`U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB
(Mark One)

/X/   Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934.

                    For the annual period ended May 31, 2003

/ /   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the transition period from ______ to ______.

                        Commission file number 033-91432


                             NEW WORLD BRANDS, INC.
        (Exact name of small business issuer as specified in its charter)

                 Delaware                               02-0401674
        (State or other jurisdiction of              (I.R.S. Employer
         incorporation or organization)             Identification No.)

          901 N.E. 125th Street, Suite 120, North Miami, Florida, 33161
                    (Address of principal executive offices)

                                 (305) 891-7389
                              (Issuer's telephone)

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 there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the 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. [ ]

The Registrant's revenues for its most recent fiscal year: $ 294,063 Number of
shares of common stock outstanding as of August 25, 2003: 20,403,939 The
aggregate market value of voting and non-voting Common Stock (14,063,939 shares)
held by non-affiliates computed by reference to the closing price of the Common
Stock as of August 25, 2003: $7,172,609

Transitional Small Business Disclosure Format (check one):  Yes [ ]  No [X].



                                       1



PART I

Item 1.  Business

        New World Brands, Inc. (formerly Oak Tree Medical Systems, Inc.), a
Delaware corporation, and its subsidiaries (the "Company") import wine and
spirits for distribution in the United States. The Company holds the exclusive
distribution rights for the wines of Vinicola L.A. Cetto, S.A. de C.V. ("L.A.
Cetto") in the United States. The Company has established arrangements for
distribution of its products with major wine and spirit wholesale distributors
from New York to California. The Company is in the initial stages of developing
its relationships with suppliers and customers, and is currently dependent on
one supplier and had two customers that represented in excess of 10% of total
sales in fiscal 2003.

        On October 16, 2001, the Company entered into a "Plan and Agreement of
Reorganization" with International Importers, Inc. ("Importers") whereby all
shares of common stock of Importers were converted into and became the right to
receive, in the aggregate, 5,500,000 shares of the Company's common stock. For
accounting purposes, the acquisition of Importers is being recorded as a
recapitalization of Importers, with Importers as the acquirer.

        On October 17, 2001, the Board of Directors adopted a resolution to
change the Company's name to New World Brands, Inc. This reflects the new
business plan of the company after the October 16, 2001 reorganization with
Importers, a wine and spirits importer.

Employees

        As of May 31, 2003 the Company had four full-time employees and no
part-time employees.

Item 2.  Property

        The Company leases it's headquarter office located at 901 NE 125th
Street, Suite 120, North Miami, Florida 33161.

Item 3.  Legal Proceedings

        The Company is not party to any material litigation or other proceedings
that management believes would result in judgments that would have a material
adverse effect on the Company.

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

        Not Applicable.



                                       2



PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

        The Company's Common Stock is currently traded in the over-the-counter
market on the OTC Electronic Bulletin Board of the National Association of
Securities Dealers (the "NASD"). The following table sets forth, for the fiscal
quarters indicated, high and low closing bid prices for the Common Stock in the
over-the-counter market as reported by the NASD. The information below reflects
inter-dealer prices, without retail mark-up, mark-down or commissions, and may
not necessarily represent actual transactions.


                                                             Low Bid  High Bid
                                                             -------  --------
Fiscal Year Ended May 31, 2003
         First Quarter.......................................$0.100    $0.460
         Second Quarter...................................... 0.150     0.320
         Third Quarter....................................... 0.160     0.300
         Fourth Quarter...................................... 0.160     0.600

Fiscal Year Ended May 31, 2002
         First Quarter.......................................$0.090    $0.389
         Second Quarter...................................... 0.100     0.750
         Third Quarter....................................... 0.370     0.080
         Fourth Quarter...................................... 0.350     0.700

        As of August 25, 2003, there were approximately 157 holders of record of
the Company's Common Stock. The closing bid and asked prices for the Company's
Common Stock on August 25, 2003, were $.49 and $.51 respectively.

        The Company has not paid any cash dividends on its Common Stock to date,
and the Company does not contemplate the payment of cash dividends in the
foreseeable future. The future dividend policy will depend on the Company's
earnings, capital requirements, financial condition, and other factors
considered relevant to the Company's ability to pay dividends.

        The following table provides information, as of May 31, 2003, with
respect to all of our compensation plans under which equity securities are
authorized for issuance:

                                         Number of securities
                                          to be issued upon        Weighted average
                                              exercise of          exercise price of     Number of securities
                                         outstanding options,    outstanding options,    remaining available
        Plan Category                    warrants and rights     warrants and rights     for future issuance
-------------------------------------------------------------------------------------------------------------
Plans approved by stockholders
Plans not approved by stockholders             430,000                   $0.19               4,800,000
                                            -----------                                     -----------
                                               430,000                                       4,800,000
                                            ===========                                     ===========


                                       3



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

General

        On October 16, 2001 the Company entered into a Plan and Agreement of
Reorganization with International Importers, Inc. ("Importers") a wine and
spirits importer. The Company now is engaged in the business of importing wine
and spirits for distribution in the continental United States.

        Until May 31, 2000, the Company engaged in the business of operating and
managing physical therapy care centers. As of May 31, 2000, the Company closed
the one remaining facility that was acquired in October 1996 because the cash
flow from this facility was insufficient to support its operations.

        During May 2003, the Company acquired the formulas and packaging of the
"Extreme Delight" cocktails. Extreme Delight are ready to drink spirit-based
cocktails, which include: Cosmopolitan, Pina Colada, Tequila Sunrise, Vodka
Splash, and Margarita. The ready to drink cocktail is the fastest growing
segment of the spirits industry. What makes Extreme Delight different is that it
is an actual spirit based cocktail as opposed to the flavored beer offerings
currently on the market. The Company will be aggressively marketing Extreme
Delight in several markets initially with plans to expand nationwide.

Results of Operations

         2003 Fiscal Year Compared to 2002 Fiscal Year

        Revenue increased to $294,063 from $164,054 for the year ended May 31,
2003 ("Fiscal 2003") compared to the year ended May 31, 2002 ("Fiscal 2002").
This was due to increased sales to current retail outlets and expanded
distribution into additional on and off premise retail outlets within its
current markets in Fiscal 2003. Also, the Company was inactive and had no sales
for a period of four and one half months prior to the reorganization with
Importers during Fiscal 2002.

        Total expenses increased by 147.63% to $1,196,701 for Fiscal 2003 from
$483,264 for Fiscal 2002 due to the renewed activity of the Company. Cost of
Sales increased to $196,019 from $84,656 for Fiscal 2003, due to increased
purchases of wine and spirits and the limited activity of the Company prior to
the reorganization with Importers. Selling, general, and administrative expenses
increased by 70.24% to $388,593 for Fiscal 2003 from $228,264 for Fiscal 2002
due to the renewed activity of the Company since the reorganization with
Importers. Consulting fees increased by 220.42% to $777,946 for Fiscal 2003 from
$242,791 for Fiscal 2002 due to greater promotion of the Company and it's
products, as well as the limited activity of the Company prior to the
reorganization with Importers. During Fiscal 2002, the company recorded
forgiveness of debt income in the amount of $646,655. The above factors
contributed to a net loss of ($1,098,657) or ($0.06) per share for Fiscal 2003
as compared to a net income of $242,789 or $0.02 per share for Fiscal 2002.

                                       4



Liquidity and Capital Resources

        The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. The Company incurred substantial losses in 2003,
used cash from operating activities in 2003 and 2002, and has negative working
capital of $425,523 at May 31, 2003. This raises substantial doubt about the
Company's ability to continue as a going concern.

        As of May 31, 2003, the Company has two loans ("Operating Loan" and
"Auto Loan") and a line of credit from Commercebank, N.A. The Operating loan's
outstanding balance was $123,958 with a variable interest rate of 0.25% plus
prime. The term of the Operating Loan is for 4 years with principal and interest
payments due monthly. The Auto loan's outstanding balance is $38,257 with and
interest rate of 6.5%. The term of the Auto Loan is for 3 years with principal
and interest payments due monthly. The line of credit is in the amount of
$25,000, as of May 31, 2003 $23,599 had been borrowed. The interest rate is
variable at 0.25% plus prime, with interest payment due monthly and the
principal payable on demand.

        In the past, the Company has funded its capital requirement from sales
of product, sales of equity securities, and the issuance of equity securities in
exchange for services rendered. To facilitate future growth of the Company, any
funding of operations will necessitate raising capital. The Company continues to
explore opportunities to raise private equity capital and, in conjunction
therewith, to provide credit support for the Company's operations. Although the
Company has in the past been and continues to be in discussions with potential
investors, there can be no assurance that its efforts to raise any substantial
amount of private capital will be successful.

        Any substantial private equity investment in the Company will result in
voting dilution of the existing stockholders and could also result in economic
dilution. If the Company is unable to obtain new capital, the Company will be
unable to carry out its strategy of growth through acquisitions and the
long-term ability of the Company to continue its operations maybe in doubt.

CRITICAL ACCOUNTING POLICIES

Use of Estimates

        The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States.
When more than one accounting principle, or method of its application, is
generally accepted, management selects the principle or method that is
appropriate in the Company's specific circumstances. Application of the
accounting principles requires the Company's management to make estimates about
the future resolution of existing uncertainties and that affect the reported
amounts of assets, liabilities, revenues, expenses which in the normal course of
business are subsequently adjusted to actual results. Actual results could
differ from such estimates. In preparing these financial statements, management
has made its best estimates and judgments of the amounts and disclosures
included in the consolidated financial statements giving due regard to
materiality.


                                       5


Revenue Recognition and Accounts Receivable

        Sales are recorded when title and risks of ownership transfer to the
buyer. Shipping and handling fees charged to customers are recorded as revenues
and the related costs are recorded as cost of sales.

        The Company markets its products to a diverse customer base in the
United States and in other countries. Credit is extended after a credit review
by management, which is based on a customer's ability to perform its
obligations. Such reviews are regularly updated. Accounts receivable at May 31,
2003 and 2002 are $53,878 and $38,473, respectively. Accounts receivable from
one customer amounted to 65% of total accounts receivable at May 31, 2003.
Accounts receivable from three customers amounted to 68% of total accounts
receivable at May 31, 2002.

Stock-Based Compensation

        The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" and related interpretations in
accounting for stock options and awards. Accordingly, no compensation costs for
stock options is included in operating results since all awards were made at
exercise prices at or above their fair value on the dates of grants.

        In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure, amending FASB Statement No. 123,
Accounting for Stock Based Compensation." This statement amends SFAS No. 123 to
provide alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock- based employee
compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure about the effects on operating results of an
entity's accounting policy decisions with respect to stock-based employee
compensation. SFAS No. 148 also amend APB 28, "Interim Financial Reporting" to
require disclosure about those effects in interim financial information. We
adopted the disclosure provisions for the year ended May 31, 2003.

        The following table illustrates the effect on results of operations if
the Company had applied the fair value recognition provisions of SFAS No. 123.

                                                  2003                   2002
                                              --------------        ------------
Net (loss) income as reported                 $ (1,098,657)          $  242,789
Deduct: Total stock-based employee
        compensation determined
        under fair value method for
        stock options, net of tax                  (67,060)            (162,256)
                                              --------------        ------------
Pro forma loss applicable
  to common stockholders                      $ (1,165,717)          $   80,533
                                              ==============        ============
Basic loss per share, as reported             $      (0.06)          $     0.02
                                              ==============        ============
Basic loss per share, pro forma               $      (0.07)          $     0.01
                                              ==============        ============
Diluted loss per share, as reported           $          -           $     0.02
                                              ==============        ============
Diluted loss per share, pro forma             $          -           $     0.01
                                              ==============        ============

                                       6




Forward Looking Statements

        This Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E or the Exchange Act, including statements reflecting the Company's
views as of the date they are made with respect to future events and financial
performance, but are subject to many risks and uncertainties which could cause
the actual results of the Company to differ materially from any future results
expressed or implied by such forward-looking statements. Factors that may affect
the business and financial results of the Company include the following. The
Company does not undertake to update any forward-looking statements.

        Limited Operating History. In October 2001, the Company acquired
International Importers, Inc. ("Importers") pursuant to a merger agreement.
Importers was incorporated in March 2000 for the purpose of acquiring the
exclusive distribution rights of L.A. Cetto Wines. In September 2000, Importers
acquired the exclusive distribution rights of L.A. Cetto Wines in the United
States and its territories. Importers began distributing wine in January 2001.
Immediately prior to the acquisition of Importers, the Company had substantially
no operations. As a result, the Company has limited operating history upon which
investors may evaluate the Company's performance, and the likelihood of the
success of the Company must be considered in light of the expenses,
complications and delays frequently encountered in connection with the
establishment and expansion of new businesses. These include, but are not
limited to, unanticipated problems relating to marketing and competition, and
additional costs and expenses that may exceed current estimates. There can be no
assurance that future revenues from sales of the Company's products will occur
or be significant, or that the Company will be able to sell its products at a
profit. Future revenues and profits, if any, will depend on various factors,
including, but not limited to, the successful implementation by the Company of
its business plan and planned growth.

        Dependence on Distribution Network. The Company imports wines and
spirits and sells these products principally to distributors for resale to
restaurants and retail outlets. The success of the Company will largely depend
on its ability to expand its relationships with distributors and other entities
involved in the process of wine and spirits distribution and sales. The failure
to expand such relationships could impact adversely on the Company's business.


                                       7



        Additionally, the laws and regulations of several states prohibit
changes of distributors, except under certain limited circumstances, making it
difficult to terminate a distributor without reasonable cause, as defined by
applicable statutes. The resulting difficulty or inability to replace
distributors, poor performance of the Company's major distributors or the
Company's inability to collect accounts receivable from its major distributors
could have a material adverse effect on the Company's business, financial
condition and results of operations.

        Because the Company is in the initial stages of implementing its
business plan, the Company is dependent on a relatively small number of
distributors. As a result, the loss of one or more of the Company's distributors
could have a material adverse effect on the Company's business, financial
condition and results of operations.

        Dependence on Suppliers. The Company is in the initial stages of
developing its relationships with suppliers of wines and spirits, and is
currently dependent on one supplier. As a result, until the Company can expand
its network of suppliers, the loss of the Company's key supplier would have a
material adverse effect on the Company's business, financial condition and
results of operations.

        Additionally, current and future suppliers to the Company will be
heavily dependent upon raw materials, such as grapes, grape juice concentrate,
grains, alcohol and packaging materials from third-party suppliers. If the
Company's current or future suppliers experience raw material supply, production
or shipment difficulties, such difficulties could adversely affect the Company's
suppliers' ability to supply goods to the Company. These suppliers are also
directly affected by increases in the costs of such raw materials. In the past,
these suppliers have experienced increases in the cost of grapes. In the event
demand for certain wine products exceeds expectations, these suppliers could
experience shortages. Also, these suppliers must be able to obtain a sufficient
number of glass bottles, which have only a small number of producers. The
inability of glass bottle suppliers to satisfy requirements of these suppliers
could adversely affect these suppliers' ability to fulfill the Company's
purchase requirements from such supplier, which in turn could have a material
adverse effect on the Company's business, financial condition and results of
operations.

        Dependence Upon Consumer Spending and Preferences. The success of the
Company's business depends upon a number of factors related to the level of
consumer spending, including the general state of the economy and consumer
confidence in future economic conditions. Changes in consumer spending can
affect both the quantity and price level of wines and spirits that customers are
willing to purchase at restaurants or through retail outlets. Reduced consumer
confidence and spending may result in reduced demand for the Company's products,
limitations on its ability to increase prices and increased selling and
promotional expenses. A sudden and unexpected shift in consumer preferences or a
reduction in sales of wine and spirits generally could have a material adverse
effect on the Company's business, financial condition and results of operations.

        Competition. The wine and spirits industry is highly competitive and
highly fragmented. The wine and spirits industry has also experienced
significant consolidation in recent years and many of the Company's competitors
have significantly greater capital resources than the Company. There can be no
assurance that the Company's products will be able to successfully compete with
its competitors.

        In addition, the Company's distributors (and the retailers that are the
customers of distributors) offer products that compete directly with the
Company's products for retail shelf space and consumer purchases. Accordingly,
there is a risk that these distributors or retailers may give higher priority to
products of the Company's competitors. In the future, the Company's distributors
and retailers may not continue to purchase our products or provide our products
with adequate levels of promotional support.

                                       8



        Government Regulation. The wine and spirits industry is subject to
extensive regulation by the U.S. Federal Bureau of Alcohol, Tobacco and Firearms
and various foreign agencies, state liquor authorities and local authorities.
These regulations and laws dictate such matters as licensing requirements, trade
and pricing practices, permitted distribution channels, permitted and required
labeling, advertising and relations with wholesalers and retailers. In addition,
new regulations or requirements or increases in excise taxes, income taxes,
property and sales taxes and international tariffs could materially adversely
affect the financial results of the Company. The Company can provide no
assurance that there will not be future legal or regulatory challenges to the
industry, which could have a material adverse effect on the Company's business,
financial condition and results of operations.

        Consumer Perception of Health Issues. While a number of research studies
suggest that various health benefits may result from the moderate consumption of
alcohol, other studies conclude or suggest that alcohol consumption does not
have any health benefits and may in fact increase the risk of stroke, cancer and
other illnesses. If an unfavorable report on alcohol consumption gains general
support, it could have a material adverse effect on the Company's business,
financial condition and results of operations.

        Factors Affecting Growth. The Company plans to continue to grow its
organization and to spend significant funds to promote the Company and its
services. The Company expects to continue to hire additional people in areas of
the Company in order to support its business. As a result of all of these
factors, to achieve operating profitability, excluding non-cash charges, the
Company will need to formulate a substantial customer base and minimize overall
costs of providing services. The Company cannot assure any investor that it will
be able to generate revenues or increase its operating efficiencies in this
manner.

        Ability to Manage Growth. The Company believes that as its business plan
is more fully realized, the Company may experience a period of rapid growth that
will result in new and increased responsibilities for management personnel and
will place a significant strain upon the Company's management, operating and
financial systems and resources. To accommodate any rapid growth and to compete
effectively and manage future growth, the Company will be required to implement
and improve its operational, financial and management information systems,
procedures and controls on a timely and cost-effective basis and to expand,
train, motivate and manage its work force. There can be no assurance that the
Company's personnel, systems, procedures and controls will be adequate to
support the Company's existing and future operations. Any failure to implement
and improve the Company's operational, financial and management systems or to
expand, train, motivate or manage employees could have a material adverse effect
on the Company's business, operating results and financial condition.


                                       9



        Reliance on Key Personnel. Our success is greatly dependent upon the
continued participation of our executive officers. In addition to providing
general supervision and direction, our executive officers provide active
direction, supervisions and management of our sales and marketing efforts. Loss
of the services of Marvin Ribotsky, our Chairman, Allen Salzman, our CEO, or
Harvey Bronstein, our President, could have a material adverse effect on our
business. The Company will need to retain additional qualified and experienced
personnel to implement its business plan. There can be no assurance that the
Company will be able to retain its current employees, or that it will be able to
recruit additional knowledgeable and experienced employees and consultants in
the future to meet its business needs. The loss of the Company's management
and/or key personnel could have a material adverse impact on the Company.

        Foreign Currency and Operations Exposure. The Company may conduct some
of its import activity for wine, spirits and packaging supplies in foreign
currency. Accordingly, there is a risk that a shift in certain foreign exchange
rates or the imposition of unforeseen and adverse trade regulations could
adversely impact the costs of these items and have an adverse impact on the
Company's profitability. In addition, the imposition of unforeseen and adverse
trade regulations could have an adverse effect on the Company's imported wine
and spirits operations and thus on the Company's business, financial condition
and results of operations.

        Capital Requirements. Capital will be needed for the effective
integration, operation and expansion of the Company's business. In addition, the
Company may from time to time require capital for renovation and expansion.
Although the Company believes it will be able to secure all needed financing,
the Company has no agreements for financing, and there can be no assurance that
the Company will be able to obtain funds when needed on satisfactory terms or at
all. Any limitation on the Company's ability to obtain additional financing
could have a material adverse effect on the Company's business, financial
condition and results of operations.

        Control by Present Management. Our officers and directors as a group
control approximately 31% of our outstanding common stock, exclusive of options.
Although this percentage is below 51%, such percentage does provide our officers
and directors with significant control over the ability to elect a majority of
the Board of Directors, to control the management of the Company, and to
influence the outcome of corporate transactions or other matters submitted to
our stockholders for approval. The interests of our stockholders that are
officers and directors of the Company could differ from the interests of other
stockholders.

        Issuance of Additional Shares. The Company will likely issue additional
shares of Common Stock either in connection with future acquisitions of assets,
contract negotiations, retention of key personnel or subsequent fund raising
endeavors. Any additional issuance of shares of Common Stock will have the
effect of diluting the equity interest of the holders of shares of Common Stock.

        No Dividends. Payment of dividends on the Common Stock is within the
discretion of the Board of Directors and will depend upon the Company's future
earnings, its capital requirements and financial condition, and other relevant
factors. The Company does not intend to declare any dividends on its Common
Stock for the foreseeable future.



                                       10


Item 7.  Financial Statements

        The financial statements and information required by Item 7 are included
in the Index shown at Item 13.

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

        None.

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

        The directors and executive officers of the Company and their positions
at August 25, 2003 were as follows:


               Name            Age                Position
               ----            ---                --------

         Allen Salzman          68          Chief Executive Officer and Director
         Harvey Bronstein       61          President and Director
         Marvin Ribotsky        68          Vice President and Chairman of the Board
         Wendy Blotner          37          Chief Financial Officer
         Scott Rosenblum        53          Director

        ALLEN SALZMAN has served as Chief Executive Officer and Director of the
Company since November 2001. Prior to this, Mr. Salzman was Chief Executive
Officer of International Importers, Inc. He has worked in all phases of the wine
and spirit industry for the past 40 years. Including owning and operating the
largest wine and spirit outlet in the state of New York and wine and spirits
outlets in Jacksonville, Florida.

        HARVEY BRONSTEIN has served and President and Director of the Company
since November 2001. Prior to this, Mr. Bronstein was the President of
International Importers, Inc. Mr. Bronstein provides sales and marketing
expertise in all areas of the wine and spirits industry. For the past 30 years
he has worked in the beverage industry for such companies as Heublin, Inc. and
Statewide Corp Division of Charmer Industries in an executive capacity.

        MARVIN RIBOTSKY has served as Vice President and Chairman of the Board
of the Company since November 2001. Mr. Ribotsky has been a consultant to many
large enterprises during the past 40 years through his work as a principal in
CPA firms in Miami, Florida. He is an active Certified Public Accountant with a
Bachelor of Science in accounting from New York University. Mr. Ribotsky is the
father of Wendy Blotner.

        WENDY BLOTNER has served as a Chief Financial Officer since November
2001. Ms. Blotner is a finance professional with management and operational
experience in financial systems, analysis, budget preparation and reporting, and
sales forecasting. She has worked as director of budgeting, planning, and
financial analysis for several public companies including Choice Point, Inc., Si
Corporation, and Siemens Energy & Automation, Inc. Ms. Blotner received her
Bachelor of Science in Finance from Florida State University and her Masters of
Business Administration from Lehigh University. Ms. Blotner is the daughter of
Marvin Ribotsky.

        SCOTT ROSENBLUM has served as a member of the Board of Directors since
October 1998. Since 1991, Mr. Rosenblum has been a partner of the law firm of
Kramer, Levin, Naftalis & Frankle, LLP, and he served as managing partner of
that firm from March 1994 to September 2000. Mr. Rosenblum is also a member of
the Board of Directors of Greg Manning Auctions, Inc., a public company,


                                       11


Section 16(a) Beneficial Ownership Reporting Compliance

        Incorporated by reference to the Company's Proxy Statement, which will
be filed within 120 days after the Company's fiscal year end.

Item 10.  Executive Compensation

        Incorporated by reference to the Company's Proxy Statement, which will
be filed within 120 days after the Company's fiscal year end.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

        Incorporated by reference to the Company's Proxy Statement, which will
be filed within 120 days after the Company's fiscal year end.

Item 12.  Certain Relationships and Related Transactions

        Incorporated by reference to the Company's Proxy Statement, which will
be filed within 120 days after the Company's fiscal year end.

Item 13.  Exhibits, Financial Statements and Reports on Form 8-K

        The following documents are filed as part of this Annual Report on form
10-KSB.

(a)      Financial Statements:
                                                                            Page
                                                                            ----

              Report of Independent Certified Public Accountants..............16

              Consolidated Balance Sheet as of May 31, 2003...................17

              Consolidated Statements of Operations for the years ended
              May 31, 2003 and 2002...........................................18

              Consolidated Statements of Stockholders' Equity for the
              Years ended May 31, 2003 and 2002...............................19

              Consolidated Statements of Cash Flows for the years ended
              May 31, 2003 and 2002...........................................20

              Notes to Consolidated Financial Statements...................21-29

                                       12



(b)     Reports on From 8-K
              None.

(c)     The following documents are filed as exhibits to this Annual Report on
Form 10-KSB:
                  23.1     Consent of Wiss & Company, LLP

                  31.1     Certification Pursuant to Section 302 of the
                           Sarbanes-Oxley Act of 2002

                  31.2     Certification Pursuant to Section 302 of the
                           Sarbanes-Oxley Act of 2002

                  32       Certification pursuant to 18 U.S.C. section 1350, as
                           adopted pursuant to section 906 of the Sarbanes Oxley
                           Act of 2002




Item 14.  Controls and Procedures

        Based on their evaluation as of a date within 90 days of the filing date
of this Annual Report on Form 10-KSB, New World Brand, Inc.'s principal
executive officer and principal financial officer have concluded that New World
Brand, Inc.'s disclosure controls and procedures as defined in Rules 13a-14(c)
and 15d-14(c) under the Securities Exchange Act of 1934 (Exchange Act) are
effective to ensure that information required to be disclosed by New World
Brand, Inc. in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.


        There were no significant changes in New World Brand's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation and up to the filing date of the Annual Report on
Form 10-KSB. There were no significant deficiencies or material weaknesses, and
therefore there were no corrective actions taken.

        It should be noted that any system of controls, however well designed
and operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions, regardless of how remote.

                                       13




        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Dated:  August 28, 2003                          NEW WORLD BRANDS, INC.


                                                 By:      /s/ Allen Salzman, CEO
                                                          ----------------------
                                                              Allen Salzman, CEO
                                                              (principal executive officer

                                                 By:      /s/ Marvin Ribotsky
                                                          ----------------------
                                                              Marvin Ribotsky, Chairman of the Board
                                                              (principal financial officer)


        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


Name                                Title                             Date
----                                -----                             ----

/s/  Allen Salzman          Chief Executive Officer              August 28, 2003
                            and Director

/s/  Harvey Bronstein       President and Director               August 28, 2003

/s/  Marvin Ribotsky        Vice President and Chairman          August 28, 2003
of the Board

/s/  Wendy Blotner          Chief Financial Officer              August 28, 2003

/s/  Scott Rosenblum        Director                             August 28, 2003














                                       14








INDEX OF FINANCIAL STATEMENTS
                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants............................16

Consolidated Financial Statements

         Consolidated Balance Sheets..........................................17

         Consolidated Statements of Operations................................18

         Consolidated Statement of Stockholders Equity........................19

         Consolidated Statements of Cash Flows................................20

         Notes to Consolidated Financial Statements........................21-29
















                                       15

















               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
New World Brands, Inc.

We have audited the accompanying consolidated balance sheet of New World Brands,
Inc. and Subsidiaries (formerly Oak Tree Medical Systems, Inc.) as of May 31,
2003, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended May 31, 2003 and 2002. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of New
World Brands, Inc. and Subsidiaries as of May 31, 2003 and 2002, and the
consolidated results of their operations and their consolidated cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.

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

                                                            WISS & COMPANY LLP


Livingston, New Jersey
July 15, 2003



                                       16









                     New World Brands, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                  May 31, 2003

        Assets:
        -------
          Cash                                                     $     13,374
          Accounts receivable                                            53,878
          Prepaid expenses                                                    -
                                                                  --------------
          Total current assets                                           67,252

          Other Intangible Assets                                       300,000
          Automobile, net of accumulated
           depreciation of $13,500
           and $3,060 respectively                                       40,500
                                                                  --------------
                 Total assets                                      $    407,752
                                                                  ==============



        Liabilities and stockholders equity:
        ------------------------------------
          Accounts payable and accrued expenses                    $    246,941
          Advances from stockholders                                    167,888
          Current maturities of loans payable bank                       77,946
                                                                  --------------
          Total current liabilities                                     492,775

          Loans payable bank, less current maturities                   107,868
                                                                  --------------
          Total liabilities                                             600,643
                                                                  --------------
          Preferred Stock - $0.01 par value, 10,000,000
           authorized, none issued.                                           -
          Common stock - $0.01 par value, 25,000,000 shares
           authorized, 17,776,564 and 15,446,564 shares issued
           and outstanding as of May 31, 2003 and
           May 31, 2002 respectively.                                   177,766
          Additional paid in capital                                 20,384,638
          Note receivable - common stock                                (99,484)
          Subscription receivable - common stock                        (54,000)
          Deficit                                                   (20,601,811)
                                                                   -------------
          Total stockholders' equity                                   (192,891)
                                                                   -------------
          Total liabilities and stockholders' equity                $   407,752
                                                                   =============


                                       17





                     New World Brands, Inc. and Subsidiaries
                      Consolidated Statements of Operations

                                                                Year Ended           Year Ended
                                                               May 31, 2003         May 31, 2002
                                                           -------------------- --------------------

 Revenues
   Wine and spirit sales                                    $        294,063    $        164,054

 Cost of goods sold                                                   196,019             84,656
                                                           -------------------- --------------------
 Gross Profit                                                          98,044             79,398
                                                           -------------------- --------------------
 Expenses
   Selling, general, and administrative                               388,593            228,264
   Depreciation and amortization                                       10,440              3,060
   Consulting fees                                                    777,946            242,791
   Interest                                                            19,722              9,149
                                                           -------------------- --------------------
   Total expenses                                                   1,196,701            483,264
                                                           -------------------- --------------------
   Net loss before extraordinary item                              (1,098,657)          (403,866)

   Extraordinary item-forgiveness of debt income (net)                      -            646,655
                                                           -------------------- --------------------
   Net income (loss)                                         $     (1,098,657)  $        242,789
                                                           ==================== ====================

 Basic income (loss) per share of common stock:
   Loss before extraordinary item                                       (0.07)             (0.03)

   Extraordinary Item                                                       -               0.05
                                                           -------------------- --------------------
   Net income (loss) per share                                          (0.07)              0.02
                                                           ==================== ====================
 Diluted income (loss) per share of common stock:
   Loss before extraordinary item                                       (0.07)             (0.03)

   Extraordinary Item                                                       -               0.05
                                                           -------------------- --------------------
   Net income (loss) per share                                          (0.07)              0.02
                                                           ==================== ====================
 Weighted average number of common and common
    share equivalents outstanding:
     Basic -                                                       16,179,907         12,913,533
                                                           ==================== ====================
     Diluted -                                                     16,179,907         13,296,677
                                                           ==================== ====================

                                       18




                     New World Brands, Inc. and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                    For the Year Ended May 31, 2003 and 2002


                                     Common Stock       Additional      Prepaid     Notes     Subscriptions                 Total
                                                                                                                        Stockholders
                                  Shares     Amount  Paid-in-Capital  Consulting  Receivable    Receivable      Deficit    Equity
                               --------------------- ---------------- ----------- ---------- -------------- ------------- ----------
        BALANCE MAY 31, 2001   $ 7,285,264  $ 72,853  $ 18,944,384    $ (55,237)  $      -    $       -    $ (19,724,596)  (762,596)


Issuance of shares for services    160,000     1,600        34,150            -          -            -               -      35,750

Recapitalization resulting from
 merger with International
 Importers, Inc.                 5,500,000    55,000      (306,078)           -          -            -          (21,347)  (272,425)

Return of common stock             (88,700)     (887)          887            -          -            -                -          -

Issuance of stock options for
 services                                -         -       142,500            -          -            -                -    142,500

Exercise of stock options        2,590,000    25,900       436,000            -   (144,484)     (54,000)               -    263,416

Stock issued in connection with
 prepaid consulting                      -         -             -       55,237          -            -                -     55,237


Net income                               -         -             -            -          -            -          242,789    242,789
                               --------------------- ---------------- ----------- ---------- -------------- ------------- ----------
        BALANCE MAY 31, 2002   $15,446,564  $154,466  $ 19,251,843    $       -   $(144,484)    (54,000)    $(19,503,154)  (295,329)

Exercise of stock options          735,000     7,350        83,900                        -           -                -     91,250

Issuance of shares for services    655,000     6,550       124,450                        -           -                -    131,000

Issuance of shares for assets    1,000,000    10,000       290,000                        -           -                -    300,000

Issuance of stock options for
 services                                -         -       323,445                        -           -                -    323,445

Repricing of options                     -         -       323,500                        -           -                -    323,500

Payment on Notes Receivable              -         -             -                   32,500           -                -     32,500

Discount on Notes Receivable             -         -       (12,500)                  12,500           -                -          -

Cancellation of Shares             (60,000)     (600)            -                        -           -                -       (600)

Net loss                                 -         -             -                        -           -       (1,098,657)(1,098,657)
                               --------------------- ---------------- ----------- ---------- -------------- ------------- ----------
        BALANCE  MAY 31, 2003  $17,776,564  $177,766  $ 20,384,638    $       -    $(99,484)  $ (54,000)    $(20,601,811)  (192,891)
                               ===================== ================ =========== ========== ============== ============= ==========

                                       19




                     New World Brands, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows


                                                                       Year Ended        Year Ended
                                                                      May 31, 2003       May 31, 2002
                                                                   ------------------  -----------------
Cash flow from operating activities:
   Net income (loss)                                               $    (1,098,657)     $     242,789
   Adjustments to reconcile net loss to net cash
    used (provided) in operating activities:
       Depreciation and amortization                                        10,440              3,060
       Common stock and stock options
        issued for services                                                453,845            233,487
       Common stock issued resulting from recapitalization                                   (272,425)
       Repricing of options                                                323,500                  -
       Changes in operating assets and liabilities:
         Accounts receivable                                               (15,405)           (38,473)
         Prepaid Expenses                                                   21,000            (21,000)
         Accounts payable and accrued expenses                              89,157           (582,661)
                                                                  -------------------  -----------------
       Net cash used in operating activities                              (216,120)          (435,223)
                                                                  -------------------  -----------------
Cash flows from investing activities:
       Cash used to purchase fixed assets                                        -             (8,000)
       Repayment of note receivable                                         32,500                  -
                                                                  -------------------  -----------------
         Net cash provided by investing activities                          32,500             (8,000)
                                                                  -------------------  -----------------
Cash flows from financing activities:
        Net proceeds from issuance of common stock                          91,250            263,416
        Net borrowings (repayments) - bank                                 (26,839)           166,653
        Net borrowings (repayments) to stockholder                         128,888             15,898
                                                                  -------------------  -----------------
         Net cash provided by financing activities                         193,299            445,967
                                                                  -------------------  -----------------
             Net change in cash                                              9,679              2,744
                                                                  -------------------  -----------------
Cash at beginning of period                                                  3,695                951
                                                                  -------------------  -----------------
Cash at end of period                                                       13,374              3,695
                                                                  ===================  =================
Supplemental disclosure of cash flow information:
        Interest Paid                                              $        15,640       $      8,043
                                                                  ==================== =================
Non-cash investing and financing activity
        Borrowings from bank for the purchase of automobile        $             -       $     46,000
        Increase in assets                                         $       300,000       $          -
        Discount on stockholder loans                              $        12,500       $          -




                                       20
NEW WORLD BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BACKGROUND OF THE COMPANY

        New World Brands, Inc. (formerly Oak Tree Medical Systems, Inc.), a
Delaware corporation, and its subsidiaries (the "Company") import wine and
spirits for distribution in the United States. The Company holds the exclusive
distribution rights for the wines of Vinicola L.A. Cetto, S.A. de C.V. ("L.A.
Cetto") in the United States. The Company has established arrangements for
distribution of its products with major wine and spirit wholesale distributors
from New York to California. The Company is in the initial stages of developing
its relationships with suppliers and customers, and is currently dependent on
one supplier and had two customers that represented in excess of 10% of total
sales in fiscal 2003.

        On October 16, 2001, the Company entered into a "Plan and Agreement of
Reorganization" with International Importers, Inc. ("Importers") whereby all
shares of common stock of Importers were converted into and became the right to
receive, in the aggregate, 5,500,000 shares of the Company's common stock. For
accounting purposes, the acquisition of Importers is being recorded as a
recapitalization of Importers, with Importers as the acquirer.

        On October 17, 2001, the Board of Directors adopted a resolution to
change the Company's name to New World Brands, Inc. This reflects the new
business plan of the company after the October 16, 2001 reorganization with
International Importers, Inc., a wine and spirits importer.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

        The consolidated financial statements include the accounts of New World
Brands, Inc. and International Importers, Inc. All material intercompany
balances and transactions have been eliminated.

Principles of Consolidation

        The consolidated financial statements include the accounts of New World
Brands, Inc. and Subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Revenue Recognition

        Wine and spirits revenue are recognized upon delivery of merchandise to
the customers carrier.

                                       21



Use of Estimates

        In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.


Fixed Assets

        The automobile is stated at cost and is being depreciated utilizing the
straight-line method over its estimated useful life of five years.

        Depreciation expense for the years ending May 31, 2003 and 2002 amounted
to $10,440 and $3,060, respectively.

Income Taxes

        Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the years in which those temporary differences
are expected to be recovered or settled. A valuation allowance has been
established to reduce deferred tax assets as it is more likely than not that
such deferred tax assets will not be realized. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.

Earnings (Loss) Per Share

        Basic earnings (loss) per common share is based on the weighted-average
number of all common shares outstanding. The computation of diluted earnings
(loss) per share does not assume the conversion, exercise or contingent issuance
of securities that would have an anti-dilutive effect on earnings (loss) per
share.

Financial Instruments

        Financial instruments include cash, accounts receivable, accounts
payable, accrued expenses, and advances to stockholders. The amounts reported
for financial instruments are considered to be reasonable approximations of
their fair values. The fair value estimates presented herein were based on
market or other information available to management. The use of different market
assumptions and/or estimation methodologies could have a material effect on the
estimated fair value amounts.


                                       22


Recent Accounting Pronouncements


        In November 2002, the FASB issued FASB Interpretation (FIN) No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 requires that a liability
be recorded in the guarantor's balance sheet upon issuance of a guarantee. In
addition, FIN 45 requires disclosures about the guarantees that an entity has
issued, including a roll forward of the entity's product warranty liabilities.
The Company does not expect FIN 45 to have a material impact on its financial
position, results of operations or cash flows.

        In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation, Transition and Disclosure." SFAS No. 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. SFAS No. 148 also
requires that disclosures of the pro forma effect of using the fair value method
of accounting for stock-based employee compensation be displayed more
prominently and in tabular format. Additionally, SFAS No. 148 requires
disclosure of the pro forma effect in interim financial statements. The
transition and annual disclosure requirements are effective for our 2003 fiscal
year. The interim disclosure requirements are now effective. The Company does
not expect the adoption of SFAS No. 148 to have a material impact on its
financial position, results of operations or cash flows.

        In January 2003, the FASB issued FIN 46, "Consolidation of Variable
Interest Entities." This Interpretation clarifies the application of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," to certain
entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies to variable interest entities created
after January 31, 2003, and is effective as of July 31, 2003 for variable
interest entities created prior to February 1, 2003. The Company does not expect
the adoption of FIN 46 to have a material effect on its financial position,
results of operations or cash flows.

        In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities." This statement amends SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," for
implementation issues related to the definition of a derivative and other FASB
projects related to financial instruments. SFAS No. 149 requires that contracts
with comparable characteristics be accounted for in a similar fashion. SFAS No.
149 applies prospectively to contracts entered into or modified after June 30,
2003 and for hedging relationships designated after June 30, 2003. The Company
does not expect the adoption of SFAS No. 149 to have a material effect on its
financial position, results of operations or cash flows.

        In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 requires that financial instruments within the scope of
SFAS No. 150 be classified as a liability or an asset. SFAS No. 150 is effective
for all financial instruments entered into after May 31, 2003 and otherwise, the
beginning of the first interim period after June 15, 2003. The Company does not
expect the adoption of SFAS No. 150 to have a material effect on its financial
position, results of operations or cash flows.


                                       23



Advertising Expense

        Advertising costs are expensed as incurred. Advertising expense for the
years ended May 31, 2003 and 2002 amounted to approximately $20,000 and $47,000,
respectively.

NOTE C - LIQUIDITY AND GOING CONCERN

        The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. The Company incurred substantial losses in 2003,
used cash from operating activities in 2003 and 2002, and has negative working
capital of $425,523 at May 31, 2003. These factors raise substantial doubt about
the Company's ability to continue as a going concern.

        In the past, the Company has funded its capital requirements from sale
of product, loans from shareholders, sales of equity securities and the issuance
of equity securities in exchange for and services rendered. The Company
continues to explore opportunities to raise private equity capital and, in
conjunction therewith, to provide credit support for the Company's operations.
Although the Company has in the past been and continues to be in discussions
with potential investors, there can be no assurance that its efforts to raise
substantial amounts of private capital will be successful. Any substantial
private equity investment in the Company will result in voting dilution of the
Company's existing stockholders and could also result in economic dilution.

NOTE D - COMMON STOCK

Consulting Agreements and Option Grants

        During May 2003, the Company issued 1,000,000 shares of stock to acquire
formulas and packaging of the "Extreme Delight" spirit-based ready to drink
cocktails.

        For the twelve months ended May 31, 2003, the Company has issued 655,000
shares of the Company's common stock in exchange for services. The consultants
performed services related to product promotion.

        For the twelve months ended May 31, 2003, the Company has issued
1,850,000 options to purchase the Company's common stock in exchange for
services. The consultants performed services related to product promotion,
general business, financing, and public/investor relations.

Stock Option Plans

        1. The Company has a Performance Equity Plan (the "Plan") under which it
may grant incentive and nonqualified stock options, stock appreciation rights,
restricted stock awards, deferred stock, stock reload options, and other
stock-based awards to purchase up to 600,000 shares of common stock to officers,
directors, key employees, and consultants. The Company may not grant any options
with a purchase price less than fair market value of common stock as of the date
of grant.


                                       24



        2. During October 2001, the Company adopted a stock option plan ("2001
Plan") whereby the Company has reserved 5,000,000 shares of its common stock for
purposes of granting options to purchase such shares pursuant to the Plan.
Options are granted to its officers and employees by the Board of Directors and
to members of the Board on a non-discretionary basis, provided that the exercise
price of the options is equal or greater than the fair market price of the
Company's common stock on the date the option is granted. The Plan terminates 10
years from its effective date.

        For the years ended May 31, 2003 and 2002, a summary of the status of
stock options was as follows:


                                                   2003                                 2002
                                                   -----                                ----
                                                          Weighted                           Weighted
                                                           Average                           Average
                                           Number of      Exercise             Number of     Exercise
                                            Shares          Price                Shares        Price
                                           -------        --------             ---------    ---------


 Outstanding-beginning of year            1,590,000    $      0.45              4,012,500      $  0.99
 Granted                                  2,550,000           0.18              1,560,000         0.48
 Exercised                                 (735,000)          0.12             (2,590,000)        0.18
 Expired                                   (400,000)          0.63               (530,000)        1.31
 Cancelled                                 (125,000)          0.15               (862,500)        0.86
                                        ------------                          -------------
 Outstanding and exercisable-end of year  2,880,000    $      0.25             1,590,000       $  0.45
                                        ============                          =============


        The following table summarizes option data as of May 31, 2003:


                                                                  Weighted
                                                                  Average      Weighted                   Weighted
                                                                 Remaining     Average                     Average
                                                    Number      Contractual    Exercise      Number       Exercise
                                                 Outstanding       Life         Price     Exercisable      Price
                                               -------------   ------------   ---------- -------------    --------
 $0 to $0.99                                      2,755,000        2.31          0.19        2,755,000     0.29

 $1 to $1.99                                         75,000        3.33          1.33           75,000     1.38

 $2 to $3.50                                         50,000        3.33          2.00           50,000     2.00

 $3.51 to $6.00                                           -                                          -
                                               -------------                             -------------
                                                   2,880,000                               2,880,000
                                               =============                             =============

                                       25



        Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"),
"Accounting for Stock-Based Compensation", establishes financial accounting and
reporting standards for stock-based employee compensation plans. The financial
accounting standards of SFAS No. 123 permit companies to either continue
accounting for stock-based compensation in the results of operations as
additional expense. The disclosure requirements of SFAS No. 123 require
companies that elect not to record the fair value in the statement of operations
to provide pro forma disclosures of net income and earnings per share in the
notes to the financial statements as if the fair value of stock-based
compensation had been recorded.

        The Company follows Accounting Principles Board Opinion No. 25 and its
related interpretations in accounting for its stock-based compensation plan. The
Company utilized the Black-Scholes option-pricing model to quantify the expense
of options issued to non-employees and the pro forma effects on net income and
net income per share for the value of the options granted to employees during
the fiscal years ended May 31, 2003 and 2002.

         The following assumptions were made in estimating fair value:

                                                     2003              2002
                                                     ----              ----

         Risk-free interest rate                      3%                 4%
         Expected volatility                        140-180%         125%-178%
         Expected option life                      1-10 years        1-10 years

        In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure, amending FASB Statement No. 123,
Accounting for Stock Based Compensation." This statement amends SFAS No. 123 to
provide alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock- based employee
compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure about the effects on operating results of an
entity's accounting policy decisions with respect to stock-based employee
compensation. SFAS No. 148 also amends APB 28, "Interim Financial Reporting" to
require disclosure about those effects in interim financial information. We
adopted the disclosure provisions for the year ended May 31, 2003. The following
table illustrates the effect on results of operations if the Company had applied
the fair value recognition provisions of SFAS No. 123 for the years ended May
31, 2003 and 2002:


                                                   2003                  2002
                                               -------------         -----------
Net (loss) income as reported                  $ (1,098,657)         $  242,789
Deduct: Total stock-based employee
        compensation determined
        under fair value method for
        stock options, net of tax                   (67,060)           (162,256)
                                               -------------          ----------
Pro forma loss applicable
  to common stockholders                       $ (1,165,717)         $   80,533
                                               =============          ==========
Basic loss per share, as reported              $      (0.06)         $     0.02
                                               =============          ==========
Basic loss per share, pro forma                $      (0.07)         $     0.01
                                               =============          ==========
Diluted loss per share, as reported            $          -          $      0.02
                                               =============          ==========
Diluted loss per share, pro forma              $          -          $      0.01
                                               =============          ==========

                                       26
NOTE E - OTHER INTANGIBLE ASSETS

        During May 2003, the Company purchased the rights, title, and ownership
of the "Extreme Delight" ready to drink cocktails from a distributor in Canada.
The Company issued 1,000,000 shares of the Company's common stock valued at
$300,000 on that day.

NOTE F - LONG-TERM DEBT

        Long-term debt consists of two notes payable. A $38,257 auto loan is
payable in monthly installments of $775, including interest at 6.5% through
March 5, 2005. A $123,958 installment loan is payable in monthly installments of
$3,646, plus interest at .25% plus the prime rate, through March 5, 2006.
Long-term debt at May 31, 2003 matures as follows:

                             2004                                  $  54,347
                             2005                                     81,231
                             2006                                     26,637
                                                                 ---------------
                                                                    $162,215
                                                                 ===============

        The installment loan is personally guaranteed by the Chairman of the
Board and the President of the Company.

NOTE G - LINE OF CREDIT

        The Company has a $25,000 line of credit which is payable on demand.
There was $23,599 of borrowings under the line of credit at May 31, 2003. The
line has a first lien on accounts receivable.

NOTE H - INCOME TAXES

        The Company has a net operating loss carryforward of approximately
$8,900,000 at May 31, 2003, which can be used to offset future federal taxable
income through 2023.

        A valuation allowance is provided when it is more than likely than not
that some portion of the deferred tax asset will not be realized. Management has
determined that a full valuation allowance is appropriate at May 31, 2003.


                                       27
NOTE I - EXTRAORDINARY ITEM

        During 2002, the Company entered into agreements defining terms to
restructure certain accounts payable. The restructuring resulted in a cash
settlement of $24,274 resulting in an extraordinary gain of $646,655 net of
income taxes that were calculated as zero.

NOTE J - SUBSCRIPTION RECEIVABLE - COMMON STOCK

        During April 2002, the Company entered into a six month consulting
agreement with an individual to provide public relations services in connection
with dealing with NASD brokers and dealers. As compensation, the consultant was
issued 200,000 options to purchase the Company's common stock for $0.30 per
share, which vest immediately. The consultant exercised their options and
remitted only $6,000 of the $60,000 due to the Company. The Company is
aggressively pursuing, with legal counsel, the remaining $54,000 from the
consultant.

NOTE K - RELATED PARTY TRANSACTIONS

        As of May 31, 2003, the Chairman of the Board and the President of the
Company have advanced the Company $154,000 and $13,888, respectively. The
advances bear interest at 5%.

        The Company leases its office space on a month-to-month basis from a
company that the Chairman of the Board is a partner. Rent payments totaled
$2,561 for the period ending May 31, 2003.

        For the period ended May 31, 2003, the Company paid $7,000 for
accounting services to a company that the Chairman of the Board is a partner.

        In July 2001, a consulting company owned by the daughter in law of the
former Chairman of the Board, exercised stock options to purchase 800,000 shares
of the Company's Common Stock at $0.10 per share. The consulting company offset
a $23,102 advance to the Company as a partial payment and the Company issued a
three-year, interest-bearing note at prime plus 1% for the remaining amount of
$56,898. In October 2001, the consulting company exercised stock options to
purchase 500,000 shares of the Company's common stock. The consulting company
offset a $7,414 advance to the Company as a partial payment and issued to the
Company a three-year, interest-bearing note at the prime interest rate for the
remaining $42,586.

        In October 2001, Scott Rosenblum, a member of the Board of Directors,
exercised options to purchase 500,000 shares of the Company's stock. Mr.
Rosenblum paid $5,000 of the Company's outstanding Accounts Payable and issued
to the Company a three-year, interest-bearing note at the prime interest rate
for the remaining $45,000. Mr. Rosenblum paid $32,500 prior to the due date of
the note in exchange for a discount of $10,000. At May 31, 2003 the balance of
the note was $0.

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NOTE L - MAJOR CUSTOMERS

        Sales to two domestic customers totaled $125,625 (43%) and $48,577 (16%)
in 2003. Accounts receivable from one customer amounted to 65% of total accounts
receivable at May 31, 2003.

NOTE M - VENDOR CONCENTRATIONS

        The Company has an exclusive distributorship agreement with a Mexican
company, which maintains a vineyard and produces various types of wines and
other related wine mixes. The Company has approval from the Federal Agency
(Alcohol, Tobacco, Firearms [ATF]) for the importation of wines into the United
States from Mexico and includes provisions for minimum annual quantity
commitments. The agreement expires August 30, 2003 with a three-year renewal
option, if agreeable by both parties. Purchases from this supplier comprised
100% of the Company's purchases in 2003.

NOTE N - SUBSEQUENT EVENTS

        In June 2003, the Company and a consultant amended a consulting
agreement to adjust the expiration date and price of stock options issued to the
consultant in exchange for services.

        During June 2003, the company entered into consulting agreements with
several consultants. The consultants will provided marketing services and will
be compensated with 1,800,000 of the Company's common stock. If sales goals are
not achieved, the consultants will have to return 450,000 shares of the
Company's common stock to the Company.



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