FORM 10-KSB

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

                    For the fiscal year ended April 30, 2006

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      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                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                                372 Danbury Road
                                Wilton, CT 06897
                    (Address of principal executive offices)

                                 (203) 762-7000
                           (Issuer's telephone number)

      Securities registered under Section 12(b) of the Exchange Act: (none)

      Securities registered under Section 12(g) of the Exchange Act: Common
                        Stock, $.001 par value per share

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

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. |_|

Issuer's revenues for its most recent fiscal year: $1,607,606

As of July 31, 2006, there were 62,924,120 shares of the Company's common stock
issued and outstanding, and the aggregate market value of such common stock held
by non-affiliates was approximately $14,754,769, based on the average of the bid
and ask prices of such stock on that date of $.675.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

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Table of Contents

                         DRINKS AMERICAS HOLDINGS, LTD.
                            FORM 10-KSB ANNUAL REPORT

                                Table of Contents

                                     PART I

Item 1.    Our Business

Item 2.    Property

Item 3.    Legal Proceedings

Item 4.    Submission of Matters to a Vote of Shareholders

                                     PART II

Item 5.    Market for Common Stock and Related Shareholder Matters

Item 6.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations

Item 7.    Financial Statements

Item 8.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure

Item 8A.   Controls and Procedures

Item 8B.   Other Information

                                    PART III

Item 9.    Directors, Executive Officers and Control Persons;
           Compliance with Section 16(a) of the Exchange Act

Item 10.   Executive Compensation

Item 11.   Security Ownership of Certain Beneficial Owners and
           Management and Related Shareholder Matters

Item 12.   Certain Relationships and Related Transactions

Item 13.   Exhibits

Item 14.   Principal Accountant Fees and Services

SIGNATURES


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                                Explanatory Note

Unless otherwise indicated or the context otherwise requires, all references
below in this Report on Form 10-K to the "Company", "us", "our" and "we" refer
to (i) Drinks Americas Holdings, Ltd. (ii) our 100% owned Delaware subsidiary,
Drinks Americas, Inc., (iii) our 100% owned Delaware limited liability company,
Maxmillian Mixers, LLC, (iv) our 90% owned Delaware limited liability company,
Drinks Global Imports, LLC, and (v) our 100% owned Delaware Limited Liability
Company, DT Drinks, LLC.

             Cautionary Notice Regarding Forward Looking Statements

Our disclosure and analysis in this Report contain some forward-looking
statements. Certain of the matters discussed concerning our operations, cash
flows, financial position, economic performance and financial condition,
including, in particular, future sales, product demand, competition and the
effect of economic conditions include forward-looking statements within the
meaning of section 27A of the Securities Act of 1933, referred to herein as the
Securities Act, and Section 21E of the Securities Exchange Act of 1934, referred
to herein as the Exchange Act.

Statements that are predictive in nature, that depend upon or refer to future
events or conditions or that include words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates" and similar expressions are
forward-looking statements. Although we believe that these statements are based
upon reasonable assumptions, including projections of orders, sales, operating
margins, earnings, cash flow, research and development costs, working capital,
capital expenditures, distribution channels, profitability, new products,
adequacy of funds from operations and other projections, and statements
expressing general optimism about future operating results, and non-historical
information, they are subject to several risks and uncertainties, and therefore,
we can give no assurance that these statements will be achieved.

Readers are cautioned that our forward-looking statements are not guarantees of
future performance and the actual results or developments may differ materially
from the expectations expressed in the forward-looking statements.

As for the forward-looking statements that relate to future financial results
and other projections, actual results will be different due to the inherent
uncertainty of estimates, forecasts and projections and may be better or worse
than projected. Given these uncertainties, you should not place any reliance on
these forward-looking statements. These forward-looking statements also
represent our estimates and assumptions only as of the date that they were made.
We expressly disclaim a duty to provide updates to these forward-looking
statements, and the estimates and assumptions associated with them, after the
date of this filing to reflect events or changes in circumstances or changes in
expectations or the occurrence of anticipated events.

We undertake no obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any additional disclosures we make in our Form
10-KSB, Forms 10-QSB and Forms 8-K reports to the SEC. Also note that we provide
a cautionary discussion of risk and uncertainties under the caption "Risk
Factors" in this prospectus. These are factors that we think could cause our
actual results to differ materially from expected results. Other factors besides
those listed here could also adversely affect us. This discussion is provided as
permitted by the Private Securities Litigation Reform Act of 1995.

Item 1. Description of Business.

History of Company:

As of March 9, 2005, the shareholders of Drinks America, Inc. ("DA"), acquired
control of Gourmet Group, which had become a Delaware corporation and changed
its name to Drinks Americas Holdings, Ltd. Prior to entering into this share
exchange, as Gourmet Group, Inc. ("Gourmet Group"), we were a company pursuing
the acquisition of various operating businesses since our sale of Jardine Foods,
Inc., our previous operating entity, in May 2002. On March 9, 2005, DA's
shareholders acquired approximately 87% of Gourmet Group's common stock in
exchange for all of DA's outstanding common shares and the Drinks' business.


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As of March 9, 2005, we, as Gourmet Group, issued an aggregate of approximately
42,963,792 shares of our common stock (or approximately 87.28% of the
outstanding common stock on a fully-diluted basis) to the DA's shareholders, an
additional 1,800,000 total shares of our common stock (or approximately 3.66%)
to two advisors to DA and a total of 400,000 shares of our common stock (or
approximately .8%) to the four members of Maxmillian Mixers, LLC ("Maxmillian"),
a Delaware limited liability company affiliated with DA ("Mixers"). Immediately
prior to issuing such shares, the Company (which had previously been a Nevada
corporation), by way of merger into a newly formed Delaware corporation, became
a Delaware corporation, changed its name to Drinks Americas Holdings, Ltd.,
effectively reverse split its outstanding shares one-for-ten, and authorized up
to 1,000,000 shares of "blank check" preferred stock in its new certificate of
incorporation. In return for such issuances of shares, we, as Gourmet Group,
received all of the outstanding shares of capital stock of DA and all of the
membership interests in Mixers. Thus, DA and Mixers became our wholly-owned
subsidiaries and the business of those subsidiaries constitutes substantially
all of our operations. Prior to the share exchange transaction described above,
Maxmillian owned approximately 99% of the outstanding capital stock of Drinks
and immediately after the share exchange became our majority shareholder.
Subsequently Maxmillian distributed its shares pro rata to its 21 members as
part of its plan of liquidation. For financial accounting purposes this share
exchange has been recognized as a reverse merger, and accordingly we changed our
fiscal year end from June 30 to Drinks' year end of April 30th, and all of our
historical financial statements prior to the share exchange are those of Drinks.

Overview

Based in Wilton, Connecticut, we were founded in 2002 by an experienced team of
beverage, entertainment, retail and consumer product industry professionals, led
by J. Patrick Kenny, a former executive at Joseph E. Seagram & Sons. We
specialize in the marketing and distribution of premium alcoholic and
nonalcoholic beverages associated with icon entertainers, sports figures,
celebrities, and destinations.

We develop, produce (primarily through co-packers), market and/or distribute
alcoholic and non-alcoholic beverages for sale in the continental United States.
While in certain cases we own the trademarks or have developed the formula for a
product that we distribute, in other cases we only have the right to distribute
the products and have been granted licenses of the trademark to allow us to do
so. We refer to all of the products we distribute as "our products" throughout
this Prospectus.

Over the past 12 months we have acquired and developed additional brands and
distributed existing products, and increased marketing support for certain of
these brands. Our production capacity is primarily through third party
independent contract packers known as "co-packers". The expansion of our
business has been negatively affected by insufficient working capital. As a
result, we regularly make judgments as to inventory levels in general and
whether to maintain inventory for any particular product based on available
working capital, rather than maintaining the optimum levels required to grow our
business.

Our strategy is to take advantage of icon celebrity brands and the strategic
relationships our management team has established throughout their careers. We
distribute our products through established distributors, virtually all of which
are already well known to our management team from prior business dealings with
them in the beverage industry. We have expanded the number of distributors we do
business with in certain markets where we believe it is appropriate. Our
distributors buy our products from us for resale. Our products are produced by
independent co-packers pursuant to our specifications. Our management's
relationships with manufacturers, distillers, development/research companies,
bottling concerns and retail customers provide the foundation through which we
expect to grow our business in the future.


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We have assembled, and will attempt to continue to assemble, our premium brands,
on a "low cost" basis. We believe acquisition of mid-sized brands and single
trademark companies can be accomplished at extremely efficient "price multiples"
in relation to their existing volume. We are willing to develop these brands
with their original owners on a cooperative economic basis and share with them
marketing, production, distribution contacts and the sophistication of our
management team. We believe that the "skill-set" of our management team is a
primary asset in the development of our acquired brands and trademarks. We have
acquired ownership interests from, or entered into ventures with, partners such
as Donald Trump, Willie Nelson, Chef Roy Yamaguchi, Wynn Starr Flavors, Inc.,
Interamericana de Licores S.A. of Panama, Advantage Marketing, which specializes
in institutional food and beverage sales, Newman's Own, Paul Newman's Beverages,
DAS Communications, Ltd, Marvin Traub Associates, Cohete Rum S.A. and Damiana
S.A.

In fiscal 2006, we formed Drinks Global Imports, LLC, a new subsidiary in which
we own 90% of the outstanding member units. This company imports super premium
wines from around the world, and will focus on wines from France, Italy, Spain,
Australia and New Zealand.

In fiscal year 2005 we have entered into a U.S. distribution contract giving us
the exclusive sales and marketing rights to Damiana a Hispanic liqueur for the
United States market. We are pleased with the market reception to this product.
In October 27, 2005, we purchased licensing and distribution rights to Rheingold
Beer in the United States. At this point, we are developing a new formula for
Rheingold beer and designing new packaging. Depending on our working capital
position, we hope to launch this product late in 2006.

In November 2005, we signed a license agreement with Trump Mark, LLC to utilize
the name Trump in connection with super premium vodka. The product and the
packaging for this product has been developed and approved by all parties and we
expect to launch Trump Super Premium Vodka in Q2 of our current Fiscal year.
Marketing for this product has commenced and we have already received orders. We
are dedicating a significant portion of our available resources to this product
and due to inadequate working capital have and will deemphasize other products
until such time as our working capital position improves.

Several of the brands that we have acquired have the strategic advantage of
association with "icon" entertainers and locations which provide us efficient
promotion and marketing opportunities. Moreover, our focus is primarily on
premium high margin, unique premium priced goods.

We believe that our organizational approach will also minimize the need to
invest heavily in fixed assets or factories and will allow us to operate with
modest overhead because of the historic relationship between members of our
management team and co-packers, distilling and bottling and production firms and
other industry participants.

We also rely on distributors who handle direct store delivery sales, which also
allows us to control our overhead. We have formed an independent network of
contract sales and regional managers, a promotional support team and several
market segment specialists who are paid on a variable basis.

We currently market and distribute, or produce (through co-packers), market and
distribute, nine unique beverage brands.


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Alcoholic Beverages:

Our alcoholic beverages include:

Old Whiskey River Bourbon (R) an award winning small batch 6 year old bourbon
(sometimes referred to in this Prospectus as "Old Whiskey River "); Old Whiskey
River Bourbon Cream, an award winning blend of real dairy cream and bourbon
(sometimes referred to in this Prospectus as "Old Whiskey River Cream"); Cohete
Rum, an award winning smooth sipping rum in the Cuban style, infused with
Guarana (sometimes referred to in this Prospectus as "Cohete"); Aguila Tequila,
a 100% tequiliana weber blue agave reposado tequila (sometimes referred to in
this Prospectus as "Aguila"); Damiana, a Mexican liqueur made from the Damiana
root and given in Mexican culture as a wedding gift because of its perceived
aphrodisiac characteristics; Y Sake, the first ultra premium sake made in
America (sometimes referred to in this Prospectus as "Y Sake"); Trump Super
Premium Vodka, produced in Holland, a product developed by master distiller Jacq
DeLac and Rheingold Beer, a well known trademark in the New York metropolitan
area.

Non Alcoholic Beverages:

Our non-alcoholic beverages include:

Swiss T, a ready to drink tea (sometimes referred to in this Prospectus as
"Swiss T"); and Newman's Own Lightly Sparkling Fruit Juices, an all natural
juice product (sometimes referred to in this Report as "Newman's").

Strategy

Our business strategy is to increase sales by expanding distribution of our
internally developed brands, as well as those for which we hold distribution
rights, in new and existing markets, stimulating consumer trial of new products
and attempting to increase consumer awareness of, and brand loyalty to, our
unique brands and products. We will also attempt to make efficient acquisitions
of stand alone brands or distribution rights to existing brands in both the
alcoholic and non-alcoholic beverage segment as a way to grow our revenue. Key
elements of our business strategy include: creating strong distributor
relationships and key accounts; stimulating strong consumer demand for our
existing brands and products with primary emphasis in the United States, Mexico,
Central America and Canada; developing unique beverage brands and products; and
targeting strategic brand acquisitions and icon product development
opportunities.

We expect to continue to grow our business with the support of an established
distribution network, which is already well-known to our management from prior
business dealings in the beverage industry. This network is currently
distributing our products nationally.

Alcoholic Beverage Distribution

We have a network of alcohol beverage distributors covering substantially all of
the states within the United States. Our distributors buy our products from us
for resale. Southern Wine & Spirits, including its affiliates, is our largest
alcohol distributor, accounting for approximately 14.35% of our sales in fiscal
2006.

Non-Alcohol Beverage Distribution

The following are our non-alcoholic beverage distributors:


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Southern Wines and Spirits:      Florida
March Health:                  New York City
AJ Lind:                       New York State
Valley Juice South:            New York State
Valley Juice North:            New York State
Fontanella Distributors:        Connecticut
Island Beverage:                New Jersey
Atlanta Foods International:     Georgia

We have organized a network of sales and contract sales employees who are
industry veterans and have assigned national coverage of our distribution
network to this team. Compensation to these individuals is on a variable success
basis. We believe that we benefit from the sales and marketing relationships
that this team brings to the organization.

Our Company is a Delaware corporation, our principal place of business is
located at 372 Danbury Road, Suite 163, Wilton, Connecticut 06897 and our
telephone number is (203) 762-7000.

Wine and Spirits Industry Overview

The United States beverage alcohol market consists of three distinct segments:
beer, wine and distilled spirits. The distilled spirits segment of this market
had increased consumption to more than 159 million 9-liter cases in 2003.
Distilled spirits consist of three primary categories: white goods, whiskey and
specialties. White goods, consisting of vodka, rum, gin and tequila, represent
the largest category, accounting for approximately 50% of sales in 2001. Vodka
is the largest category within the distilled spirits industry, accounting for
26% of distilled spirits sales in the United States in 2003. Distilled spirits
sales in the United States increased 3.8% in 2003, marking the 6th consecutive
year sales have increased in the United States market.

Historically, growth in the United States spirits industry has been driven by
favorable demographic trends as the number of new young adults of legal drinking
age (21 to 24) increased from 14.4 million in 1995 to 14.9 million in 2001. In
addition, growth in the distilled spirits industry has increased as the number
of individuals over 55 increased, as this age group has historically shifted
from beer to spirits. The number of Americans aged 55 and older increased from
54.7 million in 1995 to 59.6 million in 2001 and is expected to reach 75.1
million by 2010.

Significant consolidation in the global spirits industry has produced five
primary large competitors: Diageo, Allied Domecq, Pernod Ricard, Brown-Forman
and Bacardi. It is sometimes costly and difficult for these large companies to
create new brands. As a result, we believe opportunities exist for smaller
companies to develop high-quality, high-margin brands, which can grow to be very
attractive acquisition candidates for the larger companies.

Vodka

The vodka category is both the largest and fastest growing category of spirits
in the United States with sales of 46 million cases. Case sales are expected to
grow substantially over the next 5 years.

Whiskey

Whiskey is an aged spirit generally distilled from barley, corn or rye. The
whiskey category consists of four major segments: Scotch, Irish, American and
Canadian and can be further broken down into blended and single malt
subcategories. Whiskey is the second largest spirits category in the United
States accounting for approximately 28% of distilled spirits sales in 2003, with
44 million cases sold.


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Rum

Rum is a distilled spirit made from sugar cane or molasses that can be bottled
raw or aged in casks. Rum can be broken into several categories: light, dark,
flavored and aged. Sales of rum posted gains for six consecutive years in the
United States through 2003, and the category now accounts for approximately 12%
of total U.S. spirits sales. Rum case sales grew at a compound annual growth
rate of 5.3% between 1995 and 2001. Two brands, Bacardi and Captain Morgan,
account for approximately 76% of total U.S. rum sales, with the balance split
among a number of other rum brands. We believe that the rum category represents
the most significant growth opportunity in the industry.

The New Age or Alternative Beverage Industry

Our brands, which are classified as Alcoholic and Non-Alcoholic Ready to Drink
beverages, as well as other unique brands and products that we may develop in
the future, compete with beverage products of all types, including wines,
spirits, liqueurs, soft drinks, beer, and fruit juices.

In its annual beverage market survey for calendar year 2003, Beverage World
magazine (www.beverageworld.com ) estimated that the New Age or alternative
beverage markets was approximately $11.6 billion in the United States in total
sales and is expanding at a double digit rate per year in growth.

New Age or alternative beverages are distinguishable from mainstream carbonated
soft drinks in that they tend to contain less sugar, less carbonation, and
natural ingredients. As a general rule, three criteria have been established for
such a classification: (1) relatively new introduction to the market-place; (2)
a perception by consumers that consumption is healthy compared to mainstream
carbonated soft drinks and (3) the use of natural ingredients and flavors in the
products. According to Beverage Marketing Corporation (www.beverageworld.com),
for 2003, the New Age or alternative beverage category consists of the following
segments: premium soda, ready-to-drink ("RTD") coffee, RTD tea, RTD
(nutrient-enhanced), shelf-stable dairy (regular/diet), shelf-stable dairy
(nutrient-enhanced), single-serve-fruit beverages (regular/diet),
single-serve-fruit beverages (nutrient enhanced), smoothies, sparkling water,
sports drinks, vegetable/fruit juice blends and other New Age beverages.

                            ACQUISTIONS AND ALLIANCES

Described below are acquisitions, strategic alliances and other arrangements
which we have completed.

Celebrity and Icon based Brands

We are executing a "celebrity and icon" based brand strategy, which we believe
will enhance consumer acceptance, lower ongoing marketing costs and strengthen
our access to distribution channels. We have entered into three ventures with
icon entertainers. Our business model leverages consumer identification with
these icons, focusing on high margin premium products.

Alcoholic Beverage Products

The alcoholic products distributed by the Company are Old Whiskey River Bourbon
and Bourbon Cream, Y Sake, Aguila Tequila, Cohete Rum Guarana, Damiana, and a
collection of super premium wines. Commencing in the fall of 2006, we hope to
distribute Rheingold Beer and expect to distribute Trump Super Premium Vodka. As
indicated previously, our marketing efforts for many of our products have been
deferred so that we can dedicate the resources required to launch Trump Super
Premium Vodka and sales of certain of our products have been negatively affected
by our inability to maintain appropriate inventory levels.


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In December 2002, we purchased 25% interest in Old Whiskey River Distilling
Company, LLC and Y Sake, LLC, which owns or licenses the related trademarks and
trade names associated with the Old Whiskey River and Y Sake products. We hold
the exclusive worldwide distribution rights for the Old Whiskey River and Y Sake
products. Old Whiskey River Bourbon is marketed in association with Willie
Nelson, a renowned country western entertainer, and Y Sake in association with
Roy Yamaguchi, a renowned Japanese chef.

In December 2003, we expanded the Old Whiskey River line and introduced Old
Whiskey River Bourbon Cream. Old Whiskey River Bourbon has been featured on Food
Channel's Emeril Live as well as Celebrity Food Finds and other television
programs. This line of products is available nationally at the Texas Roadhouse
Restaurant chain as well as other outlets with specific Willie Nelson
promotions. Old Whiskey River is a feature item at Specs chain of liquor stores
in Texas and ABC liquor stores a chain of 221 outlets in Florida.

We own a 55% interest in the trademark for Aguila Tequila, a premium 100% Blue
Agave Tequila, produced by a distillery in Mexico, which is marketed with its
icon label, the North American Eagle. We have the exclusive distribution rights
for this product throughout the world except for Mexico.

We have developed and own the trademark and formula for Cohete Rum, Cuban style
rum produced in Panama. We launched this product in September, 2004. Cohete Rum
has been awarded silver medals from the International Beverage Tasting
Institute.

Late calendar year 2005, we entered into a licensing agreement with the
licensing company for the Trump Organization to find and develop a super premium
vodka. The formula for the product was developed by master distiller Jacq DeLac.
In January of 2006, we entered into an agreement to have Bruni Glass Italy
design a proprietary bottle for Trump Super Premium Vodka. In March 2006, Milton
Glaser agreed to design a bottle decoration for Trump Vodka. The product was
unveiled at the 2006 Wine and Spirits Wholesalers convention.

In August of 2005, we entered into an agreement to import and sell Damiana, a
Mexican liqueur. We are selling Damiana nationally and have sold approximately
1,600 cases of this product.

In October 2005, we acquired ownership of the Rheingold brand and trademark. We
believe Rheingold has a significant brand identity and awareness level within
the metro New York and east coast markets. We believe this brand has the
potential to be an integral component of our Metro New York distribution base.
The brand has been relabeled and is scheduled for relaunch in 2006. In May, 2006
we licensed the Rheingold trademark to be marketed with various forms of
wearables and clothing.

Non Alcoholic Products

Our non-alcoholic product offerings are Newman's Own Lightly Sparkling Fruit
Juices and a Gourmet Tea, known as Swiss T. In 2006, we expanded the base of
distributors and the retail account base for Paul Newmans Sparkling Juices to in
excess of 1800 accounts. We also developed a Paul Newmans Sparkling Flavored
Water and have the approval of the Newmans Own organization to launch a Newmans
Own Fruit Flavored Tea.

We own the Swiss T trademark. In 2006, in order to focus company resources on
the Newmans Own and Trump Super Premium Vodka, we ceased producing Swiss T. We
intend to relaunch a Swiss style tea using the same proprietary recipe and
labeling in the future.

Newman's Own Lightly Sparkling Fruit Juices is a new product and was developed
by Paul Newman Foods in association with us. We have entered into an agreement
to license Newman's Own name for distribution of this product in specified
markets and have no ownership or other rights to the Newman's Own trademark.


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We are currently distributing Newman's Own in the New York metropolitan area,
New Jersey, Connecticut and California markets and met or exceeded our goals.
Key grocery chains in the New York metropolitan area including Key Food,
ShopRite, Gristedes, Shaws and numerous independent chains are selling the
product. Newman's Own has been successful in the independent and Korean owned
retail market segment. Newman's comes in 16oz. glass bottles in original
lemonade, lemon lime, orange mango, blackberry and raspberry kiwi flavors. Based
upon on the market's reaction to this product, we hope to distribute this
product throughout the United States. Expansion of the territories for
distribution of this product is by mutual agreement of the parties. Given the
market reception to this product, we continue to dedicate resources to the
Newman's Own products, at times at the expense of other products.

The duration of our distribution contracts with respect to both alcoholic and
non alcoholic beverages vary. However, since all of our distribution agreements
have sales volume targets which we have not satisfied, we view all of these
agreements to be cancelable at any time. We rely on our relationships with those
who have granted us distribution rights rather than contractual protections.

Flavors, Research and Development Relationship

We have a research contract with Wynn Starr Flavors, Inc. ("Wynn Starr"), a
leading supplier of flavors and similar product components. Wynn Starr became a
DA shareholder by investing $250,000 in DA in 2002, and has provided research
and development services. The relationship has been essential to us, and
continues to provide a significant research resource at relatively low cost,
e.g. developing drinks for specialized ethnic tastes, age groups, various groups
of sports or music fans, and other targeted markets. Wynn Starr has also
developed our Old Whiskey River Bourbon Cream product flavor and formulation. We
expect that certain of our new products will utilize patents developed and
licensed by Wynn Starr. Wynn Star has also assisted us in evaluating the product
quality of various brands which we have considered acquiring and/or
distributing. Our incremental product development expenses to date have not been
material.

Celebrity Marketing Resources

We intend to continue to utilize our access to icon celebrity-based product
endorsers, through the contacts of our management and various advisors, to
further promote the branded identity of certain of the beverages we will
develop.

We have entered into agreements with DAS Communications, Ltd. and Shep Gordon of
Alive Enterprises. Both David Sonenberg, who controls DAS Communications, Ltd.,
and Shep Gordon are shareholders. We believe that these persons can provide
access to entertainment personalities and will help us to develop and access
unique marketing and promotional opportunities for spirits and beverages. Our
relationship with Shep Gordon has resulted in agreements with country music
"icon" Willie Nelson and Chef Roy Yamaguchi and introductions to other
promotional resources. Under our agreement with Mr. Gordon, which we entered
into in December 2002, he will provide us with marketing advisory services
through June 2008.

Trademark Development Resources

In March 2002, we entered into a consulting agreement with Marvin Traub, former
Chief Executive Officer of the Bloomingdales' department store chain, and an
expert in trademark development. Mr. Traub provides ongoing advice and marketing
expertise to us under this agreement. He also serves on our Board of Directors.


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Marketing, Sales and Distribution

Our marketing and pricing policies and programs take into consideration
competitors' prices and our perception of what a consumer is willing to pay for
the particular brand and product in the retail environment. Our goal is to
competitively price our unique products with the other comparable premium
brands. We believe our Icon strategy supports category premium pricing.

The company has entered into an agreement with Gotham Inc., a large scale New
York marketing agency. Together with our management, Gotham has developed a long
term marketing and media brand development plan for us.

Our marketing of our non-alcoholic brands focuses on building those brands at
the retail level and generally developing market profile through promotion
tasting at retail distribution locations. Newman's Own has been promoted with
consumer tastings, tee-shirt promotions and consumer trials. Our marketing
efforts in support of our non-alcoholic brands focuses largely on promotion at
key distribution points prior to the peak summer demand period.

Sales

Our products are sold in the continental United States primarily in the beverage
sections of liquor stores, grocery stores, drug stores, convenience stores,
delicatessens, sandwich shops and supermarkets. Many of our beverage products
are sold nationally and our distribution model, depending on the product,
includes several national and regional chains, including Texas Roadhouse
Restaurants, and various regional retail accounts. In 2006, we made significant
progress in selling our products to several key chains and have either sold or
received orders from Specs in Texas and ABC Liquors in Florida where Old Whisky
River has been featured extensively.

Our sales efforts are supported by three independent contractors each with in
excess of 25 years experience in beverage brand building who have specific
market responsibility.

Distribution

We sell the majority of our products through our distribution network, and we
currently have relationships with approximately 60 independent distributors
throughout North America. Our policy is to grant our distributors rights to sell
particular brands within a defined territory. Our distributors buy our products
from us for resale. We believe that substantially all of our distributors also
carry beverage products of our competitors. Our agreements with our distributors
vary; we have entered into written agreements with a number of our top
distributors for varying terms; most of our other distribution relationships are
oral (based solely on purchase orders) and are terminable by either party at
will.

We generally require our independent distributors to place purchase orders for
our products at least 14 days in advance of requested shipping dates. To the
extent we have product available in inventory, we will fulfill other purchase
orders when and as received. We and our distributors contract with independent
trucking companies to have product shipped from our contract packers to
independent warehouses, and then on to our distributors. Distributors then sell
and deliver our products either to sub-distributors or directly to retail
outlets, and such distributors or sub-distributors stock the retailers' shelves
with our products. We recognize revenue upon receipt by our distributors and
customers of our products, net of anticipated discounts and allowances. While
all sales are final and we have a "no return" policy, in limited instances, due
to credit issues or changes in distributors, we may take back product.

Production

Contract Packing Arrangements

We currently use independent contract packers known as "co-packers" to prepare,
bottle and package our products. Currently, our primary contract packers are
Heaven Hill Distilleries in Kentucky, American Beverage Company in St. Louis,
Interamericana de Licores in Panama, Sake One in Oregon, Tequila El Viejito S.
A. in Guadalajara, Mexico, Damiana S.A, Mexico, and F.X. Matt of Utica, New
York. We have also contracted WV Wanders Holland for the production of Trump
Super Premium Vodka.


                                       11

<PAGE>

We continually review our contract packing needs in light of regulatory
compliance and logistical requirements and may add or change co-packers based on
those needs.

As is customary in the contract packing industry, we are expected to arrange for
our contract packing needs sufficiently in advance of anticipated requirements.
Accordingly, it is our business practice to require our independent distributors
to place their purchase orders for our products at least 10 days in advance of
shipping. Other than minimum case volume requirements per production run, we do
not have any minimum production requirements.

Raw Materials

Substantially all of the raw materials used in the preparation, bottling and
packaging of our products are purchased by us or by our contract packers in
accordance with our specifications. The raw materials used in the preparation
and packaging of our products consist primarily of spirits, flavorings,
concentrate, glass, labels, caps and packaging. These raw materials are
purchased from suppliers selected by us or in concert with our co-packers or by
the respective supplier companies.

We believe that we have adequate sources of raw materials, which are available
from multiple suppliers across the full range of our products.

Quality Control

We attempt to use quality ingredients for our products. We seek to ensure that
all of our products satisfy our quality standards. Contract packers are selected
and monitored by our Chief Operating Officer in an effort to assure adherence to
our production procedures and quality standards. Samples of our products from
each production run undertaken by each of our contract packers are analyzed and
categorized in a reference library.

For every run of product, our contract packers undertake extensive on-line
testing of product quality and packaging. For our non-alcoholic products this
includes testing levels of sweetness, carbonation, taste, product integrity,
packaging and various regulatory cross checks. Similar product testing is done
on our wines and spirits. For each product, the contract packer must transmit
all quality control test results to us upon request. We believe that, working in
concert with our internal management, the food scientist resources of Advantage
Food Marketing and Wynn Starr Flavors, and the in-house quality control
mechanisms of our winery and distillery partners assure that our standards are
at least equal to those established in the industry.

Testing at each of our co-packers includes microbiological checks and other
tests to ensure the production facilities for our products meet the standards
and specifications of our quality assurance program. We believe the production
facilities inspection programs are at least equal to industry standards. We
request that water quality is monitored during production and at scheduled
testing times to ensure compliance with applicable government regulatory
requirements. Flavors are sourced from only qualified manufacturers. We are
committed to an on-going program of product improvement with a view toward
ensuring high quality of our products.

We believe we source and select only those suppliers that use only quality
components. We also inspect packaging suppliers' production facilities and
monitor their product quality.


                                       12

<PAGE>

Regulation

The production and marketing of our licensed and proprietary alcoholic and non
alcoholic beverages are subject to the rules and regulations of various Federal,
provincial, state and local health agencies, including in particular the U.S.
Food and Drug Administration ("FDA") and the U.S. Alcohol and Tobacco Tax and
Trade Bureau ("TTB"). The FDA and TTB also regulate labeling of our products.
From time to time, we may receive notification of various technical labeling or
ingredient reviews with respect to our licensed products. We believe that we
have a compliance program in place to ensure compliance with production,
marketing and labeling regulations on a going-forward basis. There are no
regulatory notifications or actions currently outstanding.

We have a specific manager with direct responsibility to insure regulatory
compliance and retain a regulatory law firm that oversees our submissions to
various agencies.

Trademarks, Flavor Concentrate Trade Secrets and Patents

We own a number of trademarks, including, in the United States, "Drinks
Americas" (TM), "Rheingold Beer" (TM) "Cohete" (TM), "Swiss T"(TM), " "Screaming
Monkey" (TM) and "Aguila" (TM). Trademarks have been filed and pending with no
opposition for Drinks Americas, "Monte Verde"(TM) and "Corcovado"(TM). In
addition, we have trademark protection in the United States for a number of
other trademarks for slogans and product designs, including "The Rooster Has
Landed" (R) and "Party Harder"(TM).

We also own with Alive Spirits the rights to the "Old Whiskey River" trademark.
We have a license from Newman's Own to use the Newman's Own trademark in the
marketing and selling of Newman's Own Lightly Sparkling Fruit Juices. We also
have a license from Trump Mark, LLC to use the Trump trademark in marketing and
selling Trump Super Premium Vodka.

We consider our trademarks, patent and trade secrets to be of considerable value
and importance to our business. No successful challenges to our registered
trademarks have arisen and we have no reason to believe that any such challenges
will arise in the future.

Employees

As of July 31, 2006, we had eight full-time employees and an additional seven
persons, who were independent contractors working for us either in their
individual capacity or through professional service companies controlled by
them. No employee is represented by a labor union. Three of the independent
contractors have executed contracts with us and are paid on a variable success
basis depending upon sales generated by them.

Risk Factors

This offering involves a high degree of risk. Before you invest you should
carefully consider the risks and uncertainties described below and other
information and our consolidated financial statements and related notes included
elsewhere in this prospectus. If any of the events described below actually
occur, our operating results would be dramatically adversely affected, which in
turn could cause the price of our common stock to decline, perhaps
significantly. Further, we may not be able to continue our operations. This
means you could lose all or a part of your investment.

Certain Factors That May Affect Future Results

Factors Relating to Our Company and Our Business


                                       13

<PAGE>

We are a developing Company and our prospects must be considered in light of our
short operating history and our shortage of working capital.

We are a developing company with a very short operating history, having been
incorporated in September 2002. Our prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by developing companies,
including dealing with a shortage of necessary funds in the very competitive
marketplace in which the alcoholic and non-alcoholic beverage business is
carried on, as well as the many risks commonly anticipated or experienced by
mature companies. Our ability to operate as a going concern and to achieve
profitable operations will be dependent on such factors as the success of our
business model and marketing strategy, market penetration of existing products,
competition, future brand additions, continued development of distribution
relationships and the availability of financing. No assurance can be given that
we will be able successfully to develop our business under the foregoing
conditions.

We rely heavily on our independent distributors, and this could affect our
ability to efficiently and profitably distribute and market our products, and
maintain our existing markets and expand our business into other geographic
markets.

Our ability to establish a market for our brands and products in new geographic
distribution areas, as well as maintain and expand our existing markets, is
dependent on our ability to establish and maintain successful relationships with
reliable independent distributors strategically positioned to serve those areas.
Many of our larger distributors sell and distribute competing products,
including non-alcoholic and alcoholic beverages, and our products may represent
a small portion of their business. To the extent that our distributors are
distracted from selling our products or do not expend sufficient efforts in
managing and selling our products, our sales will be adversely affected. Our
ability to maintain our distribution network and attract additional distributors
will depend on a number of factors, many of which are outside our control. Some
of these factors include: (i) the level of demand for our brands and products in
a particular distribution area; (ii) our ability to price our products at levels
competitive with those offered by competing products and (iii) our ability to
deliver products in the quantity and at the time ordered by distributors.

We cannot ensure that we will be able to meet all or any of these factors in any
of our current or prospective geographic areas of distribution. Further, our
shortage of adequate working capital may make it impossible for us to do so. Our
inability to achieve any of these factors in a geographic distribution area will
have a material adverse effect on our relationships with our distributors in
that particular geographic area, thus limiting our ability to maintain and
expand our market, which will likely adversely effect our revenues and financial
results.

We generally do not have long-term agreements with our distributors, and we
expend significant time and may need to incur significant expense in attracting
and maintaining key distributors.

Our marketing and sales strategy presently, and in the future, will rely on the
performance of our independent distributors and our ability to attract
additional distributors. We have entered into written agreements with certain of
our distributors for varying terms and duration; however, most of our
distribution relationships are informal (based solely on purchase orders) and
are terminable by either party at will. We currently do not have, nor do we
anticipate in the future that we will be able to establish, long-term
contractual commitments from many of our distributors. In addition, despite the
terms of the written agreements with certain of our significant distributors, we
have no assurance as to the level of performance under those agreements, or that
those agreements will not be terminated. There is also no assurance that we will
be able to maintain our current distribution relationships or establish and
maintain successful relationships with distributors in new geographic
distribution areas. Moreover, there is the additional possibility that we will
have to incur significant expenses to attract and maintain key distributors in
one or more of our geographic distribution areas in order to profitably exploit
our geographic markets. We may not have sufficient working capital to allow us
to do so.


                                       14

<PAGE>

Because our distributors are not required to place minimum orders with us, we
need to carefully manage our inventory levels, and it is difficult to predict
the timing and amount of our sales.

Our independent distributors are not required to place minimum monthly,
quarterly or annual orders for our products. In order to reduce their inventory
costs, our independent distributors maintain low levels of inventory which,
depending on the product and the distributor, range from 15 to 45 days of
typical sales volume in the distribution area. We believe that our independent
distributors endeavor to order products from us in such quantities, at such
times, as will allow them to satisfy the demand for our products in the
distribution area. Accordingly, there is no assurance as to the timing or
quantity of purchases by any of our independent distributors or that any of our
distributors will continue to purchase products from us in the same frequencies
and volumes as they may have done in the past. Our goal to maintain inventory
levels for each of our products sufficient to satisfy anticipated purchase
orders for our products from our distributors, which is difficult to estimate.
This places burdens on our working capital which has been limited since we began
operations. As a result, we have not consistently been able to maintain
sufficient inventory levels and may not be able to do so in the future. We are
not maintaining sufficient inventory levels for certain of our products at the
present time.

As is customary in the contract packing industry for small companies, we are
expected to arrange for our contract packing needs sufficiently in advance of
anticipated requirements. To the extent demand for our products exceeds
available inventory and the capacities available under our contract packing
arrangements, or orders are not submitted on a timely basis, we will be unable
to fulfill distributor orders on a timely basis. Conversely, we may produce more
products than warranted by the actual demand, resulting in higher storage costs
and the potential risk of inventory spoilage. Our failure to accurately predict
and manage our contract packaging requirements may impair relationships with our
independent distributors, which, in turn, would likely have a material adverse
effect on our ability to maintain relationships with those distributors.

The bankruptcy, cessation of operations, or decline in business of a significant
distributor could adversely affect our revenues, and could result in increased
costs in obtaining a replacement.

If any of our primary distributors were to stop selling our products or decrease
the number of cases purchased, our revenues and financial results could be
adversely affected. There can be no assurance that, in the future, we will be
successful in finding new or replacement distributors if any of our existing
significant distributors discontinue our brands, cease operations, file for
bankruptcy or terminate their relationship with us.

We have not satisfied certain of our commitments under distribution agreements
which if cancelled would have a material adverse effect on our business.

Our rights to distribute our products are generally governed by distribution
agreements which contain minimum sales per product targets that we have not
satisfied to date. Therefore virtually all of our distribution contracts can be
cancelled. We rely on our relationships with the parties who have granted us
distribution rights rather than contractual protection. Cancellation of one or
more of our distribution contracts would have a material adverse effect on our
business.

We need to effectively manage our growth and the execution of our business plan.
Any failure to do so would negatively impact our results.

To manage operations effectively, we must improve our operational, financial and
other management processes and systems. We have a small staff and our success
also depends largely on our ability to maintain high levels of employee
utilization, to manage our costs in general and administrative expense in
particular, and otherwise to efficiently execute our business plan. We need to
cost-efficiently add new brands and products, develop and expand our
distribution channels, and efficiently implement our business strategies. There
are no assurances that we will be able to effectively and efficiently manage our
growth. Any inability to do so, could increase our expenses and negatively
impact our results of operations.


                                       15

<PAGE>

The loss of key personnel would directly affect our efficiency and economic
results.

We are dependent upon the creative skills and leadership of our founder, J.
Patrick Kenny, who serves as our President and Chief Executive Officer, as well
as upon Bruce Klein, our Chairman and upon the management, financial and
operational skills of Jason Lazo, our Chief Operating Officer. We currently
maintain key person life insurance on Mr. Kenny in the amount of $2,000,000. The
loss of the services of either Mr. Kenny, Mr. Klein or Mr. Lazo could have a
material adverse affect on our business and operations, including our ability to
develop and execute a long-term, profitable business plan. Due to inadequate
working capital, we have often not paid agreed upon compensation to our
employees; there can be no assurance they will continue to render services to
us.

Our management team consists of several key distribution, sales and financial
personnel who have been recruited within the past several years. In order to
manage and operate our business successfully in the future, it will be necessary
to further strengthen our management team. The hiring of any additional
executives will increase our compensation expense. We may not have sufficient
working capital to be able to do so.

Our strategy requires us to develop and maintain relationships with other firms.

Our strategy depends on various relationships with other firms for product
development, research facilities, distilling facilities, bottling, distribution
and low-cost marketing. Because of these relationships, we do not expect to
invest heavily in fixed assets or factories. Of particular importance to us is
our relationship with independent producers who manufacture our products
pursuant to our specifications. We do not have our own production capacity and
rely on independent contractors to produce our products. We will need to
maintain and develop relationships with additional manufactures as we add
products to our product mix. It is vital to our success that our producers
deliver high quality products to us with favorable pricing terms. There can be
no assurance, however, that we will be able to develop and maintain
relationships which provide us the services and facilities we require. If we
fail to develop and maintain such relationships, we may be forced to change our
strategy, which could have a material adverse effect on the results of our
operations.

Our business and financial results depend on maintaining a consistent and
cost-effective supply of raw materials.

Raw materials for our products include concentrate, glass, labels, caps and
packaging materials. Currently, we purchase our flavor concentrate from two
flavor concentrate suppliers, and we anticipate that we will purchase flavor
concentrate from other flavor houses for future alcoholic and non-alcoholic
flavors and additional products, with the intention of developing other sources
of flavor concentrate for each of our products. We believe that we have adequate
sources of raw materials, which are available from multiple suppliers, and that
in general we maintain good supplier relationships. The price of our
concentrates is determined by our flavor houses and us, and may be subject to
change. Prices for the remaining raw materials are generally determined by the
market, and may change at any time. Increases in prices for any of these raw
materials could have a material adverse impact on our ability to achieve
profitability and our financial position. If we are unable to continue to find
adequate suppliers for our raw materials on economic terms acceptable to us,
this will adversely affect our results of operations.

We may not be able to acquire and successfully integrate additional products in
the future.

We have grown our business primarily through acquisitions of brands and we
expect to acquire additional brands in the future. There can be no assurance
that we will be able to acquire additional products or assimilate all of the
products we do acquire into our business or product mix. Acquisitions can be
accompanied by risks such as potential exposure to unknown liabilities relating
to the acquired product. We have entered into, and may continue to enter into,
joint ventures, which may also carry risks of liability to third parties.


                                       16

<PAGE>

Our inability to protect our trademarks, patent and trade secrets may prevent us
from successfully marketing our products and competing effectively.

Failure to protect our intellectual property could harm our brand and our
reputation, and adversely affect our ability to compete effectively. Further,
enforcing or defending our intellectual property rights, including our
trademarks, patents, copyrights and trade secrets, could result in the
expenditure of significant financial and managerial resources. We regard our
intellectual property, particularly our trademarks and trade secrets to be of
considerable value and importance to our business and our success. We rely on a
combination of trademark, patent, and trade secrecy laws, and contractual
provisions to protect our intellectual property rights. There can be no
assurance that the steps taken by us to protect these proprietary rights will be
adequate or that third parties will not infringe or misappropriate our
trademarks, trade secrets (including our flavor concentrate trade secrets) or
similar proprietary rights. In addition, there can be no assurance that other
parties will not assert infringement claims against us, and we may have to
pursue litigation against other parties to assert our rights. Any such claim or
litigation could be costly and we may lack the resources required to defend
against such claims. In addition, any event that would jeopardize our
proprietary rights or any claims of infringement by third parties could have a
material adverse affect on our ability to market or sell our brands, profitably
exploit our unique products or recoup our associated research and development
costs.

We have limited working capital and will need to raise additional capital in the
future; there is an uncertainty as to our continuation as a going concern.

Our capital needs in the future will depend upon factors such as market
acceptance of our products and any other new products we launch, the success of
our independent distributors and our production, marketing and sales costs. None
of these factors can be predicted with certainty

We have sustained substantial operating losses since our organization. We will
need substantial additional debt or equity financing in the future. We currently
have no legally binding commitments with any third parties to obtain additional
equity or debt financing. We may not be able to obtain any additional financing
on acceptable terms or at all. Our ability to obtain debt financing may be
particularly unlikely because we have limited assets to use as collateral
security for loans. As a result, we may not have adequate capital to implement
future expansions, maintain our current levels of operation or to pursue
strategic acquisitions. Our failure to obtain sufficient or any additional
financing would likely result in an inability to market our products and
maintain sufficient levels of inventory or the delay or abandonment of some or
all of our development plans, any one of which would likely harm our business
and the value of our common stock. There is uncertainty as to our continuation
as a going concern.

Certain of our products are closely identified with celebrities and our brand
recognition is significantly affected by their success in their profession.

Certain of our products, and products for which we have acquired distribution
rights, adopt the name of a single personality or celebrity, or is associated
with a single personality or celebrity, such as Willie Nelson, Paul Newman, Chef
Roy Yamaguchi and Donald Trump. Therefore, any reduction of notoriety or any
damage to the reputation of any such personality will correspondingly damage the
associated product and could have a material adverse effect on the results of
our operations.


                                       17

<PAGE>

Certain Factors Relating to Our Industry

We compete in an industry that is brand-conscious, so brand name recognition and
acceptance of our products are critical to our success.

Our business is substantially dependent upon awareness and market acceptance of
our products and brands by our targeted consumers, In addition, our business
depends on acceptance by our independent distributors of our brands as beverage
brands that have the potential to provide incremental sales growth rather than
reduce distributors' existing beverage sales. Although we believe that we have
been relatively successful towards establishing our brands as recognizable in
both the alcoholic and non alcoholic beverage industry, it is too early in the
product life cycle of these brands to determine whether our products and brands
will achieve and maintain satisfactory levels of acceptance by independent
distributors and retail consumers.

Competition from traditional alcoholic and non-alcoholic beverage manufacturers
may adversely affect our distribution relationships and may hinder development
of our existing markets, as well as prevent us from expanding our markets.

The beverage industry is highly competitive. We compete with other beverage
companies, most of which have significantly more sales and significantly more
resources, not only for consumer acceptance but also for shelf space in retail
outlets and for marketing focus by our distributors, all of whom also distribute
other beverage brands. Our products compete with all beverages, most of which
are marketed by companies with greater financial resources than what we have.
Some of these competitors are or will likely in the future, place severe
pressure on our independent distributors not to carry competitive alternative
brands such as ours. We also compete with regional beverage producers and
"private label" suppliers. Some of our alcoholic competitors are Diageo, Pernod
Ricard, Allied Domecq and Bacardi. Some of our direct competitors in the
alternative beverage industry include Cadbury Schweppes (Snapple, Stewart,
Nantucket Nectar, Mystic), Castle Brands, Thomas Kemper, Boylans and Hansens.
Competitor consolidations, market place competition, particularly among branded
beverage products, and competitive product and pricing pressures could impact
our earnings, market share and volume growth. If, due to such pressure or other
competitive phenomena, we are unable to sufficiently maintain or develop our
distribution channels, or develop alternative distribution channels, we may be
unable to achieve our financial targets. As a means of maintaining and expanding
our distribution network, we intend to expand the market for our products, and
introduce additional brands. However, we will require financing to do so. There
can be no assurance that we will be able to secure additional financing or that
other companies will not be more successful in this regard over the long term.
Competition, particularly from companies with greater financial and marketing
resources than those available to us, could have a material adverse effect on
our existing markets, as well as our ability to expand the market for our
products.

We compete in an industry characterized by rapid changes in consumer
preferences, so our ability to continue developing new products to satisfy our
consumers' changing preferences will determine our long-term success.

Our current market distribution and penetration is limited as compared with the
potential market and so our initial views as to customer acceptance of a
particular brand can be erroneous, and there can be no assurance that true
market acceptance will ultimately be achieved. In addition, customer preferences
are also affected by factors other than taste, such as the recent media focus on
obesity in youth. If we do not adjust to respond to these and other changes in
customer preferences, our sales may be adversely affected.

A decline in the consumption of alcohol could adversely affect our business.

There have been periods in American history during which alcohol consumption
declined substantially. A decline in alcohol consumption could occur in the
future due to a variety of factors including: (i) a general decline in economic
conditions, (ii) increased concern about health consequences and concerns about
drinking and driving, (iii) a trend toward other beverages such as juices and
water, (iv) increased activity of anti-alcohol consumer groups, and (v) increase
federal, state or foreign excise taxes. A decline in the consumption of alcohol
would likely negatively affect our business.


                                       18

<PAGE>

We could be exposed to product liability claims for personal injury or possibly
death.

Although we have product liability insurance in amounts we believe are adequate,
we cannot assure that the coverage will be sufficient to cover any or all
product liability claims. To the extent our product liability coverage is
insufficient; a product liability claim would likely have a material adverse
affect upon our financial condition. In addition, any product liability claim
successfully brought against us may materially damage the reputation of our
products; thus adversely affecting our ability to continue to market and sell
that or other products.

Our business is subject to many regulations and noncompliance is costly.

The production, marketing and sale of our alcoholic and non alcoholic beverages,
including contents, labels, caps and containers, are subject to the rules and
regulations of various federal, state and local health agencies. If a regulatory
authority finds that a current or future product or production run is not in
compliance with any of these regulations, we may be fined, or production may be
stopped, thus adversely affecting our financial conditions and operations.
Similarly, any adverse publicity associated with any noncompliance may damage
our reputation and our ability to successfully market our products. Furthermore,
rules and regulations are subject to change from time to time and while we
monitor developments in this area, the fact that we have limited staff makes it
difficult for us to keep up to date and we have no way of anticipating whether
changes in these rules and regulations will impact our business adversely.
Additional or revised regulatory requirements, whether regarding labeling, the
environment, taxes or otherwise, could have a material adverse effect on our
financial condition and results of operations.

The current U.S. economic uncertainty and international conflicts, and terrorism
events all or individually may have an adverse impact on our sales and earnings,
and our shipping costs have increased.

We cannot predict the impact of the current economic uncertainty in the United
States, or the current international situation, on current and future consumer
demand for and sales of our products. In addition, recent volatility in the
global oil markets has resulted in rising fuel and freight prices, which many
shipping companies are passing on to their customers. Our shipping costs have
increased over the past several months, and we expect these costs may continue
to increase. Due to the price sensitivity of our products, we do not anticipate
that we will be able to pass these increased costs on to our customers.

Certain Factors Related to Our Common Stock

Because our Common Stock is considered a "penny stock," a shareholder may have
difficulty selling shares in the secondary trading market.

Our Common Stock is subject to certain rules and regulations relating to "penny
stock" (generally defined as any equity security that has a price less than
$5.00 per share, subject to certain exemptions). Broker-dealers who sell penny
stocks are subject to certain "sales practice requirements" for sales in certain
nonexempt transactions (i.e., sales to persons other than established customers
and institutional "accredited investors"), including requiring delivery of a
risk disclosure document relating to the penny stock market and monthly
statements disclosing recent price information for the penny stocks held in the
account, and certain other restrictions. For as long as our Common Stock is
subject to the rules on penny stocks, the market liquidity for such securities
could be significantly limited. This lack of liquidity may also make it more
difficult for us to raise capital in the future through sales of equity in the
public or private markets.


                                       19

<PAGE>

The price of our Common Stock may be volatile, and a shareholder's investment in
our Common Stock could suffer a decline in value.

There could be significant volatility in the volume and market price of our
Common Stock, and this volatility may continue in the future. Our Common Stock
is listed on the OTC Bulletin Board and there is a greater chance for market
volatility for securities that trade on the OTC Bulletin Board as opposed to a
national exchange or quotation system. This volatility may be caused by a
variety of factors, including the lack of readily available quotations, the
absence of consistent administrative supervision of "bid" and "ask" quotations
and generally lower trading volume. In addition, factors such as quarterly
variations in our operating results, changes in financial estimates by
securities analysts or our failure to meet our or their projected financial and
operating results, litigation involving us, general trends relating to the
beverage industry, actions by governmental agencies, national economic and stock
market considerations as well as other events and circumstances beyond our
control could have a significant impact on the future market price of our Common
Stock and the relative volatility of such market price.

Item 2. Property

As a sub lessee we lease 2,739 square feet of office in Wilton, Connecticut
under an operating sublease which will expire July 31, 2009, with minimum annual
rent payments of approximately $50,000 through July 31, 2009. We may, at our
option, terminate the lease effective July 31, 2007, subject to formal
notification to the sublessor no later than July 31, 2006. We also lease 1100
square feet of office space in New York City, New York, with minimum annual rent
payments of approximately $3,500 per month. This lease will expire on March 31,
2008. We are attempting to sublease all or a portion of our New York City office
space. In addition we have a number of agreements with independent warehousing
companies providing for the stocking, storage and shipping of a significant
amount of our products at their various locations. We believe our leased premise
and our independent warehouse facilities are suitable and adequate for our use
and adequately covered by insurance.

Item 3. Legal Proceedings

On January 18, 2006, the Company was sued by Global Wine Ventures, Ltd., an
Australian company (affiliated with the company's Australian wine supplier) in
the United States District Court for the Central District of California, Case
No. CV06-8318. The Plaintiff seeks recovery of compensatory damages of $450,000,
punitive damages unspecified in amount, recovery of costs and attorneys' fees
based on allegations of nonpayment for goods. While the Company believes, based
on its initial analysis that, some amount may be due to the Plaintiff, it
believes it has counterclaims available which would substantially reduce the
amount actually owed. The Company has moved to dismiss this action based on a
choice of forum clause in the applicable contract with the plaintiff requiring
any legal action to be initiated in Australia and has also asserted substantial
defenses.

On or about July 19, 2006, Manhattan Beer Distributor, LLC, a wholesale
distributor of beverages in the state of New York initiated litigation in the
Supreme Court of the State of New York in Bronx County (Index No. 17776-2006)
against the Company. The Plaintiff has demanded payment of an aggregate of $86,
921.44 in connection with certain amounts allegedly owed by Rheingold Brewing
Company, Inc., allegedly assumed by the Company and certain amounts allegedly
owed to the plaintiff by the Company itself with respect to beverage
distribution services provided by the plaintiff in connection with Rheingold
beer. This complaint was received by the Company's agent on July 31, 2006. The
Company is evaluating the claims made by the plaintiff in this litigation.

Item 4.

Submission of Matters to a Vote of Shareholders

None


                                       20

<PAGE>

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchasers of Equity Securities

Our common stock was authorized to trade on June 2, 2005 on the over-the-counter
market with quotations available on the OTC Electronic Bulletin Board under the
symbol "DKAM" Trading commenced on June 3, 2005.

The following table sets forth the range of high and low bid quotations of our
common stock for the periods indicated. The information contained in the table
was obtained from Bloomberg Financial Services. The prices represent
inter-dealer quotations, which do not include retail markups, markdowns or
commissions, and may not represent actual transactions.

                                   High       Low
                                 --------   --------
Year Ended April 30, 2005

First Quarter                    $0.00125   $0.00125
Second Quarter                   $   0.20   $0.00125
Third Quarter                    $0.00125   $0.00125
Fourth Quarter                   $   3.30   $   0.80

                                   High        Low
                                 --------   --------
Year Ended April 30, 2006

First Quarter                    $   1.55   $   1.17
Second Quarter                   $   1.39   $    .70
Third Quarter                    $   0.80   $    .35
Fourth Quarter                   $   1.01   $    .45

Security Holders

At July 31, 2006, there were 62,924,120 shares of our common stock outstanding,
which were held of record by approximately 627 stockholders, not including
persons or entities that hold the stock in nominee or "street" name through
various brokerage firms.

Dividends

The payment of dividends, if any, is to be within the discretion of our Board of
Directors. We presently intend to retain all earnings, if any, for use in our
business operations and accordingly, the Board of Directors does not anticipate
declaring any dividends in the near future.

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

Equity Compensation Plan Information

As of the date of this prospectus, we do not have any equity compensation plans.

Unregistered Securities

In April 2006, we issued 897,398 shares of our common stock to MTA, an entity
owned by Marvin Traub, a Director of the Company, in satisfaction of $403,329 of
consulting fees owed to MTA.


                                       21

<PAGE>

Between December 2005 and February 2006 we issued secured convertible notes
aggregating $802,167 to evidence loans of $150,000 received from Ken Close, a
significant shareholder, $552,167 from two unrelated third parties and $100,000
from Thomas Schwalm, a director of the Company. These demand notes bear interest
at 12% per annum and require monthly interest payments only beginning January 1,
2006. The principal and unpaid accrued interest may be converted at any time
into our common stock at $0.45 per share or pursuant to any private placement
equal to or in excess of $5 million closed by the Company on or before December
31, 2006, at a price equal to twenty percent below the price at which we issue
any such securities. In March 2006, the unrelated third parties converted the
amounts owed under their notes aggregating $570,204, which included accrued
interest of $18,037, into 1,267,119 shares of our common stock. At April 30,
2006, the principal outstanding on these notes aggregated $250,000; $150,000
from Mr. Close and $100,000 from Mr. Schwalm, plus interest of $10,717 in the
aggregate. In connection with these notes, we also issued warrants to purchase
445,646 shares of our common stock at an exercise price of $0.45 per share as
follows: warrants for 83,333 shares to Mr. Close, warrants for 306,757 shares to
the two unrelated third parties and warrants for 55,556 shares to Mr. Schwalm.
The warrants are exercisable for a five year period commencing on the issue date
of the notes. The warrants include cashless exercise provisions and
anti-dilution protection.

During fiscal 2006 we issued 300,000 shares of our common stock to various
consultants, vendors and other individuals who provided services to the Company,
in satisfaction of an aggregate of $135,000 owed to them.

Between March 15 and May 9, 2005 we issued a series of senior convertible notes
totaling $1,350,000, which resulted in net proceeds, after deductions for
certain costs and fees, of $1,150,000. We also issued to the lenders, warrants
to purchase 1,350,000 shares of our common stock exercisable for a five year
period for $0.45 per share. The notes bear interest at 10% per annum, with
principal and interest payable in full one year from the date of issuance of the
respective note. The note holders have discretionary conversion rights to
convert the outstanding balance into restricted shares of our common stock, at a
per share price equal to the lower of (1) $0.45 per share or (2) the per share
price of a subsequent debt or equity financing of at least six million dollars.
Both the notes and warrants have certain antidilution features. In addition, the
warrants have a cashless exercise option. Amounts owed to these note holders are
subordinate to amounts owed to secured creditors, and are stated to be senior to
all other unsecured creditors. The notes are past due, but formal demand for
payment has not been made. As of April 30, 2006, we owe $850,000 in principal
and $93,808 in interest on these notes. In March, 2006, the largest holder of
these notes elected to convert his $500,000 note plus accrued interest of
$50,556 into 1,267,119 shares of our common stock.

On September 22, 2005 the Company borrowed $100,000 from an unrelated
individual, which loan accrues interest at a rate of 6% per annum, and is
payable along with unpaid principal on June 21, 2006. In July 2006 we issued the
note holder 50,000 restricted shares of our common stock as consideration for
extending the note to August 22, 2006. At April 30, 2006 interest accrued on
this loan was $3,616.

In March and April 2006, we received proceeds of $1,959,999 in consideration for
3,266,665 restricted shares of our common stock at $.60 per share. The shares
are to be issued in the second quarter of our April 30, 2007 fiscal year. In
addition, we received proceeds of $150,000 in consideration for 250,000 shares
of our common stock which was placed by a broker dealer who is entitled to
receive a commission of 8 % on amounts raised. The commission has not been paid
to date.

On June 16, 2006, we borrowed $50,000 from an investor which loan is repayable
on July 7, 2006. Interest under this loan is payable in 36,364 shares of our
common stock. This loan was not repaid on the due date.

On June 23, 2006, we issued 150,000 shares of our common stock to an investor
for a purchase price $0.60 per share.


                                       22

<PAGE>

On July 28, 2006, we borrowed an aggregate $300,000 from two entities which are
affiliated with one another and issued convertible promissory notes in evidence
thereof. These notes are payable on January 27, 2007, and are convertible into
shares of our common stock at $0.50 per share. In lieu of interest, we issued to
the lenders warrants to purchase an aggregate of 300,000 shares of our common
stock for $0.50 per share. These warrants are currently exercisable for a
five-year period.

On August 3, 2006, we borrowed $400,000 from a lender and issued a convertible
promissory note in like amount. This note is due and payable on February 2,
2007, bears interest at the rate of 10% per annum and is convertible into shares
of our common stock at $0.60 per share. In connection with this loan, we issued
to the lender 333,333 shares of our common stock and agreed to issue such
additional shares as may be necessary to cause the value of the shares on the
date of issue to equal not less than $200,000 on such date based on the average
closing price of our common stock for the five trading days immediately
preceding the date of issue.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion and analysis of the consolidated financial condition
and results of operations should be read with our consolidated financial
statements and related notes appearing elsewhere in this prospectus. This
discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those set forth under "Risk Factors" and
elsewhere in this prospectus.

Overview

Results of Operations

Year ended April 30, 2006 compared to year ended April 30, 2005

Net sales. Net sales were $1,607,606 in fiscal 2006 a decrease of $463,960 or
22% compared to net sales of $2,071,566 in fiscal 2005. Total case sales of our
alcoholic brands, (9 liter equivalent case) were 12,554 in fiscal 2006 compared
to18,508 in fiscal 2005, and our non-alcoholic brand case sales increased to
62,378 cases in fiscal 2006 from 37,084 in fiscal 2005. Net sales of our
alcoholic brands fell to approximately $1,100,000 in fiscal 2006 from $1,800,000
in fiscal 2005. Sales of existing alcoholic brands fell due to inventory
shortfalls as a result of insufficient working capital. In addition there was an
interruption in our Norman's Wines business due to the bankruptcy of the
Norman's Wines supplier, and a subsequent change in control resulting in an
inability to source the product. The introduction of Damiana Liqueur in fiscal
2006 as well as the expansion of our fine wines business had a positive impact
on sales in fiscal 2006. Net sales of our non-alcoholic products increased to
approximately $500,000 in fiscal 2006 as compared to $200,000 in fiscal 2005.
The increase from fiscal 2005 can be attributed to increased sales of Newman's
Own Lightly Sparkling Fruit Juices.

Gross Profit. Gross profit was $452,772 in fiscal 2006 (28.2% of net sales), a
decrease of $62,601 compared to gross profit of $515,373 in fiscal 2005(24.8% of
net sales). The dollar decrease in gross-profit was primarily attributable to
the decrease in volume of existing alcoholic brands, specifically Old Whiskey
River ($30,000 decrease in gross profit), Y Sake ($60,000 decrease in gross
profit), Cohete Rum ($45,000 decrease in gross profit) and Normans Wines
($95,000 decrease in gross profit). The percentage increase in gross-profit in
fiscal 2006 from 2005 was primarily attributable to the impact of promotional
discounts associated with the introduction of new products to the marketplace in
fiscal 2005 which had a great affect on gross-profit.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $4,606,927 in fiscal 2006, a increase of $85,525
compared to expenses of 4,521,402 in 2005. During the 2006 fiscal year a number
of positive and negative variances have occurred. Salesman's salaries, draws,
commissions and expenses were substantially lower than fiscal 2005 due to the
decrease in sales volume of our products. Other selling and marketing expenses
also decreased in fiscal 2006 as compared to 2005 . Accounting fees increased
substantially in fiscal 2006 as compared to fiscal 2005 due to our status as a
public company beginning in fiscal 2005. In addition amortization expense
relating to loan costs incurred increased by approximately $190,000 in fiscal
2006. During 2005 we incurred one-time expenses approximating $379,000, which
related to the successful completion of the reverse acquisition and payments to
consultants.


                                       23

<PAGE>

Other Expenses (net). Other expenses (net) were $236,862 in fiscal 2006, a
decrease of $84,807 from net expenses of $321,669 in fiscal 2005. Interest
expense increased by approximately $75,000 in fiscal 2006 as compared to fiscal
2005 due to our increased debt financing. Interest expense for fiscal 2005
included $157,000 paid in our common stock in order to secure forbearance from a
lender with respect to a demand loan, which we were unable to pay when it was
called. In fiscal 2006 other expenses reflect a gain of $180,000 from the
settlement with a former supplier.

Income Taxes: We have incurred substantial net losses from our inception and as
a result, have not incurred any income tax liabilities. Our federal net
operating loss carry forward is approximately $11,300,000, which we can use to
reduce taxable earnings in the future. No income tax benefits were recognized in
fiscal 2006 and 2005 as we have provided valuation reserves against the full
amount of the future carry forward loss tax benefit. We will evaluate the
reserve every reporting period and recognize the tax benefits when realization
is reasonably assured.

Impact of Inflation

Inflation has not had a material effect on our results of operations.

Financial Liquidity and Capital Resources

We have experienced net losses and negative cash flows from operations and
investing activities for the fiscal years 2005 and 2006. Net losses for fiscal
2005 and 2006 aggregated $8,718,715, but cash consumed from operating and
investing activities in both years aggregated $5,154,918. In fiscal 2005 and to
a lesser extent in fiscal 2006, we were able to reduce our cash requirements in
large part from nonpayment of certain payroll and consulting fees owed to our
management, our employees and certain other vendors and creditors. A portion of
these liabilities, were satisfied by our issuing restricted shares of our common
stock. We have funded our operations to date by bank borrowings, loans from
shareholders and investors, some of which are convertible into our common stock,
and the proceeds from the sale of our common stock. In order for us to continue
and grow our business, we will need additional financing which may take the form
of equity or debt. There can be no assurance we will be able to secure the
financing we require, and if we are unable to secure the financing we need, we
may be unable to continue our operations. .

We have significant amounts of debt and other outstanding obligations, some of
which are outlined below.

(1) Between March 15 and May 9, 2005 we issued a series of senior convertible
notes totaling $1,350,000, which resulted in net proceeds, after deductions for
certain costs and fees, of $1,150,000. We also issued to the lenders, warrants
to purchase 1,350,000 shares of our common stock exercisable for a five year
period for $0.45 per share. The notes bear interest at 10% per annum, with
principal and interest payable in full one year from the date of issuance of the
respective note. The note holders have discretionary conversion rights to
convert the outstanding balance into restricted shares of our common stock, at a
per share price equal to the lower of (1) $0.45 per share or (2) the per share
price of a subsequent debt or equity financing of at least six million dollars.
Both the notes and warrants have certain antidilution features. In addition, the
warrants have a cashless exercise option. Included in this financing was a
$100,000 note and warrants to purchase 100,000 shares of our common stock issued
to Greenwich Beverage Group, a company owned by Mr. Thomas Schwalm, one of our
Directors. Amounts owed to these note holders are subordinate to amounts owed to
secured creditors, and are stated to be senior to all other unsecured creditors.
The notes are past due, but formal demand for payment has not been made. As of
April 30, 2006, we owe $850,000 in principal and $93,808 in interest on these
notes. In March, 2006, the largest holder of these notes elected to convert his
$500,000 note plus accrued interest of $50,556 into 1,267,119 shares of our
common stock.


                                       24

<PAGE>

(2) In October 2004, we modified secured borrowing agreements with Nexcomm
International Beverages, LLC ("Nexcomm"), a company controlled by Ken Close a
person who beneficially owns 13.6% of our outstanding common stock. On the
modification date, we issued a note to Nexcomm of $155,975 (the "Nexcomm Note"),
which represented unpaid principal and interest on that date on the original
notes, which were issued during fiscal 2003 and 2004, each in the amount of
$200,000 (an aggregate of $400,000) to evidence secured loans outstanding to
NexComm on the date. The modified note was due on May 1, 2005, but was
informally extended by Nexcomm with no stipulated repayment date. The note bears
interest at 11%. The note is secured by the assets of the Company, subordinate
to those secured interests of our new lender (see paragraph 12, of this
subsection). As of April 30, 2006 the unpaid balance, including interest,
aggregated $104,035.

(3) In October 2004, we modified unsecured borrowing agreements with Ken Close.
On the modification date the Company issued two notes, to Mr. Close aggregating
$396,727, which represented unpaid principal and interest on the original notes
on that date, which were originally issued in fiscal 2004, aggregating $500,000
to evidence unsecured notes outstanding on the date. The notes bear interest at
10% per annum and required installment payments representing principal and
interest at various dates through September 1, 2005. The notes were informally
extended by Mr. Close with no stipulated repayment dates. As of April 30, 2005,
we satisfied $100,000 of these notes by issuing 222,222 restricted shares of our
common stock. As of April 30, 2006, the unpaid balance, including interest, on
these notes aggregated $338,304.

(4) Between December 2005 and February 2006 we issued convertible notes
aggregating $802,167 to evidence loans of $150,000 received from Ken Close,
$552,167 from two unrelated third parties and $100,000 from Thomas Schwalm, a
director of the Company. These demand notes bear interest at 12% per annum and
require monthly interest payments only beginning January 1, 2006. The principal
and unpaid accrued interest may be converted at any time into our common stock
at $0.45 per share or pursuant to any private placement equal to or in excess of
$5 million closed by the Company on or before December 31, 2006, at a price
equal to twenty percent below the price at which we issue any such securities.
These notes are secured on the same basis as the Nexcomm Note. In March 2006,
the unrelated third parties converted the amounts owed under their notes
aggregating $570,204, which included accrued interest of $18,037, into 1,267,119
shares of our common stock. At April 30, 2006, principal outstanding on these
notes aggregated $250,000, $150,000 from Mr. Close and $100,000 from Mr.
Schwalm, plus interest of $10,717 in the aggregate. In connection with these
notes, we also issued warrants to purchase 445,646 shares of our common stock at
an exercise price of $0.45 per share as follows: warrants for 83,333 shares to
Mr. Close, warrants for 306,757 shares to the two unrelated third parties and
warrants for 55,556 shares to Mr. Schwalm. The warrants are exercisable for a
five year period from the date of the notes. The warrants include cashless
exercise provisions and anti-dilution protection to the holders.

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


                                       25

<PAGE>

(6) In July 2004, a member of our board of directors, Frederick Schulman,
extended an unsecured credit facility to the Company in an amount of up to
$291,000. The loan bears interest at 14% per annum without any specified
repayment date. We incurred accrued interest on this loan of $48,072 in fiscal
2005 and $34, 011 in fiscal 2006. In order to provide the total borrowings made
to us, Mr. Shulman personally borrowed $172,230 from third parties. These third
parties subsequently demanded repayment from Mr. Shulman of an aggregate
$157,500 and Mr. Shulman, in turn demanded that we repay him a like amount.
Because we were unable to repay in cash, we issued 350,000 restricted shares of
our common stock (valued at $0.45 per share) to the third parties, in
consideration for Mr. Schulman's lenders for forbearance with respect to this
debt. We repaid principal of $106,000 and interest in fiscal 2006 in connection
with this loan. As of April 30, 2006, we owe $232,970, inclusive of interest, on
this debt.

(7) On June 15, 2005, we borrowed $100,000 from one of our shareholders and
issued a convertible promissory note which requires repayment of the principal
by June 15, 2008. Interest accrues at 1% above the prime rate and is payable on
a semi-annual basis. At the option of the holder, the unpaid principal portion
of this note is convertible into our common stock at a conversion price equal to
the greater of (1) 20% below the average daily closing price for each of the
trading days during the ninety day period immediately preceding the date the
shareholder provides notice to the Company the intent to convert, or (2) $1.50
per share. At April 30, 2006, interest of $10,172 is accrued on this note.

(8) On September 22, 2005 the Company borrowed $100,000 from an unrelated
individual, which accrues interest at a rate of 6% per annum, and is payable
along with unpaid principal on June 21, 2006. In July 2006 we issued the note
holder 50,000 restricted shares of our common stock as consideration for
extending the note to August 22, 2006. At April 30, 2006 interest accrued on
this loan is $3,616.

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

(10) We have an informal understanding with Mr. Shep Gordon pursuant to which he
has the option of converting all or a portion of the consulting fees which we
owe to him into shares of our Common Stock at a conversion price to be agreed
upon. The consulting agreement which we entered into in December 2002 with Mr.
Gordon provides for $600,000 in fees to Mr. Gordon payable in five fixed
increments over a period of 78 months. As of April 30, 2006 the aggregate amount
owed to Mr. Gordon was $99,996.

(11) In fiscal 2003 we entered into a consulting agreement with a company,
Marvin Traub & Associates ("MTA"), owned 100% by Marvin Traub, a member of the
Board of Directors. Under the agreement, MTA is being compensated at the rate of
$100,000 per annum. In fiscal 2006, compensation to MTA aggregated $150,000 due
to additional work performed. In January 2006, MTA converted unpaid consulting
fees aggregating $403,329 into 896,296 shares of our restricted common stock. As
of April 30, 2006, we were indebted to MTA in the amount of $24,999. This
consulting agreement is still in force for fiscal 2007.

(12) In June 2006, we entered into a $10 million, three-year, asset based
revolving credit facility with a financial institution to be used for working
capital purposes. Under this line, we may borrow 85% of eligible accounts
receivable and 30% of eligible inventory, as defined under the agreement.
Interest on the line will accrue at 1.5% above the prime rate. The facility is
secured by a first security interest in the assets of the Company. Also in June
2006, the Company entered into a purchase order financing facility with another
financial institution. The amount we are able to borrow under these facilities
will depend on our outstanding eligible accounts receivable, inventory and
eligible purchase orders, respectively. On July 31, 2006, $122,220 and $97,000
was outstanding on our revolving credit and purchase order facilities,
respectively.


                                       26

<PAGE>

(13) The Company and Trump Marks LLC executed a long-term license agreement as
of November 2005 pursuant to which the Company has the right, on a worldwide
basis to produce, market and sell superior quality vodka under the name "Trump
Vodka". The license agreement provides for royalties which we anticipate will
approximate 50% of the net profits generated from this product. The agreement
also provides for certain minimum royalty payments, which if not paid, could
result in termination of the license.

(14) In March and April 2006, we received proceeds of $1,959,999 in
consideration for 3,266,665 restricted shares of our common stock at $.60 per
share. As of July 31, 2006, 1,950,000 shares have been issued with the balance
of the shares to be issued in the second quarter of our April 30, 2007 fiscal
year. In addition, we received proceeds of $150,000 in consideration for 250,000
shares of our common stock which was placed by a broker dealer who is entitled
to receive a commission of 8 % on amounts raised. The commission has not been
paid to date.

(15) On June 16, 2006, we borrowed $50,000 from an investor which loan is
repayable on July 7, 2006. Interest under this loan is payable in 36,364 shares
of our common stock. This loan was not repaid on the due date.

(16) On July 27, 2006, the Company borrowed 153,111.80 from Ken Close, a
significant shareholder of the Company, which is not documented and is payable
on demand.

(17) On July 28, 2006, we borrowed an aggregate $300,000 from two entities which
are affiliated with one another and issued convertible promissory notes in
evidence thereof. These notes are payable on January 27, 2007, and are
convertible into shares of our common stock at $0.50 per share. In lieu of
interest, we issued to the lenders warrants to purchase an aggregate of 300,000
shares of our common stock for $0.50 per share. These warrants are currently
exercisable for a five-year period.

(18) On August 3, 2006, we borrowed $400,000 from a lender and issued a
convertible promissory note in like amount. This note is due and payable on
February 2, 2007, bears interest at the rate of 10% per annum and is convertible
into shares of our common stock at $0.60 per share. In connection with this
loan, we issued to the lender 333,333 shares of our common stock and agreed to
issue such additional shares as may be necessary to cause the value of the
shares on the date of issue to equal not less than $200,000 on such date based
on the average closing price of our common stock for the five trading days
immediately preceding the date of issue.

We require additional working capital to continue operating as a going concern
and to expand our business. We anticipate that increased sales revenues will
help to some extent, but we will need to obtain funds from equity or debt
offerings, and/or from a new or expanded credit facility. In the event we are
not able to increase our working capital, we will not be able to achieve all or
part of our plan, and our ability to attain profitable operations, generate
positive cash flows from operating and investing activities and materially
expand the business in fiscal 2007 will be materially adversely affected.

Off Balance Sheet Arrangements

Not applicable.

Critical Accounting Policies

Our significant accounting policies are more fully described in Note 2 to the
audited financial statements. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses, and the related
disclosures of contingent assets and liabilities. Actual results could differ
from those estimates under different assumptions or conditions. We believe that
the following critical accounting policy is subject to estimates and judgments
used in the preparation of the financial statements:


                                       27

<PAGE>

Long Lived Assets. Long-lived assets, including intangible assets, property,
furniture and equipment are reviewed for impairment when events or circumstances
indicate that the carrying value may not be recoverable based on certain
judgments and estimates. These judgments and estimates include the determination
of an event indicating impairment; the future undiscounted cash flows to be
generated by the asset, including the estimated life of the asset and likelihood
of alternative courses of action; and risks associated with those cash flows. An
impairment charge is recorded equal to the difference between the carrying
amount of the asset and its fair value.

Useful lives of long-lived assets are based on management's estimates of the
periods that the assets will be productively utilized in the revenue-generation
process. Factors that affect the determination of lives include prior experience
with similar assets and product life expectations and management's estimate of
the period that the assets will generate revenues.

Quantitative and Qualitative Disclosure about Market Risk

We do not hold instruments that are sensitive to changes in interest rates,
foreign currency exchange rates or commodity prices. Therefore, we believe that
we are not materially exposed to market risks resulting from fluctuations from
such rates or prices.

Item 7. Financial Statements

Financial Statements are listed in the Index to Financial Statements and filed
and included elsewhere herein as a part of this Annual Report on Form 10-KSB.

Item 8. Changes In and Disagreements With Accountants On Accounting and
Financial Disclosure

None

Item 8A. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in our filings under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms. Our Chief Executive Officer and Chief Financial Officer have evaluated
our disclosure controls and procedures as of the end of the period covered by
this Report and have determined that such disclosure controls and procedures are
effective.

Item 8B. Other Information

In April 2006, we issued 897,398 shares of our common stock to MTA, an entity
owned by Marvin Traub, a Director of the Company, in satisfaction of $403,329 of
consulting fees owed to MTA.

Between December 2005 and February 2006 we issued convertible notes aggregating
$802,167 to evidence loans of $150,000 received from Ken Close, $552,167 from
two unrelated third parties, and $100,000 from Thomas Schwalm, a director of the
Company. These demand notes bear interest at 12% per annum and require monthly
interest payments only beginning January 1, 2006. The principal and unpaid
accrued interest may be converted at any time into our common stock at $0.45 per
share or pursuant to any private placement equal to or in excess of $5 million
closed by the Company on or before December 31, 2006, at a price equal to twenty
percent below the price at which we issue any such securities. These notes are
secured on the same basis as the Nexcomm Note. In March 2006, the unrelated
third parties converted the amounts owed under their notes aggregating $570,204,
which included accrued interest of $18,037, into 1,267,119 shares of our common
stock. At April 30, 2006, principal outstanding on these notes aggregated
$250,000, $150,000 from Mr. Close and $100,000 from Mr. Schwalm, plus interest
of $10,717 in the aggregate. In connection with these notes, we also issued
warrants to purchase 445,646 shares of our common stock at an exercise price of
$0.45 per share as follows: warrants for 83,333 shares to Mr. Close, warrants
for 306,757 shares to the two unrelated parties and warrants for 55,556 shares
to Mr. Schwalm. The warrants are exercisable for a five year period from the
date of the notes. The warrants include cashless exercise provisions and
anti-dilution protection to the holders.


                                       28

<PAGE>

During fiscal 2006 we issued 300,000 shares of our common stock to various
consultants, vendors and other individuals who provided services to the Company,
in satisfaction of an aggregate of $135,000 owed to them.

In March and April 2006, we received proceeds of $1,959,999 in consideration for
3,266,665 restricted shares of our common stock at $.60 per share. The shares
are to be issued in the second quarter of our April 30, 2007 fiscal year. In
addition, we received proceeds of $150,000 in consideration for 250,000 shares
of our common stock which was placed by a broker dealer who is entitled to
receive a commission of 8 % on amounts raised. The commission has not been paid
to date.

On June 23, 2006, we issued 150,000 shares of our common stock to an investor
for a purchase price $0.60 per share.

On July 28, 2006, we borrowed an aggregate $300,000 from two entities which are
affiliated with one another and issued convertible promissory notes in evidence
thereof. These notes are payable on January 27, 2007, and are convertible into
shares of our common stock at $0.50 per share. In lieu of interest, we issued to
the lenders warrants to purchase an aggregate of 300,000 shares of our common
stock for $0.50 per share. These warrants are currently exercisable for a
five-year period.

On June 16, 2006, we borrowed $50,000 from an investor which loan is repayable
on July 7, 2006. Interest under this loan is payable in 36,364 shares of our
common stock. This loan was not repaid on the due date.

On August 3, 2006, we borrowed $400,000 from a lender and issued a convertible
promissory note in like amount. This note is due and payable on February 2,
2007, bears interest at the rate of 10% per annum and is convertible into shares
of our common stock at $0.60 per share. In connection with this loan, we issued
to the lender 333,333 shares of our common stock and agreed to issue such
additional shares as may be necessary to cause the value of the shares on the
date of issue to equal not less than $200,000 on such date based on the average
closing price of our common stock for the five trading days immediately
preceding the date of issue.

Between March 15 and May 9, 2005 we issued a series of senior convertible notes
totaling $1,350,000, which resulted in net proceeds, after deductions for
certain costs and fees, of $1,150,000. We also issued to the lenders, warrants
to purchase 1,350,000 shares of our common stock exercisable for a five year
period for $0.45 per share. The notes bear interest at 10% per annum, with
principal and interest payable in full one year from the date of issuance of the
respective note. The note holders have discretionary conversion rights to
convert the outstanding balance into restricted shares of our common stock, at a
per share price equal to the lower of (1) $0.45 per share or (2) the per share
price of a subsequent debt or equity financing of at least six million dollars.
Both the notes and warrants have certain antidilution features. In addition, the
warrants have a cashless exercise option. Amounts owed to these note holders are
subordinate to amounts owed to secured creditors, and are stated to be senior to
all other unsecured creditors. The notes are past due, but formal demand for
payment has not been made. As of April 30, 2005, we owe $850,000 in principal
and $93,808 in interest on these notes. In March, 2006, the largest holder of
these notes elected to convert his $500,000 note plus accrued interest of
$50,556 into 1,267,119 shares of our common stock.


                                       29

<PAGE>

On September 22, 2005 the Company borrowed $100,000 from an unrelated
individual, which accrues interest at a rate of 6% per annum, and is payable
along with unpaid principal on June 21, 2006. In July 2006 we issued the note
holder 50,000 restricted shares of our common stock as consideration for
extending the note to August 22, 2006. At April 30, 2006 interest accrued on
this loan is $3,616.

Item 9. Directors, Executive Officers and Control Persons; Compliance with
Section 16(a) of the Exchange Act

Name                Age         Positions and Offices
----                ---         ---------------------
J. Patrick Kenny     50   President  and Chief  Executive Officer

Bruce Klein          50   Chairman of the Board of Directors

Jason Lazo           40   Chief Operating Officer

Fabio Berkowicz      56   Chief Financial Officer

Marvin Traub         81   Member, Board of Directors

Thomas Schwalm       61   Member, Board of Directors

Fredrick Schulman    53   Member, Board of Directors

J. Patrick Kenny has served as the Chairman and Chief Executive Officer of DA
since it was founded in September 2002, and has been our President and Chief
Executive Officer, and a member of our Board of Directors, since March, 2005. He
is a former Senior Vice President and General Manager of Joseph E. Seagram &
Sons, for which he held a variety of senior management positions over 22 years,
with increasing levels of responsibility in Seagram's wine, wine cooler,
alcoholic and non-alcoholic beverage divisions.

Mr. Kenny managed Seagram's worldwide carbonated soft drink operations from 1992
through March 2000. He held the title of Senior Vice President and General
Manager when he left Seagram in March 2000, prior to its sale to Vivendi
Universal. In April, 2000, he co-founded Sweet16 Intermedia, Inc., a trademark
licensing and media company which was sold to TEENTV Inc., a media company for
chain retailers and mall properties. He has also acted as adviser to several
Fortune 500 beverage marketing companies, and has participated in several
beverage industry transactions. Prior to joining Seagram, Mr. Kenny was employed
in a range of sales and sales management positions with Scott Paper Co. and then
Coca Cola's Wine Spectrum. Mr. Kenny initially attended West Point (U.S.
Military Academy), until an athletic injury required lengthy treatment. He later
received a B.A. at Georgetown University, and an M.A. at St. Johns University in
New York.

Bruce K. Klein has served as the Vice Chairman of the Board of DA since it was
founded in September 2002 and has been our Chairman of the Board since March,
2005. Since February, 1999, he has served as the Managing Partner of Victory
Partners LLC, a company created to fund private businesses in their early
stages. In the last five years, Victory has funded six businesses in technology,
vitamins and internet services areas, of which three have became public
companies and three remain private. From 1992 to 1997, Mr. Klein was a
registered representative of the Equitable companies, responsible for sales and
services to high income clients, acting as investment advisor and estate planner
to an exclusive client base. From 1986 to 1991, Mr. Klein served as President of
Transatlantic Exports Corp., where his duties included purchasing and exporting
of finished and contract goods throughout Europe and Africa. From 1980 through
1991, Mr. Klein owned several retail businesses in lumber, hardware home centers
and decorating. He received a B.S. in Finance and an M.B.A in Marketing from
Fairleigh Dickinson University.


                                       30

<PAGE>

Jason Lazo has served as our Chief Operating Officer since March, 2005 and the
Chief Operating Officer of DA since May, 2003. From December, 1997 to May, 2003,
he worked for Joseph E. Seagram & Sons as Director of Finance, during which he
served in the Mixers Group of Seagram working with Mr. Kenny. From January, 1990
to December, 1997, Mr. Lazo worked at Kraft Foods as Manager of Business
Analysis, with responsibility for the Capri Sun and Kool-Aid Koolburst, and
Ready to Drink Country Time & Crystal Lite brands. He has also worked as a Kraft
Foods Plant Controller, managing the start-up of Capri Sun and Lender's Bagels.
He has worked in logistics and procurement for Kraft Foods central manufacturing
organization and in corporate finance for Entenmann's Bakeries, Inc. He received
a B.S. in Finance and an M.S. in Accounting from Long Island University.

Marvin Traub was an initial investor with Mr. Kenny in Maxmillian Partners, LLC.
He joined our Board of Directors in March, 2005. From 1978 to 1991, he served as
CEO and Chairman of Bloomingdales. His background is in marketing, retail, home
furnishings and apparel. Mr. Traub serves as President of his own marketing and
consulting firm, Marvin Traub Associates ("MTA") which he founded in 1992. MTA
currently has clients in 14 countries and an outstanding team of 18 consultants,
all former principals in the retail and consumer goods sectors. Prior to that,
Mr. Traub served as Chairman of Financo Global Consulting, the consulting arm of
Financo, Inc., where he was Senior Advisor.

Mr. Traub is the author of "Like No Other Store..." a combination autobiography
and history of Bloomingdale's and American retailing. It was first published in
1993 by Random House and has since gone through three printings. Mr. Traub's
consulting clients include American Express, Ralph Lauren, Jones New York, Saks
Fifth Avenue, Federated Department Stores, Nautica Europe, Lanvin-France,
Coin-Italy, Men's Health, Yue Sai Kan-China, Aishti-Lebonon, Quartier
206-Berlin, The Mercury Group-Moscow, Al Tayer Group-Dubai and AOL Time Warner
Center at Columbus Circle in New York. In 2005, in partnership with Mohan
Murjani, Mr. Traub created Murjani Traub India Ltd., a joint venture aimed at
bringing global brands to India, with offices in New York and Mumbai.

Thomas H. Schwalm was an initial investor with Mr. Kenny in Maxmillian Partners.
He joined our Board of Directors in March, 2005. He is a 25 year veteran of the
beverage industry. In 1995, he co-founded the South Beach Beverage Company,
known as SoBe beverage, which was acquired by PepsiCo, Inc. in 2001. From 1995
to January 2001, he served as managing member of SoBe Beverage. Mr. Schwalm's
career includes various managerial positions with the Joseph Schlitz Brewing
Company from 1968 to1982 and as Group Marketing Director for the Stroh Brewing
Company from 1982 to1984, where he managed a $100 million marketing budget and
introduced Stroh nationally in 1983. From 1985 to1992, he was Vice President of
Sales and Marketing for Dribeck Importers, the US importer for Becks Beer. In
1992 Mr. Schwalm became President of Barton Beers, in Chicago. Barton Beers
imported and marketed the Modelo brands - Corona, Corona Light, Pacifico, Negro
Modelo and Modelo Especiale. Barton Beers also imported Tsingtao from China,
Double Diamond from England, St. Pauli Girl from Germany, Peroni from Italy and
Point Beer from the Steven Point Brewing Company. Since January, 2002, Mr.
Schwalm has served as the Chief Executive Officer and President of the Thousand
Islands Country Club, an exclusive golfing resort, and The Preserve, a luxury
residential development, both located in upstate NY. Mr. Schwalm graduated in
1968 from the University of Wisconsin.

Fredrick Schulman served as the Chairman and President of Gourmet Group from
September 2000 until March of 2005 and he has been a member of our Board of
Directors since March, 2005. He has 25 years of experience in corporate and
commercial finance, venture capital, leveraged buy outs, investment banking and
corporate and commercial law. Mr. Schulman's career includes key positions with
RAS Securities in New York from 1994 to1998 as General Counsel and Investment
Banker, eventually becoming Executive Vice President and Director of Investment
Banking. From 1999 to September, 2001, he was President of Morgan Kent Group,
Inc., a venture capital firm based in New York and Austin, Texas. Since
September, 2003, Mr. Schulman has served as Chairman of Skyline Multimedia
Entertainment, Inc., and, since September, 2002, he has served as President and
Director of East Coast Venture Capital, Inc., a specialized small business
investment company and community development entity based in New York.


                                       31

<PAGE>

Fabio Berkowicz has served as our Chief Financial Officer since March, 2005, and
as the Chief Financial Officer of DA since October 2004. He is a certified
public accountant with over 35 years experience in public accounting. Prior to
joining us, from October 1984 to August 2003, he was a senior partner of Edward
Isaacs and its successor, McGladrey & Pullen, certified public accounting firms.
For McGladrey & Pullen, Mr. Berkowicz was a managing partner of its New York
City regional office. He was responsible for managing over 200 accountants and
CPA professionals and overseeing accounting services for the full range of both
firms' clients. In 2006, he has also performed consulting services for Rosen
Seymour Shapss Martin & Company, LLP, a public accounting firm located in New
York City, New York.

Mr. Close (a 10% shareholder) has recently received restricted shares of our
common stock in satisfaction of compensation, consulting fees, loans or other
amounts which were owed to them (see "Certain Relationships and Related Party
Transactions" for additional details).

Audit Committee

Our Audit Committee currently consists of Fredrick Schulman as Chairman, and
Marvin Traub. The Audit Committee will assist the Board in fulfilling its
oversight responsibilities relating to the integrity of our financial
statements, compliance with legal and regulatory requirements, the independent
auditor's qualifications and independence, and the performance of the
independent auditor. It is not the duty of the Audit Committee to plan or
conduct audits, to prepare our financial statements or to determine that our
financial statements and disclosures are complete and accurate and are in
accordance with generally accepted accounting principles and applicable rules
and regulations. These are the responsibilities of management and the
independent auditor. In discharging its responsibilities, the Audit Committee
expects to engage our independent auditors, approve the services performed by
such auditors, review and evaluate our accounting principles and our system of
accounting controls, and review with the auditors our quarterly unaudited and
annual audited financial statements and the results of the reviews and audit
thereof.

The Board has determined that all current members of the Audit Committee have
the ability to read and understand fundamental financial statements. The Board
has also determined that Fredrick Schulman qualifies as "Audit Committee
financial expert" as defined under Item 410(h) of Regulation S-B of the
Securities Exchange Act of 1934 (the "Exchange Act"). Mr. Schulman, in his
capacity as Chairman and Chief Executive Officer of Gourmet Group for over four
years, directly supervised the financial staff of the Company and coordinated
the preparation of the Company's financial statements with its outside auditors.
As a result of this relationship with Gourmet Group, Mr. Schulman may not be
viewed as an independent director.

Compensation Committee

The Compensation Committee was recently formed and consists of Bruce Klein as
Chairman, Fredrick Schulman and Thomas Schwalm. The Compensation Committee will
assist the Board in fulfilling its oversight responsibilities relating to
officer and director compensation, succession planning for senior management,
development and retention of senior management.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors,
executive officers and beneficial owners of more than 10% of our Common Stock to
file with the SEC reports of their holdings of, and transactions in, our Common
Stock. Based solely upon our review of copies of such reports and
representations from reporting persons that were provided to us, we believe that
each of our executive officers and directors failed to file Forms 4 and 5 with
respect to certain transactions that should have been reported by them on such
Forms, including, for those who are officers of the Company, with respect to
shares received in satisfaction of compensation earned by them or entities they
control. The substance of these transactions have been disclosed by the Company
in its Reports.


                                       32

<PAGE>

Code of Ethics

The Company has adopted a written code of ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer and any persons performing similar functions. The Company will provide a
copy of its code of ethics to any person without charge upon written request
addressed to 372 Danbury Road, Wilton, CT 06897.

Item 10. Executive Compensation.

Compensation of Executive Officers

The following table shows for fiscal years ended April 30, 2006 and 2005,
respectively, certain compensation awarded or paid to, or earned by, the
following persons (collectively, the "Named Executive Officers"): J. Patrick
Kenny, our President and Chief Executive Officer; Bruce Klein, our Chairman of
the Board; Jason Lazo, our Chief Operating Officer.

Other than the Named Executive Officers, none of our executive officers earned
more than $100,000 in salary and bonus for the 2006 or 2005 fiscal years. We did
not grant stock options to them during the periods indicated but did issue
restricted stock to them in partial satisfaction of the salary indicated below.

                           SUMMARY COMPENSATION TABLE

                                                 Annual
                                             Compensation              Other
Name and Principal Position    Fiscal Year      Salary      Bonus   Compensation
---------------------------    -----------   ------------   -----   ------------

J. Patrick Kenny                  2006         $243,500       --       $26,647
Chief Executive Officer (1)       2005          257,662       --        27,512
                                  2004          240,000       --        21,509

Bruce Klein Chairman  of the      2006          120,000       --            --
Board (2)                         2005          240,000       --            --
                                  2004          240,000       --            --

Jason Lazo                        2006          150,000       --            --
Chief Operating Officer (3)       2005          141,428       --            --
                                  2004          125,000       --            --

Frederick Schulman                2006               --       --            --
Former President Gourmet          2005               --       --            --
Group, Inc.                       2004               --       --            --

(1) Of the $257,662 and $240,000 of salary earned by Mr. Kenny (or his
consulting company) in fiscal 2005 and 2004 , respectively $18,735 (2005) and
$8,500 (2004) was payable to Westridge Partners, LLC, a consulting company
wholly-owned by Mr. Kenny. Other compensation of $26,647 in fiscal 2006, $27,512
in fiscal 2005 and $21,509 in fiscal 2004 represents payments of personal major
medical and life insurance premiums. We currently have no corporate sponsored
employee benefit plans. $388,108 of the total salary earned in fiscal 2005 and
2004 was satisfied through the issuance of 862,462 restricted shares of our
common stock.


                                       33

<PAGE>

(2) The salary shown as earned by Mr. Klein in each of the fiscal years 2006,
2005 and 2004 was payable to Victory Partners, LLC, a consulting firm controlled
by Mr. Klein, as payment for services rendered by Mr. Klein through such entity.
All of the compensation in fiscal 2005 and 2004 was satisfied through the
issuance of 1,066,667 restricted shares of our common stock.

(3) $157,249 of the salary in fiscal 2005 and 2004 was payable to Lazo, LLC, a
consulting firm controlled by Mr. Lazo as payment for services rendered by Mr.
Lazo through such entity. This amount was satisfied through the issuance of
349,443 restricted shares of our common stock.

Incentive Plans

We have not adopted any stock option plans and any incentive plans previously
adopted by Gourmet Group have been canceled.

Option Grants in Last Fiscal Year

We did not grant to the Named Executive Officers options to purchase shares in
fiscal 2006.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

None of our officers held options to purchase shares of our common stock during
fiscal 2006

We have not compensated our Board members for their participation on the Board
and do not have any standard or other arrangements for compensating them for
such service. However, we have made payments for other reasons, as described in
this "Executive Compensation" section and in the "Certain Relationships and
Related Transactions" section of this Report.

Employment Agreements

We have not entered into any employment agreements with our executive officers
or other employees to date. We may enter into employment agreements with them in
the future.

Director Compensation

Directors do not receive cash compensation for their services to us as
directors, but are reimbursed for expenses actually incurred in connection with
attending meetings of the Board of Directors.

Item 11. Security Ownership of Certain Beneficial Owners, Directors and
Executive Officers and Related Shareholder Matters

The following table shows the number of shares of common stock beneficially
owned as of July 31, 2006 by each director, the executive officers as detailed
in the executive compensation table, all directors and executive officers as a
group and other significant shareholders.


                                       34

<PAGE>
                                  Number of Shares
                                  of Common Stock        Percentage of
         Name                    Beneficially Owned   Outstanding Shares
         ----                    ------------------   ------------------
J. Patrick Kenny
30 Old Wagon Road
Wilton, CT 06877                   14,484,081 (1)            23.0%

Bruce Klein
123 Elbert Street
Ramsey, NJ 07446                   11,219,689 (2)            17.8%

Kenneth Close
59 Old Post Road
Westport, CT 06490                  8,628,465 (3)            13.6%

Thomas Schwalm
5983 SE Morning Dove Way
Hobe Sound, FL 33455                3,174,207 (4)             5.0%

Fabio Berkowicz
8 Amagansett Drive
Morganville, NJ 07751               1,681,270 (5)             2.7%

Jason Lazo
144 Wire Mill Rd.
Stamford, CT 06903                    627,359 (6)             1.0%

Marvin Traub
535 Fifth Avenue
New York, NY 10022                  1,157,246 (7)             1.8%

Fredrick Schulman
241 Fifth Ave, Suite 302
New York, NY 10016                  1,133,370 (8)             1.8%

All Directors and Officers
as a group (7 persons)             33,477,222                52.7%


(1) Includes 10,000,000 and 2,000,000 shares owned by Kenny LLC I and Kenny LLC
II, respectively, entities controlled by Mr. Kenny. Does not include 250,000
shares owned by Mr. Kenny's son and 191,263 shares owned by Mr. Kenny's brother,
as to which shares Mr. Kenny disclaims beneficial ownership.

(2) Includes 8,900,000 shares owned by Peter Christian and Associates, LLC, of
which Mr. Klein is the manager, 1,264,133 shares owned by Victory Partners, LLC,
a firm controlled by Mr. Klein, 55,556 shares owned by Vigilant Investors, of
which Mr. Klein is a partner, and 550,000 and 450,000 shares owned by the wife
and sons of Mr. Klein respectively. Mr. Klein disclaims beneficial ownership of
the shares owned by his wife and his son.

(3) Includes 6,279,957 shares owned by Nexcomm International Beverage, LLC, of
which Mr. Close is the manager and warrants to purchase 83,333 shares, including
41,666 warrants owned through Mr. Close's personal IRA. Also includes 346,558
shares (174,947 through Mr. Close's IRA) issuable under a convertible promissory
note based on a conversion price of $0.45 per share, which conversion price may
be adjusted as provided in the note.


                                       35

<PAGE>

(4) Includes 2,482,533 shares are owned by Greenwich Beverage Group, LLC
("Greenwich"), of which Mr. Schwalm is the manager and warrants to purchase
155,556 shares, including 100,000 warrants owned by Greenwich. Also includes
455,038 shares (of which 222,222 are owned by Greenwich) issuable under two
convertible promissory notes based on a purchase price of $0.45 per share, which
conversion price may be adjusted as provided in the notes.

(5) All shares are owned by MFADS, LLC of which Mr. Berkowicz is the manager.

(6) All shares are owned by Lazo, LLC, an entity controlled by Mr. Lazo.

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

(8) Includes 219,970 shares owned by Mr. Schulman's wife, Lois Shapiro, as to
which shares Mr. Schulman disclaims beneficial ownership. Does not include
690,000 shares owned by JGS Supermarket Management Corp., an entity owned and
controlled by Mr. Schulman's sister, as to which Mr. Schulman disclaims
beneficial ownership.

Item 12. Certain Relationships and Related Transactions.

Between July 2004 and December 2004 Fredrick Schulman, one of our directors (who
was then Gourmet Group's president and chairman) extended a payable on demand
unsecured credit facility to the Company in an amount of up to $291,000. Mr.
Schulman borrowed $172,230 of this amount from third parties and in turn lent
this amount to us. The remaining $118,700 was from Mr. Schulman's own funds. All
but one of the third parties from whom Mr. Schulman borrowed these funds,
comprising $157,500, in the aggregate, demanded repayment from him in December
2004, and Mr. Schulman soon thereafter demanded that we repay him a like amount.
Since we were unable to do so we issued 350,000 restricted shares of our common
stock (which we valued at $0.45 per share), which shares were delivered in 2005
to the third parties who demanded repayment of their investment of $157,500, in
consideration for their forbearance with respect to this debt.

In April 2005 in connection with a $1,350,000 private placement of senior
convertible promissory notes, Greenwich Beverage Group, LLC ("Greenwich"), a
company owned by Thomas Schwalm, loaned us $100,000 and we issued to Greenwich a
note in like amount. Interest accrued on this note aggregated $410 and $10,556
as of April 30, 2005 and 2006, respectively. During fiscal 2005 and 2006 no
principal or interest has been paid. In connection with the note, Greenwich
received warrants to purchase 100,000 shares of our common stock at $0.45 per
share.

In fiscal 2003 we entered into a consulting agreement with a company, Marvin
Traub & Associates ("MTA"), owned 100% by Marvin Traub, a member of the Board of
Directors. Under the agreement, MTA is being compensated at the rate of $100,000
per annum. In fiscal 2006, compensation to MTA aggregated $150,000 due to
additional work performed. In January 2006, MTA converted unpaid consulting fees
aggregating $403,329 into 896,296 shares of our restricted common stock. As of
April 30, 2006, we were indebted to MTA in the amount of $24,999. This
consulting agreement is still in force for fiscal 2007.

During fiscal 2005 and 2006, we modified the two borrowing agreements with one
of our shareholders, Ken Close, and his affiliate Nexcomm, with respect to
borrowings in the original aggregate amount of $1,021,000. See "Discussion and
Management's Analysis of Financial and Results of Operations, Financial
Liquidity and Capital Resources" in this Report for additional details. One of
the borrowing facilities is secured, the other unsecured. During 2006 we paid
Mr. Close and Nexcomm, in cash, an aggregate of $128,404 in principal and
interest of $19,428, respectively, in connection with these loans. During Fiscal
2005 we issued him 222,000 shares of our common stock in satisfaction of
$100,000 of this debt.


                                       36

<PAGE>

We also issued secured convertible promissory notes to Mr. Close in the amount
of $150,000 , evidencing loans made to us in fiscal year 2006. Mr. Thomas
Schwalm also participated in the lending facility by lending us $100,000 and was
issued a secured convertible promissory note to evidence such debt. Each lender
was also issued warrants to purchase our common stock in consideration for these
loans. See "Discussion and Management's Analysis of Financial and Results of
Operations, Financial Liquidity and Capital Resources" in this Report for
additional details. During fiscal 2006, the interest accrued on the loans made
by Mr. Close and Mr. Schwalm was $5,950 and $4,767, respectively; no payments
have been made to them in connection with this debt.

On July 27, 2006, the Company borrowed 153,111.80 from Mr. Close, which is not
documented and is payable on demand.

Westridge Partners, LLC, a consulting company wholly-owned by Mr.Kenny, earned
consulting fees from us in the amount of $18,735 in fiscal 2005 for services
provided to us by Mr. Kenny through such entity. In addition, unpaid
compensation of $388,108 owed to Mr. Kenny directly was satisfied in fiscal 2005
by issuing and delivering 862,462 restricted shares of our common stock. As of
April 30, 2006, we owe an aggregate of $49,105 to Mr. Kenny and Westridge
Partners.

Victory Partners, LLC ("Victory"), an entity wholly-owned by Bruce Klein, our
Chairman of the Board earned $240,000 and $120,000 of consulting fees in fiscal
years 2005 and 2006, respectively. These fees were earned by Victory for the
services provided to us by Mr.Klein through Victory. In fiscal 2005 we satisfied
consulting fee obligations totaling $568,860 (including $480,000 of the fees
earned in fiscal 2005 by issuing and delivering 1,264,133 restricted shares of
our common stock. As of April 30, 2006, we owe an aggregate of $109,300 to Mr.
Klein and Victory partners.

In May 2004 we entered into an unsecured $200,000 bank credit facility with
interest at 1.5% above the prime rate, and as of April 30, 2006 we owed the bank
$200,000. Fabio Berkowicz, our Chief Financial Officer, has personally
guaranteed our obligation to the bank. In addition we incurred fees to a
consulting firm controlled by Mr. Berkowicz totaling $80,666 in fiscal 2005 for
the services rendered to us by Mr. Berkowicz through this entity. In fiscal
2005, we satisfied consulting fee obligations totaling $71,666 by issuing
159,258 restricted shares of our common stock. As of April 30, 2006 we are
obligated to this entity for fees totaling $34,000.

In fiscal 2005 we satisfied $157,249 of compensation owed to Lazo, LLC, an
entity controlled by Jason Lazo, our chief operating officer by issuing 349,443
restricted shares of our common stock. The compensation was earned for services
provided to us by Mr. Lazo. As of April 30, 2006 we owe an aggregate of $87,710
to Mr. Lazo and Lazo, LLC.

In fiscal 2004, Vigilant Investors, a company in which Mr. Klein is a partner
and has investment authority, loaned the Company $25,000. We repaid this loan as
of April 30, 2005.

We incurred licensing royalty expenses of approximately $132,000 and $73,000 in
fiscal 2005 and 2006, respectively, to Old Whiskey River Distilling Company, LLC
and Y Sake, LLC in which we own 25 percent membership interests.


                                       37

<PAGE>

Item 13. Exhibits.

(A) Exhibit Index

2.1        Agreement and Plan of Share Exchange, dated as of June 9, 2004, among
           Gourmet Group, Inc., Drinks Americas, Inc. and the shareholders of
           Drinks Americas, Inc.

3.1        Certificate of Incorporation of Drinks Americas Holdings, Ltd.

3.2        By-Laws of Drinks Americas Holdings, Ltd.

4.1        Form of 10% Convertible Promissory Note issued by Gourmet Group,
           Inc., including Registration Rights provisions.

4.2***     Form of 10% Senior Convertible Promissory Note, dated March 2005,
           issued by Drinks Americas Holdings, Ltd. issued by Drinks Americas
           Holdings, Ltd. to investors in its Bridge Notes financing.

4.3***     Form of Stock Purchase Warrant, dated March 2005, issued by Drinks
           Americas Holdings, Ltd to investors in its Bridge Note financing.

10.1       Form of 10% Promissory Note issued by Drinks Americas, Inc. to
           Gourmet Group, Inc. relating to the proceeds of the Private
           Placement.

10.2       Agreement, dated April 6, 2004, between Paul Newman, Newman's Own,
           Inc. and Drinks Americas, Inc. relating to the distribution of
           Newman's Own Lightly Sparkling Fruit Juices.

10.3       Letter, dated May 12, 2003, from Interamericana de Licores, S.A. to
           Drinks Americas, Inc. relating to the production of Cohete Rum.

10.4       Purchase Agreement, dated July 29, 2003, between Drinks Americas,
           Inc. and Aguila Tequila Partners relating to Aguila Tequila.

10.5       Agreement, dated June 24, 2003, between Xanadu Wines Limited and
           Drinks Americas, Inc. relating to the distribution of Xanadu
           Normans Wines.

10.6       Interest Purchase Agreement, dated December 9, 2002, between
           Drinks Americas, Inc. and Shep Gordon.

10.7       Assignment, dated December 9, 2002, from Shep Gordon to Drinks
           Americas,Inc. of the limited liability company interests in Old
           Whiskey River Distilling Company LLC.

10.8       Assignment, dated December 9, 2002, from Shep Gordon to Drinks
           Americas, Inc. of the limited liability company interests in Y
           Sake LLC.

10.9       Assignment, dated December 9, 2002, from Alive Enterprises, Inc. to
           Old Whiskey River Distilling Company LLC of Trademark rights to Old
           Whiskey River.

10.10      Assignment, dated December 9, 2002, from Alive Enterprises, Inc. to
           Y SakeLLC of Trademark rights to Y Sake.

10.11      Trademark License Agreement, dated December 9, 2002, between Drinks
           Americas, Inc. and Old Whiskey River Distilling Company LLC relating
           to Old Whiskey River and Willie Nelson.

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


                                 38

<PAGE>

10.13      Distributor Rights Agreement, dated December 9, 2002, between Old
           Whiskey River Distilling Company LLC and Drinks Americas, Inc.

10.14      Distributor Rights Agreement, dated December 9, 2002, between Y
           Sake LLC and Drinks Americas, Inc.

10.15      Consulting and Exclusive Referral Agreement, dated December 9, 2002,
           by and among Shep Gordon, Drinks Americas, Inc. and Maxmillian
           Partners, LLC.

10.16      Sublease Agreement, dated August 12, 2002, by and between Blau
           Marketing Technologies, Inc. as Sublandlord and Maxmillian Partners,
           LLC as subtenant.

10.17      Amended and Restated License Agreement, dated December 10, 2002,
           between Old Whiskey River Distilling Company, LLC and Willie Nelson.

10.18      Consulting Letter Agreement, dated March 28, 2002, between Marvin
           Traub Associates, Inc. and Maxmillian Partners, LLC.

10.19      Letter, dated October 28, 2002, from DAS Communications Ltd.
           (David Sonenberg) to Drinks Americas, Inc.

10.20      Restated (Demand) Promissory Note, dated as of July 9, 2004, in the
           amount of $290,000 from Drinks Americas, Inc. to Fredrick Schulman
           as agent for the payees.

10.21      Promissory Note, dated May 10, 2004, in the amount of $200,000 from
           Drinks Americas, Inc. to Bank Leumi USA.

10.22      Unlimited Guaranty, dated May 13, 2004, from Drinks Americas, Inc.
           to Bank Leumi USA.

10.23      Secured Convertible Note and Agreement, dated April 8, 2003, in the
           amount of $200,000 from Maxmillian Partners LLC to Nexcomm
           InternationalBeverages, LLC.

10.24      Guaranty Agreement, dated April 8, 2003, between Drinks Americas,
           Inc. and Nexcomm International Beverages, LLC.

10.25      Security Agreement, dated April 8, 2003, by and between Drinks
           Americas, Inc. and Nexcomm International Beverages, LLC.

10.26      Secured Convertible Note and Agreement, dated July 28, 2003, in the
           amount of $200,000 from Maxmillian Partners LLC to Nexcomm
           International Beverages, LLC.

10.27      Security Agreement, dated July 28, 2003, by and between Maxmillian
           Partners LLC and Kenneth H. Close.

10.28      Security Agreement, dated July 28, 2003, by and between Drinks
           Americas, Inc. and Kenneth H. Close.

10.29      Guaranty Agreement, dated July 28, 2003, between Maxmillian
           Mixers LLC and Kenneth H. Close.

10.30      Promissory Note, dated October 15, 2004, in the amount of $155,975
           from Drinks Americas, Inc. to Nexcomm International Beverages, LLC.

10.31      Note, dated October 15, 2004, in the amount of $352,167 from Drinks
           Americas, Inc. to Kenneth H. Close.


                                 39

<PAGE>

10.32      Promissory Note, dated October 15, 2004, in the amount of $44,560
           from Drinks Americas, Inc. to Kenneth H. Close.

10.33      Security Agreement, dated October 15, 2004, by and between Drinks
           Americas, Inc. and Nexcomm International Beverages, LLC.

10.34***   Form of Registration Rights Agreement between Drinks Americas
           Holdings, Ltd and the  investors in its Bridge Notes financing.

10.35*     Amended and Restated Promissory Note, dated December 26, 2005, by
           and between Drinks Americas Holdings, Ltd. and Kenneth H. Close for
           $776,167.

10.36*     Asset Purchase Agreement, dated as of October, 2005, by and between
           Drinks Americas Holdings, ltd. and Rheingold Brewing Company, Inc.

10.37*     Loan Agreement, dated June 1, 2006, by and between D.T. Drinks, LLC
           and Production Finance International, LLC.

10.38*     Loan and Security Agreement, dated June 1, 2006, by and between
           Drinks Americas, Inc., Drinks Global Imports, LLC, D.T. Drinks,
           LLC and Business Alliance Capital Company.

14.0*      Code of Ethics

21.1(a)*   List of Subsidiaries of Drinks Americas Holdings, Ltd

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 Fabio Berkowicz, Chief Financial Officer, pursuant
           to Rule 13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act
           of 2002.

32.1*      Certification by J. Patrick Kenny, Chief Executive Officer, pursuant
           to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002.

32.2*      Certification by Fabio Berkowicz, Chief Financial Officer, pursuant
           to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002.

Numbers with (*) are filed herewith. Numbers with (**) have been incorporated by
reference to our Form 10-KSB filed on August 15, 2005. Numbers with (***) have
been incorporated by reference to our Form 8-K filed on March 25, 2005. All
other exhibits have been incorporated by reference to our Form 8-K filed on
March 9, 2005.

Item 14. Principal Accountants' Fees and Services

We engaged Bernstein & Pinchuk, LLP as our principal accountants to perform the
audit of our financial statements for the year ended April 30, 2006. During the
years ended April 30, 2006 and April 30, 2005, we incurred total fees payable to
our accountants totaling $102,000 and $60,000 related to the audit of the
Company for the years ended April 30, 2006 and April 30, 2006, respectively,
including fees related to quarterly reviews during each such fiscal year.


                                       40

<PAGE>

                                   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 15, 2005.

                                                Drinks Americas Holdings, Ltd.


                                                By: /s/ J. Patrick Kenny
                                                    ----------------------------
                                                          J. Patrick Kenny
                                                       Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                               Capacities                   Date
---------                               ----------                   ----


/s/ J. Patrick Kenny        Chief Executive Officer, Director   August 11, 2006
--------------------------
J. Patrick Kenny


/s/ Fabio Berkowicz              Chief Financial Officer        August 11, 2006
--------------------------
Fabio Berkowicz


/s/ Jason Lazo                   Chief Operating Officer        August 11, 2006
--------------------------
Jason Lazo


/s/ Bruce Klein                   Chairman of the Board         August 11, 2006
--------------------------
Bruce Klein


/s/ Frederick Schulman                   Director               August 11, 2006
--------------------------
Frederick Schulman


/s/ Marvin Traub                         Director               August 11, 2006
--------------------------
Marvin Traub


/s/ Thomas Schwalm                       Director               August 11, 2006
--------------------------
Thomas Schwalm


                                       41

<PAGE>


                  DRINKS AMERICAS HOLDINGS, LTD. AND AFFILIATES

                              FINANCIAL STATEMENTS

                       Years Ended April 30, 2006 and 2005

                                       AND
                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM


<PAGE>

                                                                            Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                        1

FINANCIAL STATEMENTS

  Consolidated Balance Sheet                                                   2

  Consolidated Statements of Operations                                        3

  Consolidated Statements of Changes in the Shareholders' Deficiency           4

  Consolidated Statements of Cash Flows                                      5-6

  Notes to Consolidated Financial Statements                                7-21

<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders of
Drinks Americas Holdings, Ltd.:

We have audited the accompanying consolidated balance sheet of Drinks Americas
Holdings, Ltd. and affiliates (the "Company") as of April 30, 2006, and the
related consolidated statements of operations, changes in shareholders'
deficiency, and cash flows for the years ended April 30, 2006 and 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
April 30, 2006 and the results of its operations and its cash flows for the
years ended April 30, 2006 and 2005, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, the
Company has incurred significant losses from operations since its inception and
has a working capital deficiency. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are described in Note 1. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


/s/ Bernstein & Pinchuk LLP

New York, New York
August 10, 2006

<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2006

Assets
Current assets:
  Cash and equivalents                                             $    397,766
  Accounts receivable, net of allowance of $20,000                      292,344
  Due from factor                                                        37,592
  Inventories                                                           624,216
  Other current assets                                                  132,335
                                                                   ------------
      Total current assets                                            1,484,253
Property and equipment, at cost less accumulated
  depreciation and amortization                                          57,051
Investment in equity investees                                           50,024
Intangible assets, net                                                  999,217
Other assets                                                             24,994
                                                                   ------------
                                                                   $  2,615,539
                                                                   ============

Liabilities and Shareholders' Deficiency
Current liabilities:
  Current maturities of long-term debt                             $  2,357,576
  Accounts payable                                                    2,422,255
  Accrued expenses                                                    1,450,053
  Amounts received for shares to be issued                              789,999
                                                                   ------------
      Total current liabilities                                       7,019,883
Long-term debt, less current maturities                                 100,000
Commitments and Subsequent Events                                            --
Shareholders' deficiency:
  Preferred stock, $0.001 par value; 1,000,000
   shares authorized; none issued
  Common stock, $0.001 par value; 100,000,000
   authorized; issued and outstanding 62,707,453
   shares                                                                62,707
  Additional paid,-in capital                                        10,838,165
  Accumulated deficit                                               (15,405,216)
                                                                   ------------
                                                                     (4,504,344)
                                                                   ------------
                                                                   $  2,615,539
                                                                   ============

--------------------------------------------------------------------------------

See notes to consolidated financial statements.


                                      F-2
<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED APRIL 30, 2006 AND 2005
--------------------------------------------------------------------------------

                                                  2006            2005
                                               -----------    -----------
Net sales                                      $ 1,607,606    $ 2,071,566

Cost of sales                                    1,154,834      1,556,193
                                               -----------    -----------

      Gross margin                                 452,772        515,373

Selling, general and administrative expenses     4,606,927      4,521,402
                                               -----------    -----------

      Loss before other (expense) income
        and income tax expense                  (4,154,155)    (4,006,029)
                                               -----------    -----------

Other (expense) income:
  Interest expense                                (435,243)      (361,769)
  Other income                                     198,381         40,100
                                               -----------    -----------

                                                  (236,862)      (321,669)
                                               -----------    -----------

      Loss before income tax expense            (4,391,017)    (4,327,698)

Income tax expense                                      --             --
                                               -----------    -----------

Net loss                                       $(4,391,017)   $(4,327,698)
                                               ===========    ===========
      Net loss per share (Basic and Diluted)   $      0.08    $      0.10
                                               ===========    ===========

-------------------------------------------------------------------------------

See notes to consolidated financial statements.


                                      F-3
<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY
YEARS ENDED APRIL 30, 2006 AND 2005
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   Additional
                                                                     Paid-in       Accumulated
                                         Shares        Amount        Capital         Deficit
                                     ------------   ------------   ------------    ------------
<S>                                   <C>          <C>            <C>             <C>
Balance, May 1, 2004                   43,195,291   $     43,196   $  4,434,170    $ (6,686,501)

Issuance of shares for services         1,968,501          1,968           (768)             --

Issuance of shares to shareholders
  of legal acquirer                     4,058,794          4,059         (4,059)             --

Issuance of shares in settlement
  of accrued compensation,
  expenses and notes and loans
  payable                               5,624,397          5,624      2,525,355              --

Net loss for the year                          --             --             --      (4,327,698)
                                     ------------   ------------   ------------    ------------

Balance, April 30, 2005                54,846,983         54,847      6,954,698     (11,014,199)

Issuance of shares for cash             2,050,000          2,050      1,167,948

Issuance of shares for services         1,096,296          1,096        492,233              --

Issuance of shares to shareholders
  of acquired company                     724,638            724         86,225              --

Issuance of shares in settlement
  of notes and loans payable            3,989,536          3,990      2,137,061              --

Net loss for the year                          --             --             --      (4,391,017)
                                     ------------   ------------   ------------    ------------

Balance, April 30, 2006                62,707,453   $     62,707   $ 10,838,165    $(15,405,216)
                                     ============   ============   ============    ============
</TABLE>

--------------------------------------------------------------------------------

See notes to consolidated financial statements.


                                      F-4
<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED APRIL 30, 2006 AND 2005
--------------------------------------------------------------------------------

                                                         2006          2005
                                                     -----------    -----------
Cash flows from operating activities:
  Net loss                                           $(4,391,017)   $(4,327,698)
  Adjustments to reconcile net loss to net cash
used in
   operating activities:
   Deprecation and amortization                          330,661        140,956
   Earnings in equity method investees                        --        (40,042)
   Stock issued for services of vendors, employees,
directors                                                493,329      1,195,380
   Allowance for uncollectible accounts                   64,878         30,000
   Changes in operating assets and liabilities:
    Accounts receivable                                 (252,285)        (7,654)
    Due from factor                                       (9,435)         5,976
    Inventories                                           14,618        123,943
    Other current assets                                  13,698        (73,149)
    Other assets                                          50,499             --
    Accounts payable                                     228,010        213,429
    Accrued expenses                                     621,753        450,381
                                                     -----------    -----------

      Net cash used in operating activities           (2,835,291)    (2,288,478)
                                                     -----------    -----------

Cash flows from investing activities:
  Acquisition of property and equipment                       --        (31,149)
                                                     -----------    -----------

      Net cash used in investing activities                   --        (31,149)
                                                     -----------    -----------

Cash flows from financing activities:
  Proceeds from issuance of common stock issued
   and to be issued                                    1,959,999      2,924,602
  Proceeds from issuance of debt                       1,195,648             --
  Repayment of debt                                     (154,168)      (222,584)
  Payments for loan costs                                     --       (254,581)
                                                     -----------    -----------

      Net cash provided by financing activities        3,001,479      2,447,437
                                                     -----------    -----------

      Net increase in cash and equivalents               166,188        127,810

Cash and equivalents - beginning                         231,578        103,768
                                                     -----------    -----------

Cash and equivalents - ending                        $   397,766    $   231,578
                                                     ===========    ===========

--------------------------------------------------------------------------------

(Continued)


                                      F-5
<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED APRIL 30, 2006 AND 2005
--------------------------------------------------------------------------------

                                                          2006         2005
                                                       ----------   ----------

Supplemental disclosures of noncash investing
  and financing activities:
   Sale of product in exchange for prepaid expense
     (trade credits)                                   $       --   $  114,729
                                                       ----------   ----------

   Liabilities converted into shares of common stock   $2,141,051   $1,390,799
                                                       ----------   ----------

   Asset acquisition financed by:
     Long-term debt                                    $  219,550   $       --
                                                       ----------   ----------

     Short-term liabilities assumed                    $  141,993   $       --
                                                       ----------   ----------

     Common stock issued                               $   86,948   $       --
                                                       ----------   ----------


Supplemental disclosures of cash flow information:
   Interest paid                                       $  171,981   $   97,642
                                                       ----------   ----------

   Income taxes paid                                   $       --   $       --
                                                       ----------   ----------

--------------------------------------------------------------------------------

See notes to consolidated financial statements.

                                      F-6
<PAGE>

DRINKS AMERICAS HOLDINGS, LTD AND AFFILIATE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation and
     Nature of Business

On March 9, 2005 the shareholders of Drinks Americas, Inc. ("Drinks") a company
engaged in the business of importing and distributing unique, premium alcoholic
and non-alcoholic beverages associated with icon entertainers, sports figures,
celebrities and destinations, to beverage wholesalers throughout the United
States, acquired control of Drinks Americas Holdings, Ltd. ("Holdings").
Holdings was incorporated in the state of Delaware on February 14, 2005. On
March 9, 2005 Holdings merged with Gourmet Group, Inc. ("Gourmet"), a publicly
traded Nevada corporation, which resulted in Gourmet shareholders acquiring 1
share of Holdings' common stock in exchange for 10 shares of Gourmet's common
stock. Both Holdings and Gourmet were considered "shell" corporations, as
Gourmet had no operating business on the date of the share exchange, or for the
previous three years. Pursuant to the June 9, 2004 Agreement and Plan of Share
Exchange among Gourmet, Drinks and the Drinks' shareholders, Holdings, with
approximately 4,058,000 of outstanding common stock, issued approximately
45,164,000 of additional shares of its common stock on March 9, 2005 (the
"Acquisition Date") to the common shareholders of Drinks and to the members of
its affiliate, Maxmillian Mixers, LLC ("Mixers"), in exchange for all of the
outstanding Drinks' common shares and Mixers' membership units, respectively. As
a result Maxmillian Partners, LLC ("Partners") a holding company which owned 99%
of Drinks' outstanding common stock and approximately 55% of Mixers' outstanding
membership units, became Holdings' controlling shareholder with approximately
87% of Holdings' outstanding common stock. For financial accounting purposes
this business combination has been treated as a reverse acquisition, or a
recapitalization of Partners' subsidiaries (Drinks and Mixers).

Partners, which was organized as a Delaware limited liability company on January
1, 2002 and incorporated Drinks in Delaware on September 24, 2002, subsequent to
March 9, 2005 transferred all of its Holdings shares to its members as part of a
plan of liquidation.

On March 11, 2005 Holdings and an individual organized Drinks Global, LLC
("DGI"). Holdings owned 90% of the membership units and the individual, who is
the president of DGI owned 10%. DGI's operating agreement does not require
either member to contribute cash for the membership units; however, Holdings has
paid the start-up expenses of DGI, which were not considered material. DGI's
business is to import wines from various parts of the world and sell them to
distributors throughout the United States. In May 2006 Holdings organized D.T.
Drinks, LLC ("DT Drinks") a New York limited liability company for the purpose
of selling certain alcoholic beverages.

The accompanying consolidated results of operations, changes in shareholders'
deficiency and cash flows for the period May 1, 2004 to March 8, 2005 are those
of Partners and its majority-owned subsidiaries, Drinks (with its inactive
foreign subsidiaries, Bebedes de C.A. and Cohete, S.A.) and Mixers
(collectively, the "Company" prior to March 9, 2005). The consolidated balance
sheet as of April 30, 2006 and results of operations from March 9, 2005 to April
30, 2005 and May 1, 2005 to April 30, 2006 reflect Holdings its majority-owned
subsidiaries and Partners (collectively, the "Company" subsequent to March 9,
2005). All intercompany transactions and balances in these financial statements
have been eliminated in consolidation. The amount of common and preferred shares
authorized, issued and outstanding as of April 30, 2006, are those of Holdings.
Common shares issued at the Acquisition Date represent the number of outstanding
shares of Holdings before the share exchange with Partners. Operating results of
Drinks and its predecessor Gourmet for periods prior to the date of the reverse
acquisition are not material.

                                      F-7
<PAGE>

The accompanying consolidated financial statements have been prepared on a basis
that assumes the Company will continue as a going concern. The Company has a
shareholders' deficit of $15,405,216 as of April 30, 2006, and has incurred
significant operating losses and negative cash flows from operations since
inception. These factors indicate the Company may not be able to continue as a
going concern. Management anticipates cash flows from the proceeds of additional
debt and equity offerings in fiscal 2007. Management also plans to introduce new
products and to greatly expand the marketing efforts of all of its products to
increase volume and reduce operating losses in fiscal 2007. There can be no
assurance, however that management's plans will enable the Company to attain
profitable operations or generate sufficient cash flows from operations and
financing activities necessary to continue as a going concern. The accompanying
financial statements do not include any adjustments relating to the
classification of recorded asset amounts or amounts and classification of
liabilities that might be necessary should the company be unable to continue in
existence.


2.   Summary of Significant
     Accounting Policies

Revenue Recognition

The Company recognizes revenues when title passes to the customer, which is
generally when products are shipped.

Cash and Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

The Company from time to time maintains balances in depository accounts in
excess of FDIC insured limits. The Company has not experienced any credit losses
nor anticipates any future losses in such accounts. At April 30, 2006 amounts
exceeding FDIC insured limits aggregated $273,432.

Accounts Receivable

Accounts receivable are recorded at original invoice amount less an allowance
for uncollectible accounts that management believes will be adequate to absorb
estimated losses on existing balances. Management estimates the allowance based
on collectability of accounts receivable and prior bad debt experience. Accounts
receivable balances are written off upon management's determination that such
accounts are uncollectible. Recoveries of accounts receivable previously written
off are recorded when received. Management believes that credit risks on
accounts receivable will not be material to the financial position of the
Company or results of operations.

Inventories

Inventories are valued at the lower of cost (first-in, first-out) or market.

                                      F-8
<PAGE>

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided on the
straight-line method over the estimated useful lives of furniture and equipment,
and amortization of leasehold improvements is provided on the straight-line
method over the term of the related lease.

Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards No. 144 (SFAS No.
144), Accounting for the Impairment or Disposal of Long-lived Assets, we review
long-lived assets for impairment whenever events or changes in circumstances
indicate the carrying amounts of such assets may not be recoverable. The
Company's policy is to record an impairment loss at each balance sheet date when
it is determined that the carrying amount may not be recoverable. Recoverability
of these assets is based on undiscounted future cash flows of the related asset.
At April 30, 2006 no long-lived assets were deemed to be impaired.

Income Taxes

As of April 30, 2006 Holdings and Drinks are C Corporations under the provisions
of the Internal Revenue Code (the "Code") and applicable state statutes.
Deferred taxes are provided based on the tax effects of certain temporary
differences between the valuation of assets and liabilities for financial
statement and income tax purposes. Deferred tax balances are adjusted to reflect
tax rates, based on current tax laws, which will be in effect in the years in
which the temporary differences are expected to reverse. Valuation allowances
are established as necessary to reduce deferred tax assets to amounts more
likely than not to be realized. Partners, Mixers, and DGI are limited liability
companies, taxed as partnerships with no income tax liabilities under the
provisions of the Code and applicable state statutes.

Deferred Charges and Intangible Assets

The costs of intangible assets with determinable useful lives are amortized over
the respectful useful life on the straight-line method. The costs of trademarks
and product distribution rights are amortized over their related useful lives of
between 15 to 40 years.

Deferred financing costs are amortized ratably over the life of he related debt.
If debt is retired early, the related unamortized deferred financing costs are
written off in the period debt is retired.

Investments

The investments of the Company in 25% ownership interests of Old Whiskey River
Distilling, LLC and Y Sake, LLC are accounted for under the equity method of
accounting.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense was
approximately $19,100 and $15,700 for the years ended April 30, 2006 and 2005,
respectively.

                                      F-9
<PAGE>

Shipping and Delivery

The Company includes shipping and delivery costs in selling, general and
administrative expenses. Shipping and delivery costs were approximately $101,000
and $16,700 for the years ended April 30, 2006 and 2005, respectively.

Repairs and Maintenance

The Company charges the cost of repairs and maintenance, including the cost of
replacing minor items not constituting substantial betterment, to selling,
general and administrative expenses as these costs are incurred.

Earnings Per Share

The Company computes earnings per share under the provisions of SFAS No. 128,
Earnings per Share, whereby basic earnings per share is computed by dividing net
income (loss) attributable to all classes of common shareholders by the weighted
average number of shares of all classes of common stock outstanding during the
applicable period. Diluted earnings per share is determined in the same manner
as basic earnings per share except that the number of shares is increased to
assume exercise of potentially dilutive and contingently issuable shares using
the treasury stock method, unless the effect of such increase would be
anti-dilutive. For the years ended April 30, 2006 and 2005, the diluted earnings
per share amounts equal basic earnings per share because the Company had net
losses and the impact of the assumed exercise of contingently issuable shares
would have been anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, trade receivables, accounts
payable, current maturities of long-term debt, and notes and loans payable
approximate fair values as of April 30, 2006 because of the short term
maturities of those instruments.

Recent Accounting Pronouncements

In December  2004,  SFAS No. 123R,  "Share-Based  Payment," a revision of SFAS
No. 123,  "Accounting  for  Stock-Based  Compensation,"  was issued.  SFAS No.
123R  replaces  existing  requirements  of SFAS No. 123 and APB Opinion No. 25
"Accounting for Stock-Based  Compensation,"  and requires public  companies to
recognize  the cost of  employee  services  received  in  exchange  for equity
instruments,  with limited exceptions.  SFAS No. 123R also affects the pattern
in which  compensation  cost is recognized,  the accounting for employee share
purchase  plans,  and the  accounting  for income tax  effects of  share-based
payment  transactions.   SFAS  No.  123R  is  effective  for  interim  periods
beginning  after June 15,  2005.  The  Company  is  currently  evaluating  the
effect that SFAS No. 123R will have on its  financial  position and results of
operations,  but does not believe that the adoption of SFAS No. 123R will have
a material impact on its financial position and results of operations.

                                      F-10
<PAGE>

In May 2005 FASB  issued  Statement  No.  154  "Accounting  Changes  and Error
Corrections - a replacement  of APB Opinion No. 20 and FASB  Statement No. 3."
In February 2006 the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement No. 155 "Accounting for Certain Hybrid Financial  Instruments" which
amends FASB  Statement Nos. 133 and 140.  Neither of these two  pronouncements
had an effect on the Company's consolidated financial statements.

3.   Acquisition

On October 27, 2005, the Company acquired certain assets of Rheingold Beer
("Rheingold") and assumed certain obligations from Rheingold Brewing Company,
Inc. ("RBCI"). The purpose of the acquisition was for diversification of the
Company's products and expansion of its distribution base. Holdings issued
724,638 shares of restricted common stock with a fair value of approximately
$86,900 to RBCI and assumed approximately $142,000 of their liabilities and are
contractually obligated to RBCI to issue an additional $500,000 payable in
restricted shares, with a value of $350,000, of Holdings' common stock and
$150,000 cash (with a present value of $136,000 at April 30, 2006), accruing no
interest. The value of the common stock payable shall be based on the 60
calendar day trading price of Holdings' stock prior to October 27, 2006. As of
April 30, 2006 the fair value of such stock aggregated $83,550. The total fair
value of the assets in the Rheingold acquisition included in the accompanying
balance sheet aggregated $402,212 which has been assigned to the fair value of
the Rheingold license rights that expire in 2104 with an option to renew. The
balance of the acquisition price was expensed and charged against net income for
the year ended April 30, 2006. In accordance with SFAS No. 142, since the
license is expected to generate cash flows indefinitely, it will not be
amortized but reviewed annually for impairment. Due to immateriality the
operations of Rheingold have not been included in the accompanying statement of
operations.

4.   Due From Factor

Accounts receivable   $ 80,287
Advances               (42,695)
                      --------

                      $ 37,592
                      ========

The Company had a two-year agreement with a factor, expiring on October, 2005,
which was extended on a month-to-month basis through May 2006 at which time the
Company elected to terminate the relationship. Pursuant to the agreement a
substantial portion of accounts receivable are sold to the factor without
recourse as to bad debts, but with recourse as to all customer claims.
Immediately upon assigning a customer invoice, the Company receives a cash
advance equal to 70% of the invoice amount, and is paid the balance of the
invoice at the time the factor receives the final payment from the customer. No
interest is charged by the factor for outstanding cash advances. Instead the
factor's fee for all services and cash advances is equal to 2.5% of the total of
an assigned invoice, subject to the customer paying in full within 30 days of
the invoice date. The fee increases 1% on a cumulative effect basis in intervals
of 15 days for which the related invoice remains unpaid, up to 7.5% of the
invoice amount if not paid in 90 days from invoice date.

                                      F-11
<PAGE>

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

5.   Inventories

Finished goods   $608,087
Raw materials      16,129
                 --------

                 $624,216
                 ========

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

6.   Trade Credits

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

7.   Property and Equipment

                           Useful Life     Amount
                           -----------   ---------

Computer equipment             5 years   $  23,939
Furniture                      5 years      10,654
Automobile                     4 years      43,840
Leasehold
improvements                   7 years      66,259
Production costs               2 years      30,049
                                         ---------
                                           174,741
Accumulated depreciation and
 amortization                             (117,690)
                                         ---------

                                         $  57,051
                                         =========

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

8.   Intangible Assets/Deferred Loan Costs

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

In addition, intangibles include the costs of the license and related trademarks
purchased in the Rheingold acquisition (see Note 3). Since these intangibles are
considered to have indefinite lives, as they are expected to generate cash
indefinitely, they are currently not amortized but in accordance with SFAS No.
142, are reviewed annually for impairment.

                                      F-12
<PAGE>

                Gross Carrying   Accumulated      Net of
                    Amount       Amortization  Amortization

Trademarks/dist
  rights            $  751,966     $  154,961    $  597,005
License
  rights and
  related
  trademarks           402,212             --       402,212
                    ----------     ----------    ----------
                    $1,154,178     $  154,961    $  999,217
                    ==========     ==========    ==========

Aggregate amortization expense was $267,501 (including $$221,537 for fully
amortized deferred financing costs) and $111,156 for the years ended April 30,
2006 and 2005, respectively.

Estimated annual amortization expenses as of April 30, 2006 for the next five
years are approximately $46,000 (April 30, 2007-2011).

9.   Debt

                       Notes and Loans
                           Payable       Long-Term Debt
                          ----------     --------------

Senior convertible
 notes (a)                $  850,000     $           --
Secured Notes
 Payable (includes
 interest) (b)               104,035                 --
Unsecured note
 payable (includes
 interest) (c)               338,304                 --
Bank line of credit
 (d)                         200,000                 --
Other line of credit
 (e)                         184,898                 --
Convertible notes (f)        250,000                 --
Convertible note (g)         100,000            100,000
Unsecured note
 payable (h)                 100,000                 --
Unsecured note
 payable (i)                 100,000                 --
Due to RBCI (see
 Note 3)                     219,550                 --
Other (j)                     10,789                 --
                          ----------     --------------
                           2,457,576            100,000
Less current portion       2,357,576                 --
                          ----------     --------------

Long-term debt            $  100,000     $      100,000
                          ==========     ==============

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

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


                                      F-13
<PAGE>

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

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

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

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

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

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

                                      F-14
<PAGE>

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

      In connection with these notes the Company also issued warrants to
      purchase 445,646 shares of Holdings' common stock at an exercise price of
      $0.45 per share as follows: warrants for 83,333 shares to the shareholder
      referred to in (e), warrants for 306,757 shares to the unrelated companies
      and warrants for 55,556 to the director of the Company. The warrants are
      exercisable for a five year period from the date of the note. The warrants
      include a cashless exercise provision and anti-dilution protection to the
      holders. The Company had determined, as of the date the notes were issued,
      in accordance with APB 1 4, the warrants had no value.

(g)   On June 15, 2005 DGI borrowed $100,000 from one of the Company's
      shareholders and issued a convertible promissory note which requires
      repayment of principal by June 15, 2008. Interest accrues at 1% above the
      prime rate and is payable on a semi-annual basis. At the option of the
      shareholder, the unpaid principal portion of this note is convertible
      common stock at a conversion price equal to the greater of (1) 20% below
      the average daily closing price for each of the trading days during the
      ninety day period immediately preceding the date the shareholder provides
      notice to the Company the intent to convert, or (2) $1.50 per share. At
      April 30, 2006 interest of $10,172 is included in accrued expenses in the
      accompanying consolidated balance sheet.

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

                                      F-15
<PAGE>

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

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

10.  Accrued Expenses

Payroll and consulting fees owed to
    officers, directors and shareholders   $  266,118
All other payroll and consulting fees         849,210
Interest                                      180,585
Others                                        154,140
                                           ----------

                                           $1,450,053
                                           ==========

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

11.  Shareholders' Deficiency

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

                       2006         2005
                    ----------   ----------

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

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

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

                                      F-16
<PAGE>

                                      Amount
                         Shares      Converted
                       ----------   ----------

Compensation payable
 to officers            1,211,904   $  545,357
Consulting fees
 payable to officer
 and director (a)       1,423,391      640,526
Loan payable to
 minority
 shareholder and
 director (b)             277,778      125,000
Other employees' and
 consultants'
 compensation           1,861,324      837,596
Indemnification of
 board member             350,000      157,500
Other loans               500,000      225,000
                       ----------   ----------

    Total               5,624,397   $2,530,979
                       ==========   ==========

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

On January 25, 2006 the Company reached an agreement with one of its directors
to convert consulting fees owed him aggregating $403,329 into 896,296 restricted
shares of the Company's common stock at a price of $0.45 per share. Also on
January 25, 2006 the Company reached an agreement with an unrelated entity to
convert consulting fees owed to that firm aggregating $90,000 into 200,000
shares of the Company's common stock at a price of $0.45 per share.

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

12.  Income Taxes

No provision for taxes on income is included in the accompanying statements of
operations because of the net operating losses in both fiscal years. Holdings
and Drinks previously filed income tax returns on a June 30 and December 31 tax
year, respectively; however, both companies applied for and received a change in
tax year to April 30. Drinks federal net operating loss carryforward as of April
30, 2006 is approximately $11,300,000, available to offset future years' taxable
income through 2026. The federal net operating loss carryforward of Holdings as
successor to Gourmet Group, Inc. is approximately $1,500,000. Due to the annual
limitations imposed by the Internal Revenue Code arising when shareholder
ownership changes significantly, management feels it is unlikely that the
related tax benefits from this carryforward will be realized in the future.

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

                                      F-17
<PAGE>

Deferred tax asset arising from
Net operating loss                 $ 4,280,000
Accrued compensation                   380,000
Other                                   20,000
                                   -----------
                                     4,680,000
Less valuation allowance            (4,680,000)
                                   -----------

                                   $       --
                                   ===========

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

13.  Related Party Transactions

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

Consulting Fees

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

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

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

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

                                      F-18
<PAGE>

Interest Expense

For the years ended April 30, 2006 and 2005 the Company incurred interest
expense on obligations due the shareholder and entities which he controls
referred to in Notes 9(b), 9(c), and 9(f) aggregated $35,492 and $53,064,
respectively. In addition, interest expense to the member of the Company's board
of directors, referred to in Notes 9(a) and 9(f) aggregated $15,323 and for the
year ended April 30, 2006 and 2005 respectively.

For the years ended April 30, 2006 and 2005 the Company incurred interest
expense on obligations due the member of its board of directors who is referred
to in Note 9(e) aggregated $34,011 and $14,061, respectively. In addition,
indemnification made on behalf of the director through the issuance of 350,000
restricted shares of the Company's common stock resulted in additional interest
expense of $157,500 (see Note 11) for the year ended April 30, 2005.

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

Royalty Fees

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

14.  Customer Concentration

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

15.  Commitments

Lease

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

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

Future minimum payments for all leases are approximately as follows:

                                      F-19
<PAGE>

                      Year Ending
                        April 30,     Amount
                       ----------   ----------
                          2007      $   92,000
                          2008          51,000

License Agreement

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

Litigation

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

On January 18, 2006 the Company was sued by an Australian company which is
affiliated with the Company's Australian wine supplier, in the United States
District Court for the Central District of California. The Plaintiff seeks
recovery of compensatory damages of $450,000, punitive damages of an unspecified
amount, recovery of costs and attorneys' fees based on allegations of nonpayment
of goods. While the Company believes, based on its initial analysis, that while
some amounts may be due the Plaintiff, corresponding counterclaims will
substantially reduce that amount ultimately paid. The Company intends to move to
dismiss this action.

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

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

16.  Subsequent Event

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

                                      F-20
<PAGE>

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

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

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

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

In July 2006 the Company borrowed an aggregate of $300,000 from two entities
which are affiliated with one another and issued convertible promissory notes.
These notes are payable in January 2007 and are convertible into shares of
Holding's common stock at $0.50 per share. In lieu of interest the Company
issued warrants to purchase an aggregate of 300,000 shares of Holding's common
stock for $0.50 per share. These warrants are currently exercisable for a
five-year period.

In August the Company borrowed $400,000 and issued a convertible promissory note
in like amount. This note is due and payable in February 2007 and bears interest
at the rate of 10% per annum and is convertible into shares of Holding's common
stock at $0.60 per share. In connection with this loan, the Company issued
333,333 shares of our Holding's common stock and agreed to issue such additional
shares as may be necessary to cause the value of the shares on the date of issue
to equal not less than $200,000 based on the average closing price of Holding's
common stock for the five trading days immediately preceding the date of issue.


                                      F-21
<PAGE>