**FORM
      10-KSB**




**x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF
      1934**




For
      the
      fiscal year ended April 30, 2008




**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 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
              incorporation
                or organization)
            (I.R.S.
                Employer
              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: $4,509,070




As
      of
      July 17 2008, there were 81,338,801 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 $9,926,000, based on the average of the bid
      and
      ask prices of such stock on that date of $0.25.




Transitional
      Small Business Disclosure Format (Check one): Yes o No x





**Table
      of Contents**





DRINKS
      AMERICAS HOLDINGS, LTD.


FORM
      10-KSB ANNUAL REPORT





Table
      of
      Contents





PART
                IItem
                1.
            Description
                of BusinessItem
                2.
            Description
                of PropertyItem
                3.
            Legal
                ProceedingsItem
                4.
            Submission
                of Matters to a Vote of ShareholdersPART
                IIItem
                5.
            Market
                for Common Stock and Related Shareholder Matters and Small Business
                Issuer
                Purchase of Equity SecuritiesItem
                6.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                OperationsItem
                7.
            Financial
                StatementsItem
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                DisclosureItem
                8A.
            Controls
                and ProceduresItem
                8B.
            Other
                InformationPART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons and Corporate
                Governance; Compliance with Section 16(a) of the Exchange
                ActItem
                10.
            Executive
                CompensationItem
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Shareholder MattersItem
                12.
            Certain
                Relationships and Related TransactionsItem
                13.
            ExhibitsItem
                14.
            Principal
                Accountant Fees and ServicesSIGNATURES


2


**Explanatory
      Note**




Unless
      otherwise indicated or the context otherwise requires, all references below
      in
      this Report on Form 10-KSB 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 New York limited liability company,
      Drinks Global Imports, LLC, and (v) our 100% owned New York 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 report. 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.


3


**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. As described below, as of
      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 DA’s
      business.





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 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, 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 at that time. Prior to the share exchange transaction
      described above, Maxmillian Partners, LLC ("Partners") owned approximately
      99%
      of the outstanding capital stock of DA and immediately after the share exchange
      became our majority shareholder. Subsequently, Partners distributed its shares
      pro rata to its 21 members as part of a 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 DA's
      year
      end of April 30th, and all of our historical financial statements prior to
      the
      share exchange are those of DA.





**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 with icon entertainers and celebrities.





We
      develop, produce (primarily through contracts with independent contractors
      called co-packers), market and/or distribute alcoholic and non-alcoholic
      beverages for sale primarily in the continental United States and have recently
      expanded our distribution network to certain international and duty free
      markets. 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
      own
      certain of our products jointly with celebrities, or their affiliates. We refer
      to all of the products we distribute as "our products" throughout this
      report..





Over
      the
      past 12 months we have acquired and developed additional brands and distributed
      existing products, and reallocated 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 have
      regularly made 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. We have tried to focus on the most efficient growth opportunities.
      Although our working capital position has improved as a result of our December
      2007 Private Placement of our preferred stock , we will continue to carefully
      manage our working capital and focus on brand and business opportunities that
      we
      believe offer the most strategic sense and most efficient return on investment.
      We expect that business decisions will continue to be influenced by the
      availability of working capital.


4


Our
      strategy is to take advantage of icon celebrity brands and the strategic
      relationships our management team has developed throughout their careers. We
      distribute our products through established distributors, virtually all of
      which
      are 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, typically, pursuant
      to our specifications. Our management's relationships with manufacturers,
      distillers, development/research companies, bottling concerns and certain
      customers provide the foundation through which we expect to grow our business
      in
      the future.





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 other relationships 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 products or trademarks from, or entered into
      ventures with, partners such as Trump Marks LLC, Willie Nelson, Bo Dietl, Dr.
      Dre, Wynn Starr Flavors, Inc., Old Whiskey River, LLC, DAS Communications,
      Interscope Geffen A&M, Rheingold Beer, Interamericana de Licores S.A. of
      Panama, Newman's Own, Inc., Paul Newman's Beverages, Marvin Traub Associates,
      Cohete Rum S.A. and Damiana S.A.Several
      of thebrands
      that we have acquired have the strategic advantage of association with "icon"
      entertainers which provide us efficient promotion and marketing opportunities.
      We believe the public relations impact of our association with these icons
      and
      the resulting media opportunities cuts across electronic and print media formats
      and delivers an exponential impact in building brand awareness and consumer
      excitement. 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, and in most cases also produce (through
      co-packers), 8 unique beverage brands.





Our
      major
      alcoholic beverages are:





Trump
      Super Premium Vodka, produced in Holland, a product developed by master
      distiller Jacq DeLac which was recently awarded a Four Star Highly Recommended
      Rating from Paul Paucult in a respected spirits journal and received a “90-95”,
“Superb Highly Recommended” rating from the respected Wine Enthusiast Magazine
      in its March 2008 Buying Guide issue. Trump Flavored Vodka, which we began
      selling in February 2008, are crafted at the Wanders Distillery in Holland,
      is
      comprised of Trump Premium Citron, Grape, Orange, and Raspberry, distilled
      with
      all natural fruit flavors combined with the award-winning Trump Super Premium
      Vodka ; Old Whiskey River Bourbon (R), an award winning small batch 6 year
      old
      bourbon (sometimes referred to in this Report as "Old Whiskey River "); Cohete
      Rum, an award winning smooth sipping rum in the Cuban style, infused with
      Guarana (sometimes referred to in this report as "Cohete"); Aguila Tequila,
      a
      100% tequiliana weber blue agave reposado tequila (sometimes referred to in
      this
      Report as "Aguila"); Damiana, a Mexican liqueur made from the Damiana root
      and
      at times given in Mexican culture as a wedding gift because of its perceived
      aphrodisiac characteristics; premium select-label wines from selected vineyards
      principally in France and Italy, and Casa Bo Margo wines from selected vineyards
      in Italy. In addition, as part of our recent joint venture with Grammy
      Award-winning producer and artist, Dr. Dre we will soon launch a super premium
      cognac and a unique sparkling vodka.




5


Our
      major
      non-alcoholic beverages are:





Newman's
      Own lightly sparkling fruit juice drinks, all natural juice drink products
      (sometimes referred to in this report as "Newman's Own"). Newman's Own consists
      of six sparkling fruit juice drinks and three fruit flavored, lightly sparkling
      waters.





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.





**STRATEGY**





Our
      long-term business strategy is to expand the sales and distribution of our
      celebrity and icon alcoholic and non-alcoholic beverage portfolio and to add
      branded beverage products into the largest and most profitable beverage
      categories. Our business model takes into account the limited working capital
      available for expansion of our business by leveraging the impact celebrities
      have in generating public relations and consumer awareness for our brands across
      all media platforms at comparatively low cost and investment. We often refer
      to
      entertainers and celebrities as “icons” in this report.





Key
      elements of our business strategy include: creating consumer awareness and
      demand for our brands utilizing our icon brand strategy and the demonstrated
      ability of celebrities to generate public relations and promotional brand
      marketing activity at low cost; promoting our relationships with Donald Trump,
      Willie Nelson and Paul Newman as well as additional entertainers introduced
      to
      us through the relationships we recently developed with Interscope Geffen
      A&M, of Universal Music Group including Dr. Dre; capitalizing on our
      distribution relationships with Kendall Jackson Wine Company and Phoenix
      Beehive, which distributes Heineken beer in metro New York and targeting
      acquisitions.





Since
      we
      were founded in 2002, the implementation of our business plan has been
      negatively effected by the limited amount of working capital available to us
      Our
      working capital position has improved as a result of our December Private
      Placement of our preferred stock. We will continue to carefully manage our
      working capital and focus on our celebrity and icon brand strategy relying
      on
      public relations and strategically leveraging our marketing and production
      partners’ resources and notoriety in order to implement our growth strategy
      while also focusing on our current brand portfolio.





**ALCOHOLIC
      BEVERAGE DISTRIBUTION**





We
      have a
      network of approximately 50 alcohol beverage distributors covering substantially
      all of the states within the United States. Our distributors buy our products
      from us for resale. We believe our most important distribution relationships
      include Kendall Jackson Wine Company and its subsidiary Regal Wine Distributing,
      which distribute our products in 11 states, and Phoenix Beehive the metro New
      York Heineken Beer distributor. We believe our products are given greater
      priority by these distributors than they would be given by larger spirits and
      wine distributors which sell a substantially larger number of premium spirits.
      Phoenix Beverages and Regal Wine Co., alcohol distributors, including
      affiliates, accounted for approximately 12.9% and 9.5%, respectively, of our
      sales in fiscal 2008.





**NON-ALCOHOL
      BEVERAGE DISTRIBUTION**




We
      have a
      network of approximately 20 non-alcoholic beverage distributors focused
      primarily in the east and west coasts of the United States. We have formed
      a
      joint venture with Tuscan Buyer Dairy for the delivery of our non-alcoholic
      products focusing on the food service sector in the Metro New York area. This
      gives us access to an additional distribution network in the Metro New York
      Market. We have also entered into an distribution relationship for the retail
      sector with SKI, a beverage and beer wholesaler in Metro New York, to assist
      us
      in expanding our non alcoholic and beer distribution access. On a national
      basis, we are expanding our distribution of Newman's Own, adding distributors
      in
      California, Texas, Illinois, Vermont, Nebraska, and Washington, as well as
      other
      key markets, to our existing distribution areas of New York, Connecticut and
      New
      Jersey and Pennsylvania. We have organized a network of independent contractors
      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. We have also utilized
      a
      group of per diem merchandisers to focus on the Metro New York market in the
      higher selling summer season.




6


**WINE
      AND SPIRITS INDUSTRY OVERVIEW**





The
      United States beverage alcohol market consists of three distinct
      segments:





Beer,
      wine and distilled spirits. Distilled spirits consist of three primary
      categories: white goods, whiskey and specialties. White goods, consisting of
      vodka, rum, gin and tequila, represents the largest category, accounting for
      approximately 53.1% of industry volume in 2007. Vodka is the largest product
      within the distilled spirits industry, accounting for 28.2% of distilled spirits
      case sales in the United States in 2007. Despite a slowing economy, the
      distilled spirits industry chartered its eighth consecutive year of growth,
      with
      sales increasing 5.6 percent, totaling $18.2 billion , and volume rising 2.4
      percent to 181.5 million cases. We anticipate that the industry will realize
      another year of growth in 2008, as the Distilled Spirits Council of the United
      States forecasts sales growth of 4.6 percent to $19 billion with volume expected
      to rise 1.9 percent to 185 million cases. Significant consolidation in the
      global spirits industry has produced five primary large competitors: Diageo,
      Allied Domecq, Pernod Ricard, Brown-Forman and Bacardi & Company,
      Ltd.





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. Current projections indicate an 11% increase in drinking
      age
      adults from 2005 to 2010.





**Vodka**





The
      vodka
      category is both the largest and fastest growing category of spirits in the
      United States with sales of 51.2 million cases in 2007. Imported vodkas
      flourished in the US market in 2007 as consumers gravitated to super-premium
      brands The imported vodka sector has grown steadily for 14 consecutive years
      with recent growth coming primarily from super-premium brands with an increase
      in case sales of 14.2% over 2006 on case sales of 4.7 million. Grey Goose,
      the
      largest selling product in the super-premium category, reported sales of $53.4
      million 2007, an increase of 19.3%
      from 2006.





**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 25.4% of distilled spirits case sales in 2007, with 46.2
      million cases sold.





**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 accounted for approximately 13.0% of total U.S. spirits
      case sales in 2007. Case sales grew at annual growth rate of 4.1% from 2006.
      Two
      brands, Bacardi and Captain Morgan, dominate this category with 2007 combined
      U.S. sales of $298 million.





**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
      sale of the industry report for 2008, Beverage World magazine indicated that
      non
      alcoholic beverages remains a robust growing industry, charting 1.3 percent
      growth last year. Beverage categories that have a healthy halo, ready-to-drink
      teas and bottled water, and enhanced waters and energy drinks, are the principal
      growth sectors.


7


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, for 2003, the New Age
      or
      alternative beverage category consists of the following segments: premium soda,
      ready-to-drink ("RTD") coffee, RTD tea, RTD waters (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.





**PRODUCTS,
      ACQUISTIONS AND ALLIANCES**





**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 four ventures with icon
      entertainers. Our business model leverages consumer identification with these
      icons, focusing on high margin premium products. We believe the public relations
      impact of our association with these icons and the resulting media opportunities
      cuts across electronic and print media formats and delivers an exponential
      impact in building brand awareness and consumer excitement.





**ALCOHOLIC
      BEVERAGE PRODUCTS**





The
      alcoholic products distributed by the Company are Trump Super Premium Vodka,
      Trump flavored vodka, Old Whiskey River Bourbon, Aguila Tequila, Cohete Rum,
      Damiana, Casa Bo Margo wines and a collection of select label, super premium
      wines. In December 2002, we purchased 25% interest in Old Whiskey River
      Distilling Company, LLC which owns or licenses the related trademarks and trade
      names associated with the Old Whiskey River products. We hold the exclusive
      worldwide distribution rights, through December 31, 2017, subject to an
      indefinite number of five-year renewals, for Old Whiskey River Bourbon which
      is
      marketed in association with Willie Nelson, a renowned country western
      entertainer. Our distribution agreement is subject to certain minimum sales
      requirements. 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 featured item at Specs chain of liquor stores in Texas . We have
      developed a marketing plan that focuses on Florida, North and South Carolina
      and
      Texas where Willie Nelsons’ brand image is high and bourbon consumption is
      significant.





We
      own a
      55% interest in the trademark for Aguila Tequila, a premium 100% Blue Agave
      Tequila, produced by El Viejito 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 began distributing
      this product in November, 2003. We distribute Aquila Tequila on a national
      basis
      in approximately 40 states. We did not produce Aguila Tequila in 2006 while
      we
      focused on the development of Trump Super Premium Vodka. However, we have
      expanded the selections of Aguila from one sku of Repasado to Silver, Repasado
      and Anejo selections with distinctive bottle designs for each price selection.
      Distributors in New York, Missouri, Texas and Florida have agreed to market
      these products. We launched the new brand selections in November,
      2007.





We
      have
      developed and own the trademark and formula for Cohete Rum, a 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.
      We
      distribute Cohete Rum in Florida with a specific focus on the Hispanic
      market.


8


In
      fiscal
      year 2005 we entered into a U.S. distribution contract giving us the exclusive
      sales and marketing rights to Damiana a Hispanic liquor for the United States
      market. We distribute this product on a national basis in approximately 35
      states. We are pleased with the market reception to this product. We have
      introduced point of sale marketing material aimed at expanding consumer brand
      awareness for Damiana.





In
      October 2005, we acquired ownership of a long-term license for (188 years)
      for
      the Rheingold trademark and other assets related to the Rheingold brand. 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.
      We are developing a new formula for this product with new packaging. We have
      delayed the introduction of this project originally contemplated to occur in
      the
      fall of 2007. At this time, we have no specific launch date and the roll-out
      of
      this product will depend on our working capital position and the projected
      return on the marketing investment required to launch this product. In May,
      2006
      we licensed the Rheingold trademark for use with various types of
      clothing.





Also,
      in
      association with Bo Dietl, we have commenced the import and sale of selected
      wines under the Casa Bo Margo brand in the metro New York and Connecticut
      markets. We initiated the distribution of these products in November, 2006,
      and
      we intend to continue marketing this premium line of Italian wines with support
      from Mr. Dietl a prominent radio television personality. This wine is currently
      the house wine of several prominent New York City restaurants.





In
      fiscal
      2005, we formed Drinks Global Imports, LLC ("DGI"), a new subsidiary in which
      we
      own 90% of the outstanding membership units. This company imports premium wines
      from around the world, and has to date focused on wines from France and Italy.
      DGI commenced operations in September, 2005 and we expect its business will
      continue to grow in the future. We currently distribute these products in the
      Metro New York market New Jersey, Connecticut and other New England markets,
      Kansas and Missouri.





In
      November 2005, we signed a license agreement with Trump Mark, LLC to utilize
      the
      name Trump, until November 15, 2013, in connection with super premium vodka.
      The
      formula for this product was developed by master distiller Jacq DeLac. Bruni
      Glass, Italy, designed a proprietary bottle for Trump Super Premium Vodka and
      Milton Glaser designed a bottle decoration. The product was unveiled at the
      2006
      Wine and Spirits Wholesalers convention. We launched Trump Super Premium Vodka
      on October 28, 2006 in the metro New York market. We subsequently expanded
      distribution to 46 states. The product has been sold through several key
      distributors including Phoenix Distribution and in 11 markets through Kendal
      Jackson Wine Companies distribution organization and its affiliates. Market
      reaction to this product has been excellent. Trump Super Premium Vodka was
      recently awarded a Four Star Highly Recommended rating by a nationally prominent
      spirits journal and  received
      a “90-95”, “Superb Highly Recommended” rating from the respected Wine Enthusiast
      Magazine in its March 2008 Buying Guide issue. In February 2008, we commenced
      sales of Trump flavored vodkas, which are comprised of Trump Premium Citron,
      Grape, Orange, and Raspberry, distilled with all natural fruit flavors combined
      with the award-winning Trump Super Premium Vodka.





In
        February 2008 we entered into a joint venture with Grammy Award-winning producer
        and artist, Dr. Dre. The Company and Dr. Dre have formed the joint venture
        to
        identify, develop, and market premium non-alcoholic beverages, The deal is
        under
        the umbrella of the agreement between the Company and Interscope Geffen A&M
        Records. The joint ventures first beverages will be a super premium cognac
        selection and a unique sparking vodka.





**NON
      ALCOHOLIC PRODUCTS**





Our
      non-alcoholic product offerings are Newman's Own lightly sparkling fruit juice
      drinks and sparking fruit waters. Newman's Own lightly sparkling fruit juice
      drinks are products 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. We have recently extended this agreement through October
      2009. We successfully test marketed Newman's Own in the New York metropolitan
      area during 2005. Our test marketing was focused on five fruit juices based
      on a
      proprietary formulas developed in conjunction with Paul Newman Foods. As a
      result of the success of the test marketing, we have expanded the product line
      of Newman's Own drinks to include six fruit sodas and three fruit flavored,
      lightly sparkling waters. Newman's Own drinks are all natural, are certified
      Kosher and are made with real fruit juice and pure sugar cane.


9


We
      began
      distributing Newman's Own in the New York metropolitan area, New Jersey and
      Connecticut and have expanded distribution to California, State of Washington,
      Texas, Illinois, Alabama, Alaska, Pennsylvania, Vermont and Nebraska markets.
      Key grocery chains in the New York metropolitan area include Key Food, ShopRite,
      and Shows 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 16 oz. glass bottles in lemonade, lemon lime, orange mango,
      blackberry, natural cherry, and raspberry kiwi flavors as well as three fruit
      flavored waters. 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 these products, we will continue to
      dedicate resources to the Newman's Own products and hope to increase the
      distribution area for these products in the future.





**FLAVORS,
      RESEARCH AND DEVELOPMENT RELATIONSHIP**


We
        have a
        requirements contract with Wynn Starr Flavors, Inc. ("Wynn Starr"), a leading
        supplier of flavors and similar product components through which, with certain
        exceptions, we are required to acquire the flavors we require for our products.
        Wynn Starr performs research and development for us with respect to the flavors
        we need for new and/or proposed products. Wynn Starr became a DA shareholder
        by
        investing $250,000 in DA in 2002, and, under its agreement with us, has provided
        research and development services for us thereby lessening the expenses we
        would
        otherwise incur. The relationship has been essential to us, and provides
        a
        significant research resource at relatively low cost, e.g. developing drinks
        for
        targeted markets. We expect that certain of our new products will utilize
        patents developed and licensed by Wynn Starr. Wynn Starr 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 or
      acquire.





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 our shareholders. We have also entered into a joint venture
      (50%
      each) with Interscope Geffen A&M, of Universal Music Group, to commercialize
      and market jointly owned alcoholic and non alcoholic beverage products in
      collaboration with artists under contract with Interscope Geffen A&M. We
      believe that these persons can provide access to entertainment personalities
      and
      will help us to develop and access unique marketing and promotional
      opportunities in spirits and beverages. Our relationship with Shep Gordon has
      resulted in agreements with country music "icon" Willie Nelson and access to
      various culinary icons and introductions to other promotional resources. Under
      our agreement with Mr. Gordon, which we entered into in December 2002, he will
      also provide us with marketing advisory services through June
      2009..





**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 pursuant to us under this agreement. He also serves on our Board of
      Directors.





**MARKETING,
      SALES AND DISTRIBUTION**





**MARKETING**





Our
      marketing plan is based upon our strategy of icon branding. We successfully
      launched Trump Super Premium Vodka by using the public relations activity across
      numerous media platforms to generate a high level of brand awareness and
      consumer interest. This model has also been used for Old Whisky River Bourbon
      and Paul Newmans Sparkling Fruit Beverages. 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 products with the
      other comparable premium brands and provide a higher quality product at the
      selected price points. We believe our Icon strategy supports category premium
      pricing.




10




Our
      marketing for our alcoholic brands focuses on building brand recognition with
      our distributors with the goal of a regional and, if demand warrants, a national
      roll-out of most of our products, focusing on population centers. Our marketing
      of our non-alcoholic brands has been focused on building the brands recognition
      initially in the New York metropolitan area at the retail level and generally
      developing market profile through promotion tasting at retail distribution
      locations. Our marketing plan contemplates expanding distribution to the east
      and west coast regions, focusing on population centers. 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 predominantly 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, for example, Trump
      Super
      Premium Vodka is sold at Ralphs in California, and Walgreen's, ABC Liquor,
      Albertsons and various other retail chains. Old Whiskey River is sold nationally
      at Texas Roadhouse and at Specs in Texas. Newmans sparkling fruit beverages
      and
      waters are currently sold at several hundred grocery and retail chain stores
      including Raley’s Food Stores, Shaws, ShopRite, Price Choppers, and Key
      Food.





Our
      sales
      efforts are supported by two independent contractors each with in excess of
      25
      years experience in beverage brand building who have specific market
      responsibility. These contractors manage a network of national brokers
      responsible for local markets.





**DISTRIBUTION**





We
      sell
      the majority of our products through our distribution network, and we currently
      have relationships with approximately 72 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 typically contract with
      independent 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 shipment to our distributors and
      customers of our products, net of anticipated discounts and allowances. All
      sales are final and we have a "no return" policy, although we occasionally
      accept returned products.




11


**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 WV Wanders in Holland, Heaven Hill Distilleries
      in Kentucky, Cold Spring Brewing Company in Minnesota, Interamericana de Licores
      in Panama, Tequila El Viejito S.A. in Guadalajara, Mexico, and Damiana S.A.
      Mexico. We have an option to acquire WV Wanders production facility in Holland.
      WV Wanders produces Trump Super Premium Vodka and Trump Flavors. In the event
      our relationship with any of our co-packers is terminated, we believe we could
      replace the co-packer with another of comparable quality. However, in such,
      case
      our business would be disrupted until a replacement co-packer was identified
      and
      commenced production.





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. We rely on and believe our co-packers comply with applicable
      environmental laws.





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 14 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. Typically, we rely on our contract packers to secure raw
      materials that are not unique to us. 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. Bottle production for Trump Super Premium
      Vodka and Trump flavored vodka transferred to China at the end of fiscal 2008.
      We consider World Enterprises Sino, Ltd, which now supplies the bottles for
      Trump Super Premium Vodka, and Wynn Starr to be a significant suppliers of
      raw
      materials, because they supply specialty products. We believe that we have
      adequate sources of raw materials, which are available from multiple
      suppliers.





**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 Newman's Own 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 generally 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 be 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.


12


We
      believe we select only those suppliers that use only quality components. We
      have
      a full-time senior executive who oversees all production processes with respect
      to product distilling. We also inspect packaging suppliers' production
      facilities and monitor their product quality.





**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 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),
      "Cohete" (TM), "Swiss T"(TM), " "Screaming Monkey" (TM) and "Aguila" (TM),
      Casa
      BoMargo (TM). Trademarks have been filed and pending with no opposition for
      Drinks Americas (TM), "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), "Party
      Harder"(TM), Success Distilled (TM) and The World's Finest Super Premium Vodka
      (TM).





We
      also
      own, indirectly as a member of a limited liability company, an interest in
      the
      "Old Whiskey River" trademark. We also license the Rheingold 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 the marketing and
      sale of Trump Super Premium Vodkaand
      Trump flavors.





Our
      license agreement for the Trump trademark provides for minimum royalty payments
      through November 2012. The agreement provides for certain minimum royalty
      payments, which if not paid, could result in termination of the
      license.





Under
      our
      license agreement for Old Whiskey River, we are obligated to pay royalties
      of
      between $10 and $33 per case, depending on the size of the bottle. Under our
      license agreement for Newman's Own, we are obligated to pay royalties of $.95
      per twelve bottle case. Our Rheingold license requires us to pay the licensor
      $3
      per barrel for domestic sales and $10.33 for foreign sales. Under our license
      agreement for Damaina Liqueur we are obligated to pay a percentage of gross
      profits, less certain direct selling expenses through May 2008 and $3 per case
      thereafter. Under our license agreement with Aguila Tequila we are obligated
      to
      pay $3 per case.




Under
      our joint venture agreement with Dr. Dre we are
      obligated to pay a percentage of gross profits, less certain direct selling
      expenses.





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.





**COMPETITION**





The
      beverage industry is highly competitive. We compete with other beverage
      companies, most of which have significantly more sales, significantly more
      resources and which have been in business for much longer than we have. We
      compete with national and regional beverage producers and "private label"
      suppliers. Some of our alcohol competitors are Diageo, Pernod Ricard,
      Brown-Forman, Castle Brands, Allied Biomes and Bacardi & Company, Ltd. On
      the non-alcoholic front, some of our direct competitors include Cadbury
      Schweppes (which produces Snapple and Mystic among other brands) Camper,
      Boylands and Hansens. We believe it is a costly and difficult for 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.


13


**EMPLOYEES**





As
      of
      July 17, 2008, we had twelve full-time employees and an additional five persons,
      who were independent contractors working for us either in their individual
      capacities or through professional service companies controlled by them. No
      employee is represented by a labor union. Two 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**




Investment
      in the Company 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 report. 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**




WE
      ARE A
      DEVELOPING COMPANY AND OUR PROSPECTS MUST BE CONSIDERED IN LIGHT OF OUR SHORT
      OPERATING HISTORY AND 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 requested by
        distributors.
  14


There
      can
      be no assurance 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,
      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.





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 is 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.





As
      is
      customary in the contract packing industry for small companies, we are expected
      to arrange for the production of our products 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 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.


15


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
      ENTITLE US TO DISTRIBUTE CERTAIN OF OUR PRODUCTS. IF ANY OF THESE AGREEMENTS
      WERE CANCELLED IT WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
      BUSINESS.





Our
      rights to distribute certain of our products are generally governed by
      distribution agreements which contain minimum sales targets and other
      requirements some of which 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 on our ability to maintain high levels of employee efficiency, 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 the results of our
      operations.





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 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, 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 and independent contractors. Due to increase in our working
      capital from the offering of our preferred stock we closed in December, 2007,
      we
      expect to timely pay our employees and independent contractors in the future.
      However, if we fail to do so, 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. Many of these
      individuals provide services to us as independent contractors. 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,
      typically, 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. Further, if our relationship with a producer of any of our products
      is terminated, it is likely our business will be disrupted until a replacement
      producer is identified and production commences.


16


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, flavoring, caps
      and packaging materials. Currently, we purchase our flavor concentrate from
      two
      flavor concentrate suppliers. 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 through negotiation with our flavor houses, 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. If we are unable to continue to find adequate suppliers for
      our
      raw materials on economic terms acceptable to us, it 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, if we have
      the
      working capital necessary to do so, 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 or business. We have
      entered into, and may continue to enter into, joint ventures, which may also
      carry risks of liability to third parties.





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, and profitably exploit our products.





WE
      HAVE
      LIMITED WORKING CAPITAL AND WILL NEED ADDITIONAL FINANCING IN THE
      FUTURE.





Our
      working capital needs in the future will depend upon factors such as market
      acceptance of our existing products and of any 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
      additional debt or equity financing in the future to fully implement our
      business plan. We may not be able to obtain any additional financing on
      acceptable terms or at all. As a result, we may not have adequate working
      capital to implement future expansions, maintain sufficient levels of inventory,
      maintain our current levels of operation or to pursue strategic acquisitions.
      Our failure to obtain sufficient financing would likely result in 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.


17


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, including 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,
      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.





**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 made
      progress towards establishing market recognition for certain of our brands
      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, which gives them significant advantages in gaining consumer
      acceptance for their products, access to shelf space in retail outlets and
      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, Castle
      Brands, Brown-Furman and Bacardi & Company, Ltd. Some of our direct
      competitors in the alternative beverage industry include Cadbury Schweppes
      (Snapple, Stewart, Nantucket Nectar, Mystic), 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.


18


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) increases in
      federal, state or foreign excise taxes. A decline in the consumption of alcohol
      would likely negatively affect our business.





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 you 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 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 climate 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, and 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.


19


**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.





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 over-the-counter 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.




A
      LARGE
      NUMBER OF SHARES OF COMMON STOCK WILL BE ELIGIBLE FOR FUTURE SALE AND MAY
      DEPRESS OUR STOCK PRICE.





Our
      shares that are eligible for future sale may have an adverse effect on the
      price
      of our stock. As of July 17, 2008, there were 81,338,801shares of our common
      stock outstanding. Also, we have issued approximately over 31,000,000 shares
      of
      our common stock since March 2005. Furthermore, in connection with our December
      Private Placement, we issued 5,000,000 shares of common stock, 11,000 shares
      of
      our Series A Preferred Stock, which is convertible into 22,000,000 shares of
      our
      common stock and warrants to acquire 600,000 shares of our common stock. A
      significant percent of these shares either are or soon will be eligible to
      be
      traded. Our average daily trading volume for the previous three months ended
      July 17, 2008 was approximately 130,000 shares of our common stock. Sales of
      substantial amounts of common stock, or a perception that such sales could
      occur, and the existence of options or warrants to purchase shares of common
      stock at prices that may be below the then current market price of the common
      stock, could adversely affect the market price of our common stock and could
      impair our ability to raise capital through the sale of our equity
      securities.





YOUR
      OWNERSHIP INTEREST, VOTING POWER AND THE MARKET PRICE OF OUR COMMON STOCK MAY
      DECREASE BECAUSE WE HAVE ISSUED, AND MAY CONTINUE TO ISSUE, A SUBSTANTIAL NUMBER
      OF SECURITIES CONVERTIBLE OR EXERCISABLE INTO OUR COMMON STOCK.





We
      have
      issued common stock and, warrants, and convertible notes to purchase our common
      stock to satisfy our obligations and fund our operations. In the future we
      may
      issue additional shares of common stock, options, warrants, preferred stock
      or
      other securities exercisable for or convertible into our common stock to raise
      money for our continued operations. We continue to seek additional investors.
      If
      additional sales of equity occur, your ownership interest and voting power
      in us
      will be diluted and the market price of our common stock may decrease.




20


**ITEM
      2. DESCRIPTION OF PROPERTY**





We
      lease
      2,739 square feet of office in Wilton, Connecticut under an operating sublease
      which will expire July 31, 2009, with base annual rent payments of approximately
      $50,000 through July 31, 2009. Under our lease, we are also responsible for
      our
      pro rata share of real estate tax increases. We also lease 1100 square feet
      of
      office space in New York City, New York, with minimum annual rent payments
      of
      approximately $4,000 per month. Various additional charges are passed through
      to
      us under this lease. This lease will expire on March 31, 2009. We are subleasing
      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
      or
      about July 19, 2006, Manhattan Beer Distributor, LLC, a wholesale distributor
      of
      beverages in the State of New York, (“MBD”) initiated litigation in the Supreme
      Court of the State of New York in Bronx County (Index No. 17776-2006) against
      the Company. Plaintiff sued for approximately $87,000 plus interest, for alleged
      distribution services rendered both prior and subsequent to the acquisition
      of
      certain assets related to Rheingold Beer. We have answered the complaint and
      have filed a cross-claim against RBCI Holdings, Inc., the entity that sold
      us
      the assets, for the portion of the complaint related to pre-acquisition
      services. RBCI has not filed an answer. The discovery phase of the litigation
      has been completed. There have been continuing settlement negotiations and
      a
      trial is scheduled for September 12, 2008.





In
      April
      2007, RBCI Holdings Inc. (“RBCI”) filed a complaint against the Company in the
      U.S. District court, Southern District of N.Y. (No. 07-CV-02877). RBCI seeks
      $150,000 plus 525,738 shares of common stock of the Company and re-assignment
      of
      the Rheingold license in damages for an alleged breach of the Asset Purchase
      Agreement, related to the October 27, 2005 purchase of certain Rheingold assets.
      The Company has filed a motion to dismiss the complaint. The Company believes
      that RBCI overstated assets, understated liabilities and misrepresented revenue
      in connection with the asset sale. A discovery schedule has been set. Settlement
      discussions have commenced. The Company plans to vigorously defend the
      suit.





In
      July
      2007, Michele Berg, a former employee of the Company, initiated litigation
      against the Company in Superior Court of Arizona, Maricopa County (CV
      2006-019515). The plaintiff seeks $8,125 of unpaid wages, $31,740 for
      reimbursement of expenses and other compensation, and treble damages for wage
      claim, for a total of $61,133. The Company is engaging in ongoing settlement
      discussions with the plaintiff.




On
      or
      about June 12, 2007, Phillip Cassia, formally affiliated with Sloan Equity
      Partners (“Sloan”), LLC initiated litigation in the US District Court (No. 07
      CIV 5590) alleging that the Company failed to recognize the assignment to him,
      and his subsequent exercise of, two warrants allegedly issued by the Company
      to
      Sloan to purchase 300,000 shares and 67,500 shares of the Company’s common
      stock. The plaintiff demanded that the Company affect these assignments and
      that
      the plaintiff be awarded unspecified monetary damages for alleged breach of
      the
      terms of the warrants and such other relief as may be just and proper. The
      Company has filed an answer with counterclaims against the plaintiff. The case
      was settled in April 2008 with the Company paying Cassai $500.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS**




None


21




**ITEM
      5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND
      ISSUER PURCHASERS OF EQUITY SERCURITIES AND SMALL ISSUER PURCHASE OF EQUITY
      SECURITIES**





**MARKET
      FOR OUR COMMON STOCK**


**AND
      RELATED**


**STOCKHOLDER
      MATTERS**





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" on the Over-the-Counter Bulletin Board Electronic Quotation System
      maintained by the National Association of Securities Dealers, Inc. Trading
      commenced on June 3, 2005. Prior to June 3, 2005, there was no public trading
      market for our Common Stock.





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.




Year
                Ending, April 30, 2007First
                Quarter, July 31, 2006
            
            $
            0.79
            
            $
            0.45Second
                Quarter, October 31, 2006
            
            $
            1.00
            
            $
            0.43Third
                Quarter, January 31, 2007
            
            $
            3.26
            
            $
            0.70Fourth
                Quarter, April 30, 2007
            
            $
            3.58
            
            $
            1.02Year
                Ending, April 30, 2008First
                Quarter, July, 31, 2007
            
            $
            1.59
            
            $
            0.95Second
                Quarter, October 31, 2007
            
            $
            1.00
            
            $
            0.38Third
                Quarter, January 31, 2008
            
            $
            0.56
            
            $
            0.14Fourth
                Quarter, April 30, 2008
            
            $
            0.58
            
            $
            0.21




**SECURITY
      HOLDERS**





At
      July
      17, 2008, there were 81,338,801 shares of our common stock outstanding, which
      were held of record by approximately 671 stockholders, not including persons
      or
      entities that hold the stock in nominee or "street" name through various
      brokerage firms. On such date there were five stockholders of record of our
      Preferred Stock.




**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. In addition, the terms of our Series
      A Preferred Stock limit our ability to pay cash dividends to our
      stockholders.





Dividends,
      if any, will be contingent upon our revenues and earnings, capital requirements
      and financial condition.




**EQUITY
      COMPENSATION PLAN INFORMATION**




In
      June,
      2007, our Board of Directors adopted our 2007 Stock Incentive Plan (the "Plan").
      The total number of shares of our Common Stock that may be subject to awards
      under the Plan is 7,000,000 shares. No awards have been granted under the Plan.


22




The
      terms
      of the Plan provide for grants of stock options, stock appreciation rights,
      restricted stock, stock units, bonus stock, dividend equivalents, other stock
      related awards and performance awards that may be settled in cash, stock, or
      other property. We adopted the Plan to provide a means by which employees,
      directors, and consultants of our Company and those of our subsidiaries and
      other designated affiliates, may be given an opportunity to purchase our Common
      Stock, to assist in retaining the services of such persons, to secure and retain
      the services of persons capable of filling such positions, and to provide
      incentives for such persons to exert maximum efforts for our success and the
      success of our affiliates.




Subject
      to the terms of the Plan, the plan administrator, which may be the Company's
      Board of Directors, shall determine the provisions, terms, and conditions of
      each award including, but not limited to, the vesting schedules, repurchase
      provisions, rights of first refusal, forfeiture provisions, form of payment
      (cash, shares, or other consideration) upon settlement, payment contingencies,
      performance criteria for vesting and other matters.




**UNREGISTERED
      SECURITIES**




In
      May
      2007, we issue a note holder 23,836 shares of our common stock to satisfy
      $14,301 of interest accrued through April 10, 2007. This note was issued in
      October 2006 in the amount of $250,000, bears 12% interest per annum, is
      convertible into our common stock at $0.60 per share, and matures in October
      2008. At the option of the lender, the interest accrued on the note is payable
      in shares of our common stock.




In
      July
      2007, we issued 1,000 shares of our common stock as a bonus for work performed
      by an independent contractor.




In
      June
      2007, a member of our Board of Directors was issued 40,000 shares of our common
      stock as compensation for serving on our Board.




In
      June
      2007, in connection with our new relationship with Interscope Geffen A&M, of
      Universal Group, , we issued warrants to purchase 801,000 shares of our common
      stock at a price of $1.284 per share. The warrants may be exercised at any
      time
      up to June 14, 2017. The warrants have cashless exercise
      provisions.




In
      October 2007 the Company issued 200,000 shares of our common stock with a value
      of $80,000 for payments towards legal fees related to Rheingold
      beer.




On
      December 18, 2007, we sold to three related investors (the "December Investors")
      who participated in our January 2007 Private Placement an aggregate of 3,000
      shares of our Series A Preferred Stock, $.001 par value (our "Series A Preferred
      Stock" or "Preferred Stock"), at a cash purchase price of $1,000 per share,
      generating gross proceeds of $3,000,000 (the “December Private Placement” or the
      "December Financing"). Our Preferred Stock is convertible into our common stock
      at $.50 per share which, if all of the Preferred Stock is converted, would
      result in the issuance of 6,000,000 shares of our common stock. The Preferred
      Stock has no voting or dividend rights. Out of the gross proceeds of this
      Offering, we paid Midtown Partners & Co., LLC, the placement agent, $180,000
      in commissions and $30,000 for non-accountable expenses. We also issued to
      the
      placement agent, warrants to acquire 600,000 shares of our Common Stock for
      a
      purchase price of $.50 per share (the "December Placement Agent Warrants"),
      which warrants are exercisable for a five year period.


The
        financing we consummated in January 2007 (the “January Private Placement”)
        provided participating investors with rights to exchange the common stock they
        acquired in the January Private Placement for securities issued in subsequent
        financings consummated at a common stock equivalent of $2.00 per share or
        less.
        Under this provision, all of the January Investors including the December
        Investors have exchanged 4,444,444 shares of our common stock for 8,000 shares
        of our Preferred Stock, which Preferred Stock is convertible into an aggregate
        of 16,000,000 shares of our common stock. Also, the January Warrants issued
        in
        connection with the January Private Placement contain full ratchet anti-dilution
        provisions, as to both the exercise price and the number of shares purchasable
        under the warrants, which due to the December Private Placement, would have
        resulted in the January Warrants representing the right to acquire 22,666,668
        shares of our common stock, i.e., an additional 18,888,890 shares (the “Warrant
        Increment”) at a reduced exercise price of $.50 per share. We have issued
        5,000,000 shares of our common stock to the January Investors, in consideration
        of their waiver of the Warrant Increment (the “Waiver Shares”). This waiver will
        apply to future financings as well. The provisions of the January Warrants
        which
        result in the reduction of the exercise price remain in place and, as a result
        of the December Private Placement, the exercise price of the January Warrants
        have been reduced to $.50 per share. Each of our December Investors invested
        in
        the January Private Placement but not all of our January Investors invested
        additional funds in the December Private Placement. We agreed to use our
        best
        efforts to file a Registration Statement covering the resale of the shares
        of
        our common stock issuable on the conversion of the Preferred Stock issued
        to the
        December Investors and the January Investors, and the shares of our common
        stock issuable on exercise of the December Placement Agent Warrants. Such
        Registration was declared effective by the Securities and Exchange Commission
        under the Securities and Exchange Act of 1934 on June 5, 2008. We do not
        have
        sufficient shares of common stock available to allow for the conversion of
        all
        of the preferred stock into common stock. We have agreed , and our board
        of
        directors previously
        approved amending our
        Certificate of Incorporation to increase the number of shares of common stock
        we
        are authorized to issue to 200,000,000 shares. Approval of our stockholders
        shall be required to effect such amendment under Delaware law and we expect
        to
        hold a special meeting of our stockholders for the purpose of securing such
        approval  and note
        that shareholders representing over 50% of our outstanding common stock
        consented to such amendment.
  23




In
      January 2008 the Company’s Chief Executive Officer (CEO) elected to convert
      $25,000 due him for compensation into shares of Company common stock at a price
      of $0.50 per share resulting in the Company issuing 50,000 shares to
      him.




On
      February 25, 2008 we reached an agreement with Shep Gordon to convert past
      due
      amounts owed aggregating $190,000 due him for consulting fees into shares of
      Company common stock at a price of $0.50 per share resulting in the Company
      issuing 380,000 shares to him. The market price of the Company’s common stock at
      the date of the election to convert was $0.45 per share.




On
      March
      28, 2008 a consultant elected to convert $16,818 due him for consulting fees
      into shares of Company stock at a price of $0.37 per share resulting in the
      Company issuing 45,455 shares to him.




In
      April
      2008 the Company issued 300,000 shares of its stock to three consultants
      (100,000 shares each) for their contributions relating to certain strategic
      transactions which the Company entered.




In
      June
      2008, 50,000 shares of our common stock and warrants to purchase an additional
      150,000 shares of our common stock were issued to one of the Company’s vendors
      as part of a licensing agreement. The exercise price of the warrants is $0.50
      per share. The warrants expire five years from the date of the agreement.




In
      July
      2008 in connection with an extension of a licensing agreement for one of our
      brands the Company issued 100,000 shares of common stock and warrants to
      purchase an additional 300,000 shares of common stock to a charitable
      organization supported by one of the icons with whom we have a relationship.
      Under the terms of the warrant agreement 100,000 shares of common stock are
      exercisable September 1, 2009, 100,000 shares of common stock are exercisable
      September 1, 2010, and 100,000 shares of common stock are exercisable September
      1, 2010. The warrants expire five years from the date the warrants are
      exercisable.




**Transfer
      Agent**




National
      Stock Transfer, Inc. with offices at 1512 South 1100 East, Suite B, Salt Lake
      City, UT 84105-2455, is the registrar and transfer agent for our common
      stock.




**Penny
      Stock Regulations**




The
      SEC
      has adopted regulations which generally define "penny stock" to be an equity
      security that has a market price of less than $5.00 per share. The Company's
      common stock falls within the definition of penny stock and is subject to rules
      that impose additional sales practice requirements on broker-dealers who sell
      such securities to persons other than established customers and accredited
      investors (generally those with assets in excess of $1,000,000, or annual
      incomes exceeding $200,000 or $300,000, together with their
      spouse).




For
      transactions covered by these rules, the broker-dealer must make a special
      suitability determination for the purchase of such securities and have received
      the purchaser's prior written consent to the transaction. Additionally, for
      any
      transaction, other than exempt transactions, involving a penny stock, the rules
      require the delivery, prior to the transaction, of a risk disclosure document
      mandated by the SEC relating to the penny stock market. The broker-dealer also
      must disclose the commissions payable to both the broker-dealer and the
      registered representative, current quotations for the securities and, if the
      broker-dealer is the sole market-maker, the broker-dealer must disclose this
      fact and the broker-dealer's presumed control over the market. Finally, monthly
      statements must be sent disclosing recent price information for the penny stock
      held in the account and information on the limited market in penny stocks.
      Consequently, the "penny stock" rules may restrict the ability of broker-dealers
      to sell the Company's common stock and may affect the ability of investors
      to
      sell our common stock in the secondary market.


24




**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 "Selected Financial Data" and our
      consolidated financial statements and related notes appearing elsewhere in
      this
      report. 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 report.





**RESULTS
      OF OPERATIONS**





Year
      ended April 30, 2008 compared to year ended April 30, 2007





Net
      Sales: Net sales were $4,509,000 for the year ended April 30, 2008 compared
      to
      net sales of $6,085,000 for the year ended April 30, 2007, a decrease of 26%.
      The decrease is due to the impact of the launch of Trump Super Premium Vodka
      in
      October 2006.





Trump
      Super Premium Vodka sales aggregated $2,652,000, including Trump flavored
      vodkas, which were launched in February 2008, on 29,215 cases sold, which
      accounted for 59.0% of total dollar sales and 26.0% of total case sales for
      the
      year ended April 30, 2008. Trump Flavors accounted for $443,000 of sales on
      4,393 cases sold. For the year ended April 30, 2007, Trump Super Premium Vodka
      sales aggregated $4,631,000 on 43,815 cases sold, which accounted for $76.1%
      of
      total dollar sales and 39.4% of total cases sales. This represents a dollar
      decrease of 42.7% and a case decrease of 33.3%. The launch and national pipeline
      fill-in of Trump Super Premium Vodka starting October 2006 accounted for a
      build
      in sales of the product in the prior year. Sales of all wine and spirits
      products aggregated $3,842,000 on 39,637 cases sold for the year ended April
      30,
      2008 compared to $5,575,000 on 52,936 cases for the year ended April 30, 2007.
      Net sales of Old Whiskey River Bourbon totaled $452,000 on 3,806 cases sold
      for
      the year ended April 30, 2008 compared to net sales of $341,000 on 2,647 cases
      sold for the year ended April 30, 2007. This represents a dollar increase of
      32.4% and a case increase of 43.8%. Net sales of our Aguila Tequila aggregated
      $133,000 on 1,418 cases sold for the year ended April 30, 008 compared to
      $21,000 on 246 cases sold for the year ended April 30, 2007. This represents
      a
      dollar increase of 524.0% and a case increase of 476.4%. Net sales of our
      Damiana Liqueur aggregated $197,000 on 1,555 cases sold for the year ended
      April
      30, 2008 compared to net sales of $175,000 on 1,383 cases sold for the year
      ended April 30, 2007. This represents a dollar increase of 12.1% and a case
      increase of 12.4%. Net sales of our premium imported wines totaled $392,000
      on
      3,396 cases sold for the year ended April 30, 008 compared to net sales of
      $373,000 on 4,380 cases sold for the year ended April 30, 2007. This represents
      a dollar increase of 5.2% and a case decrease of 22.1%. The dollar amount
      increased while cases decreased due to the liquidation of certain discontinued
      wines at below cost in the prior year. Net sales of our non alcoholic product,
      Newman’s Own sparkling fruit beverages and sparkling waters increased to
      $667,000 on 75,141 cases sold for the year ended April 30, 2008 compared to
      $167,000 on 16,668 cases sold for the year ended April 30, 2007. This represents
      a dollar increase of 33.4% and a case increase of 28.5%. The Company has
      substantially improved the Newman’s Own beverage products over the last year. We
      eliminated the high fructose corn syrup and replaced it with pure cane sugar
      and
      is now kosher certified. The Company has been expanding distribution of Newman’s
      Own across the country. As a result, the case volume is increase nationally.


25


Gross
      margin: Gross profit was $1,685,000 for the year ended April 30, 2008 a decrease
      of $816,000, compared to gross profit of $2,501,000 for the year ended April
      30,
      2007. Gross
      margin for our wine and spirits business was 40.7% percent for the year ended
      April 30, 2008, which was within or target of 40 percent, compared to 42.6
      percent for the prior year. Gross margin for our non alcoholic business was
      21.8
      percent for the year ended April 30, 2008 compared to 24.0 percent for the
      year
      ended April 30, 2007. The gross profit margin of our non alcoholic
      Newman’s Own products is expected to improve with the implementation of
      alternate packaging which will lead to lower product costs. Gross margin of
      our
      wines increased to 36.4% for the year ended April 30, 2008 from 11.3% for the
      year ended April 30, 2007. This increase is the direct result of the
      aforementioned liquidation of certain wines in the prior year. Gross margin
      of
      Trump Super Premium Vodka, including Trump flavored vodka, decreased to 40.1%
      for the year ended April 30, 2008 compared to 45.7% for the year ended April
      30,
      2007. The gross margin decrease is largely due to the weakening dollar which
      has
      resulted in increased Trump Vodka component costs, the introduction of the
      lower-margin Trump 1.75 liter bottle, a decrease in the percentage of direct
      sales which leads to increased direct costs such as excise taxes and freight
      ,
      as well as price support for Trump Super Premium Vodka necessary in order to
      achieve competitive pricing. The decrease in gross margin for our Trump Super
      Premium Vodka is expected to be mitigated by the reduction of price support
      and
      the transfer of bottle production to China.


Selling,
        general and administrative: Selling, general and administrative expenses
        totaled
        $7,838,000 for the year ended April 30, 2008 , compared
        to $9,982,000 for the year ended April 30, 2007, a decrease of $1,969,000,000
        or
        19.8%. Total selling and marketing costs aggregated $3,900,000 for the year
        ended April 30, 2008 compared to $3,800,000 for the year ended April 30,
        2007.
        General and administrative expenses aggregated $3,938,000 for the year ended
        April 30, 2008 compared to $6,200,000 for the year ended April 30, 2007.
        During
        the year ended April 30, 2007 the Company issued shares of its common stock
        to
        several employees, various distributors, consultants and professionals who
        contributed to our business and the successful launch of Trump Super Premium
        Vodka. In total , $1,800,000 of our selling, general and administrative expenses
        were paid by the issuance of our equity securities. For the year ended April
        30,
        2008 $230,000 of selling, general and administrative expenses were paid by
        the
        issuance of equity securities. There were additional one-time expenses
        recognized by the Company for the year ended April 30, 2007 relating to the
        Trump Super Premium Vodka launch including product development expenses
        aggregating $195,000. Product development costs for the year ended April
        30,
        2008 aggregated $58,000. Charges relating to purchase order financing aggregated
        $45,000 for the year ended April 30, 2008 compared to $245,000 for the year
        ended April 30, 3007. The decrease is due to our improved financial liquidity.
        For the year ended April 30, 2008 , fees
        earned by our Board of Directors for serving on the board aggregated $175,000
        compared to $300,000 for the year ended April 30, 2007. Due to limited working
        capital , prior
        to
        the year ended April 30, 2007 , the
        members of our Board of Directors were not previously compensated for services
        rendered to us as members of our
        Board of Directors. Shipping and warehousing expenses have increased to $455,000
        for the year ended April 30, 2008 compared to $255,000 for the year ended
        April
        30, 2007. The increase is due to the warehousing of Trump Super Premium Vodka
        for a full twelve months of national availability in the current year as
        compared to eight months for the prior year. In addition, for the year ended
        April 30, 2008 we incurred higher freight charges than for the year ended
        April
        30, 2007 ($190,000 compared to $107,000). The increase in freight charges
        is the
        result of fewer direct container sales of Trump Super Premium Vodka from
        our Netherlands warehouse as well as increased sales of our Newman’s Own
        products. Selling expenses are expected to be reduced in the future as
        sales promotions for Trump Vodka become more targeted.


Other
      Income (expense): Other income totaled $7,000 for the year ended April 30,
      2008
      compared to expense of $1,137,000 for the year ended April 30, 2007. The
      significant decrease is due to the fact that nearly $1,100,000 was recognized
      as
      a loss on debt extinguishment for the year ended April 30, 2007 none was
      incurred for the year ended April 30, 2008. There has been a reduction in
      interest expense (interest expense was $164,000 for the year ended April 30,
      2008 versus $771,000 for the year ended April 30, 2007) due to the
      extinguishment of much of our long term debt.





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 $25,000,000, which we can use to reduce
      taxable earnings in the future. No income tax benefits were recognized in fiscal
      2008 and 2007 as we have provided valuation reserves against the full amount
      of
      the future carry forward tax loss benefit. We will evaluate the reserve every
      reporting period and recognize the benefits when realization is reasonably
      assured.


26


**IMPACT
      OF INFLATION**





Although
      management expects that our operations will be influenced by general economic
      conditions we do not believe that inflation has had a material effect on our
      results of operations.





**SEASONALITY**





As
      a
      general rule, the second and third quarters of our fiscal year (August-January)
      are the periods that we realize our greatest sales as a result of sales of
      alcoholic beverages during the holiday season. During the fourth quarter of
      our
      fiscal year (February-April) we generally realize our lowest sales volume as
      a
      result of our distributors working off inventory which remained on hand after
      the holiday season. The fourth quarter ended April 30, 2008 realized improved
      sales over the prior quarter predominantly due to the launch of Trump flavored
      vodka in February 2008. As we increase our non-alcoholic beverage sales, as
      a
      result of increased distribution of Newman's Own products, we would expect
      sales
      in first quarter of our fiscal year (May-July), to increase since the spring
      and
      summer tends to be the strongest periods for sales of non-alcoholic
      beverages.





**FINANCIAL
      LIQUIDITY AND CAPITAL RESOURCES**


Although
        our working capital position has been improved as a result of our December
        Private Placement of our preferred stock, we will need to continue to carefully
        manage our working capital and our business decisions will continue to be
        influenced by our working capital requirements. Lack of
        liquidity continues to negatively affect our business and curtail the execution
        of our business plan.


We
      have
      experienced net losses and negative cash flows from operations and investing
      activities since our inception in 2003. Net losses for the years ended April
      30,
      2008 and 2007 were $6,310,948 and $9,389,250, respectively. Cash used in
      operating activities for the year ended April 30, 2008 and 2007 were
      $3,848,266 and $8,901,392, respectively. We have to date funded our operations
      predominantly through bank borrowings, loans from shareholders and investors,
      and proceeds from the sale of our common stock, preferred stock, and warrants.
      Net cash provided by financing totaled $2,986,900 for the year ended April
      30,
      2008 compared to $9,615,291 for the year ended April 30, 2007.





On
      December 18, 2007 (the "Closing Date") the Company sold to three related
      investors (the "December Investors") an
      aggregate of 3,000 shares of our Series A Preferred Stock, $.001 par value
      (the
      "Preferred Stock"), at a cash purchase price of $1,000 per share, generating
      gross proceeds of $3,000,000 (the “December Financing”). The Preferred Stock is
      convertible into our common stock at $.50 per share, which, if all the Preferred
      Stock is converted, would result in the issuance of 6,000,000 shares of our
      common stock. The Preferred Stock has no voting or dividend rights. Out of
      the
      gross proceeds of the December Financing, we paid Midtown Partners & Co.,
      LLC (the "Placement Agent") $180,000 in commissions and $30,000 for
      non-accountable expenses. We also issued, to the Placement Agent, warrants
      to
      acquire 600,000 shares of our Common Stock for a purchase price of $.50 per
      share (the "Placement Agent Warrants"), which warrants are exercisable for
      a
      five year period and contain anti-dilution provisions in the events of stock
      splits and similar matters. Both the commissions and expenses were accounted
      for
      as a reduction of Additional Paid in Capital.





The
        financing that we consummated in January 2007 (the “January Financing”) provided
        participating investors (the “January Investors”) rights to exchange the common
        stock they acquired for securities issued in subsequent financings consummated
        at a common stock equivalent of $2.00 per share or less. Under this provision,
        the January Investors have exchanged 4,444,445 shares of common stock for
        8,000
        shares of Preferred Stock (which Preferred Stock is convertible into an
        aggregate of 16,000,000 shares of our common stock). The 4,444,445 shares
        exchanged were accounted for as a reduction of Additional Paid in Capital
        and a
        reduction of Common Stock since the shares have been cancelled. Also in the
        January Financing, the January Investors acquired warrants to purchase 3,777,778
        shares of our common stock at an exercise price of $3.00 per share (the “January
        Warrants”). The January Warrants contain full ratchet anti-dilution provisions,
        as to both the exercise price and the number of shares purchasable under
        the
        warrants, which due to the December Financing, would have resulted in the
        January Warrants representing the right to acquire 22,666,668 shares of our
        common stock, i.e., an additional 18,888,890 shares (the “Warrant Increment”) at
        a reduced exercise price of $.50 per share. We have issued 5,000,000 shares
        of
        our common stock to the
        January Investors, in consideration of their waiver of the Warrant Increment
        (the “Waiver Shares”). This waiver will apply to future financings as well.
  27


The
      provisions of the January Warrants which result in the reduction of the exercise
      price remain in place and, as a result of the December Financing, the exercise
      price of the January Warrants have been reduced to $.50 per share. The value
      of
      the Waiver Shares was determined to be $1,650,000 which was the market value
      of
      the 5,000,000 shares
      which were issued in consideration of the waiver at the date of grant. Each
      of
      our December Investors participated in the January Financing but not all of
      our
      January Investors participated in the December Financing.


We
        filed
        a Registration Statement covering the resale of 6,011,001 shares of our common
        stock issuable on the conversion of Preferred Stock issued to the December
        Investors and the January Investors. Such Registration Statement was declared
        effective by the Securities and Exchange Commission under the Securities
        and
        Exchange Act of 1934 on June 5, 2008. We do not have sufficient shares of
        common
        stock available to allow for the conversion of all of the preferred stock
        into
        common stock. We have agreed , and our board of directors previously
        approved amending our
        Certificate of Incorporation to increase the number of shares of common stock
        we
        are authorized to issue to 200,000,000 shares. Approval of our stockholders
        shall be required to effect such amendment under Delaware law and we expect
        to
        hold a special meeting of our stockholders for the purpose of securing such
        approval and note
        that shareholders representing over 50% of our outstanding common stock
        consented to such amendment.
 
 The
        December Investors may allege that certain penalties are owed to them by
        the
        Company based on certain time requirements in the documentation relating
        to the
        December Financing. If such claim is successfully made, we may lack the
        liquidity to satisfy such claim.


On
      March
      28, 2008 a consultant elected to convert $16,818 due him for consulting fees
      into shares of Company stock at a price of $0.37 per share, which was the market
      price on the date of the election, resulting in the Company issuing 45,455
      shares to him..




On
      February 25, 2008 we reached an agreement with Shep Gordon to convert past
      due
      amounts owed aggregating $190,000 due him for consulting fees into shares of
      Company common stock at a price of $0.50 per share resulting in the Company
      issuing 380,000 shares to him. The market price of the Company’s common stock at
      the date of the election to convert was $0.45 per share.





On
      January 17, 2008 the Company’s Chief Executive Officer (CEO) elected to convert
      $25,000 due him for compensation into shares of Company common stock at a price
      of $0.50 per share resulting in the Company issuing 50,000
      shares to him. The market price of the Company’s common stock on the date of
      election was $0.18 per share.





From
      July
      2007 through April 2008 the Company borrowed an aggregate of $522,303 from
      our
      CEO for working capital purposes. The borrowings bear interest at 12% per annum.
      As of April, 2008, $327,554 including interest has been repaid. For the year
      ended April 30, 2008 interest incurred on this loan aggregated $37,798. As
      of
      April 30, 2008 amounts owed to our CEO on these loans aggregated $232,547
      including accrued interest.





In
      October 2006, the Company borrowed $250,000 and issued a convertible promissory
      note in like amount. This note is payable in October 2008 and is convertible
      into shares of our common stock at $0.60 per share. The note bears interest
      at
      12% per annum and is payable quarterly commencing January 2007. At the option
      of
      the lender, interest can be paid in shares of Company common stock. During
      the year ended April 30, 2008 the Company issued the note holder an
      aggregate of 49,307 shares of our common stock to satisfy an aggregate of
      $29,583 of interest accrued through October 10, 2007 and in February 2008,
      the
      Company paid the note holder $7,742 for interest accrued through January 10,
      2008. In connection with this borrowing we issued warrants to purchase
      250,000 shares of our common stock for $0.60 per share. These warrants are
      exercisable for a five-year period from the date of issuance.


28


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, as defined
        under the agreement. Interest on the line accrues at 1.5% above the prime
        rate.
        Also, in June 8 2006, we entered into a secured 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. Both of
        these
        facilities are secured by our assets. On April, 2008 $307,940 and $0 was
        outstanding on our revolving credit and purchase order facilities,
        respectively.




**ROYALTIES/LICENSING
      AGREEMENTS**





In
      November 2005, the Company entered into an eight-year license agreement for
      sales of Trump Super Premium Vodka. Under the agreement the Company is required
      to pay royalties on sales of the licensed product. The agreement provides for
      certain minimum royalty payments through November 2012 which if not satisfied
      could result in termination of the license.





Under
      our
      license agreement for Old Whiskey River, we are obligated to pay royalties
      of
      between $10 and $33 per case, depending on the size of the bottle.





Under
      our
      license agreement for Newman’s Own, we are obligated to pay royalties of $.95
      per twelve bottle case.





Under
      our
      license agreement for Damaina Liqueur we are obligated to pay a percentage
      of
      gross profits, less certain direct selling expenses through May 2008 and $3
      per
      case thereafter.





Under
      our
      license agreement with Aguila Tequila we are obligated to pay $3 per
      case.





**OTHER
      AGREEMENTS**





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. As of April 30, 2008, we were indebted to MTA in the amount of
      $156,248.





In
      December 2002, we entered into a consulting agreement with Mr. Shep Gordon
      which
      provides for payment of $120,000 per year to Mr. Gordon, payable through June
      2009. As of April 30, 2008, the aggregate amount owed to Mr.
      Gordon was approximately $30,000. We have an informal understanding with Mr.
      Shep Gordon pursuant to which he can convert all or a portion of the consulting
      fees which we owe to him into shares of our common stock at a conversion price
      negotiated from time to time. In February 2008 the Company issued 380,000 shares
      of its common stock to Mr. Gordon to satisfy $190,000 of consulting fees owed
      to
      Mr. Gordon as of January 31, 2008.





Since
      we
      were founded in 2002, the implementation of our business plan has been
      negatively affected by insufficient working capital. Business judgments have
      been substantially affected by the availability of working capital. Although
      our
      working capital position and our cash balance has been improved as a result
      of
      our December and January, 2007 private placement of our common stock, preferred
      stock and warrants, we will need to continue to carefully manage our working
      capital and our business decisions will continue to be influenced by our working
      capital requirements. Therefore, our short term business strategy will rely
      heavily on our cost efficient icon brand strategy and the resources available
      to
      us from our media and entertainment partners We will continue to focus on those
      of our products which we believe will provide the greatest return per dollar
      of
      investment with the expectation that as a result of increases in sales and
      the
      resulting improvement in our working capital position, we will be able to focus
      on those products for which market acceptance might require greater investments
      of time and resources. To that
      end,
      our short-term focus will be, for wine and spirits, Trump Super Premium Vodka,
      Old Whiskey River Bourbon, Damiana, Aquila Tequila, our select label wines,
      and
      in association with our recent joint venture with music icon Dr. Dre, a super
      premium cognac and a unique sparkling vodka. For the non-alcoholic beverages
      Newman’s Own lightly sparkling fruit juice drinks and waters. 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 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
      implement or may be required to delay all or part of our business plan, and
      our
      ability to attain profitable operations, generate positive cash flows from
      operating and investing activities and materially expand the business will
      be
      materially adversely affected.


29


**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 policies are subject to estimates and
      judgments used in the preparation of the financial statements.





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 does not offer its clients the opportunity to return products for any
      reason other than manufacturing defects. 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
      communications with its customers. 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.





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 the collectability of accounts receivable and previous 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 payments are received on
      those accounts. Management believes that credit risks are not material to the
      financial position of the Company or results of its operations.





The
      Company computes earning per share under the provisions of SFAS No. 128,
      Earnings per Share, whereby basic earning (loss) per shares 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 year ended April 30, 2008 and 2007, diluted losses
      per
      share amounts equal basic losses per share because the impact of the assumed
      exercise of contingently issuable shares would have been
      anti-dilutive.





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.


30


The
      Company accounts for stock-based compensation in accordance with Statement
      of
      Financial Accounting Standard 123 (revised 2004), Share-Based Payment (SFAS
      123R) using the modified prospective approach. The Company recognizes in the
      statement of operations the grant-date fair value of stock options and other
      equity based compensation issued to employees and non employees.





**QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**





We
      do
      participate in certain transactions which are settled in foreign currencies.
      Such transactions are short term in nature and any corresponding fluctuation
      in
      foreign exchange rates have not been material. We do not hold instruments that
      are sensitive to changes in interest 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**


DISCLOSURES
        CONTROLS AND PROCEDURES
 
 We
        have
        adopted and maintain disclosure controls and procedures (as such term is
        defined
        in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
        as
        amended (the "Exchange Act")) that are designed to provide reasonable assurance
        that information required to be disclosed in our reports under the Exchange
        Act,
        is recorded, processed, summarized and reported within the time periods required
        under the SEC's rules and forms and that the information is gathered and
        communicated to our management, including our Chief Executive Officer (Principal
        Executive Officer) and Chief Financial Officer (Principal Financial Officer),
        as
        appropriate, to allow for timely decisions regarding required
        disclosure.
 
 Our
        Chief
        Executive Officer and our Chief Financial Officer evaluated the effectiveness
        of
        our disclosure controls and procedures as of April 30, 2008 as defined in
        Rules
        13a-15(e) and 15d-15(e) under the Exchange Act. Our management recognizes
        that
        any controls and procedures, no matter how well designed and operated, can
        provide only reasonable assurance of achieving their objectives and management
        necessarily applies its judgment in evaluating the cost-benefit relationship
        of
        possible controls and procedures. Based on the evaluation of our disclosure
        controls and procedures as of April 30, 2008, our Chief Executive Officer,
        who
        also is our principal executive officer, and our Chief Financial Officer,
        who is
        our principal financial officer, concluded that, as of such date, our disclosure
        controls and procedures were effective to provide reasonable assurance that
        information required to be declared by us in reports that we file with or
        submit
        to the SEC is (1) recorded, processed, summarized, and reported within the
        periods specified in the SEC’s rules and forms and (2) accumulated and
        communicated to our management, including our Chief Executive Officer and
        our
        Chief Financial Officer, to allow timely decisions regarding required
        disclosure.




31




**ITEM
      8A(T). CONTROLS AND PROCEDURES**




MANAGEMENT’S
      ANNUAL REPORT ON INTERNAL CONTROL OVER FINICAL REPORTING





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
      under the Exchange Act. Our internal control over financial reporting is
      designed to provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external purposes
      in
      accordance with generally accepted accounting principles. Our internal control
      over financial reporting includes those policies and procedures that are
      intended to:





1.
            pertain
                to the maintenance of records that, in reasonable detail, accurately
                and
                fairly reflect the transactions and dispositions of our
                assets;





2.
            provide
                reasonable assurance that transactions are recorded as necessary
                to permit
                reparation of financial statements in accordance with generally accepted
                accounting principles, and that our receipts and expenditures are
                being
                made only in accordance with authorizations of our management and
                directors; and





3.
            provide
                reasonable assurance regarding prevention or timely detection of
                unauthorized acquisition, use, or disposition of our assets that
                could
                have a material effect on our financial
                statements.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




Management's
      assessment of the effectiveness of the small business issuer's internal control
      over financial reporting is as of the year ended April 30, 2008. We believe
      that
      internal control over financial reporting is effective. We have not identified
      any, current material weaknesses considering the nature and extent of our
      current operations and any risks or errors in financial reporting under current
      operations.




This
      annual report does not include an attestation report of the Company's registered
      public accounting firm regarding internal control over financial reporting.
      Management's report was not subject to attestation by the Company's registered
      public accounting firm pursuant to temporary rules of the SEC that permit the
      Company to provide only management's report in this annual report.




There
      was
      no change in our internal control over financial reporting that occurred during
      the fiscal quarter ended April 30, 2008, that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**ITEM
      8B. OTHER INFORMATION**




None




32




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE
      GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
      ACT**





The
      following are the executive officers and directors of the Company: ****





**Name**
            
            **Age**
            
            **Positions
                and Offices**J.
                Patrick Kenny
            
            52
            
            President
                and Chief Executive OfficerBruce
                Klein
            
            53
            
            Chairman
                of the Board of DirectorsJason
                Lazo
            
            42
            
            Chief
                Operating OfficerJeffrey
                Daub
            
            42
            
            Chief
                Financial OfficerMarvin
                Traub
            
            83
            
            Member,
                Board of DirectorsThomas
                Schwalm
            
            64
            
            Member,
                Board of DirectorsFredrick
                Schulman
            
            56
            
            Member,
                Board of DirectorsHubert
                Millet
            
            72
            
            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
      ("Seagram"), 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.BA in Marketing from Farleigh Dickinson
      University.




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 Seagram 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.


33





Jeffrey
      Daub has served as the Company's Chief Financial Officer since May 22, 2007
      and
      its controller since November, 2006. Prior to joining the Company, from 1992
      to
      November, 2006, he was employed by Rosen Seymour,
      Shapss Martin & Company LLP ("RSSM"), a public accounting firm in New York
      City, where he most recently served as an audit manager. From July, 2006 to
      November, 2006, while at RSSM, Mr. Daub assisted in the Company's internal
      accounting functions and with the preparation of its periodic filings with
      the
      Securities and Exchange Commission. At RSSM, Mr. Daub provided services to
      clients, both private and public, in various industries, including the
      supervision and performance of financial audits. Mr. Daub, 41 years old, is
      a
      Certified Public Accountant as well as an Accredited Business Valuator. He
      was
      awarded a B.S. in Applied Mathematics and Statistics with a Minor in Business
      from SUNY Stony Brook 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 the Chief Executive Officer 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 a team of 18 consultants, all former principals in the retail
      and
      consumer goods sectors. Prior to that, Mr. Traub served as Chairman of Finance
      Global Consulting, the consulting arm of Finance, 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 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
      to 1982 and as Group Marketing Director for the Stroh Brewing Company from
      1982
      to 1984, where he managed a $100 million marketing budget and introduced Stroh
      nationally in 1983. From 1985 to 1992 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, Inc. 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 to 1998 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. Since
        September, 2006, Mr. Schulman also has served as chairman of the board of
        directors of NewBank, a New York charted commercial bank.


34





Mr.
      Millet joined our Board of Directors in March, 2007. Mr. Millet has over 40
      years experience in consumer products
      and has spent over 20 years in senior management positions in the beverage
      industry. Since 2000, Mr. Millet has acted as an international consultant to
      various clients in the beverage industry. From 1989 through 2000, Mr. Millet
      worked for The Seagram Company Ltd where he served as a member of the Seagram
      Spirits & Wine Executive Council. From 1991 through 1997, he served as the
      President of Seagram Global Brands Division where he was responsible for
      production and business development for Martell Cognacs, Mumm and Perrier-Jouet
      Champagnex and Barton & Guestier wines, as well as scotch whiskey operations
      (Chivas Brothers and Glenlivet). From 1989 through 2000 Mr. Millet was the
      Chief
      Executive Officer and Chairman of Seagram's Mumm Martell Group. Mr. Millet
      has
      previously served as Chairman of Barton & Guestier SA, a member of the Board
      of Directors of Martell Cognac, a member of the Board of Directors and Chief
      Executive Officer of G.H. Mumm, a member of the Board of Directors and Chief
      Executive Officer of Perrier-Jouet, a member of the Board of Directors of
      Tropicana Europe, and Chairman of the Board of Directors of Herve Leger (Fashion
      Co.). From 1977 through 1989, Mr. Millet worked for Groupe Cointreau where
      he
      served in various roles, including the Chief Executive Officer of the Cointreau
      Group and as Cointreau's Finance & Development Director. From 1970 through
      1977 Mr. Millet worked for the British American Tobacco Company, Cosmetics
      and
      Beauty Products Division, where he served in various roles including as a Vice
      President responsible for finance and development with respect to the divisions
      of European operation.





Mr.
      Millet has also served as a member of the Board of Directors of Parfums Hermes
      (1982-2007), a member of the Hermes Group Strategic Committee (1982-2001),
      and
      serves as a member of the Board of Directors of Hermes USA, and a member of
      the
      Board of Directors of The Savannah College of Art and Design. Mr. Millet has
      been the recipient of various rewards, including Officier de la Legion
      d'honneur, Officer dans l'Ordre National du Merite and Medaille Commemorative
      d'Algerie.





**AUDIT
      COMMITTEE**





Our
      Audit
      Committee 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, Inc. 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, Inc., 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.


35
  **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 Bruce Klein did
        not
        file a Form 5 with respect to our last fiscal year and we are unsure whether
        such form was required to be filed.


**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, 2008 and 2007,
      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 ,
      and
      Jeffrey Daub our Chief Financial Officer and the Named Executive Officers whose
      total compensation exceeded $100,000 in 2008 and 2007.





Other
      than the Named Executive Officers, none of our executive officers earned more
      than $100,000 in salary and bonus for the 2008 or 2007 fiscal years. We did
      not
      grant options to them during the period indicated but, because of inadequate
      working capital, we did issue shares of restricted stock to them in partial
      satisfaction of the salary indicated below. The stock we issued to our named
      executive offices in satisfaction of compensation owed to them was valued based
      on the market value of the shares on the over-the-counter Bulletin Board on
      the
      date such individual agreed to accept such shares in lieu of a portion of any
      accrued and unpaid salary owed to him on such date. Such issuances were not
      part
      of a formal plan or arrangement and were negotiated individually between the
      Company and the named executive officer involved.




**SUMMARY
      COMPENSATION TABLE**







**NAME
                AND****PRINCIPAL****POSITION**
            
            **FISCAL**
              **YEAR**
            
            **SALARY**
              **($)**
            
            **BONUS**
              **($)**
            
            **STOCK**
              **AWARDS**
              **($)**
            
            **ALL OTHER**
              **COMPENSATION**
              **($)**
            
            **TOTAL**
              **($)**J.
                Patrick Kenny
            
            
            2008
            
            $
            300,000
            
            $
            —
            
            $
            —
            
            $
            24,609
            
            $
            324,609Chief
                Executive
            
            
            2007
            
            
            275,000
            
            
            260,000
            
            
            50,000
            
            
            35,994
            
            
            620,994Officer
                (1)Jason
                Lazo
            
            
            2008
            
            $
            175,000
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            175,000Chief
                Operating
            
            
            2007
            
            
            164,581
            
            
            100,000
            
            
            237,119
            
            
            110,000
            
            
            611,700Officer
                (2)Jeffrey
                Daub
            
            
            2008
            
            $
            125,000
            
            $
            —
            
            $
            —
            
            $
            2,161
            
            $
            127,161Chief
                Financial
            
            
            2007
            
            $
            56,983
            
            $
            —
            
            $
            —
            
            $
            788
            
            $
            57,771Officer(3)Richard
                Shiekman
            
            
            2008
            
            $
            90,000
            
            $
            —
            
            $
            —
            
            $
            24,499
            
            $
            114,999President
            
            
            2007
            
            
            134,169
            
            
            —
            
            
            —
            
            
            11,000
            
            
            145,169Drinks
                Global,LLC (4)Brian
                Kenny
            
            
            2008
            
            $
            92,000
            
            $
            7,667
            
            $
            —
            
            $
            2,802
            
            $
            102,473V.P.
                Marketing (5)
            
            
            2007
            
            $
            86,336
            
            $
            10,000
            
            $
            42,660
            
            $
            —
            
            $
            138,996




36




(1)
      In
      fiscal 2008 Mr. Kenny converted $25,000 of compensation due him into 50,000
      shares of the Company’s common stock which amount is included in salary in the
      above table. Stock awards in fiscal 2007 represent the issuance
      of 50,000 shares of our common stock to Mr. Kenny in the fourth quarter of
      fiscal 2007 which are valued at fair market value on the date of grant in
      accordance with FAS 123R at $3.03 per share . The cash bonus was approved by
      our
      board in consideration for the service that Mr. Kenny has made to our Company
      for the past five years from our inception. Other compensation of $24,609 in
      fiscal 2008 and $35,994 in fiscal 2007 represents payments of personal major
      medical and life insurance premiums. We implemented a corporate sponsored group
      life and health plan in March 2008 which does not discriminate in scope, terms
      of operation, in favor of executive officers and is available to all salaried
      employees.





(2)
      Stock
      awards represent the one-time issuance of 150,075 shares of our common stock
      issued to Mr. Lazo in the third quarter of fiscal 2007 for services provided
      to
      the Company in connection with the successful launch of Trump Super Premium
      Vodka, which are valued at market value on the date of grant in accordance
      with
      FAS 123R at $1.58 per share. The cash bonus was approved by our board in
      consideration for the service that Mr. Lazo has made to our Company for the
      past
      5 years from our inception. Bonuses were not paid in prior years due to limited
      capital. Other compensation of $110,000 in fiscal 2007 represents the gross-up
      amount reimbursed to Mr. Lazo for the payment of taxes on the value of the
      150,075 shares of common stock he received.





(3)
      Other
      compensation of $2,161 in fiscal 2008 and $788 in fiscal 2007 represents
      payments of personal major medical premiums.





(4)
      Other
      compensation of $24,499 in fiscal 2008 represent payments sales commissions
      earned ($16,779) and payments of personal medical premiums ($7,720). Other
      compensation of $11,000 in fiscal 2007 represents payments of personal major
      medical premiums.





(5)
      Stock
      awards in fiscal 2007 represent the issuance of 27,000 shares of our common
      stock issued to Mr. Kenny in the third quarter of fiscal 2007 provided to the
      Company in connection with the successful launch of Trump Super Premium Vodka
      which are at fair market value on the date of grant valued in accordance with
      FAS 123R at $1.58 per share.




**INCENTIVE
      PLANS**





In
      June,
      2007, our Board of Directors adopted our 2005 Stock Incentive Plan (the "Plan").
      The total number of shares of our Common Stock that may be subject to awards
      under the Plan 7,000,000 shares. No awards have been issued under the
      Plan.





**OPTION
      GRANTS IN LAST FISCAL YEAR**





We
      did
      not grant to the Named Executive Officers options to purchase shares in fiscal
      2008.





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
      2008





**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.


37




**DIRECTOR
      COMPENSATION**





The
      following table represents a summary of the compensation paid to our directors
      for their services on our board of directors during the fiscal year ended April
      30, 2008. Except as listed below, there were no bonuses, other annual
      compensation, restricted stock awards or stock options/SARs, or any other
      compensation paid to the directors listed for
      their
      services as a director of the Company. Except as disclosed in the table below,
      no compensation was paid to our directors for any of the last three fiscal
      years
      for their services as directors of the Company.





**Directors
      Compensation for the Fiscal Year Ended April 30, 2008**





**Name**
            
            **Cash
                Fees**
              **($)**
            
            **Stock
                Awards**
              **($)**
            
            **Total**
              **($)**Bruce
                Klein
            
            $
            25,000
            
            $
            —
            
            $
            25,000Thomas
                Schwalm
            
            
            25,000
            
            
            —
            
            
            25,000Marvin
                Traub
            
            
            25,000
            
            
            —
            
            
            25,000Fredrick
                  Schulman
            
            
            25,000
            
            
            —
            
            
            25,000Hubert
                Millet
            
            
            25,000
            
            
            50,000
            
            
            75,000





Cash
      fees
      represent amounts earned but not paid in fiscal 2008 for services rendered
      as a
      director. The board has not made a determination whether such amounts will
      be
      paid in cash or common stock. Mr. Millet joined the Board in March, 2007 and
      in
      the first quarter of fiscal 2008 was awarded 40,000 shares of our common stock
      with a market value of $50,000 which were issued in June 2007 for services
      he
      will render as a member of our Board of Directors.





In
      fiscal
      2008, our CEO was paid interest on loans he made to the Company (These payments
      are described in the section of this report entitled “Certain Relationships and
      Related Party Transactions”). In fiscal 2008, Companies wholly owned by Marvin
      Traub and Bruce Klein earned consulting fees of $100,000 and $84,000,
      respectively, for work not related to serving on our board. In addition, in
      fiscal 2008, a company controlled by Fred Schulman earned $57,833 for legal
      services rendered to our Company (See “Certain Relationships and Related Party
      Transactions”).




**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE
      OFFICERS AND RELATED SHAREHOLDER MATTERS**





The
      following table sets forth, as of July 17, 2008, certain information regarding
      the ownership of our voting securities by each stockholder known to our
      management to be (i) the beneficial owner of more than 5% of our outstanding
      common stock, (ii) our directors, (iii) our named executive officers, and (iv)
      all executive officers and directors as a group. We believe that, except as
      otherwise indicated, the beneficial owners of the Common Stock listed below,
      based on information furnished by such owners, have sole investment and voting
      power with respect to such shares. Percentage of ownership is based on
      81,338,801 shares of Common Stock issued and outstanding at July 17, 2008,
      plus,
      as to the holder thereof only and no other person, the number of shares of
      Common Stock which may be acquired on conversion of our preferred stock or
      are
      subject to options, warrants and convertible debentures exercisable or
      convertible within 60 days of July 17, 2008 by that person.


38




Name
            
            Number of Shares of
              Common Stock
              Beneficially Owned
            
            Percentage of
              Outstanding
              SharesJ.
                Patrick Kenny
              30
                Old Wagon Road
              Wilton,
                CT 06877
            
            
            14,562,583
            (1)
            
            17.90
            %Bruce
                Klein
              123
                Elbert Street
              Ramsey,
                NJ 07446
            
            
            10,922,691
            (2)
            
            13.43
            %Kenneth
                Close
              1101
                30th Street, NW
              Suite
                200
              Washington,
                DC 20007
            
            
            8,914,758
            (3)
            
            10.95
            %Thomas
                Schwalm
              5983
                SE Morning Dove Way
              Hobe
                Sound, FL 33455
            
            
            3,768,073
            (4)
            
            4.61
            %Jason
                Lazo
              144
                Wire Mill Rd.
              Stamford,
                CT 06903
            
            
            1,017,534
            (5)
            
            1.25
            %Marvin
                Traub
              535
                Fifth Avenue
              New
                York, NY 10022
            
            
            1,672,291
            (6)
            
            2.06
            %Fredrick
                Schulman
              241
                Fifth Ave, Suite 302
              New
                York, NY 10016
            
            
            1,073,772
            (7)
            
            1.32
            %Hubert
                Millet
              588
                West Stafford Rd.
              Thousand
                Oaks, CA 91361
            
            
            110,000
            (8)
            
            0.14
            %Brian
                Kenny
              30
                Old Wagon Road
              Wilton,
                CT 06877
            
            
            227,000
            (9)
            
            0.28
            %Richard
                Shiekman
              343
                Good Hill Rd
              Weston,
                CT 06883
            
            
            50,000
            (10)
            
            0.06
            %Enable
                Growth Partners, LP
              1
                Ferry Bldg Ste 255
              San
                Francisco, CA 94111
            
            
            8,626,315
            (11)
            
            9.99
            %All
                Directors, Officers
              and
                Management as a group (8
              persons)
            
            
            33,126,944
            
            
            40.71
            %




(1)
      Includes 10,000,000 shares owned by Kenny LLC I, and 2,000,000 shares owned
      by
      Kenny LLC II, entities controlled by Mr. Kenny. Does not include 227,000 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 6,700,000 shares owned by Peter Christian and Associates, LLC, and
      3,150,633 shares owned by Victory Partners, LLC, entities 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, his son, and Vigilant Investors.





(3)
      Includes 4,701,167 shares owned by Nexcomm International Beverage, LLC, an
      entity controlled by Mr. Close, 211,136 shares in trusts for the benefit of
      Mr.
      Close’s four children of which Mr. Close is a trustee, and warrants to purchase
      83,333 shares.





(4)
      Includes 3,333,267 shares and warrants to purchase 322,223 shares owned by
      Greenwich Beverage Group, LLC ("Greenwich"), an entity controlled by Mr.
      Schwalm. Also includes 1,500 shares owned by a trust of which Mr. Schwalm is
      co-trustee, as to which shares Mr. Schwalm disclaims beneficial
      ownership.





(5)
      Includes 907,434 shares owned by Lazo, LLC, an entity controlled by Mr. Lazo
      and
      100,000 shares owned by Mr. Lazo’s daughters.





(6)
      Does
      not include 22,222 shares owned by Mr. Traub's son, as to which shares Mr.
      Traub
      disclaims beneficial ownership.





39




(7)
      Includes 219,970 shares owned by Mr. Schulman's wife, Lois Shapiro, 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





(8),
      (9),
      and (10) All shares are owned directly by each person, respectively.





(11)
      Includes warrants to purchase 2,006,994 shares and 3,821,599 shares purchasable
      on conversion of convertible preferred stock. Does not include an additional
      9,778,401 shares purchasable upon conversion of convertible preferred stock
      due
      to provisions of the Certificate of Designation with respect to our Series
      A
      Preferred Stock, which generally prevent conversion of the preferred stock
      if
      conversion would result in beneficial ownership by the holder of greater than
      9.99% of our shares.




**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





We
      incurred licensing royalty expenses of approximately $62,000 and $52,000 in
      fiscal 2008 and 2007, respectively, to Old Whiskey River Distilling Company,
      LLC
      which we own 25 percent membership interests.





In
      June
      2007, Mr. Millet was issued 40,000 shares of our common stock as compensation
      for services he will render for serving on our Board of Directors.





On
      January 17, 2008 the Company’s CEO elected to convert $25,000 due him for
      compensation into shares of Company common stock at a price of $0.50 per share
      resulting in the Company issuing 50,000 shares to him.





For
      the
      years ended April 30, 2008 the Company incurred fees for services rendered
      related to sales and marketing payable to a limited liability company which
      was
      controlled by Bruce Klein, the Company's chairman of the board aggregating
      $84,000. As of April 30, 2008 unpaid fees owed to the chairman's consulting
      firm, aggregated $98,550.





For
      the
      year ended April 30, 2008 the Company incurred legal fees payable to a company
      which was controlled by Fred Schulman, a member of the Company's board of
      directors aggregating $57,633.




From
        July
        2007 through April 2008 the Company borrowed an aggregate of $522,303 from
        J.
        Patrick Kenny, our CEO, for working capital purposes. The borrowings bear
        interest at 12% per annum. As of April, 2008, $327,554 including interest
        has
        been repaid. For the year ended April 30, 2008 interest incurred on this
        loan
        aggregated $37,798. As of April 30, 2008 amounts owed to our CEO on these
        loans
        aggregated $232,547 including accrued interest.


40





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.3.3**
            Certificate
                of Designation of Series A Convertible Preferred Stock.4.1
            Form
                of 10% Convertible Promissory Note issued by Gourmet Group, Inc.,
                including Registration Rights provisions.42****
            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.4.4*****
            Form
                of Securities Purchase Agreement, dated as of January 30th, 2007
                between
                Drinks Americas Holdings, Ltd. and certain investors.4.5*****
            Form
                of Registration Rights Agreement, dated as of January 30th, 2007
                between
                Drinks Americas Holdings, Ltd. and certain investors.4.6*****
            Form
                of Common Stock Purchase Warrant, dated as of January 30th, 2007
                between
                Drinks Americas Holdings, Ltd. and certain investors.4.7*****
            Form
                of Placement Agent Agreement between Drinks Americas Holdings,Ltd.
                and
                Midtown Partners Co., LLC dated as of October 25th,
                2006.4.8*****
            Form
                of Placement Agent Warrant, dated as of January 30th, 2007 between
                Drinks
                Americas Holdings, Ltd. and Midtown Partners Co., LLC.4.9*******
            Form
                of Securities Purchase Agreement dated as of December 18, 2007 Between
                Drinks Americas Holdings, Ltd. and certain Investors.4.10*******
            Form
                of Registration Rights Agreement, dated as of December 18, 2007 Between
                Drinks Americas Holdings, Ltd and certain Investors.4.11*******
            Form
                of Placement Agent Agreement between Drinks Americas Holdings, Ltd.
                and
                Midtown Partners Co., LLC.4.13*******
            Form
                of Placement Agent Warrant, dated as of December 18, 2007 between
                Drinks
                Americas Holdings, Ltd. and Midtown Partners Co., LLC.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 Sake LLC
                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.




41




10.12
            Trademark
                License Agreement, dated December 9, 2002, between Drinks Americas,
                Inc.
                and Y Sake LLC relating to Y Sake and Roy Yamaguchi.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 International Beverages,
                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.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.




42




10.39******
            Licensee
                Agreement between Trump Marks, LLC and D.T. Drinks, LLC,dated November
                15,
                2005.10.40******
            Agreement
                between D.T. Drinks, LLC and A.H. Wanders B.V., dated August 10,
                2006.10.41*******
            Exclusive
                Distribution Agreement between Damiana Importing, Inc. and Drinks
                Americas, Inc., dated May 25, 2005.1042******
            Requirements
                Agreement between Wynn Starr Flavors, Inc. and Drinks Americas, Inc.,
                dated February 19, 2003.10.43**
            Registrant's
                Incentive 2007 Stock Plan.14.0***
            Code
                of Ethics21.1(a)***
            List
                of Subsidiaries of Drinks Americas Holdings, Ltd.23.2*
            Consent
                of accountants for use of their report.31.1*
            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 Jeffery Daub, 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 Section
                1350, as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2*
            Certification
                by Jeffery Daub, Chief Financial Officer, pursuant to 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 Post-Effective Amendment No. 1 to Form SB-2 filed on January
      22, 2008. Numbers with (***) have been incorporated by reference to our Form
      10-KSB filed on August 14, 2006. Numbers with (****) have been incorporated
      by
      reference to our Form 8-K filed on March 25, 2005. Numbers with (*****) have
      been incorporated by reference to our Form 8-K filed January 31, 2007. Numbers
      with (******) have been incorporated by reference to our Form SB-2 filed on
      March 19, 2007. Numbers with (*******) have been incorporated by reference
      to
      our 8-K filed on December 19, 2007. 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**




Set
      forth
      below are the fees billed by the Company’s independent principal accountants for
      the past two years for services provided to the Company.




Audit
      fees:We engaged Bernstein & Pinchuk, LLP as our principal accountants to
      perform the audit of our financial statements for the year ended April 30,
      2008.
      During the year ended April 30, 2007 we were billed $110,000 including amounts
      billed for the audit of the Company for the year ended April 30, 2006 and fees
      related to quarterly reviews during the year ended April 30, 3006. During the
      year ended April 30, 2008 we were billed $90,000 including amounts billed for
      the audit of the Company for the year ended April 30, 2007 and fees related
      to
      quarterly reviews for the year ended April 30, 2008. We have not yet been billed
      for the audit of the Company for the year ended April 30, 2008..




Tax
      fees:
      None




All
      Other
      Fees: For the year ended April 30, 2008 we were billed by our principal
      accountants $38,000 for the services relating to a potential acquisition and
      $3,000 relating to our Registration Statement which was declared effective
      on
      June 5, 2008.




43




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly
      authorized, on August 4, 2008.





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 KennyJ. Patrick Kenny
            
            Chief Executive Officer, Director
            
            August
                4, 2008/s/ Jeffrey DaubJeffrey Daub
            
            Chief Financial Officer
            
            August
                    4, 2008/s/ Jason LazoJason Lazo
            
            Chief Operating Officer
            
            August
                    4, 2008/s/ Bruce KleinBruce Klein
            
            Chairman of the Board
            
            August
                    4, 2008/s/
                Frederick SchulmanFrederick
                Schulman
            
            Director
            
            August
                    4, 2008/s/
                Marvin TraubMarvin
                Traub
            
            Director
            
            August
                    4, 2008/s/
                Thomas SchwalmThomas
                Schwalm
            
            Director
            
            August
                    4, 2008/s/
                Hubert MilletHubert
                Millet
            
            Director
            
            August
                    4, 2008


44


**DRINKS
      AMERICAS HOLDINGS, LTD. AND AFFILIATES**




**FINANCIAL
      STATEMENTS**





PageFINANCIAL
                STATEMENTS FOR THE YEAR ENDED APRIL 30, 2008REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FINANCIAL
                STATEMENTS
            2Consolidated
                Balance Sheet
            3Consolidated
                Statements of Operations
            4Consolidated
                Statements of Changes in the Shareholders' Equity(Deficiency)
            5Consolidated
                Statements of Cash Flows
            6-7Notes
                to Consolidated Financial Statements
            8-27





**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, 2008, and the related
      consolidated statements of operations, changes in shareholders' equity, and
      cash
      flows for the years ended April 30, 2008 and 2007. These financial statements
      are the responsibility of the Company's management. Our responsibility is to
      express an opinion on these financial statements based on our
      audits.


We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the company's internal control over financial
        reporting. Accordingly, we express no such opinion. 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 audits provide
        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,
      2008 and the results of its operations, changes in shareholders' equity and
      its cash flows for the years ended April 30, 2008 and 2007, 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.
      This condition raises substantial doubt about the Company's ability to continue
      as a going concern. Management's plans in regard to this matter are described
      in
      Note 1. The consolidated financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.




/s/
                Bernstein & Pinchuk LLPNew
                York, New YorkJuly
                18, 2008


F-2


DRINKS
      AMERICAS HOLDINGS, LTD AND AFFILIATES CONSOLIDATED BALANCE SHEET APRIL 30,
      2008




AssetsCurrent
                assets:Cash
                and equivalents
            
            $
            133,402Accounts
                receivable, net of allowances of $24,000
            
            
            583,949Inventories
            
            
            1,844,412Other
                current assets
            
            
            445,278Total
                current assets
            
            
            3,007,041Property
                and equipment, at cost less accumulated depreciation and
                amortization
            
            
            91,307Investment
                in equity investee
            
            
            69,028Intangible
                assets, net
            
            
            735,559Deferred
                loan costs, net
            
            
            22,548Other
                assets
            
            
            644,762$
            4,570,245Liabilities
                and Shareholders' Equity:Notes
                and loans payable
            
            $
            1,057,940Loan
                Payable - related party
            
            
            232,547Accounts
                payable
            
            
            1,866,477Accrued
                expenses
            
            
            1,235,165Total
                current liabilities
            
            
            4,392,129Commitments
            
            
            —Shareholders'
                equity:Preferred
                stock, $0.001 par value; 1,000,000 shares authorized; issued and
                outstanding 11,000 shares (redemption value $11,000,000)
            
            
            11Common
                stock, $0.001 par value; 100,000,000 authorized; issued and outstanding
                81,188,224 shares
            
            
            81,189Additional
                paid-in capital
            
            
            32,656,685Accumulated
                deficit
            
            
            (32,559,768
            )178,116$
            4,570,245




See
      notes
      to consolidated financial statements.




F-3


**DRINKS
      AMERICAS HOLDINGS, LTD AND AFFILIATE**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**YEARS
      ENDED APRIL 30, 2008 AND 2007**




2008
            
            2007Net
                sales
            
            $
            4,509,070
            
            $
            6,084,520Cost
                of sales
            
            
            2,824,237
            
            
            3,584,019Gross
                margin
            
            
            1,684,833
            
            
            2,500,501Selling,
                general and administrative expenses
            
            
            7,838,481
            
            
            9,981,588Loss
                before other income(expense) and income tax expense
            
            
            (6,153,648
            )
            
            (7,481,087
            )Other
                income (expense):Interest
                expense
            
            
            (164,205
            )
            
            (770,678
            )Loss
                on extinguishment of debt, net
            
            
            —
            
            
            (1,103,735
            )Other
                income (expense), net
            
            
            6,905
            
            
            (33,750
            )(157,300
            )
            
            (1,908,163
            )Loss
                before income tax expense
            
            
            (6,310,948
            )
            
            (9,389,250
            )Income
                tax expense
            
            
            —
            
            
            —Net
                loss
            
            $
            (6,310,948
            )
            $
            (9,389,250
            )Net
                loss per share (Basic and Diluted)
            
            $
            (0.08
            )
            $
            (0.14
            )




See
      notes
      to consolidated financial statements.


F-4




**DRINKS
        AMERICAS HOLDINGS, LTD AND AFFILIATES**


**CONSOLIDATED
      STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) YEARS ENDED APRIL
      30,
      2008 AND 2007**







TotalShareholders’Preferred Stock
            
            Common Stock
            
            Additional
            
            
            
            AccumulatedNumber of
            
            Par
            
            Number of
            
            Par
            
            Paid-in
            
            Accumulated
            
            EquityShares
            
            Value
            
            Shares
            
            Value
            
            Capital
            
            Deficit
            
            (Deficit)Balance,
                April 30, 2006
            
            
            —
            
            
            —
            
            
            62,707,453
            
            $
            62,707
            
            $
            12,008,857
            
            $
            (16,859,570
            )
            $
            (4,788,006
            )Issuance
                of shares for cash
            
            
            —
            
            
            —
            
            
            8,227,778
            
            
            8,228
            
            
            9,441,637
            
            
            —
            
            
            9,449,865Issuance
                of shares for services
            
            
            —
            
            
            —
            
            
            2,246,308
            
            
            2,247
            
            
            2,095,127
            
            
            —
            
            
            2,097,374Issuance
                of shares in settlement of notes and loans payable
            
            
            —
            
            
            —
            
            
            6,352,035
            
            
            6,352
            
            
            5,154,389
            
            
            —
            
            
            5,160,741Discounts
                on the issuance of Convertible notes
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            271,000
            
            
            —
            
            
            271,000Net
                loss for the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (9,389,250
            )
            
            (9,389,250
            )Balance,
                April 30, 2007
            
            
            —
            
            
            —
            
            
            79,533,574
            
            
            79,534
            
            
            28,971,010
            
            $
            (26,248,820
            )
            $
            2,801,724Issuance
                of shares for cash
            
            
            3,000
            
            
            3
            
            
            —
            
            
            —
            
            
            2,759,997
            
            
            —
            
            
            2,760,000Exchange
                of common shares for Preferred shares
            
            
            8,000
            
            
            8
            
            
            (4,444,445
            )
            
            (4,444
            )
            
            4,436
            
            
            —
            
            
            —Exchange
                of warrants for Common shares
            
            
            —
            
            
            —
            
            
            5,000,000
            
            
            5,000
            
            
            (5,000
            )
            
            —
            
            
            —Issuance
                of shares and warrants for services
            
            
            —
            
            
            —
            
            
            1,099,095
            
            
            1,099
            
            
            926,241
            
            
            —
            
            
            927,340Net
                loss for the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (6,310,948
            )
            
            (6,310,948
            )Balance,
                April 30, 2008
            
            
            11,000
            
            
            11
            
            
            81,188,224
            
            $
            81,189
            
            $
            32,656,684
            
            $
            (32,559,768
            )
            $
            178,116




See
      notes
      to consolidated financial statements.




F-5




**DRINKS
      AMERICAS HOLDINGS, LTD AND AFFILIATES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**YEARS
      ENDED APRIL 30, 2008 AND 2007**









2008
            
            2007Cash
                flows from operating activities:Net
                loss
            
            $
            (6,310,948
            )
            $
            (9,389,250
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Deprecation
                and amortization
            
            
            217,851
            
            
            192,603Loss
                on extinguishment of debt
            
            
            —
            
            
            1,103,735Earnings
                in equity method investees
            
            
            (7,392
            )
            
            (11,612
            )Stock
                and warrant issued for services of vendors, employees, directors
                and
                interest
            
            
            149,741
            
            
            2,368,373Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            303,730
            
            
            (595,335
            )Due
                from factor
            
            
            —
            
            
            37,592Inventories
            
            
            407,962
            
            
            (1,628,158
            )Other
                current assets
            
            
            601,594
            
            
            (834,537
            )Other
                assets
            
            
            176,359
            
            
            (379,607
            )Accounts
                payable
            
            
            372,301
            
            
            (181,955
            )Accrued
                expenses
            
            
            240,536
            
            
            416,759Net
                cash used in operating activities
            
            
            (3,848,266
            )
            
            (8,901,392
            )Cash
                flows from investing activities:Acquisition
                of property and equipment
            
            
            —
            
            
            (116,897
            )Net
                cash used in investing activities
            
            
            —
            
            
            (116,897
            )Cash
                flows from financing activities:Proceeds
                from issuance of common stock
            
            
            —
            
            
            8,680,835Proceeds
                from issuance of preferred stock
            
            
            2,760,000
            
            
            —Proceeds
                from issuance of debt
            
            
            604,453
            
            
            1,433,269Repayment
                of debt
            
            
            (327,554
            )
            
            (459,898
            )Payments
                for loan costs
            
            
            (50,000
            )
            
            (38,915
            )Net
                cash provided by financing activities
            
            
            2,986,900
            
            
            9,615,291Net
                increase (decrease)in cash and equivalents
            
            
            (861,366
            )
            
            597,002Cash
                and equivalents - beginning
            
            
            994,768
            
            
            397,766Cash
                and equivalents - ending
            
            $
            133,402
            
            $
            994,768Supplemental
                disclosures of noncash investing and financing activities:Liabilities
                converted into shares of common stock
            
            $
            261,078
            
            $
            3,359,720Shares
                issued equal to increase in prepaid expenses
            
            $
            80,000
            
            $
            —Warrants
                issued equal to increase in deferred costs
            
            $
            416,520
            
            $
            —Supplemental
                disclosures of cash flow information:Interest
                paid
            
            $
            76,343
            
            $
            171,981Income
                taxes paid
            
            $
            —
            
            $
            —




See
        notes
        to consolidated financial statements.




F-6


**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 shares 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).
  Subsequent
        to the Acquisition Date, Partners, which was organized as a Delaware limited
        liability company on January 1, 2002 and incorporated Drinks in Delaware
        on
        September 24, 2002, transferred all its shares of holdings to its members
        as
        part of a plan of liquidation.
  On
        March
        11, 2005 Holdings and an individual organized Drinks Global, LLC ("DGI").
        Holdings own 90% of the membership units and the individual, who is the
        president of DGI, owns 10%. 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 balance sheet as of April 30, 2008 and the
        consolidated results of operations, consolidated changes in shareholders'
        equity
        (deficiency)and consolidated cash flows for the years ended April 30, 2008
        and
        2007 reflect Holdings its majority-owned subsidiaries and Partners
        (collectively, the "Company"). 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,
        2008 and 2007, is those of Holdings.
  The
        accompanying consolidated financial statements have been prepared on a basis
        that assumes the Company will continue as a going concern. Although the Company
        has shareholders' equity of $178,116 as of April 30, 2008, we have incurred
        significant operating losses and negative cash flows since inception. For
        the
        year ended April 30, 2008, the Company sustained a net loss of $6,310,948
        compared with a net loss of $9,389,250 for the year ended April
        30,
        2007, and used $3,848,266 in operating activities compared with $8,901,392
        for
        the year ended April 30, 2007. We have increased our working capital as a
        result
        of our December 2007 private placement of our preferred stock. In addition
        we
        have improved our liquidity by extinguishing a significant amount of debt
        by
        exchanging it for our common stock in previous periods. We will need additional
        financing which may take the form of equity or debt. We anticipate that
        increased sales revenues will help to some extent. In the event we are not
        able
        to increase
        our working capital, we will not be able to implement or may be required
        to
        delay all or part of our business plan, and our ability to attain profitable
        operations, generate positive cash flows from operating and investing activities
        and materially expand the business will be materially adversely affected.
        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.
  F-7
  **Nature
        of Business**
  Through
        our majority-owned subsidiaries, Drinks, DGI and DT Drinks we import, distribute
        and market unique premium wine and spirits and alcoholic beverages associated
        with icon entertainers, celebrities and destinations, to beverage wholesalers
        throughout the United States.
  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 does not offer its clients the
        opportunity to return products for any reason other than manufacturing defects.
        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 communications with its customers.
        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.
  **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, 2008 amounts
        exceeding FDIC insured limits aggregated approximately $98,000.
  F-8
  **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 or market, using the first-in first-out cost
        method. The Company assesses the valuation of its inventories and reduces
        the
        carrying value of those inventories that are obsolete or in excess of the
        Company’s forecasted usage to their estimated net realizable value.
  The
        Company estimates the net realizable value of such inventories based on analysis
        and assumptions including, but not limited to, historical usage, expected
        future
        demand and market requirements.
  **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. When assets are retired or otherwise
        disposed of, the cost and related depreciation is removed from the accounts,
        and
        any resulting gain or loss is recognized in the statement of
        operations.
  **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 at least annually or 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. No impairment losses were recorded in the years
        ended April 30, 2008 and 2007, respectively.
  **Income
        Taxes**
  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, DGI, and DT Drinks are limited
        liability companies, taxed as partnerships with no income tax liabilities
        under
        the provisions of the Code and applicable state statutes.
  F-9
  **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 the related debt.
        If debt
        is retired early, the related unamortized deferred financing costs are written
        off in the period debt is retired.
  **Investments**
  The
        investment of the Company in 25% ownership interests of Old Whiskey River
        Distilling, LLC is accounted for under the equity method of
        accounting.
  **Advertising
        Costs**
  Advertising
        costs are expensed as incurred. Advertising expense was approximately $325,000
        and $106,000 for the years ended April 30, 2008 and 2007,
        respectively.
  **Shipping
        and Delivery**
  The
        Company includes shipping and delivery costs in selling, general and
        administrative expenses. Shipping and delivery costs were approximately $190,000
        and $108,000 for the years ended April 30, 2008 and 2007,
        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.
  F-10
  **Stock
        Based Compensation**
  The
        Company accounts for stock-based compensation in accordance with Statement
        of
        Financial Accounting Standard 123 (revised 2004), Share-Based Payment (SFAS
        123R) using the modified prospective approach. The
  Company
        recognizes in the statement of operations the grant-date fair value of stock
        options and other equity based compensation issued to employees and non
        employees.
  **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, 2008 and 2007, 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**
  SFAS
        No.
        107, ‘Disclosure About Fair Value of Financial Instruments,’ defines the fair
        value of financial instruments as the amount at which the instrument could
        be
        exchanged in a current transaction between willing participants and requires
        disclosure of the fair value of certain financial instruments. The Company
        believes that there is no material difference between the fair value and
        the
        reported amounts of financial instruments in the balance sheet due to the
        short
        term maturity of these instruments, or with respect to the debt, as compared
        to
        the current borrowing rates available to the Company.
  **Recent
        Accounting Pronouncements**
  In
        December 2007, the FASB issued SFAS No. 141(R), ‘ *Business
        Combinations,’* and
        SFAS
        No. 160, ‘ *Accounting
        and Reporting of No controlling Interest in Consolidated Financial Statements,
        an amendment of ARB No. 51.’* Statement
        No. 141(R) is required to be adopted concurrently with Statement No. 160
        and is
        effective for business combination transactions for which the acquisition
        date
        is on or after the beginning of the first annual reporting period beginning
        on
        or after December 15, 2008. Early adoption is prohibited. Application of
        Statement No. 141(R) and
        Statement No. 160 is required to be adopted prospectively. Business combination
        transactions accounted before adoption of Statement No 141(R) should be
        accounted for in accordance with Statement No. 141 and that accounting
        previously completed under Statement No. 141 should not be modified as of
        or
        after the date of adoption of Statement No. 141(R) . The Company is currently
        evaluating the impact of Statement No. 141(R) and Statement No. 160, but
        does
        not expect the adoption of these pronouncements to have a material impact
        on the
        Company’s financial position or results of operations.
  F-11
  In
        February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
        Financial Assets and Financial Liabilities" ("SFAS 159") which permits entities
        to choose to measure many financial instruments and certain other items at
        fair
        value that are not currently required to be measured at fair value (the “fair
        value option”). A business entity shall report unrealized gains and losses on
        items for which the fair value option has been elected in earnings (or another
        performance indicator if the business entity does not report earnings) at
        each
        subsequent reporting date. SFAS 159 is effective for fiscal years beginning
        after November 17, 2007, with earlier adoption permitted. The Company is
        currently evaluating the impact of adopting SFAS 157 but does not believe
        that
        the adoption if SFAS 157 will have a material impact on its financial position,
        cash flows, or results of operations.
  In
        September 2006, the FASB issued SFAS 157, "Fair Value Measurements," to define
        fair value, establish framework for measuring fair value in accordance with
        generally accepted accounting principles, and expand disclosure about fair
        value
        measurements. SFAS 157 is effective for fiscal years beginning after November
        17, 2007, earlier adoption is encouraged. The Company is currently evaluating
        the impact of adopting SFAS 157 but does not believe that the adoption of
        SFAS
        157 will have a material impact on its financial position, cash flows, or
        results of operations.
  In
        December 2007, the FASB issued proposed FASB Staff Position (FSP) 157-b,
        ‘Effectiveness Date of FASB Statement No. 157, that would permit a one-year
        deferral in applying the measurement provisions of Statement No. 157 to
        non-financial assets and non-financial liabilities (non-financial items)
        that
        are not recognized or disclosed at fair value in an entity’s financial
        statements on a recurring basis (at least annually). Therefore, if the change
        in
        fair value of a non-financial item is not required to be recognized or disclosed
        in the financial statements on annual basis or more frequently, the effective
        date of application of Statement 157 to those items is deferred until fiscal
        years beginning after November 15, 2008 and interim periods within those
        fiscal
        years. This deferral does not apply, however, to an entity that applies
        Statement 157 in interim annual financial statements before FSP 157-b is
        finalized. The Company is currently evaluating the impact, if any, that the
        adoption of 157-b will have on the Company’s financial position, cash flows, or
        results of operations.
  In
        June
        2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainties
        in Income Taxes - an interpretation of FASB Statement No. 109" ("FIN 48"),
        which
        clarifies the accounting and disclosure for uncertainty in tax positions,
        as
        defined. FIN 48 seeks to reduce the diversity in practice associated with
        certain aspects of the recognition and measurement related to accounting
        for
        income taxes. This statement is effective for fiscal years beginning after
        December 15, 2006. The Company determined that FIN 48 did not have an effect
        on
        its financial position, results of operations or cash flows on the accompanying
        financial statements.
  F-12
  3.
        Inventories
  As
        of
        April 30, 2008 Inventories consisted of the following:
  Finished
                  goods
              
              $
              1,012,656Raw
                  material
              
              
              831,756$
              1,844,412
  All
        raw
        materials used in the production of the Company's inventories are purchased
        by
        the Company and delivered to independent production contractors.
  4.
        Other
        Current Assets
  As
        of
        April 30, 2008 Other Current Assets consisted of the following:
  Prepaid
                  inventory purchases
              
              $
              405,451Prepaid
                  insurance
              
              
              14,994Other
              
              
              24,833$
              445,278
  5.
        Property and Equipment
  As
        of
        April 30, 2008 Property and Equipment consisted of the following:
  Useful Life
              
              AmountComputer
                  equipment
              
              
              5
                  years
              
              $
              23,939Furniture
              
              
              5
                  years
              
              
              10,654Automobile
              
              
              5
                  years
              
              
              68,337Leasehold
                  improvements
              
              
              7
                  years
              
              
              66,259Production
                  costs
              
              
              2
                  years
              
              
              122,449291,638Accumulated
                  depreciation and amortization
              
              
              
              
              
              (200,331
              )$
              91,307
  Depreciation
        expense for the years ended April 30, 2007 and 2006 amounted to $38,643 and
        $43,998, respectively.
 
 F-13
  6.
        Intangible Assets/Deferred Loan Costs
  Intangible
        assets include the costs to acquire trademarks, license rights and distribution
        rights for four of the Company's alcoholic products. As of April 30, 2008
        intangible assets consisted of the following:
  Trademark/distAnd
                  license rights
              
              $
              1,151,966Accumulated
                  amortization
              
              
              (416,407
              )$
              735,559
  Deferred
        loan costs consist of costs relating to the Company's short term financing.
        As
        of April 30, 2008 deferred loan costs consisted of the following:
  Deferred
                  loan costs
              
              $
              63,915Accumulated
                  amortization
              
              
              (41,367
              )$
              22,548
  Aggregate
        amortization expense for the years ended April 30, 2008 and 2007 amounted
        to
        $179,208 (including $25,000 for deferred financing costs which were removed
        from
        gross carrying amount and accumulated amortization) and $148,605,
        respectively.
 
 F-14
  Estimated
        annual amortization expense as of April 30, 2008 for the next five years
        are
        approximately as follows:
  Year Ended
              
              AmortizationApril 30,
              
              Expense2009
              
              $
              83,3812010
              
              
              60,8342011
              
              
              60,8342012
              
              
              60,8342013
              
              
              60,834
  7.
        Other
        long term assets
  In
        August
        2006, in connection with an agreement with one of its sales consultants the
        Company issued warrants to purchase 100,000 shares of Holdings common stock
        at
        an exercise price of $0.60 per share. The warrants may be exercised at any
        time
        up to five years from the date of the agreement. The Company determined,
        as of
        the grant date of the warrants, that the warrants had a value of $18,000
        which
        was amortized over the one year benefit period of such warrants. In addition,
        under the terms of the agreement, the consultant received 175,000 shares
        of
        Holdings common stock which were valued at $107,000 based on the market price
        of
        the stock at the date of the agreement. The value of stock issued is being
        amortized over the five year life of the consulting agreement. The unamortized
        value of the stock and warrants at April 30, 2008 was $68,948. The consultant
        is
        to receive an additional 100,000 warrants for each contract year with an
        exercise price to be determined by the Company’s board of directors. No cost for
        the value of the warrants currently issuable has been made since the exercise
        price has not been determined.
  In
        February 2007, the Company entered into a five year agreement with a consulting
        company to provide certain financial advisory services. The Company prepaid
        $300,000 for such services. This amount is carried as a long-term asset and
        is
        being amortized over the five year life of the agreement. At April 30, 2008
        the
        unamortized balance of the agreement was $225,370.
  0n
        June
        14, 2007, in connection with an endorsement agreement, the Company issued
        warrants to purchase 801,000 shares of the Company’s common stock at a price of
        $1.284 per share. The warrants may be exercised at any time up to June 14,
        2017.
        The Company determined that the warrants had a value of $416,500, as of the
        date
        the warrants were granted, which is being amortized over the three year term
        of
        the endorsement agreement. The warrants have cashless exercise provisions.
        At
        April 30, 2008, the unamortized balance was $ 304,034.
  F-15
  8.
        Notes
        and Loans Payable
  As
        of
        April 30, 2008 Notes and loans payable consisted of the following
  Due
                  to RBCI(a)
              
              $
              500,000Convertible
                  note(b)
              
              
              250,000Revolving
                  finance facility(c)
              
              
              307,940Other
              
              
              —1,057,940Less
                  current portion
              
              
              1,057,940Long-term
                  debt
              
              $
              —
  (a)
        On
        October 27, 2005, the Company acquired certain assets of Rheingold Beer
        (“Rheingold”) and assumed certain obligations from Rheingold Brewing Company,
        Inc. (“RBCI”). Holdings issued 724,638 shares of 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 Holdings common stock with a value of $350,000 and $150,000
        cash, accruing no interest. The obligation due RBCI was originally due on
        October 27, 2006. Due to nonpayment of the balance as a result of disagreements
        over certain of the acquired assets and liabilities, the Company was sued
        by
        RBCI (see Note 14).
  (b)
        In
        October 2006, the Company borrowed $250,000 and issued a convertible promissory
        note in like amount. The due date of the loan was extended by the Company
        to
        October 2008 from October 2007 in accordance with the terms of the original
        note
        agreement. The note is convertible into shares of our common stock at $0.60
        per
        share. The note bears interest at 12% per annum and is payable quarterly.
        At the
        option of the lender, interest can be paid in shares of Company common stock.
        During the year ended April 30, 2008 the Company issued the note holder an
        aggregate of 49,307 shares of Holdings common stock to satisfy an aggregate
        of
        $29,583 of unpaid interest accrued through October 10, 2007. In February
        2008
        the Company paid the note holder an additional $7,742 for interest accrued
        through January 10, 2008. At April 30, 2008 accrued interest on this loan
        aggregated $9,283 which is included in accrued expenses on the accompanying
        balance sheet. In connection with this borrowing we issued warrants to purchase
        250,000 shares of our common stock for $0.60 per share. These warrants are
        exercisable for a five-year period from the date of issuance. The Company
        had
        determined, as of the date the notes were issued, the warrants had a value
        of
        $48,000 which is being expensed over the life of the related debt. The terms
        of
        the note enables the holder to convert such security into common stock of
        the
        Company at a price of $0.60 per share, which was at a discount to the market
        price of the common stock at the date convertible. At issuance, the convertible
        note was convertible into shares of the Company's common stock with an aggregate
        value which exceeded the amount of proceeds allocated to the convertible
        note by
        $58,000. As of April 30, 2008, this discount has been fully
        amortized.
  (c)
        In
        June 2006, the Company entered into a $10 million, three year, working capital
        revolving finance facility with BACC, a division of Sovereign Bank. Interest
        on
        the line of credit is prime rate plus 1.5%, at April 30, 2008, 6.75%. The
        facility is secured by a first security interest in the assets of the Company
        (other than those of DT Drinks which is
        subordinated to Gateway Trade Finance, LLC (“Gateway”) (formerly Production
        Finance International, LLC). At April 30, 2008, $307,940 as outstanding on
        this
        facility.
  F-16
  I n
        June
        2006 the Company entered into a $1.5 million purchase order revolving credit
        facility with Gateway for financing the acquisition of certain inventory.
        The
        facility bears interest at prime plus 5% (10.25% at April 30,, 2008) per
        annum
        on amounts outstanding. Gateway has a first security interest in the assets
        of
        DT Drinks to the extent of this loan, as described above. At April 30, 2008
        there were no amounts due Gateway.
  9.
        Accrued Expenses
  As
        of
        April 30, 2008 Accrued Expenses consisted of the following:
  Payroll,
                  board compensation, and consulting fees owed to officers, directors
                  and
                  shareholders
              
              $
              742,567All
                  other payroll and consulting fees
              
              
              218,413Interest
              
              
              11,339Others
              
              
              262,846$
              1,410,165
  10.
        Shareholders' Equity (Deficiency)
  Weighted
        average number of common shares outstanding used to compute earnings per
        share
        for the years ended April 30, 2008 and 2007 are as follows:
  2008
              
              2007Basic and diluted
              
              
              80,014,641
              
              
              68,995,859
  In
        addition to those referred to in Notes 7 and 12, additional transactions
        affecting the Company's equity for the years ended April 30, 2008 and 2007
        are
        as follows:
  In
        April
        2008 the Company issued 300,000 shares of its stock to three consultants
        (100,000 shares each) for
  their
        contributions relating to certain strategic transactions which the Company
        entered. The aggregate value of the shares, based on the date the shares
        were
        granted, aggregated $99,000 which is included in selling, general and
        administrative expenses for the year ended April 30, 2008.
  On
        March
        28, 2008 a consultant elected to convert $16,818 due him for consulting fees
        into shares of Company stock at a price of $0.37 per share, which was the
        market
        price on the date of election (grant), resulting in the Company issuing 45,455
        shares to him.
  F-17
  In
        February 25, 2008 a consultant elected to convert $190,000 due him for
        consulting fees into shares of Company common stock at a price of $0.50 per
        share resulting in the Company issuing 190,000 shares to him. The market
        price
        of the Company’s common stock at the date of the election to convert was $0.45
        per share.
  On
        January 17, 2008 the Company’s Chief Executive Officer (CEO) elected to convert
        $25,000 due him for compensation into shares of Company common stock at a
        price
        of $0.50 per share resulting in the Company issuing 50,000 shares to him.
        The
        market price of the Company’s common stock at the date of the election to
        convert was $0.18 per share.
  On
        December 18, 2007 (the "Closing Date") the Company sold to three related
        investors (the "December Investors") an aggregate of 3,000 shares of our
        Series
        A Preferred Stock, $.001 par value (the "Preferred Stock"), at a cash purchase
        price of $1,000 per share, generating gross proceeds of $3,000,000 (the
“December Financing”). The Preferred Stock is convertible into our common stock
        at $.50 per share, which, if all the Preferred Stock is converted, would
        result
        in the issuance of 6,000,000 shares of our common stock. The Preferred Stock
        has
        no voting or dividend rights. Out of the gross proceeds of the December
        Financing, we paid Midtown Partners & Co., LLC (the "Placement Agent")
        $180,000 in commissions and $30,000 for non-accountable expenses. We also
        issued, to the Placement Agent, warrants to acquire 600,000 shares of our
        Common
        Stock for a purchase price of $.50 per share (the "Placement Agent Warrants"),
        which warrants are exercisable for a five year period and contain anti-dilution
        provisions in the events of stock splits and similar matters. Both the
        commissions and expenses were accounted for as a reduction of Additional
        Paid in
        Capital.
  The
        financing that we consummated in January 2007 (the “January Financing”) provided
        participating investors (the “January Investors”) rights to exchange the common
        stock they acquired for securities issued in subsequent financings which
        were
        consummated at a common stock equivalent of $2.00 per share or less. Under
        this
        provision, the January Investors have exchanged 4,444,445 shares of common
        stock
        for 8,000 shares of Preferred Stock (which Preferred Stock is convertible
        into
        an aggregate of 16,000,000 shares of our common stock). The 4,444,445 shares
        returned were accounted for as a reduction of Additional Paid in Capital
        and a
        reduction of Common Stock since the shares have been cancelled. Also in the
        January Financing, the January Investors acquired warrants to purchase 3,777,778
        shares of our common stock at an exercise price of $3.00 per share (the “January
        Warrants”). The January Warrants contain full ratchet anti-dilution provisions,
        as to both the exercise price and the number of shares purchasable under
        the
        warrants, which due to the December Financing, would have resulted in the
        January Warrants representing the right to acquire 22,666,668 shares of our
        common stock, i.e., an additional 18,888,890 shares (the “Warrant Increment”) at
        a reduced exercise price of $.50 per share. We have issued 5,000,000 shares
        of
        our common stock to the January Investors, in consideration of their waiver
        of
        the Warrant Increment (the “Waiver Shares”). This waiver will apply to future
        financings as well.
  The
        provisions of the January Warrants which result in the reduction of the exercise
        price remain in place and, as a result of the December Financing, the exercise
        price of the January Warrants have been reduced to $.50 per share. The value
        of
        the Waiver Shares was determined to be $1,650,000 which was the market value
        of
        the 5,000,000 shares which were issued in consideration of the waiver at
        the
        date of grant. Each of our December Investors participated in the January
        Financing but not all of our January Investors participated in the December
        Financing. We agreed to file a Registration Statement covering the resale
        of the
        shares of our common stock issuable on the conversion of Preferred Stock
        issued
        to the December Investors and the January Investors, the Waiver Shares, and
        the
        shares of our common stock issuable on exercise of the Placement Agent Warrants.
        Such Registration Statement was declared effective by the Securities and
        Exchange Commission under the Securities and Exchange Act of 1934 on June
        5,
        2008. We do not have sufficient shares of common stock available to allow
        for
        the conversion of all of the preferred stock into common stock. We have agreed
        ,
        and our board of directors previously approved, amending our Certificate
        of
        Incorporation to increase the number of shares of common stock we are authorized
        to issue to 200,000,000 shares. Approval of our stockholders shall be required
        to effect such amendment under Delaware law and we expect to hold a special
        meeting of our stockholders for the purpose of securing such approval and
        note
        that shareholders representing over 50% of our outstanding common stock
        consented to such amendment.
  F-18
  In
        October 2007 the Company issued 200,000 shares of our common stock with a
        value
        of $80,000 for payments towards legal fees (RBCI and other
        matters).
  In
        July
        2007 the Company issued 1,000 shares of our common stock as a bonus for work
        performed by an independent contractor.
  In
        June
        2007 a member of our Board of Directors was issued 40,000 shares of our common
        stock as compensation for serving on the Board. The aggregate value of the
        stock
        issued was $50,000 based on the market price on the date of grant.
  In
        June
        2007, the Board of Directors adopted the Company’s 2005 Stock Incentive Plan
        (the “Plan”). The total number of shares of Common Stock authorized for awards
        under the Plan is 7,000,000 shares. As of April 30, 2008 no awards have been
        granted under the Plan.
  In
        April
        2007 the Company sold 8,333 shares of its common stock for $5,000 to an
        unrelated investor.
  In
        April
        and February 2007, we issued 1,000 and 22,500 shares, respectively, or our
        common stock to 19 sales brokers in consideration for services to us. The
        value
        of the shares issued aggregated $61,195 based on the market price on the
        dates
        of issuances which is included in selling, general and administrative expenses
        for the year ended April 30, 2007.
  In
        February 2007, four members of our Board of Directors each were each paid
        $25,000 and issued 16,502 shares of our common stock as compensation for
        serving
        on our Board of Directors. In addition, our Chief Executive Officer was issued
        16,502 shares of our common stock as a bonus for services he provided to
        us in
        his position as our CEO. The aggregate value of the common stock issued was
        $250,000 based on the market price on the date of issuance which is included
        in
        selling, general and administrative expenses for the year ended April 30,
        2007.
  On
        January 17, 2007, the Company issued 60,000 shares of its common stock as
        payment for a passed due loan. Based on the market price of the common stock
        on
        the date the agreement was reached to issue the stock as payment, the Company
        recognized a non-cash loss of $157,440 on this transaction.
  On
        January 12, 2007, the Company issued 14,286 shares to a sales broker as a
        bonus
        for services he has provided the Company. The value of the shares of $35,415
        is
        included in selling, general and administrative expenses in the accompanying
        consolidated statement of operations for the year ended April 30,
        2007.
  In
        December 2006, the Company committed to issue shares to several of its employees
        and consultants for services they have provided to the Company in connection
        with the successful launch of Trump Super Premium Vodka.
  A
        company
        controlled by a member of the Company's board of directors received 365,210
        shares with an aggregate value of $7,032 based on the value of the Company's
        stock as of the commitment date and the Company's Chief Operating Officer
        received 150,075 shares with an aggregate value of $237,119.
  Several
        other employees and a consultant to the Company received an aggregate of
        206,716
        shares with a value of $326,611.
        The total value of the shares issued is included in selling, general and
        administrative expenses in the accompanying consolidated statement of operations
        for the year ended April 30, 2007.
  F-19
  In
        December 2006, 280,000 shares were issued as consideration to a vendor as
        payment for amounts past due of $140,000. Based on the market value of the
        Company's common stock on the date the agreement to issue the shares was
        made
        the Company recognized a non-cash loss on this transaction of
        $94,360.
  In
        March
        and April 2006, the Company received proceeds of $1,959,999 for the issuance
        of
        3,266,665 shares of our common stock. As of April 30, 2006, the Company had
        issued 1,950,000 of these shares with the balance of 1,316,665 issued in
        December 2006. In December 2006 the Company sold 33,333 of its shares of
        common
        stock for $20,000. The 33,333 shares were issued in February 2008.
  In
        October and November 2006, the Company sold 1,750,000 shares of its common
        stock
        for $1,050,000 to investors. Greenwich Beverage Group, LLC (“Greenwich”), an
        entity controlled by a member of our board of directors acquired 333,333
        shares
        of common stock for $200,000. In addition, these investors were issued warrants,
        exercisable for five years from the date of the investments, to purchase
        875,000
        (Greenwich was issued 166,667) shares of common stock at a price of $1.25
        per
        share. The Company has the option to redeem up to 50% of the warrants at
        anytime
        prior to exercise at a price of $0.50 per warrant.
  In
        between October and December 2006, we sold, in a private placement, 708,335
        shares of our common stock for $425,000 to seven accredited investors. In
        connection therewith, we paid $33,980 to a placement agent.
  In
        November 2006, the Company issued 140,000 shares of its common stock in
        connection with a consulting agreement. The value of these shares of $105,000,
        based on the market price of the Company's common stock at the date the Company
        committed to issue them, is included in selling, general and administrative
        expenses in the accompanying consolidated statement of operations for the
        year
        ended April 30, 2007.
  In
        October 2006, 20,000 shares were issued as consideration to a vendor for
        amounts
        due.
  In
        August
        2006, the Company issued 80,000 shares of its common stock as consideration
        for
        professional services. Company management determined the value of such shares
        were $40,000 based on the market price of the common stock on the date of
        the
        agreement which is included in selling, general and administrative expenses
        in
        the accompanying consolidated statement of operations for the year ended
        April
        30, 2007.
  166,667
        shares were issued in July 2006 to a charitable organization which is run
        by the
        owner of one of the Company's vendors. Company management has determined
        the
        value of such shares at the date of issuance was $97,000 which is included
        in
        selling, general and administrative expenses in the accompanying consolidated
        statements of operations for the year ended April 30, 2007.
  50,000
        shares were issued in July 2006 as consideration of a loan extension. Company
        management has determined the value of such shares was $29,000 which is included
        in interest expense in the accompanying consolidated statements of operations
        for the year ended April 30, 2007.
  F-20
  As
        of
        April 30, 2008, warrants to purchase 8,663,868 shares of Holdings common
        stock
        were outstanding, as follows:
  The
        January Warrants, which are exercisable for a five year period commencing
        on the
        sixth month anniversary of the Closing Date, and contain cashless exercise
        provisions, which apply in certain circumstances. Also in connection with
        the
        January Financing we issued warrants to acquire 444,444 shares of our common
        stock for a purchase price of $3.00 per share to the Placement Agent. We
        also
        issued in our December Financing, to the Placement Agent, warrants to acquire
        600,000 shares of our Common Stock for a purchase price of $.50 per share
        which
        warrants are exercisable for a five year period and contain anti-dilution
        provisions in the events of stock splits and similar matters.
  In
        June
        2007, as disclosed in Note 7 to the financial statements, in connection with
        an
        endorsement agreement, the Company issued warrants to purchase 801,000 shares
        of
        the Company’s common stock at a price of $1.284 per share. The warrants expire
        on June 14, 2017.
  In
        October and November 2006, the Company sold 1,750,000 shares of its common
        stock
        for $1,050,000 to investors. Greenwich acquired 333,333 shares of common
        stock
        for $200,000. In addition, these investors were issued warrants, exercisable
        for
        five years from the date of the investment, to purchase 875,000 (Greenwich
        was
        issued 166,667 of these) shares of common stock at a price of $1.25 per share.
        The Company has the option to redeem up to 50% of the warrants at anytime
        prior
        to exercise at a price of $0.50 per warrant.
  In
        October 2006, as disclosed in Note 8 to the financial statements, in connection
        with borrowings of $250,000 in exchange for a convertible note, the Company
        issued warrants to purchase 250,000 shares of Holdings common stock, at an
        exercise price of $0.60 per share. The warrants expire five years from the
        date
        of the agreement.
  In
        August
        2006, as disclosed in Note 7 to the financial statements, in connection with
        a
        consulting agreement, the Company issued warrants to purchase 100,000 shares
        of
        Holdings common stock at an exercise price of $0.60 per share. The warrants
        expire five years from the date of the agreement.
  Warrants
        were issued in connection with convertible notes issued in July 2006 to purchase
        an aggregate of 300,000 of Holding’s common stock at an exercise price of $0.50
        per share. The warrants were issued in lieu of interest payments.
  In
        February 2006, the Company issued warrants to purchase 250,000 shares of
        common
        stock at a price of $0.56 per share to a consultant in connection with
        consulting services rendered the Company. The warrants are exercisable through
        February 2011.
  Warrants
        issued in connection with convertible notes issued between December 2005
        and
        February 2006 to purchase an aggregate of 445,646 shares of Holding’s common
        stock at an exercise price of $0.45 per share. The warrants may be exercised
        at
        any time up to five years from the date of the notes. Warrants to purchase
        55,556 shares are owned by Greenwich and warrants to purchase 83,333 shares
        are
        owned by a significant shareholder of the Company.
  Warrants
        were issued in connection with senior convertible notes which were issued
        between March and May 2005 to purchase an aggregate of 1,350,000 shares of
        Holdings common stock at a per share price of $0.45. These warrants also
        have
        cashless exercise provisions. The warrants may be exercised at any time up
        to
        five years from the date of the notes. Warrants to purchase 100,000 shares
        are
        owned by Greenwich. In December 2006 three of the warrant holders exercised
        their warrants under the cashless exercise provisions of the warrants receiving
        an aggregate of 402,587 shares of the Company's common stock. Warrants to
        purchase an aggregate 0f 820,000 shares of the Company’s stock remain
        outstanding.
  F-21
  **Warrants**
  The
        following is a summary of the Company's outstanding warrants as of April
        30,
        2008
  Warrants
              
              Per
                  WarrantWarrants
                  outstanding May 1, 2006
              
              
              2,045,646
              
              $
              0.46Granted
              
              
              650,000
              
              
              0.60Granted
              
              
              875,000
              
              
              1.25Granted
              
              
              4,222,222
              
              
              3.00Exercised
              
              
              (530,000
              )
              
              0.45Forfeited
              
              
              —
              
              
              —Warrants
                  outstanding April 30, 2007
              
              
              7,262,868
              
              
              2.05Granted
              
              
              801,000
              
              
              1.28Granted
              
              
              600,000
              
              
              0.50Re-price(a)
              
              
              (3,777,778
              )
              
              3.00Re-price(a)
              
              
              3,777,778
              
              
              0.50Exercised
              
              
              —
              
              
              —Forfeited
              
              
              —
              
              
              —Warrants
                  outstanding April 30, 2008
              
              
              8,663,868
              
              $
              0.78
  (a)
              Reduction
                  in the exercise price pursuant to the provisions of the January
                  Warrants
                  which resulted in the reduction of the exercise price as a result
                  of the
                  December Financing. The exercise price of the January Warrants
                  have been
                  reduced to $.50 per share (see Note
                  10)
  11.
        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 and file a federal income tax return on a consolidated
        basis. The consolidated net operating loss carry forward as of April 30,
        2008 is
        approximately $25,000,000, available to offset future years' taxable income
        expiring in various years through 2028.
  F-22
  As
        of
        April 30, 2008, components of the deferred tax assets are as
        follows:
  Net
                  operating loss
              
              $
              9,600,000Accrued
                  compensation
              
              
              450,00010,050,000Less
                  valuation allowance
              
              
              (10,050,000
              )$
              —
  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.
  Reconciliation
        of the differences between the statutory tax rate and the effective income
        tax
        rate is as follows for the year ended April 30, 20087:
  2008
              
              2007Statutory
                  federal tax (benefit) rate
              
              
              (34.00
              )%
              
              (34.00
              )%Statutory
                  state tax (benefit) rate
              
              
              (4.00
              )%
              
              (4.00
              )%Valuation
                  allowance
              
              
              38.00
              %
              
              38.00
              %Effective
                  income tax rate
              
              
              —
              
              
              —
  12.
        Related Party Transactions
  Related
        party transactions, in addition to those referred to in Notes 9 and 10 are
        as
        follows:
  **Consulting
        and Marketing Fees**
  For
        the
        years ended April 30, 2008 and 2007, the Company incurred fees for services
        rendered related to sales and marketing payable to a limited liability company
        which was controlled by the Company's chairman of the board aggregating $84,000
        and $0, respectively. As of April 30, 2008 unpaid fees owed to the chairman's
        firm, aggregated $98,550.
  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. As of April
        30,
        2008 we were indebted to the consulting company in the amount of $156,248.
        In
        December 2006 we issued 365,210 shares of our common stock to the consulting
        company in consideration for services rendered in connection with the launch
        of
        Trump Super Premium Vodka.
  F-23
  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,
        2008
        and 2007 consulting fees incurred to this shareholder aggregated $120,000.
        On
        February 28, 2008 the consultant elected to convert $190,000 due him for
        consulting fees into shares of Company common stock at a price of $0.50 per
        share resulting in the Company issuing 380,000 shares to him. As of April
        30,
        amounts owed to this shareholder aggregated $30,000. In addition, in December
        2006, the Company reached an agreement with the consultant to settle past
        due
        amounts owed to his company, Alive Spirits LLC, aggregating $312,102 plus
        interest by issuing 595,568 shares of the Company's common stock. Based on
        the
        value of the Company's common stock on the date the agreement was reached,
        the
        Company recognized a non-cash loss of $628,895 on this transaction for the
        year
        ended April 30, 2007.
  **Legal
        Fees**
  For
        the
        years ended April 30, 2008 and 2007, the Company incurred legal fees payable
        to
        a company which was controlled by a member of the Company's board of directors
        aggregating $57,633 and $0, respectively.
  **Interest
        Expense**
  For
        the
        years ended April 30, 2008 and 2007 the Company incurred interest expense
        on
        obligations due the significant shareholder and entities which he controls
        aggregating $0 and $43,921, respectively.
  For
        the
        years ended April 30, 2008 and 2007 the Company incurred interest expense
        on
        obligations due the member of its board of directors who controls Greenwich
        Beverage Group LLC, referred to in Note 10 aggregated $0 and
        $16,833.
  **Royalty
        Fees**
  In
        connection with the Company's distribution and licensing agreements with
        its
        equity investee the Company incurred royalty expenses during 2008 and 2007
        of
        approximately $62,000 and $52,000, respectively. These amounts are included
        in
        selling, general and administrative expenses in the accompanying consolidated
        statements of operations.
  **Loan
        Payable**
  From
        July
        2007 through April 2008 the Company borrowed an aggregate of $522,303 from
        our
        CEO for working capital purposes. The borrowings bear interest at 12% per
        annum.
        As of April, 2008, $327,554 including interest has been repaid. For the year
        ended April 30, 2008 interest incurred on this loan aggregated $37,798. As
        of
        April 30, 2008 amounts owed to our CEO on these loans aggregated $232,547
        including accrued interest.
  F-24
  13.
        Customer Concentration
  For
        the
        years ended April 30, 2008 and 2007 one customer accounted for approximately
        12%
        and 19%, respectively of net sales. For the year ended April 30, 2008 and
        2007
        two different customers accounted for 10% and 17% of net sales,
        respectively.
  14.
        Commitments
  **Lease**
  The
        Company leases office space under an operating sublease, with minimum annual
        rentals of $50,000 through July 31, 2009. The Company leases additional office
        under an operating lease that requires minimal annual rental payments of
        $51,600
        until March 2009.
  Rent
        expense for these leases aggregated approximately $99,000 and $98,000 for
        the
        years ended April 30, 2008 and 2007, respectively.
  Future
        minimum payments for all leases are approximately as follows:
  Year EndingApril 30,
              
              Amount2009
              
              $
              97,3002010
              
              
              12,500
  **License
        Agreement**
  In
        November 2005 the Company entered into an eight-year partnership agreement
        for
        sales of Trump Super Premium Vodka. Under the agreement the Company is required
        to pay royalties on sales of the licensed product. The agreement requires
        minimal royalty payments through November 2012 which if not paid could result
        in
        termination of the license.
  **Litigation**
  On
        or
        about July 19, 2006, Manhattan Beer Distributor, LLC, a wholesale distributor
        of
        beverages in the State of New York, (“MBD”) initiated litigation in the Supreme
        Court of the State of New York in Bronx County (Index No. 17776-2006) against
        the Company. Plaintiff sued for approximately $87,000 plus interest, for
        alleged
        distribution services rendered both prior and subsequent to the acquisition
        of
        certain assets related to Rheingold Beer. We have answered the complaint
        and
        have filed a cross-claim against RBCI Holdings, Inc. (“RBCI”), the entity that
        sold us the assets, for the portion of the complaint related to pre-acquisition
        services. RBCI has not filed an answer. The discovery phase of the litigation
        has been completed. There have been continuing settlement negotiations and
        a
        trial is scheduled for September 12, 2008.
  F-25
  In
        April
        2007, RBCI filed a complaint against the Company in the U.S. District court,
        Southern District of N.Y. (No. 07-CV-02877). RBCI seeks $150,000 plus 525,738
        shares of common stock of the Company and re-assignment of the Rheingold
        license
        in damages for an alleged breach of the Asset Purchase Agreement, related
        to the
        October 27, 2005 purchase of certain Rheingold assets. The Company has filed
        a
        motion to dismiss the complaint. The Company believes that RBCI overstated
        assets, understated liabilities and misrepresented revenue in connection
        with
        the asset sale. A discovery schedule has been set. Settlement discussions
        have
        commenced. The Company plans to vigorously defend the suit.
  In
        July
        2007, Michele Berg, a former employee of the Company, initiated litigation
        against the Company in Superior Court of Arizona, Maricopa County (CV
        2006-019515). The plaintiff seeks $8,125 of unpaid wages, $31,740 for
        reimbursement of expenses and other compensation, and treble damages for
        wage
        claim, for a total of $61,133. The Company is engaging in ongoing settlement
        discussions with the plaintiff.
  On
        or
        about June 12, 2007, Phillip Cassia, formally affiliated with Sloan Equity
        Partners (“Sloan”), LLC initiated litigation in the US District Court (No. 07
        CIV 5590) alleging that the Company failed to recognize the assignment to
        him,
        and his subsequent exercise of, two warrants allegedly issued by the Company
        to
        Sloan to purchase 300,000 shares and 67,500 shares of the Company’s common
        stock. The Plaintiff demanded that the Company affect these assignments and
        that
        the Plaintiff be awarded unspecified monetary damages for alleged breach
        of the
        terms of the warrants and such other relief as may be just and proper. The
        Company has filed an answer with counterclaims against the Plaintiff. The
        case
        was settled in April 2008 with the Company paying Cassai $500.
  15.
        Subsequent Event
  In
        June
        2008, 50,000 shares of our common stock and warrants to purchase an additional
        150,000 shares or shares of our common stock was issued to one of the Company’s
        vendors as part of an agreement to sell their brand. The aggregate market
        value
        of the stock issued was $12,500 based on the market price on the date of
        grant.
        The exercise price of the warrants is $0.50 per share. The warrants expire
        five
        years from the date of the agreement. Management
        has determined that the aggregate value of the warrants was
        $1,700.
  In
        July
        2008 in connection with an extension of a licensing agreement for one of
        our
        brands the Company issued 100,000 shares of common stock and warrants to
        purchase an additional 300,000 shares of common stock to a charitable
        organization supported by one of the icons with whom we have a relationship.
        Company management has determined the value of such shares at the date of
        grant
        was $25,000. Under the terms of the warrant agreement 100,000 shares of common
        stock are exercisable September 1, 2009, 100,000 shares of common stock are
        exercisable September 1, 2010, and 100,000 shares of common stock are
        exercisable September 1, 2010. The exercise price of the warrants is $0.50
        per
        share. The warrants expire five years from the date of the shares are
        exercisable. Management
        has determined that the aggregate value of the warrants was
        $3,000.
 F-26