----

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| Colorado                                                       |   | 20-1892264                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification Number) |

| Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer o | Smaller Reporting Company x |
|---------------------------|---------------------|-------------------------|-----------------------------|

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|      |                                                                                         |   |
|-----------|----------------------------------------------------------------------------------------------|--------|
|      |                                                                                         | Page   |
|      | PART I.—FINANCIAL INFORMATION                                                          |   |
| Item 1.   | Financial Statements                                                                         |   |
|      | Consolidated Balance Sheets                                                                  | 2      |
|      | Consolidated Statements of Operations (Unaudited)                                            | 3      |
|      | Consolidated Statements of Cash Flows (Unaudited)                                            | 4      |
|      | Consolidated Statements of Stockholders' Deficit (Unaudited)                                 | 5      |
|      | Notes to Consolidated Financial Statements (Unaudited)                                       | 6      |
| Item 2.   | Management’s Discussion and Analysis of Financial Conditions and Results of Operations | 16     |
| Item 3.   | Quantitative and Qualitative Disclosures About Market Risks                                  | 23     |
| Item 4.   | Controls and Procedures                                                                      | 23     |
|      |                                                                                         |   |
|      | PART II—OTHER INFORMATION                                                              |   |
| Item 1.   | Legal Proceedings                                                                            | 24     |
| Item 2.   | Unregistered Sales of Equity Securities and Use of Proceeds                                  | 24     |
| Item 3.   | Defaults Upon Senior Securities                                                              | 24     |
| Item 4.   | Removed and Reserved                                                                         | 24     |
| Item 5.   | Other Information                                                                            | 24     |
| Item 6.   | Exhibits                                                                                     | 25     |
| SIGNATURE | 26                                                                                           |

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|                                                                                          |   |    |        |   |         |   |
|-----------------------------------------------------------------------------------------------|--------|---------|-------------|--------|--------------|--------|
|                                                                                          |   |    |        |   |         |   |
|                                                                                          |   | June 30 |        |   | December 31, |   |
|                                                                                          |   | 2011    |        |   | 2010         |   |
|                                                                                          |   |    |        |   | (Audited)    |   |
|                                                                                          |   |    |        |   |         |   |
|  Assets                                                                                  |   |    |        |   |         |   |
|  Current assets                                                                          |   |    |        |   |         |   |
|  Cash and cash equivalents                                                               |   | $       | 103,434     |   |         | $      | 23,234 |   |
|  Accounts receivable                                                                     |   |    | 78,772      |   |         |   | 72,857 |   |
|  Inventory                                                                               |   |    | 180,451     |   |         |   | 305,307 |   |
|  Total current assets                                                                    |   |    | 362,657     |   |         |   | 401,398 |   |
|                                                                                          |   |    |        |   |         |   |   |   |
|  Property and equipment, net                                                             |   |    | 61,341      |   |         |   | 109,418 |   |
|                                                                                          |   |    |        |   |         |   |   |   |
|  Total assets                                                                            |   | $       | 423,998     |   |         | $      | 510,816 |   |
|                                                                                          |   |    |        |   |         |   |   |   |
|  Liabilities                                                                             |   |    |        |   |         |   |   |   |
|  Current liabilities                                                                     |   |    |        |   |         |   |   |   |
|  Accounts payable                                                                        |   | $       | 260,774     |   |         | $      | 388,447 |   |
|  Accrued interest payable                                                                |   |    | 596,744     |   |         |   | 330,723 |   |
|  Accrued liabilities                                                                     |   |    | 637         |   |         |   | 637 |   |
|  Related party payable                                                                   |   |    | 949,038     |   |         |   | 637,392 |   |
|  Warrant liability                                                                       |   |    | -           |   |         |   | 1,448,400 |   |
|  Short-term notes payable and current portion of long-term debt                          |   |    | 2,256,765   |   |         |   | 1,301,074 |   |
|  Total current liabilities                                                               |   |    | 4,063,958   |   |         |   | 4,106,673 |   |
|  Long-term debt  to related party                                              |   |    | 1,650,841   |   |         |   | 1,650,841 |   |
|  Long-term debt (Net of Unamortized Discount of $1,106,111 in 2011 and $919,624 in 2010) |   |    | 2,655,168   |   |         |   | 2,673,559 |   |
|  Total liabilities                                                                       |   |    | 8,369,967   |   |         |   | 8,431,073 |   |
|                                                                                          |   |    |        |   |         |   |   |   |
|  Stockholders' deficit                                                                   |   |    |        |   |         |   |   |   |
| Preferred Stock, $0.001 par value; 25,000,000 shares authorized                               |   |    |        |   |         |
| Series A Preferred Stock, 100,000 shares authorized; shares issued                            |   |
|  and outstanding - 91,111 shares in 2011 and 2010                                        |   |    | 91          |   |         |   | 91 |   |
| Series B Preferred Stock, 2,500 shares authorized; shares issued                              |   |    |        |   |         |
|  and outstanding - 70 shares in 2011 and  0 shares in 2010                     |   |    | 383,790     |   |         |   | - |   |
|  Common Stock, $0.001 par value; 500,000,000                                             |   |    |        |   |         |   |   |   |
| shares authorized; shares issued and outstanding                                              |   |    |        |   |         |
|  - 40,397,385 in 2011 and 30,216,778 in 2010                                             |   |    | 312,349     |   |         |   | 302,168 |   |
|  Additional paid in capital                                                              |   |    | 75,537,917  |   |         |   | 71,965,937 |   |
|  Issuances in exchange for promotional consideration                                     |   |    | (62,943     | )      |         |   | (158,776 | ) |
|  Accumulated deficit                                                                     |   |    | (84,117,173 | )      |         |   | (80,029,677 | ) |
|  Total stockholders' deficit                                                             |   |    | (7,945,969  | )      |         |   | (7,920,257 | ) |
|                                                                                          |   |    |        |   |         |   |   |   |
|  Total liabilities and stockholders' deficit                                             |   | $       | 423,998     |   |         | $      | 510,816 |   |
|                                                                                          |   |    |        |   |         |   |   |   |

----

|                                                                                                                                                                                                                                                 |   | Three Months Ended June 30, |        |   | Six Months Ended June 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-------------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                                 |   | 2011                        |        |   | 2010                      |   |   | 2011 |   |   | 2010 |   |
| Net Revenues                                                                                                                                                                                                                                         |   | $                           | 174,656     |   |                      | $      | 208,055 |   |   | $ | 303,617 |   |   | $ | 353,990 |   |
| Cost of goods sold                                                                                                                                                                                                                                   |   | $                           | 119,797     |   |                      | $      | 172,543 |   |   | $ | 192,351 |   |   | $ | 302,181 |   |
| Gross margin                                                                                                                                                                                                                                         |   |                        | 54,859      |   |                      |   | 35,512 |   |   |   | 111,266 |   |   |   | 51,809 |   |
|                                                                                                                                                                                                                                                 |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                                                                                                                                                                                                                                   |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative (includes share based compensation of $222,000  for 3 months  and $1,049,092 for six months ended June 30, 2011 and $160,320 for 3 months  and $177,116 for six months ended June 30, 2010) |   |                        | 814,612     |   |                      |   | 948,845 |   |   |   | 2,119,319 |   |   |   | 1,580,388 |   |
| Sales and marketing (includes share based compensation of $67,083  for 3 months  and $250,552 for six months ended June 30, 2011 and $321,120 for 3 months  and $356,326 for six months ended June 30, 2010)           |   |                        | 810,106     |   |                      |   | 589,611 |   |   |   | 1,240,125 |   |   |   | 868,547 |   |
| Depreciation and amortization                                                                                                                                                                                                                        |   |                        | 21,475      |   |                      |   | 21,475 |   |   |   | 42,950 |   |   |   | 42,950 |   |
| Total operating expenses                                                                                                                                                                                                                             |   |                        | 1,646,193   |   |                      |   | 1,559,931 |   |   |   | 3,402,394 |   |   |   | 2,491,885 |   |
| Loss from operations                                                                                                                                                                                                                                 |   |                        | (1,591,334  | )      |                      |   | (1,524,419 | ) |   |   | (3,291,128 | ) |   |   | (2,440,076 | ) |
|                                                                                                                                                                                                                                                 |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Other Expense (Income)                                                                                                                                                                                                                               |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                                                                                                                                                                                                     |   |                        | 307,988     |   |                      |   | 457,315 |   |   |   | 583,667 |   |   |   | 739,396 |   |
| Interest expense - warrant liability                                                                                                                                                                                                                 |   |                        | (1,153,800  | )      |                      |   | 587,600 |   |   |   | (1,063,800 | ) |   |   | 882,600 |   |
| Loss (gain) on retirement of debt                                                                                                                                                                                                                    |   |                        | 116,000     |   |                      |   | 1,165,862 |   |   |   | 1,276,500 |   |   |   | 1,299,491 |   |
| Total other expense (income)                                                                                                                                                                                                                         |   |                        | (729,812    | )      |                      |   | 2,210,777 |   |   |   | 796,367 |   |   |   | 2,921,487 |   |
|                                                                                                                                                                                                                                                 |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                                                                                                                                                                                             |   | $                           | (861,522    | )      |                      | $      | (3,735,196 | ) |   | $ | (4,087,495 | ) |   | $ | (5,361,563 | ) |
|                                                                                                                                                                                                                                                 |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding                                                                                                                                                                                                 |   |                        | 374,193,849 |   |                      |   | 227,714,765 |   |   |   | 353,070,814 |   |   |   | 221,769,765 |   |
|                                                                                                                                                                                                                                                 |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per common share                                                                                                                                                                                                          |   | $                           | (0.00       | )      |                      | $      | (0.02 | ) |   | $ | (0.01 | ) |   | $ | (0.02 | ) |

----

|                                                                             |   | Six Months Ended June 30, |       |
|----------------------------------------------------------------------------------|--------|---------------------------|------------|
|                                                                             |   | 2011                      |       |   | 2010 |   |
| Cash used in operating activities                                                |   |                      |       |   |   |   |
| Net loss                                                                         |   | $                         | (4,087,496 | ) |   | $ | (5,361,563 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                      |       |   |   |   |   |   |
| Depreciation and amortization                                                    |   |                      | 42,950     |   |   |   | 42,950 |   |
| Common stock issued for services                                                 |   |                      | 1,348,394  |   |   |   | 718,440 |   |
| Loss on retirement of debt                                                       |   |                      | 1,276,500  |   |   |   | 1,295,985 |   |
| Amortization of debt discount                                                    |   |                      | 210,385    |   |   |   | 248,936 |   |
| Loss on sale of P&E                                                          |   |                      | 5,127      |   |   |   | - |   |
| Changes in operating assets and liabilities:                                     |   |                      |       |   |   |   |   |   |
| Accounts receivable                                                              |   |                      | (5,915     | ) |   |   | 65,058 |   |
| Inventory                                                                        |   |                      | 124,856    |   |   |   | (6,566 | ) |
| Accounts payable                                                                 |   |                      | (127,673   | ) |   |   | (112,429 | ) |
| Accrued interest payable                                                         |   |                      | 376,970    |   |   |   | 274,555 |   |
| Accrued liabilities                                                              |   |                      | -          |   |   |   | (6,680 | ) |
| Related party payable                                                            |   |                      | 311,646    |   |   |   | 285,026 |   |
| Warrant liability                                                                |   |                      | (1,063,800 | ) |   |   | 882,600 |   |
| Net cash used in operating activities                                            |   |                      | (1,588,056 | ) |   |   | (1,673,688 | ) |
| Cash used in investing activities                                                |   |                      |       |   |   |   |   |   |
| Purchase of property and equipment                                               |   |                      | -          |   |   |   | (21,287 | ) |
| Net cash used in investing activities                                            |   |                      | -          |   |   |   | (21,287 | ) |
| Cash provided by financing activities                                            |   |                      |       |   |   |   |   |   |
| Proceeds from issuance of common stock                                           |   |                      | -          |   |   |   | 576,500 |   |
| Proceeds from notes payable                                                      |   |                      | 1,703,000  |   |   |   | 1,077,406 |   |
| Payment on notes payable                                                         |   |                      | (34,744    | ) |   |   | - |   |
| Net cash provided by financing activities                                        |   |                      | 1,668,256  |   |   |   | 1,653,906 |   |
| Net increase in cash and cash equivalents                                        |   |                      | 80,200     |   |   |   | (41,069 | ) |
| Cash and cash equivalents                                                        |   |                      |       |   |   |   |   |   |
| Beginning of period                                                              |   |                      | 23,234     |   |   |   | 81,362 |   |
| End of period                                                                    |   | $                         | 103,434    |   |   | $ | 40,293 |   |
|                                                                             |   |                      |       |   |   |   | 0 |   |
|                                                                             |   |                      |       |   |   |   |   |   |
| Supplemental Disclosure of Noncash Investing and Financing Activities            |   |                      |       |   |   |   |   |   |
| Common stock issued for retirement of debt and accrued int                       |   | $                         | 1,752,500  |   |   | $ | 2,088,386 |   |
| Common stock issued for warrants                                                 |   | $                         | 384,600    |   |   | $ | - |   |
| Discount on common and preferred stock                                           |   | $                         | 576,290    |   |   | $ | 466,567 |   |
| Accrued interest converted to common stock                                       |   | $                         | 110,949    |   |   | $ | - |   |
| Notes payable converted to common stock                                          |   | $                         | 365,051    |   |   | $ | - |   |
| Supplemental Disclosure                                                          |   |                      |       |   |   |   |   |   |
| Interest paid                                                                    |   | $                         | 8,653      |   |   | $ | 79,894 |   |

----

|                                                        |   | Series A Preferred |   |   |                     |   |   |         |   |   |    |   |   |       |    |   | Additional  |   |       |          |    |   |      |   |       | Total   |       |
|-------------------------------------------------------------|--------|--------------------|--------|--------|--------------------------|--------|--------|--------------|--------|--------|---------|--------|--------|------------|---------|--------|-------------|--------|------------|---------------|---------|--------|-----------|--------|------------|---------|------------|
|                                                        |   | Stock              |   |   | Series B Preferred Stock |   |   | Common Stock |   |   | Paid in |   |   | Additional |    |   | Accumulated |   |       | Stockholders' |    |
|                                                        |   | Shares             |   |   | Amount                   |   |   | Shares       |   |   | Amount  |   |   | Shares     |    |   | Amount      |   |       | Capital       |    |   | Issuances |   |       | Deficit |       |   | Deficit |   |
| Balance, Dec 31, 2010                                       |   |               | 91,111 |   |                     | $      | 91     |         |   |   |    |   |   |       |    |   | 30,216,778  |   |       | $             | 302,168 |   |      | $      | 71,965,937 |    |       | $ | (158,776 | ) |   | $ | (80,029,678 | ) |   | $ | (7,920,258 | ) |
| Preferred Stock issued with Debt                            |   |               |   |   |                     |   |   |         |   |   | 70      |   |   |       | 383,790 |   |        |   |       |          |    |   |      |   |       |    |       |   |   |   |   |   |   |   |   |   |   |   | 383,790 |   |
|                                                        |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   |       |          |    |   |      |   |       |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in exchange forservices                 |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   | 2,354,607  |          |    |   | 2,355     |   |       |    | 1,250,206  |   |   |   | 95,833 |   |   |   |   |   |   |   | 1,348,394 |   |
| Common stock issued in exchange for retirement of debt |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   | 3,675,000  |          |    |   | 3,675     |   |       |    | 1,748,825  |   |   |   |   |   |   |   |   |   |   |   | 1,752,500 |   |
| Common stock issued in conjunction with debt offering  |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   | 305,000    |          |    |   | 305       |   |       |    | 192,195    |   |   |   |   |   |   |   |   |   |   |   | 192,500 |   |
| Common Stock issued for warrants                            |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   | 3,846,000  |          |    |   | 3,846     |   |       |    | 380,754    |   |   |   |   |   |   |   |   |   |   |   | 384,600 |   |
| Net loss                                                    |   |               |   |   |                     |   |   |         |   |   |    |   |   |       |    |   |        |   |       |          |    |   |      |   |       |    |       |   |   |   |   |   |   |   | (4,087,495 | ) |   |   | (4,087,495 | ) |
| Balance, June 30, 2011                                      |   |               | 91,111 |   |                     | $      | 91     |         |   |   | 70      |   |   | $          | 383,790 |   |        |   | 40,397,385 |          |    | $      | 312,349   |   |       | $       | 75,537,917 |   |   | $ | (62,943 | ) |   |   | (84,117,173 | ) |   | $ | (7,945,969 | ) |

----

| 1.   | Business and Significant Accounting Policies |
|----------------|----------------------------------------------|

----

|                       |   | Period Ended |   |
|----------------------------|--------|--------------|--------|
|                       |   | 12/31/2008   |   |   | 12/31/2009 |   | 12/31/10 |   |
| Sales Reversed             |   | $            | -      |   |   | $ | 74,584 |   |   |   |
| COGS Reversed              |   | $            | -      |   |   | $ | 47,105 |   |   |   |
| Marketing Expense Recorded |   | $            | -      |   |   | $ | 53,997 |   |   |   |
| Product by CEO             |   | $            | -      |   |   |   |   |   |   | $ | 35,000 |   |

----

| 2.   | Inventory |
|----------------|-----------|

|                       |   | June 30, |    |   | December 31, |   |
|----------------------------|--------|----------|---------|--------|--------------|--------|
|                       |   | 2011     |    |   | 2010         |   |
| Finished goods             |   | $        | 93,491  |   |         | $      | 174,555 |   |
| Work in process            |   | $        | 43,339  |   |         | $      | 71,358 |   |
| Raw materials              |   | $        | 43,621  |   |         | $      | 59,394 |   |
|                       |   | $        | 180,451 |   |         | $      | 305,307 |   |
| Allowance for obsolescence |   | $        | -       |   |         | $      | - |   |
|                       |   | $        | 180,451 |   |         | $      | 305,307 |   |

| 3.   | Property and Equipment |
|----------------|------------------------|

|                          |   | June 30, |     |   | December 31 |   |
|-------------------------------|--------|----------|----------|--------|-------------|--------|
|                          |   | 2011     |     |   | 2010        |   |
| Leasehold improvements        |   | $        | 14,004   |   |        | $      | 14,004 |   |
| Office furniture and fixtures |   |     | 31,521   |   |        |   | 31,521 |   |
| Vehicles                      |   |     | 226,843  |   |        |   | 231,970 |   |
| Warehouse equipment           |   |     | 103,134  |   |        |   | 103,134 |   |
| Computer equipment            |   |     | 75,170   |   |        |   | 75,170 |   |
|                          |   |     | 450,672  |   |        |   | 455,799 |   |
| Accumulated depreciation      |   |     | (389,331 | )      |        |   | (346,381 | ) |
|                          |   | $        | 61,341   |   |        | $      | 109,418 |   |

----

| 4.   | Commitments and Contingencies |
|----------------|-------------------------------|

| Years Ending December 31,  |   |   |    |
|----------------------------|--------|--------|---------|
|                       |   |   |    |
| Remaining 6 months of 2011 |   | $      | 101,975 |   |
| 2012                       |   | $      | 206,832 |   |
| 2013                       |   | $      | 69,260  |   |

| Years Ending December 31,  |   |   |      |
|----------------------------|--------|--------|-----------|
|                       |   |   |      |
| Remaining 6 months of 2011 |   | $      | 440,625   |   |
| 2012                       |   | $      | 962,812   |   |
| 2013                       |   | $      | 1,007,031 |   |
| 2014                       |   | $      | 750,000   |   |

----

| 5.   | Notes Payable |
|----------------|---------------|

|                                                     |   | Current |      |   | Long Term |   |       | Total  |   |
|----------------------------------------------------------|--------|---------|-----------|--------|-----------|--------|------------|--------|--------|
| 1 Note payable, originated in 2004, due in 2006,         |   | $       | 538,891   |   |      | $      | -          |   |   | $ | 538,891 |   |
| 6% interest rate, secured by assets of                   |   |    |      |   |      |   |       |   |   |   |   |   |
|  DC Brands, LLC, a wholly owned subsidiary          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand,        |   |    | 242,188   |   |      |   | -          |   |   |   | 242,188 |   |
| non interest bearing, unsecured                          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand,        |   |    | 14,500    |   |      |   | -          |   |   |   | 14,500 |   |
| non interest bearing, unsecured                          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2007, due in 2007,          |   |    | 10,000    |   |      |   | -          |   |   |   | 10,000 |   |
| 36% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Notes payable originated in 2007, due in 2008,         |   |    | 14,266    |   |      |   | -          |   |   |   | 14,266 |   |
| 24% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 7 Notes payable, originated in 2008,                     |   |    | 462,874   |   |      |   | -          |   |   |   | 462,874 |   |
| due at various dates from July to August                 |   |    |      |   |      |   |       |   |   |   |   |   |
| 2010, 15% interest, unsecured                            |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2010, due                 |   |    | -         |   |      |   | 2,029,156  |   |   |   | 2,029,156 |   |
| January 1, 2015, 10.25% interest, unsecured              |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 3 Notes payable, originated in 2010, due                 |   |    | 592,933   |   |      |   | -          |   |   |   | 592,933 |   |
| July 1, 2013, callable by Noteholders after              |   |    |      |   |      |   |       |   |   |   |   |   |
| January 1, 2012,   6% interest, unsecured |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable, originated in 2010, due                  |   |    | -         |   |      |   | 333,209    |   |   |   | 333,209 |   |
| July 1, 2013, 16% interest, unsecured                    |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 12 Notes payable, originated in 2010 and 2011, due       |   |    | -         |   |      |   | 1,078,333  |   |   |   | 1,078,333 |   |
| due at various dates from July 2013 to March 2014,       |   |    |      |   |      |   |       |   |   |   |   |   |
| 16% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 3 Notes payable, originated in 2011, due to be           |   |    | 375,000   |   |      |   | 500,000    |   |   |   | 875,000 |   |
| repaid from a portion of gross sales beginning in        |   |    |      |   |      |   |       |   |   |   |   |   |
| Feb 2012, 16% interest, unsecured                        |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2007, due in              |   |    | 6,113     |   |      |   | -          |   |   |   | 6,113 |   |
| monthly installments, maturing 2011 to 2012, interest    |   |    |      |   |      |   |       |   |   |   |   |   |
| from 1.9% to 11%, secured by motor vehicles              |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    | 2,256,765 |   |      |   | 3,940,698  |   |   |   | 6,197,463 |   |
| Unamortized discount                                     |   |    | -         |   |      |   | (1,285,530 | )      |   |   | (1,285,530 | ) |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   | $       | 2,256,765 |   |      | $      | 2,655,168  |   |   | $ | 4,911,933 |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| Related party notes                                      |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2010, callable            |   | $       | -         |   |      | $      | 1,650,841  |   |   | $ | 1,650,841 |   |
| with 366 day notice, 10% interest, unsecured             |   |    |      |   |      |   |       |   |   |   |   |   |

----

|                                                                                                                                           |   | Current |      |   | Long Term |   |      | Total  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-----------|--------|-----------|--------|-----------|--------|--------|
| 1 Note payable, originated in 2004, due in 2006, 6% interest rate, secured by assets of D C Brands, LLC, a wholly owned subsidiary             |   |    | 541,995   |   |      |   | -         |   |   |   | 541,995 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand, non interest bearing, unsecured                                                              |   |    | 242,188   |   |      |   | -         |   |   |   | 242,188 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand, non interest bearing, unsecured                                                              |   |    | 14,500    |   |      |   | -         |   |   |   | 14,500 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Note payable originated in 2007, due in 2007,36% interest, unsecured                                                               |   |    | 10,000    |   |      |   | -         |   |   |   | 10,000 |   |
|                                                                                                                            |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Notes payable originated in 2007, due in 2008,24% interest, unsecured                                                                        |   |    | 14,266    |   |      |   | -         |   |   |   | 14,266 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 7 Notes payable, originated in 2008, due at various dates from July to A ugust 2010, 15% interest, unsecured                                   |   |    | 462,873   |   |      |   | -         |   |   |   | 462,873 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Note payable, originated in 2010, due January 1, 2015, 10.25% interest, unsecured                                                            |   |    | -         |   |      |   | 1,893,708 |   |   |   | 1,893,708 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 3 Notes payable, originated in 2010, due July 1, 2013, callable after January 1, 2012 6% interest, unsecured                                   |   |    | -         |   |      |   | 592,933   |   |   |   | 592,933 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 1 Note payable, originated in 2010, due July 1, 2013, 16% interest, unsecured                                                                  |   |    | -         |   |      |   | 333,209   |   |   |   | 333,209 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 9 Notes payable, originated in 2010, duedue at various dates from July to September 2013, 16% interest, unsecured                              |   |    | -         |   |      |   | 773,333   |   |   |   | 773,333 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| 2 Notes payable, originated in 2007, due in monthly installments, maturing 2011 to 2012, interest from 1.9% to 11% , secured by motor vehicles |   |    | 15,252    |   |      |   | -         |   |   |   | 15,252 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   |    | 1,301,074 |   |      |   | 3,593,183 |   |   |   | 4,894,257 |   |
| Unamortized discount                                                                                                                           |   |    | -         |   |      |   | (919,624  | )      |   |   | (919,624 | ) |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
|                                                                                                                                           |   | $       | 1,301,074 |   |      | $      | 2,673,559 |   |   | $ | 3,974,633 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |
| Related party notes                                                                                                                            |   |    |      |   |      |   |      |   |   |   |   |   |
| 2 Notes payable, originated in 2010, callable w ith 366 day notice, 10% interest, unsecured                                                    |   | $       | -         |   |      | $      | 1,650,841 |   |   | $ | 1,650,841 |   |
|                                                                                                                                           |   |    |      |   |      |   |      |   |   |   |   |   |

----

| 6.   | Income Taxes |
|----------------|--------------|

| 7.   | Stockholders’ Equity |
|----------------|----------------------------|

----

----

----

| 8.   | Share Based Compensation Expense |
|----------------|----------------------------------|

|                       |   | Three months ended June 30, |    |   | Six months ended June 30, |   |
|----------------------------|--------|-----------------------------|---------|--------|---------------------------|--------|
|                       |   | 2011                        |    |   | 2010                      |   |   | 2011 |   |   | 2010 |   |
| General and administrative |   | $                           | 222,000 |   |                      | $      | 160,320 |   |   | $ | 1,049,092 |   |   | $ | 177,116 |   |
| Sales and marketing        |   |                        | 67,083  |   |                      |   | 321,120 |   |   |   | 250,552 |   |   |   | 356,326 |   |
|                       |   | $                           | 289,083 |   |                      | $      | 481,440 |   |   | $ | 1,299,644 |   |   | $ | 533,442 |   |

| 9.   | Related Party Transactions |
|----------------|----------------------------|

| 10.   | Subsequent Events |
|-----------------|-------------------|

----

----

----

----

|                                                     |   |    |      |   |      |   |       |   |   |
|----------------------------------------------------------|--------|---------|-----------|--------|-----------|--------|------------|--------|--------|
|                                                     |   | Current |      |   | Long Term |   |       | Total  |   |
| 1 Note payable, originated in 2004, due in 2006,         |   | $       | 538,891   |   |      | $      | -          |   |   | $ | 538,891 |   |
| 6% interest rate, secured by assets of                   |   |    |      |   |      |   |       |   |   |   |   |   |
|  DC Brands, LLC, a wholly owned subsidiary          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand,        |   |    | 242,188   |   |      |   | -          |   |   |   | 242,188 |   |
| non interest bearing, unsecured                          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2005, due on demand,        |   |    | 14,500    |   |      |   | -          |   |   |   | 14,500 |   |
| non interest bearing, unsecured                          |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable originated in 2007, due in 2007,          |   |    | 10,000    |   |      |   | -          |   |   |   | 10,000 |   |
| 36% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Notes payable originated in 2007, due in 2008,         |   |    | 14,266    |   |      |   | -          |   |   |   | 14,266 |   |
| 24% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 7 Notes payable, originated in 2008,                     |   |    | 462,874   |   |      |   | -          |   |   |   | 462,874 |   |
| due at various dates from July to August                 |   |    |      |   |      |   |       |   |   |   |   |   |
| 2010, 15% interest, unsecured                            |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2010, due                 |   |    | -         |   |      |   | 2,029,156  |   |   |   | 2,029,156 |   |
| January 1, 2015, 10.25% interest, unsecured              |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 3 Notes payable, originated in 2010, due                 |   |    | 592,933   |   |      |   | -          |   |   |   | 592,933 |   |
| July 1, 2013, callable by Noteholders after              |   |    |      |   |      |   |       |   |   |   |   |   |
| January 1, 2012,   6% interest, unsecured |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 1 Note payable, originated in 2010, due                  |   |    | -         |   |      |   | 333,209    |   |   |   | 333,209 |   |
| July 1, 2013, 16% interest, unsecured                    |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 12 Notes payable, originated in 2010 and 2011, due       |   |    | -         |   |      |   | 1,078,333  |   |   |   | 1,078,333 |   |
| due at various dates from July 2013 to March 2014,       |   |    |      |   |      |   |       |   |   |   |   |   |
| 16% interest, unsecured                                  |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 3 Notes payable, originated in 2011, due to be           |   |    | 375,000   |   |      |   | 500,000    |   |   |   | 875,000 |   |
| repaid from a portion of gross sales beginning in        |   |    |      |   |      |   |       |   |   |   |   |   |
| Feb 2012, 16% interest, unsecured                        |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2007, due in              |   |    | 6,113     |   |      |   | -          |   |   |   | 6,113 |   |
| monthly installments, maturing 2011 to 2012, interest    |   |    |      |   |      |   |       |   |   |   |   |   |
| from 1.9% to 11%, secured by motor vehicles              |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   |    | 2,256,765 |   |      |   | 3,940,698  |   |   |   | 6,197,463 |   |
| Unamortized discount                                     |   |    | -         |   |      |   | (1,285,530 | )      |   |   | (1,285,530 | ) |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
|                                                     |   | $       | 2,256,765 |   |      | $      | 2,655,168  |   |   | $ | 4,911,933 |   |
|                                                     |   |    |      |   |      |   |       |   |   |   |   |   |
| Related party notes                                      |   |    |      |   |      |   |       |   |   |   |   |   |
| 2 Notes payable, originated in 2010, callable            |   | $       | -         |   |      | $      | 1,650,841  |   |   | $ | 1,650,841 |   |
| with 366 day notice, 10% interest, unsecured             |   |    |      |   |      |   |       |   |   |   |   |   |

----

----

----

| Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities.                             |
|----------|-----------------------------------------------------------------------------------------------------------------------------------|
| Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data                                        |
| Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions. |

----

----

----

| RegulationS-B Number |   | Exhibit                                                                                                                                            |
|----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1                 |   | Certification of the Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                           |
|                 |   |                                                                                                                                               |
| 31.2                 |   | Certification of the Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                      |
|                 |   |                                                                                                                                               |
| 32.1                 |   | Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act      |
|                 |   |                                                                                                                                               |
| 32.2                 |   | Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act |

----

| DATE:  September 22 , 2011 | DC BRANDS INTERNATIONAL, INC.(Registrant) |
|----------------------------|-------------------------------------------|
|                       |                                      |   |
|                       | By:                                       | /s/Richard Pearce |
|                       |                                      | Richard Pearce President andChief Executive Officer(Principal Executive Officer) |

----