Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information set forth herein contains "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. No assurance can be given that the future results covered by the forward-looking statements will be achieved. The Company cautions readers that important factors may affect the Company's actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company. These include the Company's lack of historically profitable operations, dependence on key personnel, the success of the Company's business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission.

General

Liberty Capital Asset Management, Inc. (the "Company") was formed in 2003 as CD Banc LLC with the purpose of acquiring real estate assets and holding them for long-term appreciation. In September of 2007, CD Banc acquired 4,426 non performing sub-prime mortgage loans from South Lake Capital for a total consideration of $5,015,485. Liberty Capital Asset Management, a Nevada corporation, was formed in July of 2008 as a holding company for certain assets of CD Banc LLC in contemplation of the company going public via a reverse merger into a publicly trading corporation. On November 3 2008, Liberty Capital Asset Management completed a share exchange and asset purchase agreement with Corporate Outfitters Inc., a publicly-traded Delaware corporation which subsequently changed its name to Liberty Capital Asset Management Inc.

The Company maintains offices at 2470 Saint Rose Parkway, Suite 314, Henderson, Nevada 89074.

Critical Accounting Policies

The preparation of our consolidated financial statements and notes thereto requires management to make estimates and assumptions that affect the amounts and disclosures reported within those financial statements. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, workers' compensation costs, collectibles of accounts receivable, and impairment of goodwill and intangible assets, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements. There have been no material changes to these policies during the fiscal year.

Disclosure, pursuant to SFAS No. 107, is required of the fair value of financial instruments. However, since most of the Company's financial instruments turn over within a very short time period, management discloses that the net book value approximates fair value at the balance sheet date.

Capital Environment in 2008

A key component to the company's business plan for growth is the attraction of new investment partners to provide capital such that new pools of toxic assets may be purchased. As investor confidence began to wane during 2008, the capital markets which Liberty depends upon to supply it with new capital for acquisitions began to dry up. Hedge funds are traditional resources for capital asset firms such as Liberty, to source for investment capital to acquire new assets at a discount and then restore those assets to a more valuable status & thus a potential for profit for the company could be made. During the first part of 2008, the company visited with numerous hedge funds and received general commitments for funding to acquire pools of mortgages according to the Liberty formula. Liberty actually executed an agreement with Silar Advisors to fund up to $50 million in capital for pool acquisitions. Market conditions have retarded Silar's
investment ability and only a nominal amount of the allocation has been used.

Item 2. Management's Discussion and Analysis of Financial Condition and Plan of
Operations (Continued).

Axiom Capital was hired by Liberty on a referral by a Liberty shareholder and
meetings were set up and attended. Following is a listing of the companies
Liberty management visited with from April of 2008 through March of 2009.

Silar Advisors           Centrecourt Asset Mgt         TAIB Securities
Bryant Park Capital      Angelo Gordon                 EOS Partners
JCAM                     Chicago Investment Group      Amherst Holdings LLC
Lion Partners Ltd        Sheridan Capital Advisors LLC Guggenheim Partners
Aristeia Capital         Platinum Partners             Centurion
Mahler & Emerson Inc.    Quarry Capital Partners       Gilford Securities

The company secured several letters of intent & term sheets which totaled in excess of $100 million in funding to be delivered to Liberty Capital during 2008 & 2009. None of the funds were placed with the company. Silar purchased shares of stock in the company comprising 4.9% of the company and has purchased a small amount of pools from Liberty.

With the hedge funds weighted down with non-performing toxic assets and calls for redemptions by their investors, the hedge fund sources for capital dried up last year. Economic uncertainty and the doubt of a new national election put capital expenditures on hold.

Federal Regulation and "Bail-Out" Effects

With the election of the new Democratic President and Congress came additional impacts to the business environment Liberty operated in last fiscal year. The government's announcement of cash aid to purchase toxic mortgage assets from ailing lenders virtually dried up the source of cheap product to Liberty's business model. Many lenders who were willing to sell toxic mortgage pools suddenly withdrew their sales and opted to hang on to the assets so they could sell them to the government at better prices than the free market was willing to pay. In addition to this practice, the government also began to pass legislation which forced lenders who held foreclosed or soon to be foreclosed properties to extend the time it would take them to recover their assets. The effect of this is that any pool which Liberty would be bidding on would have typically 30% of those assets go to foreclosure. Once foreclosed, Liberty would resell the property for a profit. Historically and prior to this legislation, Liberty had been yielding approximately 70+% returns on REO (foreclosed and recaptured) properties. With the new legislation, recapture periods went from an average of six months to over two years. That turns a 70% return into a 17% return. Investors considered this type of asset too risky given the government interference and capital for toxic assets dried up. Further, assets the government had acquired at premium prices were made available to be repurchased by institutions if qualified. To qualify for Federal sharing funds for these purchases, a company must prove tangible liquid assets of at least $100 million. Liberty could never qualify having only $ 5 million.

The new administration also changed the FHA financing requirements for borrowers. Before 2009, FHA did not require a minimum FICO score (a rating system which establishes credit worthiness) for new borrowers, but rather only required that a new borrower had remained current with his payments for the previous twelve months. This allowed borrowers with sub standard credit to continue to receive home loans to purchase or refinance even if their credit profile was impaired. Most of the borrowers who are in the Liberty pool of assets fall into this category. The administration now requires that new borrowers must have at least a 600 FICO score to be considered for approval by FHA. This is a substantial change in the regulations governing FHA loans and a severe blow to the Liberty business model. The Liberty model assumes sub standard credit borrowers would still be able to re-finance out of their loans into new FHA loans once the Liberty modified loans had been held for twelve months.

Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations (Continued).

In addition to the restrictive credit requirements, FHA also changed their minimum refinance limit to a minimum of $50,000. Many of the loans Liberty owns are less than $50,000 which means that this new requirement forces Liberty borrowers who wish to refinance will need to find sources elsewhere than FHA.

It is the company's assessment that the combination of economic uncertainty, bankruptcies of major financial institutions such as Bear Stearns, Lehman Bros. Countrywide and AIG, together with harsh government regulations for mortgage holders, has led to the operating environment where it has taken much longer to execute on Liberty's operating model.

The Company acquires pools of non performing loans and then re-performs those loans by restructuring the financial parameters such that the defaulted borrower can return to making payments in a timely manner again. The loans are held for six months to one year and the new re-performing payment history creates loans having much more value than the partnership paid for it. The Company then either sells the loan or pool of reconditioned loans to a bulk purchaser or refinances the borrower out of the loan

For the Three Months Ended September 30, 2009 as Compared to the Three Months Ended September 30, 2008

Revenues generated from reperforming, sale of loans and fee revenue decreased $618,000, or 78% to $173,000, as compared to $791,000 for the three months ended September 30, 2008. The decrease is attributable to the depletion of the bulk of performing loans left in the active portfolio as well as restrictive credit availability for borrowers to refinance out of the existing loans. Also, governmental regulations have retarded borrower incentives to pay on time and have extended the foreclosure recovery period thus reducing revenue.

Selling, general and administrative, (SG&A), expenses increased $168,000 or 76%, to $391,000 for the three month period ended September 30, 2009, as compared to $222,000 for the same period in the prior year. The variance is attributable to $309,000 of expenses relating to maintenance fees associated with loans held for investment offset by decreases due to the reduction in revenues. Salary and payroll taxes were $127,000 for the three month period ended September 30, 2009 as compared to $271,000, a decrease of 53% or $144,000, for the same period in the prior year. Due to the 78% reduction in revenue, the Company reduced its work force. Professional fees were $86,000 for the three month period ended September 30, 2009 as compared to $135,000, a decrease of 34% or $46,000, during the same period of the prior year. The decrease is primarily due to a reduction in consulting fees. For the three months ended September 30, 2009, depreciation expense was $19,000 as compared to $0, for the same period of the prior year. The decrease in expenses is directly attruibutable to the 78% reduction in revenue generated.

Interest expense was $17,400 and $11,500 for the three month period ended September 30, 2009, respectively, relating to the increase in borrowings.

Loss from operations was $547,000, for the three month ended September 30, 2009 as compared to income of $116,000 from the same period in the prior year. For the three months ended September 30, 2009, the Company had loss of operations of $1.8 million as compared to income of $105,000, during the same period in the prior year. The decrease in revenue and its related costs are attributable to the impact of loan refinances declining due to the government's tightening of borrower requirements for FHA refinancing as well as restrictive credit scoring. Our loans & borrowers are sub-standard to conventional credit scoring and the added restrictions impair the ability for the company to sell individual loans. The delay in liquidation has caused the operating losses. The Company expensed $1.2 million associated with its valuation of its loans held for investment.

Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations (Continued).

For the Six Months Ended September 30, 2009 as Compared to the Six Months Ended September 30, 2008

Revenues generated from reperforming, sale of loans and fee revenue decreased $1.4 million, or 74% to $475,000, as compared to $1.8 million for the six months ended September 30, 2008. The decrease is attributable to the depletion of the bulk of performing loans left in the active portfolio as well as restrictive credit availability for borrowers to refinance out of the existing loans. Also, governmental regulations have retarded borrower incentives to pay on time and have extended the foreclosure recovery period thus reducing revenue.

Selling, general and administrative, (SG&A), expenses decreased $131,000 or 22%, to $473,000 for the six month period ended September 30, 2009, as compared to $604,000 for the same period in the prior year. Salary and payroll taxes were $269,000 for the six month period ended September 30, 2009 as compared to $585,000, a decrease of 54% or $316,000, for the same period in the prior year. Professional fees were $150,000 for the six month period ended September 30, 2009 as compared to $185,000, a decrease of 18% or $35,000, during the same period of the prior year. For the six months ended September 30, 2009, depreciation expense was $37,000 as compared to $0, for the same period of the prior year. The decrease in expenses is directly attruibutable to the 74% reduction in revenue generated.

Interest expense was $35,000 and $12,000 for the six month period ended June 30, 2009, respectively, relating to the increase in borrowings.

Loss from operations was $568,000, for the six month ended September 30, 2009 as compared to income of $310,000 from the same period in the prior year. For the six months ended September 30, 2009, the Company had loss of operations of $1.8 million as compared to income of $298,000, during the same period in the prior year. The Company expensed $1.2 million associated with its valuation of its loans held for investment. The decrease in revenue and its related costs are attributable to the impact of loan refinances declining due to the government's tightening of borrower requirements for FHA refinancing as well as restrictive credit scoring. Our loans & borrowers are sub-standard to conventional credit scoring and the added restrictions impair the ability for the company to sell individual loans. The delay in liquidation has caused the operating losses

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements and otherwise operate on an ongoing basis. The company has maintained sufficient operating cash to maintain its operations and holds reserves to service its assets. These reserves have been generated from operating cash flow.

Management sought to adjust the company's position in the market and given the operating environment, opted to raise capital in order to keep the staff on board until the capital markets loosened up and assets could again be purchased properly. The company hired Grant Bettingen, Inc to raise a $1 million private placement of the company's stock. Uses of proceeds were to keep operations going and to market new pools to purchase. If the company could raise $20 million from high net worth investors, it could continue to be successful. The offering was not successful although in excess of twenty companies were visited, primarily in New York. The offering was terminated in June.

Management cut staff positions and salaries were reduced to 54% of their previous levels. Company principals advanced money to the company from time to time for working capital needs. The company still has a pool of toxic mortgage loans on its books which it continues to work off to create cash.

Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations (Continued).

Cash Flows

Net cash provided by operating activities for the six months ended September 30, 2009 was $36,000, as compared to net cash used for operating activities for the six months ended September 30, 2008 of $389,000. The primary sources of net cash provided by operating activities the six months ended September 30, 2009 was net loss of $1.8 million, depreciation of $36,800, write down of investment of $1.2 million, stock issued for services of $91,400, decrease in loan receivable of $122,000 and an increase in accounts payable and accrued expenses of $389,000. The primary sources of cash used for operating activities the six months ended September 30, 2008, was from a net income of $298,000, increase in loan receivable of $562,000, increase in accounts receivable of $25,000, increase in stock subscription receivable $86,000 and an decrease in accounts payable of $14,000.

Net cash used for investing activities during the six months ended September 30, 2009 and September 30, 2008 was $3,900 and $3,500, respectively. Net cash used for investing activities was primarily for the purchase of software.

Net cash used in financing activities for the six months ended September 30, 2009 was $50,000, consisting primarily of payments of notes payable. Net cash provided by financing activities for the six months ended September 30, 2008 was $376,000, which were proceeds of notes payable.

Management currently believes that cash flows from operations will be sufficient to meet the Company's current liquidity and capital needs at least through fiscal 2010.