UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)



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

For the quarterly period ended March 31, 2012



o 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: 000-50370



|PREMIER BEVERAGE GROUP CORP.                                                                      
|--------------------------------------------------------------------------------------------------
|(Exact name of small business issuer in its charter)                                              
|                                                                                                  
|Nevada                                                                                            
|(State or other jurisdiction of incorporation or organization)                                    
|                                                                                                  
|501 Madison Avenue, Suite 501, New York, NY 10022                                                 
|(Address of principal executive offices)                                                          
|                                                                                                  
|646-820-0630                                                                                      
|(Issuer's telephone number)                                                                       
|                                                                                                  
|                                                                                                  
|(Former name, former address and former
        fiscal year, if changed
        since last report)



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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  ̈

|Large accelerated filer | o                                              |  | Accelerated filer         | o
|----------------------- | ---------------------------------------------- |  | ------------------------- | -
|Non-accelerated filer   | o(Do not check if a smaller reporting company) |  | Smaller reporting company | x



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



Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 61,201,483 shares outstanding as of March 31, 2012.











PREMIER BEVERAGE GROUP CORP.



INDEX



|         |                                                                                       | Page
|-------- | ------------------------------------------------------------------------------------- | ----
|PART I   | FINANCIAL INFORMATION                                                                 | 3   
|Item 1.  | Financial Statements                                                                  | 3   
|         | Condensed Consolidated Balance Sheets (Unaudited)                                     | 3   
|         | Condensed Consolidated Statements of Operations (Unaudited)                           | 4   
|         | Condensed Consolidated Statements of Cash Flows (Unaudited)                           | 5   
|         | Notes to the Condensed Consolidated Financial Statements (Unaudited)                  | 6   
|Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11  
|Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                            | 13  
|Item 4T. | Controls and Procedures                                                               | 13  
|         |                                                                                       |     
|PART II  | OTHER INFORMATION                                                                     | 15  
|Item 1.  | Legal Proceedings                                                                     | 15  
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                           | 15  
|Item 3.  | Defaults Upon Senior Securities                                                       | 15  
|Item 4.  | Submission of matters to a Vote of Security Holders                                   | 15  
|Item 5.  | Other Information                                                                     | 15  
|Item 6.  | Exhibits                                                                              | 16  
|         | Signatures                                                                            | 16  



2







PART I – FINANCIAL INFORMATION



Item 1. Consolidated Financial Statements



PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Consolidated Balance Sheets



|                                                                                                                                                     |  | March 31, 2012 |            |   |                   |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ----------------- | -
|                                                                                                                                                     |  | (Unaudited)    |            |   | December 31, 2011 |  
|ASSETS                                                                                                                                               |  |                |            |   |                   |  
|Current assets:                                                                                                                                      |  |                |            |   |                   |  
|Cash                                                                                                                                                 |  | $              | 71,647     |   |                   | $
|Accounts receivable, net                                                                                                                             |  |                | 36,804     |   |                   |  
|Inventory                                                                                                                                            |  |                | 28,854     |   |                   |  
|Prepaid expenses                                                                                                                                     |  |                | 2,000      |   |                   |  
|Deferred financing costs                                                                                                                             |  |                | 1,125      |   |                   |  
|Total current assets                                                                                                                                 |  |                | 140,430    |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Property and equipment, net                                                                                                                          |  |                | 1,499      |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Total assets                                                                                                                                         |  | $              | 141,929    |   |                   | $
|                                                                                                                                                     |  |                |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                |  |                |            |   |                   |  
|Current liabilities:                                                                                                                                 |  |                |            |   |                   |  
|Accounts payable and accrued expenses                                                                                                                |  | $              | 279,494    |   |                   | $
|Notes payable - current portion                                                                                                                      |  |                | 115,897    |   |                   |  
|Total current liabilities                                                                                                                            |  |                | 395,391    |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Long term liabilities:                                                                                                                               |  |                |            |   |                   |  
|Notes payable - long term, net                                                                                                                       |  |                | 323,375    |   |                   |  
|Total long term liabilities                                                                                                                          |  |                | 323,375    |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Total liabilities                                                                                                                                    |  |                | 718,766    |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Commitments and contingencies                                                                                                                        |  |                |            |   |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Stockholders' deficit:                                                                                                                               |  |                |            |   |                   |  
|Preferred stock-$0.0001 par value, 900,000 shares authorized, none issued and outstanding as of March 31, 2012 and December 31, 2011                 |  |                | -          |   |                   |  
|Series A Preferred stock-$5 stated value, 660,000 shares authorized, 60,000 shares issued and outstanding as of March 31, 2012 and December 31, 2011 |  |                | 300,000    |   |                   |  
|Series B Preferred stock-$500 stated value, 2,000 shares issued and outstanding as of March 31, 2012 and December 31, 2011                           |  |                | 15,000     |   |                   |  
|Common stock-0.00015 par value, 99,000,000 shares authorized, 61,201,483 shares issued and outstanding as of March 31, 2012 and December 31, 2011    |  |                | 9,180      |   |                   |  
|Additional paid in capital                                                                                                                           |  |                | 108,987    |   |                   |  
|Accumulated deficit                                                                                                                                  |  |                | (1,010,004 | ) |                   |  
|Total stockholders' deficit                                                                                                                          |  |                | (576,837   | ) |                   |  
|                                                                                                                                                     |  |                |            |   |                   |  
|Total liabilities and stockholders' deficit                                                                                                          |  | $              | 141,929    |   |                   | $



The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements



3







PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                  |  | Three Months Ended March 31, |           
|------------------------------------------------- |  | ---------------------------- | ----------
|                                                  |  | 2012                         |           
|Revenue:                                          |  |                              |           
|Sales, net                                        |  | $                            | 17,215    
|Cost of goods sold                                |  |                              | 9,087     
|Gross profit                                      |  |                              | 8,128     
|                                                  |  |                              |           
|Operating expenses:                               |  |                              |           
|Selling, general and administrative               |  |                              | 112,885   
|Depreciation expense                              |  |                              | 145       
|Total operating expenses                          |  |                              | 113,030   
|                                                  |  |                              |           
|Net loss from operations                          |  |                              | (104,902  
|                                                  |  |                              |           
|Other (expense)                                   |  |                              |           
|Interest                                          |  |                              | (68,949   
|Total other (expense)                             |  |                              | (68,949   
|                                                  |  |                              |           
|Net loss before provision for income taxes        |  |                              | (173,851  
|                                                  |  |                              |           
|Provision for income taxes (benefit)              |  |                              | -         
|                                                  |  |                              |           
|Net loss                                          |  | $                            | (173,851  
|                                                  |  |                              |           
|Net loss per common share, basic                  |  | $                            | (0.00     
|                                                  |  |                              |           
|Weighted average number of common shares, basic   |  |                              | 61,201,483
|                                                  |  |                              |           
|Weighted average number of common shares, diluted |  |                              | 63,183,096



The accompanying notes are an integral part
of these unaudited consolidated financial statements



4







PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Condensed Consolidated Statements of Cash
Flows

(Unaudited)



|                                                                                |  | Three Months Ended March 31, |         
|------------------------------------------------------------------------------- |  | ---------------------------- | --------
|                                                                                |  | 2012                         |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                           |  |                              |         
|Net loss                                                                        |  | $                            | (173,851
|Adjustments to net loss to net cash provided by (used in) operating activities: |  |                              |         
|Depreciation expense                                                            |  |                              | 145     
|Amortization of deferred financing costs                                        |  |                              | 19,480  
|Beneficial conversion feature in connection with convertible note payable       |  |                              | 48,547  
|Changes in operating assets and liabilities:                                    |  |                              |         
|(Increase) decrease in accounts receivable                                      |  |                              | (4,380  
|(Increase) decrease in inventory                                                |  |                              | (8,283  
|Decrease in prepaid and other current assets                                    |  |                              | 21,297  
|Increase (decrease) in accounts payable and accrued expenses                    |  |                              | 60,908  
|Net cash (used in) provided by operating activities                             |  |                              | (36,137 
|                                                                                |  |                              |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                           |  |                              |         
|Proceeds from issuance of notes payable                                         |  |                              | 85,922  
|Net cash provided by (used in) financing activities                             |  |                              | 85,922  
|                                                                                |  |                              |         
|Net increase (decrease) in cash                                                 |  |                              | 49,785  
|                                                                                |  |                              |         
|Cash, beginning of the period                                                   |  |                              | 21,862  
|                                                                                |  |                              |         
|Cash, end of the period                                                         |  | $                            | 71,647  
|                                                                                |  |                              |         
|Supplemental Disclosures of Cash Flow Information:                              |  |                              |         
|Cash paid during period for interest                                            |  | $                            | -       
|Cash paid during period for taxes                                               |  | $                            | -       



The accompanying notes are an integral part
of these unaudited consolidated financial statements



5







Notes to the Unaudited Condensed Consolidated
Financial Statements

For the Three Months Ended March 31, 2012



NOTE 1 – UNAUDITED FINANCIAL INFORMATION



The unaudited financial information included
for the three month interim periods ended March 31, 2012 and 2011 were taken from the books and records and are unaudited. However,
such information reflects all adjustments (consisting only of normal recurring adjustments), which are in the opinion of management,
necessary to reflect properly the results of operations for the interim periods presented. The results of operations for the three
month period ended March 31, 2012 are not necessarily indicative of the results expected for the fiscal year ending December 31,
2012.



NOTE 2 – FINANCIAL STATEMENTS AND BASIS OF PRESENTATION



Management has elected to omit substantially
all footnotes relating to the condensed consolidated financial statements of the Premier Beverage Group Corp. (the “Company”)
included in this report. For a complete set of footnotes, reference is made to the Company’s Current Report on Form 10-K
for the year ending December 31, 2011 as filed with the Securities and Exchange Commission and the audited financial statements
included therein.



The accompanying unaudited financial statements
include the accounts of the Company and the accounts of its wholly owned subsidiary OSO Beverages Corp. (and its subsidiary Fury
Distribution LLC) for all periods presented.



NOTE 3 – GOING CONCERN



The accompanying financial statements have
been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business.  As shown in the accompanying financial statements, the Company incurred a net loss of $173,851
for the three months ended March 31, 2012, and as of March 31, 2012 the Company has an accumulated deficit of $1,010,004 and a
net working capital deficit (total current liabilities exceeded total current assets) of $254,961. These factors among others raise
substantial doubt about the Company’s ability to continue as a going concern.

The Company has undertaken further steps as part of a plan to improve operations with the goal of sustaining its operations for
the next twelve months and beyond to address its lack of liquidity by raising additional funds, either in the form of debt or equity
or some combination thereof. However, there can be no assurance that the Company can successfully accomplish these steps and or
business plans, and it is uncertain that the Company will achieve a profitable level of operations and be able to obtain additional
financing.



The Company’s continued existence
is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems.  Further
losses are anticipated in the development of the Company’s business, and there can be no assurance that the Company will
be able to achieve or maintain profitability. The continuing operations of the Company and the recoverability of the carrying value
of the assets is dependent upon the ability of the Company to obtain necessary financing to fund its working capital requirements,
and upon future profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability
and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company
be unable to continue as a going concern.



There can be no assurance that any additional
financings will be available to the Company on satisfactory terms and conditions, if at all.  In the event that the Company
is unable to continue as a going concern, it may elect or be required to seek protection from its creditors by filing a voluntary
petition in bankruptcy or may be subject to an involuntary petition in bankruptcy.



6







NOTE 4 – INVENTORY



Inventory is stated at the lower of cost
or market. Cost is determined using the first-in, first-out method (“FIFO”). Inventory is stated at cost and reserves
are recorded to state the inventory at net realizable value. Inventory at March 31, 2012 was $28,854 as compared to $20,571 as
of December 31, 2011.



NOTE 5 – PROPERTY, PLANT AND EQUIPMENT



Property, plant and equipment at March 31, 2012 consist of the
following:



|                                |  | March 31, 2012 (Unaudited) |       |   | December 31, 
2011 | 
|------------------------------- |  | -------------------------- | ----- | - | ------------------ | 
|Office furniture and equipment  |  | $                          | 1,741 |   |                    | 
|Less:  accumulated depreciation |  |                            | (242  | ) |                    | 
|                                |  |                            |       |   |                    | 
|                                |  | $                          | 1,499 |   |                    | 



Depreciation expense was $145 and $0 for the three months ended
March 31, 2012 and 2011, respectively.



NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES



Accounts Payable and Accrued Expenses



The Company had outstanding accounts payable
and accrued expenses of $279,494 and $218,586 as of March 31, 2012 and December 31, 2011, respectively. Included in accrued expenses
are consulting agreements with three individuals, including Fouad Kallamni, the Company’s President. Each of these agreements
expires on September 30, 2012 and, with minor variations, provides for monthly compensation of $10,000, of which $5,000 is deferred.
The aggregate amount of deferred compensation under these consulting agreements as of March 31, 2012 is $101,000.



NOTE 7 – NOTES PAYABLE



Notes Payable



At March 31, 2012 and December 31, 2011 the Company has the
following notes payable:



|                                                                                                                                                   |  | March 31, 2012 (Unaudited) |         |  | December 31, 2011 |   |         | Interest Rate |  |  | Maturity Date |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- |  | ----------------- | - | ------- | ------------- |  |  | ------------- | -
|Notes Payable - Current Portion                                                                                                                    |  |                            |         |  |                   |   |         |               |  |  |               |  
|                                                                                                                                                   |  |                            |         |  |                   |   |         |               |  |  |               |  
|Secured Promissory Note                                                                                                                            |  | $                          | 48,500  |  |                   | $ | 48,500  |               |  |  | 0             | %
|Secured Convertible 10% Promissory Note                                                                                                            |  |                            | 6,692   |  |                   |   | 6,567   |               |  |  | 10            | %
|Unsecured Convertible 6% Promissory Notes                                                                                                          |  |                            | 60,705  |  |                   |   | 59,955  |               |  |  | 6             | %
|Total Notes Payable - Current Portion                                                                                                              |  | $                          | 115,897 |  |                   | $ | 115,022 |               |  |  |               |  
|                                                                                                                                                   |  |                            |         |  |                   |   |         |               |  |  |               |  
|Notes Payable - Long Term                                                                                                                          |  |                            |         |  |                   |   |         |               |  |  |               |  
|Senior Secured Convertible Promissory Note, net of amortized debt discount of $0 and $48,319 at March 31, 2013 and December 31, 2011, respectively |  | $                          | 100,000 |  |                   | $ | 51,681  |               |  |  | 0             | %
|Unsecured Convertible Promissory Note                                                                                                              |  |                            | 202,100 |  |                   |   | 187,100 |               |  |  | 0             | %
|Unsecured Convertible 8% Promissory Notes, net of amortized debt discount of $48,771 at March 31, 2013                                             |  |                            | 21,275  |  |                   |   | -       |               |  |  | 8             | %
|Total Notes Payable - Long Term                                                                                                                    |  | $                          | 323,375 |  |                   | $ | 238,781 |               |  |  |               |  
|                                                                                                                                                   |  |                            |         |  |                   |   |         |               |  |  |               |  
|Total Notes Payable                                                                                                                                |  | $                          | 439,272 |  |                   | $ | 353,803 |               |  |  |               |  



7







(1) This debt was reclassified from current to long-term pursuant
to ASC 470-10-45-14. On May 19, 2013, this debt was refinanced through the issuance of long-term convertible notes.



In March 2012, an additional
$15,000 was advanced to the Company under the Note Purchase Agreement with Prestwick Circle Services Corp., which is currently
in default. Prestwick has defaulted on its obligation to fund an additional $200,000 under the Note Purchase Agreement.



On March 28, 2012, the
Company issued $70,000 of its convertible promissory notes (“March 2012 Notes) to four investors. The March 2012 Notes bear
interest at the rate of 8% per annum, are due on December 31, 2013 and are convertible into shares of the Company’s common
stock at the rate of $.05 per share. The March 2012 Notes will be automatically cancelled and new convertible promissory notes
issued if, in connection with a convertible debt financing of the Company after March 28, 2012 and before December 31, 2013, such
subsequent debt financing provides for a conversion price of less than $0.05 per share of Common Stock. In accordance with ASC
470-20, the Company recognized an embedded beneficial conversion feature present in the notes. The Company allocated a portion
of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured
an aggregate of $49,000 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to
additional paid-in capital and a discount against the notes. The debt discount attributed to the beneficial conversion feature
is amortized over the notes’ maturity period as interest expense. The Company recognized $229 of the debt discount as interest
in the period, and recognized an additional $46 of accrued interest during the period.



NOTE 8 – MATERIAL SUBSEQUENT EVENTS AND CONTINGENCIES



In preparing the accompanying
consolidated financial statements, the Company has reviewed events that have occurred after March 31, 2012, through the date of
issuance of the financial statements.



Default on Senior
Secured Indebtedness



On April 1, 2012, the
Company defaulted in the payment of a senior secured promissory note in the original principal amount of $100,000 issued to a lender
on December 9, 2011. The secured lender has a first security interest in all of the Company’s assets.



8







Legal Proceedings



On April 9, 2012, the Company was served
with a civil action summons and complaint filed in the Superior Court of New Jersey, Passaic County, with respect to the non-payment
of certain unsecured promissory notes issued by the Company’s predecessor, DAM Holdings, Inc., in the amount of $60,965.
The Company did not file an answer to this summons and complaint. The repayment of these notes has been guaranteed in full by a
third party in connection with the merger of OSO USA LLC into our wholly-owned subsidiary, OSO Beverages Corp.



On July 27, 2012, we received notice that
a default judgment had been entered against the Company with respect to a civil action summons and complaint filed in the Superior
Court of New Jersey, Passaic County, for the non-payment of certain unsecured promissory notes issued by the Company’s predecessor,
DAM Holdings, Inc., in the amount of $60,965. The repayment of these notes has been guaranteed in full by a third party in connection
with the merger of OSO USA LLC into our wholly-owned subsidiary, OSO Beverages Corp. The Company intends to pursue its remedies
against such third party with respect to this judgment.



Note Conversion



On April 23, 2013, the Company exercised
its right to convert an unsecured convertible promissory note dated October 25, 2011 in the amount of $187,100 to shares of the
Company’s Common Stock at the stated conversion price of $0.135 per share. The conversion resulted in the issuance by the
Company 1,385,926 restricted shares of its Common Stock to the holder in full cancellation of the note.



Refinancing



On May 19, 2013, the Company issued a $225,000
Secured Amended and Restated Convertible Debenture to a single lender (“Amended Note”) which amended and restated the
Company’s senior secured promissory note issued to another lender on December 9, 2011 in the original principal amount of
$100,000 (“2011 Note”). The 2011 Note had been in default since April 1, 2012. Pursuant to a Forbearance Agreement
entered into with the new lender, accrued penalties and costs of $150,000 with respect to the 2011 Note were added to the principal
of the Amended Note. The Amended Note bears interest at the rate of 20% per annum, is due on December 31, 2014 and is, subject
to certain ownership limitations, convertible into shares of the Company’s common stock. The conversion price is equal to
50% of the volume weighted average closing market price for shares of the Company’s Common Stock for the 45 trading days
preceding conversion. The secured lender has a first security interest in all of the Company’s assets



New Financing



On May 19, 2013, the Company issued a Secured
Amended and Restated Convertible Debenture in the amount of $150,000 to a single lender (“May 2013 Note”). The May
2013 Note bears interest at the rate of 20% per annum, is due on December 31, 2014 and is, subject to certain ownership limitations,
convertible into shares of the Company’s common stock at the rate of $.02 per share. Commencing on May 15, 2014 and each
month thereafter, the Company is required to pay to the lender principal in the amount of $10,000. The secured lender has a security
interest in all of the Company’s assets. In addition, the loan is secured by a pledge of 31,500,000 shares of the Company’s
Common Stock owned by the Company’s president.



Note Exchange



On June 3, 2013, the
Company issued $70,000 of its convertible promissory notes (“June 2013 Notes) to four investors. The June 2013 Notes were
issued in exchange for $70,000 of convertible promissory notes issued to these investors on March 28, 2012 (“March 2012 Notes”)
pursuant to a provision in the March 2012 Notes requiring a mandatory note exchange if, in connection with a convertible debt financing
of the Company after March 28, 2012 and before December 31, 2013, such financing provided for a price at which the new note may
be converted into shares of the Company’ Common Stock of less than $0.05 per share. On May 15, 2013 the Company engaged in
a convertible debt financing in which the conversion price one of the notes is $.02 per share and the other is variable based on
a 50% discount to the volume weighted average closing market price of the Company’s stock. As a result of these financings,
the conversion price of the June 2013 Notes was reset at $.01 per share. The March 2012 and June 2013 Notes are in all other respects
identical. Interest that accrued on the March 2012 Note before the exchange may also be converted into shares of the Company’s
Common Stock at $.01 per share.



9







Authorization of Additional
Shares of Common Stock



The Company filed a Certificate
of Amendment to its Articles of Incorporation to increase the number of shares of Common Stock that could be issued to 250,000,000
from 99,000,000. The Certificate of Amendment was effective August 12, 2013. A majority of the holders of the Company’s Common
Stock approved the Certificate of Amendment, and the Company filed a Notice by Action by Written Consent of Stockholders with the
Securities and Exchange Commission that was subsequently mailed to stockholders of record.



Production Financing



On August 23, 2013, the Company’s
wholly-owned subsidiary, OSO Beverages Corp., (“OSO”) issued $90,000 in principal amount of its secured convertible
promissory notes (“OSO Notes) to two lenders. In exchange for the OSO Notes, the Company received $60,000 in cash to be used
to purchase inventory. The repayment of the OSO Notes is secured by the inventory to be purchased and all of the proceeds from
the sale thereof. Beginning on November 15, 2013 and each month thereafter, principal in the amount of $4,500 is payable to each
lender, with all unpaid principal due and payable on August 15, 2014. The difference between the principal amount of the OSO Notes
and the amount received ($15,000 with respect to each OSO Note) will be accounted for as original issue discount. The OSO Notes
are convertible into shares of the Company’s common stock at a conversion rate of $0.01 per share. As an inducement to enter
into the loan transaction, each Lender subscribed to purchase 500,000 restricted shares of the Company’s common stock for
a nominal consideration. As a further inducement to enter into the loan transaction, Fouad Kallamni, the Company’s President,
guaranteed all payments due under each OSO Note.



10











Item 2. Management's Discussion and Analysis or Plan of Operation



The following discussion and analysis
of our consolidated financial condition and results of operations for the three month period ended March 31, 2012 should be read
in conjunction with our consolidated financial statements included elsewhere in this Quarterly Report.



Special Filing Note



We have not yet filed the following reports
under the Securities Exchange Act of 1934:



Quarterly Reports on
Form 10-Q for the three month periods ended:



June 30,
2012

September
30, 2012



Annual Report on Form
10-K for the 12-month period ended December 31, 2012



Quarterly Reports on
Form 10-Q for the three month periods ended



March 31,
2013

June 30,
2013



We expect to file each of these reports
no later than October 31, 2013. Forward looking statements in this Quarterly Report and in the Form 10-K for the calendar year
ended December 31, 2011 have been made as though these reports had been timely filed with the Commission. In this regard, particular
care should be taken with respect to forward looking statements made herein which should be evaluated in light of “subsequent
events” disclosure in the footnotes to the financial statements accompanying this report as well as disclosure in the reports
that the Company will be filing for subsequent annual and quarterly periods described above. See “CAUTIONARY NOTICE
REGARDING FORWARD LOOKING STATEMENTS.”



Introductory Comments



On October 19, 2011, pursuant to the terms
of an Agreement and Plan of Merger between OSO USA LLC, a Delaware limited liability company and our wholly-owned subsidiary, OSO
Beverages Corp., OSO USA LLC merged into OSO Beverages Corp. OSO As a result of this merger, our historical motorcycle-related
business terminated, we changed our name to Premier Beverage Group Corp. and we are now engaged in the functional beverage business
described herein.



We operate our business through our wholly
owned subsidiary, OSO Beverages Corp. and distribute our OSO products through its wholly owned subsidiary, Fury Distribution Holdings
LLC. Another subsidiary, Captive Brands Corp., is inactive. Throughout this Quarterly Report on Form 10-Q as amended, the terms
“we,” “us,” “our,” “Premier Beverage” and “our company” refer to Premier
Beverage Group Corp., a Nevada corporation, and, unless the context indicates otherwise, includes these subsidiaries for all periods
presented.



We require additional capital to operate
our business. There can be no assurance that such capital will be available as necessary to meet our working capital requirements
or, if the capital is available, that it will be on reasonable terms acceptable to us. The issuances of additional equity securities
by the Company will result in dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash commitments. If we are unable to obtain financing
in the amounts and on terms deemed acceptable, the business and future success may be adversely affected.



The following discussion of our plan of
operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this
quarterly report.



11







Forward Looking Statements



The Company cautions readers regarding
forward looking statements found in the following discussion and elsewhere in this report and in any other statement made by, or
on the behalf of the Company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements
are statements not based on historical information and which relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of
which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed in any forward-looking statements made by or on
behalf of the Company. The Company disclaims any obligation to update forward-looking statements.



Overview



We are a consumer brand development company
focused on creating, marketing and selling compelling functional beverage brands. Functional beverages, which include energy drinks,
energy shots, and enhanced waters, among others, have expanded substantially in the last 10 years and disrupted the beverage landscape
formerly dominated by soft drinks. The functional beverage category has uncovered a previously unexposed consumer need that traditional
beverages did not address. We believe these beverages are quickly becoming the drink of choice for the younger generation, having
matured from “fad” status into the mainstream market.



We operate a two-tiered strategy that blends
the large upside potential of developing and owning proprietary brands with a lower risk, predictable captive brands strategy.
Our flagship brand, OSO, is a premium energy beverage offered primarily to high profile on-premise accounts. “On-premise”
accounts include clubs, bars, restaurants and hotels and generally where the product is consumed at the location. OSO holds a unique
position as a premium energy beverage. With additional repackaging initiatives currently underway, OSO intends to further differentiate
itself by offering a sleek glass bottle packaging option along with a formula that is made with 100% all natural ingredients. OSO’s
positioning is sophisticated, top-shelf energy with elegant packaging, unlike mass market ‘extreme-focused’ canned
energy drinks.



In addition to OSO, we intend to utilize
our manufacturing and brand development skills to create high quality store brands for mass retailers (which we have dubbed “captive
brands”). Our management team has prior direct experience developing captive functional beverage brands for national and
regional retailers such as Walgreens, Duane Reade, Stop&Shop and Roundy’s. Our new turnkey captive brand program involves
the development of a brand tailored for a specific retailer in return for a long-term vendor agreement with that retailer to manufacture
and supply product. The development of the brand includes all facets of product development, including formulations, branding,
packaging, distribution and marketing.



Our company is a Nevada corporation originally
formed under the name Sunrise USA Inc. on July 22, 1999. Our principal place of business is located at 501 Madison Avenue, Suite
501, New York, New York 10022. Our telephone number is (646) 820-0630.



Results of Operations



The following discussion should be read in conjunction with
our financial statements and the related notes thereto included elsewhere herein.



The following discussion should be read
in conjunction with our financial statements and the related notes thereto included elsewhere herein.



Three months ended March 31, 2012 compared
with three months March 31, 2011.



12







For the three months ended March 31, 2012
we generated revenues of $17,215 as compared to $26,900 for the three months ended March 31, 2011, a decrease of $9,685, or 36%.
Cost of goods sold for the three months ended March 31, 2012 was $9,087, generating a gross margin of $8,128. Cost of products
sold for the three months ended March 31, 2011 was $7,452, generating a gross margin of $19,448. The decrease in our revenues is
attributable principally to our lack of available inventory for sale and the absence of our sugar free product offering.



Selling, general and administrative expenses
were $112,885 for the three months ended March 31, 2012 as compared to $20,541 for the three months ended March 31, 2011, an increase
of $92,344 or approximately 450%. The increase was primarily the result of expenses related to operating a public company which
were not applicable to the comparable period.



We incurred interest expense of $68,949
for the three months ended March 31, 2012. Interest expense incurred for the three months ended March 31, 2011 was $4,550. The
increase of $64,399 in interest expense was primarily due to the application of non-cash beneficial conversion feature expenses
related to our issuances of convertible debt.



We reported a net loss and loss applicable
to common stockholders for the three months ended March 31, 2012 of $173,851. Our net loss and loss applicable to the common stockholders
for the three months ended March 31, 2011 was $5,643. The increase in net loss was attributable principally to expenses related
to operating as a public company and non-cash beneficial conversion feature expenses related to our financing activities.



Liquidity and Capital Resources



Since the merger in October 2011, we have
funded our operations primarily through the issuance of debt securities in the amount of $187,100 of convertible notes issued in
connection with the merger in October 2011 and $70,000 of convertible notes issued to investors in March 2012. As of March 31,
2012, we had $71,647 of cash on hand, $36,804 in accounts receivable, $28,854 in inventory, and $395,391 in current liabilities.



We will require additional cash to meet
our operating needs for the next twelve months.



Item 3. Quantitative and Qualitative Disclosures about Market
Risk



Item is inapplicable.



Item 4T. Controls and Procedures



Fouad Kallamni, who was our principal executive
and financial officer after the merger of OSO USA LLC into the Company on October 19, 2011 (see Item 1, Business) and for
the remainder of the reporting period which ended on March 31, 2012, has concluded that the disclosure controls and procedures
were neither effective prior to the merger or as of March 31, 2012. These controls are meant to ensure that information required
to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.



13







Management’s Report on Internal
Control over Financial Reporting



Our management is responsible for establishing
and maintaining internal controls over financial reporting and disclosure controls. Internal Control Over Financial Reporting is
a process designed by, or under the supervision of, our principal executive and financial officer, or persons performing similar
functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that:



|1. | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the registrant; and
|3. | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.                                                                                                                                  



Management conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December 31, 2011, based on the framework established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management concluded that as of December 31, 2011, it had material weaknesses in its internal control procedures which continue
to exist as of March 31, 2012.



A material weakness is a control deficiency,
or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.
We have concluded that our internal control over financial reporting was not effective as of December 31, 2011 and March 31, 2012.



The Company’s assessment identified
certain material weaknesses which are set forth below:



Entity Level Controls



We have insufficient corporate governance
policies. Our corporate governance activities and processes are not always formally documented. Specifically, decisions made by
the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any
misunderstandings regarding key decisions affecting our operations and management.



We currently have insufficient resources
which may restrict our ability to gather, analyze and report information relative to the financial statements in a timely manner,
including insufficient documentation and review of the selection and application of generally accepted accounting principles to
significant non-routine transactions. In addition, the limited size of the accounting department makes it impractical to achieve
an optimum segregation of duties.



Functional Controls and Segregation
of Duties



We have an inadequate segregation of duties
consistent with control objectives. Our management is composed of a single individual resulting in a situation where no segregation
of duties exists. In order to remedy this situation we would need to hire additional staff to provide segregation of duties. Currently,
it is not feasible to hire additional staff to obtain optimal segregation of duties. Management intends to reassess this matter
during the current fiscal year to determine whether improvement in segregation of duties is feasible.



Management believes that the material weaknesses
set forth above were the result of the scale of our operations and are a circumstance due to our small size. Management believes
these weaknesses did not have a material effect on our financial results and intends to take remedial actions upon receiving funding
for our business operations.



14







We are committed to improving our financial
organization. As part of this commitment, we will increase our personnel resources and technical accounting expertise within the
accounting function when funds are available to us. We will continue to monitor and evaluate the effectiveness of our internal
controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further
action and implementing additional enhancements or improvements, as necessary and as funds allow. We intend to take appropriate
and reasonable steps to make the necessary improvements to remediate these deficiencies, including:



|(1) | Adding personnel with the depth of knowledge and time commitment to provide a greater level of review for corporate activities;                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Continuing to update the documentation of our internal control processes, including formal risk assessment of our financial reporting processes; and
|(3) | Soliciting independent directors to enhance corporate governance and Board composition.                                                             



We intend to consider the results of our
remediation efforts and related testing as part of our assessment of the effectiveness of our internal control over financial reporting.



Changes in Internal Control over Financial
Reporting



There were no changes in our internal control
over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31,
2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



PART II – OTHER INFORMATION



Item 1. Legal Proceedings



None.



Item 1A. Risk Factors



Inapplicable.



Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds



None.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Submission of Matters to a Vote of Security Holders



None.



Item 5. Other Information



On March 28, 2012, the
Company issued $70,000 of its unsecured convertible promissory notes (“March 2012 Notes) to four investors. The March 2012
Notes bear interest at the rate of 8% per annum, are due on December 31, 2013 and are convertible into shares of the Company’s
common stock at the rate of $.05 per share. The March 2012 Notes will be automatically cancelled and new convertible promissory
notes issued if, in connection with a convertible debt financing of the Company after March 28, 2012 and before December 31, 2013,
such subsequent debt financing provides for a conversion price of less than $0.05 per share of Common Stock.



15







Item 6. Exhibits



|Exhibit
 Number |  | Exhibit                                                                                                                                                                                                      
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                                                              
|3.1             |  | Articles of Incorporation(1)                                                                                                                                                                                 
|3.2             |  | Amendments to Articles of Incorporation(1)                                                                                                                                                                   
|3.3             |  | Articles of Merger of Premier Beverage Group Corp. into DAM Holdings, Inc.(2)                                                                                                                                
|3.4             |  | By-Laws(1)                                                                                                                                                                                                   
|4.1             |  | Certificate of Designation Series A Preferred Stock(1)                                                                                                                                                       
|4.2             |  | Certificate of Designation Series B Preferred Stock(1)                                                                                                                                                       
|4.3             |  | Class A Warrant Agreement(3)                                                                                                                                                                                 
|4.4             |  | Form of Class A Warrant Certificate(3)                                                                                                                                                                       
|4.5             |  | Specimen Common Stock Certificate(1)                                                                                                                                                                         
|10.1            |  | 6% Convertible Promissory Notes(1)                                                                                                                                                                           
|10.2            |  | Stock Purchase Agreement(4)                                                                                                                                                                                  
|10.3            |  | Assumption and Indemnification Agreement(4)                                                                                                                                                                  
|10.4            |  | Form of Unsecured Promissory Note(4)                                                                                                                                                                         
|10.5            |  | Form of Note Purchase Agreement(4)                                                                                                                                                                           
|10.6            |  | Agreement and Plan of Merger of OSO USA LLC into OSO Beverages Corp.(5)                                                                                                                                      
|10.8            |  | Indemnification Agreement(1)                                                                                                                                                                                 
|10.9            |  | Form of Senior Secured Promissory Note(6)                                                                                                                                                                    
|10.10           |  | Form of Security Agreement(6)                                                                                                                                                                                
|10.11           |  | Consulting Agreement with Fouad Kallamni(1)                                                                                                                                                                  
|10.12           |  | Consulting Agreement with Core Equity Group LLC(1)                                                                                                                                                           
|10.13           |  | Consulting Agreement with Richard Fisher(1)                                                                                                                                                                  
|10.14           |  | Form of unsecured Convertible Promissory Noteissued in aggregate principal amount of $70,000*                                                                                                                
|14.1            |  | Code of Ethics(8)                                                                                                                                                                                            
|16.1            |  | Letter from Former Auditor(7)                                                                                                                                                                                
|21.1            |  | Subsidiaries of Registrant(1)                                                                                                                                                                                
|31.1            |  | Certification by Fouad Kallamni, Principal Executive and Financial
        Officer, pursuant to Rule 13a-14(a),
        pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002*                   
|32.1            |  | Certification by Fouad Kallamni, Principal Executive and Financial
        Officer, pursuant to 18 U.S.C.
        Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*



|(1) | Incorporated by reference from the Annual Report on Form 10-K for the year ending December 31, 2011  
|--- | -----------------------------------------------------------------------------------------------------
|(2) | Incorporated by reference from the Current Report on Form 8-K filed on December 1, 2011              
|(3) | Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2007
|(4) | Incorporated by reference from the Current Report on Form 8-K filed on October 27, 2011              
|(5) | Incorporated by reference from the Current Report on Form 8-K filed on October 24, 2011              
|(6) | Incorporated by reference from the Current Report on Form 8-K filed on December 15, 2011             
|(7) | Incorporated by reference from the Current Report on Form 8-K/A filed on December 23, 2011           
|(8) | Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2005
|*   | Filed herewith.                                                                                      



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|      |                   | Premier Beverage Group Corp.                                  | 
|----- | ----------------- | ------------------------------------------------------------- | 
|      |                   |                                                               | 
|Date: | October  15, 2013 | /s/ Fouad Kallamni                                            | 
|      |                   | Fouad Kallamni, President                                     | 
|      |                   | Principal Executive Officer and 
Principal Accounting Officer | 



16