UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549




FORM
10-K




x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
the Fiscal Year Ended June 30, 2009


or


 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
the transition period
from           to





Commission
File Number: 000-28865




GLOBAL BEVERAGES, INC.


(Exact
Name of Registrant as Specified In its Charter)




Nevada
            
            88-0373061(State
      or Other Jurisdiction of
            
            (I.R.S.Employerincorporation
      or organization)
            
            Identification
      Number)


700
YARRAMAN ROAD, WYBONG


UPPER
HUNTER VALLEY


NEW SOUTH WALES, AUSTRALIA
2333


(Address
of principal executive offices)





Registrant’s
telephone number, including area Code  (+61) 2 6547-8118





Securities
registered Under Section 12(b) of the Act:




Title
      of each class
              
              Name
      of each exchange on which registeredNone
              
              None




Securities
registered Under Section 12(g) of the Act:




Title
      of each class
              
              Name
      of each exchange on which registeredCommon
      Stock, par value
                $0.001
      per share
              
              Pink
      Sheets









Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  ̈
      No    x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


Yes  ̈
      No    x




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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
     ̈
       No    x




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.    
 ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
accelerated filer      ̈
       Accelerated filer     ̈
        Non-accelerated filer
     ̈
       Smaller reporting company   
x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes       ̈
      No     x




The
aggregate market value of the issuer’s voting and non-voting common equity held
by non-affiliates (65,260,833 shares) was approximately $32,630,416, based on
the average closing bid and ask price of $0.50 for such common equity as of
March 20, 2010.




As of
April 1, 2010, there were outstanding 88,747,213 shares of the issuer’s Common
Stock, par value $0.001.









DOCUMENTS
INCORPORATED BY REFERENCE




None














FORWARD LOOKING STATEMENTS




Some of
the statements under “Management’s Discussion and Analysis of Financial
Condition or Plan of Operations,” and “Description of Business” in this Annual
Report on Form 10-K are forward-looking statements. These statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by forward-looking statements.




In some
cases, you can identify forward-looking statements by terminology such as “may,”
“should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative
of these terms or other comparable terminology. You should read statements that
contain these words carefully, because they discuss our expectations about our
future operating results or our future financial condition or state other
“forward-looking” information. There may be events in the future that we are not
able to accurately predict or control. You should be aware that the occurrence
of any of the events described in this Annual Report could substantially harm
our business, results of operations and financial condition, and that upon the
occurrence of any of these events, the trading price of our securities could
decline and you could lose all or part of your investment. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, growth rates, levels of
activity, performance or achievements. We are under no duty to update any of the
forward-looking statements after the date of this Annual Report to conform these
statements to actual results.




Although
we believe that the expectations reflected in these forward-looking statements
are based on reasonable assumptions, there are a number of risks and
uncertainties that could cause actual results to differ materially from such
forward-looking statements. These factors include among others:




·
            The
      risks associated with the production and sale of
  wines;


·
            Our
      ability to raise capital to fund capital
  expenditures;


·
            Grape
      and other fruit price volatility;


·
            Our
      ability to find and retain skilled
personnel;


·
            Regulatory
      developments; and


·
            General
      economic conditions.





On
December 17, 2009, we changed our corporate name from Yarraman Winery, Inc. to
Global Beverages, Inc. All references in this Form 10-K to the “Company,”
“Global Beverages,” “Yarraman,” “we,” “us” or “our” are to Global Beverages,
Inc. and its subsidiary, Yarraman Estate Pty Limited. Except as otherwise noted,
all references to “$” shall mean United States dollars.










GLOBAL
BEVERAGES, INC.





FORM
10-K





FOR
THE FISCAL YEAR ENDED JUNE 30, 2009





INDEX





PagePART
      I
                                  
                                  - 1
      -Item
      1.
                                  Business
                                  - 1
      -Item
      1A.
                                  Risk
      Factors
                                  - 8
      -Item
      1B.
                                  Unresolved
      Staff Comments
                                  -
      10 -Item
      2.
                                  Properties
                                  -
      11 -Item
      3.
                                  Legal
      Proceedings
                                  -
      11 -PART
      II
                                  
                                  -
      11 -Item
      4.
                                  Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                                  -
      11 -Item
      5.
                                  Selected
      Financial Data
                                  -
      12 -Item
      6.
                                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                  -
      12 -Item
      6A.
                                  Quantitative
      and Qualitative Disclosures About Market Risk
                                  -
      18 -Item
      7.
                                  Financial
      Statements and Supplementary Data
                                  -
      18 -Item
      8.
                                  Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
                                  -
      18 -Item
      8A.
                                  Controls
      and Procedures
                                  -
      18 -Item
      8A(T).
                                  Controls
      and Procedures
                                  - 20
      -Item
      8B.
                                  Other
      Information
                                  - 20
      -PART
      III
                                  
                                  -
      20 -Item
      9.
                                  Directors,
      Executive Officers and Corporate Governance
                                  -
      20 -Item
      10.
                                  Executive
      Compensation
                                  -
      23 -Item
      11.
                                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                  -
      24 -Item
      12.
                                  Certain
      Relationships and Related Transactions, and Director
      Independence
                                  -
      27 -Item
      13.
                                  Principal
      Accountant Fees and Services
                                  -
      28 -Item
      14.
                                  Exhibits
      and Financial Statement Schedules
                                  -
      29
-










PART I




ITEM
1.        BUSINESS




General




We were
incorporated as a Nevada corporation on December 6, 1996 under the name Dazzling
Investments, Inc. From January 1, 1997 until December 22, 2005, we were in the
developmental stage and had no operations. On October 7, 2005, we caused to be
formed a corporation under the laws of the State of Nevada called Yarraman
Winery, Inc. and acquired one hundred shares of its common stock for cash. As
such, Yarraman Winery, Inc. (“Merger Sub”) became our wholly-owned subsidiary.
On December 6, 2005, Merger Sub was merged with and into us. As a result of the
merger, our corporate name was changed to “Yarraman Winery, Inc.” Prior to the
merger, Merger Sub had no liabilities and nominal assets and, as a result of the
merger the separate existence of Merger Sub ceased. We were the surviving
corporation in the merger and, except for the name change provided for in the
Agreement and Plan of Merger, there was no change in our directors, officers,
capital structure or business.




On
December 22, 2005, we entered into a Share Exchange Agreement (the “Exchange
Agreement”) with Yarraman Estate Pty Ltd (“Yarraman Australia”), the
shareholders of Yarraman Australia, Delta Dawn Pty Limited, as trustee of the
Yarraman Road Trust (the “Trustee” or “Delta Dawn”) and our shareholders,
pursuant to which we acquired all of the issued and outstanding shares of stock
of Yarraman Australia in exchange for the issuance in the aggregate of
15,000,000 shares of our common stock (the “Shares”) to the Trustee. Yarraman
Australia became our wholly-owned subsidiary and, upon the issuance of the
Shares, the Trustee owned 60% of our issued and outstanding common stock.
Through our wholly-owned subsidiary, Yarraman Australia, we operate our primary
business, which consists of the operation of vineyards and wine production in
Australia and distribution of our wine products in Australia, People’s Republic
of China, United States, Canada and throughout Europe.




Recent
Developments




During
recent years there have been certain trends in the beverage alcohol industry
including, the increase in global wine consumption, continued competition from
other new world wine producing countries targeting markets previously dominated
by Australian wines, the emergence of China as a significant market opportunity,
significant competition among domestic producers in the Australian wine market,
and the consolidation of suppliers, wholesalers and retailers. To capitalize on
these trends and to become more competitive we have pursued a strategy of
diversification and vertical integration, to evolve from being a specialized
wine production and distribution business to a multi beverage business operating
across multiple channels of the supply chain. Several acquisitions have been
completed, or entered into in pursuing this strategy.




ADSL. On
November 26, 2008, we made an offer to the shareholders of Asia Distribution
Solutions Ltd. (“ADSL”), a Cayman Islands company, to purchase all of the issued
and outstanding shares of ADSL. The acquisition of ADSL was completed on July 1,
2009 and, in connection with the acquisition, we issued or reserved for issuance
an aggregate of 63,422,535 shares of our Common Stock to the shareholders of
ADSL.




The
acquisition of ADSL gives us a strong distribution and retail presence in the
world’s fastest growing economy – The People’s Republic of China. This also
gives a secure and rapidly growing outlet for the wines produced in our
Australian wine production facilities.




ADSL
operates in both wholesale distribution and retail sectors, providing sales and
distribution services for foreign and Chinese companies to sell branded
beverages in the People’s Republic of China.




ADSL is
one of the only Wholly-Owned Foreign Enterprises (WOFE) in the beverage industry
with a staff count of 93 employees and is headquartered in Shanghai, with
operations in: Shanghai / Chengdu / Beijing / Shenzhen.







The
distribution unit incorporates both import & distribution services to
provide foreign beverage companies with a superior route to market and local
expertise to service both on-trade and off-trade accounts throughout China. ADSL
provides procurement and logistic solutions to supermarkets, hotels, high-end
restaurants and bars, cafes/bakeries, and beverage wholesalers/retailers,
servicing approximately 3,500 direct accounts. Via second tier wholesaler
networks the business distributes to over 10,000 indirect accounts. The points
of sale are currently focused on the larger urban and affluent regions of
China.




ADSL
represents the following brands:




Core
wines


·
            Yarraman
      (Australia)


·
              Arabella
      (South Africa)


·
            Trios
      (Australia, Italy)


·
            Trivento
      (Argentina)


·
            Santa
      Carolina (Chile)


·
            Vina
      San Pedro (Chile)


·
            Ironstone
      (USA)




Core
beers


·
            Heineken


·
              Tsing
      Tao


·
            Pabst
      Blue Ribbon


·
            Tiger


·
            Budweiser




Core
spirits


·
            The
      Speyside Single Highland Malt
Whisky


·
            Drumguish
      Single Highland Malt Whisky


·
              Lord
      Fidlin’s Gin


·
            Latvia
      Ullmanoff Vodka


·
            Mao
      Tai




Core other
beverages)


·
            Snapple
      – (Teas & Juice Drinks)


·
              Yeshu
      - (Coconut Drink)


·
            Sunkist
      - (Orange Soda)


·
            Jia
      Jia Liang Teh - (Herbal Drinks)


·
            Kelsoloch
      - (Mixers, Tonics and Soda)


·
            Private
      Label Sodas and Teas




Wine
Mall




ADSL has
tested the retail concept via a store that operates under the Wine Mall name. We
expect this “big-box” retail format to be the market leader in China,
continually pioneering the retail experience for its consumers by offering a
range of up to 2,000 labels of quality local and imported wines, beers and
spirits, as well as professional advice on wines selection, regular promotions
and wine-tasting events.




The Wine
Mall retail concept sets new standards in experience and immersion and cleverly
builds a sense of being ‘guided’ through the store and experiencing all it has
to offer. Wine Mall will have a multi-functional format embracing all consumer
segments, from self-service and full service and encourages the consumer to
explore further within the store. Consumer education is a significant part of
the operation to enable consumers to build their knowledge of wine. The store is
cleverly divided into supermarket, exhibition and seminar spaces. The stores’
design and layout is modeled on other successful “big box” liquor retailing
concepts successfully employed in countries such as Australia and
USA.


- 2
-




JUGIONG
VINYARD. In November, 2008, we agreed to acquire the Jugiong Vineyard in New
South Wales, Australia, comprising 475 acres of vineyard and a grape supply
contract which has 4 years remaining, from Delta Dawn (which is also one of our
shareholders). The consideration for the purchase of the Jugiong vineyard is $11
million which will be satisfied by the issue by us to Delta Dawn of a redeemable
convertible 2 year loan note in the principal amount of $6 million, bearing
interest at 6% per annum and, in addition, we will assume $5 million of debt
from Delta Dawn. This transaction has not yet been consummated.




The
Jugiong Vineyard property was established by a group of private investors in
1998 and is located over two blocks of land totaling 650 acres (approximately
263 hectares) comprising the Wirrilla Homestead Block and Wirrilla Point Block,
with 181 hectares under vines. The property is located just outside the township
of Jugiong, a small rural town on the Hume Highway approximately 65 km from
Yass, 124 km from Canberra and 340 km from Sydney.




Pursuant
to the terms of its acquisition agreement with Delta Dawn, Yarraman has agreed
to take approximately 20 per cent. of the anticipated growth in grape production
of the Jugiong Vineyard for its own private labels which it has been developing
for the China market. The acquisition of Jugiong will be a significant
development as the Board believes that the wine made from the Jugiong grapes
will be well suited to the Chinese market.




The vine
planting summary as follows:




Varietal
                  
                  Wirilla Homestead
                    area (Ha)
                  
                  
                  Wirilla Point
                    area (Ha)
                  
                  
                  Total vine planting
                    area
                    (Ha)Shiraz
                  
                  
                  75
                  
                  
                  
                  15
                  
                  
                  
                  90Cabernet
      sauvignon
                  
                  
                  27
                  
                  
                  
                  21
                  
                  
                  
                  48Merlot
                  
                  
                  10
                  
                  
                  
                  1
                  
                  
                  
                  11Semillon
                  
                  
                  10
                  
                  
                  
                  —
                  
                  
                  
                  10Chardonnay
                  
                  
                  9
                  
                  
                  
                  —
                  
                  
                  
                  9Verdelho
                  
                  
                  —
                  
                  
                  
                  7
                  
                  
                  
                  7Sauvignon
      blanc
                  
                  
                  —
                  
                  
                  
                  6
                  
                  
                  
                  6Total
      Area
                  
                  
                  131
                  
                  
                  
                  50
                  
                  
                  
                  181





INTELLECTUAL
PROPERTY SALE. On May 26, 2009, we entered into an Intellectual Property Sale
Agreement with the Yarraman Road Trust, pursuant to which we acquired certain
intellectual property rights. The Yarraman Road Trust is our majority
shareholder. In consideration for the property acquired, we issued 55,000 shares
of Series B Convertible Preferred Stock, which shares are convertible into
55,000,000 shares of our Common Stock, subject to sufficient unauthorized Common
Stock being available for issuance. The intellectual property rights relate to
the production and sale of alcoholic apple cider. Alcoholic cider is the fastest
growing alcohol beverage category globally, and the Australian market is growing
at a significantly faster rate than the global average. The production of
alcoholic apple cider is very similar to winemaking, but unlike winemaking,
cider can be produced all year round on a “just in time” basis. The addition of
cider production into the existing winery production facilities allows
significantly increased production throughput without the need for any
additional capital expenditure on production equipment. Due to fast turnover and
low inventory holding, along with a rapidly growing customer demand, cider
production offers significant margin and cash flow benefits




CORPORATE
NAME CHANGE. On December 8, 2009, we changed our corporate name to "Global
Beverages, Inc." to more appropriately reflect our diversified, vertically
integrated business after the ADSL acquisition.




RIVIERA
BEVERAGES ACQUISITION. On December 31, 2009, we entered into an Exchange
Agreement (the “Exchange Agreement”) with Riviera Global Holdings LLC, a New
York limited liability company, pursuant to which the Seller has agreed to sell,
upon the terms and subject to the conditions of the Exchange Agreement, all of
the issued and outstanding shares of Riviera Beverages, Inc. (“Riviera”) to us
in exchange for 19,605 shares of our Series C Convertible Preferred Stock, which
shares are convertible into 19,605,000 shares of our Common Stock subject to
sufficient unauthorized Common Stock being available for issuance. This
transaction has not yet been consummated.


- 3
-




Riviera
is an importer of beer wines and spirits from countries including France, Italy,
Australia, Chie, Argentina and Mexico. The products are then sold through
distributors in 37 states in the United States. Riviera owns a number of brands
under which it sells the imported beverages, with production of these beverages
being carried out by third parties in the countries of origin. It is
contemplated that Riviera’s Australian-sourced wines will now be produced at our
Yarraman Estate winery in the Hunter Valley.




Riviera’s
extensive distribution network throughout the United States provides another
significant outlet for the Yarraman-branded wines produced at the Australian
facilities. Additionally many of the brands owned by Riviera are suitable for
importation and distribution into China.




Overview




As of the
end of the 2009 fiscal year, we produce and sell premium (up to US$14),
super-premium (up to US$20) and ultra-premium (over US$20) wines. Our wines are
made at our winery in New South Wales, Australia, where grapes are crushed,
fermented and made into wine or blended with wines purchased from other
vineyards for production of varietals. Wines are sold both in Australia and
internationally, principally under our “Yarraman” label. The vineyards from
which we produce our wines are located on land in two regions in the State of
New South Wales, Australia - the Upper Hunter Valley and Gundagai.




Opened in
1967 on the Upper Hunter Wybong property, our winery currently has a 2,300 ton
processing facility with the capacity to yield 160,000 cases. The winery
utilizes current technology in its harvesting, production and packaging of its
products. Over US$10 million has been spent since 1994 on capital improvements
to the winery and vineyard.




The
Wirrilla Vineyard is located over two blocks of land comprising the Wirrilla
Homestead and Wirrilla Point Block, with 470 acres under vines. The Wirrilla
Vineyard produces wines including Sauvignon Blanc, Semillon, Verdelho,
Chardonnay, Merlot, Cabernet Sauvignon and Shiraz. The wines produced from this
vineyard are used in our premium range of wines.




Product
Overview




We offer
a variety of wine for sale to retail customers. Our product line consists
of:




Yarraman
Range




Under the
Yarraman label we produce and sell the following wines in 750mL bottles;
Semillon, Chardonnay, Rose, Chambourcin, Merlot and Shiraz. These wines sell for
approximately US$16 - $24. This new range of wine was recently released for sale
in the Australian market and will progressively be launched into our various
export markets.




Red
Horse Range




This
range of wines was developed for and is distributed by Robert Whale Selections
in the United States. First released in 2006, this range comprises Shiraz
Cabernet, Cabernet Merlot, Chardonnay and Semillon Verdelho in 750ml bottles and
retails for approximately US$13 per bottle.




The
Bolter




The
Bolter collection is a range of wines which was released in November 2005
targeting domestic and international markets. These wines are currently
distributed by a broad range of liquor retailers in Australia and exported to a
number of countries throughout Europe and Asia. The suggested retail price for
these wines is approximately US$10.


- 4
-




The
Bolter range sells the following types of wines in 750 ml bottles: Shiraz,
Cabernet Merlot, Chardonnay, and Classic Dry White.




The
Market




Overview




The
Australian Bureau of Statistics (“ABS”) reported that 1.68 million tons of
grapes were harvested for winemaking purposes in 2009. This was an decrease of
8% over the 2008 harvest. The reasons behind the decreased harvest are primarily
grape growers managing vineyards for lower yields as a result of the reduced
demand for grape purchases by wineries, some quantities of grapes remaining
unharvested, and some areas of vineyards being removed. ABS has estimated that
there were 163,000 hectares of vineyard cultivated for wine grapes in
2009.




Domestic
Wine Sales




Data
published by the Australian Wine & Brandy Corporation (AWBC) shows that
Australian wine accounted for 87% of domestic wine sales in Australia for 200,
down from 89% in 2008. The increase in sales of imported wines in Australia is a
trend that is forecast to continue. Total sales of Australian wine in the
domestic market for 2009 was 426 million litres, a decrease of 0.25% compared to
2008 domestic sales were comprised of 155 million litres of red wine, unchanged
from 2008, 204 million litres white wine, down 1% compared to 2008 and the
balance, 67 million litres, is made up of sparkling and fortified wines.
Yarraman Australia’s sales account for less than 1% of the domestic
market.




We
utilize a system of self distribution, and third party distributors. We have a
central distribution depot at our Wybong winery along with a third party
warehouse in Sydney which services same or next day delivery in Sydney and New
South Wales.




In
addition, we market and sell our wines through retail outlets in New South
Wales, through mailing lists, and through distributors and wine brokers who sell
in specific targeted areas outside of the state of New South Wales.




Export
Wine Sales




In 2009
Australian wine exports increased to 749 million litres, an increase of 4.5%
from 2008. The average price per litre decreased from $3.01 to $2.60. The
overall dollar value of these exports declined by 10% to $1.93 billion. The
United Kingdom remains the largest overseas market at 265 million litres (35%),
however the average value per litre is well below the overall average, at $2.18.
The United States is the second largest overseas market at 236 million litres
(32%). The average value per litre in this market has also fallen below the
overall average, at $2.51 per litre. Yarraman Australia ships approximately
7,500 cases per year to the United States market and approximately 250 cases per
year to the United Kingdom.




With
continuing investment and development in our brands, we plan to capitalize on
consumer demand in our primary export markets of China, the United States,
European Union and Asia.


- 5
-


Our wines
are distributed and sold in the following countries:




s
      Australia
              
              s
      Canada
              
              s
    Chinas
    USA
              
              s
      Poland
              
              s
      Germanys
      Ireland
              
              s
      Singapore
              
              s United
      Kingdom




We export
approximately 51% of our annual volume production The grape production for a
particular year will be reflected in sales revenue in approximately two years
due to the fact that we record sales following the ageing time necessary in
winemaking.




We
appoint agents or distributors in export markets to facilitate importation of
wines to the desired markets. Agents or distributors provide sales
representation and facilitate or directly distribute wines within their
designated regions.




All
markets, with the exception of Canada, purchase “Yarraman” branded wines in
Australian dollars with shipping from Australia paid for by and at the risk of
the purchaser. These wines are then sold wholesale.




Our
Canadian distributor acts as a commissioned agent facilitating the importation
wines into the Canadian provinces and provides sales representation in
government controlled and privatized markets. Exports to Canada are also shipped
from Australia at the purchaser’s risk and cost, although such sales are made in
Canadian dollars.




Seasonal
and Quarterly Results




We have
historically experienced and expect to continue experiencing seasonal
fluctuations in our revenues and net income. Sales volumes increase
progressively beginning in the fourth quarter through to the second quarter with
declines in the first six weeks of the third quarter for the domestic market. In
the export market we have traditionally seen increases in orders in the third
quarter progressively increasing to the second quarter of the following
financial year due to substantial lead times to meet seasonal sales
requirements.




Research
and Development




During
the years ended June 30, 2009 and 2008 we did not incur any research and
development expenses.




Customers




For the
year ended June 30, 2008, we had one customer which comprised approximately 20%
of total sales. There was a $158,412 receivable from the customer as of June 30,
2008.




For the
year ended June 30, 2009, our three largest customers accounted for 71% of
sales. There was $631,536 of receivables from these customers as of June 20,
2009.




Suppliers




We use
materials and supplies, such as glass bottles, closures, labels, boxes and
chemicals, that we currently obtain from a number of long standing suppliers.
The supplies are purchased for specific needs and there are no long-term
supplier agreements. Management monitors supply costs to maintain cost
effectiveness. Bottling of the wines is performed by a third party in the town
of Pokolbin that management believes offers product quality and prompt service,
thus minimizing holding times for finished goods as we use just-in-time bottling
and packaging for premium wine exports.


- 6
-




Competition




The 2009
Australian Wine Industry Directory lists 1,310 wine producers that export wine,
more than half of all producers. Fosters Group and Constellation Brands account
for 41% of all exports by volume, while the top 20 exporters account for 78%.
The remaining 1,290 exporters compete for 12% of the export volume. The
Australian wine industry is highly competitive, with all regions of Australia
having producers of Premium, Super Premium and Ultra Premium wines that will
compete with our own products. Wine production in Australia is dominated by
large wineries that have significantly greater financial, production,
distribution and marketing resources than we have. Management believes that the
principal competitive factor in the Premium, Super Premium and Ultra Premium
markets are product quality, price and label recognition. We have received
positive reviews of our wines and believe our prices are competitive with other
producers. Increasingly, the competition is also coming from other wine
producing countries. ABS data shows that wine imports into Australia now
represent 12% of all wine sales, up from 7% two years ago, with this trend
expected to continue.




Regulatory
Matters




In nearly
all the countries that we market our wines, such as the United States, United
Kingdom, China and Canada, there are statutory authorities which exercise
varying degrees of market regulation. Management believes that we are
substantially in compliance with all regulations.




Australian
Regulatory Board




Wine
quality control and distribution is regulated by the Australian Wine and Brandy
Corporation. The Australian Wine and Brandy Corporation is the Australian
Government authority responsible for the promotion and regulation of the
Australian wine and brandy industry and the provision of wine sector information
to wineries throughout Australia. It provides the regulatory role in quality
control and its goal is to maintain the integrity of wines originating from
Australian vineyards. It also has a role of providing industry-wide knowledge
through published literature and market development. Our business has been
regulated by the Australian Wine and Brandy Corporation since our
formation.




Trademarks
and Intellectual Property




All
trademarks and intellectual property are owned by us. We believe that all
material trademarks and intellectual property are protected in all material
respects by the law of the governments which regulate the markets in which they
are used.




Environmental
Matters




We
believe that our operations are in substantial compliance with all applicable
environmental requirements of Australia. With regard to its control of
production and waste management, management believes we operate within all
international standards.




Insurance




We
maintain liability insurance which, in the view of management, is adequate
protection for any damages arising out of our activities, including liability
insurance coverage, industrial special risk coverage, and general liability
coverage.




Employees




As of
June 30, 2009, we had 11 full-time employees and 6 part-time employees. During
May to July we employ additional part-time, seasonal employees for vine pruning.
There are also additional seasonal employees used during harvest in the winery.
None of the employees are members of a union or labor organization.




Significant
Subsidiaries




As at
June 30, 2009, our sole subsidiary was Yarraman Australia.


- 7
-




Available
Information




We file
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy any document
we file with the Commission at the Commission's public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the Commission at
1-800-SEC-0330 for further information on the public reference rooms. Our
Commission filings are also available to the public from the Commission's
Website at www.sec.gov.




We make
available free of charge our annual, quarterly and current reports, proxy
statements and other information upon request. To request such materials, please
contact Lawrence Lichter, our Chief Financial Officer, at 16133 Ventura
Boulevard, Suite 425, Encino, CA, USA 91436, or call (818)789-0265 extension
13.




ITEM
      1A.
            RISK
      FACTORS




We
have an immediate need for capital and we will need to access additional
financing. Additional financing could dilute our current stockholders’ equity
interests.




If
additional funds are raised through the issuance of equity or debt securities,
our current stockholders may experience dilution and any such securities may
have rights, preferences or privileges senior to those of the rights of our
common stock.




There can
be no assurance that additional financing will be available on terms favorable
to us, or at all. If adequate funds are not available or not available on
acceptable terms, we may not be able to fund our expansion, promote our brand
name as we desire, take advantage of unanticipated acquisition opportunities,
develop or enhance products or respond to competitive pressures. Any such
inability could have a material adverse effect on our business, results of
operations and financial condition.




Our
lack of cash reserves and liquid assets could result in an interruption of our
business and has led our auditors to express doubt about our ability to continue
as a going concern




We do not
currently have significant cash reserves. Our ability to fund our operations is
dependent at the present time on collections of our accounts receivable. We have
experienced difficulties in the recent past with collecting on our receivables.
The failure of our customers to timely pay accounts receivable could force us to
curtail our operations. Accordingly, our auditors have qualified their report on
our financials statements by expressing substantial doubt about our ability to
continue as a going concern.




We
may experience a risk of revenue reduction due to currency
conversions.




At this
time, all of our revenue, expenses and capital purchasing activities are
transacted in Australian Dollars. Capital transactions will always be reported
based on the current exchange rates, and resulting gains and losses from
historical rates are charged or credited directly to stockholders’ equity.
Revenues and expenses will be converted using the weighted-average exchange
rates for the periods being reported. Any major fluctuation in the average
exchange rate between the Australian Dollar and the U.S. Dollar during a period
will affect our results of operations reported as reported in U.S.
Dollars.




To the
extent future revenue is denominated in foreign currencies, we would be subject
to increased risks relating to foreign currency exchange rate fluctuations that
could have a material adverse affect on our financial condition and operating
results. To date, we have not engaged in any hedging transactions in connection
with our operations.




Our
indebtedness could have a material adverse effect on our financial
health.




Our
ability to satisfy our debt obligations outstanding from time to time will
depend upon our future operating performance. We do not have complete control
over our future operating performance because it is subject to prevailing
economic conditions, levels of interest rates and financial, business and other
factors. There can be no assurance that our business will generate sufficient
cash flow from operations to meet all of our debt service
requirements.


- 8
-




Our
business may be adversely affected by competition.




The wine
industry is highly competitive, and we face competition in all global markets. .
We believe that the principal competitive factors in the premium, super premium
and ultra premium segment of the wine industry are product quality, price, label
recognition and product supply Other producers may have the capability to
deliver superior results to us in these areas.




Increases
in staffing costs could adversely affect our business.




Our
business is labor intensive and we are dependent on the provision of services by
highly qualified personnel. These resources are scarce and we may face
competition for these services which could result in increased expenses for the
business. These labor expenses constitute a significant component of our overall
cost of doing business and increases in these expenses may adversely impact our
business.




Increases
in distribution expenses and/or decreases in the effectiveness of our
distributors could result in higher expenses with no corresponding increase in
revenue.




Our
current business model is reliant upon distribution and changes to the costs
associated with that distribution or a decrease in the effectiveness of those
distributors could have a significant adverse impact on the revenue and/or
profitability of our business.




We
may be subject to product liability claims which could negatively impact our
profitability.




We sell
alcoholic beverages for consumption, which involves risks such as product
contamination or spoilage, product tampering and other adulteration of products.
We may be subject to liability if the consumption of any of our products causes
injury, illness or death. A significant product liability judgment against us
may negatively impact our profitability for a period of time depending on
product availability, competitive reaction and consumer attitudes. Even if a
product liability claim is unsuccessful or is not fully pursued, any negative
publicity surrounding such assertion that products provided through our
treatment programs caused illness or injury could adversely affect our
reputation with existing and potential customers and including irreparable harm
to our corporate and brand image.




We
have limited business liability insurance coverage.




We have
limited business liability insurance coverage for our operations. Any loss due
to business disruption, litigation or natural disaster may exceed or may be
excluded from the insurance coverage we have and could result in substantial
expenses and a diversion of resources. We do not have liability insurance to
cover any operations outside of Australia.




We
may not be able to retain our key management and staff.




We are
highly dependent on the services of the principal members of our management. The
loss of one or more of such individuals could substantially impair the quality
of our products and affect our ongoing research and development programs. Our
success depends in large part upon our ability to attract and retain highly
qualified personnel. We compete in our hiring efforts with other wineries and
wine marketing companies and we may have to pay higher salaries to attract and
retain personnel.


- 9
-




Efforts
to comply with securities laws and regulations have required substantial
financial and personnel resources and we still may fail to comply.




As
directed by the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring
public companies to include a report of our management on internal controls over
financial reporting in their annual reports. The formal process of evaluating
our internal controls over financial reporting, which has required the devotion
of substantial financial and personnel resources, is continuing. Given the
status of our efforts, coupled with the fact that guidance from regulatory
authorities in the area of internal controls continues to evolve, uncertainty
exists regarding our ability to comply by applicable deadlines. Due to changes
in our personnel over the last fiscal year we were unable to timely file our
financial reports.




We
are subject to the risks associated with doing business in
Australia.




As most
of our current operations are conducted in Australia, we are subject to special
considerations and significant risks not typically associated with companies
operating in North America and Western Europe. These include risks associated
with, among others, the political, economic and legal environments and foreign
currency exchange. Our results may be adversely affected by changes in the
political and social conditions in Australia, and by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation,
among other things.




Yarraman
Estate Pty, Ltd., our wholly-owned subsidiary, is incorporated in Australia.
Some of our executive officers and all of our directors are non-residents of the
United States. Therefore, it may be difficult for an investor, or any other
person or entity, to enforce a U.S. court judgment based upon the civil
liability provisions of the U.S. federal securities laws in an Australian court
against us or any of those persons or to effect service of process upon these
persons in the United States.




Additionally,
it may be difficult for an investor, or any other person or entity, to enforce
civil liabilities under U.S. federal securities laws in original actions
instituted in Australia. It may be difficult to enforce a judgment in the United
States against us and most of our officers and directors or to assert U.S.
securities laws claims in Australia or serve process on most of our officers and
directors.




Effects
of International Sales.




We intend
to continue to market our current and future products in most major world
markets. A number of risks are inherent in international transactions. In order
for us to market our products in the U.S., Europe, Canada, Asia and certain
other foreign jurisdictions, we may have to obtain required regulatory approvals
or clearances and otherwise comply with extensive regulations regarding safety,
manufacturing processes and quality, distribution and advertising rules and
regulations. There can be no assurance that we will be able to obtain or
maintain regulatory approvals or clearances in such countries or that we will
not be required to incur significant costs in obtaining or maintaining foreign
regulatory approvals or clearances.




Fluctuations
in currency exchange rates may adversely affect the demand for our products by
increasing the price of our products in the currency of the countries in which
the products are marketed.




Regulations
in international markets relating to alcoholic beverages could adversely affect
our business.




Our
business model is dependent upon the distribution of alcoholic beverages. In
certain countries, we may be subject to state or national laws governing the
distribution of alcoholic beverages. We may be required to expend substantial
unforeseen resources to comply with such regulations. Failure to comply with
such regulations could cause a significant disruption in our business
domestically and internationally as it could distract management’s attention and
have a material adverse effect on our business and financial condition or
results of operations.




ITEM
      1B.
            UNRESOLVED
      STAFF COMMENTS




None.


- 10
-




ITEM
2.          PROPERTIES




We own
approximately 632 acres in the Upper Hunter Valley, New South Wales. The Upper
Hunter Wybong vineyard has a total of approximately 632 acres, of which 187
acres are under vine and approximately 13 acres are utilized for the winery. The
land is mostly comprised of black, sandy loam, alluvial soils along the creek
frontage and adjacent slopes, rising to arable red loams with well drained
plains and sandy slopes which extend to the sandstone ridges on the perimeter.
The surplus acreage is used for pastures used primarily to produce mulch covers
under the vines. Located on the property is the Wybong Creek, a perennial
stream. Because of climate, soil and other grown conditions, the Upper Hunter
Valley is ideally suited to growing superior quality Shiraz, Chardonnay, Merlot
and Semillon wine grapes.




Our
executive offices and administrative offices are located on the Wybong property
at the vineyard.




We
believe our properties are adequate for our current needs and will be sufficient
to serve the needs of our operations for the foreseeable future.




ITEM
3.          LEGAL
PROCEEDINGS




We are
subject to various legal proceedings from time to time in the ordinary course of
business, none of which is currently required to be disclosed under this Item
3.




PART II




ITEM
4.          MARKET FOR
REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES




Market
Information




Our
shares of common stock are publicly traded by brokers, without market makers,
and the resulting trade data (price and volume) are posted by the Pink Sheets (
www.pinksheets.com ), a centralized quotation service that collects and
publishes market maker quotes for over-the-counter securities that is published
by Pinks Sheets LLC.  Trade data for our shares may be found under the
symbol ‘YRMN.PK’. The following table sets forth the range of high and low sales
prices for our common stock for the periods indicated:




High
                      
                      
                      LowFiscal
      2009:1
      st
      Quarter
                      
                      $
                      1.50
                      
                      
                      
                      1.502
      nd
      Quarter
                      
                      $
                      1.50
                      
                      
                      
                      1.503
      rd
      Quarter
                      
                      $
                      1.50
                      
                      
                      
                      1.504
      th
      Quarter
                      
                      $
                      1.50
                      
                      
                      
                      0.50Fiscal
      2008:1
      st
      Quarter
                      
                      $
                      2.35
                      
                      
                      $
                      2.352
      nd
      Quarter
                      
                      $
                      2.35
                      
                      
                      $
                      2.353
      rd
      Quarter
                      
                      $
                      2.35
                      
                      
                      $
                      2.354
      th
      Quarter
                      
                      $
                      2.35
                      
                      
                      $
                      1.50





Our stock
is thinly traded and has not traded during the three months ended March 31,
2010. Such prices above represent quotations between dealers, without dealer
markup, markdown or commissions, and may not represent actual
transactions.


- 11
-




Record
Holders




As of
March 30, 2010, there were 88,747,213 shares of common stock issued and
outstanding, held by approximately 160 holders of record as indicated on the
records of our transfer agent.




Dividends




We have
not declared or paid dividends on our capital stock to date and intend to retain
any earnings for use in the business for the foreseeable future.




Equity Compensation Plan
Information




We do not
currently have any equity compensation plans authorized.




Recent Sales of Unregistered
Securities




During
the year ended June 30, 2009 we issued the following securities that were not
registered under the Securities Act of 1933, as amended (the “Securities
Act”):




On June
8, 2009, we issued 1,390,476 shares of common stock to various individuals and
entities for payment of services. The common stock was issued at a value of
$0.42 per share. The shares were issued pursuant to an exemption from
registration pursuant to Section 4(2) of the Securities Act and/or Regulation S
promulgated thereunder.




Purchases of Equity
Securities by the Issuer and Affiliated Purchasers




There
were no repurchases of equity securities by the issuer or affiliated purchasers
during the fourth quarter of the fiscal year ended June 30, 2009.




ITEM
5.          SELECTED FINANCIAL
DATA




We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.




ITEM
6.           MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




The
following discussion should be read in conjunction with other sections of this
Form 10-K including Part 1, “Item 1: Business” and Part II, “Item 8: Financial
Statements.” Various sections of management’s discussion and analysis
(“MD&A”) contain statements that are forward-looking. These statements are
based on current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially due to factors discussed
in this report, as well as factors not within our control. We undertake no duty
to update any forward-looking statement to conform the statement to actual
results or changes in our expectations.




Our
MD&A is provided as a supplement to our audited financial statements to help
provide an understanding of our financial condition, changes in financial
condition and results of operations. The MD&A section is organized as
follows:




·
            Overview.
      This section provides a general description of our business, as well as
      recent developments that we believe are important in understanding our
      results of operations as well as anticipating future trends in our
      operations.




·
            Critical
      Accounting Policies. This section provides an analysis of the significant
      estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues, expenses, and the related disclosure of contingent
      assets and liabilities.




- 12
-




·
            Results
      of Operations. This section provides an analysis of our results of
      operations for the fiscal year ended June 30, 2009 (“Fiscal 2009”)
      compared to the fiscal year ended June 30, 2008 (“Fiscal 2008”). A brief
      description of certain aspects, transactions and events is provided,
      including related-party transactions that impact the comparability of the
      results being analyzed.




·
            Liquidity
      and Capital Resources. This section provides an analysis of our financial
      condition as of June 30, 2009 and our cash flows for Fiscal 2009 compared
      to Fiscal 2008.




Overview




Our
financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the financial statements, during the
years ended June 30, 2009 and 2008, the Company incurred losses of $2,817,752
and $3,628,825, respectively. In addition to suffering recurring losses from
operations and negative cash flows from operations the Company has a cash
overdraft and an inability to meets its maturing obligations without borrowing
from related parties and sale of its stock. These issues may raise substantial
concern about its ability to continue as a going concern.




We
produce and sell premium, super-premium and ultra-premium wines from our
winemaking operations located outside of Sydney, Australia. Our revenues are
generated by selling our wines through distributors located both inside and
outside of Australia pursuant to agreements that generally obligate the
distributor to use its commercially reasonable efforts to arrange for the
purchase of our products by retail and wholesale venders of wines in our target
markets. We recognize revenue upon the shipment of the relevant wine (whether
bottled or in bulk form) to the purchaser under circumstances that give rise to
a binding obligation on the part of the purchaser to make payment to
us.




Critical Accounting
Policies




The
methods, estimates and judgments we use in applying our accounting policies have
a significant impact on the results we report in our financial statements, which
we discuss under the heading “Results of Operations” following this section of
our MD&A. Some of our accounting policies require us to make difficult and
subjective judgments, often resulting from the need to make estimates on matters
that are inherently uncertain.




We
believe the following critical accounting policies reflect our more significant
estimates and assumptions used in the preparation of our consolidated financial
statements:




Revenue
Recognition




Revenues
consist of sales of finished goods, which are bottled and labeled wine, and bulk
wine, which is larger quantities of unbottled wine. Revenue is recognized when
the product is shipped or delivered and the risks, rewards and title of
ownership have transferred to the customer. We recognize some shipping and
handling fees as revenue, and the related expenses as a component of cost of
sales. All internal handling charges are included with selling and marketing
expense. Historically, sales returns have not been significant. As such, we do
not record a reduction to revenue for estimated product returns in the same
period that the related revenue is recorded.




ALLOWANCE
FOR DOUBTFUL ACCOUNTS - We determine our allowance for doubtful accounts based
on the aging of accounts receivable balances, its historic write-off experience,
and the financial condition of its customers. Changes in the financial condition
of our major customers could result in significant accounts receivable
write-offs. Our allowance for doubtful accounts at June 30, 2009 and 2008 was
$43,615 and $104,213 respectively.




INVENTORY
VALUATION - We continually assess the valuation of our inventories and reduces
the carrying value of those inventories that may have a cost in excess of the
current market value or may be obsolete or in excess of our forecasted usage to
their estimated net realizable value. Net realizable value is estimated using
historic experience, current market conditions and assumptions about future
market conditions and expected demand. If actual market conditions and future
demand are less favorable than projected, inventory write-downs, which are
charged to costs of goods sold, may be required.


- 13
-




IMPAIRMENT
OF INTANGIBLE ASSETS – We have intellectual materials and water usage rights
associated with its business. We review these assets for impairment at least
annually or more frequently if an event occurs or circumstances change that
would more likely than not reduce the fair value of these assets below their
carrying value. If the fair value of these assets is less than their carrying
value, then an impairment loss would be recognized equal to the excess of the
carrying value over the fair value of the asset. As of June 30, 2009, we do not
believe there has been any impairment of these assets. Intangible assets at June
30, 2009 and 2008 totaled $19,459,248 and $249,990, respectively.




Related-Party
Transactions




We have
related-party transactions and agreements, which we believe have been accounted
for at fair value. We utilized our best estimate of the value of these
transactions and agreements. Had alternative assumptions been used, the values
obtained may have been different.




Income
Taxes




We
utilize the liability method of accounting for income taxes. Deferred income tax
assets and liabilities are calculated as the difference between the financial
statements and tax basis of assets and liabilities that will result in taxable
or deductible amounts in the future, based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income.




We record
a valuation allowance to reduce our deferred tax assets to the amount that we
believe is more likely than not to be realized. In assessing the need for a
valuation allowance, we consider all positive and negative evidence, including
scheduled reversals of deferred tax liabilities, projected future taxable
income, tax planning strategies, and recent financial performance.




The
application of tax laws and regulations is subject to legal and factual
interpretation, judgment and uncertainty. Tax laws themselves are subject to
change as a result of changes in fiscal policy, changes in legislation,
evolution of regulations and court rulings. Therefore, the actual income taxes
may be materially different from our estimates. As a result of our analysis, we
concluded that a full valuation allowance against our net deferred tax assets is
appropriate at June 30, 2009 and 2008.




Contingencies




From time
to time, we are involved in disputes, litigation and other legal proceedings. We
record a charge equal to at least the minimum estimated liability for a loss
contingency when both of the following conditions are met: (i) information
available prior to issuance of the financial statements indicates that it is
probable that an asset had been impaired or a liability had been incurred at the
date of the financial statements, and (ii) the range of loss can be reasonably
estimated. However, the actual liability in any such litigation may be
materially different from our estimates, which could result in the need to
record additional costs. Currently, we have no outstanding legal proceedings or
claims that require a loss contingency.




Stock-Based
Compensation Expense




Effective
January 1, 2006, we adopted SFAS 123R , Share-Based Payments (“SFAS
123R”). SFAS 123R requires all share-based payments, including grants of
employee stock options and warrants, be recognized in our financial statements
based on their respective grant date fair values. Under this standard, the fair
value of each share-based payment award is estimated on the date of grant using
an option pricing model that meets certain requirements. We currently use the
Black-Scholes option pricing model to estimate the fair value of our share-based
payment awards. The Black-Scholes model meets the requirements of SFAS 123R;
however, the fair values generated by the model may not be indicative of the
actual fair values of our awards as the model does not consider certain factors
important to our awards, such as continued employment, periodic vesting
requirements and limited transferability.


- 14
-




The
determination of the fair value of share-based payment awards utilizing the
Black-Scholes model is affected by our stock price and a number of assumptions,
including expected volatility, expected life, risk-free interest rate and
expected dividends. We use the historical volatility for our common stock as the
expected volatility assumption required in the Black-Scholes model, which could
be significantly different than actual volatility. The expected life of the
awards is based on historical and other economic data trended into the future.
The risk-free interest rate assumption is based on observed interest rates
appropriate for the terms of our awards. The dividend yield assumption is based
on our history and expectation of dividend payouts. Forfeitures are estimated at
the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates.




Stock-based
compensation expense recognized in our financial statements beginning January 1,
2006 and thereafter is based on awards that are ultimately expected to vest. We
evaluate the assumptions used to value our awards on a quarterly basis. If
factors change and we employ different assumptions, stock-based compensation
expense may differ significantly from what we have recorded in the past. If
there are any modifications or cancellations of the underlying unvested
securities, we may be required to accelerate, increase or cancel any remaining
unearned stock-based compensation expense. Future stock-based compensation
expense and unearned stock-based compensation will increase to the extent that
we grant additional equity awards to employees.




Results of
Operations




The
following table sets forth, for the periods indicated, certain operating
information expressed as a percentage of revenue. All amounts in the following
presentation are in U.S. Dollars unless otherwise indicated.




Twelve Months Ended June 30,2009
                
                
                2008Sales,
      net
                
                $
                2,162,966
                
                
                
                100
                %
                
                $
                2,318,719
                
                
                
                100
                %Cost
      of sales
                
                $
                1,983,571
                
                
                
                92
                %
                
                $
                2,747,800
                
                
                
                119
                %Gross
      profit (loss)
                
                $
                179,965
                
                
                
                8
                %
                
                $
                (429,081
                )
                
                
                -19
                %Selling,
      general and administrative expenses
                
                $
                1,412,188
                
                
                
                65
                %
                
                $
                1,753,077
                
                
                
                76
                %Other
      (Income) Expense
                
                $
                1,584,959
                
                
                
                73
                %
                
                $
                1,446,667
                
                
                
                62
                %Loss
      before income taxes
                
                $
                (2,817,752
                )
                
                
                -130
                %
                
                $
                (3,628,825
                )
                
                
                -157
                %Provision
      for income taxes
                
                $
                -
                
                
                
                0
                %
                
                $
                -
                
                
                
                0
                %Net
      loss
                
                $
                (2,817,752
                )
                
                
                -130
                %
                
                $
                (3,628,825
                )
                
                
                -157
                %




Twelve
Months Ended June 30, 2009 Compared to Twelve Months Ended June 30,
2008




Revenue.
Revenue was $2,162,966 in the twelve months ended June 30, 2009 compared to
$2,318,719 in the twelve months ended June 30, 2008. The decrease in revenues of
$155,753, or approximately 7%, was primarily related to the following items: (1)
an increase in our export sales of $440,300 and an increase in our grape sales
of $404,040, (2) a decrease in our domestic wholesale sales of $347,800 and a
decrease in our bulk wine sales of $313,020, and (3) the effect of fluctuation
in the exchange rate between the Australian Dollar and the US Dollar which
decreased by approximately 16.55% from June 30, 2008 to June 30, 2009 which
relates to a decrease of approximately $429,200.




Cost of
sales. Cost of revenue was $1,983,571 in the twelve months ended June 30,
2009 compared to $2,474,800 in the twelve months ended June 30, 2008, a decrease
of $764,229. As a percentage of revenue, cost of revenue was 92% in the twelve
months ended June 30, 2009 compared to 119% in the twelve months ended June 30,
2008. The decrease in cost of revenue is primarily due to increased production
volumes in the winery leading to lower per unit costs. In addition the effect of
the fluctuation in the exchange rate between the Australian Dollar and the US
Dollar had an effective increase in our cost of sales of approximately
$378,900.


- 15
-




Gross Profit
(Loss). Gross profit was $79,395 in the twelve months ended June 30, 2009
compared to gross loss of $(429,081) in the twelve months ended June 30, 2008.
As a percentage of revenues, gross profit was 8% in the twelve months ended June
30, 2009 and (19%) in the twelve months ended June 30, 2008 for the reasons
discussed above.




Sales, General
and Administrative Expenses. Sales, general and administrative expenses
were $1,412,188 in the twelve months ended June 30, 2009 compared to $1,753,077
in the twelve months ended June 30, 2008. This is a decrease of $340,889, or
approximately 19% from the 2008 period to the 2009 period. This decrease was
primarily attributable to a decrease in our general and administrative costs in
the United States of approximately $373,314.




As a
percentage of revenues, sales, general and administrative expenses decreased to
approximately 76% in the twelve months ended June 30, 2009 from 128% in the
twelve months ended June 30, 2008 due to the reasons discussed
above.




Other Income
(Expense). Other expense was $1,584,959 in the twelve months ended June
30, 2009 compared to $1,446,667 in the twelve months ended June 30, 2008. The
increase in other expense of $138,292 was primarily attributable to a decrease
in our interest expense of $917,274 due to the conversion of certain debt to
equity as of June 30, 2008 and an increase of $1,007,836 in costs related to our
acquisition of ADSL during the year ended June 30, 2009.




Net Income
(Loss) . Our net loss was $2,817,752 in the twelve months ended June 30,
2009 compared to a net loss of $3,628,825 in the twelve months ended June 30,
2008. This decrease in loss was primarily attributable to the decrease in cost
of sales and sales, general and administrative costs outlined
above.




Liquidity
and Capital Resources




As of
June 30, 2009, we had $0 of cash and cash equivalents and $(1,106,320) of
working capital as compared to $0 and $1,327,335, respectively, at June 30,
2008. Cash flow from operations is expected to improve as a result of our cost
cutting measures, including the termination of the Wirrilla lease and related
operating costs and improved sales. Cash flow from financing activities is
expected to improve as we converted approximately $5,035,000 of debt into equity
by issuing 12,000,000 shares of common stock.




During
the years ended June 30, 2009 and 2008, net cash used in operating activities
was $(1,548,411) and $(1,113,356), respectively. Net cash used in investing
activities totaled $62,741 for the year ended June 30, 2009, compared with
$60,108 for the same period ended June 30, 2008. Net cash provided by financing
activities totaled $1,287,821 for the year ended June 30, 2009, compared to
$276,521 for the same period ended June 30, 2008. The net change in our cash
balance was $0 and $(150,072) for the years ended June 30, 2009 and 2008,
respectively.




Management
has also been exploring additional investment capital alternatives with
professional investment bankers in the United States to raise an additional
$25,000,000 to fund expansion of the wholesale and retail operations in China,
to retire certain debt and to provide working capital for production and
procurement of inventory.




On
December 21, 2005 we entered into a loan agreement with Provident Capital
(“Provident”), a financial institution located in Australia. The amount of the
loan was $4,071,000 with monthly interest payments due on the 15th of each month
at the rate of 10% per annum, rising to 16% per annum if we are late in our
payments. The principal balance was originally due and payable on December 31,
2007 but has been extended to June 30, 2010. The loan is secured by certain of
our property, plant and equipment and is guaranteed by the Trust. As of June 30,
2009, the loan balance was $4,627,379.00 inclusive of accrued and unpaid
interest. Management has been exploring options to refinance its long term loan
from Provident, currently with an outstanding balance of $4,435,500. Any
refinancing transaction will seek terms that provide a lower interest rate,
which management believes will further increase the amount cash flow as a result
of savings because of lower interest payments.


- 16
-




On
December 21 2005, prior to the Exchange Agreement and in connection with the
Asset Purchase, Yarraman Australia entered into a loan agreement with the
Yarraman Road Trust, the nominal holder of all of Yarraman Australia’s shares.
This loan advance was non-interest bearing. The loan was secured the fixed
assets of our Australian subsidiary, subordinated to all of our other loans
collateralized by the fixed assets. A total of 50% of the loan payable, or
$916,398, was to be repaid in thirty-six monthly installments and was scheduled
to commence on the first business day of the twenty-fifth month following the
loan agreement, or approximately February 1, 2008. On the thirty-sixth month of
payment, in January 2011, the remaining 50% of the loan payable or $916,398 was
due and payable. The initial repayment date of February 2008 was extended to
June 30, 2008. This loan was converted into equity of the Company on June 30,
2008, see comment below.




On May 1,
2006 Yarraman Australia entered into a loan agreement with the Trust in the
principal amount of $826,020. Originally, this loan agreement had an interest
rate of 8%, with the same repayment terms of the December 21, 2005 loan. During
the year ended June 30, 2006 a total of $10,910 in interest expense was recorded
on this loan, until the Trust waived the interest requirement on this loan. This
loan was converted into equity of the Company on June 30, 2008, see comment
below.




On May
25, 2006 the Trust extended to Yarraman Australia an additional $13,767, to be
repaid in accordance with the same terms as the December 21, 2005 loan. This
loan advance is also non-interest bearing.




On June
30, 2008 the Trust agreed to convert the $1,832,795 and the $826,020 loans into
our equity and received 6,559,524 shares of common stock. The loans at such time
of conversion were approximately $2,755,000.




In March
2009 we sold the majority of the grape crop from the Jugiong vineyard and
received the benefit of this sale. As the transaction to acquire the Jugiong
Vineyard from Delta Dawn has not settled, an amount of $442,405 was attributed
to the cost of this sale, and accounted for as a loan from Delta Dawn. Other
subsequent amounts have been advanced, and payments made on our behalf. The
outstanding balance of this loan account at 30th June
2009 is $848,125.




As of
June 30, 2008 we were indebted to a private company that is owned by one of our
majority shareholders, Geoffrey White, in the amount of $2,334,733. This related
party has made various advances, loans and payments on our behalf, all of which
are unsecured, and due on demand. These advances and loans accrued interest on
their outstanding balance ranging between 0% and 10% per annum.




On July
1, 2007 these advances and loans were restructured into one loan agreement for
approximately $3,289,000. This new loan included approximately $689,000 related
to a sale of wine by the related party to us during the year ended June 30,
2008. This portion of the new loan was to be repaid commencing December 7, 2007
with receipts from the proceeds of the re-sale of this wine by us until it was
repaid in full. As of June 30, 2008 the balance on this portion of the loan was
$689,000. The entire new loan accrues interest at 6.5% per annum. This new loan
is secured by the fixed assets of our Australian subsidiary, subordinate to the
loan from the commercial bank, such loan totaling $5,511,308 as of June 30,
2008. This new loan, together with outstanding interest, was to be repaid for
any amounts still outstanding on September 30, 2008. On June 30, 2008 a total of
AUD $2,400,000 or USD $2,280,000, of the above loan was converted into 5,440,476
shares of the Company’s common stock, at a market price of approximately $0.42
per share. On October 15, 2008, the lender extended the repayment date on the
balance of the loan remaining, subsequent to the $2,280,000 portion of the loan
that had converted into common stock, from September 30, 2008 to September 30,
2009.




Inflation
and Changing Prices




Management
believes our operations have not been and, in the foreseeable future, will not
be adversely affected by inflation or changing prices.




Off-Balance
Sheet Arrangements




We have
no off-balance sheet arrangements.


- 17
-




ITEM
      6A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.




ITEM
7.           FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA




The
information required by Item 8 is included herein Appendix A beginning at page
F-1.




ITEM
8.           CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE




Not
Applicable.




ITEM
      8A.
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures.




We
maintain "disclosure controls and procedures" as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating
our disclosure controls and procedures, our management recognized that
disclosure controls and procedures, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of
disclosure controls and procedures are met. Additionally, in designing
disclosure controls and procedures, our management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship of possible
disclosure controls and procedures. The design of any disclosure controls and
procedures is also based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.




Our
management, including our Chief Executive Officer and our Chief Financial
Officer, have evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Annual Report on Form
10-K. Based on such evaluation, and as discussed in greater detail below, our
Chief Executive Officer and Chief Financial Officer have concluded that, as of
the end of the period covered by this Annual Report on Form 10-K, our disclosure
controls and procedures were not effective:




·
            to
      give reasonable assurance that the information required to be disclosed by
      us in reports that we file under the Securities Exchange Act of 1934 is
      recorded, processed, summarized and reported within the time periods
      specified in the Securities and Exchange Commission's rules and forms,
      and




·
            to
      ensure that information required to be disclosed in the reports that we
      file or submit under the Securities Exchange Act of 1934 is accumulated
      and communicated to our management, including our CEO and our Treasurer,
      to allow timely decisions regarding required
  disclosure.




Management's
Report on Internal Control Over Financial Reporting.




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) of the Securities
Exchange Act of 1934. Our internal control system was designed to provide
reasonable assurance to our management and the Board of Directors regarding the
preparation and fair presentation of published financial statements. Our
internal control over financial reporting includes those policies and procedures
that:




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




- 18
-




·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorization of management and directors,
      and




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




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




Our
management assessed the effectiveness of our internal control over financial
reporting as of June 30, 2009. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") in Internal Control-Integrated Framework. Based on the
assessment using those criteria, our management concluded that the internal
control over financial reporting was not effective at June 30,
2009.




While we
have designed a system of internal controls to supplement our existing controls
during our implementation of Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX
404"), which has not been fully implemented, we have been unable to complete
testing of these controls and accordingly lack the documented evidence that we
believe is necessary to support an assessment that our internal control over
financial reporting is effective. Without such testing, we cannot conclude that
there are any significant deficiencies or material weaknesses, nor can we
appropriately remediate any such deficiencies that might have been detected. In
addition, during the analysis of our internal controls in connection with our
implementation of SOX 404, we did identify a number of controls, the adoption of
which are material to our internal control environment and critical to providing
reasonable assurance that any potential errors could be detected. Those
identified controls include:




·
            Inventory
      - we did not maintain adequate procedures to timely record and reconcile
      inventory, including any necessary
reserves,




·
            Notes
      payable - we did not maintain adequate procedures to properly record the
      associated amortization of debt discounts timely nor the timely
      reconciliation of note balances,




·
            Journal
      Entries – We did not maintain an adequate list of recurring closing
      entries which would help insure all required closing entries are reviewed
      and recorded properly.




·
            Period
      Closing – We did not maintain an adequate checklist to insure that all
      period closing procedures are recorded properly and
      completely.




Due to
the nature of these material weaknesses in our internal control over financial
reporting, there is more than a remote likelihood that misstatements which could
be material to our annual or interim financial statements could occur that would
not be prevented or detected.




This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.  Our
management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this annual
report.




Changes
in Internal Control over Financial Reporting.




There
have been no changes in our internal control over financial reporting during our
fourth fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.




- 19
-


ITEM
8A(T).    CONTROLS AND PROCEDURES
  Not
applicable.
  ITEM
      8B.
              OTHER
      INFORMATION.
  None.
  PART
III
  ITEM
      9.
              DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
  Directors and Executive
Officers
  The
following table sets forth the names, ages, years elected and principal offices
and positions of our current directors and executive officers as of March 20,
2010.
  Name
                      
                      Year First Elected As
                        Officer
      or Director
                      
                      Age
                      
                      OfficeRod
      Walker
                      
                      2009
                      
                      53
                      
                      Chairman,
      Board of DirectorsMichael
      Kingshott
                      
                      2009
                      
                      62
                      
                      Deputy
      Chairman, Board of DirectorsIan
      Long
                      
                      2008
                      
                      43
                      
                      Board
      Member, PresidentGary
      Blom
                      
                      2008
                      
                      58
                      
                      Board
      MemberStephen
      Kulmar
                      
                      2009
                      
                      56
                      
                      Board
      MemberTimothy
      Yeo
                      
                      2009
                      
                      46
                      
                      Board
      Member and Senior Vice PresidentLawrence
      P. Lichter
                      
                      2008
                      
                      47
                      
                      Chief
      Financial Officer and
Secretary
  None of
the members of our Board of Directors or executive officers are related to one
another.  Each year the stockholders elect the members of our Board of
Directors.  We do not have a standing nominating committee or
compensation committee as our entire board of directors currently serves these
functions.  There were no changes in procedures for nominating
directors during the year ended June 30, 2009.
  Rod Walker, Chairman, Board of
Directors
  Mr Walker
has over 30 years experience in the retail and hospitality industries, working
in Australia, the United States and Canada. Mr Walker is currently the Executive
Chairman of Angus & Robertson Whitcoulls Borders, Australia’s largest book
retail chain, Chairman of Witchery Fashion, Australia’s largest ladies fashion
retailer, and a Director of Rebel Sport, Australia’s  largest sporting
goods retailer.  He is a former Managing Director of Freedom Group and
Pizza Hut Asia. Mr Walker joined the Board of Directors and was appointed
Chairman on August 24, 2009.
  Michael Kingshott, Deputy
Chairman, Board of Directors
  Mr.
Kingshott is a prominent business executive in the City of London with over 37
years experience in property, shipping, transportation and logistics with
considerable trading and management experience with Asia. Between 1981 and 1993,
Mr. Kingshott was managing director at Sally UK Holdings plc and was chairman
between 1993 and 1995. Subsequently he became non-executive chairman of Embassy
Property Group plc, which was acquired by Jacobs Holdings plc in
1995.  He left Jacobs Holdings plc in 2002. He is currently Chairman
of Serviced Office Group plc.  Mr Kingshott has been a member of the
Board of Directors since March 2009, serving as Chairman until August 24, 2009
when he was appointed Deputy Chairman.
  - 20
-
  Ian Long, Chief Executive
Officer, President and Board Member.
  Ian Long
has over 20 years experience in winemaking and wine business management,
including 10 years as Senior Winemaker at Rosemount Estate and 5 years as Group
Operations Winemaker for Southcorp Wines. In his role at Southcorp, Mr. Long was
responsible for production optimization across the Southcorp Group of 11 company
wineries and 6 contract processors, being accountable for developing the overall
vision for winemaking facilities and the transition plan to achieve this vision.
The Southcorp Group produced brands such as Penfolds, Lindemans, Rosemount,
Seppelt and Wynns.  Mr. Long has been a member of the Board of
Directors since June 2008 and our Chief Executive officer and President since
September 25, 2008.
  Gary Blom, Board
Member
  Gary Blom
has spent over 25 years as an investment banker in the United States and
Australia.  After spending 12 years on Wall Street as Managing Partner
of an International Investment Bank which specialized in corporate finance,
mergers and acquisitions he returned to Australia in 1994 to successfully launch
the Imax theatres in Australia, New Zealand and Asia.  Since 1994, he
has been an investor in Yarraman Estate.  In recent years he has
joined as a partner of Barrack & York, an Australian corporate advisory firm
that specializes in providing a full service platform integrating and
coordinating investment banking, tax, accounting and legal services to
corporations in the global market.
  Stephen Kulmar, Board
Member
  Mr.
Kulmar has spent the last 28 years of his career building a leading retail
marketing agency in Australia.  His experience covers all retail
categories from fashion apparel to liquor. He has worked with some of the most
successful retail businesses in Australia and New Zealand from Westfield to
Woolworths to the Warehouse Group. He recently retired from this agency to
concentrate on establishing a consulting business - Retail Oasis.  He
is also a nonexecutive board member of two public companies and a
shareholder/director in two successful privately owned retail
businesses.
  Timothy Yeo, Senior Vice
President and Board Member
  Mr Yeo
has over 15 years experience in food and beverage industries in China and
throughout Asia. He was founder and CEO of TBC Shanghai Ltd, one of the first
companies to import and distribute wine into China.  Mr Yeo is a
former Marketing Director of Yeo Hiap Sing Ltd, Singapore’s largest food and
beverage conglomerate, and a former Corporate Planner for Pepsi Cola North
America.  Mr Yeo has been a member of the Board of Directors and
Senior Vice President since July, 2009.
  Lawrence Lichter, Chief
Financial Officer and Secretary.
  Lawrence
Lichter has been serving as Secretary since September 20, 2007 and as Chief
Financial Officer since September 25, 2008. Mr. Lichter has been a certified
public accountant since 1984. In 1991 he founded Lichter, Yu & Associates, a
certified public accounting firm for which he still works that provides
consulting services to public companies and assists them with the preparation of
their financial statements and with their SEC and Sarbanes Oxley compliance
matters. From December 1999 through March 2008, Mr. Lichter served as the chief
financial officer for Pacific American Services Group, LLC, a company which owns
an institutional securities firm and a financial services firm and which
specializes in income tax preparation and business management.
  Section 16(a) Beneficial
Ownership Reporting Compliance
  Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, as well as persons who own more than 10% of a registered
class of our equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in beneficial
ownership. Directors, executive officers, and greater than 10% shareholders are
required by Securities and Exchange Commission regulation to furnish us with
copies of all Section 16(a) forms they file.  Based solely upon a
review of copies of Section 16(a) reports and representations received by us
from reporting persons, and without conducting any independent investigation of
our own, we believe all Forms 3, 4 and 5 were timely filed with the SEC by such
reporting persons during the year ended June 30, 2009, except as
follows:
  - 21
-
  Ian Long
failed to file a report on Form 4 when he became President and CEO on September
26, 2008.  Lawrence Lichter failed to file a Form 3 when he became
Chief Financial Officer on September 26, 2008.  Timothy Yeo failed to
file an initial report of Form 3 when he became a director on July 1, 2009 and
failed to report that he had become a Senior Vice President on July 10,
2009.  Michael Kingshott and Stephan Kulmar failed to file an initial
report on Form 3 when each became a director of the Company on March 25,
2009.
  Code of
Ethics
  On
February 3, 2006, we adopted a code of ethics that applies to our officers,
employees and directors, including our Chief Executive Officer (principal
executive officer) and Chief Financial Officer (principal financial and
accounting officer), and other persons who perform similar functions. A copy of
our Code of Ethics was filed as Exhibit 14.1 to our Annual Report on Form 10-KSB
for the fiscal year ended June 30, 2006.  Our Code of Ethics is
intended to be a codification of the business and ethical principles which guide
us, and to deter wrongdoing, to promote honest and ethical conduct, to avoid
conflicts of interest, and to foster full, fair, accurate, timely and
understandable disclosures, compliance with applicable governmental laws, rules
and regulations, the prompt internal reporting of violations and accountability
for adherence to this Code. A copy of our Code of Ethics will be provided to any
person requesting same without charge.
  Board of Directors Meetings
and Subcommittees
  Attendance
at Board Meetings and Annual Shareholders’ Meeting
  The Board
held three meetings in Fiscal 2009.  We expect each director to attend
every meeting of the Board as well as the annual meeting.   All
directors were present at the meetings of the Board in Fiscal 2009.
  Audit
Committee
  The Board
of Directors is the acting Audit Committee and does not have an audit committee
charter.
  The Board
has reviewed and discussed the audited financial statements with management; has
discussed with our independent auditors the matters required to by discussed by
the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards,Vol.
1. AU section 380), as adopted by the Public Company Accounting Oversight Board
in Rule 3200T; the Board has received the written disclosures and the letter
from our independent accountants required by applicable requirements of the
Public Company Accounting Oversight Board regarding our independent accountant’s
communications with the Board concerning independence, and has discussed with
our independent accountant their independence; and based upon the foregoing, the
Board had determined that the audited financial statements set forth herein be
included in this Annual Report on Form 10-K.
  Our Board
of Directors has determined that there is no person on our Board of Directors
who qualifies as an audit committee financial expert as that term is defined by
applicable SEC.  The Board of Directors believes that obtaining the
services of an audit committee financial expert is not economically rational at
this time in light of the costs associated with identifying and retaining an
individual who would qualify as an audit committee financial
expert.
  COMPENSATION
COMMITTEE; COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
  We do not
have a standing  compensation committee as our entire board of
directors currently serves this function. Messrs. Long and Yeo, who serve on our
board, are also employees of the Company.  Our Board of
Directors  makes decisions concerning salaries and incentive
compensation for our officers, including our Chief Executive Officer, Chief
Financial Officer and employees.   Messrs. Long and Yeo do not
participate on decisions regarding executive compensation.
  - 22
-
  COMPENSATION
OF DIRECTORS
  Prior to
May 1, 2008 members of our Board Directors received fees in the sum of $16,100
per year, with a wine allowance up to the value of $4,000 and accommodation
entitlements at Yarraman Estate in the Upper Hunter Valley,
Australia.  Our Board of Directors resolved that these fees were based
on each director attending and preparing for no fewer than four Board meetings
per year and in addition providing additional assistance to us as
required.  After May 1, 2008, the director fees were discontinued
while our directors continued to receive the wine allowance.
  Director
Compensation
  Name
                          
                          Fees
                            earned or
                            Paid in
                            Cash
                          
                          
                          All other
                            compensation
                            (i)
                          
                          
                          Total($)
                          
                          
                          ($)
                          
                          
                          ($)(a)
                          
                          (b)
                          
                          
                          (g)
                          
                          
                          (h)Rod
      Walker
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000Michael
      Kingshott
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000Ian
      Long
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000Gary
      Blom
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000Stephen
      Kulmar
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000Timothy
      Yeo
                          
                          
                          --
                          
                          
                          
                          $4,000
                          
                          
                          
                          $4,000
  (i)           Each
Director receives a wine allowance of up to $4,000 per annum.
  Nominating
Committee
  At this
time, we do not have a separate nominating committee as this function is
performed by our full Board of Directors.  Our entire Board of
Directors is active in the nominating process.  Nominations for
election to the Board of Directors may be made by the Board of Directors or by
any shareholder entitled to vote for the election of directors.  The
nominating committee does not have a fixed policy with regard to the
consideration of any director candidate recommended by
shareholders.  The Board of Directors carefully considers nominees
regardless of whether they are nominated by shareholders or existing
board-members.
  Securities Authorized for
Issuance under Equity Compensation Plans
  None.
  ITEM
      10.
              EXECUTIVE
      COMPENSATION
  Summary
Compensation Table
  The
following Summary Compensation Table sets forth, for the years indicated, all
cash compensation paid, distributed or accrued for services, including salary
and bonus amounts, rendered in all capacities by our Chief Executive
Officer.  No other executive officer or other employee received or is
entitled to receive remuneration in excess of $100,000 during the stated
periods.
  - 23
-
  Name and Principal
                        Year
                        
                        Salary (1)
                        
                        Option Grants
                        
                        All Other
                        
                        
                        TotalPosition
                        
                        
                        ($)
                        
                        ($)
                        
                        Compensation ($)
                        
                        
                        ($)(a)
                        (b)
                        
                        (c)
                        
                        (e)
                        
                        (f)
                        
                        
                        (g)Ian
      Long, Chief Executive Officer
                        2009
                        
                        
                        $100,600
                        
                        
                        
                        
                        $8,000(2)
                        
                        
                        
                        $108,6002008
                        
                        
                        108,382
                        
                        
                        
                        
                        19,881(2)
                        
                        
                        
                        128,263
 _____________
  (1)
              Salary
      represents base salary earned in 2009 and
2008.
  (2)
              Consists
      of an annual automobile allowance and annual
  bonus.
  We have
not issued any stock options or maintained any stock option or other incentive
plans since our inception. We have no plans in place and have never maintained
any plans that provide for the payment of retirement benefits or benefits that
will be paid primarily following retirement including, but not limited to, tax
qualified deferred benefit plans, supplemental executive retirement plans,
tax-qualified deferred contribution plans and nonqualified deferred contribution
plans.  Similarly, we have no contracts, agreements, plans or
arrangements, whether written or unwritten, that provide for payments to the
named executive officers or any other persons following, or in connection with
the resignation, retirement or other termination of a named executive officer,
or a change in control of us or a change in a named executive officer’s
responsibilities following a change in control.
  Employment
Contracts
  Yarraman
Australia has an employment agreement with Ian Long that provides for an annual
salary of $100,600 and an annual bonus structure of up to $20,120 by achieving
key performance criteria.  In addition, an annual auto allowance of
$8,000 is provided.
  Yarraman
Australia had an employment agreement with Mr. Raymond Brien which commenced on
June 12, 2007 and was terminated on June 20, 2008.  The agreement
provided for his total annual compensation to be $60,360 and an auto allowance
of $8,000 for serving as Chief Financial Officer.
  We have
an agreement with Mr. Lawrence Lichter that provides for annual compensation of
$25,000 for serving as corporate Secretary.
  ITEM
11. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  The
following table sets forth, as of March 20, 2010, certain information concerning
the beneficial ownership of our Common Stock by:
  ·
              each
      stockholder known by us to own beneficially five percent or more of our
      outstanding common stock;
  ·
              each
      director;
  ·
              each
      executive officer; and
  ·
              all
      of our executive officers and directors as a group, and their percentage
      ownership and voting power.
  - 24
-
 
 Name and Address of Beneficial
                                Owner
                              
                              Shares
                                Beneficially
                                Owned (1)(2)
                              
                              
                              Percent of
                                Class†Geoffrey
      White
                              
                              
                              8,405,632
                              
                              
                              
                              9.5
                              %Delta
      Dawn Pty Ltd., as trustee for the Yarraman Road Trust
                              
                              
                              7,610,724
                              (3)
                              
                              
                              8.6Gary
      Blom
                              
                              
                              6,045,200
                              
                              
                              
                              6.8Michael
      Kingshott
                              
                              
                              3,534,012
                              (4)
                              
                              
                              4.6Stephen
      Kulmar
                              
                              
                              275,800
                              
                              
                              
                              *Ian
      Long
                              
                              
                              275,000
                              
                              
                              
                              *Rod
      Walker
                              
                              
                              250,000
                              
                              
                              
                              *Tim
      Yeo
                              
                              
                              —
                              
                              
                              
                              *Lawrence
      Lichter
                                16133
      Ventura Boulevard
                                Encino,
      CA USA 91436
                              
                              
                              90,000
                              
                              
                              
                              *Total
      Held by Directors and Executive Officers as a group (7
      persons)
                              
                              
                              10,470,012
                              
                              
                              
                              11.8
                              %
 
 † As of
March 20th, 2010 there were 88,747,213 shares of our common stock issued and
outstanding.
 * Less
than one percent.
  (1)
                Unless
      otherwise noted, we believe that all persons named in the table have sole
      voting and investment power with respect to all shares of the Common Stock
      beneficially owned by them. A person is deemed to be the beneficial owner
      of securities which may be acquired by such person within sixty (60) days
      from the date indicated above upon the exercise of options, warrants or
      convertible securities. Each beneficial owner’s percentage of ownership is
      determined by assuming that options, warrants or convertible securities
      that are held by such person (not those held by any other person) and
      which are exercisable within sixty (60) days of the date indicated above,
      have been exercised. To date, we have not granted any options or warrants
      into our common stock.  Our Series A Convertible Preferred Stock
      and our Series B Convertible Preferred Stock are not currently convertible
      in shares of our common stock.
  (2)
                Unless
      otherwise noted, The address of the beneficial owner is c/o Yarraman
      Estate, 700 Yarraman Road, Wybong, Upper Hunter, New South Wales, 2333
      Australia.
  (3)
                  Delta
      Dawn Pty Ltd. is trustee of Yarraman Road Trust, an Australian unit trust
      created by a declaration of trust contained in a deed poll dated September
      26, 2002. Interests in the trust property are evidenced by the issuance of
      units to the trust beneficiaries, with each unitholder entitled to the
      benefit of the assets of the Trust in the proportion in which they are
      registered as holding units from time to time. While the unitholders do
      not have the ability to direct the disposition and the voting of
      securities of the Registrant held in the name of Delta Dawn Pty Ltd as
      trust property, they may be deemed to beneficially own the securities as a
      result of their rights under the Trust documents. All unitholders have
      disclaimed any beneficial ownership that may be imposed due to
      interpretations of unitholders’ ownership of the trust
      property.(4)
                  Includes
      shares owned by Helen Kingshott and Smith & Williamson
      Nominees.
 As of
March 20, 2010, Michael Kingshott beneficially owned 381,600 shares of our
Series A Convertible Preferred Stock representing all of our outstanding shares
of Series A Convertible Preferred Stock.
  The
following table sets forth, as of March 20, 2010, certain information concerning
the beneficial ownership of our Series B Convertible Preferred Stock
by:
  ·
              each
      stockholder known by us to own beneficially five percent or more of our
      Series B Convertible Preferred
Stock;
  ·
              each
      director;
  ·
              each
      executive officer; and
  ·
              all
      of our executive officers and directors as a group, and their percentage
      ownership and voting power.
  - 25
-
  Name and Address of Beneficial
                          Owner
                        
                        Shares
                          Beneficially
                          Owned (1)(2)
                        
                        
                        Percent of
                          Class†Delta
      Dawn Pty Ltd, as trustee for the Yarraman Road Trust (3)
                        
                        
                        50,060
                        
                        
                        
                        91.0Gary
      Blom
                        
                        
                        1,000
                        
                        
                        
                        1.8Ian
      Long
                        
                        
                        1,000
                        
                        
                        
                        1.8Stephen
      Kulmar
                        
                        
                        935
                        
                        
                        
                        1.7Tim
      Yeo
                        
                        
                        500
                        
                        
                        
                        *Lawrence
      Lichter
                          16133
      Ventura Boulevard
                          Encino,
      CA USA 91436
                        
                        
                        500
                        
                        
                        
                        *Rod
      Walker
                        
                        
                        100
                        
                        
                        
                        *Total
      Held by Directors and Executive Officers as a Group (7
      persons)
                        
                        
                        4,035
                        
                        
                        
                        7.3
  † As of
March 20th, 2010 there were 55,000 shares of our Series B Convertible Preferred
stock, par value $0.001 per share, issued and outstanding.
  * Less
than one percent.
  (1)
              Unless
      otherwise noted, we believe that all persons named in the table have sole
      voting and investment power with respect to all shares of the Common Stock
      beneficially owned by them. A person is deemed to be the beneficial owner
      of securities which may be acquired by such person within sixty (60) days
      from the date indicated above upon the exercise of options, warrants or
      convertible securities. Each beneficial owner’s percentage of ownership is
      determined by assuming that options, warrants or convertible securities
      that are held by such person (not those held by any other person) and
      which are exercisable within sixty (60) days of the date indicated above,
      have been exercised. To date, we have not granted any options or warrants
      into our common stock.  Our Series A Convertible Preferred Stock
      and our Series B Convertible Preferred Stock are not currently convertible
      in shares of our common stock.
  (2)
              Unless
      otherwise noted, The address of the beneficial owner is c/o Yarraman
      Estate, 700 Yarraman Road, Wybong, Upper Hunter, New South Wales, 2333
      Australia.
  (3)
              Delta
      Dawn Pty Ltd. is trustee of Yarraman Road Trust, an Australian unit trust
      created by a declaration of trust contained in a deed poll dated September
      26, 2002. Interests in the trust property are evidenced by the issuance of
      units to the trust beneficiaries, with each unitholder entitled to the
      benefit of the assets of the Trust in the proportion in which they are
      registered as holding units from time to time. While the unitholders do
      not have the ability to direct the disposition and the voting of
      securities of the Registrant held in the name of Delta Dawn Pty Ltd as
      trust property, they may be deemed to beneficially own the securities as a
      result of their rights under the Trust documents. All unitholders have
      disclaimed any beneficial ownership that may be imposed due to
      interpretations of unitholders’ ownership of the trust
      property.
  
 - 26
-
  ITEM
12.       CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  Related
Party Transaction Procedures.
  The Board
reviews and approves all transactions between us and any director or executive
officer that will, or is reasonably likely to require disclosure under the SEC’s
rules. In determining whether to approve any transaction with any of our
directors or executive officers, the Board will consider the following factors,
among others, to the extent relevant to the transaction:
  ·
              whether
      the terms of the transaction are fair to us and on the same basis as would
      apply if the transaction did not involve a related
  person;
  ·
              whether
      there are business reasons for us to enter into the
      transaction;
  ·
              whether
      the transaction would impair the independence of an outside director;
      and
  ·
              whether
      the transaction would present an improper conflict of interest for a
      director or executive officer, taking into consideration such factors as
      the Board deems relevant, such as the size of the transaction, the overall
      financial position of the individual, the direct or indirect nature of the
      individual’s interest in the transaction and the ongoing nature of any
      proposed relationship.
  Related
Party Transactions.
  On
January 1, 2006 Yarraman Australia entered into a consulting agreement with the
Trustee to provide business consulting services related to the wine industry for
a term of two years or until such time as their ownership percentage in our
company is reduced to less than 15%.  Under this agreement we must pay
the Trustee $100,000AUD (Australian Dollars), or approximately $96,150
annually.  This agreement was terminated in June
2008.  During the fiscal year ended June 30, 2008, we paid the Trustee
approximately $66,063.
  On
December 21 2005, prior our acquisition of Yarraman Australia, Yarraman
Australia entered into a loan agreement with the Trust, the nominal holder of
all of Yarraman Australia’s shares at that time.  The outstanding
principal balance of this loan was $1,832,795. This loan advance was
non-interest bearing.  The loan was secured by the fixed assets of
Yarraman Australia, subordinated to all of our other loans collateralized by
these fixed assets. A total of 50% of the loan payable, or $916,398, was to be
repaid in thirty-six monthly installments commencing on the first business day
of the twenty-fifth month following the loan agreement, or approximately
February 1, 2008. On the thirty-sixth month of following the payment, in January
2011, the remaining 50% of the loan payable or $916,398 was to be due and
payable. The initial repayment date of February 2008 was extended to June 30,
2008.
  On May 1,
2006 Yarraman Australia entered into a loan agreement with the Trust in the
principal amount of $826,020. Originally, this loan agreement had an interest
rate of 8%, with the same repayment terms as the December 21, 2005 loan. During
the year ended June 30, 2006 a total of $10,910 in interest expense was recorded
on this loan, until the Trust waived the interest requirement on this loan. On
May 25, 2006 the Trust extended to Yarraman Australia an additional $13,767 to
be repaid in accordance with the same terms as the December 21, 2005
loan.  This loan advance was also non-interest bearing.
  As of
June 30, 2008 both the loan advances above totaling $1,832,795 and the $826,020
loan payable were converted into 6,559,524 shares of our common stock at the
market price of approximately $0.42 per share.
  As the
entire above loan advances, totaling $2,672,582 were non-interest bearing, we
recognized imputed interest of $871,307 which is recorded as discount on debt
and a contribution of capital to us. This discount on debt is being amortized
over the term that these loan advances are outstanding.  As the loan
advance was converted into common stock during the year ended June 30, 2008, the
remaining unamortized debt discount was fully amortized upon conversion. During
the years ended June 30, 2008 and 2007, we amortized this discount on debt,
recorded as an interest expense of $763,133 and $205,905, respectively, at the
prevailing exchange rates for the years then ended.
  As of
June 30, 2008 we were indebted to a private company that is owned by Geoffrey
White, one of our significant shareholders,  in the amount of
$2,334,733.  This private company party has made various advances and
loans all of which are unsecured, and are due on demand.  These
advances and loans accrued interest on their outstanding balance ranging between
0% and 10% per annum.
  - 27
-
  On July
1, 2007 these advances and loans were restructured into one loan agreement for
approximately $3,289,000. This new loan included approximately $689,000 related
to a sale of wine by the related party to us during the year ended June 30,
2008. This portion of the new loan was to be repaid commencing December 7, 2007
with receipts from the proceeds of the re-sale of this wine by us until it was
repaid in full. As of June 30, 2008 the balance on this portion of the loan was
$689,000. The entire new loan accrues interest at 6.5% per annum. This new loan
is secured by the fixed assets of Yarraman Australia, subordinate to the loan
from our commercial bank, such loan totaling $5,511,308 as of June 30,
2008.  This new loan, together with outstanding interest, was to be
repaid on September 30, 2008.  On June 30, 2008 a total of $2,280,000,
of the above loan was converted into 5,440,476 shares of our common stock, at a
market price of approximately $0.42 per share. On October 15, 2008, the lender
extended the repayment date on the balance of the loan remaining from September
30, 2008 to September 30, 2009.
  In
November, 2008, we agreed to acquire the Jugiong Vineyard in New South Wales,
Australia, comprising 475 acres of vineyard and a grape supply contract which
has 4 years remaining, from Delta Dawn.  The consideration for the
purchase of the Jugiong vineyard is $11 million which will be satisfied by the
issue by us to Delta Dawn of a redeemable convertible 2 year loan note in the
principal amount of $6 million, bearing interest at 6% per annum and, in
addition, we will assume $5 million of debt from Delta Dawn.  This
transaction has not yet been consummated.
  On May
26, 2009, we entered into an Intellectual Property Sale Agreement with the
Yarraman Road Trust, pursuant to which we acquired certain intellectual property
rights.  The Yarraman Road Trust is our majority
shareholder.  In consideration for the property acquired, we issued
55,000 shares of Series B Convertible Preferred Stock, which shares are
convertible into 55,000,000 shares of our Common Stock, subject to sufficient
unauthorized Common Stock being available for issuance.  The
intellectual property rights relate to the production and sale of alcoholic
apple cider. Alcoholic cider is the fastest growing alcohol beverage category
globally, and the Australian market is growing at a significantly faster rate
than the global average. The production of alcoholic apple cider is very similar
to winemaking, but unlike winemaking, cider can be produced all year round on a
“just in time” basis. The addition of cider production into the existing winery
production facilities allows significantly increased production throughput
without the need for any additional capital expenditure on production
equipment.  Due to fast turnover and low inventory holding, along with
a rapidly growing customer demand, cider production offers significant margin
and cash flow benefits
  Director
Independence
  Mr.
Walker qualifies as “independent” in accordance with Rule 10A-3 of the Exchange
Act.   Messrs. Long, Yeo, Blom Kingshott and Kulmar do not
qualify as independent.  Mr. Long and Mr Yeo are employed by
us.  Mr. Blom is a beneficiary of the Yarraman Road Trust and a
consultant to us.  Mr. Kulmar is a beneficiary of the Yarraman Road
Trust. Mr. Kingshott is a major stockholder .
  ITEM
13.       PRINCIPAL ACCOUNTANT FEES AND
SERVICES
  Audit
Fees.
  The
aggregate fees billed to us by our principal accountant for services rendered
during the fiscal years ended June 30, 2009 and 2008 are set forth in the table
below:
  Fee Category
                    
                    Fiscal year ended
                      June 30, 2009
                    
                    
                    Fiscal year ended
                      June 30, 2008Audit
      fees (1)
                    
                    $
                    67,225
                    
                    
                    $
                    45,000Audit-related
      fees (2)
                    
                    $
                    0
                    
                    
                    $
                    0Tax
      fees (3)
                    
                    $
                    0
                    
                    
                    $
                    0All
      other fees (4)
                    
                    $
                    0
                    
                    
                    $
                    0Total
      fees
                    
                    $
                    67,225
                    
                    
                    $
                    45,000
  - 28
-
  (1)           Audit
fees consists of fees incurred for professional services rendered for the audit
of consolidated financial statements, for reviews of our interim consolidated
financial statements included in our quarterly reports on Form 10-Q and for
services that are normally provided in connection with statutory or regulatory
filings or engagements.
  (2)           Audit-related
fees consists of fees billed for professional services that are reasonably
related to the performance of the audit or review of our consolidated financial
statements, but are not reported under “Audit fees.”
  (3)           Tax
fees consists of fees billed for professional services relating to tax
compliance, tax planning, and tax advice.
  (4)           All
other fees consists of fees billed for all other services.
  Audit Committee’s
Pre-Approval Practice .
  Section
10A(i) of the Securities Exchange Act of 1934 prohibits our auditors from
performing audit services for us as well as any services not considered to be
“audit services” unless such services are pre-approved by the board of directors
(in lieu of the audit committee) or unless the services meet certain de minimis
standards. Accordingly, our audit committee pre-approves all services, including
audit services, provided by our independent accountants.
  ITEM
14.     EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES.
  (a)           1.           The
financial statements beginning at page F-1 are filed as a part of this Annual
Report on Form 10-K.
 
 2.           Financial
statement schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
 
 3.           Exhibits
included or incorporated herein:   See Exhibit Index
below.
 
 (b)
 
 Exhibit
      Number
              
              Description2.1
              
              Share
      Exchange Agreement, dated December 22, 2005 (incorporated herewith by
      reference to Exhibit 2.1 to Global Beverages, Inc.’s Current Report on
      Form 8-K dated December 22, 2005 and filed with the SEC on December 22,
      2005)2.2
              
              Implementation
      Agreement, dated September 3, 2008 by and between Yarraman Winery, Inc.
      and Asia Distribution Solutions Limited.*2.3
              
              Amendment
      to Implementation Agreement, dated October 30, 2008 by and between
      Yarraman Winery, Inc. and Asia Distribution Solutions
      Limited.*2.4
              
              Share
      Exchange Agreement dated October 17, 2008 between Yarraman Winery, Inc.
      and Asia Distribution Solutions Limited.*2.5
              
              Exchange
      Agreement dated December 31, 2009 by and between Global Beverages, Inc.
      and Riviera Global Holdings LLC (incorporated herewith by reference to
      Exhibit 2.1 to Global Beverages, Inc.’s Current Report on Form 8-K dated
      and filed with the SEC on January 7, 2010).
  - 29
-
  Exhibit
      Number
              
              Description2.8
              
              Intellectual
      Property Sale Agreement, dated May 26, 2009 by and between Delta Dawn Pty
      Ltd, as trustee for the Yarraman Road Trust, and Yarraman Winery,
      Inc.*3.1
              
              Articles
      of Incorporation of Global Beverages, Inc.*3.2
              
              Amended
      and Restated By-laws of Global Beverages, Inc. (incorporated herewith by
      reference to Exhibit A to Appendix B of Global Beverages, Inc.’s
      Definitive Information Statement on Schedule 14C filed with the Securities
      and Exchange Commission March 16, 2006).3.3
              
              Certificate
      of Designation of Series A Convertible Preferred Stock*3.4
              
              Certificate
      of Designation of Series B Convertible Preferred Stock*10.1
              
              Lease
      Agreement dated May 12, 2006 between Yarraman Estate Pty Ltd and Delta
      Dawn Pty Limited (incorporated herewith by reference to Exhibit 10.1 to
      Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period
      ended March 31, 2006 and filed with the Securities and Exchange Commission
      on May 15, 2006)10.2
              
              Heads
      of Agreement dated March 24, 2006 between Yarraman Estate Pty Ltd. and
      World Icon International Limited (incorporated herewith by reference to
      Exhibit 10.2 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB
      for the period ended March 31, 2006 and filed with the Securities and
      Exchange Commission on May 15, 2006)10.3
              
              Agreement
      for Services dated February 24, 2006 between Madison One Data Group
      Limited and Global Beverages, Inc. (incorporated herewith by reference to
      Exhibit 10.3 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB
      for the period ended March 31, 2006 and filed with the Securities and
      Exchange Commission on May 15, 2006)10.4
              
              Agreement
      dated ____, 2007 between Yarraman Australia and Whinners Pty
      Limited*10.5
              
              Loan
      Agreement dated May 1, 2006 between Yarraman Estate Pty Ltd and Delta Dawn
      Pty Limited (incorporated herewith by reference to Exhibit 10.6 to Global
      Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period ended
      March 31, 2006 and filed with the Securities and Exchange Commission on
      May 15, 2006)10.6
              
              Loan
      Agreement dated August 1, 2006 between Global Beverages, Inc. and Whinners
      Pty Ltd (incorporated herewith by reference to Exhibit 10.13 to Global
      Beverages, Inc.’s Annual Report on Form 10-KSB for the year ended June 30,
      2006 and filed with the Securities and Exchange Commission on September
      28, 2006)
  - 30
-
  Exhibit
      Number
              
              Description10.7
              
              Assignment
      of Debts Agreement dated February 2007 between Yarraman Estate Pty Limited
      and Whinners Pty Limited (incorporated herewith by reference to Exhibit
      10.1 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the
      quarter ended March 31. 2007 and filed with the Securities and Exchange
      Commission on June 25, 2007)10.8
              
              Employment
      Agreement dated July 16, 2007 by and between Yarraman Winery, Inc. and Ian
      Long*10.9
              
              10%
      Convertible Note Purchase Agreement dated as of September 28, 2009 by and
      between Global Beverages, Inc. and Prime Pacific Global Management
      Corporation.*10.10
              
              Promissory
      Note dated September 28, 2009 issued to Prime Pacific
    Global.*10.11
              
              Agreement
      (Convertible Debenture) dated November 30, 2009 between Copperart Group
      Superannuation Fund and Global Beverages, Inc.*10.12
              
              Agreement
      (Convertible Debenture) dated August , 2009 between Rangelodge Pty
      Limited, Global Beverages, Inc. and Yarraman Australia*10.13
              
              Agreement
      (Subscription for Convertible Notes and Parent Guarantee) dated
      February  , 2009 between Delta Dawn Pty Limited, Global
      Beverages, Inc. and Yarraman Australia*10.14
              
              Deed
      of Loan dated June 16, 2004 between Provident Capital Limited and Delta
      Dawn Pty Limited*10.15
              
              Deed
      of Variation of Loan dated June 16, 2004 between Provident Capital
      Limited, Delta Dawn Pty Limited and Gary Blom and Yarraman
      Australia*10.16
              
              Deed
      of Variation of Loan dated November 9, 2004 between Provident Capital
      Limited, Delta Dawn Pty Limited and Gary Blom and Yarraman
      Australia*10.17
              
              Deed
      of Loan dated December 21, 2005 between Provident Capital Limited an
      Yarraman Australia*10.18
              
              Letter
      Agreements, dated July 9, 2008 between HSBC and ADSL regarding loan
      facility.*10.19
              
              Deed
      for the Management of the Wirrilla Vineyard dated July 1, 2009 between
      Vitiplus Pty Limited and Yarraman Australia.*10.20
              
              Cash
      flow Financing Agreement, dated June 25, 2009 between AR cash flow PTY
      limited and Yarraman Estate PTY LTD*10.21
              
              Deed
      of Guarantee and Indemnity, dated June 25, 2009 between AR cash flow PTY
      Limited and Stephen Gary Kulmar, Gary Blom, Ian Robert Long and Yarraman
      Winery Inc. and re: Yarraman Estate PTY LTD*14.1
              
              Code
      of Ethics (incorporated herewith by reference to Exhibit 14.1 to Global
      Beverages, Inc.’s Annual Report on Form 10-KSB for the year ended June 30,
      2006 and filed with the Securities and Exchange Commission on September
      28, 2006)21.1
              
              Subsidiaries
      of Global Beverages, Inc.*31.1
              
              Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002*31.2
              
              Certification
      of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of
      the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002*32.1
              
              Certification
      of Chief Executive Officer and the Principal Financial Officer Pursuant to
      18 U.S.C. 1350 (Section 906 of the Sarbanes Oxley Act of
      2002).*32.2
              
              Certification
      of Chief Financial Officer and the Principal Financial Officer Pursuant to
      18 U.S.C. 1350 (Section 906 of the Sarbanes Oxley Act of 2002), filed
      herewith*
  *   
filed herewith
  - 31
-
  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.
  Signature
                
                Title
                
                Date/s/  Ian
      Long
                
                Chief
      Executive Officer and Director
                
                April
      8, 2010/s/
      Ian Long
                
                (Principal
      Executive Officer)
  Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed below by the following persons in the capacities and on
the dates indicated.
  Signature
                
                Title
                
                Date/s/  Ian
      Long
                
                Chief
      Executive Officer and Director
                
                April
      8, 2010Ian
      Long
                
                (Principal
      Executive Officer)/s/   Rod
      Walker
                
                Chairman
      of the Board
                
                April
      8, 2010Rod
      Walker/s/
      Lawrence P. Lichter
                
                Chief
      Financial Officer
                
                April
      8, 2010Lawrence
      P. Lichter
                
                (Principal
      Financial Officer andPrincipal
      Accounting Officer)/s/   Gary
      Blom
                
                Director
                
                April
      8, 2010Gary
      Blom/s/
      Stephen Kulmar
                
                Director
                
                April
      8, 2010Stephen
      Kulmar/s/   Michael
      Kingshott
                
                Director
                
                April
      8, 2010Michael Kingshott
                
                `/s/
      Timothy Yeo
                
                Director
                
                April
      8, 2010Timothy Yeo
  - 32
-




ACSB Acquavella, Chiarelli,
Shuster, Berkower & Co., LLP
 517
      Route one
              1
      Penn PlazaIselin,
      New Jersey, 08830
              36the
      Floor732.855.9600
              New
      York, NY 10119
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Stockholders and Board of Directors
 Global
Beverages, Inc
 
 We have
audited the accompanying consolidated balance sheet of Global Beverages,
Inc  (the “Company”) as of June 30, 2009 and the related consolidated
statement of operations and comprehensive loss, stockholders' equity (deficit)
and cash flows for the year ended June 30, 2009. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of June 30,
2009 and the results of their operations and their cash flows for the year ended
June 30, 2009, in conformity with accounting principles generally accepted in
the United States of America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has incurred
operating  losses and has negative cash flows from operations for the
year ended June 30, 2009 as more fully described in Note 2. These issues raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 Acquavella,
Chiarelli, Shuster, Berkower & Co., LLP
 
 Certified
Public Accountants
 
 New York,
N.Y.
 March 26,
2010


Annex A




GLOBAL
BEVERAGES, INC. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS





June 30,2009
                      
                      
                      2008ASSETSCurrent
      AssetsAccounts
      receivable, net
                      
                      $
                      760,313
                      
                      
                      $
                      555,798Inventory
                      
                      
                      3,362,528
                      
                      
                      
                      4,409,833Other
      receivables
                      
                      
                      —
                      
                      
                      
                      105,842Other
      assets
                      
                      
                      190,961
                      
                      
                      
                      214,463Total
      Current Assets
                      
                      
                      4,313,802
                      
                      
                      
                      5,285,936Property,
      plant and equipment, net
                      
                      
                      3,528,013
                      
                      
                      
                      4,369,644Intangible
      assets
                      
                      
                      19,459,248
                      
                      
                      
                      249,990$
                      27,301,063
                      
                      
                      $
                      9,905,570LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      payable and accrued expenses
                      
                      $
                      1,929,056
                      
                      
                      $
                      1,483,157Loan
      Payable
                      
                      
                      13,095
                      
                      
                      
                      —Cash
      deficit
                      
                      
                      38,816
                      
                      
                      
                      37,990Capital
      leases, current portion
                      
                      
                      42,539
                      
                      
                      
                      102,720Due
      to related party
                      
                      
                      3,396,616
                      
                      
                      
                      2,334,733Total
      Current Liabilities
                      
                      
                      5,420,122
                      
                      
                      
                      3,958,601Long
      Term Liabilities:Capital
      leases, net of current portion
                      
                      
                      —
                      
                      
                      
                      50,821Long-term
      debt
                      
                      
                      4,627,379
                      
                      
                      
                      5,511,308Total
      Long Term Liabilities
                      
                      
                      4,627,379
                      
                      
                      
                      5,562,129Total
      Liabilities
                      
                      
                      10,047,501
                      
                      
                      
                      9,520,730Stockholder's
      EquityPreferred
      stock, Series B, $.001 par value, 55,000 shares authorized55,000
      shares issued and outstanding
                      
                      
                      55
                      
                      
                      
                      —Common
      stock, $.001 par value, 90,000,000 shares authorized39,390,476
      and 38,000,000 shares issued and outstanding respectively
                      
                      
                      39,390
                      
                      
                      
                      38,000Additional
      paid in capital
                      
                      
                      30,851,807
                      
                      
                      
                      11,019,252Subscription
      receivable
                      
                      
                      (66,000
                      )
                      
                      
                      (88,000
                      )Other
      comprehensive income
                      
                      
                      (456,752
                      )
                      
                      
                      (287,228
                      )Accumulated
      deficit
                      
                      
                      (13,114,938
                      )
                      
                      
                      (10,297,184
                      )Total
      Stockholder's Equity
                      
                      
                      17,253,562
                      
                      
                      
                      384,840$
                      27,301,063
                      
                      
                      $
                      9,905,570





The
accompanying notes are an integral part of these audited consolidated financial
statements.


F-1


GLOBAL
BEVERAGES, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF OPERATIONS





For the Years EndedJune 30,2009
                        
                        
                        2008Sales,
      net
                        
                        $
                        2,162,966
                        
                        
                        $
                        2,318,719Cost
      of sales
                        
                        
                        1,983,571
                        
                        
                        
                        2,747,800Gross
      profit (loss)
                        
                        
                        179,395
                        
                        
                        
                        (429,081
                        )Selling,
      general and administrative expenses
                        
                        
                        1,412,188
                        
                        
                        
                        1,753,077Total
      operating expenses
                        
                        
                        1,412,188
                        
                        
                        
                        1,753,077Income
      (Loss) from operations
                        
                        
                        (1,232,793
                        )
                        
                        
                        (2,182,158
                        )Other
      (Income) ExpenseInterest
      income
                        
                        
                        (3,852
                        )
                        
                        
                        (3,730
                        )Interest
      expense
                        
                        
                        575,758
                        
                        
                        
                        1,493,032Other
      (income) expenses net
                        
                        
                        (14,500
                        )
                        
                        
                        (5,751
                        )Merger
      and acquisition costs
                        
                        
                        1,007,836
                        
                        
                        
                        —Gain
      on sale of fixed asset
                        
                        
                        (1,843
                        )
                        
                        
                        (6,076
                        )Transaction
      gain (loss) on foreign currency
                        
                        
                        21,560
                        
                        
                        
                        (30,808
                        )Total
      Other (Income) Expense
                        
                        
                        1,584,959
                        
                        
                        
                        1,446,667Loss
      before income taxes
                        
                        
                        (2,817,752
                        )
                        
                        
                        (3,628,825
                        )Provision
      for income taxes
                        
                        
                        —
                        
                        
                        
                        —Net
      loss
                        
                        
                        (2,817,752
                        )
                        
                        
                        (3,628,825
                        )Other
      comprehensive income (loss)Foreign
      currency translation
                        
                        
                        (169,524
                        )
                        
                        
                        (298,205
                        )Comprehensive
      income (loss)
                        
                        $
                        (2,987,276
                        )
                        
                        $
                        (3,927,030
                        )Net
      loss per share:Basic
      & diluted
                        
                        $
                        (0.07
                        )
                        
                        $
                        (0.14
                        )Weighted
      average number of shares outstanding:Basic
      & diluted
                        
                        
                        38,115,873
                        
                        
                        
                        26,083,333





Weighted
average of dilutive securities has not been calculated since the effect of
dilutive securities is anti- dilutive





The
accompanying notes are an integral part of these audited consolidated financial
statements.


F-2


GLOBAL
BEVERAGES, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR THE
TWELVE MONTH PERIOD ENDED JUNE 30, 2009 AND 2008





2009
                    
                    
                    2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
                    
                    $
                    (2,817,752
                    )
                    
                    $
                    (3,628,825
                    )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Shares
      issued for services
                    
                    
                    267,027
                    
                    
                    
                    315,000Depreciation
                    
                    
                    183,098
                    
                    
                    
                    446,416Salary
      forgiven for stock payment
                    
                    
                    22,000
                    
                    
                    
                    22,000Amortization
      of discount on debt
                    
                    
                    —
                    
                    
                    
                    763,133(Increase)
      / decrease in assets:Accounts
      receivables
                    
                    
                    (274,280
                    )
                    
                    
                    301,073Inventory
                    
                    
                    305,435
                    
                    
                    
                    191,281Other
      receivables
                    
                    
                    82,343
                    
                    
                    
                    (9,996
                    )Other
      assets
                    
                    
                    (10,641
                    )
                    
                    
                    41,490Increase
      in liabilities:Accounts
      payable and accrued expenses
                    
                    
                    694,359
                    
                    
                    
                    239,477Accrued
      interest related to related party loan
                    
                    
                    
                    
                    
                    
                    205,595Total
      Adjustments
                    
                    
                    1,269,341
                    
                    
                    
                    2,515,469Net
      cash used in operations
                    
                    
                    (1,548,411
                    )
                    
                    
                    (1,113,356
                    )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisition
      of property and equipment
                    
                    
                    (62,741
                    )
                    
                    
                    (45,685
                    )Acquisition
      of intangible
                    
                    
                    —
                    
                    
                    
                    (14,423
                    )Net
      cash provided by (used in) investing activities
                    
                    
                    (62,741
                    )
                    
                    
                    (60,108
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from long-term debt
                    
                    
                    25,438
                    
                    
                    
                    49,961Cash
      deficit financing
                    
                    
                    —
                    
                    
                    
                    37,990Capital
      lease payments
                    
                    
                    (79,914
                    )
                    
                    
                    (137,460
                    )Receivable
      from related party
                    
                    
                    1,318,797
                    
                    
                    
                    (101,142
                    )Loans
      payable - related party
                    
                    
                    23,500
                    
                    
                    
                    427,172Net
      cash provided by (used in) financing activities
                    
                    
                    1,287,821
                    
                    
                    
                    276,521Effect
      of exchange rate changes on cash and cash equivalents
                    
                    
                    323,332
                    
                    
                    
                    746,871Net
      decrease in cash and cash equivalents
                    
                    
                    —
                    
                    
                    
                    (150,072
                    )Cash
      and cash equivalents, beginning balance
                    
                    
                    —
                    
                    
                    
                    150,072Cash
      and cash equivalents, ending balance
                    
                    $
                    —
                    
                    
                    $
                    —SUPPLEMENTAL
      DISCLOSURES:Cash
      paid for:Income
      tax payments
                    
                    $
                    —
                    
                    
                    $
                    —Interest
      payments
                    
                    $
                    575,758
                    
                    
                    $
                    408,440Non-cash
      financing and investing activitiesDiscount
      on debt
                    
                    $
                    —
                    
                    
                    $
                    177,239Conversion
      of related party debt to common stock
                    
                    $
                    —
                    
                    
                    $
                    5,046,318Sale
      of common stock for subscription receivable
                    
                    $
                    —
                    
                    
                    $
                    110,000Common
      shares issued for accrued services
                    
                    $
                    584,000
                    
                    
                    $
                    117,000Debt
      issued for inventory
                    
                    $
                    —
                    
                    
                    $
                    727,524





The
accompanying notes are an integral part of these audited consolidated financial
statements.


F-3





GLOBAL
BEVERAGES, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (EQUITY)





Retained
                      
                      
                      TotalAdditional
                      
                      
                      Other
                      
                      
                      
                      
                      
                      Earnings
                      
                      
                      Stockholders'Preferred Stock
                      
                      
                      Common Stock
                      
                      
                      Paid
                      
                      
                      Comprehensive
                      
                      
                      Subscription
                      
                      
                      (Accumulated
                      
                      
                      EquityShares
                      
                      
                      Amount
                      
                      
                      Shares
                      
                      
                      Amount
                      
                      
                      in Capital
                      
                      
                      Income (Loss)
                      
                      
                      Receivable
                      
                      
                      Deficit)
                      
                      
                      (Deficit)Balance
      as of June 30, 2005
                      
                      
                      
                      
                      
                      
                      
                      
                      15,000,000
                      
                      
                      $
                      15,000
                      
                      
                      $
                      1,710,751
                      
                      
                      $
                      134,288
                      
                      
                      $
                      —
                      
                      
                      
                      (980,911
                      )
                      
                      $
                      879,128Recapitalization
      as result of reverse acquisition
                      
                      
                      
                      
                      
                      
                      
                      
                      3,496,500
                      
                      
                      
                      3,497
                      
                      
                      
                      (51,449
                      )
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      (47,952
                      )Settlement
      of debt in exchange of issuanceshares
      of the subsidiary
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      931,146
                      
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      931,146Stock
      issued for finders fee
                      
                      
                      
                      
                      
                      
                      
                      
                      1,250,000
                      
                      
                      
                      1,250
                      
                      
                      
                      (1,250
                      )
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —Sale
      of stock
                      
                      
                      
                      
                      
                      
                      
                      
                      5,253,500
                      
                      
                      
                      5,253
                      
                      
                      
                      1,994,747
                      
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      2,000,000Other
      comprehensive gain
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      17,901
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      17,901Net
      loss for the year ended June 30, 2006
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      (1,234,667
                      )
                      
                      
                      (1,234,667
                      )Balance
      as of June 30, 2006
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      25,000,000
                      
                      
                      
                      25,000
                      
                      
                      
                      4,583,945
                      
                      
                      
                      152,189
                      
                      
                      
                      
                      
                      
                      
                      (2,215,578
                      )
                      
                      
                      2,545,556Other
      comprehensive loss
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (141,212
                      )
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      (141,212
                      )Contribution
      from shareholders
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      871,307
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      871,307Net
      loss for the year ended June 30, 2007
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      
                      
                      
                      
                      (4,452,781
                      )
                      
                      
                      (4,452,781
                      )Balance
      as of June 30, 2007
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      25,000,000
                      
                      
                      
                      25,000
                      
                      
                      
                      5,455,252
                      
                      
                      
                      10,977
                      
                      
                      
                      —
                      
                      
                      
                      (6,668,359
                      )
                      
                      
                      (1,177,130
                      )Other
      comprehensive loss
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (298,205
                      )
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (298,205
                      )Stock
      sale
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      250,000
                      
                      
                      
                      250
                      
                      
                      
                      109,750
                      
                      
                      
                      —
                      
                      
                      
                      (88,000
                      )
                      
                      
                      —
                      
                      
                      
                      22,000Stock
      issued for services
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      750,000
                      
                      
                      
                      750
                      
                      
                      
                      431,250
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      432,000Conversion
      of related party debt to equity
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      12,000,000
                      
                      
                      
                      12,000
                      
                      
                      
                      5,023,000
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      5,035,000Net
      loss for the year ended June 30, 2008
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (3,628,825
                      )
                      
                      
                      (3,628,826
                      )Balance
      as of June 30, 2008
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      38,000,000
                      
                      
                      
                      38,000
                      
                      
                      
                      11,019,252
                      
                      
                      
                      (287,228
                      )
                      
                      
                      (88,000
                      )
                      
                      
                      (10,297,184
                      )
                      
                      
                      384,840Stock
      issued for services
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,390,476
                      
                      
                      
                      1,390
                      
                      
                      
                      582,610
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      584,000Stock
      issued for Ripe Cider Business
                      
                      
                      55,000
                      
                      
                      
                      55
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      19,249,945
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      19,250,000Collection
      on subscription receivable
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      22,000
                      
                      
                      
                      —
                      
                      
                      
                      22,000Other
      comprehensive loss
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (169,524
                      )
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (169,524
                      )Net
      loss for the twelve months ended June 30, 2009
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (2,817,754
                      )
                      
                      
                      (2,817,754
                      )Balance
      as of June 30, 2009
                      
                      
                      55,000
                      
                      
                      $
                      55
                      
                      
                      
                      39,390,476
                      
                      
                      $
                      39,390
                      
                      
                      $
                      30,851,807
                      
                      
                      $
                      (456,752
                      )
                      
                      $
                      (66,000
                      )
      $
                      
                      
                      (13,114,938
                      )
                      
                      $
                      17,253,562





The
accompanying notes are an integral part of these audited consolidated financial
statements.


F-4


GLOBAL
BEVERAGES, INC. AND SUBSIDIARY


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 YEAR
ENDED JUNE 30, 2009
 
 NOTE 1 -
NATURE OF
OPERATIONS
 
 On
December 16, 2005, Yarraman Estate Pty Limited, a privately owned Australian
company engaged in the production of wine (“Yarraman Australia”), purchased from
the beneficial owners of Yarraman Australia’s shares (the “Shareholders”) and
Delta Dawn Pty Limited as trustee (the Trustee”) of the Yarraman Road Trust (the
“Trust”), the nominal holder of such shares, certain assets including land,
buildings and equipment and water license rights by assuming certain debt,
capital leases, contribution to paid in capital for the Trust and a liability to
the Trust (the “Asset Purchase”). The assets and liabilities were recorded
at the historical cost of the related party. No cash was exchanged. The
following is a summary of the transaction:
 
 Assets
      Purchased
                    
                    $
                    5,759,740Liabilities
      Assumed
                    
                    
                    (4,384,740
                    )Payable
      to Former Parent
                    
                    
                    (431,151
                    )Contribution
      to Capital
                    
                    
                    (943,849
                    )$
                    —
 
 On
December 22, 2005, Yarraman Australia, the Trustee and the Trust, entered into a
Share Exchange Agreement (the “Exchange Agreement”) with Yarraman Winery, Inc.
(formerly Dazzling Investments, Inc.), a company incorporated on December 6,
1996 under the laws of the State of Nevada. Under the terms of the Exchange
Agreement, Yarraman Winery, Inc. issued 15,000,000 shares of its common stock
for all the issued and outstanding shares of Yarraman Australia (the “Share
Exchange”).  On December 12, 2009, Yarraman Winery, Inc.  changed
its corporate name to Global Beverages, Inc.  In these financial
statements, Global Beverages, Inc. and/or its subsidiary, Yarraman Australia are
referred to collectively as the “Company”, unless reference is made to the
respective company for reference to events surrounding that
company.
 
 The Share
Exchange was accounted for as a reverse acquisition under the purchase method of
accounting since the stockholders of Yarraman Australia obtained control of
the consolidated entity.  Accordingly, the acquisition was recorded as
a recapitalization of Yarraman Australia, with Yarraman Australia being treated
as the continuing entity.  The balance sheet consists of the net
assets of Yarraman Australia, the accounting acquirer, at historical cost and
the net assets of Global Beverages, Inc., the legal acquirer, at historical
cost. The statements of operations include the operations of the accounting
acquirer for the period presented and the operations of the legal acquirer from
the date of the acquisition. On February 3, 2006, the Company changed its fiscal
year end from December 31st to June
30th
to correspond with the fiscal year end of Yarraman Australia.
 
 The
Company produces and sells premium, super premium and ultra premium varietal
wines. The Company’s wines are made from grapes grown at its vineyard (the
“Vineyard”) and from grapes purchased from other Australian vineyards. The
grapes are crushed, fermented and made into wine at the Company’s winery and the
wines are sold principally under the Company’s Yarraman Estate Vineyard labels.
Yarraman Australia’s vineyard and winery are located in the Upper Hunter Valley,
approximately 200 miles north of Sydney, Australia.
  Prior to
the Exchange Agreement, on August 15, 2005, the Company’s Board of Directors’
declared a 4.55 for 1 common stock dividend to the shareholders of record as of
August 26, 2005. The number of common stock shares outstanding increased from
2,100,000 shares to 11,655,000 shares.  In connection with the Exchange
Agreement, certain shareholders of the Company agreed to cancel an aggregate of
8,158,500 shares of the Company’s common stock resulting in 3,496,500 shares of
common stock outstanding as a result of the Share Exchange. All prior year
information has been adjusted to reflect the stock cancellation and the stock
dividend.
 
 In
connection with Exchange Agreement, on December 22, 2005, the Company entered
into a stock purchase agreement (the “Purchase Agreement”) with certain
investors (the “Investors”) for the sale of an aggregate of 5,253,500 shares of
common stock (the “Share Sale”) for aggregate gross proceeds in the form of
promissory notes with an aggregate principal amount equal to $2,000,000 (the
“Notes”) . The Notes had a maturity of 300 days and principal was payable in
approximately quarterly installments, with interest accruing on the original
principal amount at the rate of prime plus 2.5%, payable at maturity. 
Pursuant to the Purchase Agreement, the Company granted to the Investors rights
of first refusal on financing the Company may do in the future. This right was
relinquished in September 2006. The principal balance of the note has been
collected as of December 31, 2006.
 
 In
connection with the Share Sale, the Company issued 1,250,000 shares of common
stock to MillhouseIAG Limited (“Millhouse”) as a finder’s fee.
  F-5
 
 On
May 26, 2009, Yarraman Winery, Inc. entered into an Intellectual Property Sale
Agreement with the Yarraman Road Trust, pursuant to which it acquired certain
Intellectual Property related to the “Ripe Cider” Brand and the related business
concept involving the manufacture and international sale of a low alcoholic, low
carbohydrate, apple cider made from fresh apples, including all the recipes for
the production of the cider, trademarks, logos, designs, copyright, know-how,
show-how, business systems and arrangements and all other intellectual property
associated with the brand and the cider product and its manufacture and
marketing, as well as a sales contract to supply bulk alcoholic apple cider to
an Australian company.
 
 Related
to the transaction the Company issued 55,000 shares of its Preferred Series B
stock.  Each Preferred Series B share is automatically convertible
into 1,000 common shares of stock at such time as the Company has increased the
number of authorized by unissued shares of common stock that will permit the
issuance of all shares of common stock issuable upon the conversion of all
outstanding shares of preferred stock and exercise of all options and
warrants.
 
 NOTE 2 -
GOING
CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
carrying amounts of assets and liabilities presented in the consolidated
financial statements do not purport to represent their realizable or settlement
value. As shown in the financial statements, during the years ended June 30,
2009 and 2008, the Company incurred losses of $2,817,752 and $3,628,825,
respectively. In addition to suffering recurring losses from operations and
negative cash flows from operations the Company has a cash overdraft and an
inability to meets its maturing obligations without borrowing from related
parties and sale of its stock.  These issues may raise substantial concern
about its ability to continue as a going concern.
  The
financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company’s continuation
as a going concern is dependent upon its ability to generate sufficient cash
flow to meet its obligations on a timely basis, to retain its current financing,
to obtain additional financing, and ultimately to
attain profitability.
 
 NOTE 3 -
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
 
 Basis of
Presentation
 The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America.  The functional currency of Yarraman Australia is the Australian
Dollar (“AUD”); however, the accompanying consolidated financial statements have
been translated and presented in United States Dollars (“USD” or
“$”).
 
 Principles of
Consolidation
 The
consolidated financial statements include the accounts of Global Beverages, Inc.
and its wholly owned subsidiary, Yarraman Australia.  All material
intercompany accounts, transactions and profits have been eliminated in
consolidation.
 
 Revenue
Recognition
 The
Company’s revenue recognition policies are in compliance with Staff Accounting
Bulletin (SAB) 104. The Company recognizes revenue when the product is shipped
and title passes to the customer, when a formal arrangement exists, the price is
fixed or determinable, the delivery is completed, no other significant
obligations of the Company exist and collectability is reasonably assured. The
Company’s standard terms are ‘FOB’ shipping point, with no customer acceptance
provisions. No products are sold on consignment. Credit sales are recorded as
trade accounts receivable and no collateral is required. Revenue from items sold
through the Company’s retail location is recognized at the time of sale. The
Company has established an allowance for doubtful accounts based upon factors
pertaining to the credit risk of specific customers, historical trends, and
other information. Delinquent accounts are written-off when it is determined
that the amounts are uncollectible.  Revenues are recognized net of the
amount of goods and services tax (GST) payable to the Australian taxing
authority.
 
 Accounts
Receivable
 The
Company maintains reserves for potential credit losses on accounts receivable.
Management reviews the composition of accounts receivable and analyzes
historical bad debts, customer concentrations, customer credit worthiness,
current economic trends and changes in customer payment patterns to evaluate the
adequacy of these reserves. Allowance for doubtful debts amounted to
approximately $43,615 and $104,213 as of June 30, 2009 and June 30, 2008,
respectively.
 
 Vineyard Development
Costs
 Vineyard
development costs consist primarily of the costs of the vines and expenditures
related to labor and materials to prepare the land and construct vine trellises.
The costs are capitalized until the vineyard becomes commercially productive, at
which time annual amortization is recognized using the straight-line method over
the estimated economic useful life of the vineyard, which is estimated to be 30
years. Amortization expense of vineyard development costs aggregated to $2,241
and $2,014 for the years ended June 30, 2009 and 2008, respectively, and is
included in inventory costs and ultimately becomes a component of costs of goods
sold.
  F-6
  Goods and Services
Tax
 Revenues,
expenses and assets are recognized net of the amount of goods and services tax
(GST), except where the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is recognized as part of the
cost of acquisition of the asset or as part of the expense. Receivables and
payables are stated with the amount of GST included.
 
 The net
amount of GST recoverable from, or payable to, the Australian Tax Authority
(ATO) is included as current asset or liability in the statement of financial
position. Cash flows are included in the statement of cash flows on a gross
basis. The GST components of cash flows arising from investing and financing
activities, which are recoverable from, or payable to, the ATO are classified as
operating cash flows. The Company has a net consumption tax receivable of
$51,477 and $11,578 as of June 30, 2009 and 2008, respectively.
 
 In
addition to GST, the Company is required to collect wine equalization tax
(“WET”) on sales of wine product to non-exempt Australian
customers.  Revenue is recorded net of WET taxes. The WET taxes
payable is offset by a rebate of the WET tax offered by the Australian Taxation
Office. The WET rebate of the WET tax is phased out after a statutory amount of
Australian sales have been achieved. The Company has a net WET rebate payable of
$696 at June 30, 2009 and a net WET rebate receivable of  $7,365 at
June 30,  2008.
 
 Inventories
 Yarraman
Australia’s annual crop and production costs are recognized as work-in-process
inventories. Such costs are accumulated with related direct and indirect
harvest, wine processing and production costs, and are transferred to finished
goods inventories when the wine is produced, bottled, and ready for sale. The
cost of finished goods is recognized as cost of sales when the wine product is
sold. Inventories are stated at the lower of first-in, first-out (“FIFO”) cost
or market by variety. In accordance with general practices in the wine industry,
wine inventories are generally included in current assets in the accompanying
balance sheet, although a portion of such inventories may be aged for more than
one year.
 
 During
the year ended June 30, 2008, the management of the Company sold
approximately 341,300 liters of unbottled wine at below cost. With regards to
this sale, in the year ended June 30, 2008, the Company recorded approximately
$920,000 in cost of sales to reflect this inventory at lower of cost or market
at June 30, 2007. The sales, per management, were completed to infuse working
capital into the Company for ongoing operations.
 
 June 302009
                    
                    
                    2008Winemaking
      and packaging materials
                    
                    $
                    122,704
                    
                    
                    $
                    86,507Work
      in progress (costs related to unprocessed and / or unbottled
      products)
                    
                    
                    2,604,010
                    
                    
                    
                    3,372,199Finished
      goods (bottled product)
                    
                    
                    635,814
                    
                    
                    
                    951,127$
                    3,362,528
                    
                    
                    $
                    4,409,833
  Property, Plant and
Equipment
 Property,
plant and equipment are stated at cost less accumulated depreciation. 
Expenditures for major additions and improvements are capitalized and minor
replacements, maintenance and repairs are expensed as incurred. Whenever an
asset is retired or disposed of, its cost and accumulated depreciation or
amortizations are removed from the respective accounts and the resulting gain or
loss is credited or charged to income.
 
 Depreciation
is computed using the straight-line and declining-balance methods over the
following estimated useful lives:
 
 Land
      improvements
                15 yearsWinery
      building
                30 yearsEquipment
                5-7 years
 
 Expenditures
for repairs and maintenance are charged to operating expense as incurred.
Expenditures for additions and betterments are capitalized. When assets are sold
or otherwise disposed of, the cost and related accumulated depreciation are
removed from the accounts, and any resulting gain or loss is included in
operations.
  F-7
  As of
June 30, 2009 and 2008 Property, Plant and Equipment consist of the
following:
 
 June 302009
                    
                    
                    2008Building
      improvements
                    
                    $
                    76,243
                    
                    
                    $
                    66,090Land
                    
                    
                    851,829
                    
                    
                    
                    1,017,686Plant
      and equipment
                    
                    
                    3,745,589
                    
                    
                    
                    4,535,464Computer
      equipment
                    
                    
                    81,237
                    
                    
                    
                    66,429Furniture
      and fixtures
                    
                    
                    23,754
                    
                    
                    
                    27,6374,778,652
                    
                    
                    
                    5,713,306Accumulated
      depreciation
                    
                    
                    (1,250,637
                    )
                    
                    
                    (1,343,662
                    )$
                    3,528,013
                    
                    
                    $
                    4,369,644
 
 Capital Lease
Obligations
 Included
in Property, Plant and Equipment as of June 30, 2009 and 2008 are $114,921 and
$302,696, respectively, of net fixed assets that were purchased on capital lease
arrangements.
 
 Fair Value of Financial
Instruments
 Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
 
 Long-Lived
Assets
 The
Company has adopted Statement of Financial Accounting Standards No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”),
which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,”
and the accounting and reporting provisions of APB Opinion No. 30, “Reporting
the Results of Operations for a Disposal of a Segment of a Business.” The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. Under SFAS 144 impairment losses are
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets’ carrying amounts.  In that
event, a loss is recognized based on the amount by which the carrying amount
exceeds the fair market value of the long-lived assets.  Loss on
long-lived assets to be disposed of is determined in a similar manner, except
that fair market values are reduced for the cost of disposal. Based on its
review, the Company believes that, as of June 30, 2009 there were no significant
impairments of its long-lived assets.
 
 Intangible
Assets
 In
accordance with Statement of Financial Accounting Standards No. 142 (“SFAS
No. 142”), “Goodwill and Other Intangible Assets,” the Company reviews its
goodwill and indefinite-lived intangible assets annually for impairment, or
sooner, if events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. The Company uses June 30 as its annual
impairment test measurement date.  Indefinite-lived intangible assets
consist principally of trademarks.  Intangible assets determined to
have a finite life, primarily customer relationships, are amortized over their
estimated useful lives and are subject to review for impairment in accordance
with the provisions of SFAS No. 144 (as defined below).  Note 5
provide a summary of intangible assets segregated between amortizable and
nonamortizable amounts.  In the fourth quarter of fiscal 2009, pursuant to
the Company’s accounting policy, the Company performed its annual goodwill
impairment analysis. As a result of this analysis, the Company concluded that
there was no impairment of assets.  No impairment loss was recognized
for the years ended June 30, 2009 and 2008.
 
 Effective
July 2002, the Company adopted Statement of Financial Accounting Standards No.
142 (“SFAS 142”), “Goodwill and Other Intangible Assets.”  The adoption of
SFAS No. 142 required an initial impairment assessment involving a comparison of
the fair value of trademarks, patents and other intangible assets to current
carrying value.
  Intangible
assets determined to have indefinite useful lives are not amortized.  The
Company tests intangible assets with indefinite and definite useful lives for
impairment annually, or more frequently if events or circumstances indicate that
an asset might be impaired. Intangible assets determined to have definite
lives are amortized over their useful lives or the life of the intangible asset,
whichever is less.
 
 See Note
5 for details of intangible assets.
  F-8
 
 Contingencies
 Certain
conditions may exist as of the date the financial statements are issued which
may result in a loss to the Company but which will only be resolved when one or
more future events occur or fail to occur.  The Company’s management and
legal counsel assess such contingent liabilities, and such assessment inherently
involves an exercise of judgment.  In assessing loss contingencies related
to legal proceedings that are pending against the Company or unasserted claims
that may result in such proceedings, the Company’s legal counsel evaluates the
perceived merits of any legal proceedings or unasserted claims, as well as the
perceived merits of the amount of relief sought or expected to be
sought.
 
 If the
assessment of a contingency indicates that it is probable that a material loss
has been incurred and the amount of the liability can be estimated, then the
estimated liability would be accrued in the Company’s financial
statements.  If the assessment indicates that a potential material loss
contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, together with
an estimate of the range of possible loss, if determinable and material, would
be disclosed.
 
 Loss
contingencies considered to be remote by management are generally not disclosed
unless they involve guarantees, in which case the guarantee would be
disclosed.
 
 Use of
Estimates
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain 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 and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates. Significant estimates include collectability of accounts
receivable, accounts payable, sales returns, and recoverability of long-term
assets.
 
 Basic and Diluted Earnings
Per Share
 Earnings
per share are calculated in accordance with the Statement of Financial
Accounting Standards No. 128 (“SFAS No. 128”), “Earnings per share”. SFAS No.
128 superseded Accounting Principles Board Opinion No.15 (APB
15).  Net loss per share for all periods presented has been stated to
reflect the adoption of SFAS No. 128.  Basic net loss per share is
computed by dividing loss available to common shareholders by the weighted
average number of common shares outstanding during the
period.  Diluted net loss per share is based on the assumption that
all dilutive convertible shares and stock options were converted or
exercised.  Dilution is computed by applying the treasury stock
method. Under this method, options and warrants are assumed to be exercised at
the beginning of the period (or at the time of issuance, if later), and as if
funds obtained thereby were used to purchase common stock at the average market
price during the period. For the years ended June 30, 2009 and 2008 the
Company’s common stock equivalents have not been included for earning per share
calculations as they are anti-dilutive.
 
 Translation
Adjustment
 As of
June 30, 2009 and 2008, the accounts of Yarraman Australia were maintained, and
their financial statements were expressed, in Australian Dollars (AUD). Such
financial statements were translated into U.S. Dollars (USD) in accordance with
Statement of Financial Accounting Standards No. 52 (“SFAS No. 52”), “Foreign
Currency Translation”, with the AUD as the functional currency. According to
SFAS No. 52, all assets and liabilities were translated at the current exchange
rate, stockholders’ equity are translated at the historical rates and income
statement items are translated at the weighted average exchange rate for the
period. The resulting translation adjustments are reported under other
comprehensive income in accordance with Statement of Financial Accounting
Standards No. 130 (“SFAS No. 130”), “Reporting Comprehensive Income” as a
component of stockholders’ equity.
 
 Statement of Cash
Flows
 In
accordance with SFAS No. 95, “Statement of Cash Flows,” cash flows from the
Company’s operations are based upon the local currencies.  As a
result, amounts related to assets and liabilities reported on the statement of
cash flows will not necessarily agree with changes in the corresponding balances
on the balance sheet.
 
 Concentration of Credit
Risk
 Financial
instruments that potentially subject the Company to concentrations of credit
risk are cash, and other receivables arising from their normal business
activities. The Company places its cash in what it believes to be credit-worthy
financial institutions. The Company has a diversified customer base, most of
which are in Australia. The Company routinely assesses the financial strength of
its customers and, based upon factors surrounding the credit risk, establishes
an allowance, if required, for uncollectible accounts and, as a consequence,
believes that its accounts receivable credit risk exposure beyond such allowance
is limited.
  F-9
 
 Segment
Reporting
 Statement
of Financial Accounting Standards No. 131 (“SFAS 131”), “Disclosure About
Segments of an Enterprise and Related Information” requires use of the
“management approach” model for segment reporting.  The management
approach model is based on the way a company’s management organizes segments
within the company for making operating decisions and assessing performance.
Reportable segments are based on products and services, geography, legal
structure, management structure, or any other manner in which management
disaggregates a company. SFAS 131 has no effect on the Company’s consolidated
financial statements as the Company consists of one reportable business
segment.
 
 Comprehensive
Income
 The
Company has adopted Financial Accounting Standard No. 130 (“SFAS 130”),
“Reporting Comprehensive Income”. This statement establishes rules for the
reporting of comprehensive income and its economic components. Comprehensive
income consists of net loss to common shareholders and foreign currency
translation adjustments and is presented in the consolidated statements of
operations and stockholders’ equity.
 
 Advertising
 Advertising
is expensed as incurred. Advertising expenses for the years ended June 30, 2009
and 2008 were approximately $49,814 and $20,500, respectively.
 
 Shipping
Costs
 Shipping
costs are included in selling and marketing expenses and totaled approximately
$125,053 and $124,800 for the years ended June 30, 2009 and 2008,
respectively.
 
 Income
taxes
 The
Company files federal and state income tax returns in the United States for its
domestic operations, and files separate foreign tax returns for the Company’s
Australian subsidiary. Income taxes are accounted for under Statement of
Financial Accounting Standards No. 109, “Accounting for Income Taxes,” which is
an asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company’s financial statements or tax
returns.
 
 Reclassifications
 For
comparative purposes, prior year’s consolidated financial statements may have
been reclassified to conform to report classifications of the current
year.
 
 Recently Issued Accounting
Pronouncements
 In
June 2009 the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification (“ASC”) 105, “Generally Accepted Accounting
Principles”.  ASC 105 establishes the Codification as the sole source of
authoritative accounting principles to be applied in the preparation of
financial statements in conformity with GAAP.  The adoption of this
statement did not have a material impact on the Company’s financial position or
results of operations.
  In
October 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-13,
“Revenue Recognition - Multiple-Deliverable Revenue Arrangements”.  The
guidance in ASU 2009-13 amends the criteria for separating consideration in
multiple-deliverable arrangements and expands required disclosures related to a
company’s multiple-deliverable revenue arrangements.  ASU 2009-13 is
effective prospectively for fiscal years beginning on or after June 15,
2010.  The Company is currently assessing the impact that adoption will
have on its financial position or results of operations.
  In
June 2009 the Company adopted ASC 855, “Subsequent Events”, which
establishes the general standards of accounting for and disclosures required for
events occurring after the balance sheet date but before financial statements
are issued or are available to be issued.  Under ASC 855 the effects of all
subsequent events that provide additional evidence about conditions that existed
at the date of the balance sheet, including the estimates inherent in the
process of preparing financial statements, are required to be recognized in the
financial statements.  Subsequent events that provide evidence about
conditions that did not exist at the date of the balance sheet but arose after
the balance sheet date but before financial statements are issued or are
available to be issued should not be recognized in the financial statements but
may need to be disclosed to prevent the financial statements from being
misleading.  The adoption did not have a material impact on the subsequent
events that we report, either through recognition or disclosure, in our
consolidated financial statement.
  In
November 2008 the Company adopted ASC 820, “Fair Value Measurements and
Disclosures”, which defines fair value, establishes a framework for measuring
fair value in accordance with accounting principles generally accepted in the
United States, and expands disclosures about fair value measurements.  This
statement does not require any new fair value measurements; rather, it applies
under other accounting pronouncements that require or permit fair value
measurements.  The adoption of ASC 820 did not have a material impact on
the Company’s consolidated financial position or results of
operations.
  F-10
  In
December 2007 the FASB issued ASC 805, “Business Combinations”.  Under
ASC 805, an entity is required to recognize the assets acquired, liabilities
assumed, contractual contingencies, and contingent consideration at their fair
value on the acquisition date. It further requires that acquisition-related
costs are recognized separately from the acquisition and expensed as incurred,
restructuring costs generally expensed in periods subsequent to the acquisition
date, and changes in accounting for deferred tax asset valuation allowances and
acquired income tax uncertainties after the measurement period impact income tax
expense.  The adoption of ASC 805 will change the accounting treatment
for business combinations on a prospective basis beginning in the first quarter
of fiscal year 2010.
  In
December 2007 the FASB issued ASC 810, “Consolidation”.  ASC 810
changes the accounting and reporting for minority interests, which will be
recharacterized as non-controlling interests and classified as a component of
equity.  ASC 810 is effective for us on a prospective basis for business
combinations with an acquisition date beginning in the first quarter of fiscal
year 2010.  As of October 31, 2009, the Company did not have any
minority interests; therefore the adoption of this statement is not expected to
have an impact on the Company’s consolidated financial statements.
  In
April 2008 the FASB issued guidance which was primarily codified into ASC
350 “Intangibles — Goodwill and Other”.  The guidance amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of intangible assets.  The intent of the guidance
is to improve the consistency between the useful life of a recognized intangible
asset under the accounting standards and the period of the expected cash flows
used to measure the fair value of the asset.  The Company will adopt in the
first quarter of fiscal 2010 and will apply the guidance prospectively to
intangible assets acquired after adoption.
  Other
accounting standards that have been issued or proposed that do not require
adoption until a future date are not expected to have a material impact on our
consolidated financial statements upon adoption.
 
 NOTE 4 -
CASH AND CASH
EQUIVALENTS
 
 Cash and
cash equivalents include cash in hand and cash in time deposits, certificates of
deposit and all highly liquid debt instruments with original maturities of three
months or less. As of June 30, 2009 and 2008 cash held in Australian banks are
within Australian statutory limits.
 
 NOTE 5 –
INTANGIBLE
ASSETS
 
 2009
                    
                    
                    2008Intangible
      assets subject to amortization
                    
                    $
                    9,074,400
                    
                    
                    $
                    —Indefinite-lived
      intangible assets
                    
                    
                    10,384,848
                    
                    
                    
                    249,990$
                    19,459,248
                    
                    
                    $
                    249,990
 
 Changes
in balances:
 
 Balance
      June 30, 2007
                    
                    $
                    212,200Acquisitions
                    
                    
                    9,615Dispositions/Currency
      exchange fluctuation
                    
                    
                    28,175Balance
      June 30, 2008
                    
                    
                    249,990Acquisitions
                    
                    
                    19,250,000Dispositions/Currency
      exchange fluctuation
                    
                    
                    (40,742
                    )Balance
      June 30, 2009
                    
                    $
                    19,459,248
  Intangibles
related to acquisitions during the year ended June 30, 2009 were $19,250,000 and
were related to the purchase of the Ripe Cider brand and related business
concept and agreements.  See Note 8 for further details on this
transaction.
 
 There was
no amortization of definite-lived intangible assets as of June 30, 2009 as the
acquisition related to these assets was completed on June 30, 2009.
 
 As of
June 30, 2008 the intangible assets with indefinite useful lives are comprised
of water licenses valued at $240,375 and artwork for Company products and
advertising amounting to $9,615.
  F-11
 
 NOTE 6 -
ACCOUNTS PAYABLE AND
ACCRUED EXPENSES
 
 As of
June 30, 2009 and 2008 the accounts payable and accrued expenses comprised of
the following:
  June 302009
                      
                      
                      2008Trade
      creditors
                      
                      $
                      1,474,306
                      
                      
                      $
                      1,101,760Accrued
      expenses
                      
                      
                      398,704
                      
                      
                      
                      340,700Payroll
      liabilities
                      
                      
                      56,048
                      
                      
                      
                      40,697$
                      1,929,056
                      
                      
                      $
                      1,483,157
 
 Included
in accrued expenses is a provision for annual employee leave, which represents
the value of the estimated future cash outflows to be made resulting from
employees’ services provided to the reporting dates based on their current wage
rate.  As of June 30, 2009 and June 30, 2008 annual leave was $22,782
and $23,316, respectively.
 
 At June
30, 2009 and 2008 included in accrued expenses is a net consumption
tax receivable of $51,477 and $11,578, respectively, and a net WET tax
payable of $697 at June 30, 2009 and a net WET tax receivable of $7,365 at June
30, 2008.
 
 NOTE 7 -
MAJOR CUSTOMERS AND
VENDORS
 
 For the
year ended June 30, 2008 the Company had one customer which represented
approximately 20% of total sales.   There was a $158,412
receivable from the customer as of June 30, 2008.
 
 For the
year ended June 30, 2009 the Company’s three largest customers accounted for
approximately 71% of sales.  There was a $631,536
receivable from these customers as of June 20, 2009.
 
 Gross
sales to the Company’s three largest customers are expected to continue to
represent a significant portion of the Company’s revenues.  The
Company’s arrangements with certain of its customers may, generally, be
terminated by either party with prior notice.  The Company performs
ongoing credit evaluations of its customers’ financial position and management
of the Company is of the opinion that any risk of significant loss is reduced
due to the diversity of customers and geographic sales.
 
 For the
years ended June 30, 2009 and 2008 the Company had no vendors that
accounted for more than 10% of purchases.
 
 NOTE 8 -
RELATED PARTY
TRANSACTIONS
 
 The
Company entered into various related party transactions with the Trustee and the
Trust that is the Company’s controlling stockholder.  The Trust was
the sole shareholder of Yarraman Australia prior to the Share
Exchange.
 
 On
January 1, 2006 Yarraman Australia entered into a consulting agreement with the
Trustee to provide business consulting services related to the wine
industry for a term of two years or until such time as their ownership
percentage in the Company is reduced to less then 15%.  Under this
agreement, the Company must pay the Trustee $100,000 AUD (Australian Dollars) or
approximately $80,480 USD (US Dollars) annually. This agreement was terminated
on June 30, 2008.  During the year ended June 30, 2008 the Company paid the
Trustee approximately $66,063.
 
 On
February 1, 2008 Yarraman Australia entered into a consulting agreement with an
entity that is wholly-owned by one of the members of the Company’s Board of
Directors.  This agreement is for $4,800 per month for services
related to the wine industry.  During the year ending June 30, 2008
approximately $19,200 was paid under this agreement.  This agreement
was terminated by both parties on June 30, 2008.
 
 On
May 26, 2009, the Company entered into an Intellectual Property Sale Agreement
with the Yarraman Road Trust, a major stockholder of the Company, pursuant to
which it acquired certain intellectual property related to the “Ripe Cider”
Brand and the related business concept involving the manufacture and
international sale of a low alcoholic, low carbohydrate, apple cider made from
fresh apples, including all the recipes for the production of the cider,
trademarks, logos, designs, copyright, know how, show how, business systems and
arrangements and all other intellectual property associated with the brand and
the cider product and their manufacture and marketing, as well as a sales
contract to supply bulk alcoholic apple cider to an Australian
company.  In consideration for the purchase, the Company issued 55,000
shares of its Series B Convertible Preferred Stock (the “Series B
Preferred”).  Each share of Series B Preferred is automatically
convertible into 1,000 common shares of stock at such time as the Company has
increased the number of authorized by unissued shares of common stock that will
permit the issuance of all shares of common stock issuable upon the conversion
of all outstanding shares of preferred stock and exercise of all options and
warrants.  The transaction is valued at $19,250,000.
  F-12
 
 NOTE 9 -
LOANS PAYABLE -
RELATED PARTY / DUE TO RELATED PARTY
 
 Loans payable – related
party:
  On
December 21 2005, prior to the Exchange Agreement and in connection with the
Asset Purchase, Yarraman Australia entered into a loan agreement with the Trust,
the nominal holder of all of Yarraman Australia’s shares. The outstanding
principal balance of this loan was $1,832,795. This loan advance was
non-interest bearing. The loan was secured by the fixed assets of the Company,
subordinated to all other loans of the Company that are collateralized by the
fixed assets. A total of 50% of the loan payable, or $916,398, was to be repaid
in thirty-six monthly installments commencing on or about February 1,
2008.  On the thirty-sixth month of payment, in January 2011, the
remaining 50% of the loan payable, or $916,398, was to be due and payable. The
initial repayment date of February 2008 has been extended to June 30,
2008.
  On May 1,
2006 Yarraman Australia entered into a loan agreement with the Trust in the
principal amount of $826,020. Originally, this loan agreement had an interest
rate of 8%, with the same repayment terms as the December 21, 2005 loan. During
the year ended June 30, 2006 a total of $10,910 in interest expense was recorded
on this loan, until the Trust waived the interest requirement on this loan. On
May 25, 2006 the Trust extended to Yarraman Australia an additional $13,767 to
be repaid in accordance with the same terms as the December 21, 2005 loan. This
loan advance was also non-interest bearing.
 
 As of
June 30, 2008 loan advances above totaling $1,832,795 and the $826,020 loan
payable were converted into 6,559,524 shares of the Company’s common stock at a
market price of approximately $0.42 per share, for a total of $2,755,000, the
value of these loans based on the currency conversion on the date of
conversion.
 
 As the
loan advances totaling $1,832,795, the $826,020 loan payable, and the loan of
$13,767, all totaling $2,672,582 were non-interest bearing, the Company recorded
an imputed interest of $871,307 which is recorded as discount on debt and a
contribution of capital to the Company.  This discount on debt is
being amortized over the term that these loan advances are outstanding. As the
loan advance was converted into common stock during the year ended June 30,
2008, the remaining unamortized debt discount was fully amortized upon
conversion.  During the years ended June 30, 2008 and 2007, the
Company amortized this discount on debt, recorded as an interest expense of
$763,133 and $205,905, respectively, at the prevailing exchange rates for the
years then ended.
 
 Due to related
party:
 
 As of
June 30, 2009 and 2008 the Company is indebted to a private company that is
owned by one of the Company’s majority shareholders in the amount of
$2,524,990 and $2,334,733, respectively.  This related party has made
various advances, loans and payments on behalf of the Company, all of which are
unsecured, and due on demand. These advances and loans accrue interest on their
outstanding balance ranging between 0% and 10% per annum.
  On July
1, 2007 the above shareholder had advances and loans which were restructured
into one loan agreement for approximately $3,289,000. This loan included
approximately $689,000 related to a sale of wine by the related party to the
Company during the year ended June 30, 2008. This portion of the new loan was to
be repaid commencing December 7, 2007 with receipts from the proceeds of the
re-sale of this wine by the Company until it was repaid in full. As of June 30,
2008 the balance on this portion of the loan was $689,000. The entire new loan
accrues interest at 6.5% per annum. This new loan is secured by the fixed assets
of the Company, subordinate to the loan from the commercial bank, such loan
totaling $5,511,308 as of June 30, 2008. This new loan, together with
outstanding interest, was to be repaid for any amounts still outstanding on
September 30, 2008. On June 30, 2008 a total of AUD $2,400,000, or
USD $2,280,000, of the above loan was converted into 5,440,476 shares of
the Company’s common stock, at a market price of approximately $0.42 per
share.
 
 NOTE 10 -
LONG-TERM
DEBT
 
 On
December 21, 2005, prior to the Exchange Agreement and in connection with the
Asset Purchase, Yarraman Australia assumed the loan facility that the Trust, the
then nominal holder of all of Yarraman Australia’s shares, had with a financial
institution located in Australia. As of June 30, 2009 and 2008 the total amount
due under this facility, inclusive of interest, is $4,627,379 and $5,511,308,
respectively. This loan facility bears interest at a rate of 10% per annum
rising to 16% per annum if the Company is late in its payments, with interest
payments are due on the 15th of each month. The principal balance was originally
due and payable on December 31, 2007.  The loan is secured by certain
property, plant and equipment of the Company as well as a guaranteed by the
Trust. This loan facility has been extended through to June 30, 2010 by the
lender.
  F-13
  On
January 16, 2009 the Company purchased a fixed asset which it had previously
leased.  Related to this purchase, the Company borrowed approximately
$12,500, payable in twelve equal monthly installments of $1,095 including
interest at a rate of 9.2% per annum.  As of June 30, 2009 there was a
remaining balance due of $6,525.
 
 NOTE 11 –
CAPITAL
LEASES
 
 As a part
of the Asset Purchase agreement in December 16, 2005, the Company assumed a
capital lease obligation to finance the purchase of plant and equipment. Minimum
lease payments relating to the equipment have been capitalized and are being
depreciated over the estimated useful lives of the equipment acquired. Assets
under capital lease and related accumulated amortization at June 30, 2009 and
2008 are as follows:
 
 June 30,2009
                    
                    
                    2008Plant
      and equipment
                    
                    $
                    136,816
                    
                    
                    $
                    452,854Less:
      Accumulated depreciation
                    
                    
                    (15,392
                    )
                    
                    
                    (150,157
                    )$
                    121,424
                    
                    
                    $
                    302,697
 
 The
future minimum lease payments under the capital lease and the net present value
of the future minimum lease payments at June 30, 2009 and 2008 are as
follows:
 
 June 30,2009
                    
                    
                    2008Total
      minimum lease payments
                    
                    $
                    42,539
                    
                    
                    $
                    153,541Amount
      representing interestPresent
      value of net minimum lease payments
                    
                    
                    42,539
                    
                    
                    
                    153,541Current
      portion
                    
                    
                    42,539
                    
                    
                    
                    (102,720
                    )Long-term
      capital lease obligation
                    
                    $
                    —
                    
                    
                    $
                    50,821
 
 The
future aggregate minimum annual lease payments arising from these lease
agreements are as follows:
 
 Year
      endedJune  30,
      2010
                    
                    $
                    42,539June  30,
      2011
                    
                    
                    —$
                    42,539
 
 NOTE 12 -
STOCKHOLDERS’
EQUITY
 
 On or
about March 18, 2006, the Company increased the number of authorized shares of
its capital stock to 100,000,000 shares, of which ninety million (90,000,000)
shares are common stock, par value of $0.001, and ten million (10,000,000)
shares are Preferred Stock, par value of $0.001, which may be issued in one or
more series or classes as designated by the Board of Directors, from time to
time, without the approval of stockholders.
 
 On July
16, 2007, as part of an employment agreement with Ian Long, President and Board
Member, the Company agreed to sell 250,000 shares of its common stock to Mr.
Long at a per share price of $0.44, for a total of $110,000. Mr. Long is paying
for these shares over a five year period.  As of June 30, 2009 and
2008 a total of $44,000 and $22,000 has been applied toward this subscription
receivable through payroll deductions for the President’s salary.
 
 On
September 20, 2007, the Company issued 750,000 shares of common stock to various
officers, directors and vendors in payment of services rendered in the years
ended June 30, 2008 and 2007.  Of these shares 700,000 were issued for
services rendered for the year ended June 30, 2008 and the Company recorded an
expense of $315,000, based on a per share issuance price of $0.45. The remaining
50,000 shares of common stock were issued for services performed during the year
ended June 30, 2007. These services and shares were valued at a then market
price of $117,000.
 
 On June
30, 2008 the Company issued 12,000,000 shares of common stock to convert
outstanding debt from related parties into equity as described in Footnote
8.
  F-14
  On June
8, 2009 the Company issued 1,390,476 shares of common stock for services related
to acquisition costs of Asia Distribution Solutions Limited.  The
Company recorded related acquisition expense of $584,000 based on value of $0.38
per share.  See Footnote 14.
 
 NOTE 13 -
COMMITMENTS AND
CONTINGENCIES
 
 Lease
Agreements
 On
February 1, 2008 the Company entered into an operating lease for office space in
Sydney, Australia.  The lease term is for 2 years and terminates on
January 31, 2010.  The lease payment is $805 per month.
 
 NOTE 14 -
INCOME
TAXES
 
 The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” “SFAS 109”. Under SFAS 109 the
Company is required to recognize the deferred tax assets and liabilities for
both the expected impact of differences between the financial statements and the
tax basis of assets and liabilities, and for the expected future tax benefit to
be derived from tax losses and tax credit carry forwards. SFAS 109 additionally
requires the establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets.
 
 The
Company’s subsidiary, Yarraman Australia, is governed by the income tax laws of
Australia. Pursuant to the Australian tax code corporations are subject to tax
at a statutory rate of 30%.
 
 The
components of loss before income tax consist of the following:
 
 Year ended June 30,2009
                    
                    
                    2008U.S.
      Operations
                    
                    $
                    1,310,120
                    
                    
                    $
                    661,629Australian
      Operations
                    
                    
                    1,433,643
                    
                    
                    
                    2,967,196$
                    2,743,763
                    
                    
                    $
                    3,628,825
 
 The table
below summarizes the differences between the US statutory Federal rate and the
Company’s effective tax rate as follows:
  Year ended June 30,2009
                    
                    
                    2008Income
      tax at Federal statutory rate
                    
                    
                    34
                    %
                    
                    
                    34
                    %U.S.
      tax rate in excess of foreign tax rate
                    
                    
                    (3
                    )%
                    
                    
                    (3
                    )%Permanent
      differences
                    
                    
                    (3
                    )%
                    
                    
                    (3
                    )%Temporary
      differences
                    
                    
                    —
                    
                    
                    
                    —Valuation
      allowance for tax benefits not recognized
                    
                    
                    (28
                    )%
                    
                    
                    (28
                    )%—
                    
                    
                    
                    —
 
 The
Company has a net operating loss (“NOL”) carryforward for United States income
tax purposes at June 30, 2009 expiring through the year 2029. Management
estimates its US NOL as of June 30, 2009 and 2008 to be approximately $1,925,000
and $615,000, respectively. The utilization of the Company’s NOL’s may be
limited because of a possible change in ownership as defined under Section 382
of United States Internal Revenue Code. The Company’s Australian operation has
NOL carryfowards for Australian Income tax purposes at June 30, 2009 and 2008
that are available to offset future income for an indefinite period. Management
estimates its Australian NOL as of June 30, 2009 and 2008 to be approximately
$11,464,000 and $10,030,000.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The Company has recognized, a
valuation allowance for those deferred tax assets for which it is more likely
than not that realization will not occur. The Company’s deferred tax assets as
of June 30, 2009 and 2008 are as follows:
 
 Year ended June 30,2009
                    
                    
                    2008NOL
      carryfowards
                    
                    $
                    4,034,000
                    
                    
                    $
                    3,200,000Valuation
      allowance
                    
                    
                    (4,034,000
                    )
                    
                    
                    (3,200,000
                    )Deferred
      tax asset, net of allowance
                    
                    
                    —
                    
                    
                    
                    —
  F-15
  NOTE 15 -
SUBSEQUENT
EVENTS
 
 Asia Distributions
Solutions, Ltd. Acquisition
 On
September 5, 2008 the Company entered into an Implementation Agreement with Asia
Distributions Solutions Limited (“ADSL”), a Cayman Island company publicly
traded in the United Kingdom on the London Stock Exchange's Alternative
Investment Market (“AIM”).  The Implementation Agreement sets out
certain matters relating to the conduct of the Offer and Merger Transaction that
was agreed to by the Company and ADSL whereby ADSL shareholders are to receive
63,422,535 shares of the Company’s common stock in exchange for the entire
issued and outstanding share capital of ADSL, including 30,676,000 ADSL shares
outstanding and approximately 2,143,358 ADSL shares to be issued.  The
Offer was made to ADSL shareholders on November 26, 2008.
 
 On
January 19, 2009 the acquisition of ADSL by the Company was approved by a
majority of the stockholders of ADSL.  As of May 1, 2009 over 96% of
the ADSL stockholders accepted the Offer.
 
 Under
Cayman Islands law, the Company has the right to force the non-accepting ADSL
shareholders to accept the Offer.  Using this right, on July 1, 2009
the Company completed the acquisition of ADSL.
 
 Series A Preferred
Shares
 
 On, or
about, July 1, 2009, in conjunction with the acquisition of ADSL, the Company
issued to certain ADSL shareholders 381,600 shares of Series A Convertible
Preferred shares.  Each share of Series A Preferred is automatically
convertible into 100 common shares of stock at such time as the Company has
increased the number of authorized by unissued shares of commons stock that will
permit the issuance of all shares of common stock issuable upon the conversion
of all outstanding shares of preferred stock and exercise of all options and
warrants.
 
 Jugiong Vineyard
Acquisition
 On, or
about, November 1, 2008, the Company entered into an agreement to purchase from
the Trust a vineyard and related plant and equipment that Yarraman Australia
previously leased from January 1, 2006 through May 31, 2007.  The
purchase price is $11,000,000 and will be paid by the assumption of
approximately $5,000,000 of debt related to the property and the issuance of a
two year convertible note with interest of six percent per annum in the
principal amount of $6,000,000.  As of the date of this report
the transaction has not been completed.
 
 Riviera Imports
Acquisition
 On
December 31, 2009 the Company entered into an Exchange Agreement with Riviera
Global Holdings LLC, a New York limited liability company, pursuant to which
Riviera has agreed to sell to the Company, upon the terms and subject to the
conditions of the Exchange Agreement, all of the issued and outstanding shares
of Riviera Beverages, Inc. in exchange for 19,605,000 shares of common
stock.
 
 Convertible
Debt
 Subsequent
to June 30, 2009 the Company entered into three convertible debenture agreements
with various parties in the total amount of $607,500.  The debentures
range in interest rate from 8% to 10% per annum and are convertible into shares
of the Company’s common stock upon the occurrence of certain
benchmarks.
  F-16