale in consideration for the issuance
of the shares of our common and Series A Preferred stock to the following
persons:

                                                   Shares
                                       --------------------------------------
      Name                                Common           Series A Preferred

      VIGOR Holding Corporation           500,000                753,460 (1)
      C. J. Eiras                         500,000                170,000
      Gray C. Solomon                     350,000                 10,000
      Lowell Newman                        50,000                  5,000
      Steven Dodge                         50,000                  5,000
      Jan Philippe Eiras                  350,000                 10,000
      Third parties                       200,000                      -
                                       ----------          -------------
            Total:                      2,000,000                953,460
                                        =========                =======

(1)  VIGOR Holding Corporation ("VIGOR") is controlled by C.J. Eiras. VIGOR
     subsequently assigned 7,777 shares of the Series A preferred stock to
     Arnold Rosen and 5,000 Series A preferred shares to an unrelated third
     party.

      Each Series A preferred share may, at the option of the Holder, be
converted into 45 shares of our common stock. Each Series A preferred share is
entitled to 45 votes on any matter submitted to our shareholders. Each Series A
preferred share is entitled to an annual dividend of $1.00 per share, if such a
dividend is authorized by our directors. Our directors are not required to
declare any dividends and dividends not declared will not accumulate.

     VIGOR and C.J. Eiras, the largest holders of our Series A preferred shares,
have agreed that, unless we are sold or merged into an unaffiliated corporation,
between  September  1, 2008 and August 31, 2012 they will  convert not more than
10,000  preferred  shares (or  20,000  shares in total)  each year.  We will not
register any shares of common stock  issuable  upon the exercise of the Series A
preferred  shares and it is not expected  that a public market will ever develop
for the Series A preferred shares.

      Any shares of common stock issuable upon the conversion of the Series A
preferred shares will be restricted securities and may be sold to a market-maker


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<PAGE>

or in brokerage transactions, provided that the amount sold does not, during any
three-month period, exceed l% of our outstanding common stock.

      We did not use any third party consultants in determining the terms of the
acquisition.

      Following the acquisition of Liquor Group Wholesale, William Smith
resigned as our President and as a director, and C.J. Eiras, Lowell Newman,
Steven Dodge, Jason Bandy and Jan Philippe Eiras were appointed as our officers
and directors. Arnold Rosen remained as one of our directors.

      None of our officers, directors or control persons received any cash
consideration in connection with the acquisition of Liquor Group Wholesale, and
we did not pay, or enter into any agreements relating to the payment of, any
finders or consulting fees in connection with the acquisition.

      The shares of common stock outstanding after the acquisition of Liquor
Group Wholesale, as well as the shares which may be issued upon the conversion
of the Series A Preferred stock at August 31, 2008, are shown below:

      Shares outstanding prior to acquisition of Liquor
        Group Wholesale                                            8,717,562
      Shares of common stock issued to the shareholders
        of Liquor Group Wholesale                                  2,000,000
      Shares issued to Class 4 creditors in settlement of
        their claims124,985 Shares returned to treasury and
        cancelled                                                 (2,000,000)
      Shares issued to Arnold Rosen for his services in
        structuring the acquisition of Liquor Group Wholesale        500,000
      Shares issued to Arnold Rosen in payment of amounts
        advanced to or on behalf of us                                33,972
      Shares issued to unrelated third parties in payment of
        amounts owed by us prior to the acquisition of Liquor
        Group Wholesale                                               63,038
      Shares sold to private investors at a price of $2.00 per
        share                                                         65,000
      Shares issued upon exercise of warrants                          8,294
                                                                  ----------
      Total                                                        9,512,851
                                                                  ==========

      Potential number of shares issuable upon conversion
         of Series A preferred shares                             42,905,700 (1)

 (1) As noted above, the number of Series A preferred shares which can be
     converted during any single year is limited.


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<PAGE>

OUR BUSINESS
------------

      Unless otherwise indicated, all references to our company include the
wholesale liquor distribution business of Liquor Group Holdings. General
information that follows pertaining to the liquor industry was obtained from
www.discus.org.

      On December 20, 2007 we changed our name to Liquor Group Wholesale, Inc.

      Our major markets are Florida and Michigan, which are the second and sixth
largest markets for spirits in the United States, respectively. Other states in
which we have active sales efforts and or licensed operations include: Alabama,
Arkansas, California, Georgia, North Carolina, South Carolina, Virginia, West
Virginia, Oklahoma, Texas, Oregon, Washington, Wisconsin and Indiana. We have
sales contracts for several products in distribution in other states making up
the balance of the 31 markets. One of our state level distribution clients,
Liquor Group Florida, LLC is a fully licensed beer, wine and spirits distributor
holding the fourth largest spirits portfolio in Florida. Another of our state
level distribution clients, Liquor Group Michigan, LLC is a fully licensed
control state broker which currently has the fourth largest spirits portfolio in
Michigan.

Industry Overview
-----------------

      The wine and spirits wholesale industry has undergone significant changes
in recent years. Rapid consolidation has occurred in the supplier sector, and
distributors have expanded their operations to cover a larger number of states,
resulting in consolidation among distributors. Although the market is still
quite fragmented in several states, only two major distributors are operating,
and the trend toward consolidation in the industry is continuing.

      Since the repeal of Prohibition in 1933, Federal and State governments
have regulated the sale of spirits, wine, and beer. State regulatory frameworks
fall into two types: control and open (commonly referred to as licensed). In the
18 control States*, the State controls the distribution and/or the retail sale
of alcohol beverages. In open States the distributors and retailers are
privately owned businesses. In the open "franchise" States, there are laws and
regulations that restrict the brand suppliers' ability to change distributors
affording distributors additional protection for their efforts.

*  Control States include: Alabama, Idaho, Iowa, Maine, Maryland - (Montgomery
   County), Michigan, Mississippi, Montana, New Hampshire, North Carolina, Ohio,
   Oregon, Pennsylvania, Utah, Vermont, Virginia, Washington, West Virginia,
   Wyoming.

      Under the three-tier regulatory framework established by Federal and State
law, brand suppliers of alcohol-based beverages are generally prohibited from
selling their products directly to retail outlets or consumers, effectively
requiring brand suppliers to utilize distributors such as us. This regulatory
framework effectively insulates distributors from vertical competition from
brand suppliers or retail customers. Certain large chain retailers have
challenged the three tier structure in particular States in an attempt to gain
favorable pricing directly from wineries and breweries. A successful challenge
to the three-tier system has not occurred, but is a potential long term threat
to the current framework.


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<PAGE>

      In "Control States" the State law has historically mandated the state to
act as the exclusive wholesale distributor and/or retailer of alcohol-based
beverages. Brand suppliers must utilize state licensed "Brokers" to properly
represent their products in the control state marketplace. In 1996, Michigan
became the first control state to privatize aspects of the wholesale
distribution of spirits, and Liquor Group Michigan, LLC, an affiliated company,
is one of the larger brokerages of spirits in Michigan.

      Given the three tier regulatory structure, the wine and spirits
distribution industry varies greatly from other industries such as food, drugs,
non-alcohol-based beverages or similar products. As brand suppliers can compete
directly with the distributors in these other industries by shipping directly to
retailers, distributor margins tend to be much lower than those in the wine and
spirits industry.

Brand Suppliers and Products

      We sell more than 1,500 individual products to our customers. In each of
the last three fiscal years, sales of wine and spirits to wholesale customers
accounted for more than 95% of the consolidated revenue of Liquor Group
Holdings.

      In most states liquor distributors are required by law to have exclusive
relationships with brand suppliers.

      We have agreements with the majority of our brand suppliers that generally
may be extended on a bi-annual basis but are only terminable upon 30 to 90 days
written notice upon our failure to perform our duties, including any agreed upon
sales quotas. We have entered into these various long-term agreements with
certain brand suppliers in an effort towards "Brand Alignment", a key component
in its business model. In addition, we have informal arrangements with a very
small percentage of our brand suppliers whereby we distribute the brand
suppliers' products pursuant to bailment orders without written distribution
agreements. Although the terminable written agreements provide us with the
exclusive right to distribute the brand suppliers' products in a particular
State, in practice the brand suppliers have generally selected a distributor to
be the exclusive distributor of specified products in each state. We presently
act as the exclusive distributor with respect to virtually all of the products
we distribute.

      Liquor Group Holding's import division holds exclusive import rights with
several brands that we represent. Liquor Group Holdings also holds agreements
for overriding distribution rights to expand our operations with several brand
suppliers in markets where the brand supplier currently uses other distribution
methods.

      During the periods presented, the percent of our total product purchased
from our largest vendors were:



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<PAGE>

                                        Year Ended August 31,
      Name                              2008            2007
      ----                              ----            ----

      Happy Vodka Corporation/
        Urban Brands & Spirits           18%             10%
      Drinks Americas                    18%              --
      Azarro Wines                       10%              --
      Guetsso                             6%              --
      VMI, Ltd.                           5%              3%
      Wolffer Estate Vineyard             5%              --
      Lantrix                             5%              --
      Three-D Spirits, Inc.               4%              8%
      Hood River Distillers, Inc.         4%              7%
      Spirits of Valley Forge             3%              --
      Kazbo Imports                       3%              --
      Classic Wine Imports                --             21%
      Old St. Andrews, Ltd.               --              9%

Customers

      Our only customers are State Level Clients (SLC), which consist of
licensed liquor distributors, and the 18 Control States. Most states require
wine and spirits retailers to purchase alcohol-based beverages from licensed
distributors. Brand suppliers in these states may not legally sell directly to
retail customers. In "license states" customers fall into two broad categories,
depending on where the alcohol-based beverage ultimately will be consumed:
on-premise and off-premise. Off-premise customers include package liquor stores,
grocery stores, alcohol licensed drug stores and mass merchandisers. On-premise
customers include hotels, restaurants, bars, nightclubs, golf clubhouses and
similar establishments. During the years ended August 31, 2008 and 2007, sales
to Liquor Group Florida, LLC (which is controlled by our President) represented
75% and 54% respectively of our total revenues. In licensed states alcohol
beverage licensees are abundant; in fact no single state level licensee customer
represented more than 5% of our revenues during the years ended August 31,
2008 or 2007. Our products are generally placed in bailment with these SLC to be
sold to their customers under standard purchase orders or individual
representative orders.

      We believe that the regulatory nature of the alcohol distribution industry
strengthens our business liquidity and operational freedom with its SLC. One
example of such advantageous regulation is in Florida, which has a 15-day credit
law beyond which retail customers are restricted from buying alcohol-based
beverages from any distributor in the market; many other states have similar
strict credit laws siding with the distributor (cash on delivery, or "COD" terms
in some cases), providing us with a relatively safe credit risk with our SLC. On
the other end of the client spectrum are the Control States which pay us for
100% of the product distributed within their borders backed by the full credit
and sovereignty of the individual state. The average bad debt expense for our
state level clientele in the past five fiscal years has been approximately
0.001% of total revenue.


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<PAGE>

Marketing and Sales
-------------------

      We recognize the benefits of a dedicated approach to brand management, and
separating it from sales execution is important. Brand suppliers appreciate and
depend upon the local expertise and understanding of the intricacies of the
market that a distributor can provide. We analyze the competitive landscape, and
through interaction with our sales teams adjust brand suppliers' marketing
strategies to work better.

      We use sales divisions to adapt to industry changes and product portfolio
growth. Under this structure products are positioned in the market to gain
focus. Although we have used this structure for more than three years in
Florida, recent supplier consolidation has led to the creation of separate sales
divisions in Michigan, as well as an expanded organization in Virginia and other
markets.

      Our organizational design is predicated upon category knowledge and
expertise, trade channel knowledge, and geographic coverage. Through our
marketing and sales force, we act as the top level marketing arm of our brand
suppliers by maintaining regular contact with our customers. Our sales strategy
focuses on the purchasing departments of independents, national chains,
membership clubs, and grocery chains to pave the way for more sales within the
geographic territory. Additionally, we provide our customers with a wide variety
of services, including item selection, SKU optimization and fact-based business
presentations.

Warehousing and Distribution
----------------------------

      We never take possession of any products as they are transferred from
manufacturers to the SLC directly. Our SLC operations utilize a series master
warehouses strategically located throughout the U.S. and Control State
warehouses to store and ship products pending sale to customers. Our SLC
customers ordinarily receive either next day or second-day delivery in most
markets. In general, an SLC's orders are collected and immediately processed
during the day for batch routing and order "picking". The master warehouses each
use an automated material handling system, including scanners, dispensers and
sorters. Products from the master warehouses are then often shuttled nightly to
a cross-docking facility where the orders are consolidated and loaded onto
delivery trucks. Cross-docking facilities further extend the service areas of
the master warehouses. Orders for delivery are picked in the master warehouses,
shipped in during the night, and then transferred onto local delivery trucks for
final delivery. As a result of a number of factors, including state laws and
regulations, our SLCs maintain independent distribution networks in each of
their territories.

Competition
-----------

      There are significant barriers to entry into the wholesale wine and
spirits distribution business. These barriers include established
supplier-distributor relationships, specialized distribution equipment such as
material handling systems and delivery vehicles, important industry knowledge
regarding pricing, inventory management, and distribution logistics, not to
mention the cost of licenses, inventory, equipment, delivery vehicles and cash
or surety bond requirements. Historically, it is extremely rare for


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<PAGE>

organizations not already engaged as wine and spirits distributors to enter the
business. New distributors typically enter existing markets through acquisition.

      Our operations are less cumbersome than the typical wholesale operator
since we merely facilitate the transaction between the manufacturer and the
SLC's.

      The wine and spirits wholesale distribution business is highly
competitive. Intuitively one would think that our primary competition includes
Southern Wine & Spirits, Charmer Sunbelt, Premier Beverage, Republic/National
Distributing Company and Glazier's. This in fact is not the case, as the bulk of
the business operations of these organizations is built on "popular priced"
commodity products often referred to as "well products". These distribution
power houses often vie for the top selling brands which demand exclusive
attention and command smaller margins. This leaves the mid to small brands with
less attention making them wide open for us to contract. Given the ongoing
consolidation among distributors as well as brand suppliers, the competitive
landscape is subject to continuing change. Distributors commonly compete for new
brand suppliers or brands based on reputation, market share, access to customers
and ability to satisfy supplier demands, however a more recent trend is to rely
only on the major brand families to provide enough product variety to sustain
and grow a distribution operation. This however is not our goal or modus
operandi, as we attempt to provide a variety of products that suit the needs of
our customers, regardless of the supplier.

Government Regulation

      The manufacturing, importation, distribution and sale of alcohol-based
beverages are subject to regulation by the Federal government through the
Alcohol and Tobacco Tax and Trade Bureau (TTB), as well as by State and local
regulatory agencies. Brand suppliers, distributors and retailers must be
properly licensed in order to sell alcohol-based beverages.

      In most states, the alcohol-based beverage industry operates within what
is commonly referred to as a three-tier system of distribution. The three tiers
are identified as follows: (1) (2) (3).

          Tier one (1) is comprised of brand  suppliers and  manufacturers  that
          produce  alcohol-based  beverages  and/or  importers of  alcohol-based
          beverages, bringing products into the United States through US Customs
          control.

          Tier two (2) is comprised of SLC distributors, other sub-distributors
          and the Control States which in turn market the products through
          brokers.

          Tier three (3) is comprised of licensees, both on and off premise
          customers, commonly referred to as retailers which sell the products
          to the public consumers.

      Under this system, brand suppliers and manufacturers sell to distributors
and or Control States, distributors and or Control States sell to licensees or
state stores, and licensees or state stores sell to consumers. For the most
part, brand suppliers may not sell to licensees or consumers and distributors


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<PAGE>

may not sell directly to consumers. All States prohibit brand suppliers or
distributors from having an interest in retail licensees.

      We are a Tier two (2) distributor. We hold out-of-State shipper permits
that allow us to ship products from one State to a licensed distributor in any
one of the other States or to any Control State. We also have a unique
relationship with many of our brand suppliers in Control States where we act as
both the vendor of product to the Control State on behalf of the actual brand
supplier while an affiliated company acts as the broker for the brands within
the Control State to provide a turn key service and generate additional revenues
for us.

      Our officers, directors and principal owners must be qualified by the TTB
and state regulatory agencies to hold licenses/permits as a wholesaler/importer.

      The TTB grants authorization to operate alcohol and tobacco-related
businesses under the Internal Revenue Code and the Federal Alcohol
Administration Act. Any person wanting to operate a business governed by the IRC
or the FAA must file an application with the TTB for a permit along with all
necessary documents. The basic application for a permit consists of two pages
and is filed with the TTB's offices in Cincinnati, Ohio. If the applicant is a
corporation, the application must list the names, dates of birth, social
security numbers and resident addresses for all of the corporation's officers,
directors and 10% or more owners. Once the TTB has received a complete
application, together with all supporting documents, a federal basic permit is
normally issued within 60 days.

      Our distributors face scrutiny in a number of important areas, including
initial licensing or permitting and ongoing sales and marketing activities with
or on behalf of retail customers. In many states the SLC distributors may not
give or transfer anything of value to their customers in exchange for business
or other consideration; however the definition of "value" differs from State to
State. We participate in significant promotional activities for brand suppliers
and customers, which are increasingly requesting that distributors to be
responsible for activities and related costs formerly undertaken by brand
suppliers as brand suppliers pursue ways to reduce their operating costs. These
increased demands will likely challenge us and other distributors since we
attempt to meet the wishes of brand suppliers and customers. As a result, we
regularly provide training and education programs for our sales and marketing
personnel.

      We believe that we are in compliance with applicable regulations in all
material respects. Consistent with industry practice, the sales and marketing
activities permitted by distributors for the benefit of tier one brand suppliers
are generally regulated by State licensing authorities, which authorize various
trade practice activities by statute, regulation or administrative bulletin. We
rely on such enforcement guidance, which is subject to change at the discretion
of the regulatory authorities, in determining the scope of its permitted sales
and marketing activities.

      As part of our regulatory compliance program, we are in frequent contact
with regulatory agencies so that we can: (1) be kept current on regulatory
developments affecting our business; (2) obtain answers from the agencies to
questions from company personnel regarding compliance issues; (3) encourage
enforcement of applicable laws and regulations on a consistent basis throughout


                                       11
<PAGE>

our markets. We believe that prompt and consistent enforcement by the regulatory
agencies is important and benefits us.

      We adhere strictly to the DISCUS Code of Responsible Practices for
Beverage Alcohol Advertising and Marketing and will not condone, participate in
nor permit any activity not in accordance with the guidelines contained therein.
In some instances the guidelines we adhere to exceed the DISCUS guidelines and
we reserve the right to decline to participate in, or prohibit any promotional
activity within in our territories that we deem in our sole discretion to be
outside of our own guidelines. More information on DISCUS guidelines can be
found at: www.Discus.org

General

      As of 2008 our only employees were C.J. Eiras, Lowell Newman, and Steven
Dodge, all of whom are officers of our Company.

           As of December 15, 2008 we had 9,512,851 outstanding shares of common
stock.

      Our website address is www.liquorgroup.com.

ITEM 1A.  RISK FACTORS

      Not applicable.

ITEM 1B. UNRESOLVED SEC COMMENTS

      None

ITEM 2.   PROPERTIES

     Our offices are located at 4600 Touchton  Road,  Building  100,  Suite 150,
Jacksonville,  FL 32246. We sub-lease this space, consisting of 500 square feet,
from VIGOR for $1,000  per month.  The lease on our space  expires in August 31,
2009.


ITEM 3.   LEGAL PROCEEDINGS

     In January 2008, we were served with a summons and complaint filed by Royal
Strategies and Solutions,  Inc.,  Melvin Leiner and Darren Marks.  The complaint
was filed on November 15, 2007 in the Circuit Court of Broward  County,  Florida
and a summary  judgment in favor of the  Plaintiffs for  approximately  $162,000
representing  amounts  Plaintiffs  contended they loaned us prior to 2007,  plus
accrued  interest,  was rendered  subsequent  to the year ended August 31, 2008.
However,  the judgment is pending a hearing scheduled on April 24, 2009, and the
final  disposition is unknown.  Based upon what believed we owed the Plaintiffs,
we accrued a liability of $78,900 as of August 31, 2008.


                                       12
<PAGE>

      Other than the foregoing, we do not know of any claims threatened or
pending against us, except as may result from vendor contract disputes from time
to time. We do not anticipate that resolution of any such vendor contract
disputes will result in a material adverse effect on our financial condition.

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

      Not applicable.

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK EQUITY,  RELATED STOCKHOLDER
          MATTERS AND ISSUER PURCHASES OF EQUITY

      Prior to June 2001 our common stock traded on the OTC Bulletin Board. In
June 2001 our common stock was delisted from the OTC Bulletin Board. After that
time our common stock traded on a sporadic basis in the unorganized inter-dealer
over-the-counter market through the "Pink Sheets" and under the symbol "ECBV".
Our common stock essentially stopped trading in November 2006.

      On October 23, 2008 our common stock began trading on the OTC Bulletin
Board under the symbol "LIQR". On December 15, 2008 the closing price for our
common stock was $0.50 per share. Market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commissions and may not necessarily
represent actual transactions.

      As of December 15, 2008 we had 9,512,851 outstanding shares of common
stock, of which 8,425,886 shares were "restricted securities" as that term is
defined in Rule 144 of the SEC. These restricted shares may be sold at any time
in accordance with Rule 144. By means of a registration statement on Form S-1 we
have registered 1,962,035 shares of common stock, owned by twenty of our
shareholders, for sale in the public market.

      As of December 15, 2008 we had 953,460 outstanding shares of Series A
Preferred stock. The Series A Preferred shares may be converted into 42,905,700
shares of our common stock. See Item 1 of this report for information concerning
restrictions on the conversion of the Series A Preferred shares.

      As of December 15, 2008 we had approximately 400 shareholders of record
for our common stock and eight shareholders of record for our preferred stock.

      Holders of common stock are entitled to receive such dividends as may be
declared by our Board of Directors out of funds legally available and, in the
event of liquidation, to share pro rata in any distribution of our assets after
payment of liabilities. Our Board of Directors is not obligated to declare a
common stock dividend.

      The holders of our Series A preferred shares have a preference over any
dividends which we may pay to the holders of our common stock. However, we have
not paid any dividends and we do not have any current plans to pay any dividends
to the holders of either our common or Series A preferred stock.


                                       13
<PAGE>

      Our Articles of Incorporation authorize our Board of Directors to issue up
to 20,000,000 shares of preferred stock. The provisions in our Articles of
Incorporation relating to our preferred stock would allow our directors to issue
preferred stock with rights to multiple votes per share and dividends rights
which would have priority over any dividends paid with respect to our common
stock. The issuance of preferred stock with such rights may make more difficult
the removal of management even if such removal would be considered beneficial to
shareholders generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers if such
transactions are not favored by incumbent management.

    During the year ended August 31, 2008 we did not purchase any of our
securities. During this same period no person affiliated with us purchased any
of our securities on our behalf.

ITEM 6.   SELECTED FINANCIAL DATA

      Not applicable.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

      Between October 2001 and August 31, 2007 we were inactive. On August 31,
2007 we acquired a Florida corporation named Liquor Group Wholesale,
Incorporated.

      Liquor Group Wholesale was recently formed to take over the wholesale
alcohol distribution operations of Liquor Group Holdings, LLC, effective as of
September 1, 2007. Pursuant to an agreement between Liquor Group Wholesale and
Liquor Group Holdings, Liquor Group Wholesale manages all wholesale operations
and receives all net profits generated from the wholesale distribution of liquor
to the customers of Liquor Group Holdings. Liquor Group Holdings was organized
in Florida in 2002 and distributes alcohol products on behalf of manufacturers
in 31 U.S. states.

      Two important factors which influence our net income are our sales volume
and the prices charged to us by our suppliers.

      Our sales volume for any given period is influenced by brand recognition
among consumers of the products we sell, the prices charged by our competitors
for products in the same categories as ours, and the amount spent by our
suppliers on promotion (such as advertising and in-store tastings).

      The price per product unit from our suppliers is generally established by
contract as a base price delivered to the customer. We mark up this price to
cover our expenses and provide a profit. Suppliers typically will raise their
prices by a modest amount at the end of each contract term to adjust for
inflation and higher costs of transportation. However, suppliers often lower
their prices:


                                       14
<PAGE>


     o    to help  jump-start  sales if sales are weak or have softened from the
          previous year.

     o    if field  research or pricing  trends point  towards a downturn in the
          shelf prices of a particular brand category.

     o    as a result of seasonal  trends (i.e.  holidays) or pre-planned  price
          decreases (i.e. sporting events) for a given time period.

     o    as a reward if we achieve sales goals in a specific market.

      Generally, and unless the price decrease is to reward us for meeting sales
goals, we pass any price reduction on to our customers.

      Inflation has not had a material impact on our operations since for the
most part we are able to pass on to our customers any price increases from our
suppliers.

Financial Information
---------------------

     For  financial  statement  purposes,   our  acquisition  of  the  wholesale
operations of Liquor Group Holdings was treated as a reverse  acquisition and as
though Liquor Group Wholesale,  the wholesale  division of Liquor Group Holdings
had acquired us. Accordingly,  as of August 31, 2007, and for all prior periods,
the  historical   financial  statements  of  Liquor  Group  Holdings  (wholesale
operations only) are considered our historical financial statements.

      During the year ended August 31, 2008 the only material changes in our
balance sheet components were as follows:

       Category               Explanation
       --------               -----------

       Cash                   During the year ended August 31, 2007 our
                              operations used $107,359 in cash, primarily due to
                              a $665,835 increase in our accounts receivable,
                              which will not generate cash until collected,
                              offset in part by an increase of $211,337 in
                              accounts payable.

       Accounts Receivable    Although we have recently negotiated contracts
                              with new vendors that have resulted in new sales
                              and accounts receivable balances in 2008, 78% of
                              the increase in accounts receivable is due to
                              increases in receivables from related parties,
                              principally Liquor Group Florida. We typically
                              expect payment of accounts receivables from our
                              customers when the customer ships the product
                              from the bailment warehouse to a retailer or other
                              customers of the distributor.  The following
                              contributed tothe increase:


                                       15
<PAGE>

                                o  Disruption of shipments to end customers as
                                   Happy Vodka, one of our largest suppliers,
                                   relocated its U.S. customs facility, which
                                   lengthened our historical collection period.

                                o  Liquor Group Florida, not being in a Control
                                   State, is subject to additional delays in
                                   collections from its retailers of up to 60
                                   days under the state laws of Florida, which
                                   has contributed to slower collections.

                                o  When product is returned, Liquor Group
                                   Florida often assumes the commitment to
                                   resell and remit collections to us, which has
                                   also contributed to slower collections from
                                   related parties.

       Accounts Payable       When we make a sale we record a receivable
                              for the sale price and a payable for the cost of
                              the product. We normally pay our suppliers within
                              7-14 days of the date we receive payment from a
                              customer. Accordingly, our accounts payable will
                              normally increase or decrease in line with our
                              receivables.

Results of Operations

      Material changes in items in our Statement of Operations for the year
ended August 31, 2008, as compared to the same period in the prior year, are
discussed below:

                      Increase (I) or
   Item                 Decrease (D)   Reason
   ----               ---------------  ------

   Sales                      D        During the year Happy Vodka, one of our
                                       largest suppliers, relocated its U.S.
                                       customs facility.  As a result, shipments
                                       and sales to our customers were delayed.

   Gross profit, as a         I        Price reductions, averaging 50%, from
                                       Happy percent of sales Vodka, one of our
                                       major suppliers.

   Operating Expenses:

   Personal and               D        Reduction in need for temporary help.
     administrative costs

   Bank charges               D        During the year ended August 21, 2007 we
                                       changed banks. Our new bank did not give
                                       us credit for some deposits as quickly as
                                       our old bank and we incurred charges when
                                       the bank paid checks  we drew on our


                                       16
<PAGE>

                                       account before deposits were fully
                                       credited. This problem was rectified
                                       during the year ended August  31, 2008,
                                       resulting in a decline in bank charges.

   Rent                                I In 2007, our rent was based on an
                                       allocation from Liquor Group Holdings. In
                                       2008, our rent was based on a lease
                                       agreement at $1,000 per month.

   Insurance                  I        In 2007, insurance costs were included in
                                       the overhead allocations from Liquor
                                       Group Holdings. In 2008, our insurance
                                       costs increased primarily due to our move
                                       from being privately-held to
                                       publicly-held.

   Professional and           I        Legal and accounting fees associated with
     consulting fees                   the preparation, filing, and amendment of
                                       our SEC registration statement and costs
                                       associated with having our shares quoted
                                       on the OTC Bulletin Board.

   Licensing fees             I        Costs to license our company with
                                       state government agencies.

   Interest expense           I        Interest relating to a liability for
                                       delinquent payroll taxes and penalties
                                       which we incurred when we were selling
                                       bottled coffee drinks.

   Telephone                  I        In 2008, we upgraded our communications
                                       equipment and service coverage in
                                       anticipation of expanding activities.

   Other                      I        The establishment of our new website.

   Other Income               I        Income resulting from vendor contract
                                       terminations. During the year ended
                                       August 31, 2008 several of our vendors
                                       failed to honor their agreements with us
                                       by not accepting exchanges, returns, or
                                       meeting required marketing and other
                                       program commitments. As permitted by our
                                       agreements with these vendors, after six-
                                       months notice, we liquidated their
                                       inventory to cover their obligations to
                                       us. The liquidation of this inventory
                                       resulted in revenue of $184,402. We have
                                       not shown the $184,402 as a reduction in
                                       our cost of sales but rather as other
                                       income to prevent distortion of our gross
                                       profit margin.


                                       17
<PAGE>


Liquidity and Capital Resources
-------------------------------

      Our sources and (uses) of cash, combined with the wholesale operations of
Liquor Group Holdings, during the years ended August 31, 2008 and 2007 were:

                                                      2008        2007
                                                      ----        ----

Cash provided (used) by operations                 $(107,359)   $ 62,385
Advances from Liquor Group Holdings                $      --    $ 20,975
Registration costs                                 $  36,335    $     --
Proceeds from sale of stock                        $  14,515    $130,000

      We believe that cash generated from our operations will enable us to
slowly expand our markets and increase sales. However, with additional capital,
we believe that our expansion could occur much faster. However, as of December
15, 2008 we had not made any decision as to whether we will attempt to raise
additional capital in light of the current turmoil in the financial markets.

      We believe that our cash on hand and collections from accounts receivable
will satisfy our working capital requirements if we decide to expand without
raising additional capital.

      We do not have any commitments or arrangements from any persons to provide
us with any additional capital we may need.

      Other than the turbulence in the economy which began to surface in the
summer of 2008, we do not know of any challenges, risks, demands, commitments,
events, trends or uncertainties which would materially affect our future
operating results or liquidity and capital resources.

      We do not have any off balance sheet arrangements.

     See Note 1 to the financial  statements included as part of this report for
information concerning our significant accounting policies and recent accounting
pronouncements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

      Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See the consolidated financial statements included with this Report.

ITEM  9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

      Not applicable


                                       18
<PAGE>

ITEM 9A and 9A(T).  CONTROLS AND PROCEDURES

      C.J. Eiras, our Principal Executive Officer and Jason Bandy, our Principal
Financial Officer, have evaluated the effectiveness of our disclosure controls
and procedures as of August 31, 2008 and in their opinion our disclosure
controls and procedures ensure that material information is made known to them
by others, particularly during the period in which this report is being
prepared, so as to allow timely decisions regarding required disclosure. Mr.
Eiras and Mr. Bandy have determined that these controls and procedures are
effective as of August 31, 2008. To the knowledge of Mr. Eiras and Mr. Bandy
there have been no significant changes in our internal controls or in other
factors that could significantly affect our internal controls during the quarter
ended August 31, 2008, and as a result, no corrective actions with regard to
significant deficiencies or material weakness in our internal controls were
required.

ITEM 9B.  OTHER INFORMATION

      Not applicable.

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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

     C.J. Eiras         35   President, Chief Executive Officer and a
                              Director
     Lowell Newman      53   Vice President - License States Operations and a
                              Director
     Steven Dodge       50   Vice President - Control State Operations and a
                              Director
     Jason Bandy        35   Principal Financial and Accounting Officer and
                              Secretary
     Arnold Rosen       67   Director
     Jan Philippe Eiras 45   Director

      Our directors serve in such capacity until the first annual meeting of our
shareholders and until their successors have been duly elected and qualified.
Our officers serve at the discretion of our directors.

      The principal occupations of our officers, directors and consultants,
during the past several years are as follows:

C. J. (Christopher John) Eiras has been one of our officers and directors since
August 2007. Mr. Eiras has been the managing member of Liquor Group Holdings
since its inception in 2002 and has also been President and owner of Happy Vodka
Corporation, the controlling company for all the Happy brand beverages
worldwide, since its inception in August of 2001. In May 2006 Mr. Eiras
acquired all of the equity interests in Urban Brands & Spirits, LLC and has been
its managing member since that time. Urban Brands & Spirits' portfolio includes
the Party A-Go-Go alcohol products, and the Cadillac Margarita. Since April 2005
Mr. Eiras has also been the sole owner and President of Wild Orchid Vineyards,
which carries the wine brands Orchidia and Wilde Orchid.

Lowell Newman has been one of our officers and directors since September 2007.
Mr. Newman has been an officer of Liquor Group Holdings since May of 2005.
Between 2002 and 2005 Mr. Newman was general manager of Joseph's Liquor in


                                       19
<PAGE>

Orlando, Florida. Between 2000 and 2002 Mr. Newman was a wine consultant for ABC
Fine Wine and Spirits. Newman's duties with Liquor Group include sales
representative training and the selection of brands for distribution based on
taste profiles, overall value and merchantability.

Steven Dodge has been one of our officers and directors since September 2007.
Mr. Dodge has been the control state coordinator for Liquor Group Holdings and
state manager of Liquor Group Michigan, LLC since March of 2006. Between 1994
and 2006 Mr. Dodge was the General Manager for General Wine and Liquor. Mr.
Dodge manages the Control State operations of Liquor Group.

Jason Bandy has been one of our officers  since  September  2007.  Mr. Bandy has
managed his own accounting  firm since 2002,  primarily  serving  clients in the
alcohol beverage industry. Between 1997 and 2002 Mr. Bandy was employed by Price
Waterhouse  Coopers,  an  international  public  accounting firm. Mr. Bandy is a
certified public accountant.

Arnold L. Rosen became one of our directors in 2003  following the  confirmation
of our Chapter 11 bankruptcy  plan. Mr. Rosen was past President of the Mortgage
Bankers  Association of Greater Miami,  was the founder and a former Director of
the Gold Coast National Bank in Miami, Florida, and has been a licensed mortgage
and real estate broker for the last 35 years.  Mr. Rosen  received a Bachelor of
Business Administration from the University of Miami,

Jan Philippe Eiras has been one of our directors since September 2007. Mr. Eiras
the Chief  Executive  Officer  of  Quadrus  Corporation,  a US  Missile  Defense
Contractor and software development firm since 1995.

      C.J. Eiras and Jan Philippe Eiras are brothers.

      We do not have a compensation committee. Our Board of Directors serves as
our Audit committee. Jason Bandy is the director serving as our financial
expert. Arnold Rosen is the only director who is independent, as that term is
defined in Section 803.A of the listing standards of the American Stock
Exchange.

      We have adopted a Code of Ethics applicable to our senior executive and
financial officers. A copy of the Code of Ethics is filed as Exhibit 14 to this
report.


                                       20
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

      The following table shows the compensation paid or accrued during the two
years ended August 31, 2008 to our chief executive officer. None of our officers
received compensation in excess of $100,000 during the two years ended August
31, 2008.
                                                                 All
                                                                Other
                                                                Annual
                                               Stock   Option   Compen-
Name and Principal    Fiscal  Salary   Bonus   Awards  Awards   sation
  Position             Year    (1)      (2)     (3)     (4)       (5)      Total
------------------    ------  ------   -----   ------  ------   --------   -----

C.J. Eiras, President   2008  $   --      --       --      --   $17,000  $17,000

William R. Smith,      2007   $   --      --       --      --        --   $   --
President

(1)  The dollar value of base salary (cash and non-cash) earned.
(2)  The dollar value of bonus (cash and non-cash) earned.
(3)  During the periods covered by the table,  the value of our shares issued as
     compensation for services to the persons listed in the table.
(4)  The value of all stock options  granted  during the periods  covered by the
     table.
(5)  All other  compensation  received that we could not properly  report in any
     other column of the table.

      Mr. Smith resigned as an officer and director on August 31, 2007.

     The  following  shows the  amounts  which we expect to pay to our  officers
during  the  twelve-month  period  ending  August 31,  2009,  and the time these
persons plan to devote to our  business.  We do not have  employment  agreements
with any of its officers.

                                Proposed           Time to be Devoted
      Name                    Compensation           LGW's Business
      ----                    ------------         ------------------


      C.J. Eiras                $ 250,000           40 hours per week
      Lowell Newman             $  90,000           35 hours per week
      Steven Dodge              $  90,000           35 hours per week
      Jason Bandy               $  12,000            5 hours per week

Long Term Incentive Plans - Awards in Last Fiscal Year

      None

Employee Pension, Profit Sharing or Other Retirement Plans

      None


                                       21
<PAGE>

Compensation of Directors During Year Ended August 31, 2008

    During our last fiscal year we did not compensate our directors for serving
on our Board.

Stock Option and Bonus Plans

      We do not have any stock option or stock bonus plans, although we may
adopt these plans in the future.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The following  table shows, as of December 15, 2008, the share ownership of
those  persons  who own 5% or more of our  common  and  preferred  stock and the
number and  percentage of  outstanding  shares owned by each of our officers and
directors  and by all the  officers  and  directors  as a group.  Each  Series A
preferred  share  is  entitled  to 45  votes  on  any  matter  presented  to our
shareholders.  Unless  otherwise  indicated,  each  owner  has sole  voting  and
investment power over his shares.



                                       22
<PAGE>

Common Stock
                                No Conversion of           Full Conversion of
                               Preferred Shares (1)        Preferred Shares (3)
                               Number of    Percent        Number of    Percent
Name and Address of Owner      shares       of Class       Shares       of Class
-------------------------      ---------    --------       ------       --------

C.J. Eiras                   1,000,000 (2)     10.5%     41,980,735 (4)    80%
4600 Touchton Road
Building 100/Suite 150
Jacksonville, FL 32246

Lowell Newman                   50,000          0.5%        275,000       0.5%
4600 Touchton Road
Building 100, Suite 150
Jacksonville, FL 32246

Steven Dodge                    50,000          0.5%        275,000       0.5%
39555 Orchard Hill Place
Suite 600
Novi, MI  48375

Jason Bandy                         --           --              --         --
1 Corporate Center
Grand Cayman, Cayman Islands
KY1-1204

Arnold Rosen                 1,898,812           20%      2,248,777       4.3%
7138 Ayrshire Lane
Boca Raton, FL  33496


Jan Philippe Eiras             350,000          3.7%        800,000       1.5%
6275 University Drive
Suite 37-215
Huntsville, AL  35806

All Officers and Directors
   as a group (6 persons)    3,348,812         35.2%     45,579,512      86.9%

(1) Does not include shares of common stock issuable upon the conversion of the
    Series A Preferred shares.

(2) Includes  500,000  shares of common  stock  owned by VIGOR,  a  corporation
    controlled by C.J. Eiras.

(3) Assumes all outstanding Series A Preferred shares are converted into shares
    of common stock. Each outstanding Series A Preferred share is convertible
    into 45 shares of our common stock. The percentage of class ownership has


                                       23
<PAGE>

    been computed in accordance with Rule 13d-3 of the Securities and Exchange
    Commission.

(4) Includes  the assumed  conversion  of 740,683  shares of Series A preferred
    shares owned by VIGOR, a corporation controlled by C.J. Eiras.

Preferred Stock

                                       Number of          Percent
Name and Address of Owner                Shares           of class
-------------------------              ---------          --------

C.J. Eiras                              910,683 (1)         96%
4600 Touchton Road
Building 100/Suite 150
Jacksonville, FL 32246

Lowell Newman                             5,000            0.5%
4600 Touchton Road
Building 100, Suite 150
Jacksonville, FL 32246

Steven Dodge                              5,000            0.5%
39555 Orchard Hill Place
Suite 600
Novi, MI  48375

Jason Bandy                                  --              --
1 Corporate Center
Grand Cayman, Cayman Islands
KY1-1204

Arnold Rosen                              7,777            0.8%
7138 Ayrshire Lane
Boca Raton, FL  33496

Jan Philippe Eiras                       10,000              1%
6275 University Drive
Suite 37-215
Huntsville, AL  35806

All Officers and Directors
   as a group (6 persons)               938,460           98.4%

(1)  Includes  740,683  shares of Series A  preferred  stock  owned by VIGOR, a
     corporation controlled by C.J. Eiras.


                                       24
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      We use Liquor Group Florida, LLC as our exclusive distributor in Florida.
In Michigan, we use Liquor Group Michigan, LLC (formed in September 2006) as our
exclusive broker in that state. Liquor Group Florida and Liquor Group Michigan
are both controlled by C.J. Eiras, one of our officers and directors.

      C.J. Eiras, our President and Chief Executive Officer, owns Happy Vodka
Corporation and Urban Brands & Spirits, both vendors of alcohol-based beverages
we sell. We will continue to purchase product from Happy Vodka and Urban Brands.
We believe the price and terms provided to us by Happy Vodka and Urban Brands
are the same, if not better, than prices and terms available from our
independent suppliers.

      The following chart provides sales and other information concerning these
affiliated entities.
                                                     Year Ended August 31,
                                                     2008             2007
                                                     ----             ----

Percent of our total sales resulting                   75%             54%
  from sales to Liquor Group Florida

Dollar amount of total sales to
  Liquor Group Florida                           $806,771         $609,458

Gross profit of Liquor Group Florida             $190,000         $ 58,282

Percent of our total sales to the state
  of Michigan, all of which were brokered
  by Liquor Group Michigan                             15%              32%

Brokerage commissions we paid to
  Liquor Group Michigan                           $25,156          $11,055

Percent of our total products purchased from
  Happy Vodka and Urban Brands                         18%              10%

Dollar amount of total sales from:

      Happy Vodka                                $144,837          $20,098
      Urban Brands                               $  1,596          $75,990

Dollar amount of C.J. Eiras' interest
  in sales transactions to Happy Vodka
  and Urban Brands                               $146,433          $96,088




                                       25
<PAGE>

     Our  agreement  with Liquor Group  Florida  ("LGFL")provides  LGFL with the
right to purchase product from us at prices that we may change on 30-days notice
to LGFL. LGFL may only sell our products to customers in Florida.  Our suppliers
are responsible  for all costs of shipping  product to LGFL. LGFL is required to
pay for all product purchases upon delivery to LGFL's  destination  points.  Our
agreement with LGFL is not exclusive,  does not require LGFL to make any minimum
amount of purchases  from us, and may be terminated by either party at any time.
During the two years ended August 31, 2008 and 2007 we did not provide LGFL with
any marketing support.

     Our agreement  with Liquor Group Michigan  ("LGMI")  provides LGMI with the
exclusive  right  to sell  products  for us at  prices  and upon  terms  that we
establish  from  time-to-time.  Our suppliers are  responsible  for all shipping
costs,  other  than  inventory  transferred  at our  discretion.  We pay  LGMI a
commission  ranging from 5% to 20%,  depending upon the type of product sold. We
may change the commission on 30-days notice to LGMI.  LGMI is required to sell a
minimum  number of cases,  ranging  from 50 cases for Happy Gin to 300 cases for
Happy Vodka,  each year.  Our  agreement may be terminated by either party on 90
days  notice.  During the two years  ended  August 31,  2008 and 2007 we did not
provide  LGMI with any  marketing  support.  Our  agreement  with LGMI no longer
requires a minimum amount of purchases from us.

      Our agreement with Happy Vodka Corporation gives us the exclusive right to
sell vodka, rum, tequila and gin supplied by Happy Vodka in the United States.
Happy Vodka may change the price of the products they sell to us on 90 days
notice. Happy Vodka is responsible for all shipping costs and we are required to
pay for product purchases when we receive payment from our customers. We are
required to purchase a minimum of 5,000 cases each year for each of the four
products supplied by Happy Vodka. Either party may terminate the agreement on 90
days notice to the other party. During the two years ended August 31, 2008 and
2007 Happy Vodka provided funding of $1,427 and $3,025 respectively for
marketing support. The annual amount of minimum purchase commitments under this
agreement is approximately $118,750.

     Our agreement  with Urban Brands & Spirits gives us the exclusive  right to
the Party A Go-Go Products supplied by Urban Brands in the United States.  Urban
Brands may change the price of the products they sell to us on 90-day's  notice.
Urban Brands is  responsible  for all shipping  costs and we are required to pay
for  product  purchases  when we  receive  payment  from our  customers.  We are
required to purchase a minimum amount of the product from Urban Brands  totaling
$29,400 annually. Either party may terminate the agreement on 90 day's notice to
the other  party.  During the two years  ended  August  31,  2008 and 2007 Urban
Brands did not provide us with any marketing support.



                                       26
<PAGE>


ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES
            --------------------------------------

     Stevens,  Powell & Company,  P.A.  served as our auditors for the two years
ended August 31, 2008. The following table shows the aggregate fees billed to us
for these years by Stevens, Powell & Company, P.A.:

                                       Year Ended August  31,
                                      2008               2007
                                      ----               ----

Audit Fees                           $14,750           $19,500
Audit-Related Fees                        --                --
Tax Fees                                  --                --
All Other Fees                            --                --
                                ------------      ------------
                                     $14,750           $19,500
                                     =======           =======

      Audit fees represent amounts billed for professional services rendered for
the audit of our annual financial statements included as part of this report, as
well as the audit of our financial statements and the review of our interim
financial statements which were included as part of our registration statement
on Form S-1. Before Stevens, Powell & Company, P.A. was engaged to render audit
or non-audit services, the engagement was approved by our directors. Our
directors are of the opinion that the audit related fees charged by Stevens,
Powell & Company, P.A. are consistent with Stevens, Powell & Company, P.A.
maintaining its independence from us.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

3.1      Articles of Incorporation, as amended                             (1)

3.2      Amendment to Articles of Incorporation                            (1)

3.3      Designation of Series A preferred stock                           (1)

3.4      Bylaws                                                            (1)

10.1     Agreement pertaining to the acquisition of Liquor
         Group Wholesale, Inc.                                             (1)

10.2     Agreement between Liquor Group Wholesale and Liquor
              Group Holdings, Inc.                                         (1)

10.3     Standard form of agreement with vendors                           (1)

10.4     Standard form of agreement with State Level Clients               (1)

10.5     Agreement between Liquor Group Holdings, LLC and Liquor Group
         Florida, LLC                                                      (1)



                                       27
<PAGE>

10.6     Agreement between Liquor Group Holdings, LLC and Urban Brands &
         Spirits, Inc.                                                     (1)

10.7     Agreement between Liquor Group Holdings, LLC and Happy Vodka
         Corporation                                                       (1)

10.8     Agreement between Liquor Group Holdings, LLC and Liquor Group
         Michigan, LLC                                                     (1)

14       Code of Ethics

31       Rule 13a-14(a) Certifications

32       Section 1350 Certifications


(1)  Incorporated by reference, and as same exhibit number, from our
     registration statement on Form S-1 (Commission File No. 333-147526).







                                       28
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                                          Page
                                                                          Number
                                                                          ------
Audited Financial Statements
----------------------------

Report of Independent Registered Public Accounting Firm                    F-1

Balance sheets as of August 31, 2008 and 2007                              F-2

Statements of operations for the years ended August 31, 2008 and 2007      F-3

Statements of changes in stockholders' equity for the years ended
   August 31, 2008 and 2007                                                F-4

Statements of cash flows for the years ended August 31, 2008 and 2007      F-5

Notes to financial statements for the years ended August 31, 2008 and 2007 F-6





<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO THE BOARD OF DIRECTORS
LIQUOR GROUP WHOLESALE, INC.


We have audited the accompanying balance sheets of Liquor Group Wholesale, Inc.
(the "Company"), as of August 31, 2008 and 2007, and the related statements of
operations, changes in stockholders' equity, and cash flows for the years then
ended. 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). Those standards require that we 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 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 August 31,
2008 and 2007, and the related statements of operations, changes in
stockholders' equity, and cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, the Company, as a result of
a merger, became the accounting acquirer in a reverse acquisition. This has been
reported as a change in the reporting entity retroactively applied to the
financial statements of all prior periods presented.



STEVENS, POWELL & COMPANY, P.A.
Jacksonville, Florida
December 15, 2008




                                      F-1
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                                 BALANCE SHEETS
                            AUGUST 31, 2008 AND 2007

                                                         2008             2007
                                                         ----             ----
ASSETS
   Cash and cash equivalents                        $      821       $  130,000
   Accounts receivable (includes related
    party balances of $1,651,915 in 2008
    and $1,130,839 in 2007)                          1,994,609        1,328,774
                                                    -----------      -----------
       Total current assets                          1,995,430        1,458,774
                                                    -----------      -----------
   Deferred tax assets , net of valuation
    allowance
   (Notes 1 and 3)                                           -                -
                                                    -----------      -----------
       TOTAL ASSETS                                 $1,995,430       $1,458,774
                                                    ===========      ===========

LIABILITIES
   Accounts payable (includes related party
    balances of $517,225 in 2008 and $358,047
    in 2007)                                       $ 1,261,524      $ 1,050,187
   Other liabilities (Note 4)                          226,503          239,779
   Notes payable-related parties, unsecured,
    without interest (Note 4)                           78,900           78,900
                                                    -----------      -----------
       Total current liabilities                     1,566,927        1,368,866
                                                    -----------      -----------

COMMITMENTS AND CONTINGENCIES                                -                -
                                                    -----------      -----------

       TOTAL LIABILITIES                             1,566,927        1,368,866
                                                    -----------      -----------
STOCKHOLDERS' EQUITY
   Convertible preferred stock, Series A,
    $0.0001 par value, 2,000,000 shares
    authorized, issued and outstanding 953,460              95               95
   Common stock, $0.0001 par value, 100,000,000
    shares authorized, issued and outstanding
    9,512,851 in 2008 and 9,504,557 in 2007                952              951
   Additional paid in capital                           24,839           46,660
   Retained earnings                                   402,617           42,202
                                                    -----------      -----------
       Total stockholders' equity                      428,503           89,908
                                                    -----------      -----------

         TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                       $1,995,430       $1,458,774
                                                    ===========      ===========

                See accompanying notes to financial statements.


                                      F-2
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                            STATEMENTS OF OPERATIONS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


                                                        2008             2007
                                                        ----             ----

SALES (includes related party amounts of
$806,771 in 2008 and $609,458 in 2007)              $ 1,075,694     $ 1,128,625

COST OF SALES (includes related party
amounts of $617,771 in 2008 and $551,176 in
2007)                                                  (777,960)       (985,721)
                                                    ------------    ------------
GROSS PROFIT                                            297,734         142,904
                                                    ------------    ------------
OPERATING EXPENSES
 Personnel and administrative costs
   (includes related party amounts of $ --
   in 2008 and $13,265 in 2007)                          24,047          34,580
 Bank charges                                             7,863          12,642
 Rent - related party                                    12,500           4,553
 Insurance                                               16,440               -
 Professional and consulting fees                        23,910             292
 Licensing fees                                          10,244           2,412
 Telephone expense                                        6,664           2,805
 Interest expense                                        13,421               -
     Other                                                6,632           1,468
                                                    ------------    ------------
    Total operating expenses                            121,721          58,752
                                                    ------------    ------------
OTHER INCOME
   Income from termination of vendor
    contracts (Notes 1 and 7)                           184,402               -
                                                    ------------    ------------
INCOME BEFORE PROVISION
   FOR INCOME TAXES                                     360,415          84,152

PROVISION FOR INCOME TAXES
    (Notes 1 and 3)                                           -          31,666
                                                    ------------    ------------
NET INCOME                                          $   360,415     $    52,486
                                                    ============    ============

                See accompanying notes to financial statements.


                                      F-3
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

<TABLE>
<S>                           <C>              <C>             <C>             <C>         <C>            <C>             <C>

                                Preferred Stock                 Common Stock
                                  Convertible                       Voting             Additional
                             ----------------------          ----------------------      Paid in        Retained     Stockholders'
                             Shares          Amount          Shares          Amount      Capital        Earnings         Equity
                             ------          ------          ------          ------    -----------      --------     -------------

Balance, August 31, 2006     953,460        $    95       $9,439,557      $      944   $        -      $ (10,284)     $  (9,245)

Issuance of common stock
 for cash (see Note 2)             -              -           65,000               7      129,993              -        130,000

Merger-related costs:
 Registration statement
 and private placement
 offering (see Note 2)             -              -                -               -      (83,333)             -        (83,333)

Net income (loss)                  -              -                -               -            -         52,486         52,486
                          -----------    -----------      -----------     -----------  -----------    -----------    -----------
Balance, August 31, 2007     953,460     $       95       $9,504,557      $      951   $   46,660     $   42,202     $   89,908
                          ===========    ===========      ===========     ===========  ===========    ===========    ===========
Issuance of common stock
 for warrants exercised            -              -            8,294               1       14,514              -         14,515

Registration costs                 -              -                -               -      (36,335)             -        (36,335)

Net income (loss)                  -              -                -               -            -        360,415        360,415
                          -----------    -----------      -----------     -----------  -----------    -----------    -----------

Balance, August 31, 2008     953,460     $       95       $9,512,851      $      952   $   24,839     $  402,617     $  428,503
                          ===========    ===========      ===========     ===========  ===========    ===========    ===========

</TABLE>

                See accompanying notes to financial statements.


                                      F-4
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                            STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

                                                            2008          2007
                                                            ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                        $  360,415    $   52,486
                                                       -----------   -----------
     Adjustments to reconcile net income to net
     cash provided (used) by operating activities:
       Changes in assets and liabilities:
           Accounts receivable                           (665,835)     (735,235)
           Accounts payable                               211,337       591,660
           Notes payable                                        -        78,900
           Other current liabilities                      (13,276)       74,547
                                                       -----------   -----------
     Total adjustments                                   (467,774)        9,872
                                                       -----------   -----------
       Net cash provided (used) by operating activities  (107,359)       62,358
                                                       -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES
           Net cash provided by investing activities            -             -
                                                       -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net advances from Liquor Group Holdings, LLC                 -        20,975
   Registration costs                                     (36,335)      (83,333)
   Proceeds from issuance of common stock                  14,515       130,000
                                                       -----------   -----------
     Net cash provided (used) by financing activities     (21,820)       67,642
                                                       -----------   -----------
NET INCREASE  (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                       (129,179)      130,000

CASH AND CASH EQUIVALENTS, BEGINNING                      130,000             -
                                                       -----------   -----------
CASH AND CASH EQUIVALENTS, ENDING                      $      821    $  130,000
                                                       ===========   ===========

                See accompanying notes to financial statements.


                                      F-5
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

North American Food and Beverage Corp. ("NAFB"), is a Colorado corporation that
prior to September 1999 conducted its business under the name USA Service
Systems, Inc. ("USA"). Between November 1998 and July 1999, USA provided retail
stores and manufacturers with product assembly, product demonstrations,
point-of-sale product displays, and inventory counts and audits.

As of July 1999, USA had entered into letters of intent for the acquisition of
four companies engaged in the same business as that conducted by USA. However,
USA was unable to obtain additional equity capital that was needed to finance
these acquisitions. In July 1999, USA essentially discontinued its business and
made plans to distribute its remaining assets (having a minimal value) to
certain officers and directors of USA.

Effective August 31, 1999, USA acquired all of the issued and outstanding shares
of East Coast Beverage Corp. ("East Coast"), in exchange for 5,040,000 shares of
USA's common stock. In connection with this transaction, the management of USA
resigned and was replaced by the management of East Coast. After August 31,
1999, the Company's business involved the development, production, and
distribution of Coffee House USA, a proprietary line of all-natural, ready to
drink bottled coffee drinks.

In February 2000, USA changed its name to East Coast Beverage Corp.

East Coast sold its products through distributors and wholesalers to
supermarkets, mass-marketers, convenience stores, drug store chains, and oil
company convenience stores. However, East Coast was never able to generate a
profit. During the calendar year ended December 31, 2000, the Company estimated
that it had lost in excess of $10,000,000. East Coast has not prepared any
financial statements since that date but it is believed that the Company's
losses since December 31, 2000 have been substantial.

Because of the East Coast's inability to raise capital to fund its continuing
operating losses, East Coast discontinued its bottled coffee operations in
October 2001.

On November 27, 2001, William Smith became the sole officer and director of the
Company. His objective was to reorganize East Coast without the necessity of a
bankruptcy proceeding. Mr. Smith's plan was to have substantially all East
Coast's creditors agree to accept shares of common stock in settlement of
amounts owed to the creditors. Although many creditors were willing to accept
the plan proposed by Mr. Smith, a number of creditors refused to agree to the
Smith proposal.

On April 11, 2002, East Coast filed a petition for reorganization under Chapter
11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Florida (Case No. 02-22675-BKC-PGH). After its bankruptcy
filing, and in accordance with the provisions of the Federal Bankruptcy Code, a
committee of the largest unsecured creditors was formed to assist in the
reorganization. The Creditors Committee developed a Plan of Reorganization that
was approved by a majority of East Coast's creditors, and confirmed by the
Federal Bankruptcy Court on July 8, 2003. A final decree and discharge of
trustee was entered in the bankruptcy on January 31, 2005.


                                      F-6
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Among other things, the Plan of Reorganization provided for the following:

1.  The reverse split of East Coast's common stock so that each outstanding
    share was converted into 1/15th of one share. Since there were 15,704,469
    outstanding shares prior to the bankruptcy, 1,046,965 shares were retained
    by East Coast's shareholders after the reverse split. In addition, each
    common shareholder received one warrant for each share held after the
    reverse split. Each warrant entitles the holder to purchase one share of
    East Coast's common stock at a price of $1.75 per share at any time prior to
    January 1, 2008.

2.  The issuance of 2,000,000 shares of East Coast's common stock to Royal
    Brokerage Group in exchange for 10% of the gross revenues which may be
    received by Royal from the sale of olive oil products.

3.  Unsecured creditors (Class 4 creditors) could either obtain payment of their
    claims, up to a maximum of $3,500,000 from a percentage of East Coast's
    profits over time or convert their debt into shares of LGW's common stock at
    a conversion rate of $1.75 per share.

4.  The change of East Coast's name to North American Food and Beverage Corp.
    ("NAFB " or "North American").

When it became apparent that commissions from the sale of olive oil would
generate little, if any, revenues which could be used to pay its creditors,
North American (formerly East Coast) began to look for a privately held
corporation that would be interested in a merger to take advantage of North
American's net operating losses and shareholder base.

In 2006, North American began discussions with Liquor Group Holdings LLC, a
Florida limited liability company, which, since 2002, has been engaged in the
wholesale and state level distribution of liquor.

Liquor Group  Holdings,  LLC, was  organized in Florida in 2002 and  distributes
alcohol  products on behalf of  manufacturers  in 31 U.S.  States.  Liquor Group
Wholesale,  a division of Liquor Group Holdings,  LLC ("LGW") manages  wholesale
operations and receives net profits generated from the wholesale distribution of
liquor to the customers of Liquor Group Holdings. The merger was completed first
by incorporating Liquor Group Wholesale, Inc., a Florida corporation,  on August
31, 2007,  second via the execution of an agreement between LGW and Liquor Group
Holdings,  which provided for LGW to manage all wholesale operations and receive
all net  profits  generated  from the  wholesale  distribution  of liquor to the
customers of Liquor Group  Holdings,  and third,  through NAFB's  acquisition of
LGW.

In January  2007,  North  American  signed an agreement to acquire  Liquor Group
Wholesale in return for shares of North American's common and Series A preferred
stock.


                                      F-7
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

As a result of the merger with NAFB,  which was effective  August 31, 2007,  LGW
became  the  accounting  acquirer  in a  reverse  acquisition.  When  a  reverse
acquisition  occurs,  the  pre-merger  financial  statements  of the  accounting
acquirer  become the historical  financial  statements of the combined  company.
Accounting  for  the  merger  transaction  as a  recapitalization  requires  the
historical  stockholders'  equity of Liquor Group Wholesale to be  retroactively
restated for an equivalent  number of shares received in the merger after giving
effect to any  difference  in par value of the issuer's  stock with an offset to
paid-in capital.  The effect of the  recapitalization  has been reflected in the
Statements of Changes in Stockholders' Equity at page F-4.

The acquisition of LGW was contingent upon the following:

1. The return and cancellation of up to 2,000,000 shares of North American's
   common stock.

2. Persons holding Class 4 creditor claims of not less than $3,250,000 agreeing
   to waive any right they may have to any distributions contemplated by the
   Plan of Reorganization and accepting one share of North American's common
   stock in full settlement of each $24.50 owed to them by North American.

On August 31, 2007, North American met these  contingencies  and acquired LGW in
consideration  for the  issuance  of the shares of North  American's  common and
Series A Preferred stock (see Note 8). The combined operations of NAFB and LGW
are hereinafter referred to as the "Company."

Business  Description and Activity - The Company's major markets are Florida and
Michigan,  and other states in which the Company has active sales efforts and/or
licensed operations  include:  Alabama,  Arkansas,  California,  Georgia,  North
Carolina,  South Carolina,  Virginia,  West Virginia,  Oklahoma,  Texas, Oregon,
Washington,  Wisconsin, and Indiana. The Company has sales contracts for several
products  in  distribution  in other  states  making  up the  balance  of the 31
markets.

The manufacturing, importation, distribution, and sale of alcohol-based
beverages are subject to regulation by the Federal government through the
Alcohol and Tobacco Tax and Trade Bureau ("TTB"), as well as by State and local
regulatory agencies. Brand suppliers, distributors, and retailers must be
properly licensed in order to sell alcohol-based beverages.

In most states, the alcohol-based beverage industry operates within what is
commonly referred to as a three-tier system of distribution. The three tiers are
identified as follows:

Tier one (1) is comprised of brand suppliers and manufacturers that produce
alcohol-based beverages and/or importers of alcohol-based beverages, bringing
products into the United States through U.S. Customs control.

Tier two (2) is comprised of State Level Clients ("SLC") distributors, other
sub-distributors, and the Control States which in turn market the products
through brokers.

Tier three (3) is comprised of licensees, both on and off premise customers,
commonly referred to as retailers, which sell the products to the public
consumers.


                                      F-8
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Under this system, brand suppliers and manufacturers sell to distributors and/or
Control States, distributors and/or Control States sell to licensees or state
stores, and licensees or state stores sell to consumers. For the most part,
brand suppliers may not sell to licensees or consumers, and distributors may not
sell directly to consumers. All states prohibit brand suppliers or distributors
from having an interest in retail licensees.

The  Company is a Tier two (2)  distributor  who markets and sells to other Tier
two (2) distributors.  The Company holds out-of-state shipper permits that allow
shipment of products from one state to a licensed  distributor in any one of the
other states or to any Control State.  The Company's  officers,  directors,  and
principal owners must be qualified by the TTB and state  regulatory  agencies to
hold licenses/permits as a wholesaler/importer.

The TTB grants authorization to operate alcohol and tobacco-related businesses
under the Internal Revenue Code and the Federal Alcohol Administration Act. Any
person wanting to operate a business governed by the IRC or the FAA must file an
application with the TTB for a permit along with all necessary documents. The
basic application for a permit consists of two pages and is filed with the TTB's
offices in Cincinnati, Ohio. If the applicant is a corporation, the application
must list the names, dates of birth, social security numbers, and resident
addresses for all of the corporation's officers, directors, and 10% or more
owners. Once the TTB has received a complete application, together with all
supporting documents, a federal basic permit is normally issued within 60 days.

General - This summary of significant accounting policies of the Company is
presented to assist in understanding the Company's financial statements for the
years ended August 31, 2008 and 2007 ("fiscal year 2008" and "fiscal year
2007"). The financial statements and notes are representations of the Company 's
management. The Company's management is responsible for the integrity and
objectivity of these financial statements. The accounting policies conform to
accounting principles generally accepted in the United States of America and to
general practices within the wine and spirits wholesale distribution industry
and have been consistently applied in the preparation of the financial
statements.

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
reporting period. Actual results could differ from those estimates.

The Company has recorded assets, liabilities, income, and expenses associated
with its operations. All operating expenses, not directly recorded by the
Company as a division of Liquor Group Holdings, have been allocated to the
Company based on actual costs incurred by Liquor Group Holdings or estimated by
management. Prior to the merger with NAFB, the Company estimated income taxes
using an average effective rate of 37.63%. If the Company was a separate,
stand-alone entity in 2007, these amounts might differ.

As a result of the merger with NAFB, the Company has recorded a deferred tax
asset of approximately $9.5 million at August 31, 2008, which has been
completely offset by a valuation allowance (see Note 3). Realization of the
deferred tax asset is dependent on generating sufficient taxable income in the
future.


                                      F-9
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


The amount of the deferred tax asset considered realizable could change in the
near term if estimates of future taxable income are modified or as net operating
loss carryforward periods expire.

Revenue  Recognition  - Revenue from product  sales is recognized by the Company
when  title and risk of loss  passes to the  distributor  (or  customers  of the
Company,  the  majority  being  Control  States),  which  generally  occurs upon
shipment from the  manufacturing  facilities or third party storage  facilities.
The Company is notified  electronically  when shipments  occur and  periodically
verifies that the  electronic  notifications  are  reconciled  with the physical
delivery of product to the distributors.  The Company's customers are SLC, which
consist of licensed liquor  distributors and the 18 Control States.  Most states
require wine and spirits  retailers  to purchase  alcohol-based  beverages  from
licensed  distributors.  Brand  suppliers  in these  states may not legally sell
directly to retail customers.  Revenue is billed based on unit prices negotiated
with the customer and approved by the brand supplier or manufacturer, subject to
volume discounts.

In contract  negotiations  by and between the Company and brand  suppliers,  the
price  per unit from the  supplier  is  generally  established  as a base  price
delivered to the SLC, aka: Freight on Dock ("FOD"),  per unit price listed on an
exhibit to the  contract.  This price is what the brand  supplier  expects to be
paid by the Company per unit sold to the SLCs for all sales under the agreement.
This  price is then  marked  up at a  variable  rate  depending  on the  product
category,  overall  landed  cost,  the taxable  rate  charged in the  individual
territory,  and the merchantability of the brands,  which is sufficient to cover
the estimated  expenses and profit  requirement of the Company for  implementing
the sale of the goods to its SLCs.  All of these  factors  are  considered  when
establishing the price of a particular product within a specific territory.

After the FOD price has been  established  with the brand  suppliers,  there are
factors that may cause pricing and margin variations.  Brand suppliers may lower
their FOD price  for  various  circumstances,  which may or may not  affect  the
margin that the  Company is able to achieve  per unit.  Often times if sales are
weak or they have softened from the previous  year, the brand supplier may lower
their FOD price to help  jump-start  sales.  These types of price  decreases are
generally  passed on to the SLC,  and they will have the  effect of  temporarily
lowering the Company's margin.

Other  times,  the brand  suppliers  lower their  price after field  research or
pricing  trends point towards a downturn in the shelf prices of that  particular
brand  category.  In addition,  there are some seasonal  trends that cause price
shifts  to  occur,  or  post-offs*  in  certain  instances,  wherein  there is a
pre-planned price decrease for a given time period.  These types of discounts on
the FOD costs  also have the effect of  lowering  the  margin  that the  Company
achieves.

   *  A post-off is a planned decrease in the wholesale cost of a product
      affecting only the depletion of goods for a specific time period in a
      specific territory. One example would be for a brand supplier to announce
      in September that they will discount their product in December by a
      specific dollar or percentage amount per unit in specific SLCs so that
      these SLCs have time to prepare for implementing the sale price within
      their territory. This discount is generally passed on directly to the SLC
      from LGW and the SLC generally passes on the discount to the consumer. At
      the end of a post-off period, all merchandise would return to the previous
      FOD cost.

In some  instances,  brand  suppliers  may choose to lower  their FOD price as a
reward to the Company for achieving  certain  sales goals in a specific  market.
This type of change raises the margin that the Company is able to achieve.


                                      F-10
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


The contract allows for the brand supplier to raise the FOD price of the goods;
however, such a change requires notification and implementation time, and in
some states the laws or rules related to such a change makes the price increase
an annual event at best. Generally, brand suppliers will raise their FOD price
by a modest amount at the completion of each contract term renewal, to adjust
for inflation and higher cost of transportation or cost of goods.

Consistent with EITF 99-19, Reporting Revenue Gross as a Principal versus Net as
an Agent,  the Company has recorded  revenue on the gross amounts  billed to the
distributor  (or customers of the Company,  the majority being Control  States).
The Company assumes the risks of loss for collection,  delivery, or returns when
the title  effectively  passes to the  distributor  and the revenue is recorded.
Accounts  payable  reflect  the cost of product  for which  payment has not been
remitted  to  the  manufacturer  (net  of  returns).  These  remittances  to the
manufacturer  generally  occur within 7-14 days after the  distributor  pays the
Company for product sales.

The Company  does not take  possession  of any  products  (and  thereby does not
maintain  inventories)  as  they  are  transferred  from  manufacturers  to  the
distributor  directly.  The Company's SLC operations  utilize a series of master
warehouses   strategically   located  throughout  the  U.S.  and  Control  State
warehouses  to store  and ship  products  pending  sales to  customers.  In some
instances,  product  maintained  in the master  warehouses  may be  returned  by
customers of the Company. The Company will generally grant credit memos provided
the manufacturer will accept the returned product.  Returns of product have been
reported in the periods that the initial sale occurred, if significant.

Cost of sales in the Statements of Operations includes the wholesale cost of
products shipped to the distributors, commissions, freight and delivery costs,
and other direct costs. Operating expenses in the Statements of Operations
include all general and administrative costs not allocated to cost of sales and
allocated costs from the Company, as discussed above.

Cash and Cash Equivalents - Prior to the merger with NAFB, the Company did not
maintain separate cash accounts as Liquor Group Holdings was responsible for
maintenance of bank accounts for the entire organization.

For purposes of the statement of cash flows, the Company considers cash and
highly liquid securities (consisting of a non-interest-bearing checking account)
with an original maturity or redemption option of three months or less to be
cash and equivalents. During fiscal years 2008 and 2007, the Company maintained
cash and cash equivalents with a bank. Bank deposits are insured by the FDIC up
to the maximum permitted by law or regulation. The Company may, from time to
time, maintain balances in excess of these insured limits.

Concentration of Credit Risk - Financial  instruments  that potentially  subject
the Company to credit  risk  consist  principally  of trade  receivables.  Trade
receivables  terms are  generally 30 days,  but the Company does not  anticipate
payment to be received from its customers  until the customers  ship the product
to a retailer  or other  customers  of the  distributor.  The  Company  performs
services and extends credit based on an evaluation of the  customers'  financial
condition  without  requiring  collateral.  Exposure to losses on receivables is
expected to vary by customer due to the  financial  condition of each  customer.
The Company  monitors  exposure to credit  losses and maintains  allowances  for
anticipated losses considered necessary under the circumstances.


                                      F-11
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes - The Company accounts for income taxes under the liability method
according to Statement of Financial Accounting Standards No. 109. Deferred tax
assets and liabilities are recognized for future tax consequences attributable
to differences between the financial statements' 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. Prior to the merger with NAFB, no deferred income tax
assets or liabilities existed.

Prior to the merger with NAFB, no income tax receivables or payables have been
recorded on the books and records of Liquor Group Holdings, LLC, which
is not a taxable entity. A limited liability corporation passes its earnings
and losses to its members. However, for purposes of the Company financial
statements, an income tax expense has been shown in the Statements of Operations
as an allocated cost in 2007.

Rent - The Company leases facilities and equipment using short term lease
agreements with an affiliate. The Company is responsible for maintenance, taxes,
and other operating costs. During the fiscal years ended 2008 and 2007, rent
expense totaled $12,500 and $4,553, respectively.

Under the terms of the lease, which expires August 31, 2009, the Company is
obligated for lease payments in 2009 of $12,000. The Company may renew the lease
for one additional year at $24,000 annual rent payments.

Fair Value of Financial Instruments - The carrying values of accounts
receivable, accounts payable, other liabilities, and notes payable approximate
their fair values due to the short maturity of these instruments.

Net Income Per Share - During  fiscal years 2008 and 2007,  the  Company,  after
giving effect of the  recapitalization,  had average  common shares  outstanding
totaling  9,510,109 and 9,439,735,  respectively,  and the net income per common
share was $0.038 and $0.006, respectively.  Under the treasury method, the fully
diluted  common  shares  outstanding  for  fiscal  year  2008 and  2007  totaled
52,415,809  and  9,557,285,  respectively.  For  purposes of  calculating  fully
diluted common shares  outstanding,  we assumed that all of the preferred  stock
would be  converted  as of August 31,  2007.  The fully  diluted  net income per
common share for 2008 and 2007 totaled $0.007 and $0.005, respectively.

Comprehensive Income - The items affecting comprehensive income are not material
to the financial statements and, accordingly, are not presented herein.

Commissions to Affiliate - For fiscal years 2008 and 2007, commissions paid to
an affiliate, Liquor Group Michigan, totaled $25,156 and $11,055, respectively.

Income From  Termination of Vendor  Contracts - During the year ended August 31,
2008,  certain vendors failed to honor their  agreements with the Company by not
accepting  exchanges,  returns,  or meeting required marketing and other program
commitments.  As permitted by the  agreements  with these  vendors,  and after a
six-month  notice,  the Company  liquidated the vendors'  inventory to cover the
vendor  obligations  under  the  agreements.  The  liquidation  of the  vendors'
inventory  resulted  in income of $184,402  in the fourth  quarter of 2008.  The
Company did not record the  $184,402 as a reduction  in cost of sales but rather
as other income to prevent  distortion  of the  Company's  gross profit  margin.
While these  transactions  are unusual in nature,  the Company does not consider
terminations  to be infrequent as vendor disputes occur from time to time in the
ordinary course of business. Accordingly, the Company has not reported this gain
as an extraordinary item under generally accepted accounting  principles,  which
require  material gains and losses to be reported as  extraordinary  only if the
event creating the gain or loss is both unusual and infrequent in occurrence.

Reclassifications - Certain amounts in the financial statements for prior
periods have been reclassified to conform to the classifications used for the
current year. These reclassifications did not change reported net income for the
prior period.


                                      F-12
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements - In December 2007, the FASB issued SFAS No.
141(R), "Business Combinations," ("SFAS 141(R)") which replaces SFAS 141. SFAS
141(R) establishes principles and requirements for how an acquirer in a business
combination recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any controlling interest;
recognizes and measures goodwill acquired in the business combination or a gain
from a bargain purchase; and determines what information to disclose to enable
users of the financial statements to evaluate the nature and financial effects
of the business combination. FAS 141(R) is effective for acquisitions by the
Company taking place on or after September 1, 2009. Early adoption is
prohibited. Accordingly, the Company is required to record and disclose business
combinations following existing accounting guidance until September 1, 2009. The
Company will assess the impact of SFAS 141(R) if and when a future acquisition
occurs.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51" ("SFAS 160").
SFAS 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Before this statement, limited guidance existed for reporting
noncontrolling interests (minority interest). As a result, diversity in practice
exists. In some cases minority interest is reported as a liability and in others
it is reported in the mezzanine section between liabilities and equity.
Specifically, SFAS 160 requires the recognition of a noncontrolling interest
(minority interest) as equity in the consolidated financial statements and
separate from the parent's equity. The amount of net income attributable to the
noncontrolling interest will be included in consolidated net income on the face
of the income statement. SFAS 160 clarifies that changes in a parent's ownership
interest in a subsidiary that do not result in deconsolidation are equity
transactions if the parent retains its controlling financial interest. In
addition, this statement requires that a parent recognize gain or loss in net
income when a subsidiary is deconsolidated. Such gain or loss will be measured
using the fair value of the noncontrolling equity investment on the
deconsolidation date. SFAS 160 also includes expanded disclosure requirements
regarding the interests of the parent and its noncontrolling interests. SFAS 160
is effective for the Company on September 1, 2009. Earlier adoption is
prohibited. The Company is currently evaluating the impact, if any, the adoption
of SFAS 160 will have on its financial position, results of operations and cash
flows.

In February 2008, the FASB issued FASB Staff Position No. 140-3, "Accounting for
Transfers of  Financial  Assets and  Repurchase  Financing  Transactions"  ("FSP
140-3").  This FSP provides guidance on accounting for a transfer of a financial
asset and the transferor's  repurchase financing of the asset. This FSP presumes
that an initial  transfer of a financial  asset and a repurchase  financing  are
considered part of the same arrangement (linked transaction) under SFAS No. 140.
However,  if certain  criteria  are met,  the initial  transfer  and  repurchase
financing are not evaluated as a linked transaction and are evaluated separately
under Statement 140. FSP 140-3 will be effective for financial statements issued
for fiscal years  beginning  after November 15, 2008, and interim periods within
those fiscal years and earlier application is not permitted.  Accordingly,  this
FSP is effective for the Company on September 1, 2009.  The Company is currently
evaluating  the  impact,  if any,  the  adoption  of FSP 140-3  will have on its
financial position, results of operations and cash flows.


                                      F-13
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In April 2008, the FASB issued FASB Staff Position No. 142-3, "Determination of
the Useful Life of Intangible Assets" ("FSP 142-3"). This FSP amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under SFAS No. 142,
"Goodwill and Other Intangible Assets". The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
No. 142 and the period of expected cash flows used to measure the fair value of
the asset under SFAS No. 141(R), "Business Combinations," and other U.S.
generally accepted accounting principles. This FSP is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years and early adoption is prohibited.
Accordingly, this FSP is effective for the Company on September 1, 2009. The
Company does not believe the adoption of FSP 142-3 will have a material impact
on its financial position, results of operations or cash flows.

In May, 2008, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 162, "The Hierarchy of Generally
Accepted Accounting Principles," ("SFAS No. 162"). SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy). SFAS No. 162 will be effective 60
days following the SEC's approval of the Public Company Accounting Oversight
Board's amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles." The FASB has stated
that it does not expect SFAS No. 162 will result in a change in current
practice. The application of SFAS No. 162 will have no effect on the Company's
financial position, results of operations or cash flows.

The SEC's Office of the Chief Accountant and the staff of the FASB issued press
release 2008-234 on September 30, 2008 ("Press Release") to provide
clarifications on fair value accounting. The press release includes guidance on
the use of management's internal assumptions and the use of "market" quotes. It
also reiterates the factors in SEC Staff Accounting Bulletin ("SAB") Topic 5M
which should be considered when determining other-than-temporary impairment: the
length of time and extent to which the market value has been less than cost;
financial condition and near-term prospects of the issuer; and the intent and
ability of the holder to retain its investment for a period of time sufficient
to allow for any anticipated recovery in market value.

On October 10, 2008, the FASB issued FSP SFAS 157-3, "Determining the Fair Value
of a Financial Asset When the Market for That Asset Is Not Active" ("FSP SFAS
157-3"). This FSP clarifies the application of SFAS No. 157, "Fair Value
Measurements" (see Note 6) in a market that is not active and provides an
example to illustrate key considerations in determining the fair
value of a financial asset when the market for that asset is not active. The FSP
is effective upon issuance, including prior periods for which financial
statements have not been issued. For the Company, this FSP is effective for the
year ended August 31, 2008, and will have no effect on the Company's financial
position, results of operations or cash flows.

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies are not expected to have a material impact on the
Company's financial position, results of operations or cash flows.



                                      F-14
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

NOTE 2 - MERGER

On August 31, 2007, North American acquired the Company in consideration for the
issuance of the shares of North American's  common and Series A preferred stock.
Each Series A preferred  share may,  at the option of the Holder,  be  converted
into 45 shares of the Company's  common stock.  Each Series A preferred share is
entitled to 45 votes on any matter submitted to the shareholders of the Company.
Each  Series A preferred  share is  entitled to an annual  dividend of $1.00 per
share,  if  such a  dividend  is  authorized  by the  Company's  directors.  The
Company's directors are not required to declare any dividends, and dividends not
declared will not accumulate.

The Series A preferred  shares may not be  converted  until  September  1, 2008.
Vigor Holding  Corporation and C.J.  Eiras,  the largest holders of the Series A
preferred  shares,  have agreed that  between  September  1, 2008 and August 31,
2012, they will convert not more than 10,000  preferred shares (or 20,000 shares
in total)  during  each  year.  The  Company  will not  register  any  shares of
preferred  stock,  and it is not expected that a public market will ever develop
for the Series A preferred  shares.  Upon  conversion  of the Series A preferred
shares into common  stock of the  Company,  those shares of common stock will be
registered and subject to certain sale limitations under Rule 144 of the SEC.

On December 20, 2007,  the Company  changed its name to Liquor Group  Wholesale,
Inc.

The shares of common stock outstanding after the acquisition of Liquor Group
Wholesale, and as of August 31, 2008 and 2007, as well as the shares that may be
issued upon the conversion of the Series A preferred stock and the exercise of
outstanding warrants follow:

   Shares outstanding prior to acquisition of Liquor
    Group Wholesale                                                 8,717,562

   Shares of common stock issued to the shareholders of
    Liquor Group Wholesale                                          2,000,000
   Shares issued to Class 4 creditors in settlement of their
    claims                                                            124,985
   Shares returned to treasury and cancelled                       (2,000,000)
   Shares issued to Arnold Rosen for his services in
    structuring the acquisition of Liquor Group Wholesale             500,000

   Shares issued to Arnold Rosen in payment of amounts advanced
    to or on behalf of the Company                                     33,972
   Shares issued to unrelated third parties in payment of
    amounts owed by the Company prior to the acquisition of
    Liquor Group Wholesale                                             63,038
   Shares sold to private investors at a price of $2.00 per share      65,000
                                                                  ------------
     Total outstanding shares at August 31, 2007                    9,504,557
   Shares that may be issued in the future:
   Shares issuable upon exercise of outstanding warrants            1,046,965(1)
   Potential number of shares issuable upon conversion
    of Series A preferred shares                                   42,905,700(2)
                                                                  ------------
      Total potential outstanding shares at August 31, 2007        53,457,222
                                                                  ------------
   Shares issued for warrants exercised in 2008                         8,294
   Warrants exercised in 2008                                          (8,294)
   Warrants expired in 2008                                        (1,038,671)
                                                                  ------------
      Total potential outstanding shares at August 31, 2008        52,418,551
                                                                  ============



                                      F-15
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

NOTE 2 - MERGER (Continued)


(1)  As part of its bankruptcy  plan North American (now LGW) issued warrants to
     its shareholders. Each warrant entitled the holder to purchase one share of
     the  Company's  common  stock at a price of $1.75 per share.  The  warrants
     expired on January 1, 2008, with 8,294 warrants exercised.
(2)  Any shares of common stock  issuable  upon the  conversion  of the Series A
     preferred  shares  will be  restricted  securities  and  may,  be sold to a
     market-maker  or in brokerage  transactions,  provided that the amount sold
     does  not,  during  any  three-month  period,  exceed  1% of the  Company's
     outstanding common stock.

     The  following  table  outlines,  for the  periods  presented,  the maximum
     increase in the  Company's  outstanding  common  shares upon the  allowable
     conversion of the Series A preferred shares and the shares of the Company's
     common stock  available  for resale upon the  conversion  of the  preferred
     shares.  The numbers in the table  assume there is no change in the control
     of the Company prior to September 30, 2012.

            2008                                             -0-
            2009                                      2,225,000
            2010                                        900,000
            2011                                        900,000
            2012                                        900,000
                                                   ------------
                                                      4,925,000
        Shares issuable upon conversion of all
         remaining Series A Preferred shares         37,980,700 (1)
                                                     ----------

            Total                                    42,905,700
                                                     ==========

     (1)  This total is not the number of common  shares  that can be sold,  but
          only the total number of shares  allowed to be  converted.  There is a
          restriction that the amount of common shares allowed to be sold during
          any three-month period,  cannot exceed 1% of the Company's outstanding
          common stock.

NOTE 3 - INCOME TAXES

The provision for income taxes on income is summarized as follows:

                                               For the Years Ended August 31,
                                                     2008             2007
                                                     ----             ----
   Current:
      Federal                                     $ 115,801      $   27,038
      State                                          19,823           4,628
                                                -----------    ------------
                                                    135,624          31,666
                                                -----------    ------------
   Deferred:
      Federal                                      (115,801)              -
      State                                         (19,823)              -
                                                -----------    ------------
                                                   (135,624)              -
                                                -----------    ------------

         Total income tax provision             $         -    $     31,666
                                                ===========    ============


                                      F-16
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 3 - INCOME TAXES (Continued)

The major elements contributing to the difference between the income tax
provision and the amount computed by applying the federal statutory tax rate of
34% to income before income taxes are as follows:

                                                For the Years Ended August 31,
                                                     2008             2007
                                                     ----             ----

   Tax benefit at U.S. Statutory rates            $ 122,541     $    28,612
   State income tax                                  13,083           3,054
   Utilization of net operating loss               (135,624)              -
                                                 ----------     -----------

         Income tax provision                    $        -     $    31,666
                                                 ==========     ===========

As a result of the merger with NAFB, the Company recorded deferred tax assets of
$9.6 million at August 31, 2007, principally comprised of net operating losses.
The deferred tax assets were offset by a valuation allowance in the same amount.
Deferred tax assets, net of a valuation allowance, are recorded when management
believes it is more likely than not that tax benefits will be realized. A
summary follows:
                                                                      Deferred
                                                                     Tax Asset
                                                                      (Net of
                                        Deferred      Valuation      Valuation
                                       Tax Asset      Allowance      Allowance)
                                       ---------      ---------      ---------

   Balance at August 31, 2007         $9,647,110    $(9,647,110)    $        -
   Income offset by net operating
      loss carryforward in 2008         (135,624)       135,624              -
                                    ------------  --------------  -------------

                                      $9,511,486    $(9,511,486)  $          -
                                      ==========    ============  =============

The Company has net operating loss carryforwards at August 31, 2008 totaling
approximately $25.5 million that begin expiring in 2014. The Company believes
that the current tax benefit for the years ended August 30, 2008 and 2007, would
withstand an Internal Revenue Service challenge.

NOTE 4 - NOTES PAYABLE AND OTHER LIABILITIES

Following the merger with NAFB, the Company has recorded demand notes payable
totaling $78,900 at August 31, 2008, to certain formerly related parties. The
Company had been negotiating to convert this debt to common stock. However, the
total amount outstanding is in dispute with three of the four creditors. As of
August 31, 2007, those creditors have demanded amounts totaling approximately
$129,000 (including interest of approximately $26,000). The principal balance of
$78,900 reflected in the Company records for these creditors was based on
advances deposited into Company bank accounts, which totaled $78,900, excluding
interest. The fourth creditor with $14,500 agreed to convert this debt for 8,000
shares of common stock effective August 31, 2007.



                                      F-17
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007

NOTE 4 - NOTES PAYABLE AND OTHER LIABILITIES - (Continued)


In January 2008,  the Company was served with a summons and  complaint  filed by
the three  creditors  ("Plaintiffs").  The  complaint  was filed on November 15,
2007, in the Circuit Court of Broward  County,  Florida.  A summary  judgment in
favor of the  Plaintiffs  was  rendered  subsequent  to  August  31,  2008,  for
approximately $162,000,  representing amounts Plaintiffs contend they loaned the
Company prior to 2007,  including accrued interest.  The public records for this
complaint  indicate that final disposition has not been rendered,  and a hearing
is scheduled for April 24, 2009.  Based upon what the Company  believed was owed
to the  Plaintiffs,  a liability  of $78,900 was recorded as of August 31, 2008.
This judgment is also subject to any appeals that may be pursued by the Company.

As a result of the merger with NAFB, the Company  assumed a liability for unpaid
withheld income and employment  taxes for former NAFB  employees.  In 2003, NAFB
entered  into an  installment  agreement  to pay 36 equal  payments of $5,710 to
satisfy its obligation.  Payments were discontinued in late-2004, and on June 8,
2006,  the Internal  Revenue  Service  filed a Notice of Federal Tax Lien in the
amount of $128,762.  At August 31, 2008, the Company has estimated the liability
at $156,481,  which includes estimated interest, and has reported this amount in
Other  Liabilities  in  the  Balance  Sheet.   However,  the  Company  has  been
negotiating a reduction in the remaining amount due.

NOTE 5 - STOCKHOLDERS' EQUITY

Preferred Stock - The Company is authorized to issue up to 20,000,000  shares of
preferred stock. The Company's Articles of Incorporation  provide that the Board
of Directors has the  authority to divide the  preferred  stock into series and,
within the limitations provided by the Colorado Business Corporation Act, to fix
by  resolution  the  voting  power,  designations,   preferences,  and  relative
participation,   special  rights,   and  the   qualifications,   limitations  or
restrictions  of the  shares  of any  series  so  established.  As the  Board of
Directors has  authority to establish the terms of, and to issue,  the preferred
stock  without  shareholder  approval,  the  preferred  stock could be issued to
defend against any attempted takeover of the Company. Effective August 31, 2007,
953,460 preferred shares were issued pursuant to the merger with NAFB.

Common Stock - The Company is authorized to issue 100,000,000 shares of common
stock. Holders of common stock are each entitled to cast one vote for each share
held of record on all matters presented to shareholders. Cumulative voting is
not allowed; hence, the holders of a majority of the outstanding common stock
can elect all directors.

Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefore and,
in the event of liquidation, to share pro rata in any distribution of the
Company's assets after payment of liabilities. The Board is not obligated to
declare a dividend. It is not anticipated that dividends will be paid in the
foreseeable future.

Holders of common stock do not have preemptive rights to subscribe to additional
shares if issued by the Company. There is no conversion, redemption, sinking
fund, or similar provisions regarding the common stock. All outstanding shares
of common stock are fully paid and non-assessable.



                                      F-18
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 5 - STOCKHOLDERS' EQUITY (Continued)

Effective August 31, 2007, 721,995 common shares were issued pursuant to the
merger (see Note 8). Effective August 31, 2007, an additional 65,000 common
shares were issued at an offering price of $2.00 per share. The proceeds of
$130,000 from this private placement were designated for working capital needs.

As  part of its  bankruptcy  plan,  North  American  (now  the  Company)  issued
1,046,965  warrants to its  shareholders.  Each  warrant  entitled the holder to
purchase one share of the Company's  common stock at a price of $1.75 per share.
Warrants  totaling  8,294 common shares were  exercised  effective  December 31,
2007, and the remaining  unexercised warrants totaling 1,038,671 expired January
1, 2008.

NOTE 6 - RELATED PARTY TRANSACTIONS AND MAJOR CUSTOMERS

In addition to the Notes Payable (see Note 4) outstanding to Mr. William R.
Smith and related parties, the Company has expensed consulting and other fees to
Mr. Smith and related parties in fiscal years 2008 and 2007 totaling $- and
$13,265, respectively.

All other obligations to related parties (except as shown below) have been
cancelled either in the confirmed Plan of Reorganization or pursuant to the
transaction with NAFB (see Note 2).

Individual accounts receivable balances at August 31, 2008 and 2007, in excess
of 10% of total accounts receivable to affiliated and non-affiliated customers
were as follows:

<TABLE>
           <S>                                <C>           <C>           <C>             <C>

                                                 August 31, 2008              August 31, 2007
                                            -------------------------    ------------------------
                                                      % of Accounts                % of Accounts
                                            Amount    Receivable, Net    Amount   Receivable, Net
                                            ------    ---------------    ------   ---------------
   Affiliated Customers
      Liquor Group Florida               $1,624,011        81%        $1,130,839           85%

   Non-affiliated Customers
      ABC Michigan                       $  206,641        10%        $  161,662           10%

</TABLE>

Accounts receivables from other affiliated customers were immaterial at August
31, 2008 and 2007.

Approximately 41% and 34%, respectively, of the accounts payable at August 31,
2008 and 2007, were owed to affiliated companies with Happy Vodka Corporation
representing approximately 37% and 29%, respectively, of total accounts payable.



                                      F-19
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 7 - COMMITMENTS AND CONTINGENCIES

The Company is involved in various claims and legal proceedings of a nature
considered normal to its business, which include claims that may arise from
vendor contract disputes from time to time. The Company believes that the
results of these claims will not have a material adverse effect on the Company's
financial condition.

In connection with the confirmed Plan of Reorganization for NAFB, various
obligations including leases, employment agreements, options, and other
commitments were discharged in bankruptcy. Additional obligations have been
limited or otherwise canceled in connection with the LGW transaction described
below.

On January 28, 2007,  an agreement  was executed  whereby NAFB would acquire all
the issued and  outstanding  stock of Liquor Group  Wholesale Inc.  ("LGW"),  in
exchange for shares of NAFB's common stock (to a maximum of 49.9%) and preferred
stock. As part of the agreement,  the Company offered 1,125,000 shares through a
private offering at $2.00 per share.

The Company has attempted to contact all of its Class 4 debtors with the
exchange offer discussed in Note 1. Substantially all of the debtors have agreed
to the exchange of debt for Company stock; however, a number of the creditors
have not responded or are out of business. The Company has estimated its maximum
unsettled contingent claims at $250,000, all of which expired in January 2008.
Based on the high probability that none of these claims will be presented, and
if presented, the claims would be settled by issuing common stock; no liability
has been recorded in the balance sheet for these claims at August 31, 2008.

At August 31, 2008, the Company had agreements  with related parties to purchase
minimum quantities of product from Happy Vodka and Urban Brands. The commitments
require  annual  purchases  totallying  $118,750 and $29,400  respectively.  All
outstanding related party purchase commitments may be terminated by either party
upon 90 day's notice. No other material purchase  commitments  existed at August
31, 2008.

During the fourth quarter of 2008, the Company recorded other income totaling
$184,402 from the termination of certain vendor contracts resulting from the
suppliers failure to accept product returns (buy backs), damaged shipments,
product overcharges, exchanges, and other violations of contractual terms. For
example, contracts require the supplier to reclaim (or buy back) inventory in
the bailment warehouse at the original price paid by the Company if the contract
is terminated for any reason. While the suppliers may dispute the Company's
action, the Company believes any resolution of such disputes will not have a
material effect on the Company's financial condition.



                                      F-20
<PAGE>

                          LIQUOR GROUP WHOLESALE, INC.

                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED AUGUST 31, 2008 AND 2007


NOTE 7 - COMMITMENTS AND CONTINGENCIES (Continued)

The Company is dependent upon payment from related parties of trade  receivables
totaling  $1,651,915.  Also,  the Company may accept returns of product from its
customers,  which may not be fully  offset by a reduction  in trade  payables or
supplier buy backs. If nonpayment of related party trade  receivables,  defaults
on supplier contracts,  or early termination of significant  contracts including
those with  related  parties  were to occur,  these  events  would likely have a
material effect on the Company's financial condition.

The Company's liability insurance was not renewed for the fiscal year ending
August 31, 2009, due to excessive premiums. Accordingly, the Company will
self-insure for any claims arising subsequent to August 31, 2008.




                                      F-21
<PAGE>




                                   SIGNATURES


      In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 12th day of December 2008


                                    LIQUOR GROUP WHOLESALE, INC.


                                 By:     /s/ C.J. Eiras
                                         ----------------------------------
                                         C.J. Eiras, President

                                 By:     /s/ Jason Bandy
                                         ----------------------------------
                                         Jason Bandy, Principal Financial and
                                         Accounting Officer

      Pursuant to the requirements of the Securities Exchange Act of l934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                            Title                    Date

/s/ C.J. Eiras                      Director             December 12, 2008
------------------------
C.J. Eiras


/s/ Lowell Newman                   Director             December 13, 2008
------------------------
Lowell Newman


/s/ Steven Dodge                    Director             November 25, 2008
-------------------------
Steven Dodge


/s/ Arnold Rosen                    Director             December 12, 2008
-------------------------
Arnold Rosen


                                    Director
-------------------------
Jan Philippe Eiras






<PAGE>


                          LIQUOR GROUP WHOLESALE, INC.

                                    FORM 10-K

                                    EXHIBITS


<PAGE>