UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.   20549



FORM 10-K

 ̈
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



FOR THE FISCAL YEAR ENDED _______



x
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



For transition period from January 1, 2012
to March 31, 2012



333-173537

Commission File Number



MONTALVO SPIRITS, INC.

(Name of Business Issuer in Its Charter)



|NEVADA                                                         | 22-4004890                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)



4326 LAUREL GLEN DRIVE, MOORPARK, CA
93021

(Address of principal executive offices)



818-266-9286

(Issuer's telephone number, including area
code)



Securities Registered Pursuant To Section
12(B) of the Act: None



|Securities Registered Pursuant To Section 12(G) of the Act: | common stock, par value $0.001 per share
|----------------------------------------------------------- | ----------------------------------------
|                                                            | (Title of Class)                        



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 a 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 x
    No  ̈



Indicate by checkmark whether the registrant
has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months ( or for such
shorter period that the registrant was required to submit and post such files.



Yes x
     No  o



Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K 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. x



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 definitions of
“large accelerated filer”, “accelerated filer”, or “smaller reporting company in Rule 12b-2 of the
Exchange Act (check one):



|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 Exchange Act). Yes   ̈
  No   x



As of July 11, 2013, there were 67,112,512
shares of common stock of the registrant issued and outstanding.



The aggregate market value of the voting
stock held on March 31, 2012 by non-affiliates of the registrant was $0 based on the closing price of $0 per share as reported
on the OTC Bulletin Board on September 30, 2011 the last business day of the registrant's most recently completed fiscal second
quarter (calculated by excluding all shares held by executive officers, directors and holders known to the registrant of five percent
or more of the voting power of the registrant's common stock, without conceding that such persons are "affiliates" of
the registrant for purposes of the federal securities laws).











TABLE OF CONTENTS



|PART I     |                                                                                                                  | 1 
|---------- | ---------------------------------------------------------------------------------------------------------------- | --
|           |                                                                                                                  |   
|Item 1.    | Business                                                                                                         | 1 
|Item 1A    | Risk Factors                                                                                                     | 5 
|Item 1B    | Unresolved Staff Comments                                                                                        | 17
|Item 2.    | Properties                                                                                                       | 17
|Item 3.    | Legal Proceedings                                                                                                | 17
|Item 4.    | Mine Safety Disclosures                                                                                          | 17
|           |                                                                                                                  |   
|PART II    |                                                                                                                  | 17
|           |                                                                                                                  |   
|Item 5.    | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 17
|Item 6.    | Selected Financial Data                                                                                          | 19
|Item 7.    | Management’s Discussion and Analysis of Plan of Operation and Results of Operations                              | 19
|Item 7A    | Quantitative and Qualitative Disclosures About Market Risk                                                       | 24
|Item 8.    | Financial Statements and Supplementary Data                                                                      | 25
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                             | 25
|Item 9A(T) | Controls and Procedures                                                                                          | 25
|Item 9B.   | Other Information                                                                                                | 27
|           |                                                                                                                  |   
|PART III   |                                                                                                                  |   
|           |                                                                                                                  |   
|Item 10.   | Directors, Executive Officers, Promoters and Corporate Governance.                                               | 27
|Item 11.   | Executive Compensation                                                                                           | 29
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                   | 29
|Item 13.   | Certain Relationships and Related Transactions and Director Independence                                         | 31
|Item 14.   | Principal Accountant Fees and Services                                                                           | 31
|           |                                                                                                                  |   
|PART IV    |                                                                                                                  |   
|           |                                                                                                                  |   
|Item 15.   | Exhibits, Financial Statement Schedules                                                                          | 32
|           |                                                                                                                  |   
|SIGNATURES |                                                                                                                 











PART I



SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS



The Transition Report on Form 10-K/T
contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in
this Transition Report on Form 10-K/T that are not purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), including, but not limited to, statements regarding our expectations, beliefs,
intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives
of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“project,” “will,” “would,” “should,” “could,” “can,” “predict,”
“potential,” “continue,” “objective,” or the negative of these terms, and similar expressions
intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These
forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors
that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed
or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited
to, those identified below, and those discussed in the section entitled “Risk Factors” included in this Transition
Report on Form 10-K/T. Furthermore, such forward-looking statements speak only as of the date of this Transition Report on Form
10-K/T. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances
after the date of such statements. We qualify all of our forward- looking statements by these cautionary statements. In addition,
the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those
described in the section entitled “Risk Factors.” These and other factors could cause our results to differ materially
from those expressed in this Transition Report on Form 10-K/T.



Unless otherwise indicated, information
contained in this Transition Report on Form 10-K/T concerning our industry and the markets in which we operate, including our general
expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions
that we have made that are based on those data and other similar sources, and on our knowledge of the markets for our services.
These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In
addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which
we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described
in the section entitled “Risk Factors” and elsewhere in this Transition Report on Form 10-K/T. These and other factors
could cause results to differ materially from those expressed in the estimates made by third parties and by us.



References in this Transition Report
on Form 10-K/T (the “Transition Report”) to “we”, “us,” “our,” “Registrant,”
“the Company,” “Montalvo” mean Montalvo Spirits, Inc. and our subsidiaries, unless the context otherwise
requires. This Transition Report on Form 10-K/T reports our financial results for the three month period from January 1, 2012 through
March 31, 2012, which we refer to as the “transition period” throughout this report.



ITEM I: BUSINESS



Corporate History



Advanced Cloud Storage, Inc.



Montalvo Spirits, Inc.,
formerly known as Advanced Cloud Storage, Inc. (“Advanced Cloud”), was incorporated on November 18, 2010 under the
laws of the State of Nevada. It was a development stage company with initial operations of organization and incorporation, target
market identification, marketing plans, and capital formation. A substantial portion of the Company’s activities had involved
developing a business plan and establishing contacts and visibility in the marketplace.



CASA Montalvo Holdings, Inc.



CASA Montalvo Holdings,
Inc., a development stage company (“Casa Montalvo”), was incorporated under the laws of the State of California on
April 4, 2011. The Company develops, markets and/or distributes alcoholic beverages, primarily in the United States.



1







Montalvo Imports LLC



On August 9, 2012,
Casa Montalvo formed Montalvo Imports LLC (“Imports”) under the laws of the State of Delaware. Imports, of which the
Company is the sole member, was formed to market and/or distribute alcoholic beverages and provide services to Casa Montalvo.



Acquisition of CASA Montalvo Treated
as a Reverse Acquisition



On December 21, 2012,
Advanced Cloud entered into and consummated the Agreement and Plan of Share Exchange (the “Exchange Agreement”) with
Casa Montalvo and the shareholders of Casa Montalvo (the “Exchange”). Upon consummation of the transactions set forth
in the Agreement (the “Closing”), the Registrant adopted the business plan of Casa Montalvo.



Pursuant to the Agreement,
the Registrant agreed to acquire all of the outstanding capital stock of Casa Montalvo in exchange for the issuance of an aggregate
1,817,891 shares (the “Exchange Shares”) of the Registrant’s common stock, par value $0.001 per share (the “Common
Stock”). As a result of the Exchange, Casa Montalvo became a wholly-owned subsidiary of the Registrant. Following the consummation
of the Exchange, the shareholders of Casa Montalvo will beneficially own approximately eighty-eight and one half percent (88.5%)
of the issued and outstanding Common Stock of the Registrant. The parties have taken the actions necessary to provide that the
Exchange is treated as a “tax free exchange” under Section 368 of the Internal Revenue Code of 1986, as amended. Pursuant
to the terms of the Exchange Agreement, the Registrant’s principal shareholder agreed to retire 10,000,000 shares of the
Registrant’s Common Stock. The Exchange Agreement contains customary representations, warranties and covenants of the Registrant
and Casa Montalvo for like transactions.



Simultaneously therewith,
the Company accepted a subscription in the amount of One Hundred Thousand Dollars ($100,000) for Two Hundred Thousand (200,000)
post-split shares of Common Stock, offered pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated
thereunder.



At the effective time
of the Exchange, our board of directors and officers was reconstituted by the resignation of George Frederick Meyer as Chairman
of the Board of Directors, President/Secretary/Treasurer and Chief Executive Officer of the Registrant and the appointment of Alex
Viecco as Chief Executive Officer and Director, Carlos Gonzalez Rivera as Chief Operating Officer, Chief Financial Officer and
Director, Sergio Gonzalez Rivera as President and Director and Daniel Cahill as Director of Sales and Director.



Additionally, on December
21, 2012, holders of a majority of the Company’s outstanding Common Stock voted to amend the Company’s Articles of
Incorporation to: (i) change its name to “Montalvo Spirits, Inc.”, (ii) increase the number of its authorized shares
of capital stock from 75,000,000 shares to 310,000,000 consisting of (a) 300,000,000 shares were designated as Common Stock and
(b) 10,000,000 shares were designated as blank check preferred stock and (iii) effectuate a forward split on a 1:32.4552 basis.



As a result of the
controlling financial interest of the former stockholder of Casa Montalvo, for financial statement reporting purposes, the merger
between the Company and Casa Montalvo has been treated as a reverse acquisition with Casa Montalvo deemed the accounting acquirer
and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with section 805-10-55
of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction and the net assets of Casa
Montalvo (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying
value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities
of Casa Montalvo which are recorded at their historical cost. The equity of the Company is the historical equity of Casa Montalvo
retroactively restated to reflect the number of shares issued by the Company in the transaction.



Company Overview



Casa Montalvo Holdings,
Inc. (“Casa Montalvo”) was incorporated on April 4, 2011 under the laws of the state of California. Casa Montalvo develops,
markets and/or distributes alcoholic beverages, primarily in the United States. We sell our products through a network of established
spirits distributors, who are licensed to distribute alcoholic beverages throughout the United States. The Company is federally
licensed, maintaining the right to sell to distributors in all markets in the U.S. and globally.



2







The Company intends
to focus on growing the market share of its initial products, the ultra-premium Montalvo line of tequilas, whose expressions include
Plata, Reposado, Anejo and Extra-Anejo. We own the Montalvo brand trademark and have exclusive worldwide master distribution rights
to the brands.



We intend to grow our
business by expanding our portfolio of premium alcoholic beverage brands, including additional spirits categories, as well as beer
and wine, through additional importation and distribution contracts of existing brands. In addition, we may choose to develop new
brands or acquire existing companies with their own brand portfolios.



Target Markets and Marketing Strategy



While our primary route
to market is by selling directly to distributors, who maintain extensive resources to sell to both on and off premise retail accounts,
including liquor stores, grocery stores, convenience stores, bars and restaurants, to build our brands, we must effectively communicate
with three distinct audiences: the distributors; the retail trade; and the end consumer. We believe advertising, marketing and
promotional activities help to establish and reinforce the image and perception of our brand as we strive in building substantial
brand value.



In control states,
the state liquor commissions act in place of distributors and decide which products are to be purchased and offered for sale in
their respective states. The Company would sell on consignment to any control state in which we do business, whereby the Company
would provide inventory to state regulated stores and would be paid upon sale of the product. Should the inventory we provide not
sell in a timely manner or at all, this could negatively impact our working capital and tie up our inventory for an unknown period
of time.



We are currently not
transacting in any control states, although we are in the process of listing in Oregon and plan on listing in Wyoming and Massachusetts
in the near future.



Marketing, sales and
customer service functions are provided by the Company’s executive officers and independent contractors who work together
with third party design and advertising firms to maintain a high degree of focus on each of our products. We attempt to build brand
awareness through innovative marketing activities including social media, brand tastings, as well as competitive spirits competitions.
We use a variety of marketing strategies and tactics to build brand equity and increase sales, including consumer and trade advertising,
price promotions, point-of-sale materials, event sponsorship, in-store and on-premise promotions and public relations, as well
as a variety of other traditional and non-traditional marketing techniques. Our significant public relations campaign has helped
gain editorial coverage for our brands, which increases brand awareness. The Company defines editorial coverage as an article in
a publication expressing the opinion of its editors or publishers. Montalvo Tequila has been featured in various industry publications,
including Tasting Panel Magazine, Beverage Industry and M. Shanken’s Market Watch. Past and future event sponsorship is an
economical way for us to have influential consumers taste our brands.



Products



We have an Exclusive
Worldwide Distribution Agreement with Destilidora Huerta Real, S.A. de C.V., the producers of Montalvo Tequila. Montalvo, an award
winning, ultra-premium tequila brand is a handcrafted, meticulously formulated tequila produced from only the highest quality blue
agave plants from the Lowlands of Jalisco, Mexico. Montalvo ensures the brand’s premium quality by handcrafting in small
batches, using hand-selected Blue Weber agave plants picked at the peak of maturity and employing a third distillation. Fourth-generation
tequila producers Sergio and Carlos Gonzalez Rivera have combined their family’s ancient traditions with modern techniques,
resulting in a clean, smooth and memorable tequila. Montalvo is available in four expressions: Plata, Reposado, Añejo and
Extra-Añejo.



Inventory



The Company maintains
a relatively large inventory based on historical revenues in order to meet unknown customer delivery requirements of new independent
distributors the Company is in the process of securing. The Company feels that the current production capacity of our primary supplier
is sufficient to meet demand for the foreseeable future. In case of an unexpected surge in demand, our primary supplier maintains
contract manufacturing arrangements with third-party suppliers capable of producing large-scale volumes of our products. Based
on the relatively short turnaround time from placing an order with our supplier to receiving the product, the Company believes
it will be able to effectively manage our inventory in the face of unknown demand.



3







Patents and Trademarks



Pursuant to the Exclusive
Distribution Agreement with Destilidora Huerta Real, S.A. de C.V., we own the trademark “Montalvo”. The trademark is
registered in the United States, Mexico, Colombia, Brazil and Argentina, and is currently pending in the European Union. We consider
the trademark to be valuable and important to our business.



Customers



The U.S. alcoholic
beverage industry is a regulated, three-tier system of suppliers, distributors and retailers. The Company currently distributes
the Montalvo Tequila brand through a network of independent distributors. The Company also maintains an arrangement with MHW, Ltd.,
a third-party leading service provider to alcoholic beverage companies, to import the Montalvo brand into the U.S. as well as to
sell Montalvo directly to retailers in New York, New Jersey and California. The Company hopes to expand the number of independent
distributors in certain existing markets and new markets, when the Company has sufficient funds to maintain a larger marketing
campaign.



Competition



The alcohol beverage
industry is highly competitive. We compete with other alcohol beverage companies, most of which have significantly more sales and
resources than us, and have been in business for much longer than we have. We compete with national and regional beverage producers
and "private label" suppliers. Some of our largest competitors are Diageo PLC, Pernod Ricard S.A., Bacardi Limited, Brown-Forman
Corporation, Beam Inc., Remy Cointreau S.A. and Constellation Brands, Inc.



Over the last decade,
the wine and spirits industry in the United States has undergone dramatic consolidation and realignment of brands and brand ownership.
The number of major importers, suppliers and distributors in the U.S. has declined significantly due to this consolidation. As
a result, we believe there is a great opportunity for smaller companies to develop high-quality, high-margin brands, which can
grow to be very attractive acquisition candidates for the larger companies.



We believe that we compete
on the basis of quality, price, brand recognition and distribution strength. By focusing on the premium and super-premium segments
of the market, which typically have higher margins, we believe we are able to gain relatively significant attention from our distributors
for a company of our size. Our U.S. sales force have built, and should continue to build sound, long standing relationships with
distributors both locally and nationally as well as with their customers. Finally, with the continued consolidation among the major
companies that we have seen and expect to continue to see, we feel there is an opportunity for small to mid-size spirits companies
such as ours, as the major companies contract their portfolios to focus on fewer brands.



There can be no assurance
that the Company will compete successfully with existing or new competitors, or that the competition will not have a material adverse
effect on the business, operating results or financial condition of the Company (See ITEM 1A “RISK FACTORS”).



Management and Employees



As of the date of this
Transition Report, the Company has no Executive Staff other than its executive officers.



The Company currently
has no full time employees other than the above officers. The Company’s sales and marketing team consists of eight (8) independent
contractors, which are all at-will contractors. The Company is not a party to any collective bargaining agreements.



Liquidity and Capital Resources



The Company’s
only known potential sources of capital are possible proceeds from private placements, issuance of notes payable, loans from its
officers, and cash from future revenues after the Company commences sales. The Company may require additional financing to continue
operations, and there is no assurance that such additional financing will be available.



4







Potential Future Projects and Conflicts
Of Interest



Members of the Company’s
Management may serve in the future as an officer, director or investor in other entities. Neither the Company nor any shareholder
would have any interest in these projects. Management believes that they have sufficient resources to fully discharge their responsibilities
to all projects they have organized or will organize in the future, if any.



Government Regulation



The production and
marketing of our alcoholic beverages are subject to the rules and regulations of various Federal, provincial, state and local health
agencies, including in particular the U.S. Alcohol and Tobacco Tax and Trade Bureau (“TTB”) as well as the Alcoholic
Beverage Control Laws of all states in which our products are sold. The TTB also regulates labeling of our products.



We believe that we
are in material compliance with applicable federal, state, and other regulations and that we have a compliance program in place
to ensure compliance with production, marketing and labeling regulations on a going-forward basis. There are no regulatory notifications
or actions currently outstanding.



Website



Our website address is www.montalvospirits.com.



We intend to make available
through our website, all of our filings with the Commission and all amendments to these reports as soon as reasonably practicable
after filing, by providing a hyperlink to the EDGAR website containing our reports.



Available Information



The Company is required to file annual,
quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
Investors may read and copy any document that the Company files, including this Transition Report on Form 10-K, at the SEC’s
Public Reference Room at 450 F Street, N.W., Washington, DC 20549. Investors may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site at http://www.sec.gov that
contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC,
from which investors can electronically access the Company’s SEC filings.



Our Information



Our principal executive offices are currently
located at 4326 Laurel Glen Drive, Moorpark, CA and our telephone number is (818) 266-9286. We can be contacted by email at info@MontalvoSpirits.com.



ITEM 1A. RISK FACTORS



Our business, financial condition, operating
results and prospects are subject to the following risks. Additional risks and uncertainties not presently foreseeable to us may
also impair our business operations. If any of the following risks actually occurs, our business, financial condition or operating
results could be materially adversely affected. In such case, the trading price of our common stock could decline, and our stockholders
may lose all or part of their investment in the shares of our common stock.



This Transition Report on Form 10-K/T contains
forward-looking statements that involve risks and uncertainties. These statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “intends,” “plans,” “may,”
“will,” “should,” or “anticipation” or the negative thereof or other variations thereon or
comparable terminology. Actual results could differ materially from those discussed in the forward- looking statements as a result
of certain factors, including those set forth below and elsewhere in this Transition Report on Form 10-K.



5







Certain factors may have a material adverse effect on
our business, financial condition, and results of operations. You should consider carefully the risks and uncertainties described
below, in addition to other information contained in this Transition Report on Form 10-K/T, including our consolidated financial
statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect
our business. If any of the following risks actually occurs, our business, financial condition, results of operations, and future
prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you
could lose part of all of your investment.



We have inadequate capital and need for additional financing
to accomplish our business and strategic plans.



We have very limited
funds, and such funds are not adequate to develop our current business plan. We believe that for our company to be successful,
we will be required to spend significant sums to market our products. If the sales of our products do not enable us to meet this
need, our ultimate success may depend on our ability to raise additional capital. In the absence of additional financing or significant
revenues and profits, the Company will have to approach its business plan from a much different and much more restricted direction,
attempting to secure additional funding sources to fund its growth, borrowing money from lenders or elsewhere or to take other
actions to attempt to provide funding. We cannot guarantee that we will be able to obtain sufficient additional funds when needed,
or that such funds, if available, will be obtainable on terms satisfactory to us.



Our limited operating history does not afford investors
a sufficient history on which to base an investment decision.



We are currently in
the early stages of developing our business. There can be no assurance that at this time that we will operate profitably or will
have adequate working capital to meet our obligations as they become due.



Investors must consider the risks and difficulties
frequently encountered by early stage companies, particularly in rapidly evolving and changing markets. Such risks include the
following:



| | · | the nature of our competition and our ability to effectively market the Company’s products;
| | - | -------------------------------------------------------------------------------------------

| | · | ability to anticipate and adapt to the highly competitive alcoholic beverage and spirits market;
| | - | ------------------------------------------------------------------------------------------------

| | · | ability to effectively manage expanding operations; amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations, and infrastructure; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | dependence upon key personnel to market and sell our services and the loss of one of our key managers may adversely affect
the marketing of our services.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



We cannot be certain
that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely
affected and we may not have the resources to continue or expand our business operations.



Recent worldwide and domestic economic trends and financial
market conditions could adversely impact our financial performance.



The worldwide and domestic
economies have experienced adverse conditions and may be subject to further deterioration for the foreseeable future. We are subject
to risks associated with these adverse conditions, including economic slowdown and the disruption, volatility and tightening of
credit and capital markets. This global economic situation could adversely impact our major suppliers, distributors and retailers.
In addition, unfavorable global or domestic economic situations could adversely impact our major suppliers, distributors and retailers.
Financial difficulties experienced by our suppliers or customers could result in product delays, possible accounts receivable defaults
and inventory challenges. The inability of suppliers, distributors or retailers to conduct business or to access liquidity could
impact our ability to distribute our products.



There can be no assurance
that market conditions will improve in the near future. A prolonged downturn, further worsening or broadening of the adverse conditions
in the worldwide and domestic economies could affect consumer spending patterns and purchases of our products, and create or exacerbate
credit issues, cash flow issues and other financial hardships for us and for our suppliers, distributors, retailers and consumers.
Depending upon their severity and duration, these conditions could have a material adverse impact on our business, liquidity, financial
condition and results of operations. We are unable to predict the likely duration and severity of the current disruption in the
financial markets and the adverse economic conditions in the U.S. and other markets.



6







We depend on a limited number of suppliers. Failure to
obtain satisfactory performance from our suppliers or loss of our existing suppliers could cause us to lose sales, incur additional
costs and lose credibility in the marketplace. We also have annual purchase obligations with certain suppliers.



We depend on a limited
number of third-party suppliers for the sourcing of all of our products, including both our own proprietary brands and those we
distribute for others. These suppliers consist of third-party distillers, bottlers and producers in Mexico. For our proprietary
products, we may rely on a single supplier to fulfill one or all of the manufacturing functions for a brand. For instance, Destilidora
Huerta Real, S.A. de C.V. is the sole producer for Montalvo Tequila. The termination of our written or oral agreements or an adverse
change in the terms of these agreements could have a negative impact on our business. If our suppliers increase their prices, we
may not have alternative sources of supply and may not be able to raise the prices of our products to cover all or even a portion
of the increased costs. Also, our suppliers’ failure to perform satisfactorily or handle increased orders, delays in shipments
of products from international suppliers or the loss of our existing suppliers, especially our key suppliers, could cause us to
fail to meet orders for our products, lose sales, incur additional costs and/or expose us to product quality issues. In turn, this
could cause us to lose credibility in the marketplace and damage our relationships with distributors, ultimately leading to a decline
in our business and results of operations. If we are not able to renegotiate these contracts on acceptable terms or find suitable
alternatives, our business could be negatively impacted.



The sales of our products could decrease significantly
if we cannot secure and maintain listings in the control states.



In the control states,
the state liquor commissions act in place of distributors and decide which products are to be purchased and offered for sale in
their respective states. Products selected for listing must generally reach certain volumes and/or profit levels to maintain their
listings. Products are selected for purchase and sale through listing procedures which are generally made available to new products
only at periodically scheduled listing interviews. Products not selected for listings can only be purchased by consumers in the
applicable control state through special orders, if at all. If, in the future, we are unable to maintain our current listings in
the control states, or secure and maintain listings in those states for any additional products we may acquire, sales of our products
could decrease significantly.



Currency exchange rate fluctuations and devaluations may
have a significant adverse effect on our revenues, sales, costs of goods and overall financial results.



For the transition
period ended March 31, 2012, non-U.S. operations accounted for none of our revenues. However, we are dependent upon resources in
Mexico for the products we intend to market, distribute and sell. Therefore, gains and losses on the conversion of foreign payments
into U.S. dollars could cause fluctuations in our results of operations, and fluctuating exchange rates could cause reduced revenues
and/or gross margins from non-U.S. dollar-denominated international sales and inventory purchases. Our ability to acquire spirits
and wine and produce and sell our products at favorable prices will also depend in part on the relative strength of the U.S. dollar.
We may not be able to hedge against these risks.



If our inventory is lost due to theft,
fire or other damage or becomes obsolete, our results of operations would be negatively impacted.



We expect our inventory
levels to fluctuate to meet customer delivery requirements for our products. We are always at risk of loss of that inventory due
to theft, fire or other damage, and any such loss, whether insured against or not, could cause us to fail to meet our orders and
harm our sales and operating results. Also, our inventory may become obsolete as we introduce new products, cease to produce old
products or modify the design of our products’ packaging, which would increase our operating losses and negatively impact
our results of operations.



Weather conditions may have a material adverse effect
on our sales or on the price of raw materials used to produce spirits.



We operate in an industry
where performance is affected by the weather. Extreme changes in weather conditions may result in lower consumption of tequila
and other alcoholic beverages. In particular, unusually cold spells in winter or high temperatures in the summer can result in
temporary shifts in customer preferences and impact demand for the alcoholic beverages we produce and distribute. Similar weather
conditions in the future may have a material adverse effect on our sales which could affect our business, financial condition and
results of operations. In addition, inclement weather may affect the availability of grain used to produce raw spirit, which could
result in a rise in raw spirit pricing that could negatively affect margins and sales.



7







Climate change, or legal, regulatory
or market measures to address climate change, may negatively affect our business, operations or financial performance, and water
scarcity or poor quality could negatively impact our production costs and capacity.



Our business depends
upon agricultural activity and natural resources. There has been much public discussion related to concerns that carbon dioxide
and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency
and severity of extreme weather and natural disasters. Severe weather events and climate change may negatively affect agricultural
productivity in the regions from which we presently source our agricultural raw materials such as agave. Decreased availability
of our raw materials may increase the cost of goods for our products. Severe weather events or changes in the frequency or intensity
of weather events can also disrupt our supply chain, which may affect production operations, insurance cost and coverage, as well
as delivery of our products to wholesalers, retailers and consumers.



Water is essential
in the production of our products. The quality and quantity of water available for use is important to the supply of agave and
our ability to operate our business. Water is a limited resource in many parts of the world and if climate patterns change and
droughts become more severe, there may be a scarcity of water or poor water quality which may affect our production costs or impose
capacity constraints. Such events could adversely affect our results of operations and financial condition.



The Company has limited protection
of the Exclusive Master Distribution Agreement (“Distribution Agreement”).



The Company currently
has an exclusive right to distribute all Casa Montalvo products throughout the world for a three-year term. The term will be extended
indefinitely provided the Company hits minimal sales requirements. Any breach of the Distribution Agreement, or an act of terminating
cause, could lead to the loss of the Company’s exclusive distribution rights, for the respective jurisdictions which the
Company operates, which would have a material adverse effect on the business, results of operations and financial condition.



Either our or our strategic partners’
failure to protect our respective trademarks and trade secrets could compromise our competitive position and decrease the value
of our brand portfolio.



Since we frequently
enter into exclusive arrangements to market the Company’s products with unaffiliated agents, our business and prospects depend
in part on our, and with respect to our agency or joint venture brands, our strategic partners’ ability to develop favorable
consumer recognition of our brands and trademarks. Although both we and our strategic partners actively apply for registration
of our brands and trademarks, they could be imitated in ways that we cannot prevent. Also, we rely on trade secrets and proprietary
know-how, concepts and formulas. Our methods of protecting this information may not be adequate. Moreover, we may face claims of
misappropriation or infringement of third parties’ rights that could interfere with our use of this information. Defending
these claims may be costly and, if unsuccessful, may prevent us from continuing to use this proprietary information in the future
and result in a judgment or monetary damages being levied against us. We do not maintain non-competition agreements with all of
our key personnel or with some of our key suppliers. If competitors independently develop or otherwise obtain access to our or
our strategic partners’ trade secrets, proprietary know-how or recipes, the appeal, and thus the value, of our brand portfolio
could be reduced, negatively impacting our sales and growth potential.



An impairment in the carrying value
of goodwill or other acquired intangible assets could negatively affect our operating results and shareholders’ equity.



The carrying value
of goodwill represents the fair value of acquired businesses in excess of identifiable assets and liabilities as of the acquisition
date, net of any cumulative impairments. The carrying value of other intangible assets represents the fair value of trademarks,
trade names and other acquired intangible assets as of the acquisition date, net of impairments and accumulated amortization. Goodwill
and other acquired intangible assets expected to contribute indefinitely to our cash flows are not amortized, but must be evaluated
for impairment by our management at least annually. If carrying value exceeds current fair value as determined based on the discounted
future cash flows of the related business, the intangible asset is considered impaired and is reduced to fair value via a non-cash
charge to earnings. If the value of goodwill or other acquired intangible assets is impaired, our earnings and shareholders’
equity could be adversely affected.



8







We operate in highly competitive
industries, and competitive pressures could have a material adverse effect on our business.



The alcoholic beverages
production and distribution industries in our region are intensely competitive. The principal competitive factors in these industries
include product range, pricing, distribution capabilities and responsiveness to consumer preferences, with varying emphasis on
these factors depending on the market and the product. The alcoholic beverage industry competes with respect to brand recognition,
product quality, brand loyalty, customer service and price. Failure to maintain and enhance the Company’s competitive position
could materially and adversely affect the Company’s business and prospects for business. Wholesaler, retailer and consumer
purchasing decisions are influenced by, among other things, the perceived absolute or relative overall value of our products, including
their quality or pricing, compared to competitor’s products. Unit volume and dollar sales could also be affected by pricing,
purchasing, financing, operational, advertising or promotional decisions made by wholesalers, state and provincial agencies, and
retailers which could affect their supply of, or consumer demand for, our products. We could also experience higher than expected
selling, general and administrative expenses if we find it necessary to increase the number of our personnel or our advertising
or marketing expenditures to maintain our competitive position or for other reasons.



Our business could be adversely
affected by a decline in the consumption of alcohol and spirits we sell.



While over the past several years there
have been modest increases in consumption of beverage alcohol in most of our product categories and geographic markets, there have
been periods in the past in which there were substantial declines in the overall per capita consumption of beverage alcohol products
in the U.S. and other markets in which we participate. A limited or general decline in consumption in one or more of our product
categories could occur in the future due to a variety of factors, including:



| | • | A general decline in economic or geopolitical conditions;
| | - | ---------------------------------------------------------

| | • | Concern about the health consequences of consuming beverage alcohol products and about drinking and driving;
| | - | ------------------------------------------------------------------------------------------------------------

| | • | A general decline in the consumption of beverage alcohol products in on-premise establishments, such as may result from smoking
bans and stricter laws related to driving while under the influence of alcohol;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Consumer dietary preferences favoring lighter, lower calorie beverages such as diet soft drinks, sports drinks and water products;
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | • | The increased activity of anti-alcohol groups;
| | - | ----------------------------------------------

| | • | Increased federal, state, provincial or foreign excise or other taxes on beverage alcohol products and possible restrictions
on beverage alcohol advertising and marketing; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Increased regulation placing restrictions on the purchase or consumption of beverage alcohol products.
| | - | ------------------------------------------------------------------------------------------------------



We are subject to extensive government
regulation and are required to obtain and renew various permits and licenses; changes in or violations of laws or regulations or
failure to obtain or renew permits and licenses could materially adversely affect our business and profitability.



Our business of marketing
and distributing alcoholic beverages in the United States is subject to regulation by national and local governmental agencies.
These regulations and laws address such matters as licensing and permit requirements, regarding the production, storage and import
of alcoholic products; competition and anti-trust matters; trade and pricing practices; taxes; distribution methods and relationships;
required labeling and packaging; advertising; sales promotion; and relations with wholesalers and retailers. Loss of production
capacity due to regulatory issues can negatively affect our sales and increase our operating costs as we attempt to increase production
at other facilities during that time to offset the lost production. It is possible that we could have similar issues in the future
that will adversely impact our sales and operating costs. Additionally, new or revised regulations or requirements or increases
in excise taxes, customs duties, income taxes, or sales taxes could materially adversely affect our business, financial condition
and results of operations.



In addition, we are
subject to numerous environmental and occupational, health and safety laws and regulations in the countries in which we plan to
operate. We may incur significant costs to maintain compliance with evolving environmental and occupational, health and safety
requirements, to comply with more stringent enforcement of existing applicable requirements or to defend against challenges or
investigations, even those without merit. Future legal or regulatory challenges to the industry in which we operate or our business
practices and arrangements could give rise to liability and fines, or cause us to change our practices or arrangements, which could
have a material adverse effect on us, our revenues and our profitability.



9







Governmental regulation
and supervision as well as future changes in laws, regulations or government policy (or in the interpretation of existing laws
or regulations) that affect us, our competitors or our industry generally, strongly influence our viability and how we operate
our business. Complying with existing laws, regulations and government policy is burdensome, and future changes may increase our
operational and administrative expenses and limit our revenues.



Additionally, governmental
regulatory and tax authorities have a high degree of discretion and may at times exercise this discretion in a manner contrary
to law or established practice. Such conduct can be more prevalent in jurisdictions with less developed or evolving regulatory
systems like Mexico. Our business would be materially and adversely affected if there were any adverse changes in relevant laws
or regulations or in their interpretation or enforcement. Our ability to introduce new products and services may also be affected
if we cannot predict how existing or future laws, regulations or policies would apply to such products or services.



If we fail to manage growth effectively
or prepare for product scalability, it could have an adversely effect on our employee efficiency, product quality, working capital
levels and results of operations.



Any significant growth
in the market for our products or our entry into new markets may require an expansion of our employee base for managerial, operational,
financial, and other purposes. As of March 31, 2012, we had no full time employees outside of our management team. During any period
of growth, we may face problems related to our operational and financial systems and controls, including quality control and delivery
and service capacities. We would also need to continue to expand, train and manage our employee base. Continued future growth will
impose significant added responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate
new employees.



Aside from increased
difficulties in the management of human resources, we may also encounter working capital issues, as we will need increased liquidity
to finance the marketing of the products we sell, and the hiring of additional employees. For effective growth management, we will
be required to continue improving our operations, management, and financial systems and controls. Our failure to manage growth
effectively may lead to operational and financial inefficiencies that will have a negative effect on our profitability. We cannot
assure investors that we will be able to timely and effectively meet that demand and maintain the quality standards required by
our existing and potential customers.



Our management team may not be able
to successfully implement our business strategies.



If our management
team is unable to execute on its business strategies, then our development, including the establishment of revenues and our sales
and marketing activities would be materially and adversely affected. In addition, we may encounter difficulties in effectively
managing the budgeting, forecasting and other process control issues presented by any future growth. We may seek to augment or
replace members of our management team or we may lose key members of our management team, and we may not be able to attract new
management talent with sufficient skill and experience.



If we are unable to retain key executives
and other key affiliates, our growth could be significantly inhibited and our business harmed with a material adverse effect on
our business, financial condition and results of operations.



Our success is, to
a certain extent, attributable to the management, sales and marketing, and operational and technical expertise of certain key personnel.
Alex Viecco, our Chief Executive Officer, Carlos Gonzalez Rivera, our Chief Operating Officer, and Sergio Gonzalez Rivera, our
President, perform key functions in the operation of our business. The loss of any of these could have a material adverse effect
upon our business, financial condition, and results of operations. We do not maintain key-person insurance for members of our management
team because it is cost prohibitive at this point. If we lose the services of any senior management, we may not be able to locate
suitable or qualified replacements, and may incur additional expenses to recruit and train new personnel, which could severely
disrupt our business and prospects.



Our success in the
future may depend on our ability to establish and maintain strategic alliances, and any failure on our part to establish and maintain
such relationships would adversely affect our market penetration and revenue growth.



Due to the regulated
nature of the alcoholic beverage industry, we will be required to establish strategic relationships with third parties. Our ability
to establish strategic relationships will depend on a number of factors, many of which are outside our control, such as the competitive
position of our product and marketing plan relative to our competitors. We may not be able to establish other strategic relationships
in the future. In addition, any strategic alliances that we establish may subject us to a number of risks, including risks associated
with sharing proprietary information, loss of control of operations that are material to developed business and profit-sharing
arrangements. Moreover, strategic alliances may be expensive to implement and subject us to the risk that the third party will
not perform its obligations under the relationship, which may subject us to losses over which we have no control or expensive termination
arrangements. As a result, even if our strategic alliances with third parties are successful, our business may be adversely affected
by a number of factors that are outside of our control.



10







Our financial results may not meet
the expectations of investors and may fluctuate because of many factors and, as a result, investors should not rely on our revenue
and/or financial projections as indicative of future results.



Fluctuations in operating
results or the failure of operating results to meet the expectations investors may negatively impact the value of our securities.
Operating results may fluctuate due to a variety of factors that could affect revenues or expenses in any particular quarter. Fluctuations
in operating results could cause the value of our securities to decline. Investors should not rely on revenue or financial projections
or comparisons of results of operations as an indication of future performance. As a result of the factors listed below, it is
possible that in future periods results of operations may be below the expectations of investors. This could cause the market price
of our securities to decline. Factors that may affect our quarterly results include:



| | • | delays in sales resulting from potential customer sales cycles;
| | - | ---------------------------------------------------------------

| | • | variations or inconsistencies in return on investment models and results;
| | - | -------------------------------------------------------------------------

| | • | delays in demonstrating product performance or installations;
| | - | -------------------------------------------------------------

| | • | changes in competition; and
| | - | ---------------------------

| | • | changes or threats of significant changes in legislation or rules or standards that would change the drivers for product adoption.
| | - | ----------------------------------------------------------------------------------------------------------------------------------



Because our
auditors have issued a going concern opinion, there is substantial doubt about our ability to continue as a going concern.



Our report from our
independent registered public accounting firm for the transition period ended March 31, 2012 includes an explanatory paragraph
stating that our recurring losses from operations and negative cash flows raise substantial doubt about our ability to continue
as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of
operations will be materially and adversely affected and we may be unable to continue as a going concern. If we are unable to continue
as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on
our audited consolidated financial statements, and it is likely that investors will lose all or a part of their investment. After
this offering, future reports from our independent registered public accounting firm may also contain statements expressing doubt
about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future
and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling
to provide additional funding on commercially reasonable terms or at all.



Our strategy may include acquiring
companies which may result in unsuitable acquisitions or failure to successfully integrate acquired companies, which could lead
to reduced profitability.



We may embark
on a growth strategy through acquisitions of companies or operations that complement existing product lines, customers or other
capabilities. We may be unsuccessful in identifying suitable acquisition candidates, or may be unable to consummate desired acquisitions.
To the extent any future acquisitions are completed, we may be unsuccessful in integrating acquired companies or their operations,
or if integration is more difficult than anticipated, we may experience disruptions that could have a material adverse impact on
future profitability. Some of the risks that may affect our ability to integrate, or realize any anticipated benefits from, acquisitions
include:



| | • | unexpected losses of key employees or customer of the acquired company;
| | - | -----------------------------------------------------------------------

| | • | difficulties integrating the acquired company’s standards, processes, procedures and controls;
| | - | ----------------------------------------------------------------------------------------------

| | • | difficulties coordinating new product and process development;
| | - | --------------------------------------------------------------

| | • | difficulties hiring additional management and other critical personnel;
| | - | -----------------------------------------------------------------------

| | • | difficulties increasing the scope, geographic diversity and complexity of our operations;
| | - | -----------------------------------------------------------------------------------------

| | • | difficulties consolidating facilities, transferring processes and know-how;
| | - | ---------------------------------------------------------------------------

| | • | difficulties reducing costs of the acquired company’s business;
| | - | ---------------------------------------------------------------

| | • | diversion of management’s attention from our management; and
| | - | ------------------------------------------------------------

| | • | adverse impacts on retaining existing business relationships with customers.
| | - | ----------------------------------------------------------------------------



11







Demand for our products may be adversely
affected by many factors, including changes in consumer preferences and trends.



Consumer preferences
may shift due to a variety of factors including changes in demographic and social trends, public health initiatives, product innovations,
changes in vacation or leisure activity patterns and a downturn in economic conditions, which may reduce consumers’ willingness
to purchase distilled spirits or cause a shift in consumer preferences toward beer, wine or non-alcoholic beverages. Our success
depends in part on fulfilling available opportunities to meet consumer needs and anticipating changes in consumer preferences with
successful new products and product innovations.



We face substantial competition in
our industry and many factors may prevent us from competing successfully.



We compete on the basis
of product taste and quality, brand image, price, service and ability to innovate in response to consumer preferences. The global
spirits industry is highly competitive and is dominated by several large, well-funded international companies which trend toward
consolidation. It is possible that our competitors may either respond to industry conditions or consumer trends more rapidly or
effectively or resort to price competition to sustain market share, which could adversely affect our sales and profitability. The
dollar amount and unit volume of our sales could be negatively affected by our inability to maintain or increase prices, changes
in geographic or product mix, a general decline in beverage alcohol consumption or the decision of wholesalers, retailers or consumers
to purchase competitor’s products instead of our products. Wholesaler, retailer and consumer purchasing decisions are influenced
by, among other things, the perceived absolute or relative overall value of our products, including their quality or pricing, compared
to competitor’s products. Unit volume and dollar sales could also be affected by pricing, purchasing, financing, operational,
advertising or promotional decisions made by wholesalers, state and provincial agencies, and retailers which could affect their
supply of, or consumer demand for, our products. We could also experience higher than expected selling, general and administrative
expenses if we find it necessary to increase the number of our personnel or our advertising or marketing expenditures to maintain
our competitive position or for other reasons.



Adverse public opinion about alcohol
could reduce demand for our products.



Anti-alcohol groups
have, in the past, advocated successfully for more stringent labeling requirements, higher taxes and other regulations designed
to discourage alcohol consumption. More restrictive regulations, negative publicity regarding alcohol consumption and/or changes
in consumer perceptions of the relative healthfulness or safety of beverage alcohol could decrease sales and consumption of alcohol
and thus the demand for our products. This could, in turn, significantly decrease both our revenues and our revenue growth, causing
a decline in our results of operations.



Class action or other litigation
relating to alcohol abuse or the misuse of alcohol could adversely affect our business.



The alcoholic beverage
industry faces the possibility of class action or similar litigation alleging that the continued excessive use or abuse of beverage
alcohol has caused death or serious health problems. It is also possible that governments could assert that the use of alcohol
has significantly increased government funded health care costs. Litigation or assertions of this type have adversely affected
companies in the tobacco industry, and it is possible that we, as well as our suppliers, could be named in litigation of this type.



Also, lawsuits have
been brought in a number of states alleging that beverage alcohol manufacturers and marketers have improperly targeted underage
consumers in their advertising. Plaintiffs in these cases allege that the defendants’ advertisements, marketing and promotions
violate the consumer protection or deceptive trade practices statutes in each of these states and seek repayment of the family
funds expended by the underage consumers. While we have not been named in these lawsuits, we could be named in similar lawsuits
in the future. Any class action or other litigation asserted against us could be expensive and time-consuming to defend against,
depleting our cash and diverting our personnel resources and, if the plaintiffs in such actions were to prevail, our business could
be harmed significantly.



12







Regulatory decisions and legal, regulatory
and tax changes could limit our business activities, increase our operating costs and reduce our margins.



The production, distribution,
marketing, advertising and labeling of beverage alcohol products is subject to extensive regulation in all of the countries in
which we operate. We are required to comply with these regulations and to maintain various permits and licenses. We are also required
to conduct business only with holders of licenses to import, warehouse, transport, distribute and sell beverage alcohol products.
We cannot assure you that these and other governmental regulations applicable to our industry will not change or become more stringent.
Moreover, because these laws and regulations are subject to interpretation, we may not be able to predict when and to what extent
liability may arise. Additionally, due to increasing public concern over alcohol-related societal problems, including driving while
intoxicated, underage drinking, alcoholism and health consequences from the abuse of alcohol, various levels of government may
seek to impose additional restrictions or limits on advertising or other marketing activities promoting beverage alcohol products.
Failure to comply with any of the current or future regulations and requirements relating to our industry and products could result
in monetary penalties, suspension or even revocation of our licenses and permits. Costs of compliance with changes in regulations
could be significant and could harm our business, as we could find it necessary to raise our prices in order to maintain profit
margins, which could lower the demand for our products and reduce our sales and profit potential.



Further, the distribution
of beverage alcohol products is subject to extensive taxation both in the U.S. and internationally (and, in the U.S., at both the
federal and state government levels), and beverage alcohol products themselves are the subject of national import and excise duties
in most countries around the world. An increase in taxation or in import or excise duties could also significantly harm our sales
revenue and margins, both through the reduction of overall consumption and by encouraging consumers to switch to lower-taxed categories
of beverage alcohol.



We could face product liability or
other related liabilities that increase our costs of operations and harm our reputation.



Although we maintain
liability insurance and will attempt to limit contractually our liability for damages arising from our products, these measures
may not be sufficient for us to successfully avoid or limit liability. Our product liability insurance coverage is limited to $1
million per occurrence and $2 million in the aggregate and our general liability umbrella policy is capped at $1 million. Further,
any contractual indemnification and insurance coverage we have from parties supplying our products is limited, as a practical matter,
to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by these suppliers. In any event,
extensive product liability claims could be costly to defend and/or costly to resolve and could harm our reputation.



If we become subject to product liability
claims, personal injury claims or defective products, our business may be harmed.



The marketing and sale
of the Company’s products and services entails risk of product liability and there can be no assurance that product liability
claims will not be asserted against the Company. While the Company intends to obtain some business liability insurance, insurance
designed to cover product liability is expensive, difficult to obtain in some cases and may not be available now or in the future
on acceptable terms, if at all. Furthermore, there can be no assurance that such insurance coverage will be adequate, or that a
product liability claim, even one without merit, would not have a material adverse effect on the business or financial condition
of the Company. As a result, any imposition of product liability could materially harm our business, financial condition and results
of operations. In addition, we do not have any business interruption insurance due to the limited coverage of any such business
interruption insurance, and as a result, any business disruption or natural disaster could severely disrupt our business and operations
and significantly decrease our revenue and profitability.



Contamination of our products and/or
counterfeit or confusingly similar products could harm the image and integrity of, or decrease customer support for, our brands
and decrease our sales.



The success of our
brands depends upon the positive image that consumers have of them. Contamination, whether arising accidentally or through deliberate
third-party action, or other events that harm the integrity or consumer support for our brands, could affect the demand for our
products. Contaminants in raw materials purchased from third parties and used in the production of our products or defects in the
distillation and fermentation processes could lead to low beverage quality as well as illness among, or injury to, consumers of
our products and could result in reduced sales of the affected brand or all of our brands. Also, to the extent that third parties
sell products that are either counterfeit versions of our brands or brands that look like our brands, consumers of our brands could
confuse our products with products that they consider inferior. This could cause them to refrain from purchasing our brands in
the future and in turn could impair our brand equity and adversely affect our sales and operations.



Our Executive Officers and certain
stockholders possess the majority of our voting power, and through this ownership, control our Company and our corporate actions.



Our current executive
officers and certain large shareholders of the Company, hold approximately 64% of the voting power of the outstanding shares of
our Common Stock. These officers have a controlling influence in determining the outcome of any corporate transaction or other
matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all
of our assets, election of directors, and other significant corporate actions. As such our executive officers have the power to
prevent or cause a change in control; therefore, without his consent we could be prevented from entering into transactions that
could be beneficial to us. The interests of our executive officers may give rise to a conflict of interest with the Company and
the Company’s shareholders. For additional details concerning voting power please refer to the section below entitled “Description
of Securities.”



13







There is a substantial lack of liquidity
of our common stock and volatility risks.



Our common stock is
quoted on the OTCQB under the symbol “TQLA.” The liquidity of our common stock may be very limited and affected by
our limited trading market. The OTCQB market is an inter-dealer market much less regulated than the major exchanges, and is subject
to abuses, volatilities and shorting. There is currently no broadly followed and established trading market for our common stock.
An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility
and more efficient execution of buy and sell orders. Absence of an active trading market reduces the liquidity of the shares traded.



The trading volume
of our common stock may be limited and sporadic. This situation is attributable to a number of factors, including the fact that
we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the
investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend
to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when
trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume
of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any
assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current
trading levels will be sustained. As a result of such trading activity, the quoted price for our common stock on the OTCQB may
not necessarily be a reliable indicator of our fair market value. In addition, if our shares of common stock cease to be quoted,
holders would find it more difficult to dispose of or to obtain accurate quotation as to the market value of, our common stock
and as a result, the market value of our common stock likely would decline.



The market price for
our stock may be volatile and subject to fluctuations in response to factors, including the following:



| | · | The increased concentration of the ownership of our shares by a limited number of affiliated stockholders following the Exchange
may limit interest in our securities;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | variations in quarterly operating results from the expectations of securities analysts or investors;
| | - | ----------------------------------------------------------------------------------------------------

| | · | revisions in securities analysts’ estimates or reductions in security analysts’ coverage;
| | - | -----------------------------------------------------------------------------------------

| | · | announcements of new attractions or services by us or our competitors;
| | - | ----------------------------------------------------------------------

| | · | reductions in the market share of our services;
| | - | -----------------------------------------------

| | · | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | · | general technological, market or economic trends;
| | - | -------------------------------------------------

| | · | investor perception of our industry or prospects;
| | - | -------------------------------------------------

| | · | insider selling or buying;
| | - | --------------------------

| | · | investors entering into short sale contracts;
| | - | ---------------------------------------------

| | · | regulatory developments affecting our industry; and
| | - | ---------------------------------------------------

| | · | additions or departures of key personnel.
| | - | -----------------------------------------



Many of these factors
are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot
make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including
as to whether our common stock will sustain current market prices, or as to what effect that the sale of shares or the availability
of common stock for sale at any time will have on the prevailing market price.



Our common stock may never be listed on a major stock
exchange.



We anticipate seeking
the listing of our common stock on a national or other securities exchange at some time in the future, assuming that we can satisfy
the initial listing standards for such exchange. We currently do not satisfy the initial listing standards and cannot ensure that
we will be able to satisfy such listing standards or that our common stock will be accepted for listing on any such exchange. Should
we fail to satisfy the initial listing standards of such exchanges, or our common stock is otherwise rejected for listing, the
trading price of our common stock could suffer, the trading market for our common stock may be less liquid, and our common stock
price may be subject to increased volatility.



14







A decline in the price of our common
stock could affect our ability to raise working capital and adversely impact our ability to continue operations.



A prolonged decline
in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability
to raise capital. A decline in the price of our common stock could be especially detrimental to our liquidity and our operations.
Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business
plan and operations, including our ability to develop new services and continue our current operations. If our common stock price
declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient
to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to
continue our normal operations.



Concentrated ownership of our common
stock creates a risk of sudden changes in our common stock price.



The sale by any shareholder
of a significant portion of their holdings could have a material adverse effect on the market price of our common stock.



Sales of our currently issued and
outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive
effect on the price of the shares of our common stock.



A substantial majority
of the outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities
Act of 1933, as amended (the “Securities Act”) (“Rule 144”). As restricted shares, these shares may be
resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions
from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence
that a non-affiliate who has held restricted securities for a period of at least six months may sell their shares of common stock.
Under Rule 144, affiliates who have held restricted securities for a period of at least six months may, under certain conditions,
sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s
outstanding shares of common stock or the average weekly trading volume during the four calendar weeks prior to the sale (the four
calendar week rule does not apply to companies quoted on the OTCQB). A sale under Rule 144 or under any other exemption from the
Securities Act, if available, or pursuant to subsequent registrations of our shares of common stock, may have a depressive effect
upon the price of our shares of common stock in any active market that may develop.



If we issue additional shares or
derivative securities in the future, it will result in the dilution of our existing stockholders.



Our Articles of Incorporation authorizes
the issuance of up to 300,000,000 shares of common stock, $0.001 par value per share. Our board of directors may choose to issue
some or all of such shares, or derivative securities to purchase some or all of such shares, to provide additional financing in
the future.



We do not plan to declare or pay
any dividends to our stockholders in the near future.



We have not declared
any dividends in the past, and we do not intend to distribute dividends in the near future. The declaration, payment and amount
of any future dividends will be made at the discretion of the board of directors and will depend upon, among other things, the
results of operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of
directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no
assurance with respect to the amount of any such dividend.



The requirements of being a public
company may strain our resources and distract management.



As a public company,
we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). These requirements are extensive. The Exchange Act requires
that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act
requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.



15







We may incur significant
costs associated with our public company reporting requirements and costs associated with applicable corporate governance requirements.
We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and
to make some activities more time consuming and costly. This may divert management’s attention from other business concerns,
which could have a material adverse effect on our business, financial condition and results of operations. We also expect that
these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability
insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the
same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on
our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these
rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.



If we do not file our quarterly or
annual reports with the SEC, we may be de-listed from the OTCQB.



OTCQB is the middle
tier of the OTC market. OTCQB companies report to the SEC or a U.S. banking regulator, making it easy for investors to identify
companies that are current in their reporting obligations. There are no financial or qualitative standards to be in this tier.
OTCQB securities may also be quoted on the FINRA BB. The OTCQB allows investors to easily identify reporting companies traded in
the OTC market regardless of where they are quoted.



Under OTCQB rules relating
to the timely filing of periodic reports with the SEC, any OTCQB issuer who fails to file a periodic report (Forms 10-Q or 10-K)
by the due date of such report, period we may be removed from the OTCQB and our common stock may only be able to be traded on the
OTC Pink. The OTC Pink is the bottom tier of the OTC market – a speculative trading marketplace that helps broker-dealers
get the best prices for investors. Accordingly, our securities may become worthless and we may be forced to curtail or abandon
our business plan.



Persons associated with securities offerings, including
consultants, may be deemed to be broker dealers.



In the event that any
of our securities are offered without engaging a registered broker-dealer, we may face claims for rescission and other remedies.
If any claims or actions were to be brought against us relating to our lack of compliance with the broker-dealer requirements,
we could be subject to penalties, required to pay fines, make damages payments or settlement payments, or repurchase such securities.
In addition, any claims or actions could force us to expend significant financial resources to defend our company, could divert
the attention of our management from our core business and could harm our reputation.



Future changes in financial accounting
standards or practices may cause adverse unexpected financial reporting fluctuations and affect reported results of operations.



A change in accounting
standards or practices can have a significant effect on our reported results and may even affect our reporting of transactions
completed before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements
have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect
our reported financial results or the way we conduct business.



“Penny Stock” rules may make buying or selling
our common stock difficult.



Trading in our common
stock is subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to
be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require
that any broker-dealer that recommends our common stock to persons other than prior customers and accredited investors, must, prior
to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement
to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving
a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock
market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity
of our common stock.



16







ITEM 1B: UNRESOLVED STAFF COMMENTS.



As of March 31, 2012, there were no unresolved
comments from the SEC.



ITEM 2: PROPERTIES



Description of Property



We neither rent nor own any properties.
We utilize the office space and equipment of our Chief Executive Officer and director at no cost. Management estimates such amounts
to be immaterial. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or
securities of, or interests in, persons primarily engaged in real estate activities.



ITEM 3: LEGAL PROCEEDINGS.



From time to time, we are involved in claims
and suits that arise in the ordinary course of our business. Although management currently believes that resolving any such claims
against us will not have a material adverse impact on our business, financial position or results of operations, these matters
are subject to inherent uncertainties and management’s view of these matters may change in the future. Except as disclosed
herein, we are not aware of any material, existing or pending legal proceedings nor are we involved as a plaintiff in any material
proceeding or pending litigation.





ITEM 4: MINE SAFETY DISCLOSURES.



Not applicable.



PART II



ITEM 5: MARKET FOR REGISTRANT'S COMMON
EQUITY RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.



The Company’s Common Stock was initially
traded on the Over The Counter Bulletin Board under the symbol ACSR and was first quoted on October 18, 2011. The table below sets
forth the high and low prices for the Company’s Common Stock for the quarters included within the past two fiscal years,
and the transition period ended March 31, 2012. Quotations reflect inter-dealer prices, without retail mark-up, mark-down commission,
and may not represent actual transactions. Since the Company's common stock trades sporadically, there is not an established active
public market for its common stock. No assurance can be given that an active market will exist for the Company's common stock and
the Company does not expect to declare dividends in the foreseeable future since the Company intends to utilize its earnings, if
any, to finance its future growth, including possible acquisitions.



|                                                  |  | High |   |  | Low |  
|------------------------------------------------- |  | ---- | - |  | --- | -
|Fiscal Year Ended March 31, 2011                  |  |      |   |  |     |  
|December 31, 2011                                 |  | $    | 0 |  |     | $
|March 31, 2012                                    |  | $    | 0 |  |     | $
|                                                  |  |      |   |  |     |  
|Fiscal Year Ended March 31, 2012                  |  |      |   |  |     |  
|June 30, 2012                                     |  | $    | 0 |  |     | $
|September 30, 2012                                |  | $    | 0 |  |     | $
|December 31, 2012                                 |  | $    | 0 |  |     | $
|March 31, 2012                                    |  | $    | 0 |  |     | $
|                                                  |  |      |   |  |     |  
|Transition Period January 1, 2012- March 31, 2012 |  |      |   |  |     |  
|March 31, 2012                                    |  | $    | 0 |  |     | $



17







Common Stock



Holders of Company’s
common stock are entitled to one vote per share on each matter submitted to vote at a meeting of Company’s stockholders.
Holders of common stock do not have cumulative voting rights. Stockholders do not have any preemptive rights or other similar rights
to acquire additional shares of Company’s common stock or other securities. Subject to preferences that may be applicable
to any then-outstanding preferred stock, holders of common stock are entitled to share in all dividends that the board of directors,
in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, subject to preferences
that may be applicable to any then-outstanding preferred stock, each outstanding share of common stock entitles its holder to participate
ratably in all remaining assets of the Company that are available for distribution to stockholders after providing for each class
of stock, if any, having preference over the common stock.



Holders of common stock
have no conversion, preemptive or other subscription rights, and there are no redemption or sinking fund provisions applicable
to the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred
stock, when and if any preferred stock is authorized and issued.



Preferred Stock



The Company's Amended
Articles of Incorporation authorizes the issuance of 10,000,000 shares of “Blank Check” Preferred Stock, par value
$0.001 per share, subject to any limitations prescribed by law, without further vote or action by the stockholders, to issue from
time to time shares of preferred stock in one or more series. Each such series of Preferred Stock shall have such number of shares,
designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined
by the Company's board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences,
conversion rights and preemptive rights.



Dividends.



The Company has not paid any cash dividends
since its inception. The Company currently intends to retain any earnings for use in its business, and therefore does not anticipate
paying dividends in the foreseeable future.



Long-Term Incentive Plans Awards in
Last Fiscal Year



None.



Recent Sales of Unregistered Securities.



During the transition period ended March
31, 2012, the Company issued the following securities exempt from the registration requirements of the Securities Act pursuant
to Section 4(2) of the Securities Act. No underwriting or other compensation was paid in connection with these transactions:



On February 2, 2011, the Company issued 10,000,000 founder’s
shares at $0.001 per share, with net proceeds to the Company of $10,000.



On July 9, 2012 the Company issued 15,384
shares of its common stock at $0.325 per share, or $5,000 to two individuals.



On July 20, 2012 the Company issued 15,384
shares of its common stock at $0.325 per share, or $5,000 to two individuals



From August 24, 2011 through September
2, 2011 the Company issued 28,920 shares of its common stock at $0.325 per share, or $9,400 to four individuals.



On September 1, 2011, the Company issued 237,250 shares at $0.04
per share, with net proceeds to the Company of $9,490.



On September 27, 2011 the Company issued
100,000 shares of its common stock for services, valued at $32,500 on the date of issuance.



18









On December 21, 2012, the Company entered
into and consummated the Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Casa Montalvo Holdings,
Inc., a California corporation (“Casa Montalvo”) and the shareholders of Casa Montalvo. Pursuant to the Exchange Agreement,
the Company issued 1,817,891 shares of Common Stock to acquire all of the outstanding capital stock of Casa Montalvo.



Also on December 21, 2012, the Company
accepted a subscription in the amount of One Hundred Thousand Dollars ($100,000) for 200,000 shares of Common Stock.



Unless noted above, the sales of the securities
identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities
and, accordingly, we believe that these transactions were exempt from the registration requirements of the Securities Act pursuant
to Section 4(2) thereof and rules promulgated there under. Each of the above-referenced investors in our stock represented to
us in connection with their investment that they were “accredited investors” (as defined by Rule 501 under the Securities
Act) and were acquiring the shares for investment and not distribution, that they could bear the risks of the investment and could
hold the securities for an indefinite period of time. The investors received written disclosures that the securities had not been
registered under the Securities Act and that any resale must be made pursuant to a registration or an available exemption from
such registration. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.



ITEM 6: SELECTED FINANCIAL DATA



Not applicable for smaller reporting companies.



ITEM 7: MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion and analysis
of our financial condition and results of operations should be read in conjunction with our financial statements and the accompanying
notes included in this Transition Report. The following discussion may contain forward-looking statements that reflect our plans,
estimates and beliefs and involve risks, uncertainties and assumptions. Our actual results could differ materially from those
discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed
below and under the headings “Risk Factors” and “Forward-Looking Statements.”



Overview



Advanced Cloud Storage,
Inc. (the “Company”) was incorporated in the State of Nevada on November 18, 2010. The Company was an initial development
stage and was organized to engage in the business of online data storage.



On December 21, 2012,
the Registrant entered into an Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Casa Montalvo
Holdings, Inc., a California corporation (“Casa Montalvo”), whereby the Registrant acquired all of the issued and
outstanding capital stock of Casa Montalvo in exchange (the “Exchange”) for approximately 59,000,000 post-split shares
of Common Stock. Simultaneously therewith, the Registrant accepted a subscription of a private placement offering of Two Hundred
Thousand (200,000) post-split shares of its Common Stock, on a post-Split basis, at an aggregate purchase price of One Hundred
Thousand Dollars ($100,000).



As a result of the
Exchange, Casa Montalvo became a wholly-owned subsidiary of the Registrant. Following the consummation of the Exchange, the shareholders
of Casa Montalvo will beneficially own approximately eighty-nine percent (89%) of the issued and outstanding Common Stock of the
Registrant. Pursuant to the terms of the Share Exchange Agreement, the Registrant’s principal shareholder agreed to retire
10,000,000 shares of the Registrant’s Common Stock. The parties have taken the actions necessary to provide that the Exchange
is treated as a “tax free exchange” under Section 368 of the Internal Revenue Code of 1986, as amended. The Agreement
contains customary representations, warranties and covenants of the Registrant and Casa Montalvo for like transactions. The foregoing
descriptions of the above referenced agreements do not purport to be complete. For an understanding of their terms and provisions,
reference should be made to the Agreement attached as Exhibits 10.1 to the Current Report on Form 8-K filed on December 24, 2012.
A copy of the press release dated December 21, 2012 announcing the completion of the documents relating to the Share Exchange
is attached to the Current Report on Form 8-K filed on December 24, 2012 as Exhibit 99.1 and incorporated herein by reference.



19







Additionally, on December
21, 2012, holders of a majority of the Company’s outstanding Common Stock voted to amend the Company’s Articles of
Incorporation to: (i) change its name to “Montalvo Spirits, Inc.”; (ii) increase the number of its authorized shares
of capital stock from 75,000,000 shares to 310,000,000 consisting of (a) 300,000,000 shares were designated as Common Stock and
(b) 10,000,000 shares were designated as blank check preferred stock., and (iii) effectuate a forward split on a 1:32.4552 basis.



TARGET MARKETS AND MARKETING STRATEGY



While our primary
route to market is by selling directly to distributors, who maintain extensive resources to sell to both on and off premise retail
accounts, including liquor stores, grocery stores, convenience stores, bars and restaurants, to build our brands, we must effectively
communicate with three distinct audiences: the distributors; the retail trade; and the end consumer. We believe advertising, marketing
and promotional activities help to establish and reinforce the image and perception of our brand as we strive in building substantial
brand value.



We employ, in-house
marketing, sales and customer service personnel who work together with third party design and advertising firms to maintain a
high degree of focus on each of our products. We attempt to build brand awareness through innovative marketing activities including
social media, brand tastings, as well as competitive spirits competitions. We use a variety of marketing strategies and tactics
to build brand equity and increase sales, including consumer and trade advertising, price promotions, point-of-sale materials,
event sponsorship, in-store and on-premise promotions and public relations, as well as a variety of other traditional and non-traditional
marketing techniques. Our significant public relations campaign has helped gain editorial coverage for our brands, which increases
brand awareness. Past and future event sponsorship is an economical way for us to have influential consumers taste our brands.



PLAN OF OPERATIONS



The Company develops,
markets and/or distributes alcoholic beverages, primarily in the United States. We sell our products through a network of established
spirits distributors, who are licensed to distribute alcoholic beverages throughout the United States. The Company is federally
licensed, maintaining the right to sell to distributors in all markets in the U.S. and globally.



The Company intends
to focus on growing the market share of its initial products, the ultra-premium Montalvo line of tequilas, whose expressions include
Plata, Reposado, Anejo and Extra-Anejo. We own the Montalvo brand trademark and have exclusive worldwide master distribution rights
to the brands.



We intend to grow
our business by expanding our portfolio of premium alcoholic beverage brands, including additional spirits categories, as well
as beer and wine, through additional importation and distribution contracts of existing brands. In addition, we may choose to
develop new brands or acquire existing companies with their own brand portfolios.



To achieve our goal of building a distinctive
portfolio of premium craft spirits, we seek to:



| | · | grow revenues by securing additional independent distributors
    for Montalvo Tequila in multiple states in the U.S. and potentially in additional countries internationally and by targeted
    marketing activities. We anticipate such marketing activities will require the Company to expend approximately $750,000. As
    the independent distributors are generally large, well-recognized companies, the Company feels that accounts receivable financing
    should be available, though it may not be on favorable terms. We anticipate that increased sales revenues from Montalvo Tequila
    will contribute to improving our cash flow and provide additional liquidity from operations. The Company may require additional
    financing through private placements or issuance of notes payable, and there is no assurance that such financing will be available.
    In the event we are not able to increase our working capital, we will not be able to implement or may be required to delay
    all or part of our business plan, and our ability to attain profitable operations, generate positive cash flows from operating
    and investing activities and materially expand the business will be materially adversely affected.                         
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | explore the potential of developing or acquiring new or existing
    brands by identifying attractive acquisition candidates, entering into negotiations and reaching agreements with these candidates
    and obtaining financing to acquire such brands. We estimate we will expend $15,000 to identify brands that are potential acquisition
    targets and $25,000 discussing and negotiating acquisition terms and drafting preliminary agreements; the funding required
    to acquire a potential target is too speculative to estimate. We intend to finance our brand acquisitions through a combination
    of third party financing and, in appropriate circumstances, the further issuance of equity and/or debt securities. Acquiring
    additional brands could have a significant effect on our financial position, and could cause substantial fluctuations in our
    quarterly and yearly operating results. Also, the pursuit of acquisitions and other new business relationships may require
    significant management attention. We may not be able to successfully identify attractive acquisition candidates, obtain financing
    on favorable terms or complete these types of transactions in a timely manner and on terms acceptable to us, if at all.



20







PRODUCTS



We have an Exclusive
Worldwide Distribution Agreement with Destilidora Huerta Real, S.A. de C.V., the producers of Montalvo Tequila. Montalvo, an award
winning, ultra-premium tequila brand is a handcrafted, meticulously formulated tequila produced from only the highest quality
blue agave plants from the Lowlands of Jalisco, Mexico. Montalvo ensures the brand’s premium quality by handcrafting in
small batches, using hand-selected Blue Weber agave plants picked at the peak of maturity and employing a third distillation.
Fourth-generation tequila producers Sergio and Carlos Gonzalez Rivera have combined their family’s ancient traditions with
modern techniques, resulting in a clean, smooth and memorable tequila. Montalvo is available in four expressions: Plata, Reposado,
Añejo and Extra-Añejo.



CUSTOMERS



The U.S. alcoholic beverage industry is a regulated, three-tier
system of suppliers, distributors and retailers. The Company currently distributes the Montalvo Tequila brand through a network
of independent distributors. The Company also maintains an arrangement with MHW, Ltd., a third-party leading service provider
to alcoholic beverage companies, to import the Montalvo brand into the U.S. as well as to sell Montalvo directly to retailers
in New York, New Jersey and California. The Company hopes to expand the number of independent distributors in certain existing
markets and new markets, when the Company has sufficient funds to maintain a larger marketing campaign.



GOING CONCERN



We have incurred losses from operations
of $79,304 and have had limited revenues from operations through the transition period ended March 31, 2012. Further, the Company
has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the
support of certain stockholders.



These factors raise substantial doubt
about the ability of the Company to continue as a going concern. Management is planning to raise necessary additional funds through
loans and additional sales of its common stock. There is no assurance that the Company will be successful in raising additional
capital or in further developing its operations



Liquidity and Capital Resources



Our auditors have issued a “going
concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve
months unless we obtain additional capital. We must raise cash to implement our strategy and stay in business. The amount of the
offering will likely allow us to operate for at least one year.



As of the transition period ended March
31, 2012, we had $6,905 in cash and $37,100 in inventories totaling $44,005 in assets. The funds available to the Company will not be sufficient to fund the planned operations of the Company. If we
do not substantially increase our sales, we will require funding to continue our operations of which there can be no assurance
that we will be able to raise funds or that if we do so that they will be on grounds that are favorable to the Company.



Off Balance Sheet Arrangements



As of the transition period of March 31,
2012, there were no off balance sheet arrangements.



Basis of Presentation



The financial statements
of the Company are presented in United States dollars and have been prepared in accordance with accounting principles generally
accepted in the United States.



Critical Accounting Policies



21







Use of Estimates and Assumptions



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make
estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets
and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales
and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved
information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation
of financial statements; accordingly, actual results could differ from these estimates. These estimates and assumptions also affect
the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions
on a regular basis. Actual results could differ from those estimates.



Revenue Recognition



The Company recognizes revenue from product
sales in accordance with Topic 360 “ Revenue Recognition in Financial Statements ,” which is when all of the
following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred,
(3) the fee is fixed or determinable and (4) collectability is reasonably assured.



Cash and Cash Equivalents



The Company considers all highly liquid
investments with an original maturity of three months or less to be cash equivalents. For the transition period ending March 31,
2012, cash and cash equivalents include cash on hand and cash in the bank.



Property and Equipment



Property and equipment is recorded at
cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are
retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized.
Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.



The range of estimated useful lives used
to calculated depreciation for principal items of property and equipment are as follow:



|Asset
    Category    |  | Depreciation/AmortizationPeriod
|--------------------- |  | -------------------------------
|Furniture and Fixture |  | 3 Years                        
|Office equipment      |  | 3 Years                        



For the transition period ending March 31, 2012, property and
equipment consisted of office equipment purchased during the period.



Impairment of Long-Lived Assets



Long-Lived Assets, such as property, plant,
and equipment and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Any goodwill or other intangible assets are tested at least annually for
impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated
future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair
value of the asset. There were no events or changes in circumstances that necessitated an impairment of long lived assets as of
March 31, 2012.



22







Income Taxes



Deferred income taxes are provided to
reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial
reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected
to be realized.



ASC Topic 740 contains a two-step approach
to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining
if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount,
which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and
estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At September 30, 2012, the Company
did not record any liabilities for uncertain tax positions.



Concentration of Credit Risk



The Company maintains its operating cash
balances in banks located in California. The Federal Depository Insurance Corporation (“FDIC”) insures accounts at
each institution up to $100,000. At March 31, 2012, the Company’s cash accounts were below the insured limit.



Earnings Per Share



Basic earnings per share is computed by
dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during
the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants,
and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that
could share in the earnings of the Company. The Company does not have any options, warrants or other common stock equivalents
outstanding as of March 31, 2012.



Fair Value of Financial Instruments



The Company's financial instruments consist
primarily of cash, accounts payable, accrued liabilities, and advances from affiliates. The carrying amounts of such financial
instruments approximate their respective estimated fair value due to the short-term maturities of these instruments. The estimated
fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future
earnings or cash flows.



ASC Topic 820, “ Fair Value Measurements” (“ASC Topic 820”) defines fair value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. The standard provides a consistent definition of fair value that focuses on an exit price that
would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information
over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs
used in the valuation of an asset or liability as of the measurement date.



The three-level hierarchy for fair value measurements is defined
as follows:



| | Level 1 – inputs to the valuation methodology
        are quoted prices (unadjusted) for identical assets or liabilities in active markets;                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 2 – inputs to the valuation methodology
        include quoted prices for similar assets and liabilities in active markets, or inputs that are observable for the assets
        or liabilities other than quoted prices, either directly or indirectly, including inputs in markets that are not considered
        to be active;
| | Level 3 – inputs to the valuation methodology are unobservable and significant to
    the fair value measurement.                                                                                                                                                                                                                       



Off Balance Sheet Arrangements



We have not entered into any off-balance
sheet arrangements during the transition period ended March 31, 2012.



23







RECENT ACCOUNTING PRONOUNCEMENTS



Recently Issued Accounting Pronouncements



In January 2013, the FASB issued ASU No.
2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities".
This ASU clarifies that the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets
and Liabilities." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities
borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting
Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective
for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.



In February 2013, the FASB issued ASU
No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive
Income." The ASUadds new disclosure
requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect
on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.



In February 2013, the Financial Accounting
Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several
Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses
the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt
arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities
for fiscal years, and interim periods within those years, beginning after December 15, 2013.



In March 2013, the FASB issued ASU No.
2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition
of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU
addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment
in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit
activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should
be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective
prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.



In March 2013, the FASB issued ASU 2013-07,
“Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require
an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation
is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is
approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution
of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary
bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception
(for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for
liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial
statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected
resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The
entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects
to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities
that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting
periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption
is permitted.



Management does not believe that any other
recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
financial statements.



ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Company is not exposed to market risk
related to interest rates on foreign currencies.



24









ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA



The information required by Item 8 appears
after the signature page to this report.



ITEM 9. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES



None.



ITEM 9A(T). CONTROLS AND
PROCEDURES



(a) Evaluation of Disclosure Controls
and Procedures



In accordance with Rule 13a-15(b) of the
Securities Exchange Act of 1934 as amended (the “Exchange Act”), as of the end of the period covered by this Transition
Report on Form 10-K/T, the Company’s management evaluated, with the participation of the Company’s principal executive
officer and principal financial officer, the effectiveness of the design and operation of the Company’s disclosure controls
and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act). Disclosure controls and procedures are
defined as those controls and other procedures of an issuer that are designed to ensure that the information required to be disclosed
by the issuer in the reports it files or submits under the Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based
upon an evaluation of the effectiveness of disclosure controls and procedures, our Company’s principal executive officer
and principal financial officer have concluded that as of the end of the period covered by this Transition Report on Form 10-K/T
our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are not effective because
of the material weaknesses in our disclosure controls and procedureswhich are identified below. It should be
noted that the design of any system of controls is 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,
regardless of how remote.



The material weaknesses in our disclosure
control procedures are as follows:



| | 1. | Lack of formal policies and procedures necessary
    to adequately review significant accounting transactions.The Company utilizes a third party independent contractor
    for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management,
    we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions.
    The third party independent contractor is not involved in the day to day operations of the Company and may not be provided
    information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 2. | Audit Committee and Financial Expert. The Company
    does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within
    the financial reporting process.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



We intend to initiate measures to remediate
the identified material weaknesses including, but not necessarily limited to, the following:



| | · | Establishing a formal review process of significant
    accounting transactions that includes participation of the Chief Executive Officer, the Chief Financial Officer and the Company’s
    corporate legal counsel.                                                   
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                          
| | · | Form an Audit Committee that will establish policies and procedures
    that will provide the Board of Directors a formal review process that will among other things, assure that management controls
    and procedures are in place and being maintained consistently.



25







(b) Management’s Report on Internal
Control over Financial Reporting



Our management is responsible for establishing
and maintaining adequate internal control over financial reporting for the company (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act). Internal control over financial reporting is to provide reasonable assurance regarding the reliability
of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States
of America. Internal control over financial reporting includes maintain records that in reasonable detail accurately and fairly
reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial
statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management
authorization; and providing reasonable assurance that unauthorized acquisition , use or disposition of company assets that could
have a material effect on our financial statements would be prevented or detected.



As of March 31, 2012, management assessed
the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal
control over financial reporting established in SEC guidance on conducting such assessments. Based on this evaluation under the
COSO Framework, our management concluded that our internal control over financial reporting are not effective as of March 31,
2013. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on that evaluation, they concluded that,
as of March 31, 2013, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP
rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control
over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls
and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the
Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls
and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and
procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material
weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements
as of March 31, 2013and communicated to our management.



The matters involving internal controls
and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the
Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls
and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and
procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material
weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements
as of March 31, 2013and communicated to our management.



Management believes that the material
weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company's financial results. However, management
believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of
directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures
can result in the Company's determination to its financial statements for the future years.



We are committed to improving our financial
organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within the accounting function when funds are available
to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee
of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which
will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and
SEC disclosure requirements.



26







Management believes that the appointment
of more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning
audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing
and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written
policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and
SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management
believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation
of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training
needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of
additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.



We will continue to monitor and evaluate
the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis
and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds
allow.



(c) Changes in Internal Control Over
Financial Reporting



There have been no changes in our internal
controls over financial reporting that occurred during the transition period ended March 31, 2012 that have materially affected
or are reasonably likely to materially affect, our internal controls over financial reporting.



Attestation
Report of the Independent Registered Public Accounting Firm



This Transition Report does not include
an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide management report
in the Transition Report.



ITEM 9B Other Information



None.



ITEM 10. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CORPORATE GOVERNANCE



The following table sets forth the names
and ages of our current directors and executive officers, their principal offices and positions and the date each such person
became a director or executive officer. Executive officers are elected annually by our Board of Directors. Each executive officer
holds his office until he resigns, is removed by the Board or his successor is elected and qualified. Directors are elected annually
by our stockholders at the annual meeting. Each director holds his office until his successor is elected and qualified or his
earlier resignation or removal.



The following persons are the directors
and executive officers of our company:



|Name                   |  | Age |  |  | Title                                           
|---------------------- |  | --- |  |  | ------------------------------------------------
|Alex Viecco            |  | 48  |  |  | Chief Executive Officer, Director               
|Carlos Gonzalez Rivera |  | 41  |  |  | Chief Operating Officer; Chief Financial Officer
|Sergio Gonzalez Rivera |  | 43  |  |  | President, Director                             
|Daniel Cahill          |  | 38  |  |  | Director of sales, Director                     



The Company’s executive officers
and directors are elected annually and serve until the next annual meeting of stockholders.



Alex Viecco, Chief
Executive Officer and Director, has served as the Chief Executive Officer of Casa Montalvo Holdings, Inc. since 2011, prior
thereto and from 2000 to 2011, Mr. Viecco served as the Co-Founder and Vice President of New Era Debt Solutions, in Camarillo,
California. Under Mr. Viecco’s leadership, New Era Debt Solutions has become an industry leader, providing debt resolution
for thousands of clients throughout the United States. With his expertise in the debt resolution field, Mr. Viecco has been featured
in numerous industry publications. Mr. Viecco also worked as a Financial Consultant with a division of Citigroup, and consistently
led sales throughout his five-year tenure. While serving in this capacity, Mr. Viecco managed, supervised, and trained dozens
of representatives into successful positions, and received multiple awards. The Company believed Mr. Viecco’s extensive
business and finance expertise made him an ideal candidate to serve in these capacities.



27







Sergio Gonzalez
Rivera , Chief Operating Officer and Director, has served as the President of Casa Montalvo Holdings, Inc. since 2011,
prior thereto and from 2005 to the present, Mr. Gonzalez Rivera has served as a Director of Destilidora Huerta Real, S.A. de C.V.,
a distillery located in Jalisco, Mexico. From a young age, Mr. Gonzalez Rivera began learning from his father and uncles all of
the intricacies of the art of producing tequila, from picking the perfect Blue Agave Weber plants, to identifying the best time
to harvest the plants to give the best yield. Sergio learned the secret of producing high quality Tequila is combining ancient
techniques with modern world trends. His family’s experience in tequila business dates back to his great grandfather and
Sergio has worked in a variety of positions in the industry from sales, engineering, product development, customer service and
management. Mr. Gonzalez Rivera earned a degree in Business Management, Project Management, Marketing, Innovation and Strategies,
Real Estate Business, and Sales from the University of Guadalajara. Mr. Rivera also continued his studies in Systems Engineering
in Germany, with a specialization in business and entrepreneurism. The Company believes Mr. Gonzalez Rivera’s distinguished
career in the tequila industry and the region, made him ideal for these positions. Mr. Gonzalez Rivera also serves as Councilman
of the Municipality of Tequila, Mexico.



Carlos Gonzalez
Rivera, President and Director, has served as the Chief Operating of Casa Montalvo Holdings, Inc. since 2011, prior thereto
and from 2005 to the present, served as President of Destilidora Huerta Real, S.A. de C.V., a distillery located in Jalisco, Mexico.
Mr. Gonzalez Rivera spent many years with his family learning the art of producing tequila. His particular interest was in harvesting
the plants and learning their regional attributes and has been recognized by the local farmers as an instrumental representative
to ensure fair trade in the region. Mr. Gonzalez Rivera graduated from the University of Guadalajara, Mexico with a degree in
Dentistry Medicine in 1994. After further studies and specializing as a dental surgeon, he travelled to the United States to continue
his studies in modern dental techniques, where he worked with well-respected dentists in Oxnard, California and Thousand Oaks,
California. The Company believes Mr. Rivera’s previous experience operating tequilerias make him an asset to the Company.



Daniel Cahill,
Director of Sales and Director, has served as the Director of Sales of Casa Montalvo Holdings, Inc. since 2011, prior thereto
and from 2011 to 2012 Mr. Cahill served as the Managing Director of Point Loma Capital, Inc. Prior thereto and from 2001 to 2011,
Mr. Cahill served in various positions at Meyers Associates, Aegis Capital and Maxim Group. Throughout his career, he has executed
a wide variety of financing transactions as an investment banker to numerous private and publicly traded companies, as well as
spending significant time and resources mentoring and developing new advisors on how to build and maintain client relationships.
The Company believes Mr. Cahill’s experience in the finance industry would be an asset to the Company.



Significant Employees



The Company does not, at present, have
any employees other than the current director and officer and director. We have not entered into any employment agreements, as
we currently do not have any employees other than the current director and officer and director.



Family Relations



Sergio Gonzalez Rivera and Carlos Gonzalez
Rivera are brothers. There are no other family relationships among the Company’s Directors and Officers.



Involvement in Legal Proceedings



No executive Officer or Director of the
Company has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding
that is currently pending.



No executive Officer or Director of the
Company is the subject of any pending legal proceedings.



No Executive Officer or Director of the
Company is involved in any bankruptcy petition by or against any business in which they are a general partner or executive officer
at this time or within two years of any involvement as a general partner, executive officer, or Director of any business.



28







Audit Committee



Our Board of Directors has not established
a separate audit committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Instead the board of directors acts as the audit committee within the meaning of Section 3(a)(58)(B) of the Exchange
Act. The Company intends on establishing an Audit Committee composed of independent directors of the Company. The audit committee's
duties would be to recommend to the Company's board of directors the engagement of independent auditors to audit the Company's
financial statements and to review its accounting and auditing principles. The audit committee would review the scope, timing
and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public
accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee would
at all times be composed exclusively of directors who are, in the opinion of the Company's board of directors, free from any relationship
which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial
statements and generally accepted accounting principles.



Compensation Committee



Our board of directors does not have a
separate compensation committee responsible for determining executive and director compensation.  Instead, the board
of directors fulfills this function, and each member of the Board participates in the determination.  Given the small
size of the Company and its Board, plus the Company's limited resources, locating, obtaining and retaining additional independent
directors is extremely difficult.  In the absence of independent directors, the Board does not believe that creating
a separate compensation committee would result in any improvement in the compensation determination process.  Accordingly,
the board of directors has concluded that the Company and its stockholders would be best served by having the entire board of
director’s act in place of a compensation committee.  When acting in this capacity, the Board does not have a
charter.



Code of Ethics



We have adopted a code of ethics meeting
the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed to deter
wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public
reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence
to the provisions of the code of ethic. A copy of our code of ethics is available without charge, upon written request to: Montalvo
Spirits, Inc., Attn: C.E.O., 4326 Laurel Glen Drive, Moorpark, California 93021.



ITEM 11. EXECUTIVE COMPENSATION



The following table
sets forth all of the compensation awarded to, earned by or paid to (i) each individual serving as the Company’s principal
executive officer during the transition period and the last three completed fiscal years ending March 31, 2013, 2012 and 2011;
(ii) each other individual that served as an executive officer of the Company at the transition period conclusion of the fiscal
year ended March 31, 2013 and who received in excess of $100,000 in the form of salary and bonus during such fiscal year.



|Name and Principal Position            |  | Year              |  | Salary (1) |        |  | Bonus |  |   | Equity Awards |  |  | Option Awards |  |  | All Other Compensation |   |  | Total | 
|-------------------------------------- |  | ----------------- |  | ---------- | ------ |  | ----- |  | - | ------------- |  |  | ------------- |  |  | ---------------------- | - |  | ----- | 
|George Frederick                       |  | 2013              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|Meyer, President, Secretary, Treasurer |  | 2012              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|and Chief Executive Officer            |  | 2011              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | Transition Period |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  |                   |  |            |        |  |       |  |   |               |  |  |               |  |  |                        |   |  |       | 
|Alex Viecco*                           |  | 2013              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | 2012              |  |            | 72,000 |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | Transition Period |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  |                   |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|Carlos Gonzalez Rivera *               |  | 2013              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | 2012              |  |            | 72,000 |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | Transition Period |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  |                   |  |            |        |  |       |  |   |               |  |  |               |  |  |                        |   |  |       | 
|Sergio Gonzalez Rivera *               |  | 2013              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | 2012              |  |            | 72,000 |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | Transition Period |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  |                   |  |            |        |  |       |  |   |               |  |  |               |  |  |                        |   |  |       | 
|Daniel P. Cahill *                     |  | 2013              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | 2012              |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 
|                                       |  | Transition Period |  |            | —      |  |       |  | — |               |  |  | —             |  |  |                        | — |  |       | 



*Appointed December
21, 2012

(1) Transition Period
means the period from January 1, 2012 to March 31, 2012



Outstanding Equity Awards at Fiscal
Year-End



The following table sets forth for each named executive officer
certain information concerning the outstanding equity awards as of the transition period ended March 31, 2012:



|Name and Principal Position       |  | Number of Securities
    Underlying Unexercised Options Exercisable |   |  | Number of Securities
    Underlying Unexercised Options Unexercisable |  |   | Option Exercise
    Price ($) |  |  | Option Expiration
    Date |  |  | Number of Shares
    or Units of Stock that Have Not Vested |   |  | Market Value of
    Shares or Units of Stock that Have Not Vested |  |   | Equity Incentive
    Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested |  |  | Equity Incentive
    Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that
    Have Not Vested | 
|--------------------------------- |  | ------------------------------------------------------------------- | - |  | --------------------------------------------------------------------- |  | - | ----------------------------- |  |  | -------------------------- |  |  | ----------------------------------------------------------- | - |  | ----------------------------------------------------------------- |  | - | ------------------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------------------------------------- | 
|George Frederick Meyer, former    |  |                                                                     | — |  |                                                                       |  | — |                               |  |  | —                          |  |  |                                                             | — |  |                                                                   |  | — |                                                                                                         |  |  | —                                                                                                                           | 
|                                  |  |                                                                     |   |  |                                                                       |  |   |                               |  |  |                            |  |  |                                                             |   |  |                                                                   |  |   |                                                                                                         |  |  |                                                                                                                             | 
|Alex Viecco, CEO                  |  |                                                                     | — |  |                                                                       |  | — |                               |  |  | —                          |  |  |                                                             | — |  |                                                                   |  | — |                                                                                                         |  |  | —                                                                                                                           | 
|                                  |  |                                                                     |   |  |                                                                       |  |   |                               |  |  |                            |  |  |                                                             |   |  |                                                                   |  |   |                                                                                                         |  |  |                                                                                                                             | 
|Carlos Gonzalez Rivera, COO, CFO  |  |                                                                     | — |  |                                                                       |  | — |                               |  |  | —                          |  |  |                                                             | — |  |                                                                   |  | — |                                                                                                         |  |  | —                                                                                                                           | 
|                                  |  |                                                                     |   |  |                                                                       |  |   |                               |  |  |                            |  |  |                                                             |   |  |                                                                   |  |   |                                                                                                         |  |  |                                                                                                                             | 
|Sergio Gonzalez Rivera, President |  |                                                                     | — |  |                                                                       |  | — |                               |  |  | —                          |  |  |                                                             | — |  |                                                                   |  | — |                                                                                                         |  |  | —                                                                                                                           | 
|                                  |  |                                                                     |   |  |                                                                       |  |   |                               |  |  |                            |  |  |                                                             |   |  |                                                                   |  |   |                                                                                                         |  |  |                                                                                                                             | 
|Daniel Cahill, Director of Sales  |  |                                                                     | — |  |                                                                       |  | — |                               |  |  | —                          |  |  |                                                             | — |  |                                                                   |  | — |                                                                                                         |  |  | —                                                                                                                           | 



29







Employment Agreements



Employment with the President



On January 1, 2012, the Company and Carlos
Gonzalez (“CG”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the
Company’s President. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”)
until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant to the Employment
Agreement, CG is entitled to a salary of $72,000 per annum for the period beginning on the Effective Date through
December 31, 2012.



Employment with the Chief Operating
Officer



On January 1, 2012, the Company and Sergio
Gonzalez (“SG”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the
Company’s Chief Operating Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective
Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant
to the Employment Agreement, SG is entitled to a salary of $72,000 per annum for the period beginning on the Effective
Date through December 31, 2012.



Employment with the Chief Executive
Officer



On January 1, 2012, the Company and Alex
Viecco (“AV”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the
Company’s Chief Executive Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective
Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant
to the Employment Agreement, AV is entitled to a salary of $72,000 per annum for the period beginning on the Effective Date through
December 31, 2012.



Compensation of Directors



The Company did not
pay any fees to their respective directors for attendance at meetings of the board; however, the Company may adopt a policy of
making such payments in the future.  The Company will reimburse out-of-pocket expenses incurred by directors in attending
board and committee meetings.



ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT, AND RELATED STOCKHOLDERS MATTERS.



The following table sets forth information
relating to the beneficial ownership of the Company's common stock by those persons beneficially holding more than 5% of the Company's
common stock, by the Company's directors and executive officers, and by all of the Company's directors and executive officers
as a group as of the transition period ending March 31, 2012:



|Shareholder                                     |  | Beneficial Ownership (a) |            |  | Percent of Class (b) | 
|----------------------------------------------- |  | ------------------------ | ---------- |  | -------------------- | 
|Frederik Meyer                                  |  |                          | 10,000,000 |  |                      | 
|                                                |  |                          |            |  |                      | 
|All Directors and Executive Officers as a group |  |                          | 10,000,000 |  |                      | 



(a) Security ownership
is direct unless indicated otherwise. Security ownership information for beneficial owners is taken from statements filed with
the Securities and Exchange Commission pursuant to Sections 13(d), 13(g) and 16(a) and/or information made known to the Company.

(b) Based on 10,237,250 shares of our
common stock outstanding as of the transition period ending March 31, 2012.



30







ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE



For the transition period ending March
31, 2012, there were no contemplated transactions that the Company may enter into with our officers, directors or affiliates.
If any such transactions are contemplated we will file such disclosure in a timely manner with the Commission on the proper form
making such transaction available for the public to view.



The Company has no formal written employment
agreement or other contracts with our current director and officer and director and there is no assurance that the services to
be provided by them will be available for any specific length of time in the future. The amounts of compensation and other terms
of any full time employment arrangements would be determined, if and when, such arrangements become necessary.



ITEM 14. PR INCIPAL ACCOUNTING
FEES AND SERVICES



Audit Fees



The aggregate fees for each of transition
period and the last two years for professional services rendered by the principal accountant for our audits of our annual financial
statements and interim reviews of our financial statements included in our fillings with Securities and Exchange Commission on
Form 10-K and 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings
or engagements for those years were approximately:





|Transition Period |  | $ | 5,000 | 
|----------------- |  | - | ----- | 



Audit Related Fees



The aggregate fees in each of the last
two years for the assurance and related services provided by the principal accountant that are not reasonably related to the performance
of the audit or review of the Company's financial statements and are not reported in paragraph (1) were approximately:



|Transition Period |  | $ | 0 | 
|----------------- |  | - | - | 



We incurred these fees in connection with
registration statements and financing transactions. Tax Fees



The aggregate fees in each of the last
two years for the professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were
approximately:



|Transition Period |  | $ | 0 | 
|----------------- |  | - | - | 



All Other Fees



The aggregate fees in each of the last
two years for the products and services provided by the principal accountant, other than the services reported in paragraph (1)
were approximately:



|Transition Period |  | $ | 0 | 
|----------------- |  | - | - | 



31







ITEM 15 . EXHIBITS



(a) Financial Statements and Financial
Statement Schedules



| | 1.  Consolidated Financial Statements
    are listed in the Index to Consolidated Financial Statements on page F-1 of this Transition  Report.
| | ----------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Other schedules are omitted because
        they are not applicable, not required, or because required information is included in the Consolidated Financial Statements
        or notes thereto.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) Exhibit |  | Description                                                                                                                                        
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Articles of Incorporation*                                                                                                                         
|3.2         |  | By-Laws*                                                                                                                                           
|21          |  | List of Subsidiaries#                                                                                                                              
|31.1        |  | Chief Executive Officer Certification of Periodic Financial
    Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002#                  
|31.2        |  | Chief Executive Officer Certification of Periodic Financial
    Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002#                  
|32.1        |  | Chief Executive Officer Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002#
|32.2        |  | Chief Financial Officer Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002#



*	Incorporated
by reference to the Company’s Form S-1, filed with the Securities Commission on April 15, 2011, as amended.

# Filed
herewith



SIGNATURES



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



Dated: July 11, 2013



| | MONTALVO SPIRITS, INC.                                                                       
| | ---------------------------------------------------------------------------------------------
| |                                                                                              
| | /s/ Alex Viecco                                                                              
| | Name: Alex Viecco                                                                            
| | Title: Chief Executive Officer                                                               
| | (Principal Executive Officer)                                                                
| |                                                                                              
| | /s/ Carlos Gonzalez Rivera                                                                   
| | Name: Carlos Gonzalez Rivera                                                                 
| | Title: Chief Financial Officer, Chief Operating Officer
        (Principal Financial Officer)



32







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



|Signature                  |  | Title                                                          |  | Date         
|-------------------------- |  | -------------------------------------------------------------- |  | -------------
|                           |  |                                                                |  |              
|/s/ Alex Viecco            |  | Chief Executive Officer, Director                              |  | July 11, 2013
|Alex Viecco                |  | (Principal Executive Officer)                                  |  |              
|                           |  |                                                                |  |              
|/s/ Carlos Gonzalez Rivera |  | Chief Financial Officer, Chief Operating Officer, and Director |  | July 11, 2013
|Carlos Gonzalez Rivera     |  | (Principal Financial Officer)                                  |  |              
|                           |  |                                                                |  |              
|/s/Sergio Gonzalez Rivera  |  | President, Director                                            |  | July 11, 2013
|Sergio Gonzalez Rivera     |  |                                                                |  |              
|                           |  |                                                                |  |              
|/s/Daniel Cahill           |  | Director of Sales, Director                                    |  | July 11, 2013
|Daniel Cahill              |  |                                                                |  |              



EXHIBIT INDEX



(a) Financial Statements and Financial
Statement Schedules

| | 1.  Consolidated
    Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this Transition  Report
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | 2.                                                                                                                                           



|Exhibit |  | Description                                                                                                                                        
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|3.1     |  | Articles of Incorporation*                                                                                                                         
|3.2     |  | By-Laws*                                                                                                                                           
|21      |  | List of Subsidiaries#                                                                                                                              
|31.1    |  | Chief Executive Officer Certification of Periodic Financial
    Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002#                  
|31.2    |  | Chief Executive Officer Certification of Periodic Financial
    Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002#                  
|32.1    |  | Chief Executive Officer Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002#
|32.2    |  | Chief Financial Officer Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002#



*	Incorporated
by reference to the Company’s Form S-1, filed with the Securities Commission on April 15, 2011, as amended.

# Filed herewith



33









CASA Montalvo Holdings, Inc.



(A Development Stage Company)



March 31, 2012



Index to the Financial Statements



|Contents                                                                                                                                                                                                                      |  | Page(s)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------
|                                                                                                                                                                                                                              |  |        
|Report of Independent Registered Public Accounting Firm                                                                                                                                                                       |  | F-2    
|                                                                                                                                                                                                                              |  |        
|Balance Sheets at March 31, 2012 and December 31, 2011                                                                                                                                                                        |  | F-3    
|                                                                                                                                                                                                                              |  |        
|Statements of Operations for the Three Months Ended March 31, 2012,
    for the Period from April 4, 2011 (inception) through December 31, 2011, and for the Period from April 4, 2011 (inception)
    through March 31, 2012 |  | F-4    
|                                                                                                                                                                                                                              |  |        
|Statement of Stockholders’ Equity (Deficit) for the Period from April 4, 2011(inception) through March 31, 2012                                                                                                               |  | F-5    
|                                                                                                                                                                                                                              |  |        
|Statements of Cash Flows for the Three Months Ended March 31, 2012, for the Period from April 4, 2011 (inception) through December 31, 2011, and for the Period from April 4, 2011 (inception) through March 31, 2012         |  | F-6    
|                                                                                                                                                                                                                              |  |        
|Notes to the Financial Statements                                                                                                                                                                                             |  | F-7    



F-1







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and Stockholders of

Casa Montalvo Holdings, Inc.

Moorpark, California



We have audited the accompanying balance
sheets of Casa Montalvo Holdings, Inc., (the “Company”) as of March 31, 2012 and December 31, 2011 and the related
statements of operations, stockholders’ equity (deficit) and cash flows for the three months ended March 31, 2012, for the
period from April 4, 2011 (inception) through December 31, 2011, and for the period from April 4, 2011 (inception) through March
31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audit.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2012 and December
31, 2011 and the results of its operations and its cash flows for the three months ended March 31, 2012, for the period from April
4, 2011 (inception) through December 31, 2011, and for the period from April 4, 2011 (inception) through March 31, 2012 in conformity
with accounting principles generally accepted in the United States of America.



|/s/Li and Company, PC | 
|--------------------- | 
|Li and Company, PC    | 
|                      | 
|Skillman, New Jersey  | 
|July 11, 2013         | 



F-2







CASA MONTALVO HOLDINGS, INC.

(A Development Stage Company)

Balance Sheets



|                                                                                                      |  | March 31, 2012 |          |   | December 31, 2011 |  
|----------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ----------------- | -
|                                                                                                      |  |                |          |   |                   |  
|ASSETS                                                                                                |  |                |          |   |                   |  
|CURRENT ASSETS                                                                                        |  |                |          |   |                   |  
|Cash                                                                                                  |  | $              | 6,905    |   |                   | $
|Inventories                                                                                           |  |                | 37,100   |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|Total Current Assets                                                                                  |  |                | 44,005   |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|TOTAL ASSETS                                                                                          |  | $              | 44,005   |   |                   | $
|                                                                                                      |  |                |          |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                        |  |                |          |   |                   |  
|CURRENT LIABILITIES                                                                                   |  |                |          |   |                   |  
|Note payable                                                                                          |  | $              | 21,000   |   |                   | $
|Accrued expenses                                                                                      |  |                | 72,975   |   |                   |  
|Notes payable - related parties                                                                       |  |                | 15,000   |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|Total Current Liabilities                                                                             |  |                | 108,975  |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|LONG-TERM LIABILITIES                                                                                 |  |                |          |   |                   |  
|Notes payable - related parties, net of current maturities                                            |  |                | 8,000    |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|Total Liabilities                                                                                     |  |                | 116,975  |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|COMMITMENTS AND CONTINGENCIES                                                                         |  |                |          |   |                   |  
|                                                                                                      |  |                |          |   |                   |  
|STOCKHOLDERS' EQUITY (DEFICIT)                                                                        |  |                |          |   |                   |  
|Common stock par value $0.001: 25,000,000 shares authorized; 15,328,920 shares issued and outstanding |  |                | 15,329   |   |                   |  
|Additional paid-in capital                                                                            |  |                | 41,771   |   |                   |  
|Deficit accumulated during the development stage                                                      |  |                | (130,070 | ) |                   |  
|                                                                                                      |  |                |          |   |                   |  
|Total Stockholders' Equity (Deficit)                                                                  |  |                | (72,970  | ) |                   |  
|                                                                                                      |  |                |          |   |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                  |  | $              | 44,005   |   |                   | $



See accompanying notes to the financials
statements.



F-3







CASA MONTALVO HOLDINGS, INC.

(A Development Stage Company)

Statement of Operations



|                                           |  |                      |            |   | For the Period From |   |            | For the Period From | 
|------------------------------------------ |  | -------------------- | ---------- | - | ------------------- | - | ---------- | ------------------- | 
|                                           |  |                      |            |   | April 4, 2011       |   |            | April 4, 2011       | 
|                                           |  | For the Three Months |            |   | (Inception)         |   |            | (Inception)         | 
|                                           |  | Ended                |            |   | Through             |   |            | Through             | 
|                                           |  | March 31, 2012       |            |   | December 31, 2011   |   |            | March 31, 2012      | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|SALES                                      |  | $                    | -          |   |                     | $ | -          |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|OPERATING EXPENSES                         |  |                      |            |   |                     |   |            |                     | 
|Selling                                    |  |                      | -          |   |                     |   | 33,224     |                     | 
|Consulting                                 |  |                      | 18,000     |   |                     |   | -          |                     | 
|Salaries and wages                         |  |                      | 54,000     |   |                     |   | 7,500      |                     | 
|General and administrative                 |  |                      | 6,671      |   |                     |   | 9,650      |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|Total Operating Expenses                   |  |                      | 78,671     |   |                     |   | 50,374     |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|LOSS FROM OPERATIONS                       |  |                      | (78,671    | ) |                     |   | (50,374    | )                   | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|OTHER (INCOME) EXPENSE                     |  |                      |            |   |                     |   |            |                     | 
|Interest expense                           |  |                      | 633        |   |                     |   | 392        |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|Total Other (Income) Expense               |  |                      | 633        |   |                     |   | 392        |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|LOSS BEFORE INCOME TAXES                   |  |                      | (79,304    | ) |                     |   | (50,766    | )                   | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|Income tax provision                       |  |                      | -          |   |                     |   | -          |                     | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|NET LOSS                                   |  | $                    | (79,304    | ) |                     | $ | (50,766    | )                   | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|Net Loss per Common Share                  |  |                      |            |   |                     |   |            |                     | 
|- Basic and diluted                        |  | $                    | (0.01      | ) |                     | $ | (0.00      | )                   | 
|                                           |  |                      |            |   |                     |   |            |                     | 
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |  |                      |            |   |                     |   |            |                     | 
|- Basic and diluted                        |  |                      | 15,328,920 |   |                     |   | 15,248,330 |                     | 



See accompanying notes to the financials
statements.



F-4







CASA MONTALVO HOLDINGS, INC.

(A Development Stage Company)

Statement of Stockholders' Equity (Deficit)

For the Period from January 1, 2012 through
March 31, 2012



|                                                                                                |  |                                |            |  |         |   |        | Additional  |  |   |               |  |  | Total  |         
|----------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- |  | ------- | - | ------ | ----------- |  | - | ------------- |  |  | ------ | --------
|                                                                                                |  | Common stock: $0.001 par value |            |  | Paid-In |   |        | Accumulated |  |   | Stockholders' | 
|                                                                                                |  | Shares                         |            |  | Amount  |   |        | Capital     |  |   | Deficit       |  |  | Equity |         
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Balance at inception, April 4, 2011                                                             |  |                                | -          |  |         | $ | -      |             |  | $ | -             |  |  | $      | -       
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Common stock issued to founders for cash at par value upon formation                            |  |                                | 14,600,000 |  |         |   | 14,600 |             |  |   |               |  |  |        |         
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Common stock issued to founders for services at par value upon formation                        |  |                                | 600,000    |  |         |   | 600    |             |  |   |               |  |  |        |         
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Common stock issued for cash at $0.325 per share from August 24, 2011 through September 2, 2011 |  |                                | 28,920     |  |         |   | 29     |             |  |   | 9,371         |  |  |        |         
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Common stock issued for services at $0.325 per share on September 27, 2011                      |  |                                | 100,000    |  |         |   | 100    |             |  |   | 32,400        |  |  |        |         
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Net loss                                                                                        |  |                                |            |  |         |   |        |             |  |   |               |  |  |        | (50,766 
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Balance, December 31, 2011                                                                      |  |                                | 15,328,920 |  |         |   | 15,329 |             |  |   | 41,771        |  |  |        | (50,766 
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Net loss                                                                                        |  |                                |            |  |         |   |        |             |  |   |               |  |  |        | (79,304 
|                                                                                                |  |                                |            |  |         |   |        |             |  |   |               |  |  |        |         
|Balance, March 31, 2012                                                                         |  |                                | 15,328,920 |  |         | $ | 15,329 |             |  | $ | 41,771        |  |  | $      | (130,070



See accompanying notes to the financials
statements.



F-5







CASA MONTALVO HOLDINGS, INC.

(A Development Stage Company)

Statements of Cash Flows



|                                                                            |  |                      |         |   | For the Period From |   |         | For the Period From | 
|--------------------------------------------------------------------------- |  | -------------------- | ------- | - | ------------------- | - | ------- | ------------------- | 
|                                                                            |  |                      |         |   | April 4, 2011       |   |         | April 4, 2011       | 
|                                                                            |  | For the Three Months |         |   | (Inception)         |   |         | (Inception)         | 
|                                                                            |  | Ended                |         |   | Through             |   |         | Through             | 
|                                                                            |  | March 31, 2012       |         |   | December 31, 2011   |   |         | March 31, 2012      | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|OPERATING ACTIVITIES:                                                       |  |                      |         |   |                     |   |         |                     | 
|Net Loss                                                                    |  | $                    | (79,304 | ) |                     | $ | (50,766 | )                   | 
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                      |         |   |                     |   |         |                     | 
|Stock based compensation                                                    |  |                      | -       |   |                     |   | 33,100  |                     | 
|Changes in operating assets and liabilities:                                |  |                      |         |   |                     |   |         |                     | 
|Inventories                                                                 |  |                      | (21,000 | ) |                     |   | (16,100 | )                   | 
|Accrued expenses                                                            |  |                      | 72,583  |   |                     |   | 392     |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|Net Cash Used in Operating Activities                                       |  |                      | (27,721 | ) |                     |   | (33,374 | )                   | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|FINANCING ACTIVITIES:                                                       |  |                      |         |   |                     |   |         |                     | 
|Proceeds from notes payable - related party                                 |  |                      | 12,000  |   |                     |   | 11,000  |                     | 
|Proceeds from notes payable                                                 |  |                      | 21,000  |   |                     |   | -       |                     | 
|Proceeds from sale of common stock                                          |  |                      | -       |   |                     |   | 24,000  |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|Net Cash Provided by Financing Activities                                   |  |                      | 33,000  |   |                     |   | 35,000  |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|NET CHANGE IN CASH                                                          |  |                      | 5,279   |   |                     |   | 1,626   |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|CASH AT BEGINNING OF PERIOD                                                 |  |                      | 1,626   |   |                     |   | -       |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|CASH AT END OF PERIOD                                                       |  | $                    | 6,905   |   |                     | $ | 1,626   |                     | 
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                          |  |                      |         |   |                     |   |         |                    
|                                                                            |  |                      |         |   |                     |   |         |                     | 
|Interest paid                                                               |  | $                    | 633     |   |                     | $ | 392     |                     | 
|Income tax paid                                                             |  | $                    | -       |   |                     | $ | -       |                     | 



See accompanying notes to the financials
statements.



F-6







CASA Montalvo Holdings, Inc.

(A Development Stage Company)

March 31, 2012

Notes to the Financial Statements



Note 1 - Organization and Operations



CASA Montalvo Holdings, Inc.



CASA Montalvo Holdings, Inc., a development
stage company, (“Casa” or the “Company”) was incorporated on April 4, 2011 under the laws of the State
of California. The Company develops, markets and/or distributes alcoholic beverages, primarily in the
United States.



Montalvo Imports LLC



On August 9, 2012, the company formed Montalvo
Imports LLC (“Imports”) under the laws of the State of Delaware.  The LLC, of which the Company is the sole member,
was formed to provide the same services as the Company.



On December 21, 2012, in association with
the entering into and consummation of, the Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Advanced
Cloud Storage, Inc., the Board of Directors of the Company (the “Board”) approved a change in the Company’s fiscal
year end from December 31 to March 31. As a result of this change, the Company is filing a Transition Report on Form
10-K for the three-month transition period ended March 31, 2012.



Note 2 - Summary of Significant Accounting
Policies



Basis of Presentation



The Company’s financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).



Development Stage Company



The Company
is a development stage company as defined bysection 915-10-20 of the FASB Accounting Standards Codification.
Although the Company has recognized some nominal amount of revenue since inception, the Company is still devoting substantially
all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated
since inception have been considered as part of the Company's development stage activities.



Use of Estimates and Assumptions



The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.



The Company’s significant estimates
and assumptions include the fair value of financial instruments; the carrying value,recoverability
and impairment, if any, of long-lived assets, including the values assigned to and the estimated useful life of office equipment;expected term of share options and similar instruments,expected
volatility of the entity’s common shares and the method used to estimate it, expected annual
rate of quarterly dividends, and risk free rate(s); income tax rate, income
tax provision, deferred tax assets, deferred tax assets and the valuation allowance of deferred tax assets, and the assumption
that the Company will continue as a going concern. Those significant accounting estimates or assumptions
bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates
or assumptions are difficult to measure or value.



Management bases
its estimates on historical experience and on various assumptions that are believed to be reasonablein relation to the
financial statements taken as a wholeunder the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.



Management regularlyevaluates the key factors and assumptions used to develop the estimates utilizing currently available
information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed
appropriate, those estimates are adjusted accordingly.



F-7







Actual results could differ from those
estimates.



Fair Value of Financial Instruments



The Company follows paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial
instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted
in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of
fair value hierarchy defined by Paragraph 820-10-35-37 are described below:



| | Level 1 | Quoted market prices available in active markets for
identical assets or liabilities as of the reporting date.
| | ------- | --------------------------------------------------------------------------------------------------------------



| | Level 2 | Pricing inputs other than quoted prices in active markets
included in Level 1, which are either directly or indirectly observable as of the reporting date.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | Level 3 | Pricing inputs that are generally observable inputs and
not corroborated by market data.
| | ------- | ----------------------------------------------------------------------------------------



Financial assets are
considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.



The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority
to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.



The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses approximate its fair value because of the short maturity of
this instrument.



Transactions involving related parties
cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings
may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions
were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.



It is not, however, practical to determine
the fair value of advances from stockholders, if any, due to their related party nature.



Fair Value of Non-Financial Assets
or Liabilities Measured on a Recurring Basis



The Company’s non-financial assets
include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory
levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and
historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving
inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory
cycle counts.



Cash Equivalents



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



Inventories



Inventory Valuation



The Company values inventory, consisting
of finished goods, at the lower of cost or market.Cost is determined on the first-in and first-out
(“FIFO”) method. The Companyreduces inventory for the diminution of value, resulting from
product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory
and its estimated market value.  Factors utilized in the determination of estimated market value include (i) estimates
of future demand, and (ii) competitive pricing pressures.



F-8







There was no inventory obsolescence at
March 31, 2012.



Related Parties



The Company follows subtopic 850-10 of
the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.



Pursuant to Section 850-10-20 the
Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would
be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management
of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the
management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing
its own separate interests; and g. Other parties that can significantly influence the management or operating policies of
the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the
other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.



The financial
statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances,
and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the
nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal
amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions
for each of the periods for which income statements are presented and the effects of any change in the method of establishing the
terms from that used in the preceding period; and d. mounts due from or torelated parties as
of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.



Commitment and Contingencies



The Company
follows subtopic 450-20 ofthe FASB Accounting Standards Codification to report accounting for contingencies.Certain conditions may exist as of the date the consolidated 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 assesses 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 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 therein.



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 consolidated financial statements. If the assessment indicates that a potentially
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of
the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.



Loss contingencies considered remote are
generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe,
based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated
financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and
adversely affect the Company’s business, financial position, and results of operations or cash flows.



Revenue Recognition



The Company follows paragraph 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or
realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
(i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer,
(iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.



F-9







Stock-Based Compensation for Obtaining
Employee Services



The Company accounts for its stock based
compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement
principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant
to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair
value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is
probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s
most recent private placement memorandum ("PPM”), or weekly or monthly price observations would generally be more appropriate
than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and
asked quotes and lack of consistent trading in the market.



The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for
inputs are as follows:



| | · | Expected term of share options and similar instruments: The expected life of options and similar instruments represents the
period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB
Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the
options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments
and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value)
of the instruments. Pursuant to paragraph 718-50-S99-1, it may be appropriate to use the simplified method, if (i) A company
does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the
limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share
option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide
a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes
in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected
term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company
does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii)
a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable
for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected,
the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company
uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar
instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations
would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations
for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading
in the market.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the
contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected
dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods
within the expected term of the share options and similar instruments.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free
rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within
the expected term of the share options and similar instruments.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company’s policy is to recognize
compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite
service period for the entire award.



Equity Instruments Issued to Parties
Other Than Employees for Acquiring Goods or Services



The Company accounts for equity instruments
issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting
Standards Codification (“Sub-topic 505-50”).



F-10







Pursuant to ASC Section 505-50-30, all
transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably
measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on
which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are
thinly traded the use of share prices established in the Company’s most recent private placement memorandum ("PPM”),
or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares
could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.



The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for
inputs are as follows:



| | · | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards
Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments
are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected
exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s
expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the
contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments
as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected
term.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii)
a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable
for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected,
the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company
uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar
instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations
would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations
for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading
in the market.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the
contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected
dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods
within the expected term of the share options and similar instruments.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free
rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within
the expected term of the share options and similar instruments.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Pursuant to ASC paragraph 505-50-25-7,
if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for
goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the
elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached.
A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether
the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity
under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1,
a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable
equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific
performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity
by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the
balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other
than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date
for transactions that are within the scope of this Subtopic.



Pursuant to Paragraphs 505-50-25-8 and
505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after
a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance
conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity
had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments.
A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise
expires unexercised.



F-11







Pursuant to ASC paragraph 505-50-30-S99-1,
if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity
instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are
not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should
be recorded.



Income Tax Provision



The Company accounts
for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred
tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected
to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than
not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income
in the period that includes the enactment date.



The Company
adoptedsection 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to
uncertainty income taxes.Section 740-10-25addresses the determination
of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. UnderSection 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only
if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on
the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.Section
740-10-25also provides guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures.



The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well
as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded
on its consolidated balance sheets and provides valuation allowances as management deems necessary.



Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the
Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion,
adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates,
additional allowances or reversals of reserves may be necessary.



Uncertain Tax Positions



The Company
did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to
the provisions ofSection 740-10-25for the three months ended March 31, 2012 or for the
period from April 4, 2011 (inception) through December 31, 2011.



Net Income (Loss) per Common Share



Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss)
per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and potentially outstanding shares of common stock during the periodto reflect the potential
dilution that could occur from common shares issuable through stock options and warrants.



There were no
potentially outstanding dilutive common shares for the interim period ended March 31, 2012or for the period from April
4, 2011 (inception) through December 31, 2011.



F-12







Cash Flows Reporting



The Company adopted paragraph 230-10-45-24
of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether
they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or
reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification
to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities
by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating
cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The
Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of
the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the
reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing
and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB
Accounting Standards Codification.



Subsequent Events



The Company follows the guidance in Section
855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent
events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting
Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed
to users, such as through filing them on EDGAR.



Recently Issued Accounting Pronouncements



In January 2013, the FASB issued ASU No.
2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities".
This ASU clarifies that the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and
Liabilities." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing
and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards
Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal
years, and interim periods within those years, beginning on or after January 1, 2013.



In February 2013, the FASB issued ASU No.
2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income."
The ASUadds new disclosure requirements
for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income.
The ASU is effective for public entities for fiscal years beginning after December 15, 2013.



In February 2013, the Financial Accounting
Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several
Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses
the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt
arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities
for fiscal years, and interim periods within those years, beginning after December 15, 2013.



In March 2013, the FASB issued ASU No.
2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition
of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU
addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in
a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity
or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released
into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively
for fiscal years, and interim periods within those years, beginning after December 15, 2013.



In March 2013, the FASB issued ASU 2013-07,“Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an
entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation
is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is
approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution
of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary
bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception
(for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for
liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial
statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected
resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity
should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to
either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities
that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting
periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption
is permitted.



Management does not believe that any other
recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
financial statements.



F-13







Note 3 – Financial Condition



The financial
statements have been preparedassuming that the Company will continue as a going concern, which contemplates continuity
of operations, realization of assets, and liquidation of liabilities in the normal course of business.



As reflected in the financial statements,
the Company had a deficit accumulated during the development stage at March 31, 2012, a net loss and net cash used in operating
activities for the period then ended. These factors raise substantial doubt about the Company’s
ability to continue as a going concern.



While the Company is attempting to commence
operations and generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s
daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that
the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity
for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate sufficient
revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to
continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient
revenues.



The financial statements do not include
any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern.



Note 4 – Notes Payable



On January 13, 2012, an independent third
party loaned the Company $5,000 in the form of a promissory note. The Note is due on January 13, 2013 and bears interest at 8%
per annum.



On January 18, 2012, an independent third
party loaned the Company $3,000 in the form of a promissory note. The Note is due on January 18, 2013 and bears interest at 8%
per annum.



On January 19, 2012, an independent third
party loaned the Company $3,000 in the form of a promissory note. The Note is due on January 19, 2013 and bears interest at 8%
per annum.



On January 20, 2012, an independent third
party loaned the Company $10,000 in the form of a promissory note. The Note is due on January 20, 2013 and bears interest at 8%
per annum.



Notes payable consist of the following:



|                                                                                              |  | March 31, 2012 |       
|--------------------------------------------------------------------------------------------- |  | -------------- | ------
|                                                                                              |  |                |       
|Note payable with interest at 8%per annum, with principal and interest due onJanuary 13, 2013 |  |                | 5,000 
|                                                                                              |  |                |       
|Note payable with interest at 8%per annum, with principal and interest due onJanuary 18, 2013 |  |                | 3,000 
|                                                                                              |  |                |       
|Note payable with interest at 8%per annum, with principal and interest due onJanuary 19, 2013 |  |                | 3,000 
|                                                                                              |  |                |       
|Note payable with interest at 8%per annum, with principal and interest due onJanuary 20, 2013 |  |                | 10,000
|                                                                                              |  |                |       
|                                                                                              |  | $              | 21,000



Note 5 – Notes Payable –
Related Parties



On June 6, 2011 the Chief Executive Officer
of the Company, loaned the Company $1,000 in the form of a promissory note. The Note is due on June 6, 2013 and bears interest
at 8% per annum.



On June 21, 2011 a significant stockholder
of the Company, loaned the Company $10,000 in the form of a promissory note. The Note is due on June 21, 2013 and bears interest
at 8% per annum.



F-14







On January 3, 2012 a stockholder of the
Company, loaned the Company $2,000 in the form of a promissory note. The Note is due on January 20, 2013 and bears interest at
8% per annum.



On January 20, 2012 a significant stockholder
of the Company, loaned the Company $2,000 in the form of a promissory note. The Note is due on January 20, 2014 and bears interest
at 8% per annum.



On March 1, 2012 a significant stockholder
of the Company, loaned the Company $2,000 in the form of a promissory note. The Note is due on March 1, 2013 and bears interest
at 8% per annum.



On March 23, 2012 a significant stockholder
of the Company, loaned the Company $6,000 in the form of a promissory note. The Note is due on March 23, 2014 and bears interest
at 8% per annum.



Notes payable – related parties at
March 31, 2012 and December 31, 2011 consisted of the following:



|                                                                                                                        |  | March 31, 2012 |        |   | December 31, 2011 |  
|----------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------ | - | ----------------- | -
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued June 6, 2011, with interest at 8%per annum, with principal and interest due onJune 6, 2013         |  | $              | 1,000  |   |                   | $
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued June 21, 2011, with interest at 8%per annum, with principal and interest due onJune 21, 2013       |  |                | 10,000 |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued January 3, 2012, with interest at 8%per annum, with principal and interest due onJanuary 20, 2013  |  |                | 2,000  |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued January 20, 2012, with interest at 8%per annum, with principal and interest due onJanuary 20, 2014 |  |                | 2,000  |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued March 1, 2012, with interest at 8%per annum, with principal and interest due onMarch 31, 2013      |  |                | 2,000  |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Note payable, issued March 23, 2012, with interest at 8%per annum, with principal and interest due onMarch 23, 2014     |  |                | 6,000  |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|                                                                                                                        |  |                | 23,000 |   |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Long-term portion                                                                                                       |  |                | (8,000 | ) |                   |  
|                                                                                                                        |  |                |        |   |                   |  
|Notes payable – related parties                                                                                         |  | $              | 15,000 |   |                   | $



Note 6 – Related Party Transactions



Related Parties



Related parties with whom the Company had
transactions are:



|Related Parties          |  | Relationship                                                              
|------------------------ |  | --------------------------------------------------------------------------
|                         |  |                                                                           
|Alex Viecco              |  | Chief Executive Officer and significant stockholder of the Company        
|                         |  |                                                                           
|Point Loma Capital, Inc. |  | An entity owned and controlled by a significant stockholder of the Company
|                         |  |                                                                           
|CMFD Group, LLC          |  | An entity owned and controlled by a significant stockholder of the Company
|                         |  |                                                                           
|Chris Ursitti            |  | A stockholder of the Company                                              



F-15







Note 7 – Stockholders’ Equity
(Deficit)



Shares Authorized



Upon formation the total number of shares
of all classes of stock which the Company is authorized to issue is One Million (1,000,000) shares of which One Million (1,000,000)
shares shall be Common Stock, par value $0.001 per share.



Amendment to the Certificate of Incorporation



In April 2011, the Company filed a Certificate
of Amendment of Articles of Incorporation and changed its total number of common shares which the Company is authorized to issue
from One Million (1,000,000), par value $0.001 per share, to Twenty-Five Million (25,000,000) shares, par value $0.001 per share.



Common Stock



Upon formation the Company issued to the
Company’s founders 14,600,000 shares of its common stock valued at par, or $14,600.



Sale of Common Stock



From August 24, 2011 through September
2, 2011 the Company issued 28,920 shares of its common stock at $0.325 per share, or $9,400 to four individuals.



Issuance of Common Stock for Obtaining
Employee Services



Upon formation the Company issued to certain
of the Company’s founders 600,000 shares of its common stock valued at par, or $600.



Issuance of Common Stock to
Parties Other Than Employees for Acquiring Goods or Services



On September 27, 2011 the Company issued
100,000 shares of its common stock for services, valued at $32,500 on the date of issuance.



Note 8 – Income Tax Provision



Deferred Tax Assets



At March 31, 2012, the Company had net
operating loss (“NOL”) carry–forwards for Federal income tax purposes of $130,070 that may be offset against
future taxable income through 2032. No tax benefit has been reported with respect to these net operating loss carry-forwards because
the Company believes that the realization of the Company’s net deferred tax assets of approximately $44,224 was not considered
more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation
allowance.



Deferred tax assets
consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred
tax assets because of the uncertainty regarding its realization.  The valuation allowance increased approximately $26,963
and $17,260for the Three Months Ended March 31, 2012 and for the Period from April 4, 2011 (inception) through December
31, 2011, respectively.



Components of deferred tax assets are as
follows:



|                                                    |  | March 31, 2012 |         |   | December 31, 2011 |  
|--------------------------------------------------- |  | -------------- | ------- | - | ----------------- | -
|Net deferred tax assets – non-current:              |  |                |         |   |                   |  
|                                                    |  |                |         |   |                   |  
|Expected income tax benefit from NOL carry-forwards |  |                | 44,224  |   |                   |  
|                                                    |  |                |         |   |                   |  
|Less valuation allowance                            |  |                | (44,224 | ) |                   |  
|                                                    |  |                |         |   |                   |  
|Deferred tax assets, net of valuation allowance     |  | $              | -       |   |                   | $



F-16







Income Tax Provision in the Statement
of Operations



A reconciliation of the federal statutory
income tax rate and the effective income tax rate as a percentage of income before income tax provision is as follows:



|                                                                   |  | For the Three Months Ended March 31, 2012 |       |   | For the Period from April 4, 2011 (inception) through December 31, 2011 | 
|------------------------------------------------------------------ |  | ----------------------------------------- | ----- | - | ----------------------------------------------------------------------- | 
|                                                                   |  |                                           |       |   |                                                                         | 
|Federal statutory income tax rate                                  |  |                                           | 34.0  |   |                                                                         | 
|                                                                   |  |                                           |       |   |                                                                         | 
|Change in valuation allowance on net operating loss carry-forwards |  |                                           | (34.0 | ) |                                                                         | 
|                                                                   |  |                                           |       |   |                                                                         | 
|Effective income tax rate                                          |  |                                           | 0.0   | % |                                                                         | 



Tax Returns Remaining subject to
IRS Audits



The corporation income tax returns for
the Period from April 4, 2011 (inception) through March 31, 2012 was not yet filed. The corporation income tax returns for the
Period from April 4, 2011 (inception) through March 31, 2012 will remain subject to audit under the statute of limitations by the
Internal Revenue Service for a period of three (3) years from the date they are filed.



Note 9 – Commitments and Contingencies



Financial Advisory Agreement



On
January 1, 2012, the Company entered into a financial advisory services agreement (“Agreement”) with CMFD Group, LLC
(“CMFD”) for consulting services to be provided as required by the Company. The Agreement requires that CMFD be paid
$6,000 per month for one year from date of signing. The sole officer and shareholder of CMFD is a significant stockholder of the
Company.



Employment with the President



On January 1, 2012, the Company and Carlos
Gonzalez (“CG”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the
Company’s President. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”)
until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant to the Employment
Agreement, CG is entitled to a salary of $72,000per annum for the period beginning on the
Effective Date through December 31, 2012.



Employment with the Chief Operating
Officer



On January 1, 2012, the Company and Sergio
Gonzalez (“SG”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the
Company’s Chief Operating Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective
Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant
to the Employment Agreement, SG is entitled to a salary of $72,000per annum for the period
beginning on the Effective Date through December 31, 2012.



Employment with the Chief Executive
Officer



On January 1, 2012, the Company and Alex
Viecco (“AV”), entered into an Employment Agreement (the “Employment Agreement”), to employ CG as the Company’s
Chief Executive Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”)
until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant to the Employment
Agreement, AV is entitled to a salary of $72,000per annum for the period beginning on the
Effective Date through December 31, 2012.



Note 10 – Subsequent Events



The Company evaluated all events that occurred
after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.
 The Management of the Company determined that there were reportable subsequent events to be disclosed as follows:



F-17







Sale of Common Stock



On July 9, 2012 the Company issued 15,384
shares of its common stock at $0.325 per share, or $5,000 to two individuals.



On July 20, 2012 the Company issued 15,384
shares of its common stock at $0.325 per share, or $5,000 to two individuals.



On December 17, 2012, the Company issued
3,500,312 shares of its common stock for services, valued at $1,137,601 on the date of issue, to 12 individuals, including the
Chief Executive Officer, the President, the Chief Financial Officer, a Director, and a significant stockholder of the Company.



On December 17, 2012, the Company issued
58,462 shares of its common stock, at $0.325 per share, for the conversion of $19,000 in promissory notes.



Financing



On October 7, 2012, an independent third
party, loaned the Company $5,000 in the form of a promissory note. The Note is due on October 10, 2013 and bears interest at 8%
per annum.



On May 7, 2012, the Chief Executive Officer
of the Company, loaned the Company $2,000 in the form of a promissory note. The Note is due on May 7, 2014 and bears interest at
8% per annum.



On July 2, 2012, an independent third party,
loaned the Company $5,000 in the form of a promissory note. The Note is due on July 2, 2013 and bears interest at 8% per annum.



On November 20, 2012, an independent third
party, loaned the Company $1,000 in the form of a promissory note. The Note is due on November 20, 2013 and bears interest at 8%
per annum.



On November 20, 2012, an independent third
party, loaned the Company $1,000 in the form of a promissory note. The Note is due on November 20, 2013 and bears interest at 8%
per annum.



Exclusive Master Distribution Agreement



On August 23, 2012 the Company entered
into a distribution agreement with Destiladora Huerta Real, S.A. de C.V. (“Huerta”), whose officers are the President
and Chief Operating Officer of the Company. The agreement is for Montalvo Imports to be the exclusive distributor of certain tequilas
produced by Huerta. LLC shall pay Huerta its delivered cost plus taxes and 0.5% (1/2%) for the product; with 50% payment due with
the order and the balance 90 days from the date of delivery. The agreement has a term of three years commencing on the date that
Imports receives approval of its Federal Basic Wholesalers Permit from the U.S. Alcohol and Tobacco Tax and Trade Bureau and continue
in effect until either party gives notice 12 months in advance.



Huerta also agrees to begin the transfer
of the ownership of the brands and marks upon Imports receiving a minimum of $250,000 in equity investment or Imports placing an
aggregate of $250,000 in orders.



The Company issued a 5% promissory note
for the purchase of $320,000 of inventories, which are included in the consolidated balance sheet.



F-18