FORM
        10-KSB/A
  x
              ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
                  OF 1934
 
 For
        the
        fiscal year ended April 30, 2006
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
                  1934
 
 For
        the
        transition period from __________ to __________
 
 Commission
        File Number 33-55254-10
 
 Drinks
        Americas Holdings, Ltd.
 (Exact
        name of small business issuer as specified in its charter)
 
 Delaware
              87-0438825(State
                  or other jurisdiction of
              (I.R.S.
                  Employerincorporation
                  or organization)
              Identification
                  No.)
 
 372
        Danbury Road
 Wilton,
        CT 06897
 (Address
        of principal executive offices)
 
 (203)
        762-7000
 (Issuer's
        telephone number)
 
 Securities
        registered under Section 12(b) of the Exchange Act: (none)
 
 Securities
        registered under Section 12(g) of the Exchange Act: Common
 Stock,
        $.001 par value per share
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days. Yes x  No o
  Check
        if
        no disclosure of delinquent filers in response to Item 405 of Regulation
        S-B is
        contained in this form, and no disclosure will be contained, to the best
        of
        registrant's knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-KSB or any amendment
        to
        this Form 10-KSB.  o
 
 Issuer's
        revenues for its most recent fiscal year: $1,607,606
 
 As
        of
        July 31, 2006, there were 62,924,120 shares of the Company's common stock
        issued
        and outstanding, and the aggregate market value of such common stock held
        by
        non-affiliates was approximately $14,754,769, based on the average of the
        bid
        and ask prices of such stock on that date of $.675.
 
 Transitional
        Small Business Disclosure Format (Check one): Yes o No x
  
  Table
        of
        Contents
 
 DRINKS
        AMERICAS HOLDINGS, LTD.
 FORM
          10-KSB/A ANNUAL REPORT
 
 Table
        of
        Contents
  PART
                  IItem
                  1.
              Description
                  of Business
              3Item
                  2.
              Property
              20Item
                  3.
              Legal
                  Proceedings
              20Item
                  4.
              Submission
                  of Matters to a Vote of ShareholdersPART
                  IIItem
                  5.
              Market
                  for Common Stock and Related Shareholder Matters
              21Item
                  6.
              Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              23Item
                  7.
              Financial
                  Statements
              28Item
                  8.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              28Item
                  8A.
              Controls
                  and Procedures
              28Item
                  8B.
              Other
                      Information
              28PART
                  IIIItem
                  9.
              Directors,
                  Executive Officers and Control Persons; Compliance with Section
                  16(a) of
                  the Exchange Act
              30Item
                  10.
              Executive
                  Compensation
              33Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Shareholder Matters
              34Item
                  12.
              Certain
                  Relationships and Related Transactions
              36Item
                  13.
              Exhibits
              38Item
                  14.
              Principal
                  Accountant Fees and Services
              40SIGNATURES
              41
  2
  Explanatory
        Note
 
 Unless
        otherwise indicated or the context otherwise requires, all references below
        in
        this Report on Form 10-K to the "Company", "us", "our" and "we" refer to
        (i)
        Drinks Americas Holdings, Ltd. (ii) our 100% owned Delaware subsidiary, Drinks
        Americas, Inc., (iii) our 100% owned Delaware limited liability company,
        Maxmillian Mixers, LLC, (iv) our 90% owned Delaware limited liability company,
        Drinks Global Imports, LLC, and (v) our 100% owned Delaware Limited Liability
        Company, DT Drinks, LLC.
 
 Cautionary
        Notice Regarding Forward Looking Statements
 
 Our
        disclosure and analysis in this Report contain some forward-looking statements.
        Certain of the matters discussed concerning our operations, cash flows,
        financial position, economic performance and financial condition, including,
        in
        particular, future sales, product demand, competition and the effect of economic
        conditions include forward-looking statements within the meaning of section
        27A
        of the Securities Act of 1933, referred to herein as the Securities Act,
        and
        Section 21E of the Securities Exchange Act of 1934, referred to herein as
        the
        Exchange Act.
 
 Statements
        that are predictive in nature, that depend upon or refer to future events
        or
        conditions or that include words such as "expects," "anticipates," "intends,"
        "plans," "believes," "estimates" and similar expressions are forward-looking
        statements. Although we believe that these statements are based upon reasonable
        assumptions, including projections of orders, sales, operating margins,
        earnings, cash flow, research and development costs, working capital, capital
        expenditures, distribution channels, profitability, new products, adequacy
        of
        funds from operations and other projections, and statements expressing general
        optimism about future operating results, and non-historical information,
        they
        are subject to several risks and uncertainties, and therefore, we can give
        no
        assurance that these statements will be achieved.
 
 Readers
        are cautioned that our forward-looking statements are not guarantees of future
        performance and the actual results or developments may differ materially
        from
        the expectations expressed in the forward-looking statements.
 
 As
        for
        the forward-looking statements that relate to future financial results and
        other
        projections, actual results will be different due to the inherent uncertainty
        of
        estimates, forecasts and projections and may be better or worse than projected.
        Given these uncertainties, you should not place any reliance on these
        forward-looking statements. These forward-looking statements also represent
        our
        estimates and assumptions only as of the date that they were made. We expressly
        disclaim a duty to provide updates to these forward-looking statements, and
        the
        estimates and assumptions associated with them, after the date of this filing
        to
        reflect events or changes in circumstances or changes in expectations or
        the
        occurrence of anticipated events.
 
 We
        undertake no obligation to publicly update any forward-looking statement,
        whether as a result of new information, future events or otherwise. You are
        advised, however, to consult any additional disclosures we make in our Form
        10-KSB, Forms 10-QSB and Forms 8-K reports to the SEC. Also note that we
        provide
        a cautionary discussion of risk and uncertainties under the caption "Risk
        Factors" in this prospectus. These are factors that we think could cause
        our
        actual results to differ materially from expected results. Other factors
        besides
        those listed here could also adversely affect us. This discussion is provided
        as
        permitted by the Private Securities Litigation Reform Act of 1995.
  Item
        1.
        Description of Business.
 
 History
        of Company:
 
 As
        of
        March 9, 2005, the shareholders of Drinks America, Inc. ("DA"), acquired
        control
        of Gourmet Group, which had become a Delaware corporation and changed its
        name
        to Drinks Americas Holdings, Ltd. Prior to entering into this share exchange,
        as
        Gourmet Group, Inc. ("Gourmet Group"), we were a company pursuing the
        acquisition of various operating businesses since our sale of Jardine Foods,
        Inc., our previous operating entity, in May 2002. On March 9, 2005, DA's
        shareholders acquired approximately 87% of Gourmet Group's common stock in
        exchange for all of DA's outstanding common shares and the Drinks'
        business.
  3
  As
        of
        March 9, 2005, we, as Gourmet Group, issued an aggregate of approximately
        42,963,792 shares of our common stock (or approximately 87.28% of the
        outstanding common stock on a fully-diluted basis) to the DA's shareholders,
        an
        additional 1,800,000 total shares of our common stock (or approximately 3.66%)
        to two advisors to DA and a total of 400,000 shares of our common stock (or
        approximately .8%) to the four members of Maxmillian Mixers, LLC ("Maxmillian"),
        a Delaware limited liability company affiliated with DA ("Mixers"). Immediately
        prior to issuing such shares, the Company (which had previously been a Nevada
        corporation), by way of merger into a newly formed Delaware corporation,
        became
        a Delaware corporation, changed its name to Drinks Americas Holdings, Ltd.,
        effectively reverse split its outstanding shares one-for-ten, and authorized
        up
        to 1,000,000 shares of "blank check" preferred stock in its new certificate
        of
        incorporation. In return for such issuances of shares, we, as Gourmet Group,
        received all of the outstanding shares of capital stock of DA and all of
        the
        membership interests in Mixers. Thus, DA and Mixers became our wholly-owned
        subsidiaries and the business of those subsidiaries constitutes substantially
        all of our operations. Prior to the share exchange transaction described
        above,
        Maxmillian owned approximately 99% of the outstanding capital stock of Drinks
        and immediately after the share exchange became our majority shareholder.
        Subsequently Maxmillian distributed its shares pro rata to its 21 members
        as
        part of its plan of liquidation. For financial accounting purposes this share
        exchange has been recognized as a reverse merger, and accordingly we changed
        our
        fiscal year end from June 30 to Drinks' year end of April 30th, and all of
        our
        historical financial statements prior to the share exchange are those of
        Drinks.
 
 Overview
 
 Based
        in
        Wilton, Connecticut, we were founded in 2002 by an experienced team of beverage,
        entertainment, retail and consumer product industry professionals, led by
        J.
        Patrick Kenny, a former executive at Joseph E. Seagram & Sons. We specialize
        in the marketing and distribution of premium alcoholic and nonalcoholic
        beverages associated with icon entertainers, sports figures, celebrities,
        and
        destinations.
 
 We
        develop, produce (primarily through co-packers), market and/or distribute
        alcoholic and non-alcoholic beverages for sale in the continental United
        States.
        While in certain cases we own the trademarks or have developed the formula
        for a
        product that we distribute, in other cases we only have the right to distribute
        the products and have been granted licenses of the trademark to allow us
        to do
        so. We refer to all of the products we distribute as "our products" throughout
        this Prospectus.
 
 Over
        the
        past 12 months we have acquired and developed additional brands and distributed
        existing products, and increased marketing support for certain of these brands.
        Our production capacity is primarily through third party independent contract
        packers known as "co-packers". The expansion of our business has been negatively
        affected by insufficient working capital. As a result, we regularly make
        judgments as to inventory levels in general and whether to maintain inventory
        for any particular product based on available working capital, rather than
        maintaining the optimum levels required to grow our business.
 
 Our
        strategy is to take advantage of icon celebrity brands and the strategic
        relationships our management team has established throughout their careers.
        We
        distribute our products through established distributors, virtually all of
        which
        are already well known to our management team from prior business dealings
        with
        them in the beverage industry. We have expanded the number of distributors
        we do
        business with in certain markets where we believe it is appropriate. Our
        distributors buy our products from us for resale. Our products are produced
        by
        independent co-packers pursuant to our specifications. Our management's
        relationships with manufacturers, distillers, development/research companies,
        bottling concerns and retail customers provide the foundation through which
        we
        expect to grow our business in the future.
  4
  We
        have
        assembled, and will attempt to continue to assemble, our premium brands,
        on a
        "low cost" basis. We believe acquisition of mid-sized brands and single
        trademark companies can be accomplished at extremely efficient "price multiples"
        in relation to their existing volume. We are willing to develop these brands
        with their original owners on a cooperative economic basis and share with
        them
        marketing, production, distribution contacts and the sophistication of our
        management team. We believe that the "skill-set" of our management team is
        a
        primary asset in the development of our acquired brands and trademarks. We
        have
        acquired ownership interests from, or entered into ventures with, partners
        such
        as Donald Trump, Willie Nelson, Chef Roy Yamaguchi, Wynn Starr Flavors, Inc.,
        Interamericana de Licores S.A. of Panama, Advantage Marketing, which specializes
        in institutional food and beverage sales, Newman's Own, Paul Newman's Beverages,
        DAS Communications, Ltd, Marvin Traub Associates, Cohete Rum S.A. and Damiana
        S.A.
 
 In
        fiscal
        2006, we formed Drinks Global Imports, LLC, a new subsidiary in which we
        own 90%
        of the outstanding member units. This company imports super premium wines
        from
        around the world, and will focus on wines from France, Italy, Spain, Australia
        and New Zealand.
 
 In
        fiscal
        year 2005 we have entered into a U.S. distribution contract giving us the
        exclusive sales and marketing rights to Damiana a Hispanic liqueur for the
        United States market. We are pleased with the market reception to this product.
        In October 27, 2005, we purchased licensing and distribution rights to Rheingold
        Beer in the United States. At this point, we are developing a new formula
        for
        Rheingold beer and designing new packaging. Depending on our working capital
        position, we hope to launch this product late in 2006.
 
 In
        November 2005, we signed a license agreement with Trump Mark, LLC to utilize
        the
        name Trump in connection with super premium vodka. The product and the packaging
        for this product has been developed and approved by all parties and we expect
        to
        launch Trump Super Premium Vodka in Q2 of our current Fiscal year. Marketing
        for
        this product has commenced and we have already received orders. We are
        dedicating a significant portion of our available resources to this product
        and
        due to inadequate working capital have and will deemphasize other products
        until
        such time as our working capital position improves.
 
 Several
        of the brands that we have acquired have the strategic advantage of association
        with "icon" entertainers and locations which provide us efficient promotion
        and
        marketing opportunities. Moreover, our focus is primarily on premium high
        margin, unique premium priced goods.
 
 We
        believe that our organizational approach will also minimize the need to invest
        heavily in fixed assets or factories and will allow us to operate with modest
        overhead because of the historic relationship between members of our management
        team and co-packers, distilling and bottling and production firms and other
        industry participants.
 
 We
        also
        rely on distributors who handle direct store delivery sales, which also allows
        us to control our overhead. We have formed an independent network of contract
        sales and regional managers, a promotional support team and several market
        segment specialists who are paid on a variable basis.
 
 We
        currently market and distribute, or produce (through co-packers), market
        and
        distribute, nine unique beverage brands.
  5
  Alcoholic
        Beverages:
  Our
        alcoholic beverages include:
  Old
        Whiskey River Bourbon (R) an award winning small batch 6 year old bourbon
        (sometimes referred to in this Prospectus as "Old Whiskey River "); Old Whiskey
        River Bourbon Cream, an award winning blend of real dairy cream and bourbon
        (sometimes referred to in this Prospectus as "Old Whiskey River Cream");
        Cohete
        Rum, an award winning smooth sipping rum in the Cuban style, infused with
        Guarana (sometimes referred to in this Prospectus as "Cohete"); Aguila Tequila,
        a 100% tequiliana weber blue agave reposado tequila (sometimes referred to
        in
        this Prospectus as "Aguila"); Damiana, a Mexican liqueur made from the Damiana
        root and given in Mexican culture as a wedding gift because of its perceived
        aphrodisiac characteristics; Y Sake, the first ultra premium sake made in
        America (sometimes referred to in this Prospectus as "Y Sake"); Trump Super
        Premium Vodka, produced in Holland, a product developed by master distiller
        Jacq
        DeLac and Rheingold Beer, a well known trademark in the New York metropolitan
        area.
  Non
        Alcoholic Beverages:
  Our
        non-alcoholic beverages include:
  Swiss
        T,
        a ready to drink tea (sometimes referred to in this Prospectus as "Swiss
        T");
        and Newman's Own Lightly Sparkling Fruit Juices, an all natural juice product
        (sometimes referred to in this Report as "Newman's").
  Strategy
  Our
        business strategy is to increase sales by expanding distribution of our
        internally developed brands, as well as those for which we hold distribution
        rights, in new and existing markets, stimulating consumer trial of new products
        and attempting to increase consumer awareness of, and brand loyalty to, our
        unique brands and products. We will also attempt to make efficient acquisitions
        of stand alone brands or distribution rights to existing brands in both the
        alcoholic and non-alcoholic beverage segment as a way to grow our revenue.
        Key
        elements of our business strategy include: creating strong distributor
        relationships and key accounts; stimulating strong consumer demand for our
        existing brands and products with primary emphasis in the United States,
        Mexico,
        Central America and Canada; developing unique beverage brands and products;
        and
        targeting strategic brand acquisitions and icon product development
        opportunities.
  We
        expect
        to continue to grow our business with the support of an established distribution
        network, which is already well-known to our management from prior business
        dealings in the beverage industry. This network is currently distributing
        our
        products nationally.
  Alcoholic
        Beverage Distribution
  We
        have a
        network of alcohol beverage distributors covering substantially all of the
        states within the United States. Our distributors buy our products from us
        for
        resale. Southern Wine & Spirits, including its affiliates, is our largest
        alcohol distributor, accounting for approximately 14.35% of our sales in
        fiscal
        2006.
  Non-Alcohol
        Beverage Distribution
  The
        following are our non-alcoholic beverage distributors:
 Southern
                    Wines and Spirits:
                
                FloridaMarch
                    Health:
                
                New
                    York CityAJ
                    Lind:
                
                New
                    York StateValley
                    Juice South:
                
                New
                    York StateValley
                    Juice North:
                
                New
                    York StateFontanella
                    Distributors:
                
                ConnecticutIsland
                    Beverage:
                
                New
                    JerseyAtlanta
                    Foods International:
                
                Georgia
 6
  We
        have
        organized a network of sales and contract sales employees who are industry
        veterans and have assigned national coverage of our distribution network
        to this
        team. Compensation to these individuals is on a variable success basis. We
        believe that we benefit from the sales and marketing relationships that this
        team brings to the organization.
  Our
        Company is a Delaware corporation, our principal place of business is located
        at
        372 Danbury Road, Suite 163, Wilton, Connecticut 06897 and our telephone
        number
        is (203) 762-7000.
  Wine
        and
        Spirits Industry Overview
  The
        United States beverage alcohol market consists of three distinct segments:
        beer,
        wine and distilled spirits. The distilled spirits segment of this market
        had
        increased consumption to more than 159 million 9-liter cases in 2003. Distilled
        spirits consist of three primary categories: white goods, whiskey and
        specialties. White goods, consisting of vodka, rum, gin and tequila, represent
        the largest category, accounting for approximately 50% of sales in 2001.
        Vodka
        is the largest category within the distilled spirits industry, accounting
        for
        26% of distilled spirits sales in the United States in 2003. Distilled spirits
        sales in the United States increased 3.8% in 2003, marking the 6th consecutive
        year sales have increased in the United States market.
  Historically,
        growth in the United States spirits industry has been driven by favorable
        demographic trends as the number of new young adults of legal drinking age
        (21
        to 24) increased from 14.4 million in 1995 to 14.9 million in 2001. In addition,
        growth in the distilled spirits industry has increased as the number of
        individuals over 55 increased, as this age group has historically shifted
        from
        beer to spirits. The number of Americans aged 55 and older increased from
        54.7
        million in 1995 to 59.6 million in 2001 and is expected to reach 75.1 million
        by
        2010.
  Significant
        consolidation in the global spirits industry has produced five primary large
        competitors: Diageo, Allied Domecq, Pernod Ricard, Brown-Forman and Bacardi.
        It
        is sometimes costly and difficult for these large companies to create new
        brands. As a result, we believe opportunities exist for smaller companies
        to
        develop high-quality, high-margin brands, which can grow to be very attractive
        acquisition candidates for the larger companies.
  Vodka
  The
        vodka
        category is both the largest and fastest growing category of spirits in the
        United States with sales of 46 million cases. Case sales are expected to
        grow
        substantially over the next 5 years.
  Whiskey
  Whiskey
        is an aged spirit generally distilled from barley, corn or rye. The whiskey
        category consists of four major segments: Scotch, Irish, American and Canadian
        and can be further broken down into blended and single malt subcategories.
        Whiskey is the second largest spirits category in the United States accounting
        for approximately 28% of distilled spirits sales in 2003, with 44 million
        cases
        sold.
  7
  Rum
  Rum
        is a
        distilled spirit made from sugar cane or molasses that can be bottled raw
        or
        aged in casks. Rum can be broken into several categories: light, dark, flavored
        and aged. Sales of rum posted gains for six consecutive years in the United
        States through 2003, and the category now accounts for approximately 12%
        of
        total U.S. spirits sales. Rum case sales grew at a compound annual growth
        rate
        of 5.3% between 1995 and 2001. Two brands, Bacardi and Captain Morgan, account
        for approximately 76% of total U.S. rum sales, with the balance split among
        a
        number of other rum brands. We believe that the rum category represents the
        most
        significant growth opportunity in the industry.
  The
        New
        Age or Alternative Beverage Industry
  Our
        brands, which are classified as Alcoholic and Non-Alcoholic Ready to Drink
        beverages, as well as other unique brands and products that we may develop
        in
        the future, compete with beverage products of all types, including wines,
        spirits, liqueurs, soft drinks, beer, and fruit juices.
  In
        its
        annual beverage market survey for calendar year 2003, Beverage World magazine
        (www.beverageworld.com ) estimated that the New Age or alternative beverage
        markets was approximately $11.6 billion in the United States in total sales
        and
        is expanding at a double digit rate per year in growth.
  New
        Age
        or alternative beverages are distinguishable from mainstream carbonated soft
        drinks in that they tend to contain less sugar, less carbonation, and natural
        ingredients. As a general rule, three criteria have been established for
        such a
        classification: (1) relatively new introduction to the market-place; (2)
        a
        perception by consumers that consumption is healthy compared to mainstream
        carbonated soft drinks and (3) the use of natural ingredients and flavors
        in the
        products. According to Beverage Marketing Corporation (www.beverageworld.com),
        for 2003, the New Age or alternative beverage category consists of the following
        segments: premium soda, ready-to-drink ("RTD") coffee, RTD tea, RTD
        (nutrient-enhanced), shelf-stable dairy (regular/diet), shelf-stable dairy
        (nutrient-enhanced), single-serve-fruit beverages (regular/diet),
        single-serve-fruit beverages (nutrient enhanced), smoothies, sparkling water,
        sports drinks, vegetable/fruit juice blends and other New Age
        beverages.
  ACQUISTIONS
        AND ALLIANCES
  Described
        below are acquisitions, strategic alliances and other arrangements which
        we have
        completed.
  Celebrity
        and Icon based Brands
  We
        are
        executing a "celebrity and icon" based brand strategy, which we believe will
        enhance consumer acceptance, lower ongoing marketing costs and strengthen
        our
        access to distribution channels. We have entered into three ventures with
        icon
        entertainers. Our business model leverages consumer identification with these
        icons, focusing on high margin premium products.
  Alcoholic
        Beverage Products
  The
        alcoholic products distributed by the Company are Old Whiskey River Bourbon
        and
        Bourbon Cream, Y Sake, Aguila Tequila, Cohete Rum Guarana, Damiana, and a
        collection of super premium wines. Commencing in the fall of 2006, we hope
        to
        distribute Rheingold Beer and expect to distribute Trump Super Premium Vodka.
        As
        indicated previously, our marketing efforts for many of our products have
        been
        deferred so that we can dedicate the resources required to launch Trump Super
        Premium Vodka and sales of certain of our products have been negatively affected
        by our inability to maintain appropriate inventory levels.
  8
  In
        December 2002, we purchased 25% interest in Old Whiskey River Distilling
        Company, LLC and Y Sake, LLC, which owns or licenses the related trademarks
        and
        trade names associated with the Old Whiskey River and Y Sake products. We
        hold
        the exclusive worldwide distribution rights for the Old Whiskey River and
        Y Sake
        products. Old Whiskey River Bourbon is marketed in association with Willie
        Nelson, a renowned country western entertainer, and Y Sake in association
        with
        Roy Yamaguchi, a renowned Japanese chef.
  In
        December 2003, we expanded the Old Whiskey River line and introduced Old
        Whiskey
        River Bourbon Cream. Old Whiskey River Bourbon has been featured on Food
        Channel's Emeril Live as well as Celebrity Food Finds and other television
        programs. This line of products is available nationally at the Texas Roadhouse
        Restaurant chain as well as other outlets with specific Willie Nelson
        promotions. Old Whiskey River is a feature item at Specs chain of liquor
        stores
        in Texas and ABC liquor stores a chain of 221 outlets in Florida.
  We
        own a
        55% interest in the trademark for Aguila Tequila, a premium 100% Blue Agave
        Tequila, produced by a distillery in Mexico, which is marketed with its icon
        label, the North American Eagle. We have the exclusive distribution rights
        for
        this product throughout the world except for Mexico.
  We
        have
        developed and own the trademark and formula for Cohete Rum, Cuban style rum
        produced in Panama. We launched this product in September, 2004. Cohete Rum
        has
        been awarded silver medals from the International Beverage Tasting
        Institute.
  Late
        calendar year 2005, we entered into a licensing agreement with the licensing
        company for the Trump Organization to find and develop a super premium vodka.
        The formula for the product was developed by master distiller Jacq DeLac.
        In
        January of 2006, we entered into an agreement to have Bruni Glass Italy design
        a
        proprietary bottle for Trump Super Premium Vodka. In March 2006, Milton Glaser
        agreed to design a bottle decoration for Trump Vodka. The product was unveiled
        at the 2006 Wine and Spirits Wholesalers convention.
  In
        August
        of 2005, we entered into an agreement to import and sell Damiana, a Mexican
        liqueur. We are selling Damiana nationally and have sold approximately 1,600
        cases of this product.
  In
        October 2005, we acquired ownership of the Rheingold brand and trademark.
        We
        believe Rheingold has a significant brand identity and awareness level within
        the metro New York and east coast markets. We believe this brand has the
        potential to be an integral component of our Metro New York distribution
        base.
        The brand has been relabeled and is scheduled for relaunch in 2006. In May,
        2006
        we licensed the Rheingold trademark to be marketed with various forms of
        wearables and clothing.
  Non
        Alcoholic Products
  Our
        non-alcoholic product offerings are Newman's Own Lightly Sparkling Fruit
        Juices
        and a Gourmet Tea, known as Swiss T. In 2006, we expanded the base of
        distributors and the retail account base for Paul Newmans Sparkling Juices
        to in
        excess of 1800 accounts. We also developed a Paul Newmans Sparkling Flavored
        Water and have the approval of the Newmans Own organization to launch a Newmans
        Own Fruit Flavored Tea.
  We
        own
        the Swiss T trademark. In 2006, in order to focus company resources on the
        Newmans Own and Trump Super Premium Vodka, we ceased producing Swiss T. We
        intend to relaunch a Swiss style tea using the same proprietary recipe and
        labeling in the future.
  Newman's
        Own Lightly Sparkling Fruit Juices is a new product and was developed by
        Paul
        Newman Foods in association with us. We have entered into an agreement to
        license Newman's Own name for distribution of this product in specified markets
        and have no ownership or other rights to the Newman's Own
        trademark.
  9
  We
        are
        currently distributing Newman's Own in the New York metropolitan area, New
        Jersey, Connecticut and California markets and met or exceeded our goals.
        Key
        grocery chains in the New York metropolitan area including Key Food, ShopRite,
        Gristedes, Shaws and numerous independent chains are selling the product.
        Newman's Own has been successful in the independent and Korean owned retail
        market segment. Newman's comes in 16oz. glass bottles in original lemonade,
        lemon lime, orange mango, blackberry and raspberry kiwi flavors. Based upon
        on
        the market's reaction to this product, we hope to distribute this product
        throughout the United States. Expansion of the territories for distribution
        of
        this product is by mutual agreement of the parties. Given the market reception
        to this product, we continue to dedicate resources to the Newman's Own products,
        at times at the expense of other products.
  The
        duration of our distribution contracts with respect to both alcoholic and
        non
        alcoholic beverages vary. However, since all of our distribution agreements
        have
        sales volume targets which we have not satisfied, we view all of these
        agreements to be cancelable at any time. We rely on our relationships with
        those
        who have granted us distribution rights rather than contractual
        protections.
  Flavors,
        Research and Development Relationship
  We
        have a
        research contract with Wynn Starr Flavors, Inc. ("Wynn Starr"), a leading
        supplier of flavors and similar product components. Wynn Starr became a DA
        shareholder by investing $250,000 in DA in 2002, and has provided research
        and
        development services. The relationship has been essential to us, and continues
        to provide a significant research resource at relatively low cost, e.g.
        developing drinks for specialized ethnic tastes, age groups, various groups
        of
        sports or music fans, and other targeted markets. Wynn Starr has also developed
        our Old Whiskey River Bourbon Cream product flavor and formulation. We expect
        that certain of our new products will utilize patents developed and licensed
        by
        Wynn Starr. Wynn Star has also assisted us in evaluating the product quality
        of
        various brands which we have considered acquiring and/or distributing. Our
        incremental product development expenses to date have not been
        material.
  Celebrity
        Marketing Resources
  We
        intend
        to continue to utilize our access to icon celebrity-based product endorsers,
        through the contacts of our management and various advisors, to further promote
        the branded identity of certain of the beverages we will develop.
  We
        have
        entered into agreements with DAS Communications, Ltd. and Shep Gordon of
        Alive
        Enterprises. Both David Sonenberg, who controls DAS Communications, Ltd.,
        and
        Shep Gordon are shareholders. We believe that these persons can provide access
        to entertainment personalities and will help us to develop and access unique
        marketing and promotional opportunities for spirits and beverages. Our
        relationship with Shep Gordon has resulted in agreements with country music
        "icon" Willie Nelson and Chef Roy Yamaguchi and introductions to other
        promotional resources. Under our agreement with Mr. Gordon, which we entered
        into in December 2002, he will provide us with marketing advisory services
        through June 2008.
  Trademark
        Development Resources
  In
        March
        2002, we entered into a consulting agreement with Marvin Traub, former Chief
        Executive Officer of the Bloomingdales' department store chain, and an expert
        in
        trademark development. Mr. Traub provides ongoing advice and marketing expertise
        to us under this agreement. He also serves on our Board of
        Directors.
  10
  Marketing,
        Sales and Distribution
  Our
        marketing and pricing policies and programs take into consideration competitors'
        prices and our perception of what a consumer is willing to pay for the
        particular brand and product in the retail environment. Our goal is to
        competitively price our unique products with the other comparable premium
        brands. We believe our Icon strategy supports category premium
        pricing.
  The
        company has entered into an agreement with Gotham Inc., a large scale New
        York
        marketing agency. Together with our management, Gotham has developed a long
        term
        marketing and media brand development plan for us.
  Our
        marketing of our non-alcoholic brands focuses on building those brands at
        the
        retail level and generally developing market profile through promotion tasting
        at retail distribution locations. Newman's Own has been promoted with consumer
        tastings, tee-shirt promotions and consumer trials. Our marketing efforts
        in
        support of our non-alcoholic brands focuses largely on promotion at key
        distribution points prior to the peak summer demand period.
  Sales
  Our
        products are sold in the continental United States primarily in the beverage
        sections of liquor stores, grocery stores, drug stores, convenience stores,
        delicatessens, sandwich shops and supermarkets. Many of our beverage products
        are sold nationally and our distribution model, depending on the product,
        includes several national and regional chains, including Texas Roadhouse
        Restaurants, and various regional retail accounts. In 2006, we made significant
        progress in selling our products to several key chains and have either sold
        or
        received orders from Specs in Texas and ABC Liquors in Florida where Old
        Whisky
        River has been featured extensively.
  Our
        sales
        efforts are supported by three independent contractors each with in excess
        of 25
        years experience in beverage brand building who have specific market
        responsibility.
  Distribution
  We
        sell
        the majority of our products through our distribution network, and we currently
        have relationships with approximately 60 independent distributors throughout
        North America. Our policy is to grant our distributors rights to sell particular
        brands within a defined territory. Our distributors buy our products from
        us for
        resale. We believe that substantially all of our distributors also carry
        beverage products of our competitors. Our agreements with our distributors
        vary;
        we have entered into written agreements with a number of our top distributors
        for varying terms; most of our other distribution relationships are oral
        (based
        solely on purchase orders) and are terminable by either party at
        will.
  We
        generally require our independent distributors to place purchase orders for
        our
        products at least 14 days in advance of requested shipping dates. To the
        extent
        we have product available in inventory, we will fulfill other purchase orders
        when and as received. We and our distributors contract with independent trucking
        companies to have product shipped from our contract packers to independent
        warehouses, and then on to our distributors. Distributors then sell and deliver
        our products either to sub-distributors or directly to retail outlets, and
        such
        distributors or sub-distributors stock the retailers' shelves with our products.
        We recognize revenue upon receipt by our distributors and customers of our
        products, net of anticipated discounts and allowances. While all sales are
        final
        and we have a "no return" policy, in limited instances, due to credit issues
        or
        changes in distributors, we may take back product.
  Production
  Contract
        Packing Arrangements
  We
        currently use independent contract packers known as "co-packers" to prepare,
        bottle and package our products. Currently, our primary contract packers
        are
        Heaven Hill Distilleries in Kentucky, American Beverage Company in St. Louis,
        Interamericana de Licores in Panama, Sake One in Oregon, Tequila El Viejito
        S.
        A. in Guadalajara, Mexico, Damiana S.A, Mexico, and F.X. Matt of Utica, New
        York. We have also contracted WV Wanders Holland for the production of Trump
        Super Premium Vodka.
  11
  We
        continually review our contract packing needs in light of regulatory compliance
        and logistical requirements and may add or change co-packers based on those
        needs.
  As
        is
        customary in the contract packing industry, we are expected to arrange for
        our
        contract packing needs sufficiently in advance of anticipated requirements.
        Accordingly, it is our business practice to require our independent distributors
        to place their purchase orders for our products at least 10 days in advance
        of
        shipping. Other than minimum case volume requirements per production run,
        we do
        not have any minimum production requirements.
  Raw
        Materials
  Substantially
        all of the raw materials used in the preparation, bottling and packaging
        of our
        products are purchased by us or by our contract packers in accordance with
        our
        specifications. The raw materials used in the preparation and packaging of
        our
        products consist primarily of spirits, flavorings, concentrate, glass, labels,
        caps and packaging. These raw materials are purchased from suppliers selected
        by
        us or in concert with our co-packers or by the respective supplier
        companies.
  We
        believe that we have adequate sources of raw materials, which are available
        from
        multiple suppliers across the full range of our products.
  Quality
        Control
  We
        attempt to use quality ingredients for our products. We seek to ensure that
        all
        of our products satisfy our quality standards. Contract packers are selected
        and
        monitored by our Chief Operating Officer in an effort to assure adherence
        to our
        production procedures and quality standards. Samples of our products from
        each
        production run undertaken by each of our contract packers are analyzed and
        categorized in a reference library.
  For
        every
        run of product, our contract packers undertake extensive on-line testing
        of
        product quality and packaging. For our non-alcoholic products this includes
        testing levels of sweetness, carbonation, taste, product integrity, packaging
        and various regulatory cross checks. Similar product testing is done on our
        wines and spirits. For each product, the contract packer must transmit all
        quality control test results to us upon request. We believe that, working
        in
        concert with our internal management, the food scientist resources of Advantage
        Food Marketing and Wynn Starr Flavors, and the in-house quality control
        mechanisms of our winery and distillery partners assure that our standards
        are
        at least equal to those established in the industry.
  Testing
        at each of our co-packers includes microbiological checks and other tests
        to
        ensure the production facilities for our products meet the standards and
        specifications of our quality assurance program. We believe the production
        facilities inspection programs are at least equal to industry standards.
        We
        request that water quality is monitored during production and at scheduled
        testing times to ensure compliance with applicable government regulatory
        requirements. Flavors are sourced from only qualified manufacturers. We are
        committed to an on-going program of product improvement with a view toward
        ensuring high quality of our products.
  We
        believe we source and select only those suppliers that use only quality
        components. We also inspect packaging suppliers' production facilities and
        monitor their product quality.
  12
  Regulation
  The
        production and marketing of our licensed and proprietary alcoholic and non
        alcoholic beverages are subject to the rules and regulations of various Federal,
        provincial, state and local health agencies, including in particular the
        U.S.
        Food and Drug Administration ("FDA") and the U.S. Alcohol and Tobacco Tax
        and
        Trade Bureau ("TTB"). The FDA and TTB also regulate labeling of our products.
        From time to time, we may receive notification of various technical labeling
        or
        ingredient reviews with respect to our licensed products. We believe that
        we
        have a compliance program in place to ensure compliance with production,
        marketing and labeling regulations on a going-forward basis. There are no
        regulatory notifications or actions currently outstanding.
  We
        have a
        specific manager with direct responsibility to insure regulatory compliance
        and
        retain a regulatory law firm that oversees our submissions to various
        agencies.
  Trademarks,
        Flavor Concentrate Trade Secrets and Patents
  We
        own a
        number of trademarks, including, in the United States, "Drinks Americas"
        (TM),
        "Rheingold Beer" (TM) "Cohete" (TM), "Swiss T"(TM), " "Screaming Monkey"
        (TM)
        and "Aguila" (TM). Trademarks have been filed and pending with no opposition
        for
        Drinks Americas, "Monte Verde"(TM) and "Corcovado"(TM). In addition, we have
        trademark protection in the United States for a number of other trademarks
        for
        slogans and product designs, including "The Rooster Has Landed" (R) and "Party
        Harder"(TM).
  We
        also
        own with Alive Spirits the rights to the "Old Whiskey River" trademark. We
        have
        a license from Newman's Own to use the Newman's Own trademark in the marketing
        and selling of Newman's Own Lightly Sparkling Fruit Juices. We also have
        a
        license from Trump Mark, LLC to use the Trump trademark in marketing and
        selling
        Trump Super Premium Vodka.
  We
        consider our trademarks, patent and trade secrets to be of considerable value
        and importance to our business. No successful challenges to our registered
        trademarks have arisen and we have no reason to believe that any such challenges
        will arise in the future.
  Employees
  As
        of
        July 31, 2006, we had eight full-time employees and an additional seven persons,
        who were independent contractors working for us either in their individual
        capacity or through professional service companies controlled by them. No
        employee is represented by a labor union. Three of the independent contractors
        have executed contracts with us and are paid on a variable success basis
        depending upon sales generated by them.
  Risk
        Factors
  This
        offering involves a high degree of risk. Before you invest you should carefully
        consider the risks and uncertainties described below and other information
        and
        our consolidated financial statements and related notes included elsewhere
        in
        this prospectus. If any of the events described below actually occur, our
        operating results would be dramatically adversely affected, which in turn
        could
        cause the price of our common stock to decline, perhaps significantly. Further,
        we may not be able to continue our operations. This means you could lose
        all or
        a part of your investment.
  Certain
        Factors That May Affect Future Results
  Factors
        Relating to Our Company and Our Business
  13
  We
        are a
        developing Company and our prospects must be considered in light of our short
        operating history and our shortage of working capital.
  We
        are a
        developing company with a very short operating history, having been incorporated
        in September 2002. Our prospects must be considered in light of the risks,
        expenses and difficulties frequently encountered by developing companies,
        including dealing with a shortage of necessary funds in the very competitive
        marketplace in which the alcoholic and non-alcoholic beverage business is
        carried on, as well as the many risks commonly anticipated or experienced
        by
        mature companies. Our ability to operate as a going concern and to achieve
        profitable operations will be dependent on such factors as the success of
        our
        business model and marketing strategy, market penetration of existing products,
        competition, future brand additions, continued development of distribution
        relationships and the availability of financing. No assurance can be given
        that
        we will be able successfully to develop our business under the foregoing
        conditions.
  We
        rely
        heavily on our independent distributors, and this could affect our ability
        to
        efficiently and profitably distribute and market our products, and maintain
        our
        existing markets and expand our business into other geographic
        markets.
  Our
        ability to establish a market for our brands and products in new geographic
        distribution areas, as well as maintain and expand our existing markets,
        is
        dependent on our ability to establish and maintain successful relationships
        with
        reliable independent distributors strategically positioned to serve those
        areas.
        Many of our larger distributors sell and distribute competing products,
        including non-alcoholic and alcoholic beverages, and our products may represent
        a small portion of their business. To the extent that our distributors are
        distracted from selling our products or do not expend sufficient efforts
        in
        managing and selling our products, our sales will be adversely affected.
        Our
        ability to maintain our distribution network and attract additional distributors
        will depend on a number of factors, many of which are outside our control.
        Some
        of these factors include: (i) the level of demand for our brands and products
        in
        a particular distribution area; (ii) our ability to price our products at
        levels
        competitive with those offered by competing products and (iii) our ability
        to
        deliver products in the quantity and at the time ordered by
        distributors.
  We
        cannot
        ensure that we will be able to meet all or any of these factors in any of
        our
        current or prospective geographic areas of distribution. Further, our shortage
        of adequate working capital may make it impossible for us to do so. Our
        inability to achieve any of these factors in a geographic distribution area
        will
        have a material adverse effect on our relationships with our distributors
        in
        that particular geographic area, thus limiting our ability to maintain and
        expand our market, which will likely adversely effect our revenues and financial
        results.
  We
        generally do not have long-term agreements with our distributors, and we
        expend
        significant time and may need to incur significant expense in attracting
        and
        maintaining key distributors.
  Our
        marketing and sales strategy presently, and in the future, will rely on the
        performance of our independent distributors and our ability to attract
        additional distributors. We have entered into written agreements with certain
        of
        our distributors for varying terms and duration; however, most of our
        distribution relationships are informal (based solely on purchase orders)
        and
        are terminable by either party at will. We currently do not have, nor do
        we
        anticipate in the future that we will be able to establish, long-term
        contractual commitments from many of our distributors. In addition, despite
        the
        terms of the written agreements with certain of our significant distributors,
        we
        have no assurance as to the level of performance under those agreements,
        or that
        those agreements will not be terminated. There is also no assurance that
        we will
        be able to maintain our current distribution relationships or establish and
        maintain successful relationships with distributors in new geographic
        distribution areas. Moreover, there is the additional possibility that we
        will
        have to incur significant expenses to attract and maintain key distributors
        in
        one or more of our geographic distribution areas in order to profitably exploit
        our geographic markets. We may not have sufficient working capital to allow
        us
        to do so.
  14
  Because
        our distributors are not required to place minimum orders with us, we need
        to
        carefully manage our inventory levels, and it is difficult to predict the
        timing
        and amount of our sales.
  Our
        independent distributors are not required to place minimum monthly, quarterly
        or
        annual orders for our products. In order to reduce their inventory costs,
        our
        independent distributors maintain low levels of inventory which, depending
        on
        the product and the distributor, range from 15 to 45 days of typical sales
        volume in the distribution area. We believe that our independent distributors
        endeavor to order products from us in such quantities, at such times, as
        will
        allow them to satisfy the demand for our products in the distribution area.
        Accordingly, there is no assurance as to the timing or quantity of purchases
        by
        any of our independent distributors or that any of our distributors will
        continue to purchase products from us in the same frequencies and volumes
        as
        they may have done in the past. Our goal to maintain inventory levels for
        each
        of our products sufficient to satisfy anticipated purchase orders for our
        products from our distributors, which is difficult to estimate. This places
        burdens on our working capital which has been limited since we began operations.
        As a result, we have not consistently been able to maintain sufficient inventory
        levels and may not be able to do so in the future. We are not maintaining
        sufficient inventory levels for certain of our products at the present
        time.
  As
        is
        customary in the contract packing industry for small companies, we are expected
        to arrange for our contract packing needs sufficiently in advance of anticipated
        requirements. To the extent demand for our products exceeds available inventory
        and the capacities available under our contract packing arrangements, or
        orders
        are not submitted on a timely basis, we will be unable to fulfill distributor
        orders on a timely basis. Conversely, we may produce more products than
        warranted by the actual demand, resulting in higher storage costs and the
        potential risk of inventory spoilage. Our failure to accurately predict and
        manage our contract packaging requirements may impair relationships with
        our
        independent distributors, which, in turn, would likely have a material adverse
        effect on our ability to maintain relationships with those
        distributors.
  The
        bankruptcy, cessation of operations, or decline in business of a significant
        distributor could adversely affect our revenues, and could result in increased
        costs in obtaining a replacement.
  If
        any of
        our primary distributors were to stop selling our products or decrease the
        number of cases purchased, our revenues and financial results could be adversely
        affected. There can be no assurance that, in the future, we will be successful
        in finding new or replacement distributors if any of our existing significant
        distributors discontinue our brands, cease operations, file for bankruptcy
        or
        terminate their relationship with us.
  We
        have
        not satisfied certain of our commitments under distribution agreements which
        if
        cancelled would have a material adverse effect on our business.
  Our
        rights to distribute our products are generally governed by distribution
        agreements which contain minimum sales per product targets that we have not
        satisfied to date. Therefore virtually all of our distribution contracts
        can be
        cancelled. We rely on our relationships with the parties who have granted
        us
        distribution rights rather than contractual protection. Cancellation of one
        or
        more of our distribution contracts would have a material adverse effect on
        our
        business.
  We
        need
        to effectively manage our growth and the execution of our business plan.
        Any
        failure to do so would negatively impact our results.
  To
        manage
        operations effectively, we must improve our operational, financial and other
        management processes and systems. We have a small staff and our success also
        depends largely on our ability to maintain high levels of employee utilization,
        to manage our costs in general and administrative expense in particular,
        and
        otherwise to efficiently execute our business plan. We need to cost-efficiently
        add new brands and products, develop and expand our distribution channels,
        and
        efficiently implement our business strategies. There are no assurances that
        we
        will be able to effectively and efficiently manage our growth. Any inability
        to
        do so, could increase our expenses and negatively impact our results of
        operations.
  15
  The
        loss
        of key personnel would directly affect our efficiency and economic
        results.
  We
        are
        dependent upon the creative skills and leadership of our founder, J. Patrick
        Kenny, who serves as our President and Chief Executive Officer, as well as
        upon
        Bruce Klein, our Chairman and upon the management, financial and operational
        skills of Jason Lazo, our Chief Operating Officer. We currently maintain
        key
        person life insurance on Mr. Kenny in the amount of $2,000,000. The loss
        of the
        services of either Mr. Kenny, Mr. Klein or Mr. Lazo could have a material
        adverse affect on our business and operations, including our ability to develop
        and execute a long-term, profitable business plan. Due to inadequate working
        capital, we have often not paid agreed upon compensation to our employees;
        there
        can be no assurance they will continue to render services to us.
  Our
        management team consists of several key distribution, sales and financial
        personnel who have been recruited within the past several years. In order
        to
        manage and operate our business successfully in the future, it will be necessary
        to further strengthen our management team. The hiring of any additional
        executives will increase our compensation expense. We may not have sufficient
        working capital to be able to do so.
  Our
        strategy requires us to develop and maintain relationships with other
        firms.
  Our
        strategy depends on various relationships with other firms for product
        development, research facilities, distilling facilities, bottling, distribution
        and low-cost marketing. Because of these relationships, we do not expect
        to
        invest heavily in fixed assets or factories. Of particular importance to
        us is
        our relationship with independent producers who manufacture our products
        pursuant to our specifications. We do not have our own production capacity
        and
        rely on independent contractors to produce our products. We will need to
        maintain and develop relationships with additional manufactures as we add
        products to our product mix. It is vital to our success that our producers
        deliver high quality products to us with favorable pricing terms. There can
        be
        no assurance, however, that we will be able to develop and maintain
        relationships which provide us the services and facilities we require. If
        we
        fail to develop and maintain such relationships, we may be forced to change
        our
        strategy, which could have a material adverse effect on the results of our
        operations.
  Our
        business and financial results depend on maintaining a consistent and
        cost-effective supply of raw materials.
  Raw
        materials for our products include concentrate, glass, labels, caps and
        packaging materials. Currently, we purchase our flavor concentrate from two
        flavor concentrate suppliers, and we anticipate that we will purchase flavor
        concentrate from other flavor houses for future alcoholic and non-alcoholic
        flavors and additional products, with the intention of developing other sources
        of flavor concentrate for each of our products. We believe that we have adequate
        sources of raw materials, which are available from multiple suppliers, and
        that
        in general we maintain good supplier relationships. The price of our
        concentrates is determined by our flavor houses and us, and may be subject
        to
        change. Prices for the remaining raw materials are generally determined by
        the
        market, and may change at any time. Increases in prices for any of these
        raw
        materials could have a material adverse impact on our ability to achieve
        profitability and our financial position. If we are unable to continue to
        find
        adequate suppliers for our raw materials on economic terms acceptable to
        us,
        this will adversely affect our results of operations.
  We
        may
        not be able to acquire and successfully integrate additional products in
        the
        future.
  We
        have
        grown our business primarily through acquisitions of brands and we expect
        to
        acquire additional brands in the future. There can be no assurance that we
        will
        be able to acquire additional products or assimilate all of the products
        we do
        acquire into our business or product mix. Acquisitions can be accompanied
        by
        risks such as potential exposure to unknown liabilities relating to the acquired
        product. We have entered into, and may continue to enter into, joint ventures,
        which may also carry risks of liability to third parties.
  16
  Our
        inability to protect our trademarks, patent and trade secrets may prevent
        us
        from successfully marketing our products and competing effectively.
  Failure
        to protect our intellectual property could harm our brand and our reputation,
        and adversely affect our ability to compete effectively. Further, enforcing
        or
        defending our intellectual property rights, including our trademarks, patents,
        copyrights and trade secrets, could result in the expenditure of significant
        financial and managerial resources. We regard our intellectual property,
        particularly our trademarks and trade secrets to be of considerable value
        and
        importance to our business and our success. We rely on a combination of
        trademark, patent, and trade secrecy laws, and contractual provisions to
        protect
        our intellectual property rights. There can be no assurance that the steps
        taken
        by us to protect these proprietary rights will be adequate or that third parties
        will not infringe or misappropriate our trademarks, trade secrets (including
        our
        flavor concentrate trade secrets) or similar proprietary rights. In addition,
        there can be no assurance that other parties will not assert infringement
        claims
        against us, and we may have to pursue litigation against other parties to
        assert
        our rights. Any such claim or litigation could be costly and we may lack
        the
        resources required to defend against such claims. In addition, any event
        that
        would jeopardize our proprietary rights or any claims of infringement by
        third
        parties could have a material adverse affect on our ability to market or
        sell
        our brands, profitably exploit our unique products or recoup our associated
        research and development costs.
  We
        have
        limited working capital and will need to raise additional capital in the
        future;
        there is an uncertainty as to our continuation as a going concern.
  Our
        capital needs in the future will depend upon factors such as market acceptance
        of our products and any other new products we launch, the success of our
        independent distributors and our production, marketing and sales costs. None
        of
        these factors can be predicted with certainty
  We
        have
        sustained substantial operating losses since our organization. We will need
        substantial additional debt or equity financing in the future. We currently
        have
        no legally binding commitments with any third parties to obtain additional
        equity or debt financing. We may not be able to obtain any additional financing
        on acceptable terms or at all. Our ability to obtain debt financing may be
        particularly unlikely because we have limited assets to use as collateral
        security for loans. As a result, we may not have adequate capital to implement
        future expansions, maintain our current levels of operation or to pursue
        strategic acquisitions. Our failure to obtain sufficient or any additional
        financing would likely result in an inability to market our products and
        maintain sufficient levels of inventory or the delay or abandonment of some
        or
        all of our development plans, any one of which would likely harm our business
        and the value of our common stock. There is uncertainty as to our continuation
        as a going concern.
  Certain
        of our products are closely identified with celebrities and our brand
        recognition is significantly affected by their success in their
        profession.
  Certain
        of our products, and products for which we have acquired distribution rights,
        adopt the name of a single personality or celebrity, or is associated with
        a
        single personality or celebrity, such as Willie Nelson, Paul Newman, Chef
        Roy
        Yamaguchi and Donald Trump. Therefore, any reduction of notoriety or any
        damage
        to the reputation of any such personality will correspondingly damage the
        associated product and could have a material adverse effect on the results
        of
        our operations.
  17
  Certain
        Factors Relating to Our Industry
  We
        compete in an industry that is brand-conscious, so brand name recognition
        and
        acceptance of our products are critical to our success.
  Our
        business is substantially dependent upon awareness and market acceptance
        of our
        products and brands by our targeted consumers, In addition, our business
        depends
        on acceptance by our independent distributors of our brands as beverage brands
        that have the potential to provide incremental sales growth rather than reduce
        distributors' existing beverage sales. Although we believe that we have been
        relatively successful towards establishing our brands as recognizable in
        both
        the alcoholic and non alcoholic beverage industry, it is too early in the
        product life cycle of these brands to determine whether our products and
        brands
        will achieve and maintain satisfactory levels of acceptance by independent
        distributors and retail consumers.
  Competition
        from traditional alcoholic and non-alcoholic beverage manufacturers may
        adversely affect our distribution relationships and may hinder development
        of
        our existing markets, as well as prevent us from expanding our
        markets.
  The
        beverage industry is highly competitive. We compete with other beverage
        companies, most of which have significantly more sales and significantly
        more
        resources, not only for consumer acceptance but also for shelf space in retail
        outlets and for marketing focus by our distributors, all of whom also distribute
        other beverage brands. Our products compete with all beverages, most of which
        are marketed by companies with greater financial resources than what we have.
        Some of these competitors are or will likely in the future, place severe
        pressure on our independent distributors not to carry competitive alternative
        brands such as ours. We also compete with regional beverage producers and
        "private label" suppliers. Some of our alcoholic competitors are Diageo,
        Pernod
        Ricard, Allied Domecq and Bacardi. Some of our direct competitors in the
        alternative beverage industry include Cadbury Schweppes (Snapple, Stewart,
        Nantucket Nectar, Mystic), Castle Brands, Thomas Kemper, Boylans and Hansens.
        Competitor consolidations, market place competition, particularly among branded
        beverage products, and competitive product and pricing pressures could impact
        our earnings, market share and volume growth. If, due to such pressure or
        other
        competitive phenomena, we are unable to sufficiently maintain or develop
        our
        distribution channels, or develop alternative distribution channels, we may
        be
        unable to achieve our financial targets. As a means of maintaining and expanding
        our distribution network, we intend to expand the market for our products,
        and
        introduce additional brands. However, we will require financing to do so.
        There
        can be no assurance that we will be able to secure additional financing or
        that
        other companies will not be more successful in this regard over the long
        term.
        Competition, particularly from companies with greater financial and marketing
        resources than those available to us, could have a material adverse effect
        on
        our existing markets, as well as our ability to expand the market for our
        products.
  We
        compete in an industry characterized by rapid changes in consumer preferences,
        so our ability to continue developing new products to satisfy our consumers'
        changing preferences will determine our long-term success.
  Our
        current market distribution and penetration is limited as compared with the
        potential market and so our initial views as to customer acceptance of a
        particular brand can be erroneous, and there can be no assurance that true
        market acceptance will ultimately be achieved. In addition, customer preferences
        are also affected by factors other than taste, such as the recent media focus
        on
        obesity in youth. If we do not adjust to respond to these and other changes
        in
        customer preferences, our sales may be adversely affected.
  A
        decline
        in the consumption of alcohol could adversely affect our business.
  There
        have been periods in American history during which alcohol consumption declined
        substantially. A decline in alcohol consumption could occur in the future
        due to
        a variety of factors including: (i) a general decline in economic conditions,
        (ii) increased concern about health consequences and concerns about drinking
        and
        driving, (iii) a trend toward other beverages such as juices and water, (iv)
        increased activity of anti-alcohol consumer groups, and (v) increase federal,
        state or foreign excise taxes. A decline in the consumption of alcohol would
        likely negatively affect our business.
  18
  We
        could
        be exposed to product liability claims for personal injury or possibly
        death.
  Although
        we have product liability insurance in amounts we believe are adequate, we
        cannot assure that the coverage will be sufficient to cover any or all product
        liability claims. To the extent our product liability coverage is insufficient;
        a product liability claim would likely have a material adverse affect upon
        our
        financial condition. In addition, any product liability claim successfully
        brought against us may materially damage the reputation of our products;
        thus
        adversely affecting our ability to continue to market and sell that or other
        products.
  Our
        business is subject to many regulations and noncompliance is
        costly.
  The
        production, marketing and sale of our alcoholic and non alcoholic beverages,
        including contents, labels, caps and containers, are subject to the rules
        and
        regulations of various federal, state and local health agencies. If a regulatory
        authority finds that a current or future product or production run is not
        in
        compliance with any of these regulations, we may be fined, or production
        may be
        stopped, thus adversely affecting our financial conditions and operations.
        Similarly, any adverse publicity associated with any noncompliance may damage
        our reputation and our ability to successfully market our products. Furthermore,
        rules and regulations are subject to change from time to time and while we
        monitor developments in this area, the fact that we have limited staff makes
        it
        difficult for us to keep up to date and we have no way of anticipating whether
        changes in these rules and regulations will impact our business adversely.
        Additional or revised regulatory requirements, whether regarding labeling,
        the
        environment, taxes or otherwise, could have a material adverse effect on
        our
        financial condition and results of operations.
  The
        current U.S. economic uncertainty and international conflicts, and terrorism
        events all or individually may have an adverse impact on our sales and earnings,
        and our shipping costs have increased.
  We
        cannot
        predict the impact of the current economic uncertainty in the United States,
        or
        the current international situation, on current and future consumer demand
        for
        and sales of our products. In addition, recent volatility in the global oil
        markets has resulted in rising fuel and freight prices, which many shipping
        companies are passing on to their customers. Our shipping costs have increased
        over the past several months, and we expect these costs may continue to
        increase. Due to the price sensitivity of our products, we do not anticipate
        that we will be able to pass these increased costs on to our
        customers.
  Certain
        Factors Related to Our Common Stock
  Because
        our Common Stock is considered a "penny stock," a shareholder may have
        difficulty selling shares in the secondary trading market.
  Our
        Common Stock is subject to certain rules and regulations relating to "penny
        stock" (generally defined as any equity security that has a price less than
        $5.00 per share, subject to certain exemptions). Broker-dealers who sell
        penny
        stocks are subject to certain "sales practice requirements" for sales in
        certain
        nonexempt transactions (i.e., sales to persons other than established customers
        and institutional "accredited investors"), including requiring delivery of
        a
        risk disclosure document relating to the penny stock market and monthly
        statements disclosing recent price information for the penny stocks held
        in the
        account, and certain other restrictions. For as long as our Common Stock
        is
        subject to the rules on penny stocks, the market liquidity for such securities
        could be significantly limited. This lack of liquidity may also make it more
        difficult for us to raise capital in the future through sales of equity in
        the
        public or private markets.
  19
  The
        price
        of our Common Stock may be volatile, and a shareholder's investment in our
        Common Stock could suffer a decline in value.
  There
        could be significant volatility in the volume and market price of our Common
        Stock, and this volatility may continue in the future. Our Common Stock is
        listed on the OTC Bulletin Board and there is a greater chance for market
        volatility for securities that trade on the OTC Bulletin Board as opposed
        to a
        national exchange or quotation system. This volatility may be caused by a
        variety of factors, including the lack of readily available quotations, the
        absence of consistent administrative supervision of "bid" and "ask" quotations
        and generally lower trading volume. In addition, factors such as quarterly
        variations in our operating results, changes in financial estimates by
        securities analysts or our failure to meet our or their projected financial
        and
        operating results, litigation involving us, general trends relating to the
        beverage industry, actions by governmental agencies, national economic and
        stock
        market considerations as well as other events and circumstances beyond our
        control could have a significant impact on the future market price of our
        Common
        Stock and the relative volatility of such market price.
  Item
        2.
        Property
  As
        a sub
        lessee we lease 2,739 square feet of office in Wilton, Connecticut under
        an
        operating sublease which will expire July 31, 2009, with minimum annual rent
        payments of approximately $50,000 through July 31, 2009. We may, at our option,
        terminate the lease effective July 31, 2007, subject to formal notification
        to
        the sublessor no later than July 31, 2006. We also lease 1100 square feet
        of
        office space in New York City, New York, with minimum annual rent payments
        of
        approximately $3,500 per month. This lease will expire on March 31, 2008.
        We are
        attempting to sublease all or a portion of our New York City office space.
        In
        addition we have a number of agreements with independent warehousing companies
        providing for the stocking, storage and shipping of a significant amount
        of our
        products at their various locations. We believe our leased premise and our
        independent warehouse facilities are suitable and adequate for our use and
        adequately covered by insurance.
  Item
        3.
        Legal Proceedings
  On
        January 18, 2006, the Company was sued by Global Wine Ventures, Ltd., an
        Australian company (affiliated with the company's Australian wine supplier)
        in
        the United States District Court for the Central District of California,
        Case
        No. CV06-8318. The Plaintiff seeks recovery of compensatory damages of $450,000,
        punitive damages unspecified in amount, recovery of costs and attorneys'
        fees
        based on allegations of nonpayment for goods. While the Company believes,
        based
        on its initial analysis that, some amount may be due to the Plaintiff, it
        believes it has counterclaims available which would substantially reduce
        the
        amount actually owed. The Company has moved to dismiss this action based
        on a
        choice of forum clause in the applicable contract with the plaintiff requiring
        any legal action to be initiated in Australia and has also asserted substantial
        defenses.
  On
        or
        about July 19, 2006, Manhattan Beer Distributor, LLC, a wholesale distributor
        of
        beverages in the state of New York initiated litigation in the Supreme Court
        of
        the State of New York in Bronx County (Index No. 17776-2006) against the
        Company. The Plaintiff has demanded payment of an aggregate of $86, 921.44
        in
        connection with certain amounts allegedly owed by Rheingold Brewing Company,
        Inc., allegedly assumed by the Company and certain amounts allegedly owed
        to the
        plaintiff by the Company itself with respect to beverage distribution services
        provided by the plaintiff in connection with Rheingold beer. This complaint
        was
        received by the Company's agent on July 31, 2006. The Company is evaluating
        the
        claims made by the plaintiff in this litigation.
  Item
        4.
  Submission
        of Matters to a Vote of Shareholders
  None
  20
  Item
        5.
        Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
        Purchasers of Equity Securities
  Our
        common stock was authorized to trade on June 2, 2005 on the over-the-counter
        market with quotations available on the OTC Electronic Bulletin Board under
        the
        symbol "DKAM" Trading commenced on June 3, 2005.
  The
        following table sets forth the range of high and low bid quotations of our
        common stock for the periods indicated. The information contained in the
        table
        was obtained from Bloomberg Financial Services. The prices represent
        inter-dealer quotations, which do not include retail markups, markdowns or
        commissions, and may not represent actual transactions.
 
 High
              
              LowYear
                  Ended April 30, 2005First
                  Quarter
              
              $
              0.00125
              
              $
              0.00125Second
                  Quarter
              
              $
              0.20
              
              $
              0.00125Third
                  Quarter
              
              $
              0.00125
              
              $
              0.00125Fourth
                Quarter
              
              $
              1.00
              
              $
              0.00125
 
 High
              
              LowYear
                  Ended April 30, 2006First
                  Quarter
              
              $
              1.55
              
              $
              1.17Second
                  Quarter
              
              $
              1.39
              
              $
              .70Third
                  Quarter
              
              $
              0.80
              
              $
              .35Fourth
                  Quarter
              
              $
              1.01
              
              $
              .45
 
 Security
        Holders
  At
        July
        31, 2006, there were 62,924,120 shares of our common stock outstanding, which
        were held of record by approximately 627 stockholders, not including persons
        or
        entities that hold the stock in nominee or "street" name through various
        brokerage firms.
  Dividends
  The
        payment of dividends, if any, is to be within the discretion of our Board
        of
        Directors. We presently intend to retain all earnings, if any, for use in
        our
        business operations and accordingly, the Board of Directors does not anticipate
        declaring any dividends in the near future.
  Dividends,
        if any, will be contingent upon our revenues and earnings, capital requirements
        and financial conditions.
  Equity
        Compensation Plan Information
  As
        of the
        date of this prospectus, we do not have any equity compensation
        plans.
  Unregistered
        Securities
  In
        January 2006 2006, we agreed to issue 897,398 shares of our common stock
        to MTA,
        an entity owned by Marvin Traub, a Director of the Company, in satisfaction
        of
        $403,329 of consulting fees owed to MTA. The shares were issued in March
        2006.
  21
  Between
        December 2005 and February 2006 we issued secured convertible notes aggregating
        $802,167 to evidence loans of $150,000 received from Ken Close, a significant
        shareholder, $552,167 from two unrelated third parties and $100,000 from
        Greenwich Beverage Group LLC (“Greenwich”) an entity controlled by Thomas
        Schwalm, a director of the Company. These demand notes bear interest at 12%
        per
        annum and require monthly interest payments only beginning January 1, 2006.
        The
        principal and unpaid accrued interest may be converted at any time into our
        common stock at $0.45 per share or pursuant to any private placement equal
        to or
        in excess of $5 million closed by the Company on or before December 31, 2006,
        at
        a price equal to twenty percent below the price at which we issue any such
        securities. In March 2006, the unrelated third parties converted the amounts
        owed under their notes aggregating $570,204, which included accrued interest
        of
        $18,037, into 1,267,119 shares of our common stock. At April 30, 2006, the
        principal outstanding on these notes aggregated $250,000; $150,000 from Mr.
        Close and $100,000 from Greenwich, plus interest of $10,717 in the aggregate.
        In
        connection with these notes, we also issued warrants to purchase 445,646
        shares
        of our common stock at an exercise price of $0.45 per share as follows: warrants
        for 83,333 shares to Mr. Close, warrants for 306,757 shares to the two unrelated
        third parties and warrants for 55,556 shares to Greenwich. The warrants are
        exercisable for a five year period commencing on the issue date of the notes.
        The warrants include cashless exercise provisions and anti-dilution
        protection.
  During
        fiscal 2006 we issued 300,000 shares of our common stock to various consultants,
        vendors and other individuals who provided services to the Company, in
        satisfaction of an aggregate of $135,000 owed to them.
  Between
        March 15 and May 9, 2005 we issued a series of senior convertible notes totaling
        $1,350,000, which resulted in net proceeds, after deductions for certain
        costs
        and fees, of $1,150,000. We also issued to the lenders, warrants to purchase
        1,350,000 shares of our common stock exercisable for a five year period for
        $0.45 per share. The notes bear interest at 10% per annum, with principal
        and
        interest payable in full one year from the date of issuance of the respective
        note. The note holders have discretionary conversion rights to convert the
        outstanding balance into restricted shares of our common stock, at a per
        share
        price equal to the lower of (1) $0.45 per share or (2) the per share price
        of a
        subsequent debt or equity financing of at least six million dollars. Both
        the
        notes and warrants have certain antidilution features. In addition, the warrants
        have a cashless exercise option. Amounts owed to these note holders are
        subordinate to amounts owed to secured creditors, and are stated to be senior
        to
        all other unsecured creditors. The notes are past due, but formal demand
        for
        payment has not been made. As of April 30, 2006, we owe $850,000 in principal
        and $93,808 in interest on these notes. In March, 2006, the largest holder
        of
        these notes elected to convert his $500,000 note plus accrued interest of
        $50,556 into 1,267,119 shares of our common stock.
  On
        September 22, 2005 the Company borrowed $100,000 from an unrelated individual,
        which loan accrues interest at a rate of 6% per annum, and is payable along
        with
        unpaid principal on June 21, 2006. In July 2006 we issued the note holder
        50,000
        restricted shares of our common stock as consideration for extending the
        note to
        August 22, 2006. At April 30, 2006 interest accrued on this loan was
        $3,616.
  In
        February 2006, the Company issued warrants to purchase 250,000 shares of
        the
        Company’s common stock at an exercise price of $0.56 per share. The warrants may
        be exercised at any time up tp February 2011.
  In
        March
        and April 2006, we received proceeds of $1,959,999 in consideration for
        3,266,665 restricted shares of our common stock at $.60 per share. The shares
        are to be issued in the second quarter of our April 30, 2007 fiscal year.
        In
        addition, we received proceeds of $150,000 in consideration for 250,000 shares
        of our common stock which was placed by a broker dealer who is entitled to
        receive a commission of 8 % on amounts raised. The commission has not been
        paid
        to date.
  On
        June
        16, 2006, we borrowed $50,000 from an investor which loan is repayable on
        July
        7, 2006. Interest under this loan is payable in 36,364 shares of our common
        stock. This loan was not repaid on the due date.
  On
        June
        23, 2006, we issued 150,000 shares of our common stock to an investor for
        a
        purchase price $0.60 per share.
  22
  166,667
        shares were issued in July 2006 as a donation to a charitable organization
        which
        is run by the owner of one of the Company’s vendors.
  50,000
        shares were issued in July 2006 as a consideration of a loan
        extension.
  On
        July
        28, 2006, we borrowed an aggregate $300,000 from two entities which are
        affiliated with one another and issued convertible promissory notes in evidence
        thereof. These notes are payable on January 27, 2007, and are convertible
        into
        shares of our common stock at $0.50 per share. In lieu of interest, we issued
        to
        the lenders warrants to purchase an aggregate of 300,000 shares of our common
        stock for $0.50 per share. These warrants are currently exercisable for a
        five-year period.
  On
        August
        3, 2006, we borrowed $400,000 from a lender and issued a convertible promissory
        note in like amount. This note is due and payable on February 2, 2007, bears
        interest at the rate of 10% per annum and is convertible into shares of our
        common stock at $0.60 per share. In connection with this loan, we issued
        to the
        lender 333,333 shares of our common stock and agreed to issue such additional
        shares as may be necessary to cause the value of the shares on the date of
        issue
        to equal not less than $200,000 on such date based on the average closing
        price
        of our common stock for the five trading days immediately preceding the date
        of
        issue.
  In
        August
        2006, in connection with a consulting agreement the Company issued1175,000
        shares of its common stock and warrants to purchase an additional 100,000
        shares
        at a price of $0.60 per share. The warrants may be exercised at any time
        up to
        five years from the date of the agreement. In addition, under the terms of
        the
        agreement the consultant is to receive warrants to purchase an additional
        100,000 shares for each contract year with an exercise price to be determined
        by
        the Company’s board of directors. The agreement is for three years with an
        automatic two year extension.
  Item
        6.
        Management's Discussion and Analysis of Financial Condition and Results of
        Operations
  The
        following discussion and analysis of the consolidated financial condition
        and
        results of operations should be read with our consolidated financial statements
        and related notes appearing elsewhere in this prospectus. This discussion
        and
        analysis contains forward-looking statements that involve risks, uncertainties
        and assumptions. The actual results may differ materially from those anticipated
        in these forward-looking statements as a result of certain factors, including,
        but not limited to, those set forth under "Risk Factors" and elsewhere in
        this
        prospectus.
  Overview
  Results
        of Operations
  Year
        ended April 30, 2006 compared to year ended April 30, 2005
  Net
        sales. Net sales were $1,607,606 in fiscal 2006 a decrease of $463,960 or
        22%
        compared to net sales of $2,071,566 in fiscal 2005. Total case sales of our
        alcoholic brands, (9 liter equivalent case) were 12,554 in fiscal 2006 compared
        to18,508 in fiscal 2005, and our non-alcoholic brand case sales increased
        to
        62,378 cases in fiscal 2006 from 37,084 in fiscal 2005. Net sales of our
        alcoholic brands fell to approximately $1,100,000 in fiscal 2006 from $1,800,000
        in fiscal 2005. Sales of existing alcoholic brands fell due to inventory
        shortfalls as a result of insufficient working capital. In addition there
        was an
        interruption in our Norman's Wines business due to the bankruptcy of the
        Norman's Wines supplier, and a subsequent change in control resulting in
        an
        inability to source the product. The introduction of Damiana Liqueur in fiscal
        2006 as well as the expansion of our fine wines business had a positive impact
        on sales in fiscal 2006. Net sales of our non-alcoholic products increased
        to
        approximately $500,000 in fiscal 2006 as compared to $200,000 in fiscal 2005.
        The increase from fiscal 2005 can be attributed to increased sales of Newman's
        Own Lightly Sparkling Fruit Juices.
  Gross
        Profit. Gross profit was $452,772 in fiscal 2006 (28.2% of net sales), a
        decrease of $62,601 compared to gross profit of $515,373 in fiscal 2005(24.8%
        of
        net sales). The dollar decrease in gross-profit was primarily attributable
        to
        the decrease in volume of existing alcoholic brands, specifically Old Whiskey
        River ($30,000 decrease in gross profit), Y Sake ($60,000 decrease in gross
        profit), Cohete Rum ($45,000 decrease in gross profit) and Normans Wines
        ($95,000 decrease in gross profit). The percentage increase in gross-profit
        in
        fiscal 2006 from 2005 was primarily attributable to the impact of promotional
        discounts associated with the introduction of new products to the marketplace
        in
        fiscal 2005 which had a great affect on gross-profit.
  Selling,
        General and Administrative Expenses. Selling, general and administrative
        expenses were $4,766,120 in fiscal 2006, an increase of $244,718 compared
        to
        expenses of $4,521,402 in 2005. During the 2006 fiscal year a number of positive
        and negative variances have occurred. Salesman's salaries, draws, commissions
        and expenses were substantially lower than fiscal 2005 due to the decrease
        in
        sales volume of our products. Other selling and marketing expenses also
        decreased in fiscal 2006 as compared to 2005 . Accounting fees increased
        substantially in fiscal 2006 as compared to fiscal 2005 due to our status
        as a
        public company beginning in fiscal 2005. Amortization expense relating to
        loan
        costs incurred increased by approximately $190,000 in fiscal 2006. In addition,
        in fiscal 2006 we incurred amortization expense on our Rheingold intangible
        assets of approximately $41,000. During 2005 we incurred one-time expenses
        approximating $379,000, which related to the successful completion of the
        reverse acquisition and payments to consultants.
  23
  Other
        Expenses (net). Other expenses (net) were $1,532,023 in fiscal 2006, an increase
        of $1,210,354 from net expenses of $321,669 in fiscal 2005. Interest expense
        increased by approximately $500,000 in fiscal 2006 as compared to fiscal
        2005. A
        large part of this increase, approximately $491,000 was related to discounts
        assigned to detachable warrants and beneficial conversion features recognized
        on
        convertible debt issuances. The discounts are a non-cash charge. We also
        incurred additional interest expense due to our increased debt financing.
        Interest expense for fiscal 2005 included $157,000 paid in our common stock
        in
        order to secure forbearance from a lender with respect to a demand loan,
        which
        we were unable to pay when it was called. As of April 30, 2006, we recognized
        an
        impairment loss of of approximately $804,000 on our Rheingold intangible
        assets
        which were acquired in October 2005. We concluded that the Rheingold products
        will require reformulation and additional investment before we can bring
        it to
        market.In fiscal 2006 other expenses reflect a gain of $180,000 from the
        settlement with a former supplier.
  Income
        Taxes: We have incurred substantial net losses from our inception and as
        a
        result, have not incurred any income tax liabilities. Our federal net operating
        loss carry forward is approximately $11,300,000, which we can use to reduce
        taxable earnings in the future. No income tax benefits were recognized in
        fiscal
        2006 and 2005 as we have provided valuation reserves against the full amount
        of
        the future carry forward loss tax benefit. We will evaluate the reserve every
        reporting period and recognize the tax benefits when realization is reasonably
        assured.
  Impact
        of
        Inflation
  Inflation
        has not had a material effect on our results of operations.
  Financial
        Liquidity and Capital Resources
  We
        have
        experienced net losses and negative cash flows from operations and investing
        activities for the fiscal years 2005 and 2006. Net losses for fiscal 2005
        and
        2006 aggregated $10,173,069, but cash consumed from operating and investing
        activities in both years aggregated $5,154,918. In fiscal 2005 and to a lesser
        extent in fiscal 2006, we were able to reduce our cash requirements in large
        part from nonpayment of certain payroll and consulting fees owed to our
        management, our employees and certain other vendors and creditors. A portion
        of
        these liabilities, were satisfied by our issuing restricted shares of our
        common
        stock. We have funded our operations to date by bank borrowings, loans from
        shareholders and investors, some of which are convertible into our common
        stock,
        and the proceeds from the sale of our common stock. In order for us to continue
        and grow our business, we will need additional financing which may take the
        form
        of equity or debt. There can be no assurance we will be able to secure the
        financing we require, and if we are unable to secure the financing we need,
        we
        may be unable to continue our operations. .
  We
        have
        significant amounts of debt and other outstanding obligations, some of which
        are
        outlined below.
  (1)
        Between March 15 and May 9, 2005 we issued a series of senior convertible
        notes
        totaling $1,350,000, which resulted in net proceeds, after deductions for
        certain costs and fees, of $1,150,000. We also issued to the lenders, warrants
        to purchase 1,350,000 shares of our common stock exercisable for a five year
        period for $0.45 per share. The notes bear interest at 10% per annum, with
        principal and interest payable in full one year from the date of issuance
        of the
        respective note. The note holders have discretionary conversion rights to
        convert the outstanding balance into restricted shares of our common stock,
        at a
        per share price equal to the lower of (1) $0.45 per share or (2) the per
        share
        price of a subsequent debt or equity financing of at least six million dollars.
        Both the notes and warrants have certain antidilution features. In addition,
        the
        warrants have a cashless exercise option. Included in this financing was
        a
        $100,000 note and warrants to purchase 100,000 shares of our common stock
        issued
        to Greenwich Beverage Group, a company owned by Mr. Thomas Schwalm, one of
        our
        Directors. Amounts owed to these note holders are subordinate to amounts
        owed to
        secured creditors, and are stated to be senior to all other unsecured creditors.
        The notes are past due, but formal demand for payment has not been made.
        As of
        April 30, 2006, we owe $850,000 in principal and $93,808 in interest on these
        notes. In March, 2006, the largest holder of these notes elected to convert
        his
        $500,000 note plus accrued interest of $50,556 into 1,267,119 shares of our
        common stock.
  24
  (2)
        In
        October 2004, we modified secured borrowing agreements with Nexcomm
        International Beverages, LLC ("Nexcomm"), a company controlled by Ken Close
        a
        person who beneficially owns 13.6% of our outstanding common stock. On the
        modification date, we issued a note to Nexcomm of $155,975 (the "Nexcomm
        Note"),
        which represented unpaid principal and interest on that date on the original
        notes, which were issued during fiscal 2003 and 2004, each in the amount
        of
        $200,000 (an aggregate of $400,000) to evidence secured loans outstanding
        to
        NexComm on the date. The modified note was due on May 1, 2005, but was
        informally extended by Nexcomm with no stipulated repayment date. The note
        bears
        interest at 11%. The note is secured by the assets of the Company, subordinate
        to those secured interests of our new lender (see paragraph 12, of this
        subsection). As of April 30, 2006 the unpaid balance, including interest,
        aggregated $104,035.
  (3)
        In
        October 2004, we modified unsecured borrowing agreements with Ken Close.
        On the
        modification date the Company issued two notes, to Mr. Close aggregating
        $396,727, which represented unpaid principal and interest on the original
        notes
        on that date, which were originally issued in fiscal 2004, aggregating $500,000
        to evidence unsecured notes outstanding on the date. The notes bear interest
        at
        10% per annum and required installment payments representing principal and
        interest at various dates through September 1, 2005. The notes were informally
        extended by Mr. Close with no stipulated repayment dates. As of April 30,
        2005,
        we satisfied $100,000 of these notes by issuing 222,222 restricted shares
        of our
        common stock. As of April 30, 2006, the unpaid balance, including interest,
        on
        these notes aggregated $338,304.
  (4)
        Between December 2005 and February 2006 we issued convertible notes aggregating
        $802,167 to evidence loans of $150,000 received from Ken Close, $552,167
        from
        two unrelated third parties and $100,000 from Greenwich Beverage Group LLC
        (“Greenwich”) an entity controlled by Thomas Schwalm, a director of the Company.
        These demand notes bear interest at 12% per annum and require monthly interest
        payments only beginning January 1, 2006. The principal and unpaid accrued
        interest may be converted at any time into our common stock at $0.45 per
        share
        or pursuant to any private placement equal to or in excess of $5 million
        closed
        by the Company on or before December 31, 2006, at a price equal to twenty
        percent below the price at which we issue any such securities. These notes
        are
        secured on the same basis as the Nexcomm Note. In March 2006, the unrelated
        third parties converted the amounts owed under their notes aggregating $570,204,
        which included accrued interest of $18,037, into 1,267,119 shares of our
        common
        stock. At April 30, 2006, principal outstanding on these notes aggregated
        $250,000, $150,000 from Mr. Close and $100,000 from Greenwich, plus interest
        of
        $10,717 in the aggregate. In connection with these notes, we also issued
        warrants to purchase 445,646 shares of our common stock at an exercise price
        of
        $0.45 per share as follows: warrants for 83,333 shares to Mr. Close, warrants
        for 306,757 shares to the two unrelated third parties and warrants for 55,556
        shares to Greenwich. The warrants are exercisable for a five year period
        from
        the date of the notes. The warrants include cashless exercise provisions
        and
        anti-dilution protection to the holders.
  (5)
        In
        May 2004, the Company obtained a line of credit with a financial institution
        for
        aggregate borrowings of up to $200,000, with interest at 1.5% above the bank's
        prime rate. The credit line technically expired on August 1, 2005. However,
        the
        line was informally in effect, under the previous terms through May 2006
        when it
        was formally extended through June 1, 2007. At the time of the May 2006
        extension, the line was reduced to $175,000 and the interest rate adjusted
        to
        4.50% above the bank's prime rate. The Company's chief financial officer,
        Fabio
        Berkowitz, has guaranteed the payment of our obligations under this line
        of
        credit.
  25
  (6)
        In
        July 2004, a member of our board of directors, Frederick Schulman, extended
        an
        unsecured credit facility to the Company in an amount of up to $291,000.
        The
        loan bears interest at 14% per annum without any specified repayment date.
        We
        incurred accrued interest on this loan of $48,072 in fiscal 2005 and $34,
        011 in
        fiscal 2006. In order to provide the total borrowings made to us, Mr. Shulman
        personally borrowed $172,230 from third parties. These third parties
        subsequently demanded repayment from Mr. Shulman of an aggregate $157,500
        and
        Mr. Shulman, in turn demanded that we repay him a like amount. Because we
        were
        unable to repay in cash, we issued 350,000 restricted shares of our common
        stock
        (valued at $0.45 per share) to the third parties, in consideration for Mr.
        Schulman's lenders for forbearance with respect to this debt. We repaid
        principal of $106,000 and interest in fiscal 2006 in connection with this
        loan.
        As of April 30, 2006, we owe $232,970, inclusive of interest, on this
        debt.
  (7)
        On
        June 15, 2005, we borrowed $100,000 from one of our shareholders and issued
        a
        convertible promissory note which requires repayment of the principal by June
        15, 2008. Interest accrues at 1% above the prime rate and is payable on a
        semi-annual basis. At the option of the holder, the unpaid principal portion
        of
        this note is convertible into our common stock at a conversion price equal
        to
        the greater of (1) 20% below the average daily closing price for each of
        the
        trading days during the ninety day period immediately preceding the date
        the
        shareholder provides notice to the Company the intent to convert, or (2)
        $1.50
        per share. At April 30, 2006, interest of $10,172 is accrued on this
        note.
  (8)
        On
        September 22, 2005 the Company borrowed $100,000 from an unrelated individual,
        which accrues interest at a rate of 6% per annum, and is payable along with
        unpaid principal on June 21, 2006. In July 2006 we issued the note holder
        50,000
        restricted shares of our common stock as consideration for extending the
        note to
        August 22, 2006. At April 30, 2006 interest accrued on this loan is
        $3,616.
  (9)
        In
        August 2005, the Company borrowed $100,000 from a shareholder. Although this
        loan does not have written documentation the Company has an understanding
        with
        the lender that the loan would accrue interest at 12% per annum and would
        be
        repaid from the proceeds of the Company's next financing. At April 30, 2006
        interest of $8,538 is accrued on this loan.
  (10)
        We
        have an informal understanding with Mr. Shep Gordon pursuant to which he
        has the
        option of converting all or a portion of the consulting fees which we owe
        to him
        into shares of our Common Stock at a conversion price to be agreed upon.
        The
        consulting agreement which we entered into in December 2002 with Mr. Gordon
        provides for $600,000 in fees to Mr. Gordon payable in five fixed increments
        over a period of 78 months. As of April 30, 2006 the aggregate amount owed
        to
        Mr. Gordon was $99,996.
  (11)
        In
        fiscal 2003 we entered into a consulting agreement with a company, Marvin
        Traub
& Associates ("MTA"), owned 100% by Marvin Traub, a member of the Board of
        Directors. Under the agreement, MTA is being compensated at the rate of $100,000
        per annum. In fiscal 2006, compensation to MTA aggregated $150,000 due to
        additional work performed. In January 2006, MTA converted unpaid consulting
        fees
        aggregating $403,329 into 896,296 shares of our restricted common stock.
        As of
        April 30, 2006, we were indebted to MTA in the amount of $24,999. This
        consulting agreement is still in force for fiscal 2007.
  (12)
        In
        June 2006, we entered into a $10 million, three-year, asset based revolving
        credit facility with a financial institution to be used for working capital
        purposes. Under this line, we may borrow 85% of eligible accounts receivable
        and
        30% of eligible inventory, as defined under the agreement. Interest on the
        line
        will accrue at 1.5% above the prime rate. The facility is secured by a first
        security interest in the assets of the Company. Also in June 2006, the Company
        entered into a purchase order financing facility with another financial
        institution. The amount we are able to borrow under these facilities will
        depend
        on our outstanding eligible accounts receivable, inventory and eligible purchase
        orders, respectively. On July 31, 2006, $122,220 and $97,000 was outstanding
        on
        our revolving credit and purchase order facilities, respectively.
  26
  (13)
        The
        Company and Trump Marks LLC executed a long-term license agreement as of
        November 2005 pursuant to which the Company has the right, on a worldwide
        basis
        to produce, market and sell superior quality vodka under the name "Trump
        Vodka".
        The license agreement provides for royalties which we anticipate will
        approximate 50% of the net profits generated from this product. The agreement
        also provides for certain minimum royalty payments, which if not paid, could
        result in termination of the license.
  (14)
        In
        March and April 2006, we received proceeds of $1,959,999 in consideration
        for
        3,266,665 restricted shares of our common stock at $.60 per share. As of
        July
        31, 2006, 1,950,000 shares have been issued with the balance of the shares
        to be
        issued in the second quarter of our April 30, 2007 fiscal year. In addition,
        we
        received proceeds of $150,000 in consideration for 250,000 shares of our
        common
        stock which was placed by a broker dealer who is entitled to receive a
        commission of 8 % on amounts raised. The commission has not been paid to
        date.
  (15)
        On
        June 16, 2006, we borrowed $50,000 from an investor which loan is repayable
        on
        July 7, 2006. Interest under this loan is payable in 36,364 shares of our
        common
        stock. This loan was not repaid on the due date.
  (16)
        On
        July 27, 2006, the Company borrowed 153,111.80 from Ken Close, a significant
        shareholder of the Company, which is not documented and is payable on
        demand.
  (17)
        On
        July 28, 2006, we borrowed an aggregate $300,000 from two entities which
        are
        affiliated with one another and issued convertible promissory notes in evidence
        thereof. These notes are payable on January 27, 2007, and are convertible
        into
        shares of our common stock at $0.50 per share. In lieu of interest, we issued
        to
        the lenders warrants to purchase an aggregate of 300,000 shares of our common
        stock for $0.50 per share. These warrants are currently exercisable for a
        five-year period.
  (18)
        On
        August 3, 2006, we borrowed $400,000 from a lender and issued a convertible
        promissory note in like amount. This note is due and payable on February
        2,
        2007, bears interest at the rate of 10% per annum and is convertible into
        shares
        of our common stock at $0.60 per share. In connection with this loan, we
        issued
        to the lender 333,333 shares of our common stock and agreed to issue such
        additional shares as may be necessary to cause the value of the shares on
        the
        date of issue to equal not less than $200,000 on such date based on the average
        closing price of our common stock for the five trading days immediately
        preceding the date of issue.
  We
        require additional working capital to continue operating as a going concern
        and
        to expand our business. We anticipate that increased sales revenues will
        help to
        some extent, but we will need to obtain funds from equity or debt offerings,
        and/or from a new or expanded credit facility. In the event we are not able
        to
        increase our working capital, we will not be able to achieve all or part
        of our
        plan, and our ability to attain profitable operations, generate positive
        cash
        flows from operating and investing activities and materially expand the business
        in fiscal 2007 will be materially adversely affected.
  Off
        Balance Sheet Arrangements
  Not
        applicable.
  Critical
        Accounting Policies
  Our
        significant accounting policies are more fully described in Note 2 to the
        audited financial statements. The preparation of financial statements in
        conformity with accounting principles generally accepted in the United States
        of
        America requires management to make estimates and assumptions that affect
        the
        reported amounts of assets, liabilities, revenues and expenses, and the related
        disclosures of contingent assets and liabilities. Actual results could differ
        from those estimates under different assumptions or conditions. We believe
        that
        the following critical accounting policy is subject to estimates and judgments
        used in the preparation of the financial statements:
  27
  Revenue
        recognition. The Company recognizes revenues when title passes to the customer,
        which is generally when products are shipped.
  The
        Company recognizes revenue dilution from items such as product returns,
        inventory, credits, discounts, and other allowances in the period that such
        amounts are first expected to occur. The Company has not realized material
        amounts of revenue dilution in the periods covered by this report. In this
        regard, the Company does not offer its clients the opportunity to return
        products for any reason other than manufacturing defects. No material amounts
        of
        product returns had occurred during this fiscal year. In addition, the Company
        does not offer incentives to its customers to either acquire more products
        or
        maintain higher inventory levels of products than they would in ordinary
        course
        of business. The Company assesses levels of inventory maintained by its
        customers thorough telephone communications with its customers and believes
        that
        most maintain low levels of inventory of its products. Furthermore, it is
        the
        Company’s policy to accrue for material post shipment obligations and customer
        incentives in the period the related revenue is recognized. As of April 30,
        2006, there were no such amounts to accrue.
  Long
        Lived Assets. Long-lived assets, including intangible assets, property,
        furniture and equipment are reviewed for impairment when events or circumstances
        indicate that the carrying value may not be recoverable based on certain
        judgments and estimates. These judgments and estimates include the determination
        of an event indicating impairment; the future undiscounted cash flows to
        be
        generated by the asset, including the estimated life of the asset and likelihood
        of alternative courses of action; and risks associated with those cash flows.
        An
        impairment charge is recorded equal to the difference between the carrying
        amount of the asset and its fair value.
  Useful
        lives of long-lived assets are based on management's estimates of the periods
        that the assets will be productively utilized in the revenue-generation process.
        Factors that affect the determination of lives include prior experience with
        similar assets and product life expectations and management's estimate of
        the
        period that the assets will generate revenues.
  Quantitative
        and Qualitative Disclosure about Market Risk
  We
        do not
        hold instruments that are sensitive to changes in interest rates, foreign
        currency exchange rates or commodity prices. Therefore, we believe that we
        are
        not materially exposed to market risks resulting from fluctuations from such
        rates or prices.
  Item
        7.
        Financial Statements
  Financial
        Statements are listed in the Index to Financial Statements and filed and
        included elsewhere herein as a part of this Annual Report on Form
        10-KSB.
  Item
        8.
        Changes In and Disagreements With Accountants On Accounting and Financial
        Disclosure
  None
  Item
        8A.
        Controls and Procedures
  We
          maintain disclosure controls and procedures designed to ensure that information
          required to be disclosed in our filings under the Securities Exchange Act
          of
          1934 is recorded, processed, summarized and reported within the time periods
          specified in the Securities and Exchange Commission's rules and forms.
          Our Chief
          Executive Officer and Chief Financial Officer have evaluated our disclosure
          controls and procedures as of the end of the period covered by this Report
          and
          have determined that such disclosure controls and procedures are effective.
          Our
          restatement to the financial statements for the year ended April 30, 2006
          did
          not affect managements original conclusion concerning the effectiveness
          of the
          Company's controls and procedures.
  There
        have been no changes in our internal control over financial reporting identified
        in connection with the evaluation that occurred during the last fiscal quarter
        of our 2006 fiscal year that has materially affected, or is likely to reasonably
        affect, our internal control over financial reprting.
  Item
        8B.
        Other Information
  In
        January 2006, we agreed to issue 897,398 shares of our common stock to MTA,
        an
        entity owned by Marvin Traub, a Director of the Company, in satisfaction
        of
        $403,329 of consulting fees owed to MTA. The shares were issued in March
        2006.
  Between
        December 2005 and February 2006 we issued convertible notes aggregating $802,167
        to evidence loans of $150,000 received from Ken Close, $552,167 from two
        unrelated third parties, and $100,000 from Greenwich Beverage Group LLC
        (“Greenwich”) an entity controlled by Thomas Schwalm, a director of the Company.
        These demand notes bear interest at 12% per annum and require monthly interest
        payments only beginning January 1, 2006. The principal and unpaid accrued
        interest may be converted at any time into our common stock at $0.45 per
        share
        or pursuant to any private placement equal to or in excess of $5 million
        closed
        by the Company on or before December 31, 2006, at a price equal to twenty
        percent below the price at which we issue any such securities. These notes
        are
        secured on the same basis as the Nexcomm Note. In March 2006, the unrelated
        third parties converted the amounts owed under their notes aggregating $570,204,
        which included accrued interest of $18,037, into 1,267,119 shares of our
        common
        stock. At April 30, 2006, principal outstanding on these notes aggregated
        $250,000, $150,000 from Mr. Close and $100,000 from Greenwich, plus interest
        of
        $10,717 in the aggregate. In connection with these notes, we also issued
        warrants to purchase 445,646 shares of our common stock at an exercise price
        of
        $0.45 per share as follows: warrants for 83,333 shares to Mr. Close, warrants
        for 306,757 shares to the two unrelated parties and warrants for 55,556 shares
        to Greenwich. The warrants are exercisable for a five year period from the
        date
        of the notes. The warrants include cashless exercise provisions and
        anti-dilution protection to the holders.
  28
  During
        fiscal 2006 we issued 300,000 shares of our common stock to various consultants,
        vendors and other individuals who provided services to the Company, in
        satisfaction of an aggregate of $135,000 owed to them.
  In
        March
        and April 2006, we received proceeds of $1,959,999 in consideration for
        3,266,665 restricted shares of our common stock at $.60 per share. The shares
        are to be issued in the second quarter of our April 30, 2007 fiscal year.
        In
        addition, we received proceeds of $150,000 in consideration for 250,000 shares
        of our common stock which was placed by a broker dealer who is entitled to
        receive a commission of 8 % on amounts raised. The commission has not been
        paid
        to date.
  On
        June
        23, 2006, we issued 150,000 shares of our common stock to an investor for
        a
        purchase price $0.60 per share.
  On
        July
        28, 2006, we borrowed an aggregate $300,000 from two entities which are
        affiliated with one another and issued convertible promissory notes in evidence
        thereof. These notes are payable on January 27, 2007, and are convertible
        into
        shares of our common stock at $0.50 per share. In lieu of interest, we issued
        to
        the lenders warrants to purchase an aggregate of 300,000 shares of our common
        stock for $0.50 per share. These warrants are currently exercisable for a
        five-year period.
  On
        June
        16, 2006, we borrowed $50,000 from an investor which loan is repayable on
        July
        7, 2006. Interest under this loan is payable in 36,364 shares of our common
        stock. This loan was not repaid on the due date.
  On
        August
        3, 2006, we borrowed $400,000 from a lender and issued a convertible promissory
        note in like amount. This note is due and payable on February 2, 2007, bears
        interest at the rate of 10% per annum and is convertible into shares of our
        common stock at $0.60 per share. In connection with this loan, we issued
        to the
        lender 333,333 shares of our common stock and agreed to issue such additional
        shares as may be necessary to cause the value of the shares on the date of
        issue
        to equal not less than $200,000 on such date based on the average closing
        price
        of our common stock for the five trading days immediately preceding the date
        of
        issue.
  Between
        March 15 and May 9, 2005 we issued a series of senior convertible notes totaling
        $1,350,000, which resulted in net proceeds, after deductions for certain
        costs
        and fees, of $1,150,000. We also issued to the lenders, warrants to purchase
        1,350,000 shares of our common stock exercisable for a five year period for
        $0.45 per share. The notes bear interest at 10% per annum, with principal
        and
        interest payable in full one year from the date of issuance of the respective
        note. The note holders have discretionary conversion rights to convert the
        outstanding balance into restricted shares of our common stock, at a per
        share
        price equal to the lower of (1) $0.45 per share or (2) the per share price
        of a
        subsequent debt or equity financing of at least six million dollars. Both
        the
        notes and warrants have certain antidilution features. In addition, the warrants
        have a cashless exercise option. Amounts owed to these note holders are
        subordinate to amounts owed to secured creditors, and are stated to be senior
        to
        all other unsecured creditors. The notes are past due, but formal demand
        for
        payment has not been made. As of April 30, 2005, we owe $850,000 in principal
        and $93,808 in interest on these notes. In March, 2006, the largest holder
        of
        these notes elected to convert his $500,000 note plus accrued interest of
        $50,556 into 1,267,119 shares of our common stock.
  29
  On
        September 22, 2005 the Company borrowed $100,000 from an unrelated individual,
        which accrues interest at a rate of 6% per annum, and is payable along with
        unpaid principal on June 21, 2006. In July 2006 we issued the note holder
        50,000
        restricted shares of our common stock as consideration for extending the
        note to
        August 22, 2006. At April 30, 2006 interest accrued on this loan is
        $3,616.
  Item
        9.
        Directors, Executive Officers and Control Persons; Compliance with Section
        16(a)
        of the Exchange Act
 
 Name
              
              Age
              
              Positions
                  and OfficesJ.
                  Patrick Kenny
              
              50
              
              President
                  and Chief Executive OfficerBruce
                  Klein
              
              50
              
              Chairman
                  of the Board of DirectorsJason
                  Lazo
              
              40
              
              Chief
                  Operating OfficerFabio
                  Berkowicz
              
              56
              
              Chief
                  Financial OfficerMarvin
                  Traub
              
              81
              
              Member,
                  Board of DirectorsThomas
                  Schwalm
              
              61
              
              Member,
                  Board of DirectorsFredrick
                  Schulman
              
              53
              
              Member,
                  Board of Directors
  J.
        Patrick Kenny has served as the Chairman and Chief Executive Officer of DA
        since
        it was founded in September 2002, and has been our President and Chief Executive
        Officer, and a member of our Board of Directors, since March, 2005. He is
        a
        former Senior Vice President and General Manager of Joseph E. Seagram &
Sons, for which he held a variety of senior management positions over 22
        years,
        with increasing levels of responsibility in Seagram's wine, wine cooler,
        alcoholic and non-alcoholic beverage divisions.
  Mr.
        Kenny
        managed Seagram's worldwide carbonated soft drink operations from 1992 through
        March 2000. He held the title of Senior Vice President and General Manager
        when
        he left Seagram in March 2000, prior to its sale to Vivendi Universal. In
        April,
        2000, he co-founded Sweet16 Intermedia, Inc., a trademark licensing and media
        company which was sold to TEENTV Inc., a media company for chain retailers
        and
        mall properties. He has also acted as adviser to several Fortune 500 beverage
        marketing companies, and has participated in several beverage industry
        transactions. Prior to joining Seagram, Mr. Kenny was employed in a range
        of
        sales and sales management positions with Scott Paper Co. and then Coca Cola's
        Wine Spectrum. Mr. Kenny initially attended West Point (U.S. Military Academy),
        until an athletic injury required lengthy treatment. He later received a
        B.A. at
        Georgetown University, and an M.A. at St. Johns University in New
        York.
  Bruce
        K.
        Klein has served as the Vice Chairman of the Board of DA since it was founded
        in
        September 2002 and has been our Chairman of the Board since March, 2005.
        Since
        February, 1999, he has served as the Managing Partner of Victory Partners
        LLC, a
        company created to fund private businesses in their early stages. In the
        last
        five years, Victory has funded six businesses in technology, vitamins and
        internet services areas, of which three have became public companies and
        three
        remain private. From 1992 to 1997, Mr. Klein was a registered representative
        of
        the Equitable companies, responsible for sales and services to high income
        clients, acting as investment advisor and estate planner to an exclusive
        client
        base. >From 1986 to 1991, Mr. Klein served as President of Transatlantic
        Exports Corp., where his duties included purchasing and exporting of finished
        and contract goods throughout Europe and Africa. From 1980 through 1991,
        Mr.
        Klein owned several retail businesses in lumber, hardware home centers and
        decorating. He received a B.S. in Finance and an M.B.A in Marketing from
        Fairleigh Dickinson University.
  30


Jason
        Lazo has served as our Chief Operating Officer since March, 2005 and the
        Chief
        Operating Officer of DA since May, 2003. From December, 1997 to May, 2003,
        he
        worked for Joseph E. Seagram & Sons as Director of Finance, during which he
        served in the Mixers Group of Seagram working with Mr. Kenny. From January,
        1990
        to December, 1997, Mr. Lazo worked at Kraft Foods as Manager of Business
        Analysis, with responsibility for the Capri Sun and Kool-Aid Koolburst, and
        Ready to Drink Country Time & Crystal Lite brands. He has also worked as a
        Kraft Foods Plant Controller, managing the start-up of Capri Sun and Lender's
        Bagels. He has worked in logistics and procurement for Kraft Foods central
        manufacturing organization and in corporate finance for Entenmann's Bakeries,
        Inc. He received a B.S. in Finance and an M.S. in Accounting from Long Island
        University.
  Marvin
        Traub was an initial investor with Mr. Kenny in Maxmillian Partners, LLC.
        He
        joined our Board of Directors in March, 2005. From 1978 to 1991, he served
        as
        CEO and Chairman of Bloomingdales. His background is in marketing, retail,
        home
        furnishings and apparel. Mr. Traub serves as President of his own marketing
        and
        consulting firm, Marvin Traub Associates ("MTA") which he founded in 1992.
        MTA
        currently has clients in 14 countries and an outstanding team of 18 consultants,
        all former principals in the retail and consumer goods sectors. Prior to
        that,
        Mr. Traub served as Chairman of Financo Global Consulting, the consulting
        arm of
        Financo, Inc., where he was Senior Advisor.
  Mr.
        Traub
        is the author of "Like No Other Store..." a combination autobiography and
        history of Bloomingdale's and American retailing. It was first published
        in 1993
        by Random House and has since gone through three printings. Mr. Traub's
        consulting clients include American Express, Ralph Lauren, Jones New York,
        Saks
        Fifth Avenue, Federated Department Stores, Nautica Europe, Lanvin-France,
        Coin-Italy, Men's Health, Yue Sai Kan-China, Aishti-Lebonon, Quartier
        206-Berlin, The Mercury Group-Moscow, Al Tayer Group-Dubai and AOL Time Warner
        Center at Columbus Circle in New York. In 2005, in partnership with Mohan
        Murjani, Mr. Traub created Murjani Traub India Ltd., a joint venture aimed
        at
        bringing global brands to India, with offices in New York and
        Mumbai.
  Thomas
        H.
        Schwalm was an initial investor with Mr. Kenny in Maxmillian Partners. He
        joined
        our Board of Directors in March, 2005. He is a 25 year veteran of the beverage
        industry. In 1995, he co-founded the South Beach Beverage Company, known
        as SoBe
        beverage, which was acquired by PepsiCo, Inc. in 2001. From 1995 to January
        2001, he served as managing member of SoBe Beverage. Mr. Schwalm's career
        includes various managerial positions with the Joseph Schlitz Brewing Company
        from 1968 to1982 and as Group Marketing Director for the Stroh Brewing Company
        from 1982 to1984, where he managed a $100 million marketing budget and
        introduced Stroh nationally in 1983. From 1985 to1992, he was Vice President
        of
        Sales and Marketing for Dribeck Importers, the US importer for Becks Beer.
        In
        1992 Mr. Schwalm became President of Barton Beers, in Chicago. Barton Beers
        imported and marketed the Modelo brands - Corona, Corona Light, Pacifico,
        Negro
        Modelo and Modelo Especiale. Barton Beers also imported Tsingtao from China,
        Double Diamond from England, St. Pauli Girl from Germany, Peroni from Italy
        and
        Point Beer from the Steven Point Brewing Company. Since January, 2002, Mr.
        Schwalm has served as the Chief Executive Officer and President of the Thousand
        Islands Country Club, an exclusive golfing resort, and The Preserve, a luxury
        residential development, both located in upstate NY. Mr. Schwalm graduated
        in
        1968 from the University of Wisconsin.
  Fredrick
        Schulman served as the Chairman and President of Gourmet Group from September
        2000 until March of 2005 and he has been a member of our Board of Directors
        since March, 2005. He has 25 years of experience in corporate and commercial
        finance, venture capital, leveraged buy outs, investment banking and corporate
        and commercial law. Mr. Schulman's career includes key positions with RAS
        Securities in New York from 1994 to1998 as General Counsel and Investment
        Banker, eventually becoming Executive Vice President and Director of Investment
        Banking. From 1999 to September, 2001, he was President of Morgan Kent Group,
        Inc., a venture capital firm based in New York and Austin, Texas. Since
        September, 2003, Mr. Schulman has served as Chairman of Skyline Multimedia
        Entertainment, Inc., and, since September, 2002, he has served as President
        and
        Director of East Coast Venture Capital, Inc., a specialized small business
        investment company and community development entity based in New
        York.
  31
  Fabio
        Berkowicz has served as our Chief Financial Officer since March, 2005, and
        as
        the Chief Financial Officer of DA since October 2004. He is a certified public
        accountant with over 35 years experience in public accounting. Prior to joining
        us, from October 1984 to August 2003, he was a senior partner of Edward Isaacs
        and its successor, McGladrey & Pullen, certified public accounting firms.
        For McGladrey & Pullen, Mr. Berkowicz was a managing partner of its New York
        City regional office. He was responsible for managing over 200 accountants
        and
        CPA professionals and overseeing accounting services for the full range of
        both
        firms' clients. In 2006, he has also performed consulting services for Rosen
        Seymour Shapss Martin & Company, LLP, a public accounting firm located in
        New York City, New York.
  Mr.
        Close
        (a 10% shareholder) has recently received restricted shares of our common
        stock
        in satisfaction of compensation, consulting fees, loans or other amounts
        which
        were owed to them (see "Certain Relationships and Related Party Transactions"
        for additional details).
  Audit
        Committee
  Our
        Audit
        Committee currently consists of Fredrick Schulman as Chairman, and Marvin
        Traub.
        The Audit Committee will assist the Board in fulfilling its oversight
        responsibilities relating to the integrity of our financial statements,
        compliance with legal and regulatory requirements, the independent auditor's
        qualifications and independence, and the performance of the independent auditor.
        It is not the duty of the Audit Committee to plan or conduct audits, to prepare
        our financial statements or to determine that our financial statements and
        disclosures are complete and accurate and are in accordance with generally
        accepted accounting principles and applicable rules and regulations. These
        are
        the responsibilities of management and the independent auditor. In discharging
        its responsibilities, the Audit Committee expects to engage our independent
        auditors, approve the services performed by such auditors, review and evaluate
        our accounting principles and our system of accounting controls, and review
        with
        the auditors our quarterly unaudited and annual audited financial statements
        and
        the results of the reviews and audit thereof.
  The
        Board
        has determined that all current members of the Audit Committee have the ability
        to read and understand fundamental financial statements. The Board has also
        determined that Fredrick Schulman qualifies as "Audit Committee financial
        expert" as defined under Item 410(h) of Regulation S-B of the Securities
        Exchange Act of 1934 (the "Exchange Act"). Mr. Schulman, in his capacity
        as
        Chairman and Chief Executive Officer of Gourmet Group for over four years,
        directly supervised the financial staff of the Company and coordinated the
        preparation of the Company's financial statements with its outside auditors.
        As
        a result of this relationship with Gourmet Group, Mr. Schulman may not be
        viewed
        as an independent director.
  Compensation
        Committee
  The
        Compensation Committee was recently formed and consists of Bruce Klein as
        Chairman, Fredrick Schulman and Thomas Schwalm. The Compensation Committee
        will
        assist the Board in fulfilling its oversight responsibilities relating to
        officer and director compensation, succession planning for senior management,
        development and retention of senior management.
  Section
        16(a) Beneficial Ownership Reporting Compliance
  Section
        16(a) of the Securities Exchange Act of 1934 requires our directors, executive
        officers and beneficial owners of more than 10% of our Common Stock to file
        with
        the SEC reports of their holdings of, and transactions in, our Common Stock.
        Based solely upon our review of copies of such reports and representations
        from
        reporting persons that were provided to us, we believe that each of our
        executive officers and directors failed to file Forms 4 and 5 with respect
        to
        certain transactions that should have been reported by them on such Forms,
        including, for those who are officers of the Company, with respect to shares
        received in satisfaction of compensation earned by them or entities they
        control. The substance of these transactions have been disclosed by the Company
        in its Reports.
  32
  Code
        of
        Ethics
  The
        Company has adopted a written code of ethics that applies to the Company's
        principal executive officer, principal financial officer, principal accounting
        officer and any persons performing similar functions. The Company will provide
        a
        copy of its code of ethics to any person without charge upon written request
        addressed to 372 Danbury Road, Wilton, CT 06897.
  Item
        10.
        Executive Compensation.
  Compensation
        of Executive Officers
  The
        following table shows for fiscal years ended April 30, 2006 and 2005,
        respectively, certain compensation awarded or paid to, or earned by, the
        following persons (collectively, the "Named Executive Officers"): J. Patrick
        Kenny, our President and Chief Executive Officer; Bruce Klein, our Chairman
        of
        the Board; Jason Lazo, our Chief Operating Officer.
  Other
        than the Named Executive Officers, none of our executive officers earned
        more
        than $100,000 in salary and bonus for the 2006 or 2005 fiscal years. We did
        not
        grant stock options to them during the periods indicated but did issue
        restricted stock to them in partial satisfaction of the salary indicated
        below.
 
 SUMMARY
        COMPENSATION TABLE
 AnnualCompensation
                
                
                
                OtherName
                    and Principal Position
                
                Fiscal
                    Year
                
                Salary
                
                Bonus
                
                CompensationJ.
                    Patrick Kenny
                
                
                2006
                
                $
                243,500
                
                
                —
                
                $
                26,647Chief
                    Executive Officer (1)
                
                
                2005
                
                
                257,662
                
                
                —
                
                
                27,5122004
                
                
                240,000
                
                
                —
                
                
                21,509Bruce
                    Klein Chairman of the
                
                
                2006
                
                
                120,000
                
                
                —
                
                
                —Board
                    (2)
                
                
                2005
                
                
                240,000
                
                
                —
                
                
                —2004
                
                
                240,000
                
                
                —
                
                
                —Jason
                    Lazo
                
                
                2006
                
                
                150,000
                
                
                —
                
                
                —Chief
                    Operating Officer (3)
                
                
                2005
                
                
                141,428
                
                
                —
                
                
                —2004
                
                
                125,000
                
                
                —
                
                
                —Frederick
                    Schulman
                
                
                2006
                
                
                —
                
                
                —
                
                
                —Former
                    President Gourmet
                
                
                2005
                
                
                —
                
                
                —
                
                
                —Group,
                    Inc.
                
                
                2004
                
                
                —
                
                
                —
                
                
                —
 
 (1)
        Of
        the $257,662 and $240,000 of salary earned by Mr. Kenny (or his consulting
        company) in fiscal 2005 and 2004 , respectively $18,735 (2005) and $8,500
        (2004)
        was payable to Westridge Partners, LLC, a consulting company wholly-owned
        by Mr.
        Kenny. Other compensation of $26,647 in fiscal 2006, $27,512 in fiscal 2005
        and
        $21,509 in fiscal 2004 represents payments of personal major medical and
        life
        insurance premiums. We currently have no corporate sponsored employee benefit
        plans. $388,108 of the total salary earned in fiscal 2005 and 2004 was satisfied
        through the issuance of 862,462 restricted shares of our common
        stock.
 
 33
  (2)
        The
        salary shown as earned by Mr. Klein in each of the fiscal years 2006, 2005
        and
        2004 was payable to Victory Partners, LLC, a consulting firm controlled by
        Mr.
        Klein, as payment for services rendered by Mr. Klein through such entity.
        All of
        the compensation in fiscal 2005 and 2004 was satisfied through the issuance
        of
        1,066,667 restricted shares of our common stock.
 
 (3)
        $157,249 of the salary in fiscal 2005 and 2004 was payable to Lazo, LLC,
        a
        consulting firm controlled by Mr. Lazo as payment for services rendered by
        Mr.
        Lazo through such entity. This amount was satisfied through the issuance
        of
        349,443 restricted shares of our common stock.
 
 Incentive
        Plans
 
 We
        have
        not adopted any stock option plans and any incentive plans previously adopted
        by
        Gourmet Group have been canceled.
 
 Option
        Grants in Last Fiscal Year
 
 We
        did
        not grant to the Named Executive Officers options to purchase shares in fiscal
        2006.
 
 Aggregated
        Option Exercises in Last Fiscal Year and Fiscal Year-End Option
        Values
 
 None
        of
        our officers held options to purchase shares of our common stock during fiscal
        2006
 
 We
        have
        not compensated our Board members for their participation on the Board and
        do
        not have any standard or other arrangements for compensating them for such
        service. However, we have made payments for other reasons, as described in
        this
        "Executive Compensation" section and in the "Certain Relationships and Related
        Transactions" section of this Report.
 
 Employment
        Agreements
 
 We
        have
        not entered into any employment agreements with our executive officers or
        other
        employees to date. We may enter into employment agreements with them in the
        future.
 
 Director
        Compensation
 
 Directors
        do not receive cash compensation for their services to us as directors, but
        are
        reimbursed for expenses actually incurred in connection with attending meetings
        of the Board of Directors.
 
 Item
        11.
        Security Ownership of Certain Beneficial Owners, Directors and Executive
        Officers and Related Shareholder Matters
 
 The
        following table shows the number of shares of common stock beneficially owned
        as
        of July 31, 2006 by each director, the executive officers as detailed in
        the
        executive compensation table, all directors and executive officers as a group
        and other significant shareholders.
 
 34
 
 Number
                    of Sharesof
                    Common Stock
                
                Percentage
                    ofName
                
                Beneficially
                    Owned
                
                Outstanding
                    SharesJ.
                    Patrick Kenny30
                    Old Wagon RoadWilton,
                    CT 06877
                
                
                14,484,081
                (1)
                
                23.0
                %Bruce
                    Klein123
                    Elbert StreetRamsey,
                    NJ 07446
                
                
                11,219,689
                (2)
                
                17.8
                %Kenneth
                    Close59
                    Old Post RoadWestport,
                    CT 06490
                
                
                8,666,126
                (3)
                
                13.7
                %Thomas
                    Schwalm5983
                    SE Morning Dove WayHobe
                    Sound, FL 33455
                
                
                3,174,207
                (4)
                
                5.0
                %Fabio
                    Berkowicz8
                    Amagansett DriveMorganville,
                    NJ 07751
                
                
                1,681,270
                (5)
                
                2.7
                %Jason
                    Lazo144
                    Wire Mill Rd.Stamford,
                    CT 06903
                
                
                627,359
                (6)
                
                1.0
                %Marvin
                    Traub535
                    Fifth AvenueNew
                    York, NY 10022
                
                
                1,157,246
                (7)
                
                1.8
                %Fredrick
                    Schulman241
                    Fifth Ave, Suite 302New
                    York, NY 10016
                
                
                953,370
                (8)
                
                1.5
                %All
                    Directors and Officersas
                    a group (7 persons)
                
                
                33,297,223
                
                
                52.4
                %
  (1)
        Includes 10,000,000 and 2,000,000 shares owned by Kenny LLC I and Kenny LLC
        II,
        respectively, entities controlled by Mr. Kenny. Does not include 250,000
        shares
        owned by Mr. Kenny's son and 191,263 shares owned by Mr. Kenny's brother,
        as to
        which shares Mr. Kenny disclaims beneficial ownership.
 
 (2)
        Includes 8,900,000 shares owned by Peter Christian and Associates, LLC, of
        which
        Mr. Klein is the manager, 1,264,133 shares owned by Victory Partners, LLC,
        a
        firm controlled by Mr. Klein, 55,556 shares owned by Vigilant Investors,
        of
        which Mr. Klein is a partner, and 550,000 and 450,000 shares owned by the
        wife
        and sons of Mr. Klein respectively. Mr. Klein disclaims beneficial ownership
        of
        the shares owned by his wife and his son.
 
 (3)
        Includes 6,279,957 shares owned by Nexcomm International Beverage, LLC, of
        which
        Mr. Close is the manager and warrants to purchase 83,333 shares, including
        41,666 warrants owned through Mr. Close's personal IRA. Also includes 346,558
        shares (174,947 through Mr. Close's IRA) issuable under a convertible promissory
        note based on a conversion price of $0.45 per share, which conversion price
        may
        be adjusted as provided in the note.
 
 35
  (4)
        Includes 2,482,533 shares are owned by Greenwich Beverage Group, LLC
        ("Greenwich"), of which Mr. Schwalm is the manager and warrants to purchase
        155,556 shares, owned by Greenwich. Also includes 455,038 shares (owned by
        Greenwich) issuable under two convertible promissory notes based on a purchase
        price of $0.45 per share, which conversion price may be adjusted as provided
        in
        the notes.
  (5)
        All
        shares are owned by MFADS, LLC of which Mr. Berkowicz is the
        manager.
  (6)
        All
        shares are owned by Lazo, LLC, an entity controlled by Mr. Lazo.
  (7)
        Does
        not include 22,222 shares owned by Mr. Traub's son, as to which shares Mr.
        Traub
        disclaims beneficial ownership.
  (8)
        Includes 219,970 shares owned by Mr. Schulman's wife, Lois Shapiro, as to
        which
        shares Mr. Schulman disclaims beneficial ownership. Does not include 690,000
        shares owned by JGS Supermarket Management Corp., an entity owned and controlled
        by Mr. Schulman's sister, as to which Mr. Schulman disclaims beneficial
        ownership.
  Item
        12.
        Certain Relationships and Related Transactions.
  Between
        July 2004 and December 2004 Fredrick Schulman, one of our directors (who
        was
        then Gourmet Group's president and chairman) extended a payable on demand
        unsecured credit facility to the Company in an amount of up to $291,000.
        Mr.
        Schulman borrowed $172,230 of this amount from third parties and in turn
        lent
        this amount to us. The remaining $118,700 was from Mr. Schulman's own funds.
        All
        but one of the third parties from whom Mr. Schulman borrowed these funds,
        comprising $157,500, in the aggregate, demanded repayment from him in December
        2004, and Mr. Schulman soon thereafter demanded that we repay him a like
        amount.
        Since we were unable to do so we issued 350,000 restricted shares of our
        common
        stock (which we valued at $0.45 per share), which shares were delivered in
        2005
        to the third parties who demanded repayment of their investment of $157,500,
        in
        consideration for their forbearance with respect to this debt.
  In
        April
        2005 in connection with a $1,350,000 private placement of senior convertible
        promissory notes, Greenwich Beverage Group, LLC ("Greenwich"), a company
        owned
        by Thomas Schwalm, loaned us $100,000 and we issued to Greenwich a note in
        like
        amount. Interest accrued on this note aggregated $410 and $10,556 as of April
        30, 2005 and 2006, respectively. During fiscal 2005 and 2006 no principal
        or
        interest has been paid. In connection with the note, Greenwich received warrants
        to purchase 100,000 shares of our common stock at $0.45 per share.
  In
        fiscal
        2003 we entered into a consulting agreement with a company, Marvin Traub
&
Associates ("MTA"), owned 100% by Marvin Traub, a member of the Board of
        Directors. Under the agreement, MTA is being compensated at the rate of $100,000
        per annum. In fiscal 2006, compensation to MTA aggregated $150,000 due to
        additional work performed. In January 2006, MTA converted unpaid consulting
        fees
        aggregating $403,329 into 896,296 shares of our restricted common stock.
        As of
        April 30, 2006, we were indebted to MTA in the amount of $24,999. This
        consulting agreement is still in force for fiscal 2007.
  During
        fiscal 2005 and 2006, we modified the two borrowing agreements with one of
        our
        shareholders, Ken Close, and his affiliate Nexcomm, with respect to borrowings
        in the original aggregate amount of $1,021,000. See "Discussion and Management's
        Analysis of Financial and Results of Operations, Financial Liquidity and
        Capital
        Resources" in this Report for additional details. One of the borrowing
        facilities is secured, the other unsecured. During 2006 we paid Mr. Close
        and
        Nexcomm, in cash, an aggregate of $128,404 in principal and interest of $19,428,
        respectively, in connection with these loans. During Fiscal 2005 we issued
        him
        222,000 shares of our common stock in satisfaction of $100,000 of this
        debt.
  36
  We
        also
        issued secured convertible promissory notes to Mr. Close in the amount of
        $150,000 , evidencing loans made to us in fiscal year 2006. Greenwich also
        participated in the lending facility by lending us $100,000 and was issued
        a
        secured convertible promissory note to evidence such debt. Each lender was
        also
        issued warrants to purchase our common stock in consideration for these loans.
        See "Discussion and Management's Analysis of Financial and Results of
        Operations, Financial Liquidity and Capital Resources" in this Report for
        additional details. During fiscal 2006, the interest accrued on the loans
        made
        by Mr. Close and Greenwich was $5,950 and $4,767, respectively; no payments
        have
        been made to them in connection with this debt.
  On
        July
        27, 2006, the Company borrowed 153,111.80 from Mr. Close, which is not
        documented and is payable on demand.
  Westridge
        Partners, LLC, a consulting company wholly-owned by Mr.Kenny, earned consulting
        fees from us in the amount of $18,735 in fiscal 2005 for services provided
        to us
        by Mr. Kenny through such entity. In addition, unpaid compensation of $388,108
        owed to Mr. Kenny directly was satisfied in fiscal 2005 by issuing and
        delivering 862,462 restricted shares of our common stock. As of April 30,
        2006,
        we owe an aggregate of $49,105 to Mr. Kenny and Westridge Partners.
  Victory
        Partners, LLC ("Victory"), an entity wholly-owned by Bruce Klein, our Chairman
        of the Board earned $240,000 and $120,000 of consulting fees in fiscal years
        2005 and 2006, respectively. These fees were earned by Victory for the services
        provided to us by Mr.Klein through Victory. In fiscal 2005 we satisfied
        consulting fee obligations totaling $568,860 (including $480,000 of the fees
        earned in fiscal 2005 by issuing and delivering 1,264,133 restricted shares
        of
        our common stock. As of April 30, 2006, we owe an aggregate of $109,300 to
        Mr.
        Klein and Victory partners.
  In
        May
        2004 we entered into an unsecured $200,000 bank credit facility with interest
        at
        1.5% above the prime rate, and as of April 30, 2006 we owed the bank $200,000.
        Fabio Berkowicz, our Chief Financial Officer, has personally guaranteed our
        obligation to the bank. In addition we incurred fees to a consulting firm
        controlled by Mr. Berkowicz totaling $80,666 in fiscal 2005 for the services
        rendered to us by Mr. Berkowicz through this entity. In fiscal 2005, we
        satisfied consulting fee obligations totaling $71,666 by issuing 159,258
        restricted shares of our common stock. As of April 30, 2006 we are obligated
        to
        this entity for fees totaling $34,000.
  In
        fiscal
        2005 we satisfied $157,249 of compensation owed to Lazo, LLC, an entity
        controlled by Jason Lazo, our chief operating officer by issuing 349,443
        restricted shares of our common stock. The compensation was earned for services
        provided to us by Mr. Lazo. As of April 30, 2006 we owe an aggregate of $87,710
        to Mr. Lazo and Lazo, LLC.
  In
        fiscal
        2004, Vigilant Investors, a company in which Mr. Klein is a partner and has
        investment authority, loaned the Company $25,000. We repaid this loan as
        of
        April 30, 2005.
  We
        incurred licensing royalty expenses of approximately $132,000 and $73,000
        in
        fiscal 2005 and 2006, respectively, to Old Whiskey River Distilling Company,
        LLC
        and Y Sake, LLC in which we own 25 percent membership interests.
 
 37
  Item
        13.
        Exhibits.
 
 (A)
        Exhibit Index
  2.1
              
              Agreement and Plan of Share Exchange,
                dated
                as of June 9, 2004, among Gourmet Group, Inc., Drinks Americas, Inc.
                and
                the shareholders of Drinks Americas, Inc.3.1
              
              Certificate of Incorporation of Drinks
                Americas Holdings, Ltd.3.2
              
              By-Laws of Drinks Americas Holdings,
                Ltd.4.1
              
              Form of 10% Convertible Promissory
                Note
                issued by Gourmet Group, Inc., including Registration Rights
                provisions.4.2***
              
              Form of 10% Senior Convertible Promissory
                Note, dated March 2005, issued by Drinks Americas Holdings, Ltd.
                issued by
                Drinks Americas Holdings, Ltd. to investors in its Bridge Notes
                financing.4.3***
              
              Form
                  of Stock Purchase Warrant, dated March 2005, issued by Drinks Americas
                  Holdings, Ltd to investors in its Bridge Note
                  financing.10.1
              
              Form of 10% Promissory Note issued
                by Drinks
                Americas, Inc. to Gourmet Group, Inc. relating to the proceeds of
                the
                Private Placement.10.2
              
              Agreement, dated April 6, 2004, between
                Paul
                Newman, Newman's Own, Inc. and Drinks Americas, Inc. relating to
                the
                distribution of Newman's Own Lightly Sparkling Fruit Juices.10.3
              
              Letter,
                  dated May 12, 2003, from Interamericana de Licores, S.A. to Drinks
                  Americas, Inc. relating to the production of Cohete
                  Rum.10.4
              
              Purchase
                  Agreement, dated July 29, 2003, between Drinks Americas, Inc. and
                  Aguila
                  Tequila Partners relating to Aguila Tequila.10.5
              
              Agreement,
                  dated June 24, 2003, between Xanadu Wines Limited and Drinks Americas,
                  Inc. relating to the distribution of Xanadu Normans
                  Wines.10.6
              
              Interest
                  Purchase Agreement, dated December 9, 2002, between Drinks Americas,
                  Inc.
                  and Shep Gordon.10.7
              
              Assignment,
                  dated December 9, 2002, from Shep Gordon to Drinks Americas,Inc.
                  of the
                  limited liability company interests in Old Whiskey River Distilling
                  Company LLC.10.8
              
              Assignment,
                  dated December 9, 2002, from Shep Gordon to Drinks Americas, Inc.
                  of the
                  limited liability company interests in Y Sake LLC.10.9
              
              Assignment,
                  dated December 9, 2002, from Alive Enterprises, Inc. to Old Whiskey
                  River
                  Distilling Company LLC of Trademark rights to Old Whiskey
                  River.10.10
              
              Assignment,
                  dated December 9, 2002, from Alive Enterprises, Inc. to Y SakeLLC
                  of
                  Trademark rights to Y Sake.10.11
              
              Trademark
                  License Agreement, dated December 9, 2002, between Drinks Americas,
                  Inc.
                  and Old Whiskey River Distilling Company LLC relating to Old Whiskey
                  River
                  and Willie Nelson.10.12
              
              Trademark
                  License Agreement, dated December 9, 2002, between Drinks Americas,
                  Inc.
                  and Y Sake LLC relating to Y Sake and Roy
                  Yamaguchi.
  38
 10.13
                
                Distributor
                    Rights Agreement, dated December 9, 2002, between Old Whiskey
                    River
                    Distilling Company LLC and Drinks Americas, Inc.10.14
                
                Distributor
                    Rights Agreement, dated December 9, 2002, between Y Sake LLC
                    and Drinks
                    Americas, Inc.10.15
                
                Consulting
                    and Exclusive Referral Agreement, dated December 9, 2002, by
                    and among
                    Shep Gordon, Drinks Americas, Inc. and Maxmillian Partners,
                    LLC.10.16
                
                Sublease
                    Agreement, dated August 12, 2002, by and between Blau Marketing
                    Technologies, Inc. as Sublandlord and Maxmillian Partners, LLC
                    as
                    subtenant.10.17
                
                Amended
                    and Restated License Agreement, dated December 10, 2002, between
                    Old
                    Whiskey River Distilling Company, LLC and Willie
                    Nelson.10.18
                
                Consulting
                    Letter Agreement, dated March 28, 2002, between Marvin Traub
                    Associates,
                    Inc. and Maxmillian Partners, LLC.10.19
                
                Letter,
                    dated October 28, 2002, from DAS Communications Ltd. (David Sonenberg)
                    to
                    Drinks Americas, Inc.10.20
                
                Restated
                    (Demand) Promissory Note, dated as of July 9, 2004, in the amount
                    of
                    $290,000 from Drinks Americas, Inc. to Fredrick Schulman as agent
                    for the
                    payees.10.21
                
                Promissory
                    Note, dated May 10, 2004, in the amount of $200,000 from Drinks
                    Americas,
                    Inc. to Bank Leumi USA.10.22
                
                Unlimited
                    Guaranty, dated May 13, 2004, from Drinks Americas, Inc. to Bank
                    Leumi
                    USA.10.23
                
                Secured
                    Convertible Note and Agreement, dated April 8, 2003, in the amount
                    of
                    $200,000 from Maxmillian Partners LLC to Nexcomm InternationalBeverages,
                    LLC.10.24
                
                Guaranty
                    Agreement, dated April 8, 2003, between Drinks Americas, Inc.
                    and Nexcomm
                    International Beverages, LLC.10.25
                
                Security
                    Agreement, dated April 8, 2003, by and between Drinks Americas,
                    Inc. and
                    Nexcomm International Beverages, LLC.10.26
                
                Secured
                    Convertible Note and Agreement, dated July 28, 2003, in the amount
                    of
                    $200,000 from Maxmillian Partners LLC to Nexcomm International
                    Beverages,
                    LLC.10.27
                
                Security
                    Agreement, dated July 28, 2003, by and between Maxmillian Partners
                    LLC and
                    Kenneth H. Close.10.28
                
                Security
                    Agreement, dated July 28, 2003, by and between Drinks Americas,
                    Inc. and
                    Kenneth H. Close.10.29
                
                Guaranty
                    Agreement, dated July 28, 2003, between Maxmillian Mixers LLC
                    and Kenneth
                    H. Close.10.30
                
                Promissory
                    Note, dated October 15, 2004, in the amount of $155,975 from
                    Drinks
                    Americas, Inc. to Nexcomm International Beverages, LLC.10.31
                
                Note,
                    dated October 15, 2004, in the amount of $352,167 from Drinks
                    Americas,
                    Inc. to Kenneth H. Close.
 39
 10.32
                
                Promissory
                    Note, dated October 15, 2004, in the amount of $44,560 from Drinks
                    Americas, Inc. to Kenneth H. Close.10.33
                
                Security
                    Agreement, dated October 15, 2004, by and between Drinks Americas,
                    Inc.
                    and Nexcomm International Beverages, LLC.10.34***
                
                Form
                    of Registration Rights Agreement between Drinks Americas Holdings,
                    Ltd and
                    the investors in its Bridge Notes financing.10.35*
                
                Amended
                    and Restated Promissory Note, dated December 26, 2005, by and
                    between
                    Drinks Americas Holdings, Ltd. and Kenneth H. Close for
                    $776,167.10.36*
                
                Asset
                    Purchase Agreement, dated as of October, 2005, by and between
                    Drinks
                    Americas Holdings, ltd. and Rheingold Brewing Company,
                    Inc.10.37*
                
                Loan
                    Agreement, dated June 1, 2006, by and between D.T. Drinks, LLC
                    and
                    Production Finance International, LLC.10.38*
                
                Loan
                    and Security Agreement, dated June 1, 2006, by and between Drinks
                    Americas, Inc., Drinks Global Imports, LLC, D.T. Drinks, LLC
                    and Business
                    Alliance Capital Company.14.0*
                
                Code
                    of Ethics21.1(a)*
                
                List
                    of Subsidiaries of Drinks Americas Holdings, Ltd31.1*
                
                Certification
                    by J. Patrick Kenny, Chief Executive Officer, pursuant to Rule
                    13a-14(a),
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002.31.2*
                
                Certification
                    by Fabio Berkowicz, Chief Financial Officer, pursuant to Rule
                    13a-14(a),
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002.32.1*
                
                Certification
                    by J. Patrick Kenny, Chief Executive Officer, pursuant to 18
                    U.S.C.
                    Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                    Act
                    of 2002.32.2*
                
                Certification
                    by Fabio Berkowicz, Chief Financial Officer, pursuant to 18 U.S.C.
                    Section
                    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                    Act of
                    2002.
 Numbers
        with (*) are filed herewith. Numbers with (**) have been incorporated by
        reference to our Form 10-KSB filed on August 15, 2005. Numbers with (***)
        have
        been incorporated by reference to our Form 8-K filed on March 25, 2005. All
        other exhibits have been incorporated by reference to our Form 8-K filed
        on
        March 9, 2005.
  Item
        14.
        Principal Accountants' Fees and Services
  We
        engaged Bernstein & Pinchuk, LLP as our principal accountants to perform the
        audit of our financial statements for the year ended April 30, 2006. During
        the
        years ended April 30, 2006 and April 30, 2005, we incurred total fees payable
        to
        our accountants totaling $102,000 and $60,000 related to the audit of the
        Company for the years ended April 30, 2006 and April 30, 2005, respectively,
        including fees related to quarterly reviews during each such fiscal
        year.
 
 40
  SIGNATURES
 
 In
          accordance with Section 13 or 15(d) of the Exchange Act, the registrant
          caused
          this Form 10-KSB/A to be signed on its behalf by the undersigned, thereunto
          duly
          authorized, on April 17, 2007.
  Drinks
                  Americas Holdings, Ltd.By:
              /s/
                J.
                Patrick KennyJ.
                  Patrick Kenny
                Chief
                  Executive Officer
  In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the registrant and in the capacities and on
        the
        dates indicated.
 
 Signature
                
                Capacities
                
                Date/s/ J. Patrick Kenny
                  J. Patrick Kenny
                
                Chief
                    Executive Officer, Director
                
                April
                    17, 2007/s/ Fabio Berkowicz
                  Fabio
                    Berkowicz
                
                Chief
                    Financial Officer
                
                April
                    17, 2007/s/ Jason Lazo
                  Jason
                    Lazo
                
                Chief
                    Operating Officer
                
                April
                    17, 2007/s/ Bruce Klein
                  Bruce
                    Klein
                
                Chairman
                    of the Board
                
                April
                    17, 2007/s/ Frederick Schulman
                  Frederick
                    Schulman
                
                Director
                
                April
                    17, 2007/s/ Marvin Traub
                    Marvin
                    Traub
                
                Director
                
                April
                    17, 2007/s/ Thomas Schwalm
                    Thomas
                    Schwalm
                
                Director
                
                April
                    17, 2007
  41
  DRINKS
        AMERICAS HOLDINGS, LTD. AND AFFILIATES
 
 FINANCIAL
        STATEMENTS
 
 Years
        Ended April 30, 2006 and 2005
 
 AND
 REPORT
        OF
        INDEPENDENT REGISTERED
 PUBLIC
        ACCOUNTING FIRM
 PageREPORT
                      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  1FINANCIAL
                      STATEMENTSConsolidated
                      Balance Sheet
                  2Consolidated
                      Statements of Operations
                  3Consolidated
                      Statements of Changes in the Shareholders' Deficiency
                  4Consolidated
                      Statements of Cash Flows
                  5-6Notes
                      to Consolidated Financial Statements
                  7-25
 REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
        the
        Board of Directors and Shareholders of Drinks Americas Holdings,
        Ltd.:
 
 We
        have
        audited the accompanying consolidated balance sheet of Drinks Americas Holdings,
        Ltd. and affiliates (the "Company") as of April 30, 2006, and the related
        consolidated statements of operations, changes in shareholders' deficiency,
        and
        cash flows for the years ended April 30, 2006 and 2005. 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 audit.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of the Company as of April
        30,
        2006 and the results of its operations and its cash flows for the years ended
        April 30, 2006 and 2005, in conformity with accounting principles generally
        accepted in the United States of America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. As discussed in Note 1, the
        Company has incurred significant losses from operations since its inception
        and
        has a working capital deficiency. These conditions raise substantial doubt
        about
        the Company's ability to continue as a going concern. Management's plans
        in
        regard to these matters are described in Note 1. The consolidated financial
        statements do not include any adjustments that might result from the outcome
        of this
        uncertainty.
  The
          consolidated balance sheet at April 30, 2006 and the related consolidated
          statements of operations, changes in stockholders' deficiency, cash flows
          and
          related footnote disclosures for that year are restated to reflect the
          change in
          method of accounting for the acquisition of Rheingold; the valuation of
          beneficial conversion features of convertible promissory notes issued as
          well as
          the valuation of warrants issued to purchase common stock; the valuation
          of
          shares issued for services and the valuation of warrants issued in February
          2006. These matters are further disclosed in notes 3, 8, 9, 11, 16, 17
          and 18.
 
 
 /s/
          Bernstein & Pinchuk LLP
 
 New
          York,
          New York
 August
            10, 2006 - except for the method of accounting for the acquisition of
            Rheingold
            disclosed in notes 3 and 8; the method of determining the valuation of
            beneficial conversion features of convertible promissory notes issued
            as well as
            the valuation of warrants issued to purchase common stock disclosed in
            note
            9(f); and the valuation of 1,096,296 shares  of
            common
            stock issued for services; the valuation of warrants issued in February
            2006
            disclosed in note 11; and the valuation of stock and warrants issued
            as
            disclosed in note 16; the explanation and quantification of the restatements
            disclosed in Note 17; the explanation as to the Amendment of
            form 10KSB disclosed in Note 18; and the related effect of these changes
            to the
            consolidated statements of operations and cash flows, weighted average
            number of
            shares and earnings per s  hare
            for
            the year ended April 30, 2006 and the effect to assets, liabilities and
            the
            stockholders' deficiency section of the balance sheet as of April 30,
            2006, for
            which the date is March 14, 2007.
 
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 CONSOLIDATED
        BALANCE SHEET AS OF APRIL 30, 2006 (Restated)
 AssetsCurrent
                    assets:Cash
                    and equivalents
                
                $
                397,766Accounts
                    receivable, net of allowance of $20,000
                
                
                292,344Due
                    from factor
                
                
                37,592Inventories
                
                
                624,216Other
                    current assets
                
                
                132,335Total
                    current assets
                
                
                1,484,253Property
                      and equipment, at cost less accumulateddepreciation and
                      amortization
                
                
                57,051Investment
                    in equity investees
                
                
                50,024Intangible
                    assets, net
                
                
                997,005Other
                    assets
                
                
                24,994$
                2,613,327Liabilities
                    and Shareholders' DeficiencyCurrent
                    liabilities:Current
                    maturities of long-term debt
                
                $
                2,639,026Accounts
                    payable
                
                
                2,422,255Accrued
                    expenses
                
                
                1,450,053Amounts
                    received for shares to be issued
                
                
                789,999Total
                    current liabilities
                
                
                7,301,333Long-term
                    debt, less current maturities
                
                
                100,000Commitments
                    and Subsequent Events
                
                
                —Shareholders'
                    deficiency:Preferred
                    stock, $0.001 par value; 1,000,000 shares authorized; none
                    issuedCommon
                    stock, $0.001 par value; 100,000,000 authorized; issued and outstanding
                    62,707,453 shares
                
                
                62,707Additional
                    paid,-in capital
                
                
                12,008,857Accumulated
                    deficit
                
                
                (16,859,570
                )(4,788,006
                )$
                2,613,327
  See
        notes
        to consolidated financial statements.
 
 F-3
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 CONSOLIDATED
        STATEMENTS OF OPERATIONS
 YEARS
        ENDED APRIL 30, 2006 AND 2005
 2006
                  
                  2005(Restated)Net
                      sales
                  
                  $
                  1,607,606
                  
                  $
                  2,071,566Cost
                      of sales
                  
                  
                  1,154,834
                  
                  
                  1,556,193Gross
                      margin
                  
                  
                  452,772
                  
                  
                  515,373Selling,
                      general and administrative expenses
                  
                  
                  4,766,120
                  
                  
                  4,521,402Loss
                        before other income (expense)and
                        income tax expense
                  
                  
                  (4,313,348
                  )
                  
                  (4,006,029
                  )Other
                      income (expense) :Interest
                      expense
                  
                  
                  (926,243
                  )
                  
                  (361,769
                  )Impairment
                      of intangible asset
                  
                  
                  (804,161
                  )Other
                      income
                  
                  
                  198,381
                  
                  
                  40,100(1,532,023
                  )
                  
                  (321,669
                  )Loss
                      before income tax expense
                  
                  
                  (5,845,371
                  )
                  
                  (4,327,698
                  )Income
                      tax expense
                  
                  
                  —
                  
                  
                  —Net
                      loss
                  
                  $
                  (5,845,371
                  )
                  $
                  (4,327,698
                  )Net
                      loss per share (Basic and Diluted)
                  
                  $
                  0.10
                  
                  $
                  0.10
 See
        notes
        to consolidated financial statements.
 
 F-4
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 CONSOLIDATED
        STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY
 YEARS
        ENDED APRIL 30, 2006 (restated) AND 2005
 AdditionalPaid-in
                
                AccumulatedShares
                
                Amount
                
                Capital
                
                DeficitBalance,
                    May 1, 2004
                
                
                43,195,291
                
                $
                43,196
                
                $
                4,434,170
                
                $
                (6,686,501
                )Issuance
                    of shares for services
                
                
                1,968,501
                
                
                1,968
                
                
                (768
                )
                
                —Issuance
                    of shares to shareholders of legal acquirer
                
                
                4,058,794
                
                
                4,059
                
                
                (4,059
                )
                
                —Issuance
                    of shares in settlement of accrued compensation, expenses and
                    notes and
                    loans payable
                
                
                5,624,397
                
                
                5,624
                
                
                2,525,355
                
                
                —Net
                    loss for the year
                
                
                —
                
                
                —
                
                
                —
                
                
                (4,327,698
                )Balance,
                    April 30, 2005
                
                
                54,846,983
                
                
                54,847
                
                
                6,954,698
                
                
                (11,014,199
                )Issuance
                    of shares for cash
                
                
                2,050,000
                
                
                2,050
                
                
                1,167,948Issuance
                    of shares for services
                
                
                1,096,296
                
                
                1,096
                
                
                608,875
                
                
                —Issuance
                    of shares to shareholders of acquired company
                
                
                724,638
                
                
                724
                
                
                649,275
                
                
                —Issuance
                    of shares in settlement of notes and loans payable
                
                
                3,989,536
                
                
                3,990
                
                
                2,137,061
                
                
                —Discounts
                    on the issuance of Convertible notes
                
                
                —
                
                
                —
                
                
                491,000Net
                    loss for the year
                
                
                —
                
                
                —
                
                
                —
                
                
                (5,845,371
                )Balance,
                    April 30, 2006
                
                
                62,707,453
                
                $
                62,707
                
                $
                12,008,857
                
                $
                (16,859,570
                )
 
 See
        notes
        to consolidated financial statements.
 
 F-5
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 YEARS
        ENDED APRIL 30, 2006 AND 2005
 2006
                
                2005(restated)Cash
                    flows from operating activities:Net
                    loss
                
                $
                (5,845,371
                )
                $
                (4,327,698
                )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Deprecation
                    and amortization
                
                
                372,183
                
                
                140,956Earnings
                    in equity method investees
                
                
                —
                
                
                (40,042
                )Stock
                    issued for services of vendors, employees, directors and
                    interest
                
                
                1,102,000
                
                
                1,195,380Impairment
                    of intangible asset
                
                
                804,161Allowance
                    for uncollectible accounts
                
                
                64,878
                
                
                30,000Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                (252,285
                )
                
                (7,654
                )Due
                    from factor
                
                
                (9,435
                )
                
                5,976Inventories
                
                
                14,618
                
                
                123,943Other
                    current assets
                
                
                13,698
                
                
                (73,149
                )Other
                    assets
                
                
                50,499
                
                
                —Accounts
                    payable
                
                
                228,010
                
                
                213,429Accrued
                    expenses
                
                
                621,753
                
                
                450,381Net
                    cash used in operating activities
                
                
                (2,835,291
                )
                
                (2,288,478
                )Cash
                    flows from investing activities:Acquisition
                    of property and equipment
                
                
                —
                
                
                (31,149
                )Net
                    cash used in investing activities
                
                
                —
                
                
                (31,149
                )Cash
                    flows from financing activities:Proceeds
                    from issuance of common stock issued and to be issued
                
                
                1,959,999
                
                
                2,924,602Proceeds
                    from issuance of debt
                
                
                1,195,648
                
                
                —Repayment
                    of debt
                
                
                (154,168
                )
                
                (222,584
                )Payments
                    for loan costs
                
                
                —
                
                
                (254,581
                )Net
                    cash provided by financing activities
                
                
                3,001,479
                
                
                2,447,437Net
                    increase in cash and equivalents
                
                
                166,188
                
                
                127,810Cash
                    and equivalents - beginning of year
                
                
                231,578
                
                
                103,768Cash
                    and equivalents - end of year
                
                $
                397,766
                
                $
                231,578
 (Continued)
 
 F-6
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 YEARS
        ENDED APRIL 30, 2006 AND 2005
 2006
                
                2005Supplemental
                    disclosures of noncash investing and financing activities:Sale
                    of product in exchange for prepaid expense (trade credits)
                
                $
                —
                
                $
                114,729Liabilities
                    converted into shares of common stock
                
                $
                2,141,051
                
                $
                1,390,799Asset
                    acquisition financed by:Current
                    assets less current liablities
                
                $
                (115,683
                )Intangible
                    and other assets
                
                $
                1,265,683Payable
                    to seller
                
                $
                500,000
                
                $
                —Common
                    stock issued
                
                $
                650,000
                
                $
                —Supplemental
                    disclosures of cash flow information:Interest
                    paid
                
                $
                171,981
                
                $
                97,642Income
                    taxes paid
                
                $
                —
                
                $
                —
 See
        notes
        to consolidated financial statements.
 
 F-7
  DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 1.
              Basis
                  of Presentation and
 Nature
                  of Business
  On
        March
        9, 2005 the shareholders of Drinks Americas, Inc. ("Drinks") a company engaged
        in the business of importing and distributing unique, premium alcoholic and
        non-alcoholic beverages associated with icon entertainers, sports figures,
        celebrities and destinations, to beverage wholesalers throughout the United
        States, acquired control of Drinks Americas Holdings, Ltd. ("Holdings").
        Holdings was incorporated in the state of Delaware on February 14, 2005.
        On
        March 9, 2005 Holdings merged with Gourmet Group, Inc. ("Gourmet"), a publicly
        traded Nevada corporation, which resulted in Gourmet shareholders acquiring
        1
        share of Holdings' common stock in exchange for 10 shares of Gourmet's common
        stock. Both Holdings and Gourmet were considered "shell" corporations, as
        Gourmet had no operating business on the date of the share exchange, or for
        the
        previous three years. Pursuant to the June 9, 2004 Agreement and Plan of
        Share
        Exchange among Gourmet, Drinks and the Drinks' shareholders, Holdings, with
        approximately 4,058,000 of outstanding common stock, issued approximately
        45,164,000 of additional shares of its common stock on March 9, 2005 (the
        "Acquisition Date") to the common shareholders of Drinks and to the members
        of
        its affiliate, Maxmillian Mixers, LLC ("Mixers"), in exchange for all of
        the
        outstanding Drinks' common shares and Mixers' membership units, respectively.
        As
        a result Maxmillian Partners, LLC ("Partners") a holding company which owned
        99%
        of Drinks' outstanding common stock and approximately 55% of Mixers' outstanding
        membership units, became Holdings' controlling shareholder with approximately
        87% of Holdings' outstanding common stock. For financial accounting purposes
        this business combination has been treated as a reverse acquisition, or a
        recapitalization of Partners' subsidiaries (Drinks and Mixers).
  Partners,
        which was organized as a Delaware limited liability company on January 1,
        2002
        and incorporated Drinks in Delaware on September 24, 2002, subsequent to
        March
        9, 2005 transferred all of its Holdings shares to its members as part of
        a plan
        of liquidation.
  On
        March
        11, 2005 Holdings and an individual organized Drinks Global, LLC ("DGI").
        Holdings owned 90% of the membership units and the individual, who is the
        president of DGI owned 10%. DGI's operating agreement does not require either
        member to contribute cash for the membership units; however, Holdings has
        paid
        the start-up expenses of DGI, which were not considered material. DGI's business
        is to import wines from various parts of the world and sell them to distributors
        throughout the United States. In May 2006 Holdings organized D.T. Drinks,
        LLC
        ("DT Drinks") a New York limited liability company for the purpose of selling
        certain alcoholic beverages.
  The
        accompanying consolidated results of operations, changes in shareholders'
        deficiency and cash flows for the period May 1, 2004 to March 8, 2005 are
        those
        of Partners and its majority-owned subsidiaries, Drinks (with its inactive
        foreign subsidiaries, Bebedes de C.A. and Cohete, S.A.) and Mixers
        (collectively, the "Company" prior to March 9, 2005). The consolidated balance
        sheet as of April 30, 2006 and results of operations from March 9, 2005 to
        April
        30, 2005 and May 1, 2005 to April 30, 2006 reflect Holdings its majority-owned
        subsidiaries and Partners (collectively, the "Company" subsequent to March
        9,
        2005). All intercompany transactions and balances in these financial statements
        have been eliminated in consolidation. The amount of common and preferred
        shares
        authorized, issued and outstanding as of April 30, 2006, are those of Holdings.
        Common shares issued at the Acquisition Date represent the number of outstanding
        shares of Holdings before the share exchange with Partners. Operating results
        of
        Drinks and its predecessor Gourmet for periods prior to the date of the reverse
        acquisition are not material.
  F-8
  The
          accompanying consolidated financial statements have been prepared on a
          basis
          that assumes the Company will continue as a going concern. The Company
          has an
          accumulated deficit of $16,859,570 as of April 30, 2006, and has incurred
          significant operating losses and negative cash flows from operations since
          inception. These factors indicate the Company may not be able to continue
          as a
          going concern. Management anticipates cash flows from the proceeds of additional
          debt and equity offerings in fiscal 2007. Management also plans to introduce
          new
          products and to greatly expand the marketing efforts of all of its products
          to
          increase volume and reduce operating losses in fiscal 2007. There can be
          no
          assurance, however that management's plans will enable the Company to attain
          profitable operations or generate sufficient cash flows from operations
          and
          financing activities necessary to continue as a going concern. The accompanying
          financial statements do not include any adjustments relating to the
          classification of recorded asset amounts or amounts and classification
          of
          liabilities that might be necessary should the company be unable to continue
          in
          existence.
  2.
                  Summary
                      of Significant Accounting Policies
 Revenue
        Recognition
  The
        Company recognizes revenues when title passes to the customer, which is
        generally when products are shipped.
  The
        Company recognizes revenue dilution from items such as product returns,
        inventory, credits, discounts and other allowances in the period that such
        items
        are first expected to occur. The Company has not realized material amounts
        of
        revenue dilution in the periods covered by this report. In this regard, the
        Company does not offer its clients the opportunity to return products for
        any
        reason other than manufacturing defects. No material amounts of product returns
        had occurred during these fiscal years. In addition, the Company does not
        offer
        incentives to its customers to either acquire more products or maintain higher
        inventory levels of products than they would in ordinary course of business.
        The
        Company assesses levels of inventory maintained by its customers through
        telephone communications with its customers and believes that most maintain
        low
        levels of inventory of its products. Furthermore, it is the Company’s policy to
        accrue for material post shipment obligations and customer incentives in
        the
        period the related revenue is recognized. As of April 30, 2006 there were
        no
        such amounts to accrue.
  Cash
        and
        Equivalents
  The
        Company considers all highly liquid investments with a maturity of three
        months
        or less when purchased to be cash equivalents.
  The
        Company from time to time maintains balances in depository accounts in excess
        of
        FDIC insured limits. The Company has not experienced any credit losses nor
        anticipates any future losses in such accounts. At April 30, 2006 amounts
        exceeding FDIC insured limits aggregated $273,432.
  Accounts
        Receivable
  Accounts
        receivable are recorded at original invoice amount less an allowance for
        uncollectible accounts that management believes will be adequate to absorb
        estimated losses on existing balances. Management estimates the allowance
        based
        on collectability of accounts receivable and prior bad debt experience. Accounts
        receivable balances are written off upon management's determination that
        such
        accounts are uncollectible. Recoveries of accounts receivable previously
        written
        off are recorded when received. Management believes that credit risks on
        accounts receivable will not be material to the financial position of the
        Company or results of operations.
  Inventories
  Inventories
        are valued at the lower of cost (first-in, first-out) or market.
  F-9
  Property
        and Equipment
  Property
        and equipment are stated at cost. Depreciation is provided on the straight-line
        method over the estimated useful lives of furniture and equipment, and
        amortization of leasehold improvements is provided on the straight-line method
        over the term of the related lease.
  Impairment
        of Long-Lived Assets
  In
        accordance with Statement of Financial Accounting Standards No. 144 (SFAS
        No.
        144), Accounting for the Impairment or Disposal of Long-lived Assets, we
        review
        long-lived assets for impairment whenever events or changes in circumstances
        indicate the carrying amounts of such assets may not be recoverable. The
        Company's policy is to record an impairment loss at each balance sheet date
        when
        it is determined that the carrying amount may not be recoverable. Recoverability
        of these assets is based on undiscounted future cash flows of the related
        asset.
        At April 30, 2006 long-lived assets relating
        to the Rheingold acquisition were deemed impaired (see Note
        3).
  Income
        Taxes
  As
        of
        April 30, 2006 Holdings and Drinks are C Corporations under the provisions
        of
        the Internal Revenue Code (the "Code") and applicable state statutes. Deferred
        taxes are provided based on the tax effects of certain temporary differences
        between the valuation of assets and liabilities for financial statement and
        income tax purposes. Deferred tax balances are adjusted to reflect tax rates,
        based on current tax laws, which will be in effect in the years in which
        the
        temporary differences are expected to reverse. Valuation allowances are
        established as necessary to reduce deferred tax assets to amounts more likely
        than not to be realized. Partners, Mixers, and DGI are limited liability
        companies, taxed as partnerships with no income tax liabilities under the
        provisions of the Code and applicable state statutes.
  Deferred
        Charges and Intangible Assets
  The
        costs
        of intangible assets with determinable useful lives are amortized over their
        respectful useful lives and reviewed for impairment when circumstances warrant.
        Intangible assets that have an indefinite useful life are not amortized until
        such useful life is determined to be no longer indefinite. Evaluation of
        the
        remaining useful life of an intangible asset that is not being amortized
        must be
        completed each reporting period to determine whether events and circumstances
        continue to support an indefinite useful life. Indefinite-lived intangible
        assets must be tested for impairment at least annually, or more frequently
        if
        warranted. Intangible assets with finite lives are generally amortized on
        a
        straight line bases over the estimated period benefited. The costs of trademarks
        and product distribution rights are amortized over their related useful lives
        of
        between 15 to 40 years. We review our intangible assets for events or changes
        in
        circumstances that may indicate that the carrying amount of the assets may
        not
        be recoverable, in which case an impairment charge is recognized
        currently.
  Deferred
        financing costs are amortized ratably over the life of he related debt. If
        debt
        is retired early, the related unamortized deferred financing costs are written
        off in the period debt is retired.
  Investments
  The
        investments of the Company in 25% ownership interests of Old Whiskey River
        Distilling, LLC and Y Sake, LLC are accounted for under the equity method
        of
        accounting.
  Advertising
        Costs
  Advertising
        costs are expensed as incurred. Advertising expense was approximately $19,100
        and $15,700 for the years ended April 30, 2006 and 2005,
        respectively.
  F-10
  Shipping
        and Delivery
  The
        Company includes shipping and delivery costs in selling, general and
        administrative expenses. Shipping and delivery costs were approximately $101,000
        and $16,700 for the years ended April 30, 2006 and 2005,
        respectively.
  Repairs
        and Maintenance
  The
        Company charges the cost of repairs and maintenance, including the cost of
        replacing minor items not constituting substantial betterment, to selling,
        general and administrative expenses as these costs are incurred.
  Earnings
        Per Share
  The
        Company computes earnings per share under the provisions of SFAS No. 128,
        Earnings per Share, whereby basic earnings per share is computed by dividing
        net
        income (loss) attributable to all classes of common shareholders by the weighted
        average number of shares of all classes of common stock outstanding during
        the
        applicable period. Diluted earnings per share is determined in the same manner
        as basic earnings per share except that the number of shares is increased
        to
        assume exercise of potentially dilutive and contingently issuable shares
        using
        the treasury stock method, unless the effect of such increase would be
        anti-dilutive. For the years ended April 30, 2006 and 2005, the diluted earnings
        per share amounts equal basic earnings per share because the Company had
        net
        losses and the impact of the assumed exercise of contingently issuable shares
        would have been anti-dilutive.
  Use
        of
        Estimates
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts in the financial
        statements and accompanying notes. Actual results could differ from those
        estimates.
  Fair
        Value of Financial Instruments
  The
        carrying amounts for cash and cash equivalents, trade receivables, accounts
        payable, current maturities of long-term debt, and notes and loans payable
        approximate fair values as of April 30, 2006 because of the short term
        maturities of those instruments.
  Recent
        Accounting Pronouncements
  In
        December 2004, SFAS No. 123R, "Share-Based Payment," a revision of SFAS No.
        123,
        "Accounting for Stock-Based Compensation," was issued. SFAS No. 123R replaces
        existing requirements of SFAS No. 123 and APB Opinion No. 25 "Accounting
        for
        Stock-Based Compensation," and requires public companies to recognize the
        cost
        of employee services received in exchange for equity instruments, with limited
        exceptions. SFAS No. 123R also affects the pattern in which compensation
        cost is
        recognized, the accounting for employee share purchase plans, and the accounting
        for income tax effects of share-based payment transactions. SFAS No. 123R
        is
        effective for interim periods beginning after June 15, 2005. The Company
        is
        currently evaluating the effect that SFAS No. 123R will have on its financial
        position and results of operations, but does not believe that the adoption
        of
        SFAS No. 123R will have a material impact on its financial position and results
        of operations.
  F-11
  In
        May
        2005 FASB issued Statement No. 154 "Accounting Changes and Error Corrections
        - a
        replacement of APB Opinion No. 20 and FASB Statement No. 3." In February
        2006
        the Financial Accounting Standards Board ("FASB") issued Statement No. 155
        "Accounting for Certain Hybrid Financial Instruments" which amends FASB
        Statement Nos. 133 and 140. Neither of these two pronouncements had an effect
        on
        the Company's consolidated financial statements.
  3.
              Acquisition
  On
        October 27, 2005, the Company acquired certain assets of Rheingold Beer
        (“Rheingold”) and assumed certain obligations from Rheingold Brewing Company,
        Inc. (“RBCI”). The purpose of the acquisition was for diversification of the
        Company’s products and expansion of its distribution base. Holdings issued
        724,638 shares of restricted common stock with a fair value of approximately
        $650,000 to RBCI and assumed approximately $142,000 of their liabilities
        and are
        contractually obligated to RBCI to issue an additional $500,000 payable in
        restricted shares, with a value of $350,000, of Holdings’ common stock and
        $150,000 cash, accruing no interest, on October 27, 2006. The value of the
        common stock to be issued shall be based on the 60 calendar day trading price
        of
        Holdings’ stock prior to October 27, 2006.
  The
        amount initially assigned to the value of the Rheingold license rights
        aggregated $1,245,683 of which $41,522 has been amortized as of April 30,
        2006.
        Management determined as of April 30, 2006 that based on estimated future
        cash
        flows, the carrying amount excedes ts fair value by $804,161, an impairment
        loss
        of that amount was recognized. Management’s estimations were reached after
        determining that the product will need to be completely reformulated and
        will
        require additional investment to bring the product to market.
 
 4.
              Due
                  From Factor
 Accounts
                    receivable
                
                $
                80,287Advances
                
                
                (42,695
                )$
                37,592
 The
        Company had a two-year agreement with a factor, expiring on October, 2005, which
        was
        extended on a month-to-month basis through May 2006 at which time the Company
        elected to terminate the relationship. Pursuant to the agreement a substantial
        portion of accounts receivable are sold to the factor without recourse
        as to bad debts, but with recourse as to all customer claims. Immediately
        upon assigning a customer invoice, the Company receives a cash advance
        equal to 70% of the invoice amount, and is paid the balance of the invoice
        at the time the factor receives the final payment from the customer. No interest
        is charged by the factor for outstanding cash advances. Instead the factor's
        fee for all services and cash advances is equal to 2.5% of the total of an
        assigned invoice, subject to the customer paying in full within 30 days of the
        invoice date. The fee increases 1% on a cumulative effect basis in intervals of
        15
        days for which the related invoice remains unpaid, up to 7.5% of the invoice
        amount if not paid in 90 days from invoice date.
 
 F-12


Guarantees
      of the Company's obligations under the agreement have been provided by the
      Company's chief executive officer and its chairman of the board. The factor
      has
      a security interest in the Company's tangible and intangible
      assets.





5.
              Inventories


Finished
                  goods
              
              $
              608,087Raw
                  materials
              
              
              16,129$
              624,216




All
      raw
      materials used in the production of the Company's inventories are purchased
      by
      the Company and delivered to independent production contractors.





6.
            Trade
                Credits





The
      Company entered into an agreement in June 2004 with a corporate trading company
      to receive trade credits upon deliveries of certain non-alcoholic beverages
      to
      buyers obtained by the trading company. Earned trade credits must be utilized
      by
      June 2009, and there are additional terms specifically defined in the agreement.
      The Company has approximately $58,000 which is net of an impairment reserve
      of
      $58,000 at April 30, 2006 of such trade credits included in other current assets
      in the accompanying consolidated balance sheet.





7.
            Property
                and Equipment


Useful
                  Life
              
              AmountComputer
                  equipment
              
              
              5
                  years
              
              $
              23,939Furniture
              
              
              5
                  years
              
              
              10,654Automobile
              
              
              4
                  years
              
              
              43,840LeaseholdImprovements
              
              
              7
                  years
              
              
              66,259Production
                  costs
              
              
              2
                  years
              
              
              30,049174,741Accumulated
                  depreciation and amortization
              
              
              
              
              
              (117,690
              )$
              57,051




Depreciation
      expense for the years ended April 30, 2006 and 2005 amounted to $63,160 and
      $29,800, respectively.





8.
            Intangible
                Assets/Deferred Loan Costs





Intangible
      assets include the costs to acquire trademarks, license rights and distribution
      rights for three of the Company's alcoholic products.





In
      addition, intangibles include the costs of the license and related trademarks
      purchased in the Rheingold acquisition (see Note 3).




F-13




Useful
                  Life
              
              Gross
                  Carrying Amount
              
              Accumulated
                  Amortization
              
              Net
                  of AmortizationTrademarks/dist
                  rights
              15-40
                  years
              
              $
              751,966
              
              $
              154,961
              
              $
              597,005License
                  rights
                  and related
                  trademarks
              15
                  years
              
              
              400,000
              
              
              -
              
              
              400,0001,151,966
              
              
              154,961
              
              $
              997,005


Aggregate
      amortization expense was $309,023 (including $221,537 for fully amortized
      deferred financing costs) and $111,156 for the years ended April 30, 2006 and
      2005, respectively.





Estimated
      annual amortization expenses as of April 30, 2006 for the next five years are
      approximately $73,000 (April 30, 2007-2011).





9.
            Debt


Notes
                  and Loans Payable
              
              Long-Term
                  DebtSenior
                    convertiblenotes
                    (a)
              
              $
              850,000
              
              $
              $
                  —Secured
                      NotesPayable
                      (includes interest) (b)
              
              
              104,035
              
              
              —Unsecured
                      notepayable
                      (includes interest) (c)
              
              
              338,304
              
              
              —Bank
                    line of credit(d)
              
              
              200,000
              
              
              —Other
                    line of credit (e)
              
              
              184,898
              
              
              —Convertible
                  notes (f)
              
              
              250,000
              
              
              —Convertible
                  note (g)
              
              
              100,000
              
              
              100,000Unsecured
                    notepayable
                    (h)
              
              
              100,000
              
              
              —Unsecured
                    note payable (i)
              
              
              100,000
              
              
              —Due
                    to RBCI (see Note 3)
              
              
              500,000
              
              
              —Other
                  (j)
              
              
              11,789
              
              
              —2,739,026
              
              
              100,000Less
                  current portion
              
              
              2,639,026
              
              
              —Long-term
                  debt
              
              $
              100,000
              
              $
              100,000




Long-term
      portion is due in 2008 (see (g) below).





(a)
            Between
                March 15 and May 9, 2005 the Company issued a series of senior convertible
                notes totaling $1,350,000, which resulted in net proceeds after deductions
                for certain costs and fees, of $1,150,000, including a $100,000 note
                to
                Greenwich Beverage Group, LLC (“Greenwich”) a company managed by a member
                of the Company's board of directors. The notes bear interest at 10%
                per
                annum, with principal and interest payable in full one year from
                the date
                of issuance of the respective note. The notes are past due, but formal
                demand for payment has not been made. The note holders have discretionary
                conversion rights to convert all of the principal amount into restricted
                shares of Holdings' common stock, at a per share price equal to the
                lower
                of (1) $0.45 at any time prior to maturity or (2) the per share price
                realized in a subsequent debt or equity financing of at least six
                million
                as defined in the notes. In March 2006 the largest holder of these
                notes
                elected to convert his $500,000 note plus accrued interest of $50,556
                into
                1,267,119 of Holdings' common stock. In addition each of the note
                holders
                was issued separate warrants to purchase an aggregate 1,350,000 shares
                of
                the Company's common stock. The warrants may be exercised at any
                time up
                to five years from the date of issuance at the same price per share.
                Both
                the notes and warrants have certain antidilutive features to the
                holders
                of the notes and warrants. In addition, the warrant holders have
                a
                cashless surrender option which provides for the number of shares
                of
                common stock to be issued upon surrender of the warrants to equal
                the
                number of shares underlying the warrants multiplied by a fraction
                (the
                numeration of which is $0.45 less the market value of the Company's
                common
                stock as defined and the denominator of which is such market value).
                The
                Company had determined, as of the date the notes were issued , in
                accordance with APB 1 4, the warrants had no
                value.




F-14




Amounts
      owed to these note holders are subordinate to amounts owed to secured creditors,
      and senior to all other unsecured creditors. Accrued interest of $93,808 is
      included in accrued expenses in the accompanying balance sheet.




(b)
            In
                October 2004 the Company modified secured borrowing agreements with
                Nexcomm International Beverages, LLC ("Nexcomm"), a company controlled
                by
                a person beneficially owning 13% of the outstanding common stock
                of the
                Company as of April 30, 2006. On the modification date the Company
                issued
                a note to Nexcomm aggregating $155,975, which represented unpaid
                principal
                and interest on the original notes. The modified note was due on
                May 1,
                2005 but was informally extended by Nexcomm with no stipulated repayment
                date. The note bears interest at 11%. The note is secured by the
                assets of
                the Company subordinate to those secured interests of the factor.
                As of
                April 30, 2006 the unpaid balance, including interest, aggregated
                $104,035.




(c)
            In
                October 2004 the Company modified unsecured borrowing agreements
                with the
                shareholder referred to in (b). On the modification date the Company
                issued two notes to the shareholder aggregating $396,727, which
                represented unpaid principal and interest on the original notes.
                The notes
                bear interest at 10% per annum and required installment payments
                representing principal and interest at various dates through September
                1,
                2005. The notes were informally extended by the shareholder with
                no
                stipulated repayment dates. As of April 30, 2005 the Company satisfied
                $100,000 of these notes by issuing 222,222 restricted shares of Holdings'
                common stock (see Note 11). As of April 30, 2006 the unpaid balance,
                including interest, on these notes aggregated
                $338,304.




(d)
            In
                May 2004, the Company obtained a line of credit with a financial
                institution for aggregate borrowings of $200,000, with interest at
                1.5%
                above the bank's prime rate. The credit line with this institution
                technically expired on August 1, 2005. However, the line was informally
                in
                effect, under the previous terms through May 2006 when it was formally
                extended through June 1, 2007. The extended terms include a reduced
                line
                of $175,000 with an initial interest rate of 4.50% above the bank's
                prime
                rate. The Company's chief financial officer has guaranteed the payment
                of
                the Company's obligations under this line of
                credit.




(e)
            In
                July 2004 a member of the Company's board of directors extended an
                unsecured credit facility to the Company in an amount of up to $291,000.
                The total loan bears interest at 14% per annum without any specified
                repayment date. Accrued interest on this note of $48,072 is included
                in
                accrued expenses in the accompanying consolidated balance
                sheet.




In
      order
      to provide the total borrowings made by the Company, the director personally
      borrowed $172,230 from third parties. These third parties subsequently demanded
      repayment from the director for an aggregate $157,500 and the director, in
      turn
      demanded that the Company repay him a like amount. Because the Company was
      unable to repay in cash, management agreed to issue 350,000 restricted shares
      of
      the Holdings common stock (valued at $0.45 per share) to the third parties,
      on
      behalf of the director, in consideration for their forbearance with respect
      to
      this debt. A total of $157,500 is included in interest expense in the
      accompanying consolidated statement of operations for the year ended April
      30,
      2005.




F-15




(f)
            Between
                December 2005 and February 2006 the Company issued convertible notes
                aggregating $802,167. The notes consist of $150,000 received from
                the
                shareholder referred to in (c), $552,167 from two unrelated companies,
                and
                $100,000 from Greenwich. These demand notes bear interest at 12%
                per annum
                and require monthly interest payments only beginning January 1, 2006.
                The
                principal and unpaid accrued interest may be converted at any time
                into
                the equity securities of Holdings at $0.45 per share or pursuant
                to any
                private placement equal to or in excess of $5 million closed by the
                Company on or before December 31, 2006, at a price equal to twenty
                percent
                below the price at which the Company issues any such securities.
                These
                notes are secured on the same basis as the Nexcomm notes in (b).
                In March
                2006 the two unrelated companies converted the amounts owed under
                their
                notes aggregating $570,204, which included accrued interest of $18,037,
                into 1,267,119 shares of Holdings' common stock. At April 30, 2006
                principal outstanding on these notes aggregated $250,000, $150,000
                from
                the Company's shareholder and $100,000 from Greenwich, plus interest
                of
                $10,717 which is included in accrued expenses in the accompanying
                consolidated balance sheet.




In
      connection with these notes the Company also issued warrants to purchase 445,646
      shares of Holdings' common stock at an exercise price of $0.45 per share as
      follows: warrants for 83,333 shares to the shareholder referred to in (e),
      warrants for 306,757 shares to the unrelated companies and warrants for 55,556
      to Greenwich. The warrants are exercisable for a five year period from the
      date
      of the note. The warrants include a cashless exercise provision and
      anti-dilution protection to the holders. The Company has determined that the
      warrants had a fair value of $112,000 as of the date the notes were issued.




The
      $0.45
      per share conversion price enabled the holders to convert such securities into
      common stock of the Company which was at a discount to the market price of
      the
      common stock at the date convertible. At issuance the convertible promissiory
      notes were convertible into common shares of the Company’s common stock with an
      aggregate value which exceeded the amount of proceeds allocated to the
      convertible notes by $379,000. Since the notes are payable on demand the
      discounts recognized for both the warrants and beneficial conversion feautures
      were expensed immediately are included in interest expense for the year ended
      April 30, 2006.




(g)
            On
                June 15, 2005 DGI borrowed $100,000 from one of the Company's shareholders
                and issued a convertible promissory note which requires repayment
                of
                principal by June 15, 2008. Interest accrues at 1% above the prime
                rate
                and is payable on a semi-annual basis. At the option of the shareholder,
                the unpaid principal portion of this note is convertible common stock
                at a
                conversion price equal to the greater of (1) 20% below the average
                daily
                closing price for each of the trading days during the ninety day
                period
                immediately preceding the date the shareholder provides notice to
                the
                Company the intent to convert, or (2) $0.45 per share. At April 30,
                2006
                interest of $10,172 is included in accrued expenses in the accompanying
                consolidated balance sheet.




(h)
            On
                September 22, 2005 the Company borrowed $100,000 from an unrelated
                individual which accrues interest at a rate of 6% per annum which
                was
                payable along with unpaid principal on June 21, 2006. In July the
                Company
                issued 50,000 restricted shares of Holding's common stock in consideration
                for extending the repayment date to August 22, 2006. At April 30,
                2006
                accrued interest of $3,616 is included in the accompanying consolidated
                balance sheet.




F-16




(i)
            In
                August 2005 the Company borrowed $100,000 from a shareholder. Although
                this loan does not have written documentation the Company has an
                understanding with the lender that the loan would accrue interest
                at 12%
                per annum and would be repaid from the proceeds of the Company's
                next
                financing. At April 30, 2006 interest of $8,538 is included in accrued
                expenses in the accompanying consolidated balance
                sheet.





(j)
            Balance
                represents amounts owed to the Company's chairman of the board ($3,500)
                and another director of the Company
                ($7,288).





10.
            Accrued
                Expenses




Payroll
                  and consulting fees owed toofficers,
                  directors and shareholders
              
              $
              266,118All
                  other payroll and consulting fees
              
              
              849,210Interest
              
              
              180,585Others
              
              
              154,140$
              1,450,053





As
      of
      April 30, 2005, a substantial portion of accrued payroll and consulting fees
      originating in fiscal 2005 and 2004 was converted into restricted shares of
      the
      Company's common stock (see Note 11).





11.
            Shareholders'
                Deficiency





Weighted
      average number of common shares outstanding used to compute earnings per share
      for the years ended April 30, 2006 and 2005 are as follows:


2006
              
              2005Basic
                  and diluted
              
              
              57,413,468
              
              
              44,385,129





In
      addition to the conversions of the Company's debt referred to in Note 9 and
      the
      purchase of Rheingold referred to in Note 3, additional transactions affecting
      the Company's equity are as follows:





On
      March
      6, 2005 the Company reached agreements individually with its officers and
      certain board members, employees, consultants and lenders to convert the
      Company's indebtedness to all of them aggregating $2,530,979, into restricted
      shares of the Company's common stock. Accordingly, the Company issued 5,624,397
      restricted shares of its common stock, which was based on a contracted
      conversion price of $0.45 per share for all conversions as
      follows:




F-17




Shares
              
              Amount
                  ConvertedCompensation
                    payableto
                    officers
              
              
              1,211,904
              
              $
              545,357Consulting
                      feespayable
                      to officer and director (a)
              
              
              1,423,391
              
              
              640,526Loan
                        payable tominority
                        shareholder and director (b)
              
              
              277,778
              
              
              125,000Other
                      employees' andconsultants'
                      compensation
              
              
              1,861,324
              
              
              837,596Indemnification
                    of board member
              
              
              350,000
              
              
              157,500Other
                  loans
              
              
              500,000
              
              
              225,000Total
              
              
              5,624,397
              
              $
              2,530,979




Between
      June 2004 and October 2004 Drinks received proceeds of $962,500 related to
      the
      issuance of senior notes payable to Gourmet. Gourmet in turn received the
      identical proceeds from the issuance of its senior convertible notes over the
      same period to eight individual investors. The purpose of the Gourmet notes
      was
      to provide working capital to Drinks. The Gourmet notes bore interest at 10%
      per
      annum with the principal payable in eight quarterly installments, together
      with
      accrued interest, commencing 15 months after the issuance date of the respective
      note. On June 24, 2005 all of the note holders who had invested in the Gourmet
      notes, converted the aggregate outstanding balance of $1,046,510, consisting
      of
      the principal balance of $962,500 plus accrued interest of $84,010 into
      1,498,959 shares of the Company's common stock, based on a conversion price
      of
      approximately $0.70 per share. Costs relating to such conversion aggregated
      $26,916.




On
      January 25, 2006 the Company reached an agreement with one of its directors
      to
      convert consulting fees owed him aggregating $403,329 into 896,296 restricted
      shares of the Company's common stock. Also on January 25, 2006 the Company
      reached an agreement with an unrelated entity to convert consulting fees owed
      to
      that firm aggregating $90,000 into 200,000 shares. Based on a fair value of
      the
      common stock on the date the shares were granted the Company recognized
      additional consulting fees aggregating $76,740 for the year Ended in April
      30,
      2006.




In
      February 2006, the Company issued warrants to purchase 250,000 shares of the
      Company’s common stock at an exercise price of $0.56 per share. The warrants may
      be exercised at any time up to February 2011. The Company has determined, as
      of
      the date the notes were issued, that the warrants had a value of $40,000 in
      accordance with FAS 123(R) which is included in selling, general and
      administrative expenses in the accompanying consolidated statement of operations
      for the year ended April 30, 2006.




In
      March
      and April 2006, the Company received proceeds of $1,959,999 for the issuance
      of
      3,266,665 restricted shares of its common stock. As of April 30, 2006 the
      Company has issued 1,950,000 shares with the balance of 1,316,665 to be issued
      in the second quarter of the Company's 2007 fiscal year. The aggregate amount
      received on the unissued shares, $789,999, is included as a current liability
      in
      the accompanying balance sheet. In consideration of fees of $45,000 incurred
      with this financing the Company issued 100,000 restricted shares of Holding's
      common stock.




12.
            Income
                Taxes




No
      provision for taxes on income is included in the accompanying statements of
      operations because of the net operating losses in both fiscal years. Holdings
      and Drinks previously filed income tax returns on a June 30 and December 31
      tax
      year, respectively; however, both companies applied for and received a change
      in
      tax year to April 30. Drinks federal net operating loss carryforward as of
      April
      30, 2006 is approximately $13,000,000, available to offset future years' taxable
      income through 2026. The federal net operating loss carryforward of Holdings
      as
      successor to Gourmet Group, Inc. is approximately $1,500,000. Due to the annual
      limitations imposed by the Internal Revenue Code arising when shareholder
      ownership changes significantly, management feels it is unlikely that the
      related tax benefits from this carryforward will be realized in the future
and
      has
      provided a valuation allowance equal to the deferred tax
      benefit.




As
      of
      April 30, 2006, the components of current and non-current income tax assets
      were:





F-18




Deferred
                    tax asset arising fromNet
                    operating loss
              
              $
              5,845,000Accrued
                  compensation
              
              
              380,000Other
              
              
              20,0006,245,000Less
                  valuation allowance
              
              
              (6,245,000
              )$
              —




A
      valuation allowance has been provided against the entire deferred tax asset
      due
      to the uncertainty of future profitability of the Company. Management's position
      with respect to the likelihood of recoverability of these deferred tax assets
      will be evaluated each reporting period.





13.
            Related
                Party Transactions





Related
      party transactions, in addition to those referred to in Notes 9 and 11 are
      as
      follows:





Consulting
      Fees




For
      the
      years ended April 30, 2006 and 2005, the Company incurred consulting fees
      payable to a limited liability company which was controlled by the Company's
      chairman of the board aggregating $120,000 and $220,000, respectively. In
      addition, the Company incurred consulting fees payable to a limited liability
      company controlled by the Company's chief executive officer and largest
      shareholder of $0 and $18,735 for the years ended April 30, 2006 and 2005,
      respectively. These fees were entirely for the services rendered by each. For
      the year ended April 30, 2006 amounts due the chairman's consulting firm
      aggregated $90,800. As of April 30, 2005 unpaid fees owed to the chairman's
      consulting firm, aggregating $568,860 were converted into $1,264,133 restricted
      shares of the Company's common stock (see Note 11).




In
      fiscal
      2003 we entered into a consulting agreement with a company wholly owned by
      a
      member of the Company's board of directors. Under the agreement the consulting
      company is being compensated at a rate of $100,000 per annum. Fees incurred
      to
      the consulting firm aggregated $150,000 (due to additional work performed)
      and
      $100,000 for the years ended April 30, 2006 and 2005, respectively. As of April
      30, 2006 amounts due the director's consulting firm total $30,003. As of April
      30, 2006 unpaid fees owed to the director's consulting firm aggregating $403,329
      were converted into 896,296 restricted shares of the Company's common stock
      (see
      Note 11).




For
      the
      years ended April 30, 2006 and 2005 fees incurred by the Company to a consulting
      firm controlled by the Company's chief financial officer aggregated $0 and
      $80,666, respectively. As of April 30, 2006 amounts due the officer's consulting
      firm aggregate $34,000. As of April 30, 2005 fees owed to the officer's
      consulting firm aggregating $71,666 were converted into 159,258 restricted
      shares of the Company's common stock (see Note 11).




In
      December 2002 the Company entered into a consulting agreement with one of its
      shareholders which provides for $600,000 in fees payable in five fixed
      increments over a period of 78 months. The Company has an informal agreement
      with the shareholder pursuant to which he has the option of converting all
      or a
      portion of the consulting fees owed him into shares of Holding's common stock
      at
      a conversion price to be agreed upon. For each of the years ended April 30,
      2006
      and 2005 consulting fees incurred to this shareholder aggregated $92,304. As
      of
      April 30, 2006 amounts owed to this shareholder aggregated $99,996.




F-19




Interest
      Expense




For
      the
      years ended April 30, 2006 and 2005 the Company incurred interest expense on
      obligations due Greenwich which is referred to in Notes 9(b), 9(c), and
      9(f) aggregated $127,292(including $91,800 of amortization of discounts on
      such
      debt) and $53,064, respectively. In addition, interest expense to the member
      of
      the Company's board of directors, referred to in Notes 9(a) and 9(f) aggregated
      $15,323 and for the year ended April 30, 2006 and 2005
      respectively.




For
      the
      years ended April 30, 2006 and 2005 the Company incurred interest expense on
      obligations due the member of its board of directors who is referred to in
      Note
      9(e) aggregated $95,211(including $61,200 of amortization of discounts on such
      debt) and $14,061, respectively. In addition, indemnification made on behalf
      of
      the director through the issuance of 350,000 restricted shares of the Company's
      common stock resulted in additional interest expense of $157,500 (see Note
      11)
      for the year ended April 30, 2005.




For
      the
      year ended April 30, 2006 interest incurred on borrowings from the shareholders
      referred to in Notes 9(g) and 9(i) aggregated $10,172 and $8,538,
      respectively.




Royalty
      Fees




In
      connection with the Company's distribution and licensing agreements with its
      equity investee the Company incurred royalty expenses during 2006 and 2005
      of
      approximately $73,000 and $132,000, respectively. These amounts are included
      in
      selling, general and administrative expenses in the accompanying consolidated
      statements of operations.




14.
            Customer
                Concentration




For
      the
      year ended April 30, 2006 and 2005 one customer accounted for approximately
      14%
      and 18% of net sales.




15.
            Commitments




Lease




The
      Company leases office space under an operating sublease, with minimum annual
      rentals of $50,000 through July 31, 2009. Partners may at its option terminate
      the lease effective July 31, 2007, subject to formal notification to the
      sublessor no later than July 31, 2006. The Company leases additional office
      under an operating lease, that requires minimal annual rental payments of
      $42,000 until March 2008.




Rent
      expense for these leases aggregated approximately $105,000 and $50,000 for
      the
      years ended April 30, 2006 and 2005, respectively.




Future
      minimum payments for all leases are approximately as follows:





F-20




Year
                  Ending April
                  30,
              
              Amount2007
              
              $
              92,0002008
              
              
              51,000


License
      Agreement




In
      November 2005 the Company entered into an eight-year licensing agreement for
      sales of a new alcoholic beverage. Under the agreement the Company is required
      to pay royalties of 50% of the gross profit (less any direct marketing,
      promotional and distribution costs) on sales of the licensed product, as
      defined. The agreement also requires minimal royalty payments of $10 per case
      sold through November 2006, $2,000,000 through November 2008, $3,250,000 from
      November 2008 through November 2010 and $4,250,000 from November 2010 through
      November 2012. In addition the agreement contains a provision for minimum
      promotional and advertising payments of $5,000,000 through May 2007 and 12.5%
      of
      gross sales (as defined) over the subsequent 12 months.




Litigation




In
      December 2004 the Company was sued in the Superior Court of New Jersey by a
      European supplier for $51,656. The Company in turn filed a counterclaim against
      the supplier. In May 2006 the case was settled with the European supplier
      agreeing to certain marketing stipulations on its products and Drinks will
      pay
      $15,000 upon and execution of those stipulations.




On
      January 18, 2006 the Company was sued by an Australian company which is
      affiliated with the Company's Australian wine supplier, in the United States
      District Court for the Central District of California. The Plaintiff seeks
      recovery of compensatory damages of $450,000, punitive damages of an unspecified
      amount, recovery of costs and attorneys' fees based on allegations of nonpayment
      of goods. While the Company believes, based on its initial analysis, that while
      some amounts may be due the Plaintiff, corresponding counterclaims will
      substantially reduce that amount ultimately paid. The Company has moved to
      dismiss this action based on a choice of forum clause in the applicable contract
      with the plaintiff requiring any legal action to be initiated in Australia
      and
      has also asserted substantial defenses.




In
      July
      2006 a beverage distributor initiated litigation in the Supreme Court of the
      State of New York against the Company. The plaintiff has demanded payment of
      an
      aggregate of $86,921, in connection with amounts allegedly owed by RBCI and
      allegedly assumed by the Company in the Rheingold acquisition (see Note 3)
      and
      certain amounts allegedly owed by the Company itself. The Company is evaluating
      the claims made by the plaintiff in this litigation.




A
      claim
      has been made against the Company relating to certain intellectual property
      rights. Although this matter is in the preliminary stages the Company is
      confident that if the claimant moved forward with the complaint the Company
      would prevail.




16.
            Subsequent
                Event




In
      June
      2006 the Company entered into a $10 million, three-year, asset-based revolving
      financing facility with a financial institution to be used for working capital
      purposes. Interest on the line will accrue at 1.5% above the prime rate. The
      facility is secured by a first security interest in the assets of the
      Company.




F-21




Also
      in
      June 2006, the Company entered into a purchase order financing facility with
      another financial institution.




In
      June
      2006 the Company borrowed $50,000 from an investor which is repayable in July
      2006. Interest under this loan is payable in 36,364 shares of Holding's common
      stock. To date this loan has not been repaid.




In
      June
      2006 the Company issued 150,000 restricted shares of Holding's common stock
      to
      an investor for a purchase price of $0.60 per share.




In
      July
      2006 the Company borrowed $153,112 from the shareholder previously referred
      to
      in Notes 9(a) and(f). which is not documented and is payable on
      demand.




In
      July
      2006 the Company borrowed an aggregate of $300,000 from two entities which
      are
      affiliated with one another and issued convertible promissory notes. These
      notes
      are payable in January 2007 and are convertible into shares of Holding's common
      stock at $0.50 per share. In lieu of interest the Company issued warrants to
      purchase an aggregate of 300,000 shares of Holding's common stock for $0.50
      per
      share. These warrants are currently exercisable for a five-year period. The
      Company has determined that the fair values of the related conversion option
      and
      warrants were $72,000 and $75,000 respectively on the dates the notes were
      granted.




In
      August
      the Company borrowed $400,000 and issued a convertible promissory note in like
      amount. This note is due and payable in February 2007 and bears interest at
      the
      rate of 10%


per
      annum
      and is convertible into shares of Holding's common stock at $0.60 per share.
      In
      connection with this loan, the Company issued 333,333 shares of our Holding's
      common stock and agreed to issue such additional shares as may be necessary
      to
      cause the value of the shares on the date of issue to equal not less than
      $200,000 based on the average closing price of Holding's common stock for the
      five trading days immediately preceding the date of issue. The Company
      recognized the $200,000 (which was the fair value of the 333,333 shares on


the
      date
      the note was granted) as deferred interest expense to be amortized over the
      life
      of the related loan.




F-22


Note
          17.
          Restatement of Financial Statements
  The
          consolidated balance sheet as of April 30, 2006 and the related statement
          of
          operations for the year ended April30, 2006 have been restated to correct
          the
          following:
 
 During
          the period ended October 31, 2005, the Company acquired certain assets
          of
          Rheingold Brewing Co., Inc. (see Note 3). The Company originally recorded
          the
          consequences of this acquisition by applying a discount, to the Common
          Stock
          issued at the closing of the acquisition as well as to those shares to
          be issued
          in October 2006, as compared to the quoted market price of its stock at
          the time
          of the acquisition. The Company should have recorded this transaction based
          on
          the quoted market price of its Common Stock at the time of the acquisition
          and
          has restated the April 30, 2006 consolidated financial statements accordingly.
          In addition the Company was to begin amortizing the Rheingold intangible
          asset
          in the period in which sales were expected to begin. The cost of the intangible
          should be amortized to expense over the period of benefit, beginning as
          of the
          date of acquisition. Accordingly, the Company has restated the accompanying
          consolidated financial statements to reflect the amortization of the intangible
          asset beginning in the quarter ended January 31, 2006. The impact of the
          amortization on net income for the year ended April 30, 2006 to correct
          this
          error, was $ (41,522) which did not affect the stated per share loss (basis
          and
          diluted) previously reported. Furthermore, the Company should have recorded
          an
          impairment charge at April 30, 2006 to the intangible asset when such impairment
          was determined by management. The Company has restated the accompanying
          consolidated financial statements for the year ended April 30, 2006 to
          reflect
          the impairment charge of $804,161 or $(.01) per share (basic and
          diluted.)
 
 
 The
          Company entered into several transactions in the year ended April 30, 2006
          which
          involved the issuance of the Company’s common stock in satisfaction of
          obligations. Originally, in recording these transactions a discount was
          applied
          against the quoted market price per share of the common stock issued. The
          Company should have accounted for all such transactions based on the quoted
          market price of the Company’s common stock without discount. The impact on net
          loss for the year ended April 30, 2006, 2006 to correct these errors, was
          $
          (117,671) which did not affect the stated per share loss (basic and diluted)
          previously reported.
 
 During
          the year ended April 30, 2006 the Company issued convertible promissory
          notes
          with detachable warrants as part of investment units. In recording such
          transactions the Company did not recognize a value for the conversion features
          of the convertible promissory notes and did not recognize the value of
          the
          warrants issued as part of the investment units. The failure to report
          values
          for the conversion features of the convertible promissory notes and for
          the
          warrants was due to the Company applying discounts to the value of the
          common
          stock underlying such securities, which discounts should have not been
          recognized. The Company should have recognized the intrinsic value of the
          conversion features of the convertible promissory notes by allocating the
          proceeds received by the Company with respect to the investment units between
          the warrants and convertible promissory in order to determine the effective
          purchase price for the debt and the warrants, and the resulting effective
          conversion price of the convertible promissory notes. The impact on net
          loss for
          the year ended April 30, 2006 to correct these errors, was $ (491,000)
          or $
          (.01) per share (basic and diluted).
 
 None
          of
          the restatements affected net cash provided by operations, net cash used
          in
          investing activities or net cash provided by financing
          activities.
 
 F-23
  The
          following table sets forth the effects of the Restatements on the consolidated
          balance sheet as of April 30, 2006:
 
 **As****Previously****Selected
                      Balance Sheet Date at April 30, 2006:**
                  
                  **Reported**
                  
                  **Adjustments**
                  
                  **As
                      Restated**Intangible
                      assets, net
                  
                  $
                  999,217
                  
                  $
                  (2,212
                  )
                  $
                  997,005Total
                      assets
                  
                  
                  2,615,539
                  
                  
                  (2,212
                  )
                  
                  2,613,327Notes
                      and loans payable (current portion)
                  
                  
                  2,357,576
                  
                  
                  281,450
                  
                  
                  2,639,026Current
                      liabilities
                  
                  
                  7,019,883
                  
                  
                  281,450
                  
                  
                  7,301,333Additional
                      paid in capital
                  
                  
                  10,838,165
                  
                  
                  1,170,692
                  
                  
                  12,008,857Accumulated
                      deficit
                  
                  
                  (15,405,216
                  )
                  
                  (1,454,354
                  )
                  
                  (16,859,570
                  )Shareholders
                      deficit
                  
                  
                  (4,504,344
                  )
                  
                  (283,662
                  )
                  
                  (4,788,006
                  )Total
                      liabilities and shareholders deficiency
                  
                  
                  2,615,539
                  
                  
                  (2,212
                  )
                  
                  2,613,327
  **Consolidated
          Statement of Operations**
 
 The
          following table sets forth the effects of the Restatements on the Consolidated
          Statements of Operations for the year ended April 30, 2006
  Selling,
                      general and administrative expenses -as previously
                      reported
                  
                  $
                  4,606,927Impact
                      of restatements
                  
                  
                  159,193Selling,
                      general and administrative expenses - restated
                  
                  $
                  4,766,120Loss
                      before other expenses (net) - as previously reported
                  
                  $
                  4,154,155Impact
                      of restatements
                  
                  
                  159,193Loss
                      before other expenses (net) - restated
                  
                  $
                  4,313,348Interest
                      expense -as previously reported
                  
                  $
                  (435,243
                  )Impact
                      of restatements
                  
                  
                  (491,000
                  )Interest
                      expense - restated
                  
                  $
                  (
                      926,243
                  )Impairment
                      of intangible asset - as previously reported
                  
                  $
                  -Impact
                      of restatements
                  
                  
                  (804,161
                  )Impairment
                      of intangible asset - restated
                  
                  $
                  (804,161
                  )Other
                      expenses (net) - as previously reported
                  
                  $
                  (236,862
                  )Impact
                      of restatements
                  
                  
                  (
                      1,295,161
                  )Other
                      expenses (net) - restated
                  
                  $
                  (1,532,023
                  )Net
                      loss - as previously reported
                  
                  $
                  4,391,017Impact
                      of restatements
                  
                  
                  1,454,354Net
                      loss - as restated
                  
                  $
                  5,845,371Net
                      loss per share (basic and diluted) - as previously
                      reported
                  
                  $
                  (.08
                  )Impact
                      of restatements
                  
                  
                  (.02
                  )Net
                      loss per share (basic and diluted) - restated
                  
                  $
                  (.10
                  )
 
 F-24
 18 .
          Amendment to Form 10kSB
 
 The
        Company’s Form 10QSB for the year ended April 30, 2006 has been amended to
        reflect the restatements noted in Note 17, additional disclosure in Note
        2
        pertaining to revenue dilution, and revisions to the disclosure in Item 8A
        “Controls and Procedures” to provide additional required
        information.
 
 F-25