UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 000-50370

PREMIER BEVERAGE GROUP CORP.
(Exact name of small business issuer in its charter)

Nevada		33-1041835
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

501 Madison Avenue, Suite 501, New York, NY 10022
(Address of principal executive offices)

646-820-0630
(Issuer's telephone number)


(Former name, former address and former fiscal year, if changed since last report)

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

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)		Smaller reporting company	x

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 61,201,483 shares outstanding as of March 31, 2012.

PREMIER BEVERAGE GROUP CORP.

INDEX

		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4T.	Controls and Procedures	13

PART II	OTHER INFORMATION	15
Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
	Signatures	16

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Consolidated Balance Sheets

	March 31, 2012
	(Unaudited)			December 31, 2011
ASSETS
Current assets:
Cash	$	71,647		$	21,862
Accounts receivable, net		36,804			32,424
Inventory		28,854			20,571
Prepaid expenses		2,000			23,297
Deferred financing costs		1,125			20,605
Total current assets		140,430			118,759

Property and equipment, net		1,499			1,644

Total assets	$	141,929		$	120,403

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	279,494		$	218,586
Notes payable - current portion		115,897			115,022
Total current liabilities		395,391			333,608

Long term liabilities:
Notes payable - long term, net		323,375			238,781
Total long term liabilities		323,375			238,781

Total liabilities		718,766			572,389

Commitments and contingencies

Stockholders' deficit:
Preferred stock-$0.0001 par value, 900,000 shares authorized, none issued and outstanding as of March 31, 2012 and December 31, 2011		-			-
Series A Preferred stock-$5 stated value, 660,000 shares authorized, 60,000 shares issued and outstanding as of March 31, 2012 and December 31, 2011		300,000			300,000
Series B Preferred stock-$500 stated value, 2,000 shares issued and outstanding as of March 31, 2012 and December 31, 2011		15,000			15,000
Common stock-0.00015 par value, 99,000,000 shares authorized, 61,201,483 shares issued and outstanding as of March 31, 2012 and December 31, 2011		9,180			9,180
Additional paid in capital		108,987			59,987
Accumulated deficit		(1,010,004	)		(836,153	)
Total stockholders' deficit		(576,837	)		(451,986	)

Total liabilities and stockholders' deficit	$	141,929		$	120,403

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2012			2011
Revenue:
Sales, net	$	17,215		$	26,900
Cost of goods sold		9,087			7,452
Gross profit		8,128			19,448

Operating expenses:
Selling, general and administrative		112,885			20,541
Depreciation expense		145			-
Total operating expenses		113,030			20,541

Net loss from operations		(104,902	)		(1,093	)

Other (expense)
Interest		(68,949	)		(4,550	)
Total other (expense)		(68,949	)		(4,550	)

Net loss before provision for income taxes		(173,851	)		(5,643	)

Provision for income taxes (benefit)		-			-

Net loss	$	(173,851	)	$	(5,643	)

Net loss per common share, basic	$	(0.00	)	$	(0.00	)

Weighted average number of common shares, basic		61,201,483			50,000,000

Weighted average number of common shares, diluted		63,183,096			50,000,000

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

PREMIER BEVERAGE GROUP CORP.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(173,851	)	$	(5,643	)
Adjustments to net loss to net cash provided by (used in) operating activities:
Depreciation expense		145			-
Amortization of deferred financing costs		19,480			4,550
Beneficial conversion feature in connection with convertible note payable		48,547			-
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(4,380	)		1,153
(Increase) decrease in inventory		(8,283	)		7,452
Decrease in prepaid and other current assets		21,297			1,850
Increase (decrease) in accounts payable and accrued expenses		60,908			(12	)
Net cash (used in) provided by operating activities		(36,137	)		9,350

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable		85,922			(11,871	)
Net cash provided by (used in) financing activities		85,922			(11,871	)

Net increase (decrease) in cash		49,785			(2,521	)

Cash, beginning of the period		21,862			2,521

Cash, end of the period	$	71,647		$	-

Supplemental Disclosures of Cash Flow Information:
Cash paid during period for interest	$	-		$	-
Cash paid during period for taxes	$	-		$	-

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

Notes to the Unaudited Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2012

NOTE 1 – UNAUDITED FINANCIAL INFORMATION

The unaudited financial information included for the three month interim periods ended March 31, 2012 and 2011 were taken from the books and records and are unaudited. However, such information reflects all adjustments (consisting only of normal recurring adjustments), which are in the opinion of management, necessary to reflect properly the results of operations for the interim periods presented. The results of operations for the three month period ended March 31, 2012 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2012.

NOTE 2 – FINANCIAL STATEMENTS AND BASIS OF PRESENTATION

Management has elected to omit substantially all footnotes relating to the condensed consolidated financial statements of the Premier Beverage Group Corp. (the “Company”) included in this report. For a complete set of footnotes, reference is made to the Company’s Current Report on Form 10-K for the year ending December 31, 2011 as filed with the Securities and Exchange Commission and the audited financial statements included therein.

The accompanying unaudited financial statements include the accounts of the Company and the accounts of its wholly owned subsidiary OSO Beverages Corp. (and its subsidiary Fury Distribution LLC) for all periods presented.

NOTE 3 – GOING CONCERN

The accompanying 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 accompanying financial statements, the Company incurred a net loss of $173,851 for the three months ended March 31, 2012, and as of March 31, 2012 the Company has an accumulated deficit of $1,010,004 and a net working capital deficit (total current liabilities exceeded total current assets) of $254,961. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has undertaken further steps as part of a plan to improve operations with the goal of sustaining its operations for the next twelve months and beyond to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. However, there can be no assurance that the Company can successfully accomplish these steps and or business plans, and it is uncertain that the Company will achieve a profitable level of operations and be able to obtain additional financing.

The Company’s continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. Further losses are anticipated in the development of the Company’s business, and there can be no assurance that the Company will be able to achieve or maintain profitability. The continuing operations of the Company and the recoverability of the carrying value of the assets is dependent upon the ability of the Company to obtain necessary financing to fund its working capital requirements, and upon future profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event that the Company is unable to continue as a going concern, it may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy.

NOTE 4 – INVENTORY

Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method (“FIFO”). Inventory is stated at cost and reserves are recorded to state the inventory at net realizable value. Inventory at March 31, 2012 was $28,854 as compared to $20,571 as of December 31, 2011.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at March 31, 2012 consist of the following:

	March 31, 2012 (Unaudited)			December 31, 2011
Office furniture and equipment	$	1,741			1,741
Less: accumulated depreciation		(242	)		(97	)

	$	1,499			1,644

Depreciation expense was $145 and $0 for the three months ended March 31, 2012 and 2011, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts Payable and Accrued Expenses

The Company had outstanding accounts payable and accrued expenses of $279,494 and $218,586 as of March 31, 2012 and December 31, 2011, respectively. Included in accrued expenses are consulting agreements with three individuals, including Fouad Kallamni, the Company’s President. Each of these agreements expires on September 30, 2012 and, with minor variations, provides for monthly compensation of $10,000, of which $5,000 is deferred. The aggregate amount of deferred compensation under these consulting agreements as of March 31, 2012 is $101,000.

NOTE 7 – NOTES PAYABLE

Notes Payable

At March 31, 2012 and December 31, 2011 the Company has the following notes payable:

	March 31, 2012 (Unaudited)		December 31, 2011		Interest Rate			Maturity Date
Notes Payable - Current Portion

Secured Promissory Note	$	48,500	$	48,500		0	%	5/2/2012
Secured Convertible 10% Promissory Note		6,692		6,567		10	%	5/12/2009
Unsecured Convertible 6% Promissory Notes		60,705		59,955		6	%	8/8/2010 - 9/8/2010
Total Notes Payable - Current Portion	$	115,897	$	115,022

Notes Payable - Long Term
Senior Secured Convertible Promissory Note, net of amortized debt discount of $0 and $48,319 at March 31, 2013 and December 31, 2011, respectively	$	100,000	$	51,681		0	%	12/31/2014	(1)
Unsecured Convertible Promissory Note		202,100		187,100		0	%	4/24/2012
Unsecured Convertible 8% Promissory Notes, net of amortized debt discount of $48,771 at March 31, 2013		21,275		-		8	%	12/31/2013
Total Notes Payable - Long Term	$	323,375	$	238,781

Total Notes Payable	$	439,272	$	353,803

(1) This debt was reclassified from current to long-term pursuant to ASC 470-10-45-14. On May 19, 2013, this debt was refinanced through the issuance of long-term convertible notes.

In March 2012, an additional $15,000 was advanced to the Company under the Note Purchase Agreement with Prestwick Circle Services Corp., which is currently in default. Prestwick has defaulted on its obligation to fund an additional $200,000 under the Note Purchase Agreement.

On March 28, 2012, the Company issued $70,000 of its convertible promissory notes (“March 2012 Notes) to four investors. The March 2012 Notes bear interest at the rate of 8% per annum, are due on December 31, 2013 and are convertible into shares of the Company’s common stock at the rate of $.05 per share. The March 2012 Notes will be automatically cancelled and new convertible promissory notes issued if, in connection with a convertible debt financing of the Company after March 28, 2012 and before December 31, 2013, such subsequent debt financing provides for a conversion price of less than $0.05 per share of Common Stock. In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the notes. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $49,000 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the notes. The debt discount attributed to the beneficial conversion feature is amortized over the notes’ maturity period as interest expense. The Company recognized $229 of the debt discount as interest in the period, and recognized an additional $46 of accrued interest during the period.

NOTE 8 – MATERIAL SUBSEQUENT EVENTS AND CONTINGENCIES

In preparing the accompanying consolidated financial statements, the Company has reviewed events that have occurred after March 31, 2012, through the date of issuance of the financial statements.

Default on Senior Secured Indebtedness

On April 1, 2012, the Company defaulted in the payment of a senior secured promissory note in the original principal amount of $100,000 issued to a lender on December 9, 2011. The secured lender has a first security interest in all of the Company’s assets.

Legal Proceedings

On April 9, 2012, the Company was served with a civil action summons and complaint filed in the Superior Court of New Jersey, Passaic County, with respect to the non-payment of certain unsecured promissory notes issued by the Company’s predecessor, DAM Holdings, Inc., in the amount of $60,965. The Company did not file an answer to this summons and complaint. The repayment of these notes has been guaranteed in full by a third party in connection with the merger of OSO USA LLC into our wholly-owned subsidiary, OSO Beverages Corp.

On July 27, 2012, we received notice that a default judgment had been entered against the Company with respect to a civil action summons and complaint filed in the Superior Court of New Jersey, Passaic County, for the non-payment of certain unsecured promissory notes issued by the Company’s predecessor, DAM Holdings, Inc., in the amount of $60,965. The repayment of these notes has been guaranteed in full by a third party in connection with the merger of OSO USA LLC into our wholly-owned subsidiary, OSO Beverages Corp. The Company intends to pursue its remedies against such third party with respect to this judgment.

Note Conversion

On April 23, 2013, the Company exercised its right to convert an unsecured convertible promissory note dated October 25, 2011 in the amount of $187,100 to shares of the Company’s Common Stock at the stated conversion price of $0.135 per share. The conversion resulted in the issuance by the Company 1,385,926 restricted shares of its Common Stock to the holder in full cancellation of the note.

Refinancing

On May 19, 2013, the Company issued a $225,000 Secured Amended and Restated Convertible Debenture to a single lender (“Amended Note”) which amended and restated the Company’s senior secured promissory note issued to another lender on December 9, 2011 in the original principal amount of $100,000 (“2011 Note”). The 2011 Note had been in default since April 1, 2012. Pursuant to a Forbearance Agreement entered into with the new lender, accrued penalties and costs of $150,000 with respect to the 2011 Note were added to the principal of the Amended Note. The Amended Note bears interest at the rate of 20% per annum, is due on December 31, 2014 and is, subject to certain ownership limitations, convertible into shares of the Company’s common stock. The conversion price is equal to 50% of the volume weighted average closing market price for shares of the Company’s Common Stock for the 45 trading days preceding conversion. The secured lender has a first security interest in all of the Company’s assets

New Financing

On May 19, 2013, the Company issued a Secured Amended and Restated Convertible Debenture in the amount of $150,000 to a single lender (“May 2013 Note”). The May 2013 Note bears interest at the rate of 20% per annum, is due on December 31, 2014 and is, subject to certain ownership limitations, convertible into shares of the Company’s common stock at the rate of $.02 per share. Commencing on May 15, 2014 and each month thereafter, the Company is required to pay to the lender principal in the amount of $10,000. The secured lender has a security interest in all of the Company’s assets. In addition, the loan is secured by a pledge of 31,500,000 shares of the Company’s Common Stock owned by the Company’s president.

Note Exchange

On June 3, 2013, the Company issued $70,000 of its convertible promissory notes (“June 2013 Notes) to four investors. The June 2013 Notes were issued in exchange for $70,000 of convertible promissory notes issued to these investors on March 28, 2012 (“March 2012 Notes”) pursuant to a provision in the March 2012 Notes requiring a mandatory note exchange if, in connection with a convertible debt financing of the Company after March 28, 2012 and before December 31, 2013, such financing provided for a price at which the new note may be converted into shares of the Company’ Common Stock of less than $0.05 per share. On May 15, 2013 the Company engaged in a convertible debt financing in which the conversion price one of the notes is $.02 per share and the other is variable based on a 50% discount to the volume weighted average closing market price of the Company’s stock. As a result of these financings, the conversion price of the June 2013 Notes was reset at $.01 per share. The March 2012 and June 2013 Notes are in all other respects identical. Interest that accrued on the March 2012 Note before the exchange may also be converted into shares of the Company’s Common Stock at $.01 per share.

Authorization of Additional Shares of Common Stock

The Company filed a Certificate of Amendment to its Articles of Incorporation to increase the number of shares of Common Stock that could be issued to 250,000,000 from 99,000,000. The Certificate of Amendment was effective August 12, 2013. A majority of the holders of the Company’s Common Stock approved the Certificate of Amendment, and the Company filed a Notice by Action by Written Consent of Stockholders with the Securities and Exchange Commission that was subsequently mailed to stockholders of record.

Production Financing

On August 23, 2013, the Company’s wholly-owned subsidiary, OSO Beverages Corp., (“OSO”) issued $90,000 in principal amount of its secured convertible promissory notes (“OSO Notes) to two lenders. In exchange for the OSO Notes, the Company received $60,000 in cash to be used to purchase inventory. The repayment of the OSO Notes is secured by the inventory to be purchased and all of the proceeds from the sale thereof. Beginning on November 15, 2013 and each month thereafter, principal in the amount of $4,500 is payable to each lender, with all unpaid principal due and payable on August 15, 2014. The difference between the principal amount of the OSO Notes and the amount received ($15,000 with respect to each OSO Note) will be accounted for as original issue discount. The OSO Notes are convertible into shares of the Company’s common stock at a conversion rate of $0.01 per share. As an inducement to enter into the loan transaction, each Lender subscribed to purchase 500,000 restricted shares of the Company’s common stock for a nominal consideration. As a further inducement to enter into the loan transaction, Fouad Kallamni, the Company’s President, guaranteed all payments due under each OSO Note.

Item 2. Management's Discussion and Analysis or Plan of Operation

The following discussion and analysis of our consolidated financial condition and results of operations for the three month period ended March 31, 2012 should be read in conjunction with our consolidated financial statements included elsewhere in this Quarterly Report.

Special Filing Note

We have not yet filed the following reports under the Securities Exchange Act of 1934:

Quarterly Reports on Form 10-Q for the three month periods ended:

June 30, 2012

September 30, 2012

Annual Report on Form 10-K for the 12-month period ended December 31, 2012

Quarterly Reports on Form 10-Q for the three month periods ended

March 31, 2013

June 30, 2013

We expect to file each of these reports no later than October 31, 2013. Forward looking statements in this Quarterly Report and in the Form 10-K for the calendar year ended December 31, 2011 have been made as though these reports had been timely filed with the Commission. In this regard, particular care should be taken with respect to forward looking statements made herein which should be evaluated in light of “subsequent events” disclosure in the footnotes to the financial statements accompanying this report as well as disclosure in the reports that the Company will be filing for subsequent annual and quarterly periods described above. See “CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS.”

Introductory Comments

On October 19, 2011, pursuant to the terms of an Agreement and Plan of Merger between OSO USA LLC, a Delaware limited liability company and our wholly-owned subsidiary, OSO Beverages Corp., OSO USA LLC merged into OSO Beverages Corp. OSO As a result of this merger, our historical motorcycle-related business terminated, we changed our name to Premier Beverage Group Corp. and we are now engaged in the functional beverage business described herein.

We operate our business through our wholly owned subsidiary, OSO Beverages Corp. and distribute our OSO products through its wholly owned subsidiary, Fury Distribution Holdings LLC. Another subsidiary, Captive Brands Corp., is inactive. Throughout this Quarterly Report on Form 10-Q as amended, the terms “we,” “us,” “our,” “Premier Beverage” and “our company” refer to Premier Beverage Group Corp., a Nevada corporation, and, unless the context indicates otherwise, includes these subsidiaries for all periods presented.

We require additional capital to operate our business. There can be no assurance that such capital will be available as necessary to meet our working capital requirements or, if the capital is available, that it will be on reasonable terms acceptable to us. The issuances of additional equity securities by the Company will result in dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected.

The following discussion of our plan of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report.

Forward Looking Statements

The Company cautions readers regarding forward looking statements found in the following discussion and elsewhere in this report and in any other statement made by, or on the behalf of the Company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. The Company disclaims any obligation to update forward-looking statements.

Overview

We are a consumer brand development company focused on creating, marketing and selling compelling functional beverage brands. Functional beverages, which include energy drinks, energy shots, and enhanced waters, among others, have expanded substantially in the last 10 years and disrupted the beverage landscape formerly dominated by soft drinks. The functional beverage category has uncovered a previously unexposed consumer need that traditional beverages did not address. We believe these beverages are quickly becoming the drink of choice for the younger generation, having matured from “fad” status into the mainstream market.

We operate a two-tiered strategy that blends the large upside potential of developing and owning proprietary brands with a lower risk, predictable captive brands strategy. Our flagship brand, OSO, is a premium energy beverage offered primarily to high profile on-premise accounts. “On-premise” accounts include clubs, bars, restaurants and hotels and generally where the product is consumed at the location. OSO holds a unique position as a premium energy beverage. With additional repackaging initiatives currently underway, OSO intends to further differentiate itself by offering a sleek glass bottle packaging option along with a formula that is made with 100% all natural ingredients. OSO’s positioning is sophisticated, top-shelf energy with elegant packaging, unlike mass market ‘extreme-focused’ canned energy drinks.

In addition to OSO, we intend to utilize our manufacturing and brand development skills to create high quality store brands for mass retailers (which we have dubbed “captive brands”). Our management team has prior direct experience developing captive functional beverage brands for national and regional retailers such as Walgreens, Duane Reade, Stop&Shop and Roundy’s. Our new turnkey captive brand program involves the development of a brand tailored for a specific retailer in return for a long-term vendor agreement with that retailer to manufacture and supply product. The development of the brand includes all facets of product development, including formulations, branding, packaging, distribution and marketing.

Our company is a Nevada corporation originally formed under the name Sunrise USA Inc. on July 22, 1999. Our principal place of business is located at 501 Madison Avenue, Suite 501, New York, New York 10022. Our telephone number is (646) 820-0630.

Results of Operations

The following discussion should be read in conjunction with our financial statements and the related notes thereto included elsewhere herein.

Three months ended March 31, 2012 compared with three months March 31, 2011.

For the three months ended March 31, 2012 we generated revenues of $17,215 as compared to $26,900 for the three months ended March 31, 2011, a decrease of $9,685, or 36%. Cost of goods sold for the three months ended March 31, 2012 was $9,087, generating a gross margin of $8,128. Cost of products sold for the three months ended March 31, 2011 was $7,452, generating a gross margin of $19,448. The decrease in our revenues is attributable principally to our lack of available inventory for sale and the absence of our sugar free product offering.

Selling, general and administrative expenses were $112,885 for the three months ended March 31, 2012 as compared to $20,541 for the three months ended March 31, 2011, an increase of $92,344 or approximately 450%. The increase was primarily the result of expenses related to operating a public company which were not applicable to the comparable period.

We incurred interest expense of $68,949 for the three months ended March 31, 2012. Interest expense incurred for the three months ended March 31, 2011 was $4,550. The increase of $64,399 in interest expense was primarily due to the application of non-cash beneficial conversion feature expenses related to our issuances of convertible debt.

We reported a net loss and loss applicable to common stockholders for the three months ended March 31, 2012 of $173,851. Our net loss and loss applicable to the common stockholders for the three months ended March 31, 2011 was $5,643. The increase in net loss was attributable principally to expenses related to operating as a public company and non-cash beneficial conversion feature expenses related to our financing activities.

Liquidity and Capital Resources

Since the merger in October 2011, we have funded our operations primarily through the issuance of debt securities in the amount of $187,100 of convertible notes issued in connection with the merger in October 2011 and $70,000 of convertible notes issued to investors in March 2012. As of March 31, 2012, we had $71,647 of cash on hand, $36,804 in accounts receivable, $28,854 in inventory, and $395,391 in current liabilities.

We will require additional cash to meet our operating needs for the next twelve months.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item is inapplicable.

Item 4T. Controls and Procedures

Fouad Kallamni, who was our principal executive and financial officer after the merger of OSO USA LLC into the Company on October 19, 2011 (see Item 1, Business) and for the remainder of the reporting period which ended on March 31, 2012, has concluded that the disclosure controls and procedures were neither effective prior to the merger or as of March 31, 2012. These controls are meant to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining internal controls over financial reporting and disclosure controls. Internal Control Over Financial Reporting is a process designed by, or under the supervision of, our principal executive and financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

1.	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
2.	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the registrant; and
3.	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2011, based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that as of December 31, 2011, it had material weaknesses in its internal control procedures which continue to exist as of March 31, 2012.

A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. We have concluded that our internal control over financial reporting was not effective as of December 31, 2011 and March 31, 2012.

The Company’s assessment identified certain material weaknesses which are set forth below:

Entity Level Controls

We have insufficient corporate governance policies. Our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

We currently have insufficient resources which may restrict our ability to gather, analyze and report information relative to the financial statements in a timely manner, including insufficient documentation and review of the selection and application of generally accepted accounting principles to significant non-routine transactions. In addition, the limited size of the accounting department makes it impractical to achieve an optimum segregation of duties.

Functional Controls and Segregation of Duties

We have an inadequate segregation of duties consistent with control objectives. Our management is composed of a single individual resulting in a situation where no segregation of duties exists. In order to remedy this situation we would need to hire additional staff to provide segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management intends to reassess this matter during the current fiscal year to determine whether improvement in segregation of duties is feasible.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and are a circumstance due to our small size. Management believes these weaknesses did not have a material effect on our financial results and intends to take remedial actions upon receiving funding for our business operations.

We are committed to improving our financial organization. As part of this commitment, we will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies, including:

(1)	Adding personnel with the depth of knowledge and time commitment to provide a greater level of review for corporate activities;
(2)	Continuing to update the documentation of our internal control processes, including formal risk assessment of our financial reporting processes; and
(3)	Soliciting independent directors to enhance corporate governance and Board composition.

We intend to consider the results of our remediation efforts and related testing as part of our assessment of the effectiveness of our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Inapplicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

On March 28, 2012, the Company issued $70,000 of its unsecured convertible promissory notes (“March 2012 Notes) to four investors. The March 2012 Notes bear interest at the rate of 8% per annum, are due on December 31, 2013 and are convertible into shares of the Company’s common stock at the rate of $.05 per share. The March 2012 Notes will be automatically cancelled and new convertible promissory notes issued if, in connection with a convertible debt financing of the Company after March 28, 2012 and before December 31, 2013, such subsequent debt financing provides for a conversion price of less than $0.05 per share of Common Stock.

Item 6. Exhibits

Exhibit Number		Exhibit

3.1		Articles of Incorporation⁽¹⁾
3.2		Amendments to Articles of Incorporation⁽¹⁾
3.3		Articles of Merger of Premier Beverage Group Corp. into DAM Holdings, Inc.⁽²⁾
3.4		By-Laws⁽¹⁾
4.1		Certificate of Designation Series A Preferred Stock⁽¹⁾
4.2		Certificate of Designation Series B Preferred Stock⁽¹⁾
4.3		Class A Warrant Agreement⁽³⁾
4.4		Form of Class A Warrant Certificate⁽³⁾
4.5		Specimen Common Stock Certificate⁽¹⁾
10.1		6% Convertible Promissory Notes⁽¹⁾
10.2		Stock Purchase Agreement⁽⁴⁾
10.3		Assumption and Indemnification Agreement⁽⁴⁾
10.4		Form of Unsecured Promissory Note⁽⁴⁾
10.5		Form of Note Purchase Agreement⁽⁴⁾
10.6		Agreement and Plan of Merger of OSO USA LLC into OSO Beverages Corp.⁽⁵⁾
10.8		Indemnification Agreement⁽¹⁾
10.9		Form of Senior Secured Promissory Note⁽⁶⁾
10.10		Form of Security Agreement⁽⁶⁾
10.11		Consulting Agreement with Fouad Kallamni⁽¹⁾
10.12		Consulting Agreement with Core Equity Group LLC⁽¹⁾
10.13		Consulting Agreement with Richard Fisher⁽¹⁾
10.14		Form of unsecured Convertible Promissory Noteissued in aggregate principal amount of $70,000^*
14.1		Code of Ethics⁽⁸⁾
16.1		Letter from Former Auditor⁽⁷⁾
21.1		Subsidiaries of Registrant⁽¹⁾
31.1		Certification by Fouad Kallamni, Principal Executive and Financial Officer, pursuant to Rule 13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002^*
32.1		Certification by Fouad Kallamni, Principal Executive and Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002^*

⁽¹⁾	Incorporated by reference from the Annual Report on Form 10-K for the year ending December 31, 2011
⁽²⁾	Incorporated by reference from the Current Report on Form 8-K filed on December 1, 2011
⁽³⁾	Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2007
⁽⁴⁾	Incorporated by reference from the Current Report on Form 8-K filed on October 27, 2011
⁽⁵⁾	Incorporated by reference from the Current Report on Form 8-K filed on October 24, 2011
⁽⁶⁾	Incorporated by reference from the Current Report on Form 8-K filed on December 15, 2011
⁽⁷⁾	Incorporated by reference from the Current Report on Form 8-K/A filed on December 23, 2011
⁽⁸⁾	Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2005
^*	Filed herewith.

SIGNATURES

Pursuant to the requirements 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.

		Premier Beverage Group Corp.

Date:	October 15, 2013	/s/ Fouad Kallamni
		Fouad Kallamni, President
		Principal Executive Officer and Principal Accounting Officer

Premier Beverage Group Corp 10-Q