UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended June 30, 2009


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

For the transition period from to

Commission File Number: 000-28865

GLOBAL BEVERAGES, INC.

(Exact Name of Registrant as Specified In its Charter)

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

700 YARRAMAN ROAD, WYBONG

UPPER HUNTER VALLEY

NEW SOUTH WALES, AUSTRALIA 2333

(Address of principal executive offices)

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

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

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

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

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

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

Yes ¨ No x

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

Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

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

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

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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

None

FORWARD LOOKING STATEMENTS

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

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

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

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

·	Our ability to raise capital to fund capital expenditures;

·	Grape and other fruit price volatility;

·	Our ability to find and retain skilled personnel;

·	Regulatory developments; and

·	General economic conditions.

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

GLOBAL BEVERAGES, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2009

INDEX

		Page

PART I		- 1 -
Item 1.	Business	- 1 -
Item 1A.	Risk Factors	- 8 -
Item 1B.	Unresolved Staff Comments	- 10 -
Item 2.	Properties	- 11 -
Item 3.	Legal Proceedings	- 11 -

PART II		- 11 -
Item 4.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	- 11 -
Item 5.	Selected Financial Data	- 12 -
Item 6.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	- 12 -
Item 6A.	Quantitative and Qualitative Disclosures About Market Risk	- 18 -
Item 7.	Financial Statements and Supplementary Data	- 18 -
Item 8.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	- 18 -
Item 8A.	Controls and Procedures	- 18 -
Item 8A(T).	Controls and Procedures	- 20 -
Item 8B.	Other Information	- 20 -

PART III		- 20 -
Item 9.	Directors, Executive Officers and Corporate Governance	- 20 -
Item 10.	Executive Compensation	- 23 -
Item 11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	- 24 -
Item 12.	Certain Relationships and Related Transactions, and Director Independence	- 27 -
Item 13.	Principal Accountant Fees and Services	- 28 -
Item 14.	Exhibits and Financial Statement Schedules	- 29 -

PART I

ITEM 1. BUSINESS

General

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

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

Recent Developments

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

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

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

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

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

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

ADSL represents the following brands:

Core wines

Yarraman (Australia)

Arabella (South Africa)

Trios (Australia, Italy)

Trivento (Argentina)

Santa Carolina (Chile)

Vina San Pedro (Chile)

Ironstone (USA)

Core beers

Heineken

Tsing Tao

Pabst Blue Ribbon

Tiger

Budweiser

Core spirits

The Speyside Single Highland Malt Whisky

Drumguish Single Highland Malt Whisky

Lord Fidlin’s Gin

Latvia Ullmanoff Vodka

Mao Tai

Core other beverages)

Snapple – (Teas & Juice Drinks)

Yeshu - (Coconut Drink)

Sunkist - (Orange Soda)

Jia Jia Liang Teh - (Herbal Drinks)

Kelsoloch - (Mixers, Tonics and Soda)

Private Label Sodas and Teas

Wine Mall

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

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

- 2 -

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

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

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

The vine planting summary as follows:

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

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

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

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

- 3 -

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

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

Overview

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

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

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

Product Overview

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

Yarraman Range

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

Red Horse Range

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

The Bolter

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

- 4 -

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

The Market

Overview

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

Domestic Wine Sales

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

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

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

Export Wine Sales

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

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

- 5 -

Our wines are distributed and sold in the following countries:

s Australia	s Canada	s China
s USA	s Poland	s Germany
s Ireland	s Singapore	s United Kingdom

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

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

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

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

Seasonal and Quarterly Results

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

Research and Development

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

Customers

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

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

Suppliers

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

- 6 -

Competition

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

Regulatory Matters

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

Australian Regulatory Board

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

Trademarks and Intellectual Property

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

Environmental Matters

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

Insurance

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

Employees

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

Significant Subsidiaries

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

- 7 -

Available Information

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

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

ITEM 1A.

RISK FACTORS

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

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

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

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

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

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

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

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

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

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

- 8 -

Our business may be adversely affected by competition.

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

Increases in staffing costs could adversely affect our business.

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

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

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

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

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

We have limited business liability insurance coverage.

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

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

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

- 9 -

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

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

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

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

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

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

Effects of International Sales.

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

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

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

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

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

- 10 -

ITEM 2. PROPERTIES

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

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

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

ITEM 3. LEGAL PROCEEDINGS

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

PART II

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

Market Information

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

	High		Low
Fiscal 2009:
1 st Quarter	$	1.50		1.50
2 nd Quarter	$	1.50		1.50
3 rd Quarter	$	1.50		1.50
4 th Quarter	$	1.50		0.50

Fiscal 2008:
1 st Quarter	$	2.35	$	2.35
2 nd Quarter	$	2.35	$	2.35
3 rd Quarter	$	2.35	$	2.35
4 th Quarter	$	2.35	$	1.50

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

- 11 -

Record Holders

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

Dividends

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

Equity Compensation Plan Information

We do not currently have any equity compensation plans authorized.

Recent Sales of Unregistered Securities

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

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

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

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

ITEM 5. SELECTED FINANCIAL DATA

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

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

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

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

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

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

- 12 -

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

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

Overview

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

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

Critical Accounting Policies

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

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

Revenue Recognition

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

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

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

- 13 -

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

Related-Party Transactions

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

Income Taxes

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

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

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

Contingencies

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

Stock-Based Compensation Expense

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

- 14 -

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

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

Results of Operations

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

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

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

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

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

- 15 -

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

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

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

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

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

Liquidity and Capital Resources

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

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

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

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

- 16 -

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

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

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

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

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

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

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

Inflation and Changing Prices

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

- 17 -

ITEM 6A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

Not Applicable.

ITEM 8A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

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

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

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

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

Management's Report on Internal Control Over Financial Reporting.

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

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

- 18 -

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

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

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

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

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

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

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

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

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

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

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

Changes in Internal Control over Financial Reporting.

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

- 19 -

ITEM 8A(T). CONTROLS AND PROCEDURES

Not applicable.

ITEM 8B.

OTHER INFORMATION.

None.

PART III

ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names, ages, years elected and principal offices and positions of our current directors and executive officers as of March 20, 2010.

Name	Year First Elected As Officer or Director	Age	Office
Rod Walker	2009	53	Chairman, Board of Directors
Michael Kingshott	2009	62	Deputy Chairman, Board of Directors
Ian Long	2008	43	Board Member, President
Gary Blom	2008	58	Board Member
Stephen Kulmar	2009	56	Board Member
Timothy Yeo	2009	46	Board Member and Senior Vice President
Lawrence P. Lichter	2008	47	Chief Financial Officer and Secretary

None of the members of our Board of Directors or executive officers are related to one another. Each year the stockholders elect the members of our Board of Directors. We do not have a standing nominating committee or compensation committee as our entire board of directors currently serves these functions. There were no changes in procedures for nominating directors during the year ended June 30, 2009.

Rod Walker, Chairman, Board of Directors

Mr Walker has over 30 years experience in the retail and hospitality industries, working in Australia, the United States and Canada. Mr Walker is currently the Executive Chairman of Angus & Robertson Whitcoulls Borders, Australia’s largest book retail chain, Chairman of Witchery Fashion, Australia’s largest ladies fashion retailer, and a Director of Rebel Sport, Australia’s largest sporting goods retailer. He is a former Managing Director of Freedom Group and Pizza Hut Asia. Mr Walker joined the Board of Directors and was appointed Chairman on August 24, 2009.

Michael Kingshott, Deputy Chairman, Board of Directors

Mr. Kingshott is a prominent business executive in the City of London with over 37 years experience in property, shipping, transportation and logistics with considerable trading and management experience with Asia. Between 1981 and 1993, Mr. Kingshott was managing director at Sally UK Holdings plc and was chairman between 1993 and 1995. Subsequently he became non-executive chairman of Embassy Property Group plc, which was acquired by Jacobs Holdings plc in 1995. He left Jacobs Holdings plc in 2002. He is currently Chairman of Serviced Office Group plc. Mr Kingshott has been a member of the Board of Directors since March 2009, serving as Chairman until August 24, 2009 when he was appointed Deputy Chairman.

- 20 -

Ian Long, Chief Executive Officer, President and Board Member.

Ian Long has over 20 years experience in winemaking and wine business management, including 10 years as Senior Winemaker at Rosemount Estate and 5 years as Group Operations Winemaker for Southcorp Wines. In his role at Southcorp, Mr. Long was responsible for production optimization across the Southcorp Group of 11 company wineries and 6 contract processors, being accountable for developing the overall vision for winemaking facilities and the transition plan to achieve this vision. The Southcorp Group produced brands such as Penfolds, Lindemans, Rosemount, Seppelt and Wynns. Mr. Long has been a member of the Board of Directors since June 2008 and our Chief Executive officer and President since September 25, 2008.

Gary Blom, Board Member

Gary Blom has spent over 25 years as an investment banker in the United States and Australia. After spending 12 years on Wall Street as Managing Partner of an International Investment Bank which specialized in corporate finance, mergers and acquisitions he returned to Australia in 1994 to successfully launch the Imax theatres in Australia, New Zealand and Asia. Since 1994, he has been an investor in Yarraman Estate. In recent years he has joined as a partner of Barrack & York, an Australian corporate advisory firm that specializes in providing a full service platform integrating and coordinating investment banking, tax, accounting and legal services to corporations in the global market.

Stephen Kulmar, Board Member

Mr. Kulmar has spent the last 28 years of his career building a leading retail marketing agency in Australia. His experience covers all retail categories from fashion apparel to liquor. He has worked with some of the most successful retail businesses in Australia and New Zealand from Westfield to Woolworths to the Warehouse Group. He recently retired from this agency to concentrate on establishing a consulting business - Retail Oasis. He is also a nonexecutive board member of two public companies and a shareholder/director in two successful privately owned retail businesses.

Timothy Yeo, Senior Vice President and Board Member

Mr Yeo has over 15 years experience in food and beverage industries in China and throughout Asia. He was founder and CEO of TBC Shanghai Ltd, one of the first companies to import and distribute wine into China. Mr Yeo is a former Marketing Director of Yeo Hiap Sing Ltd, Singapore’s largest food and beverage conglomerate, and a former Corporate Planner for Pepsi Cola North America. Mr Yeo has been a member of the Board of Directors and Senior Vice President since July, 2009.

Lawrence Lichter, Chief Financial Officer and Secretary.

Lawrence Lichter has been serving as Secretary since September 20, 2007 and as Chief Financial Officer since September 25, 2008. Mr. Lichter has been a certified public accountant since 1984. In 1991 he founded Lichter, Yu & Associates, a certified public accounting firm for which he still works that provides consulting services to public companies and assists them with the preparation of their financial statements and with their SEC and Sarbanes Oxley compliance matters. From December 1999 through March 2008, Mr. Lichter served as the chief financial officer for Pacific American Services Group, LLC, a company which owns an institutional securities firm and a financial services firm and which specializes in income tax preparation and business management.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, as well as persons who own more than 10% of a registered class of our equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership. Directors, executive officers, and greater than 10% shareholders are required by Securities and Exchange Commission regulation to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of copies of Section 16(a) reports and representations received by us from reporting persons, and without conducting any independent investigation of our own, we believe all Forms 3, 4 and 5 were timely filed with the SEC by such reporting persons during the year ended June 30, 2009, except as follows:

- 21 -

Ian Long failed to file a report on Form 4 when he became President and CEO on September 26, 2008. Lawrence Lichter failed to file a Form 3 when he became Chief Financial Officer on September 26, 2008. Timothy Yeo failed to file an initial report of Form 3 when he became a director on July 1, 2009 and failed to report that he had become a Senior Vice President on July 10, 2009. Michael Kingshott and Stephan Kulmar failed to file an initial report on Form 3 when each became a director of the Company on March 25, 2009.

Code of Ethics

On February 3, 2006, we adopted a code of ethics that applies to our officers, employees and directors, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial and accounting officer), and other persons who perform similar functions. A copy of our Code of Ethics was filed as Exhibit 14.1 to our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2006. Our Code of Ethics is intended to be a codification of the business and ethical principles which guide us, and to deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of interest, and to foster full, fair, accurate, timely and understandable disclosures, compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations and accountability for adherence to this Code. A copy of our Code of Ethics will be provided to any person requesting same without charge.

Board of Directors Meetings and Subcommittees

Attendance at Board Meetings and Annual Shareholders’ Meeting

The Board held three meetings in Fiscal 2009. We expect each director to attend every meeting of the Board as well as the annual meeting. All directors were present at the meetings of the Board in Fiscal 2009.

Audit Committee

The Board of Directors is the acting Audit Committee and does not have an audit committee charter.

The Board has reviewed and discussed the audited financial statements with management; has discussed with our independent auditors the matters required to by discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; the Board has received the written disclosures and the letter from our independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding our independent accountant’s communications with the Board concerning independence, and has discussed with our independent accountant their independence; and based upon the foregoing, the Board had determined that the audited financial statements set forth herein be included in this Annual Report on Form 10-K.

Our Board of Directors has determined that there is no person on our Board of Directors who qualifies as an audit committee financial expert as that term is defined by applicable SEC. The Board of Directors believes that obtaining the services of an audit committee financial expert is not economically rational at this time in light of the costs associated with identifying and retaining an individual who would qualify as an audit committee financial expert.

COMPENSATION COMMITTEE; COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

We do not have a standing compensation committee as our entire board of directors currently serves this function. Messrs. Long and Yeo, who serve on our board, are also employees of the Company. Our Board of Directors makes decisions concerning salaries and incentive compensation for our officers, including our Chief Executive Officer, Chief Financial Officer and employees. Messrs. Long and Yeo do not participate on decisions regarding executive compensation.

- 22 -

COMPENSATION OF DIRECTORS

Prior to May 1, 2008 members of our Board Directors received fees in the sum of $16,100 per year, with a wine allowance up to the value of $4,000 and accommodation entitlements at Yarraman Estate in the Upper Hunter Valley, Australia. Our Board of Directors resolved that these fees were based on each director attending and preparing for no fewer than four Board meetings per year and in addition providing additional assistance to us as required. After May 1, 2008, the director fees were discontinued while our directors continued to receive the wine allowance.

Director Compensation

Name	Fees earned or Paid in Cash		All other compensation (i)		Total
	($)		($)		($)
(a)	(b)		(g)		(h)
Rod Walker		--		$4,000		$4,000
Michael Kingshott		--		$4,000		$4,000
Ian Long		--		$4,000		$4,000
Gary Blom		--		$4,000		$4,000
Stephen Kulmar		--		$4,000		$4,000
Timothy Yeo		--		$4,000		$4,000

(i) Each Director receives a wine allowance of up to $4,000 per annum.

Nominating Committee

At this time, we do not have a separate nominating committee as this function is performed by our full Board of Directors. Our entire Board of Directors is active in the nominating process. Nominations for election to the Board of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. The nominating committee does not have a fixed policy with regard to the consideration of any director candidate recommended by shareholders. The Board of Directors carefully considers nominees regardless of whether they are nominated by shareholders or existing board-members.

Securities Authorized for Issuance under Equity Compensation Plans

None.

ITEM 10.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following Summary Compensation Table sets forth, for the years indicated, all cash compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by our Chief Executive Officer. No other executive officer or other employee received or is entitled to receive remuneration in excess of $100,000 during the stated periods.

- 23 -

Name and Principal	Year	Salary (1)		Option Grants	All Other		Total
Position		($)		($)	Compensation ($)		($)
(a)	(b)	(c)		(e)	(f)		(g)
Ian Long, Chief Executive Officer	2009		$100,600			$8,000(2)		$108,600
	2008		108,382			19,881(2)		128,263

_____________

(1)	Salary represents base salary earned in 2009 and 2008.

(2)	Consists of an annual automobile allowance and annual bonus.

We have not issued any stock options or maintained any stock option or other incentive plans since our inception. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Similarly, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer’s responsibilities following a change in control.

Employment Contracts

Yarraman Australia has an employment agreement with Ian Long that provides for an annual salary of $100,600 and an annual bonus structure of up to $20,120 by achieving key performance criteria. In addition, an annual auto allowance of $8,000 is provided.

Yarraman Australia had an employment agreement with Mr. Raymond Brien which commenced on June 12, 2007 and was terminated on June 20, 2008. The agreement provided for his total annual compensation to be $60,360 and an auto allowance of $8,000 for serving as Chief Financial Officer.

We have an agreement with Mr. Lawrence Lichter that provides for annual compensation of $25,000 for serving as corporate Secretary.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of March 20, 2010, certain information concerning the beneficial ownership of our Common Stock by:

each stockholder known by us to own beneficially five percent or more of our outstanding common stock;

each director;

each executive officer; and

all of our executive officers and directors as a group, and their percentage ownership and voting power.

- 24 -

Name and Address of Beneficial Owner	Shares Beneficially Owned (1)(2)			Percent of Class†

Geoffrey White		8,405,632			9.5	%

Delta Dawn Pty Ltd., as trustee for the Yarraman Road Trust		7,610,724	(3)		8.6

Gary Blom		6,045,200			6.8

Michael Kingshott		3,534,012	(4)		4.6

Stephen Kulmar		275,800			*

Ian Long		275,000			*

Rod Walker		250,000			*

Tim Yeo		—			*

Lawrence Lichter 16133 Ventura Boulevard Encino, CA USA 91436		90,000			*

Total Held by Directors and Executive Officers as a group (7 persons)		10,470,012			11.8	%

† As of March 20th, 2010 there were 88,747,213 shares of our common stock issued and outstanding.

* Less than one percent.

(1)

Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of the Common Stock beneficially owned by them. A person is deemed to be the beneficial owner of securities which may be acquired by such person within sixty (60) days from the date indicated above upon the exercise of options, warrants or convertible securities. Each beneficial owner’s percentage of ownership is determined by assuming that options, warrants or convertible securities that are held by such person (not those held by any other person) and which are exercisable within sixty (60) days of the date indicated above, have been exercised. To date, we have not granted any options or warrants into our common stock. Our Series A Convertible Preferred Stock and our Series B Convertible Preferred Stock are not currently convertible in shares of our common stock.

(2)

Unless otherwise noted, The address of the beneficial owner is c/o Yarraman Estate, 700 Yarraman Road, Wybong, Upper Hunter, New South Wales, 2333 Australia.

	(3)	Delta Dawn Pty Ltd. is trustee of Yarraman Road Trust, an Australian unit trust created by a declaration of trust contained in a deed poll dated September 26, 2002. Interests in the trust property are evidenced by the issuance of units to the trust beneficiaries, with each unitholder entitled to the benefit of the assets of the Trust in the proportion in which they are registered as holding units from time to time. While the unitholders do not have the ability to direct the disposition and the voting of securities of the Registrant held in the name of Delta Dawn Pty Ltd as trust property, they may be deemed to beneficially own the securities as a result of their rights under the Trust documents. All unitholders have disclaimed any beneficial ownership that may be imposed due to interpretations of unitholders’ ownership of the trust property.

	(4)	Includes shares owned by Helen Kingshott and Smith & Williamson Nominees.

As of March 20, 2010, Michael Kingshott beneficially owned 381,600 shares of our Series A Convertible Preferred Stock representing all of our outstanding shares of Series A Convertible Preferred Stock.

The following table sets forth, as of March 20, 2010, certain information concerning the beneficial ownership of our Series B Convertible Preferred Stock by:

each stockholder known by us to own beneficially five percent or more of our Series B Convertible Preferred Stock;

each director;

each executive officer; and

all of our executive officers and directors as a group, and their percentage ownership and voting power.

- 25 -

Name and Address of Beneficial Owner	Shares Beneficially Owned (1)(2)		Percent of Class†

Delta Dawn Pty Ltd, as trustee for the Yarraman Road Trust (3)		50,060		91.0

Gary Blom		1,000		1.8

Ian Long		1,000		1.8

Stephen Kulmar		935		1.7

Tim Yeo		500		*

Lawrence Lichter 16133 Ventura Boulevard Encino, CA USA 91436		500		*

Rod Walker		100		*

Total Held by Directors and Executive Officers as a Group (7 persons)		4,035		7.3

† As of March 20th, 2010 there were 55,000 shares of our Series B Convertible Preferred stock, par value $0.001 per share, issued and outstanding.

* Less than one percent.

(1)

(2)

Unless otherwise noted, The address of the beneficial owner is c/o Yarraman Estate, 700 Yarraman Road, Wybong, Upper Hunter, New South Wales, 2333 Australia.

(3)

Delta Dawn Pty Ltd. is trustee of Yarraman Road Trust, an Australian unit trust created by a declaration of trust contained in a deed poll dated September 26, 2002. Interests in the trust property are evidenced by the issuance of units to the trust beneficiaries, with each unitholder entitled to the benefit of the assets of the Trust in the proportion in which they are registered as holding units from time to time. While the unitholders do not have the ability to direct the disposition and the voting of securities of the Registrant held in the name of Delta Dawn Pty Ltd as trust property, they may be deemed to beneficially own the securities as a result of their rights under the Trust documents. All unitholders have disclaimed any beneficial ownership that may be imposed due to interpretations of unitholders’ ownership of the trust property.

- 26 -

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transaction Procedures.

The Board reviews and approves all transactions between us and any director or executive officer that will, or is reasonably likely to require disclosure under the SEC’s rules. In determining whether to approve any transaction with any of our directors or executive officers, the Board will consider the following factors, among others, to the extent relevant to the transaction:

whether the terms of the transaction are fair to us and on the same basis as would apply if the transaction did not involve a related person;

whether there are business reasons for us to enter into the transaction;

whether the transaction would impair the independence of an outside director; and

whether the transaction would present an improper conflict of interest for a director or executive officer, taking into consideration such factors as the Board deems relevant, such as the size of the transaction, the overall financial position of the individual, the direct or indirect nature of the individual’s interest in the transaction and the ongoing nature of any proposed relationship.

Related Party Transactions.

On January 1, 2006 Yarraman Australia entered into a consulting agreement with the Trustee to provide business consulting services related to the wine industry for a term of two years or until such time as their ownership percentage in our company is reduced to less than 15%. Under this agreement we must pay the Trustee $100,000AUD (Australian Dollars), or approximately $96,150 annually. This agreement was terminated in June 2008. During the fiscal year ended June 30, 2008, we paid the Trustee approximately $66,063.

On December 21 2005, prior our acquisition of Yarraman Australia, Yarraman Australia entered into a loan agreement with the Trust, the nominal holder of all of Yarraman Australia’s shares at that time. The outstanding principal balance of this loan was $1,832,795. This loan advance was non-interest bearing. The loan was secured by the fixed assets of Yarraman Australia, subordinated to all of our other loans collateralized by these fixed assets. A total of 50% of the loan payable, or $916,398, was to be repaid in thirty-six monthly installments commencing on the first business day of the twenty-fifth month following the loan agreement, or approximately February 1, 2008. On the thirty-sixth month of following the payment, in January 2011, the remaining 50% of the loan payable or $916,398 was to be due and payable. The initial repayment date of February 2008 was extended to June 30, 2008.

On May 1, 2006 Yarraman Australia entered into a loan agreement with the Trust in the principal amount of $826,020. Originally, this loan agreement had an interest rate of 8%, with the same repayment terms as the December 21, 2005 loan. During the year ended June 30, 2006 a total of $10,910 in interest expense was recorded on this loan, until the Trust waived the interest requirement on this loan. On May 25, 2006 the Trust extended to Yarraman Australia an additional $13,767 to be repaid in accordance with the same terms as the December 21, 2005 loan. This loan advance was also non-interest bearing.

As of June 30, 2008 both the loan advances above totaling $1,832,795 and the $826,020 loan payable were converted into 6,559,524 shares of our common stock at the market price of approximately $0.42 per share.

As the entire above loan advances, totaling $2,672,582 were non-interest bearing, we recognized imputed interest of $871,307 which is recorded as discount on debt and a contribution of capital to us. This discount on debt is being amortized over the term that these loan advances are outstanding. As the loan advance was converted into common stock during the year ended June 30, 2008, the remaining unamortized debt discount was fully amortized upon conversion. During the years ended June 30, 2008 and 2007, we amortized this discount on debt, recorded as an interest expense of $763,133 and $205,905, respectively, at the prevailing exchange rates for the years then ended.

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

- 27 -

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

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

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

Director Independence

Mr. Walker qualifies as “independent” in accordance with Rule 10A-3 of the Exchange Act. Messrs. Long, Yeo, Blom Kingshott and Kulmar do not qualify as independent. Mr. Long and Mr Yeo are employed by us. Mr. Blom is a beneficiary of the Yarraman Road Trust and a consultant to us. Mr. Kulmar is a beneficiary of the Yarraman Road Trust. Mr. Kingshott is a major stockholder .

ITEM 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees.

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended June 30, 2009 and 2008 are set forth in the table below:

Fee Category	Fiscal year ended June 30, 2009		Fiscal year ended June 30, 2008
Audit fees (1)	$	67,225	$	45,000
Audit-related fees (2)	$	0	$	0
Tax fees (3)	$	0	$	0
All other fees (4)	$	0	$	0
Total fees	$	67,225	$	45,000

- 28 -

(1) Audit fees consists of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2) Audit-related fees consists of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3) Tax fees consists of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4) All other fees consists of fees billed for all other services.

Audit Committee’s Pre-Approval Practice .

Section 10A(i) of the Securities Exchange Act of 1934 prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the board of directors (in lieu of the audit committee) or unless the services meet certain de minimis standards. Accordingly, our audit committee pre-approves all services, including audit services, provided by our independent accountants.

ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) 1. The financial statements beginning at page F-1 are filed as a part of this Annual Report on Form 10-K.

2. Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3. Exhibits included or incorporated herein: See Exhibit Index below.

(b)

Exhibit Number		Description

2.1		Share Exchange Agreement, dated December 22, 2005 (incorporated herewith by reference to Exhibit 2.1 to Global Beverages, Inc.’s Current Report on Form 8-K dated December 22, 2005 and filed with the SEC on December 22, 2005)

2.2		Implementation Agreement, dated September 3, 2008 by and between Yarraman Winery, Inc. and Asia Distribution Solutions Limited.*

2.3		Amendment to Implementation Agreement, dated October 30, 2008 by and between Yarraman Winery, Inc. and Asia Distribution Solutions Limited.*

2.4		Share Exchange Agreement dated October 17, 2008 between Yarraman Winery, Inc. and Asia Distribution Solutions Limited.*

2.5		Exchange Agreement dated December 31, 2009 by and between Global Beverages, Inc. and Riviera Global Holdings LLC (incorporated herewith by reference to Exhibit 2.1 to Global Beverages, Inc.’s Current Report on Form 8-K dated and filed with the SEC on January 7, 2010).

- 29 -

Exhibit Number		Description

2.8		Intellectual Property Sale Agreement, dated May 26, 2009 by and between Delta Dawn Pty Ltd, as trustee for the Yarraman Road Trust, and Yarraman Winery, Inc.*

3.1		Articles of Incorporation of Global Beverages, Inc.*

3.2		Amended and Restated By-laws of Global Beverages, Inc. (incorporated herewith by reference to Exhibit A to Appendix B of Global Beverages, Inc.’s Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission March 16, 2006).

3.3		Certificate of Designation of Series A Convertible Preferred Stock*

3.4		Certificate of Designation of Series B Convertible Preferred Stock*

10.1		Lease Agreement dated May 12, 2006 between Yarraman Estate Pty Ltd and Delta Dawn Pty Limited (incorporated herewith by reference to Exhibit 10.1 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period ended March 31, 2006 and filed with the Securities and Exchange Commission on May 15, 2006)

10.2		Heads of Agreement dated March 24, 2006 between Yarraman Estate Pty Ltd. and World Icon International Limited (incorporated herewith by reference to Exhibit 10.2 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period ended March 31, 2006 and filed with the Securities and Exchange Commission on May 15, 2006)

10.3		Agreement for Services dated February 24, 2006 between Madison One Data Group Limited and Global Beverages, Inc. (incorporated herewith by reference to Exhibit 10.3 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period ended March 31, 2006 and filed with the Securities and Exchange Commission on May 15, 2006)

10.4		Agreement dated ____, 2007 between Yarraman Australia and Whinners Pty Limited*

10.5		Loan Agreement dated May 1, 2006 between Yarraman Estate Pty Ltd and Delta Dawn Pty Limited (incorporated herewith by reference to Exhibit 10.6 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the period ended March 31, 2006 and filed with the Securities and Exchange Commission on May 15, 2006)

10.6		Loan Agreement dated August 1, 2006 between Global Beverages, Inc. and Whinners Pty Ltd (incorporated herewith by reference to Exhibit 10.13 to Global Beverages, Inc.’s Annual Report on Form 10-KSB for the year ended June 30, 2006 and filed with the Securities and Exchange Commission on September 28, 2006)

- 30 -

Exhibit Number		Description

10.7		Assignment of Debts Agreement dated February 2007 between Yarraman Estate Pty Limited and Whinners Pty Limited (incorporated herewith by reference to Exhibit 10.1 to Global Beverages, Inc.’s Quarterly Report on Form 10-QSB for the quarter ended March 31. 2007 and filed with the Securities and Exchange Commission on June 25, 2007)

10.8		Employment Agreement dated July 16, 2007 by and between Yarraman Winery, Inc. and Ian Long*

10.9		10% Convertible Note Purchase Agreement dated as of September 28, 2009 by and between Global Beverages, Inc. and Prime Pacific Global Management Corporation.*

10.10		Promissory Note dated September 28, 2009 issued to Prime Pacific Global.*

10.11		Agreement (Convertible Debenture) dated November 30, 2009 between Copperart Group Superannuation Fund and Global Beverages, Inc.*

10.12		Agreement (Convertible Debenture) dated August , 2009 between Rangelodge Pty Limited, Global Beverages, Inc. and Yarraman Australia*

10.13		Agreement (Subscription for Convertible Notes and Parent Guarantee) dated February , 2009 between Delta Dawn Pty Limited, Global Beverages, Inc. and Yarraman Australia*

10.14		Deed of Loan dated June 16, 2004 between Provident Capital Limited and Delta Dawn Pty Limited*

10.15		Deed of Variation of Loan dated June 16, 2004 between Provident Capital Limited, Delta Dawn Pty Limited and Gary Blom and Yarraman Australia*

10.16		Deed of Variation of Loan dated November 9, 2004 between Provident Capital Limited, Delta Dawn Pty Limited and Gary Blom and Yarraman Australia*

10.17		Deed of Loan dated December 21, 2005 between Provident Capital Limited an Yarraman Australia*

10.18		Letter Agreements, dated July 9, 2008 between HSBC and ADSL regarding loan facility.*

10.19		Deed for the Management of the Wirrilla Vineyard dated July 1, 2009 between Vitiplus Pty Limited and Yarraman Australia.*

10.20		Cash flow Financing Agreement, dated June 25, 2009 between AR cash flow PTY limited and Yarraman Estate PTY LTD*

10.21		Deed of Guarantee and Indemnity, dated June 25, 2009 between AR cash flow PTY Limited and Stephen Gary Kulmar, Gary Blom, Ian Robert Long and Yarraman Winery Inc. and re: Yarraman Estate PTY LTD*

14.1		Code of Ethics (incorporated herewith by reference to Exhibit 14.1 to Global Beverages, Inc.’s Annual Report on Form 10-KSB for the year ended June 30, 2006 and filed with the Securities and Exchange Commission on September 28, 2006)

21.1		Subsidiaries of Global Beverages, Inc.*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Certification of Chief Executive Officer and the Principal Financial Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes Oxley Act of 2002).*

32.2		Certification of Chief Financial Officer and the Principal Financial Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes Oxley Act of 2002), filed herewith*

* filed herewith

- 31 -

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

Signature	Title	Date
/s/ Ian Long	Chief Executive Officer and Director	April 8, 2010
/s/ Ian Long	(Principal Executive Officer)

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

Signature	Title	Date
/s/ Ian Long	Chief Executive Officer and Director	April 8, 2010
Ian Long	(Principal Executive Officer)

/s/ Rod Walker	Chairman of the Board	April 8, 2010
Rod Walker

/s/ Lawrence P. Lichter	Chief Financial Officer	April 8, 2010
Lawrence P. Lichter	(Principal Financial Officer and Principal Accounting Officer)

/s/ Gary Blom	Director	April 8, 2010
Gary Blom

/s/ Stephen Kulmar	Director	April 8, 2010
Stephen Kulmar

/s/ Michael Kingshott	Director	April 8, 2010
Michael Kingshott	`

/s/ Timothy Yeo	Director	April 8, 2010
Timothy Yeo

- 32 -

ACSB Acquavella, Chiarelli, Shuster, Berkower & Co., LLP

517 Route one	1 Penn Plaza
Iselin, New Jersey, 08830	36the Floor
732.855.9600	New York, NY 10119

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Global Beverages, Inc

We have audited the accompanying consolidated balance sheet of Global Beverages, Inc (the “Company”) as of June 30, 2009 and the related consolidated statement of operations and comprehensive loss, stockholders' equity (deficit) and cash flows for the year ended June 30, 2009. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2009 and the results of their operations and their cash flows for the year ended June 30, 2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred operating losses and has negative cash flows from operations for the year ended June 30, 2009 as more fully described in Note 2. These issues raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Acquavella, Chiarelli, Shuster, Berkower & Co., LLP

Certified Public Accountants

New York, N.Y.

March 26, 2010

Annex A

GLOBAL BEVERAGES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	June 30,
	2009			2008
ASSETS
Current Assets

Accounts receivable, net	$	760,313		$	555,798
Inventory		3,362,528			4,409,833
Other receivables		—			105,842
Other assets		190,961			214,463
Total Current Assets		4,313,802			5,285,936

Property, plant and equipment, net		3,528,013			4,369,644

Intangible assets		19,459,248			249,990

	$	27,301,063		$	9,905,570

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses	$	1,929,056		$	1,483,157
Loan Payable		13,095			—
Cash deficit		38,816			37,990
Capital leases, current portion		42,539			102,720
Due to related party		3,396,616			2,334,733
Total Current Liabilities		5,420,122			3,958,601

Long Term Liabilities:
Capital leases, net of current portion		—			50,821
Long-term debt		4,627,379			5,511,308
Total Long Term Liabilities		4,627,379			5,562,129

Total Liabilities		10,047,501			9,520,730

Stockholder's Equity
Preferred stock, Series B, $.001 par value, 55,000 shares authorized
55,000 shares issued and outstanding		55			—
Common stock, $.001 par value, 90,000,000 shares authorized
39,390,476 and 38,000,000 shares issued and outstanding respectively		39,390			38,000
Additional paid in capital		30,851,807			11,019,252
Subscription receivable		(66,000	)		(88,000	)
Other comprehensive income		(456,752	)		(287,228	)
Accumulated deficit		(13,114,938	)		(10,297,184	)
Total Stockholder's Equity		17,253,562			384,840

	$	27,301,063		$	9,905,570

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

F-1

GLOBAL BEVERAGES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended
	June 30,
	2009			2008

Sales, net	$	2,162,966		$	2,318,719
Cost of sales		1,983,571			2,747,800
Gross profit (loss)		179,395			(429,081	)

Selling, general and administrative expenses		1,412,188			1,753,077
Total operating expenses		1,412,188			1,753,077

Income (Loss) from operations		(1,232,793	)		(2,182,158	)

Other (Income) Expense
Interest income		(3,852	)		(3,730	)
Interest expense		575,758			1,493,032
Other (income) expenses net		(14,500	)		(5,751	)
Merger and acquisition costs		1,007,836			—
Gain on sale of fixed asset		(1,843	)		(6,076	)
Transaction gain (loss) on foreign currency		21,560			(30,808	)
Total Other (Income) Expense		1,584,959			1,446,667

Loss before income taxes		(2,817,752	)		(3,628,825	)

Provision for income taxes		—			—

Net loss		(2,817,752	)		(3,628,825	)

Other comprehensive income (loss)
Foreign currency translation		(169,524	)		(298,205	)

Comprehensive income (loss)	$	(2,987,276	)	$	(3,927,030	)

Net loss per share:
Basic & diluted	$	(0.07	)	$	(0.14	)

Weighted average number of shares outstanding:
Basic & diluted		38,115,873			26,083,333

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

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

F-2

GLOBAL BEVERAGES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(2,817,752	)	$	(3,628,825	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Shares issued for services		267,027			315,000
Depreciation		183,098			446,416
Salary forgiven for stock payment		22,000			22,000
Amortization of discount on debt		—			763,133
(Increase) / decrease in assets:
Accounts receivables		(274,280	)		301,073
Inventory		305,435			191,281
Other receivables		82,343			(9,996	)
Other assets		(10,641	)		41,490
Increase in liabilities:
Accounts payable and accrued expenses		694,359			239,477
Accrued interest related to related party loan					205,595
Total Adjustments		1,269,341			2,515,469

Net cash used in operations		(1,548,411	)		(1,113,356	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		(62,741	)		(45,685	)
Acquisition of intangible		—			(14,423	)
Net cash provided by (used in) investing activities		(62,741	)		(60,108	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt		25,438			49,961
Cash deficit financing		—			37,990
Capital lease payments		(79,914	)		(137,460	)
Receivable from related party		1,318,797			(101,142	)
Loans payable - related party		23,500			427,172
Net cash provided by (used in) financing activities		1,287,821			276,521

Effect of exchange rate changes on cash and cash equivalents		323,332			746,871

Net decrease in cash and cash equivalents		—			(150,072	)

Cash and cash equivalents, beginning balance		—			150,072

Cash and cash equivalents, ending balance	$	—		$	—

SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Income tax payments	$	—		$	—
Interest payments	$	575,758		$	408,440
Non-cash financing and investing activities
Discount on debt	$	—		$	177,239
Conversion of related party debt to common stock	$	—		$	5,046,318
Sale of common stock for subscription receivable	$	—		$	110,000
Common shares issued for accrued services	$	584,000		$	117,000
Debt issued for inventory	$	—		$	727,524

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

F-3

GLOBAL BEVERAGES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (EQUITY)

																	Retained			Total
									Additional			Other					Earnings			Stockholders'
	Preferred Stock				Common Stock				Paid			Comprehensive			Subscription		(Accumulated			Equity
	Shares		Amount		Shares		Amount		in Capital			Income (Loss)			Receivable		Deficit)			(Deficit)

Balance as of June 30, 2005						15,000,000	$	15,000	$	1,710,751		$	134,288		$	—		(980,911	)	$	879,128

Recapitalization as result of reverse acquisition						3,496,500		3,497		(51,449	)		—					—			(47,952	)
Settlement of debt in exchange of issuance
shares of the subsidiary						—		—		931,146			—					—			931,146
Stock issued for finders fee						1,250,000		1,250		(1,250	)		—					—			—
Sale of stock						5,253,500		5,253		1,994,747			—					—			2,000,000
Other comprehensive gain						—		—		—			17,901					—			17,901
Net loss for the year ended June 30, 2006						—		—		—			—					(1,234,667	)		(1,234,667	)

Balance as of June 30, 2006		—		—		25,000,000		25,000		4,583,945			152,189					(2,215,578	)		2,545,556

Other comprehensive loss						—		—		—			(141,212	)				—			(141,212	)
Contribution from shareholders										871,307											871,307

Net loss for the year ended June 30, 2007						—		—		—			—					(4,452,781	)		(4,452,781	)

Balance as of June 30, 2007		—		—		25,000,000		25,000		5,455,252			10,977			—		(6,668,359	)		(1,177,130	)

Other comprehensive loss						—		—		—			(298,205	)		—		—			(298,205	)
Stock sale						250,000		250

GLOBAL BEVERAGES, INC. 10-K