UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
	For the fiscal year ended December 31, 2012
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
~~For the transition period from to~~	For the transition period from to

Commission File Number: 000-50370

_____________________________________________

PREMIER BEVERAGE GROUP CORP.

(Exact name of registrant as specified in its charter)

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

501 Madison Avenue, Suite 501

New York, NY 10022

(Address of principal executive offices)

(646) 820-0630

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, no par value		None

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

~~Indicate~~ Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ o No þ

Indicate by checkmark 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 þ No ¨o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨o

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. ¨ o

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. (Check one):

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

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

As of ~~April~~March 2431, ~~2012~~2013, the aggregate market value of such common stock held by non-affiliates was approximately $1297,~~188,059~~015 using the closing price on that day of $.0401 per share.

As of ~~April~~March 2431, ~~2012~~2013, there were 61,201,483 shares of the Company’s common stock issued and outstanding.

Documents Incorporated By Reference:

None.

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:

March 31, 2012

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~~ September 30, 2013. Forward looking statements in this Annual Report on Form 10-K for the calendar year ended December 31, 2011 have been made as though this report 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.”

We expect to file each of these reports prior to or about May 15, 2014. Forward looking statements in this Annual Report 1 have been made as though this report 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.”

EXPLANATORY NOTE

Unless otherwise indicated or the context otherwise requires, all references in this Annual Report on Form 10-K to “we,” “us,” “our,” “Premier Beverage Group” and the “Company” are to Premier Beverage Group Corp., a Nevada corporation, and our wholly-owned subsidiaries, OSO Beverages Corp., Fury Distribution Holdings LLC and Captive Brands Corp.

In addition, unless otherwise indicated or the context otherwise requires, all references in this Annual Report to “OSO” refers to our premium beverage sold under the brand name “OSO.”

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K (Report) contains a number of forward-looking statements that reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this Report other than statements of historical fact, including statements that address operating performance, the economy, events or developments that management expects or anticipates will or may occur in the future, including statements related to volume growth, revenues, profitability, distributor channels, new products, adequacy of funds from operations, cash flows and financing, our ability to continue as a going concern, potential strategic transactions, statements regarding future operating results and non-historical information, are forward-looking statements. In particular, the words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” “will,” “can,” “plan,” “predict,” “could,” “future,” "continue," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that the statement is not forward-looking.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions and apply only as of the date of this Report. Our actual results, performance or achievements could differ materially from historical results as well the results expressed in, anticipated or implied by these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In particular, our business, including our financial condition and results of operations and our ability to continue as a going concern may be impacted by a number of factors as disclosed in this Report. For a discussion of some of the factors that may affect our business, results and prospects, see “Item 1A. Risk Factors.” Readers are also urged to carefully review and consider the various disclosures made by us in this Report and in our other reports we file with the Securities and Exchange Commission, including our periodic reports on Forms 10-Q and current reports on Form 8-K, and those described from time to time in our press releases and other communications, which attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.

PREMIER BEVERAGE GROUP CORP.

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2011~~2012

Table of Contents

		Page
PART I	~~PART I~~
Item 1.	Business	34
Item 1A .	Risk Factors	10
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
PART II	~~PART II~~
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	2120
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2221
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	2524
Item 8.	Financial Statements and Supplementary Data	2524
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	25
Item 9A.	Controls and Procedures	2625
Item 9B.	Other Information	2726
PART III	~~PART III~~
Item 10.	Directors, Executive Officers and Corporate Governance	27
Item 11.	Executive Compensation	2928
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	2928
Item 13.	Certain Relationships and Related Transactions, and Director Independence	3029
Item 14.	Principal Accountant Fees and Services	3029
PART IV	~~PART IV~~
Item 15.	Exhibits and Financial Statement Schedules	3029
SIGNATURES		3231
EX-23.1
EX-31.1
EX-32.1

PART I

ITEM 1. BUSINESS.

Background

On October 19, 2011, pursuant to the terms of an Agreement and Plan of Merger between OSO USA LLC, a Delaware limited liability company ~~(“OSOLLC”)~~ and our wholly-owned subsidiary, OSO Beverages Corp., OSOLLC merged into OSO Beverages Corp. OSO ~~Beverages~~As ~~was~~a ~~the~~result ~~surviving corporation, and we issued the principal members~~ of ~~OSOLLC~~this 50merger,~~000,000~~ ~~newly issued restricted shares of~~ our ~~common~~historical ~~stock~~business ~~as consideration for all of the outstanding membership interests of OSOLLC. Effective October 19~~terminated, ~~2011,~~we changed our ~~historical~~name ~~business terminated,~~ and we are now engaged in the new business ~~set~~described ~~forth in Item 1 of this Annual Report~~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 Annual Report on Form 10-K 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 currently have insufficient working capital to carry on normal day-to-day operations. Although we continue to serve customers on a limited basis from existing inventory, we are unable to purchase additional inventory or actively market our products to new accounts. We have no payroll, and current consulting fee obligations are being accrued. Our principal focus since the end of the first quarter of 2012 has been finding additional capital. 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 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 foregoing statements and with the financial statements and the related notes thereto included elsewhere in this Annual Report.

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,~~ weWe ~~intend~~operate ~~to utilize~~ our ~~manufacturing~~business ~~and~~principally ~~brand~~through ~~development~~our ~~skills~~wholly toowned 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 Walgreenssubsidiary, ~~Duane~~OSO ~~Reade,~~Beverages ~~Stop&Shop and Roundy’s~~Corp. ~~Our~~We ~~new~~distribute ~~turnkey~~our ~~captive brand~~OSO ~~program~~products ~~involves~~through ~~the~~our ~~development~~wholly ofowned 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 developmentsubsidiary, ~~including~~ ~~formulations,~~Fury ~~branding,~~Distribution ~~packaging,~~Holdings ~~distribution and marketing~~LLC.

We Our ~~operate~~company ~~our~~is ~~business through~~a ~~our~~Nevada ~~wholly~~corporation ~~owned~~originally ~~subsidiaries,~~formed ~~OSO~~on ~~Beverages~~July ~~Corp~~22, 1999. ~~and~~We ~~Captive~~changed ~~Brands~~our name to Premier Beverage Group Corp. Wein ~~distribute~~November ~~our~~2011. ~~OSO~~Our ~~products~~principal ~~through~~place ~~our wholly~~of ~~owned~~business ~~subsidiary~~is located at 501 Madison Avenue, ~~Fury~~Suite ~~Distribution~~501, ~~Holdings~~New ~~LLC~~York, New York 10022. Our telephone number is (646) 820-0630.

Our company is a Nevada corporation originally formed as Sunrise USA Inc. on July 22, 1999. We changed our name to Premier Beverage Group Corp. in November 2011. Our principal place of business is located at 501 Madison Avenue, Suite 501, New York, New York 10022. Our telephone number is (646) 820-0630.4

Products

We currently operate ~~two~~one ~~distinct~~ business ~~units~~unit offering functional ~~beverage products as follows:~~beverages.

OSO

Our flagship brand is OSO, a premium energy beverage that we currently sell to on-premise accounts in New York City. While energy drinks have exploded in mass retail environments, on-premise accounts have been forced to accept a mass retail product because it was the only energy drink on the market. Patrons of high-end establishments demand premium “call” spirits, but yet settle for the same energy drink mixer that would be found at a gas station. Industry trends indicate that 34% of 18-24 year olds are regular energy drink consumers and that half of all college students consume at least 1 energy drink per week. This provides a significant base that will mature and look for new alternatives as their tastes change. Just as college students will graduate from a cheap beer to craft brews, fine spirits or wine as they get older and their disposable incomes increase, we believe their taste for energy drinks will also mature and that they will graduate to a more sophisticated product with higher quality ingredients matching the surrounding environment of the high-end establishment in which they are hanging-out. This is OSO, a premium offering for discerning consumers that set themselves apart or have graduated from mainstream “extreme” energy drink brands.

OSO (pronounced “O-SO”) was developed as the first premium energy beverage, made from all natural ingredients to create a better tasting product and packaged in a way that elevates it from just a mainstream drink to a coveted world-class energy beverage. It is an energy drink fitting of the environment in which it is sold. The name is derived from the chemical composition of Taurine, its active ingredient. We currently offer OSO in an 8.3oz can in two flavors, Original and Light. OSO was originally formulated in Austria, widely recognized as the motherland of energy drinks, where it is also manufactured.

In 2011, we undertook an initiative to repackage and reformulate our OSO product line. The key objectives of this initiative were to:

Provide a premium, sophisticated, world-class look across all of our OSO products

Design and introduce an iconic glass bottle packaging

Reformulate our products to be 100% all natural, and be the world’s best tasting energy beverage

With the new designs we have completed, our planned logo and packaging will now be consistent with our premium identity. We chose ‘Gold’ as a primary color for our palate for its precious stature, and used Gold and White Gold to describe our Original and Light flavors. In our efforts, we engaged a world renowned packaging team to rebrand OSO. We designed a bottle that provided a premium identity, but also stayed within the reach of mainstream consumers. Similar to the Coca-Cola bottle, we believe our iconic form will be globally accepted across geographies and genres.

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Captive Brands

In November 2011, we announced our intent to enter into the captive brands functional beverage business, which we formalized with the formation of Captive Brands Corp. in January 2012. Captive brands are store brands that differentiate themselves based on brand versus solely price positioning – the next generation of “generics” or “private labels.” These brands are promoted head-to-head with national brands, receive premium shelf space, and generally are products that match national brands in terms of quality. Despite the brand development and promotion costs, captive brands tend to have a higher margin for retailers compared to national brands and therefore are gaining favor across all sectors and categories. This has become especially true in recent years given the rough economic environment, which has consumers and retailers alike looking for ways to save money but not sacrifice quality.

4 We have suspended our captive brands initiative pending the receipt of additional capital.

The components of captive brands that are critical to get right in order to win the trust of consumers include brand, packaging, and product. The brand needs to be appealing, not look like a generic or knock-off. The packaging needs to reflect quality, not a cheap me-too product cutting corners. And, finally, the product that is being purchased needs to perform as well, if not better, than the national brands against which it competes.

Through our captive brands business, we plan to offer a turnkey program for retailers from brand development through to product manufacturing in return for an exclusive supply agreement and/or an ongoing royalty on sales of the products. By partnering with the retailer, we gain a significant competitive advantage and unmatched support within the store. These programs provide us with predictable cash-flow, order-backed capital allocation, and scale which can be shared with our owned brands like OSO to reduce cost and risk in product development.

In addition to the dynamics listed above, we believe our captive brands program brings several benefits to our owned brands as follows:

• Developing close relationships with retailers that ultimately may sell our owned brands in the future;

• Understanding retailers’ product preferences, priorities and perceptions;

• Understanding factors which result in retail success; and

• Understanding price points that are attractive to consumers and retailers.

Industry Background

Our products compete in the functional beverage market, a highly competitive space that includes large companies like Red Bull, Coca-Cola and Pepsi, medium sized companies like Hansen and Jones Soda, and a wide variety of smaller companies. Industry players are generally attracted to this category due to its sheer size and the wide range of tastes and preferences of its customer’s demographics. Even a very small percentage share of these markets can provide a meaningful business.

According to the market research firm Mintel, in 2007, non-alcoholic beverage sales in the United States reached $84.5 billion. The industry experienced impressive growth considering the top three segments (milk, carbonated drinks and fruit juices) which account for 62% of total market sales displayed flat or declining sales compared with the same period a year earlier. Much of the industry growth can be attributed to a new generation of beverages that offer specific functional benefits to the consumer such as energy, vitamins or antioxidants. These beverages are classified as functional beverages and include energy drinks, ready-to-drink teas and designer waters.

Growth in the functional beverage category has soared as health and wellness take on a more predominant role in the American consumer’s life. In 2008 functional beverage sales globally were valued at $26.8 billion with a compound annual growth rate of 8.6%. Energy drinks hold 47.3% of the global functional beverage market share driving the overall category growth. According to a Mintel 2009 report, global energy drinks sales have grown more than 240% from 2004 to 2009. Astoundingly, the US energy drink market alone is anticipated to more than double to $19.7 billion by 2013, which is a 160% increase from just that of 2008 (Datamonitor 2008). The four main players - Red Bull, Hansen’s Natural, Coca-Cola and PepsiCo - control roughly 75% of the U.S. energy drink market, leaving an increasing number of entrepreneurs in pursuit of the remaining 25% market share.

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According to Mintel in 2009, young consumers are driving the sales trends with 34% of 18-24 year olds being categorized as regular energy drink users. Over half of all college students consume at least 1 energy drink per week due to a lack of sleep or to mix with alcohol (Miller 2008). The demographics of a strong young (and maturing) consumer base combined with the strong overall market growth projections indicate an extremely attractive market which will continue to evolve and provide opportunity for new and existing players.

Business Strategy

Our business strategy revolves around the concept of building powerful and relevant brands that are distinct from existing products in the functional beverage category. We build brands through a business strategy coupling the high return potential of building owned brands with a lower risk, more predictable captive brands strategy to support our operations and build retailer relationships. While there is economic potential for both of these strategies, it is our primary strategy to use the captive brands business as a solid base business and springboard for our owned brands.

Our business strategy targets the two primary sectors which are growing in this unique economic environment: the high-end premium and the value-conscious consumers. Our products cater to both of these markets. In addition, we believe our business structure provides a natural risk-mitigation strategy that balances the lower margin, long-term predictive revenue of a captive brand contract with the higher risk, higher reward of developing our owned brand, OSO.

Marketing and Sales

Marketing and Sales

We believe that brand recognition and brand loyalty begin with a strong foundation of loyal trend setters in specially chosen venues and markets. The energy beverage category includes products from numerous newcomers, and customers have demonstrated an ability to quickly discern a cheap knock off from a true winner. Our product introduction strategy employs these beliefs and is evidenced by our market strategies.

Historically, OSO has been sold to exclusive venues and on-premise accounts primarily through relationships developed by our founder, Fouad Kallamni. Through Mr. Kallamni’s network, OSO has been able to penetrate exclusive, tight knit on-premise venues in New York City. Our general market penetration strategy includes tactical, ground level campaigns aimed at converting trend setting individuals from the complacency of mainstream energy drinks into the elegance of OSO energy beverages. Through our experience and research, we understand that the exclusive on-premise venues are where people go to be seen, and where lifestyle trends are developed and perpetuated. On-premise accounts include high end clubs, bars, upscale hotels, casinos, restaurants and other fine establishments where the product is consumed “on the premises”. They are frequented by tastemakers, trendsetters, celebrities and people of importance in our target market. Through building OSO from this important ground level, we believe that we are securing a foundation that will provide the groundwork for years of success in not only on-premise accounts but ultimately in retail at an appropriate time.

Upon launch of our redesigned OSO products, we intend to employ an aggressive marketing strategy initially targeted in the key market of New York City, where we already have a strong presence with certain top tier on premise accounts. Our penetration plan calls for six months of heavy ground level activity in trend setting markets, getting into as many of the most exclusive on-premise venues as possible. We intend to use on the ground resources in each market and will build our reputation through targeted marketing events, sponsorships, specific on-premise promotions, sampling initiatives, the use of trend setting individuals and other promotional strategies. Our goal in each territory is to introduce OSO as clearly better, and the first top shelf ultra premium energy beverage in a market that does not offer one. After nine months in a territory, we intend to begin to introduce our products into select retailers, with a goal of entering select retail establishments within the first twelve months.

While our initial penetration strategy is beginning in New York, we have a roadmap leading to other important cities using the same tactical strategy. Our near term focus will be on the East Coast, including Miami, Boston, Philadelphia, Atlanta and Washington DC. From there we will seek to enter the West Coast through Los Angeles and Las Vegas, and Midwestern and Southern markets through Chicago and Austin. Upon completion of our campaigns in these initial cities, we will begin to seek nationwide distribution and retail relationships that will ultimately take OSO to the next level of maturity as it moves into the highly coveted mass market for energy drinks.

Our goal for each OSO market is to generate significant interest in our products through the initiatives detailed above to attract top tier distribution partners. We have identified certain desired distribution partners in several of our planned markets, beginning with the East Coast.

In our CaptiveBrands division, we employ a different marketing strategy. Our founder and president has developed captive brands in the functional beverage category historically, and we intend to continue this through turnkey programs marketed to retailers. Our captive brand turnkey program involves the development of a brand tailored for a specific retailer in return for a long term agreement with that retailer to manufacture and supply product. The development of the brand includes all facets of product development, including formulations, branding, packaging, and marketing. We are currently marketing our program to retailers based in the United States through relationships we have developed with brokers, buyers, retailers, distributors and other industry players. We intend to continue to attend trade shows and access our wide network of beverage and retail contacts in order to further develop our captive brand programs.

Competition

The success and popularity of functional beverages has created an extremely competitive environment. The principal areas of competition are taste, pricing, packaging, development of new products and flavors, and marketing campaigns. Our products compete with a wide range of drinks produced by a relatively large number of manufacturers, any of which have substantially greater financial, marketing and distribution resources than we do.

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Important factors affecting our ability to compete successfully include taste and flavor of products, trade and consumer promotions, rapid and effective development of new, unique cutting-edge products, attractive and different packaging, branded product advertising and pricing. We also compete for distributors who will concentrate on marketing our products over those of our competitors, provide stable and reliable distribution, and secure adequate shelf space in retail outlets.

In the energy drink category, the industry is dominated by five brands: Red Bull, Monster, Rockstar, Full Throttle and AMP. Red Bull is the industry leader, having pioneered the energy drink category. Monster in 2007 was second to Red Bull in terms of revenues, according to New Nutrition Business. Rockstar, a private company with a distribution agreement with Pepsi, has the third highest revenues, followed by Full Throttle, a Coca-Cola brand and AMP, which is owned by Pepsi.

Big beverage conglomerates have been taking market share by creating their own beverages, or through acquiring smaller proven functional beverage companies. Coca-Cola acquired Glacéau and its VitaminWater and Fuze Beverages, while PepsiCo acquired sparkling beverage maker Izze natural, Ardea and its Airforce Nutrisoda, and super-premium juice maker Naked Juice in a bid to expand their non-carbonated beverage portfolios. That being said, new entrants continue to gain market share by focusing on new discoveries and vitamin enhancements to generate buzz on their product.

In order for us to be successful competing in the beverage industry, we must provide an offering that differentiates itself from the competition. In December 2011, we provided the market with an inside look at our new packaging for OSO, which includes a sleek glass bottle version and a redesigned aluminum can. We believe our packaging redesign more accurately reflects the top shelf premium identity to which we aspire, and is unique in the energy drink category. With our CaptiveBrands products, we intend to compete with name brands by partnering with retailers to create store brands. By implementing this strategy, we align ourselves with the retailer and incentivize them to position our products favorably in the store at a compelling price for customers. Although we believe our strategies are sound, there can be no assurance that we will be able to execute effectively on these strategies or that the market will accept them or that our competition will not be more successful in implementing similar strategies or counter strategies to our own.

Distribution and Production

Distribution

We currently distribute our OSO products through our wholly owned distributor, Fury Distribution Holdings LLC. We intend to seek distribution relationships through regional and/or national distribution companies upon launch of our redesigned OSO cans and new bottles. We have been in discussions with certain key players. We are currently aggressively seeking new or expanded relationships with third-party distributors and will continue to pursue such relationships, providing a wider reach for our OSO products. However, we cannot assure you that we will be successful; and if we are not successful, we may need to curtail operations or cease operating our business.

With our captive brand products, we plan to distribute our products in the United States directly to certain warehouses or distribution centers of our customers, which in turn provide distribution into their retail stores.

Manufacturing

We do not directly manufacture our products but rather outsource the manufacturing to third-party bottlers and contract packers. We provide our third-party manufacturers with the ingredient blends, juices, flavors, sweeteners and other ingredients, as well as our cans, labels, trays and boxes for our beverage products. Depending on the product, the third-party bottlers add filtered water, sweeteners, and vitamin blends for the manufacture and packaging of the finished products into approved containers in accordance with our formulas.

We presently use Starzinger for the bottling and contract packaging of our OSO line of beverages. We do not have any formal written agreements in place with any of our bottlers. If our relationship with Starzinger were to terminate, we believe that we could obtain alternative manufacturing and co-packing facilities in the United States with adequate capacity for most of our products at commercially reasonable rates within a reasonably short time period. We continue to seek alternative and/or additional manufacturing and packing facilities in the United States with adequate capacity for the production of our various products to minimize the risk of any disruption in production, minimize our shipping and handling costs, and to reduce our overall cost of producing products.

For our CaptiveBrands products, we intend to enter into contract packing arrangements with either domestic or international vendors, depending on the type of program, location of the deliveries, and products to be sold. We maintain an active network of contract packing vendor relationships both in the U.S. and overseas.

Our ability to estimate demand for our products is imprecise, particularly with new products, and may be less precise during periods of rapid growth, particularly in new markets. If we materially underestimate demand for our products or are unable to secure sufficient ingredients or raw materials including, but not limited to, glass and plastic bottles, aluminum cans, labels, flavors, vitamins, certain sweeteners, or packing arrangements, we might not be able to satisfy demand on a short-term basis.

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Raw Materials

The principal raw materials which we use are aluminum cans and ends, labels, nutrive and non-nutrive additives, concentrates and sweeteners, the costs of which are subject to fluctuations. We are uncertain whether the prices of these or any other raw materials or ingredients will continue to fluctuate in the future.

Generally, the raw materials that we use in our business are readily available from numerous sources. However, some raw materials are manufactured by a limited number of companies, including some of our ingredients and our aluminum cans.

~~For our OSO products,~~ weWe purchase beverage flavors, concentrates, juices, vitamins, sweeteners as well as other ingredients through a sole supplier, Starzinger GmbH. We have identified alternative suppliers for many of the ingredients contained in our beverages. We have identified alternative suppliers for many of the supplements contained in many of our beverages. We seek to develop back-up sources of supply for certain of our flavors and concentrates, and to conclude arrangements with suppliers which would enable us to obtain access to certain concentrates or flavor formulas in certain circumstances.

For our CaptiveBrands programs, we leverage our network of US based and international relationships to provide the best product at the best price for the specific customer. We have several ingredient suppliers and packaging suppliers available to support our programs.

Regulation

There are no known existing or probable governmental regulations that would adversely affect our business.

As a beverage producer, however, we must comply with various federal, state, provincial, local and foreign laws relating to production, packaging, quality, labeling and distribution, including, in the U.S., those of the federal Food, Drug and Cosmetic Act, the Fair Packaging and Labeling Act, the Federal Trade Commission Act, the Nutrition Labeling and Education Act and California Proposition 65. We are also subject to various federal, state, provincial, local and foreign environmental laws and workplace regulations. These laws and regulations include, in the U.S., the Occupational Safety and Health Act, the Unfair Labor Standards Act, the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Federal Motor Carrier Safety Act, laws governing equal employment opportunity, customs and foreign trade laws and regulations, laws relating to the maintenance of fuel storage tanks, laws relating to water consumption and treatment, and various other federal statutes and regulations. These laws and regulations may change as a result of political, economic, or social events. Such regulatory changes may include changes in food and drug laws, laws related to advertising, accounting standards, taxation requirements, competition laws and environmental laws, including laws relating to the regulation of water rights and treatment. Changes in laws, regulations or government policy and related interpretations may alter the environment in which we do business, which may materially adversely affect our business, prospects, financial condition, and results of operations.

Intellectual Property

Our intellectual property includes trademarks related to OSO as well as trade secrets relating formulation and bottling which we have licensed from our sole officer. In general, trademark registrations expire 10 years from the filing date or registration date. All trademark registrations may be renewed for a nominal fee.

Although we do not believe that we infringe the proprietary rights of third parties, there can be no assurance that third parties will not claim infringement by us with respect to past, current or future technologies. Any such claim, whether meritorious or not, could be time-consuming, result in costly litigation and could have a material adverse effect upon our business, results of operations and financial condition.

We consider our trademarks and trade secrets described above to be of considerable value and importance to our business.

Seasonality

Our sales are seasonal and we experience fluctuations in quarterly results due to many factors. Our current portfolio of functional beverage products, namely energy drinks, tend to see higher volumes in warmer months, with spikes around specific holiday and high profile events in the colder months. We expect that our sales will vary from quarter to quarter based on this dynamic. As a result, period-to-period comparisons of sales volumes may be less meaningful and should not be relied upon as any indication of future performance or results expected for the fiscal year.

	9

Employees

We currently have ~~three staff~~no ~~members~~employees ~~under~~or ~~consulting~~compensated ~~agreements.~~personnel, Inalthough ~~addition~~Mr. toKallamni ~~this~~devotes ~~staff,~~substantial wetime ~~employ~~to the ~~services~~business ofon ~~several~~an ~~specialist~~uncompensated ~~independent contractors for design, artwork, sales and quality control~~basis. WeFrom ~~consider~~time ~~our relations with our staff members~~ to betime ~~good.~~we We have ~~never~~ ~~had a work stoppage, and no employees are represented under collective bargaining agreements. We have~~ entered into consulting agreements with certain of our personnel ~~and intend to enter into formal employment agreements as soon as practicable~~.

Securities Exchange Act Reports and other Available Information

We make available on or through our website at www.premierbeveragegroup.com certain reports and amendments to those reports that we file with or furnish to the Securities and Exchange Commission (SEC) in accordance with the Securities Exchange Act of 1934, as amended (“Exchange Act”). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and Section 16 filings and amendments thereto. Our Code of Ethics is also available on our website. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.

A copy of any of the materials filed with or furnished to the SEC are available free of charge and can be mailed to you upon request to Premier Beverage Group Corp., 501 Madison Avenue, Suite 501, New York, New York 10022.

Item 1A. RISK FACTORS

You should carefully consider the following risk factors that may affect our business, including our financial condition and results of operations. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business. If any of the following risks actually occur, our business could be harmed, the trading price of our common stock could decline and you could lose all or part of your investment in us.

We have a history of losses and may not achieve profitability in the foreseeable future.

We have generated only limited revenues from product sales and have incurred net losses, ~~excluding one-time gains in 2011,~~ of ~~approximately~~ $~~204~~482,~~400~~690, ~~$49,000~~ and $56204,~~600~~359 for the fiscal years ended December 31, ~~2011,~~2012 ~~December 31, 2010~~ and December 31, ~~2009~~2011, respectively. At December 31, ~~2011~~2012, we and our subsidiaries had an accumulated deficit of ~~approximately~~ $~~836~~1,~~153~~318,843 on a consolidated basis. Since inception, we have incurred losses and have had capital and stockholders’ deficits and limited cash to fund operations. We expect to incur additional operating losses, as well as negative cash flows from operations, for the foreseeable future, as we continue to expand our marketing efforts ~~with respect to our products~~, continue to seek new relationships with distributors and continue our research and development of additional products. As a result there can be no assurance that we will ever achieve or sustain profitability.

We will need additional capital in order to satisfy our business objectives.

To ~~date,~~We wecurrently have ~~financed~~insufficient ~~our~~working capital to carry on normal day-to-day operations. ~~principally~~Although ~~through~~we ~~private~~continue ~~placement~~to ofserve ~~our~~customers ~~securities,~~on ~~short~~a ~~term~~limited ~~debt~~basis from existing inventory, ~~production~~we ~~financing and~~are ~~cash~~unable ~~flow~~to ~~from~~purchase ~~operations~~additional inventory or actively market our products to new accounts. OnWe ~~March~~have ~~28,~~no ~~2012~~payroll, weand ~~closed~~current aconsulting ~~private~~fee ~~placement~~obligations ofare ~~our~~being ~~debt~~accrued. ~~securities~~Our ~~from~~principal ~~which~~focus wesince ~~received net~~the ~~proceeds~~end of ~~$70,000~~the Wefirst ~~estimate~~quarter ~~that~~of we2012 ~~will~~has ~~require~~been ~~substantial~~finding additional ~~financing~~capital. atThere ~~various~~can ~~intervals,~~be ~~including~~no ~~later in~~assurance ~~2012,~~that insuch ~~order~~capital towill ~~continue~~be ~~our~~available ~~brand~~as ~~development~~necessary ~~and~~to ~~business~~meet ~~development~~our ~~programs,~~working ~~including~~capital ~~significant~~ requirements ~~for operating expenses~~or, ~~purchase~~if ofthe ~~inventory,~~capital ~~commercialization~~is ofavailable, ~~our~~that ~~products~~it ~~and~~will ~~intellectual~~be ~~property~~on ~~protection~~reasonable ~~and~~terms ~~enforcement~~acceptable us. The ~~amount~~issuances of additional ~~capital~~equity wesecurities by the Company will ~~require,~~result in dilution in the ~~timing~~equity interests of our ~~capital~~current ~~needs~~stockholders. ~~and~~Obtaining ~~the~~commercial ~~availability~~loans, ofassuming ~~financing~~those ~~to fund~~loans ~~those~~would ~~needs~~be available, will ~~depend~~increase onour aliabilities ~~number~~and offuture ~~factors,~~cash ~~including~~commitments. If we are unable to obtain financing in the ~~performance~~amounts ofand ~~our~~on terms deemed acceptable, the business and ~~the~~future ~~market~~success ~~conditions~~may ~~for~~be ~~debt or~~adversely ~~equity~~affected. ~~financing~~The following risk factors should be read with the foregoing statements in mind.

We can provide no assurance that additional funding will be available on a timely basis or on terms acceptable to us, or at all. In the event that we are unable to obtain such financing, we will not be able to fully develop and commercialize our products.10

~~Our~~ To ~~future~~date, ~~capital~~ we have financed our operations principally through private placement of our securities, short term debt, production financing and cash flow from operations. On March 28, 2012, we closed a private placement of our debt securities from which we received net proceeds of $70,000. In addition, we received $15,000 under an existing note purchase agreement. We estimate that we will require substantial additional financing at various intervals in order to continue our brand development and business development programs, including significant requirements for operating expenses, purchase of inventory, commercialization of our products and intellectual property protection and enforcement. The amount of additional capital we will require, the timing of our capital needs and the availability of financing to fund those needs will depend ~~upon~~on ~~many~~a number of factors, including: the performance of our business and the market conditions for debt or equity financing.

· We ~~continued~~can ~~progress~~provide inno ~~owned~~assurance ~~and~~that ~~captive~~additional ~~brand~~funding ~~development~~will ~~programs;~~be available on a timely basis or on terms acceptable to us, or at all. In the event that we are unable to obtain such financing, we will not be able to fully develop and commercialize our products.

· Our ~~competing~~future ~~commercial~~capital ~~and~~requirements ~~market~~will ~~developments;~~depend upon many factors, including:

· ~~our~~continued ~~ability~~progress toin ~~establish~~our ~~additional~~brand ~~collaborative~~development ~~relationships with mass merchants~~programs; ~~and~~

· ~~effects~~competing ofcommercial ~~our~~and ~~commercialization~~market ~~activities.~~developments;

10· our ability to establish additional collaborative relationships with mass merchants; and

If· weeffects ~~cannot secure adequate financing when needed, we may be required to delay, scale back or eliminate one or more~~ of our ~~product~~commercialization ~~development programs or to enter into license or other arrangements with third parties to commercialize products that we would otherwise seek to develop and commercialize ourselves~~activities. ~~In such event, our business, prospects, financial condition and results of operations may be materially adversely affected.~~

~~Because~~ If we ~~have~~cannot ~~had~~secure ~~only~~adequate ~~limited operations~~financing when needed, ~~investors~~we may ~~not~~be ~~have~~required ato ~~sufficient~~delay, ~~history~~scale onback ~~which~~or eliminate one or more of our product development programs or to ~~base~~enter aninto ~~investment~~license ~~decision~~or other arrangements with third parties to commercialize products that we would otherwise seek to develop and commercialize ourselves. In such event, our business, prospects, financial condition and results of operations may be materially adversely affected.

~~Our OSO and CaptiveBrands~~ ~~business~~Because ~~subsidiaries~~we ~~are~~have had only ~~recently formed. In October 2011, OSO Beverages Corp. acquired OSO USA LLC, an entity that was formed in 2009 and that conducted~~ limited ~~business activities during 2009~~operations, ~~2010~~investors ~~and~~may ~~2011.~~not ~~Our Captive Brands Corp. subsidiary was formed in January 2012. Accordingly, we~~ have a ~~limited~~sufficient ~~operating~~ history ~~upon~~on which ~~investors~~to ~~may~~base ~~evaluate~~an ~~our~~investment ~~prospects for success~~decision. Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly developing markets such as the functional beverage industry. Such risks include, among others, the following:

· Our ~~competition;~~OSO subsidiary is only recently formed. In October 2011, OSO Beverages Corp. acquired OSO USA LLC, an entity that was formed in 2009 and that conducted limited business activities during 2009, 2010, 2011 and 2012. Accordingly, we have a limited operating history upon which investors may evaluate our prospects for success. Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly developing markets such as the functional beverage industry. Such risks include, among others, the following:

· ~~need for acceptance of products~~competition;

· ~~ability~~need tofor ~~anticipate~~acceptance ~~and~~of ~~adapt to a competitive market~~products;

· ~~amount~~ability ~~and~~to ~~timing~~anticipate ~~of operating costs~~ and ~~capital~~adapt ~~expenditures relating~~ to ~~expansion~~a ofcompetitive ~~our business, operations, and infrastructure~~market; ~~and~~

· ~~dependence~~amount ~~upon~~and ~~key~~timing ~~personnel.~~of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and

We· ~~cannot~~dependence beupon ~~certain that~~key ~~our strategy will be successful or that we will successfully address these risks~~personnel. ~~In the event that we do not successfully address these risks, our business, prospects, financial condition and results of operations could be materially and adversely affected.~~

We depend on our distributors, retailers and brokers to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets. 11

~~Our ability to establish~~ aWe ~~market~~cannot ~~for~~be ~~our~~certain ~~brands~~that ~~and products in new geographic distribution areas, as well as to maintain and expand~~ our ~~existing~~strategy ~~markets, depends~~will onbe ~~our ability to establish and maintain~~ successful ~~relationships~~or ~~with~~that ~~reliable~~we ~~distributors,~~will ~~retailers~~successfully ~~and~~address ~~brokers~~these ~~strategically positioned to serve those areas~~risks. ~~Our~~In ~~distributors, retailers and brokers sell and distribute competing products, and our products may represent a small portion of their business. To~~ the ~~extent~~event that ~~our~~we ~~distributors, retailers and brokers are distracted from selling our products or~~ do not ~~employ~~successfully ~~sufficient~~address ~~efforts~~these inrisks, ~~managing and selling~~ our ~~products~~business, ~~including re-stocking the retail shelves with our products~~prospects, ~~our~~financial ~~sales~~condition and ~~profitability~~results ~~will be adversely affected. Our ability to maintain our distribution network and attract additional distributors, retailers and brokers will depend on a number~~ of ~~factors,~~operations ~~including~~could ~~the~~be ~~level~~materially ~~of demand for our brands, our ability to competitively price our products~~ and ~~our~~adversely ~~ability to manufacture and deliver products in a timely manner~~affected.

We ~~may~~depend ~~not be able to meet all or any of these factors. Our inability to achieve any of these factors in a geographic distribution area will have a material adverse effect~~ on our ~~relationships with our~~ distributors, retailers and brokers into ~~that~~efficiently ~~particular~~and ~~geographic~~profitably ~~area, thus~~distribute ~~limiting~~and ~~our~~market ~~ability to expand~~ our ~~market~~products, ~~which~~maintain ~~would~~our ~~likely~~existing ~~materially~~markets ~~adversely~~and ~~effect~~expand our business, ~~prospects,~~into ~~financial condition~~other ~~and~~geographic ~~results of operations~~markets.

11 Our ability to establish a market for our brands and products in new geographic distribution areas, as well as to maintain and expand our existing markets, depends on our ability to establish and maintain successful relationships with reliable distributors, retailers and brokers strategically positioned to serve those areas. Our distributors, retailers and brokers sell and distribute competing products, and our products may represent a small portion of their business. To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in managing and selling our products, including re-stocking the retail shelves with our products, our sales and profitability will be adversely affected. Our ability to maintain our distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, including the level of demand for our brands, our ability to competitively price our products and our ability to manufacture and deliver products in a timely manner.

We ~~currently~~may ~~distribute~~not be able to meet all or any of these factors. Our inability to achieve any of these factors in a geographic distribution area will have a material adverse effect on our ~~products through~~relationships with our ~~wholly~~distributors, ~~owned~~retailers ~~subsidiary~~and brokers in that particular geographic area, ~~Fury~~thus ~~Distribution~~limiting ~~Holdings~~our ability to expand our market, ~~and~~which wewould ~~may~~likely ~~not~~materially beadversely ~~successful~~effect inour ~~attracting~~business, prospects, financial condition and ~~maintaining~~results ~~key distributors~~of operations.

~~Our marketing and~~ ~~sales strategy depends in large part on the availability and performance of planned distributors.~~ We currently distribute our ~~OSO~~ products through our wholly owned subsidiary, Fury Distribution Holdings LLC. We are actively seeking distribution relationships that can support our expected sales volumes. We may not be able to service our accounts properly with our current distribution arrangement. We currently do not have, ~~nor~~and do we ~~anticipate in the future that we will be able to establish, long-term contractual commitments from external distributors. We~~ may not be ~~able to attract distribution relationships or establish and maintain new~~ successful ~~relationships with distributors~~ in ~~our~~attracting ~~current geographic markets or new geographic distribution areas,~~ and wemaintaining ~~may have to incur additional expenditures to attract and maintain~~ key distributors ~~in one or more of our distribution areas in order to profitably exploit our products~~.

It Our ismarketing ~~difficult~~and sales strategy depends in large part on the availability and performance of planned distributors. We currently distribute our OSO products through our wholly owned subsidiary, Fury Distribution Holdings LLC. We may not be able to ~~predict~~service our accounts properly with our current distribution arrangement. We currently do not have, nor do we anticipate in the ~~timing~~ future that we will be able to establish, long-term contractual commitments from external distributors. We may not be able to attract distribution relationships or establish and ~~amount~~maintain new successful relationships with distributors in our current geographic markets or new geographic distribution areas, and we may have to incur additional expenditures to attract and maintain key distributors in one or more of our ~~sales~~distribution areas in order to profitably exploit our products.

~~In order to reduce~~ ~~inventory~~It ~~costs,~~is ~~distributors~~difficult ~~endeavor~~ to ~~order~~predict ~~products from us on a “just in time” basis in quantities, and at such times, based on~~ the ~~demand for products in a particular distribution area. Accordingly, there is no assurance as to the~~ timing or ~~quantity of purchases by any of our distributors or that any of our distributors will continue to purchase products from us in the same frequencies~~ and ~~volumes~~amount ~~as they may have done in the past. In addition, we cannot accurately predict the number~~ of ~~cases~~ ~~to be sold by any of~~ our ~~distributors~~sales.

~~Our~~ In ~~business~~order ~~plan~~to ~~and~~reduce ~~future~~inventory ~~growth depends~~costs, distributors endeavor to order products from us on a ~~significant~~“just ~~extent~~in time” basis in quantities, and at such times, based on ~~our~~the ~~captive~~demand ~~brands~~for ~~strategy~~products in a particular distribution area. IfAccordingly, wethere ~~are~~is ~~unable~~no assurance as to ~~successfully~~the ~~implement~~timing ~~this~~or ~~strategy,~~quantity of purchases by any of our ~~business,~~ ~~prospects,~~distributors ~~financial~~or ~~condition~~that any of our distributors will continue to purchase products from us in the same frequencies and ~~results~~volumes as they may have done in the past. In addition, we cannot accurately predict the number of ~~operations~~cases ~~could~~to be ~~materially~~sold ~~adversely~~by ~~affected~~any of our distributors.

We intend to allocate significant resources to our efforts in our Captive Brands subsidiary to develop our captive brands strategy through a turn key program we have developed specifically for retailers. These efforts may ~~prove~~incur tohigher besupply ~~unsuccessful~~costs or ~~unprofitable,~~be inunable ~~which case our results of operations and financial condition may suffer. Our ability~~ to ~~establish~~deliver ~~a market for our brands and~~ products ~~in the~~to ~~captive brands category depends on~~ our ~~ability~~customers toif ~~create~~we ~~compelling~~are ~~new~~unable ~~brands with appealing brand identities and~~ to ~~establish and~~ maintain ~~successful~~ relationships with ~~diverse retailers, including grocery stores. Our success in the captive brands channel therefore depends on~~ our ~~ability~~raw tomaterial ~~secure and maintain exclusive relationships with retailers~~suppliers.

~~Because products in~~ ~~the~~Other ~~captive~~than ~~brands~~water, ~~industry compete primarily on~~ the ~~basis~~principal ofraw ~~price,~~materials wenecessary ~~may not be able~~ to ~~distinguish~~produce our ~~captive brand~~ products ~~from~~ ~~those~~are ~~of larger~~caps, ~~more~~aluminum ~~well-established~~cans and ~~substantially~~ends, ~~better~~bottles, ~~financed~~labels, ~~companies~~cartons inand ~~this~~trays, ~~industry~~concentrates, ~~such~~sweeteners asand ~~COTT~~nutrive ~~Corporation, the~~and ~~Coca~~non-~~Cola~~nutrive ~~Company~~additives. ~~and~~In ~~PepsiCo~~addition, ~~Inc.,~~the supply of specific ingredients and ~~may~~packaging ~~not~~materials could be ~~able~~materially toadversely ~~compete~~affected ~~with~~by ~~these~~economic ~~companies~~factors ~~based~~such ~~solely~~as onindustry ~~price.~~consolidation, ~~Our~~energy ~~inability to~~shortages, ~~successfully~~governmental ~~execute~~controls, onlabor ~~our~~disputes, ~~captive~~natural ~~brands~~disasters, ~~strategy~~acts ~~would~~of ~~materially~~war ~~adversely~~or ~~affect~~terrorism ~~our~~and ~~business,~~other ~~prospects~~factors, ~~financial~~all ~~condition and~~of ~~results~~which ofare ~~operations~~beyond our control.

~~We may incur higher supply costs or be unable to deliver products to our customers if we are unable to maintain relationships with our raw material suppliers.~~12

~~Other than water,~~ ~~the~~We ~~principal~~rely ~~raw~~upon ~~materials~~our ~~necessary~~ongoing torelationships ~~produce~~with our ~~products~~key ~~are~~flavor ~~caps, aluminum cans and ends, bottles, labels, cartons and trays, concentrates, sweeteners and nutrive and non-nutrive additives~~suppliers. We ~~In addition, the supply of specific ingredients and packaging materials~~ could besuffer ~~materially~~disruptions ~~adversely~~in ~~affected~~our bybusiness ~~economic~~if ~~factors~~we ~~such~~are asunable ~~industry~~to ~~consolidation,~~source ~~energy~~our ~~shortages,~~flavors ~~governmental controls,~~on ~~labor~~acceptable ~~disputes,~~terms ~~natural~~from ~~disasters, acts of war or terrorism and other factors, all of which are beyond~~ our ~~control~~key suppliers.

We Generally, ~~rely~~flavor ~~upon~~suppliers hold the proprietary rights to their flavors. Consequently, we do not have the list of ingredients or formula for our ~~ongoing~~flavors ~~relationships with~~and certain of our ~~key~~concentrates ~~flavor~~readily available to us, and we may be unable to obtain these flavors or concentrates from alternative suppliers on short notice. WeIf we need to replace a flavor supplier, we could ~~suffer~~experience temporary disruptions in our ~~business~~ability ifto wedeliver ~~are~~products ~~unable~~ to ~~source~~ our ~~flavors~~customers, onwhich ~~acceptable terms~~in ~~from~~turn could have a material adverse effect on our ~~key~~business, ~~suppliers~~prospects, financial condition, and results of operations.

~~Generally, flavor~~ ~~suppliers~~We ~~hold~~rely ~~the~~on ~~proprietary~~third ~~rights~~party tobottlers ~~their~~and ~~flavors.~~contract ~~Consequently,~~packers ~~for~~to manufacture our ~~Captive~~products. ~~Brands~~If ~~subsidiary especially,~~ we doare ~~not have~~unable ~~the~~to ~~list~~maintain ofgood ~~ingredients~~relationships orwith ~~formula for~~ our ~~flavors~~bottlers and ~~certain~~contract ofpackers ~~our concentrates readily available to us,~~ and ~~we may be unable to obtain these flavors~~ /or ~~concentrates~~their ~~from~~ability ~~alternative suppliers on short notice. If we need~~ to ~~replace~~manufacture aour ~~flavor~~products ~~supplier, we~~becomes ~~could~~constrained ~~experience~~or ~~temporary~~unavailable ~~disruptions in our ability~~ to ~~deliver products to our customers~~us, ~~which in turn could have a material adverse effect on~~ our business, prospects, financial condition, and results of operations could be materially adversely affected.

12 We do not directly manufacture our products. We outsource such manufacturing to bottlers and other contract packers. We do not anticipate bringing the manufacturing process in-house in the future. Our production arrangements are terminable at will. In the event of a disruption or delay, we may be unable to procure alternative packing facilities at commercially reasonable rates and/or within a reasonably short time period. A disruption or delay in production of any of our products could significantly affect our revenues from such products because alternative co-packing facilities in the U.S. with adequate capacity may not be available for such products either at commercially reasonable rates and/or within a reasonably short time period, if at all. Consequently, a disruption in production of such products could have a material adverse effect on our business, prospects, financial condition and results of operations. Our failure to accurately predict and manage our contract manufacturing requirements may impair relationships with our independent distributors and accounts which, in turn, would likely have a material adverse effect on our ability to maintain effective relationships with those distributors and accounts.

~~We rely on third party bottlers~~ ~~and~~Failure ~~contract packers~~ to ~~manufacture~~accurately ~~our~~estimate ~~products.~~demand Iffor ~~we are unable to maintain good relationships with~~ our ~~bottlers and contract packers and/or their ability to manufacture our~~ products ~~becomes~~could ~~constrained~~materially oradversely ~~unavailable~~affect ~~to us,~~ our business, ~~prospects,~~and financial ~~condition~~ ~~and~~ results ~~of operations could be materially adversely affected~~.

We domay not ~~directly manufacture~~correctly estimate demand for our products. WeOur ~~outsource~~ability ~~such~~to ~~manufacturing~~estimate todemand ~~bottlers~~for ~~and~~our ~~other~~products ~~contract~~is ~~packers.~~imprecise, Weparticularly dowith ~~not~~new ~~anticipate~~products, ~~bringing the~~and ~~manufacturing~~may ~~process~~be ~~in-house~~less inprecise ~~the~~during ~~future.~~periods ~~Our~~of ~~production~~rapid ~~arrangements~~growth, ~~are~~particularly ~~terminable~~in atnew ~~will~~markets. InIf ~~the~~we ~~event~~materially ofunderestimate ~~a disruption~~demand orfor ~~delay,~~our weproducts ~~may~~or beare unable to ~~procure~~secure ~~alternative~~sufficient ~~packing~~ingredients ~~facilities~~or atraw ~~commercially~~materials ~~reasonable~~including, ~~rates~~but ~~and/or~~not ~~within a~~limited ~~reasonably~~to, ~~short~~cans, ~~time~~glass, ~~period.~~labels, Aflavors, ~~disruption~~supplements, orcertain ~~delay~~sweeteners, inor ~~production~~packing ofarrangements, ~~any~~we ofmight ~~our~~not ~~products~~be ~~could~~able ~~significantly~~to ~~affect~~satisfy ~~our~~demand ~~revenues from~~on ~~such~~a ~~products~~short-term ~~because~~basis. ~~alternative co~~Industry-~~packing~~wide ~~facilities~~shortages inof ~~the~~supplements ~~U.S.~~and ~~with~~sweeteners ~~adequate~~have ~~capacity~~been ~~may~~experienced ~~not~~and becould ~~available~~from ~~for~~time ~~such products~~to ~~either~~time atbe ~~commercially~~experienced ~~reasonable~~in ~~rates~~the ~~and/or~~future. ~~within~~These akinds ~~reasonably~~of ~~short~~shortages ~~time~~could ~~period,~~interfere ifwith atand/or ~~all.~~delay ~~Consequently,~~production aof ~~disruption in~~certain ~~production~~ of ~~such~~our products and could have a material adverse effect on our business, prospects, financial condition and results of ~~operations~~operation. ~~Our~~We ~~failure~~do tonot ~~accurately~~use ~~predict~~hedging ~~and~~agreements ~~manage~~or ~~our~~alternative ~~contract~~instruments ~~manufacturing requirements may impair relationships with our independent distributors and accounts which, in turn, would likely have a material adverse effect on our ability~~ to ~~maintain effective~~manage ~~relationships~~this ~~with those distributors and accounts~~risk.

~~Failure~~ We tomay ~~accurately~~be ~~estimate~~required ~~demand for~~to ~~our~~provide ~~products~~more ~~could~~favorable ~~materially~~terms ~~adversely~~to ~~affect~~ our ~~business~~customers ~~and~~in ~~financial~~the ~~results~~future.

We To ~~may~~the ~~not~~extent ~~correctly estimate~~the ~~demand~~consolidation ~~for~~among ~~our~~mass ~~products.~~retailers ~~Our~~continues, ~~ability~~a togreater ~~estimate~~percentage ~~demand~~of ~~for~~ our ~~products~~sales iscould ~~imprecise,~~be ~~particularly~~concentrated ~~with~~in ~~new~~a ~~products~~smaller number of retailers, ~~and~~ which may beenhance ~~less~~our ~~precise~~customers’ ~~during~~ability ~~periods~~to ofnegotiate ~~rapid~~more ~~growth~~favorable terms and prices from us. For example, ~~particularly~~many companies in ~~new~~the ~~markets.~~industry Ifdiscount weprices ~~materially~~of ~~underestimate~~existing ~~demand~~products, provide for ~~our~~ ~~products~~advertising allowances and credits or ~~are~~give ~~unable~~other sales incentives to ~~secure~~customers. ~~sufficient~~In ~~ingredients~~addition, ormany ~~raw~~companies ~~materials~~reduce ~~including,~~the ~~but~~prices ~~not~~of ~~limited~~their products to, ~~cans,~~provide ~~glass,~~price ~~labels, flavors,~~adjustments ~~supplements,~~for ~~certain~~retail ~~sweeteners,~~inventories orheld ~~packing~~by ~~arrangements,~~customers weat ~~might~~the ~~not~~time bea ~~able~~price tochange ~~satisfy~~occurs, ~~demand~~a onpractice areferred ~~short-term~~to ~~basis. Industry-wide~~as ~~shortages~~price ofprotection. ~~supplements~~We ~~and~~offer ~~sweeteners~~a ~~have~~marketing ~~been~~allowance ~~experienced~~to ~~and~~select ~~could~~retailers ~~from~~as ~~time~~part toof ~~time~~our bebroader ~~experienced~~based indeal ~~the future~~negotiation. As ~~These~~a ~~kinds~~result of ~~shortages~~competitive ~~could~~practices ~~interfere~~or ~~with~~otherwise, we have in the past and~~/or~~ ~~delay~~may ~~production~~in ofthe ~~certain~~future ofbe ~~our~~required ~~products~~to ~~and~~make ~~could~~such ~~have~~concessions to a ~~material adverse~~significant ~~effect~~degree, onwhich could materially adversely affect our business, prospects, financial condition and results of ~~operation~~operations. ~~We do not use hedging agreements or alternative instruments to manage this risk.~~

~~We may be required to provide more favorable terms to our customers in the future.~~13

~~To the extent the~~ ~~consolidation~~Our ~~among~~inability ~~mass~~to ~~retailers~~protect ~~continues, a greater percentage of~~ our ~~sales~~trademarks ~~could~~and betrade ~~concentrated~~secrets ~~in a smaller number of retailers, which~~ may ~~enhance~~prevent ~~our~~us ~~customers’ ability to negotiate more favorable terms and prices~~ from ~~us.~~successfully For example, many companies in the industry discount prices of existing products, provide for advertising allowances and credits or give other sales incentives to customers. In addition, many companies reduce the prices of their products to provide price adjustments for retail inventories held by customers at the time a price change occurs, a practice referred to as price protection. We offer a marketing ~~allowance to select retailers as part of~~ our ~~broader~~products ~~based deal negotiation. As a result of competitive practices or otherwise, we have in the past~~ and ~~may~~competing ~~in the future be required to make such concessions to a significant degree, which could materially adversely affect our business, prospects, financial condition and results of operations~~effectively.

13 We regard our intellectual property, particularly our trademarks and trade secrets, to be of considerable value and importance to our business and our success. We rely on a combination of trademark and trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights. Failure to protect our intellectual property could materially harm our brands and our reputation and materially adversely affect our ability to compete effectively. There can be no assurance that the steps taken by us to protect these proprietary rights will be adequate or that third parties will not infringe or misappropriate our trademarks, trade secrets or similar proprietary rights. In addition, there can be no assurance that other parties will not assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights. Any such claim or litigation could be costly and may require a substantial investment of our management’s time. In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands, profitably exploit our products or recoup our associated research and development costs, any of which could have a material adverse effect on our business, prospects, financial condition and results of operations.

~~Our~~ ~~inability~~Litigation toor ~~protect~~legal ~~our~~proceedings ~~trademarks~~could ~~and~~expose ~~trade secrets may prevent~~ us ~~from~~to ~~successfully~~significant ~~marketing~~liabilities ~~our products~~ and ~~competing~~damage ~~effectively~~our reputation.

We ~~regard~~may ~~our~~become ~~intellectual property,~~party ~~particularly our trademarks and trade secrets,~~ to belitigation ofclaims ~~considerable value~~ and ~~importance~~legal ~~to our business and our success~~proceedings. We ~~rely~~Litigation oninvolves asignificant ~~combination~~risks, ofuncertainties ~~trademark~~ and ~~trade secrecy laws~~costs, ~~confidentiality~~including ~~procedures~~distraction ~~and~~of ~~contractual~~management ~~provisions~~attention toaway ~~protect~~ from our ~~intellectual~~current ~~property~~business ~~rights~~operations. ~~Failure~~The tocost ~~protect~~of ~~our~~litigation, ~~intellectual~~even ~~property~~if ~~could~~without ~~materially~~merit, ~~harm our brands~~ and ~~our reputation and materially adversely affect our ability to compete effectively. There can be no assurance that~~ the ~~steps~~resulting ~~taken~~distraction ~~by us~~ to ~~protect these~~management, ~~proprietary~~could ~~rights~~have ~~will~~a bematerial ~~adequate~~adverse oreffect ~~that~~on ~~third parties will not infringe or misappropriate~~ our ~~trademarks~~business, ~~trade~~prospects, ~~secrets or~~financial ~~similar~~condition ~~proprietary~~and ~~rights~~results of operations. In ~~addition~~July, ~~there~~we ~~can~~received bea nonotice ~~assurance~~ that ~~other~~a ~~parties~~default ~~will~~judgment ~~not~~had ~~assert~~been ~~infringement~~entered ~~claims~~ against us, ~~and~~in wethe ~~may~~amount ~~have~~of to$66,051. ~~pursue~~See ~~litigation~~Item ~~against~~3, ~~other parties to assert our rights~~Litigation. ~~Any~~We ~~such~~are ~~claim~~indemnified oragainst ~~litigation~~any ~~could~~payments bewe ~~costly and~~ may ~~require~~be arequired ~~substantial~~to ~~investment~~make ofpursuant ~~our~~to ~~management’s~~this ~~time. In addition~~judgment, ~~any~~but ~~event~~there ~~that~~can ~~would~~be ~~jeopardize~~no ~~our~~assurance ~~proprietary rights~~that orthe ~~any~~indemnifying ~~claims~~party ofwill ~~infringement by third parties could~~ have athe ~~material~~resources ~~adverse effect on our ability~~ to ~~market or sell our brands~~pay, ~~profitably exploit our products~~ or ~~recoup~~otherwise ~~our~~cooperate ~~associated~~with ~~research~~us ~~and~~with ~~development~~respect ~~costs,~~to ~~any~~the ofpayment ~~which could have a material adverse effect on our business~~of, ~~prospects,~~such ~~financial condition and results of operations~~obligation.

~~As part of our captive~~ ~~brands~~If ~~strategy,~~ we ~~may~~lose ~~enter~~the ~~into~~services ~~licensing agreements under which we grant our licensing partners certain rights to use our trademarks and other designs. Although our agreements require that a licensing partner’s use~~ of our ~~trademarks and designs is subject to our control and approval~~President, ~~any breach of these provisions, or any other action by any of~~ our ~~licensing~~operations ~~partners~~could ~~that is~~be ~~harmful~~disrupted ~~to our brands, goodwill~~ and ~~overall image, could have a material adverse effect on~~ our business, ~~prospects,~~could ~~financial condition~~be ~~and results of operations~~harmed.

~~Litigation~~ Our orbusiness ~~legal~~plan ~~proceedings~~relies ~~could~~significantly ~~expose~~on usthe continued services of our President, Fouad Kallamni. If we were to ~~significant liabilities~~lose ~~and~~the ~~damage~~services of Mr. Kallamni, our ~~reputation~~ability to continue to execute our business plan could be materially impaired. Although Mr. Kallamni does not have an employment agreement with us (he currently serves without compensation pending the receipt of additional funding), we are not aware of any facts or circumstances that suggest Mr. Kallamni might leave us. We do not have key man life insurance on Mr. Kallamni.

~~We may become party~~ ~~to litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our current business operations.~~ The ~~cost~~inability ofto ~~litigation,~~attract ~~even if without merit,~~ and ~~the~~retain ~~resulting distraction~~key topersonnel ~~management,~~would ~~could~~directly ~~have~~affect ~~a material adverse effect on~~ our ~~business,~~efficiency ~~prospects, financial condition~~ and results of operations.

On Our ~~April~~success ~~19,~~depends ~~2012, we~~on ~~received~~our aability ~~Civil~~to ~~Action~~attract ~~Summons~~ and ~~Complaint~~retain ~~from~~highly ~~certain~~qualified ~~holders~~employees ~~of promissory notes~~ in ~~the~~such ~~principal~~areas ~~amount~~as ofproduction, ~~$50~~distribution,~~000~~ ~~issued by~~sales, ~~our~~marketing ~~predecessor,~~and ~~Hybrid~~finance. ~~Dynamics~~We ~~Corporation,~~compete into ~~2008~~hire new employees. ~~The~~Our ~~Complaint~~operating ~~demands~~results ~~repayment~~could ofbe ~~the~~adversely ~~principal~~affected ~~and~~by ~~interest~~increased incosts ~~the aggregate~~due ~~amount~~to ofincreased ~~$60~~competition for employees,~~965,~~ ~~plus~~higher ~~incidental~~employee ~~and~~turnover ~~consequential~~or ~~damages~~increased ~~and~~employee ~~attorneys’~~benefit ~~fees~~costs. ~~See~~Any ~~Item~~unplanned 3turnover, ~~Litigation~~particularly involving our key personnel, could negatively impact our operations, financial condition and employee morale.

~~Others may allege that we infringe~~ onGlobal ~~their~~or ~~intellectual~~regional ~~property~~catastrophic ~~rights,~~events ~~which~~ could ~~result~~impact inour ~~the~~operations ~~diversion of attention~~ and ~~resources~~financial ~~from our business operations~~results.

~~Occasionally, third~~ ~~parties~~Our ~~may~~business ~~assert~~can ~~that~~be weaffected ~~are,~~by ormajor ~~may~~natural ~~be,~~disasters ~~infringing~~or onwidespread oroutbreaks ~~misappropriating~~of ~~their~~infectious ~~intellectual~~diseases ~~property~~such ~~rights.~~as Inavian ~~these~~influenza ~~cases, we~~or ~~intend~~severe toacute ~~defend~~respiratory. ~~against~~Such ~~claims~~events orcould ~~negotiate~~impair ~~licenses~~our ~~when~~ability weto ~~consider~~manage ~~these~~our ~~actions~~business ~~appropriate~~in the U.S., ~~Intellectual~~could ~~property~~disrupt ~~cases are~~our ~~uncertain~~supply of raw materials, and ~~involve~~could ~~complex~~impact ~~legal~~production, transportation and ~~factual~~delivery ~~questions~~of products. IfIn weaddition, ~~become~~such ~~involved~~events incould ~~this~~cause ~~type~~disruption of ~~litigation~~regional or global economic activity, itwhich ~~could~~can ~~consume significant~~affect ~~resources~~consumers’ purchasing power in the affected areas and, ~~divert~~therefore, ~~our~~reduce ~~attention~~demand ~~from~~for ~~business~~our ~~operations~~products.

If we are found to infringe on the intellectual property rights of others, we could incur significant damages, be enjoined from continuing to manufacture, market or use the affected product, or be required to obtain a license to continue manufacturing or using the affected product. A license could be very expensive to obtain or may not be available at all. Similarly, changing products or processes to avoid infringing the rights of others may be costly or impracticable.14

If we ~~lose~~are ~~the~~unable ~~services~~to ofbuild ~~our~~and ~~President, our~~sustain ~~operations~~proper ~~could~~information betechnology ~~disrupted~~infrastructure, ~~and~~ our business could ~~be harmed~~suffer.

~~Our business plan~~ ~~relies~~We ~~significantly~~depend on ~~the~~information ~~continued~~technology ~~services~~to improve the effectiveness of our ~~President~~operations and to interface with our customers, ~~Fouad~~as ~~Kallamni~~well as to maintain financial accuracy and efficiency. IfWe wecould ~~were~~be subject to ~~lose~~transaction errors, processing inefficiencies, the ~~services~~loss of ~~Mr.~~customers, ~~Kallamni~~business disruptions, ~~our~~ ~~ability~~or tothe ~~continue~~loss of or damage to ~~execute~~intellectual ~~our~~property ~~business~~through ~~plan~~security ~~could~~breach, beif ~~materially~~we ~~impaired.~~do ~~Although~~not ~~Mr.~~allocate ~~Kallamni~~and ~~does~~effectively ~~not~~manage ~~have~~the anresources ~~employment agreement~~necessary ~~with~~to usbuild ~~(he~~and ~~currently~~sustain ~~serves~~the onproper ~~consulting~~technology ~~basis~~infrastructure. ~~pending~~Notwithstanding ~~the~~our ~~receipt~~implementation of ~~additional~~security ~~funding)~~measures, weour ~~are~~information ~~not~~systems ~~aware~~could ofpotentially ~~any facts~~be penetrated by outside parties intent on extracting or ~~circumstances~~corrupting ~~that~~information ~~suggest~~or Mrdisrupting business processes. ~~Kallamni~~Such ~~might~~unauthorized ~~leave~~access ~~us.~~could Wedisrupt doour ~~not~~business and result in the loss of assets, which would have ~~key~~a ~~man~~material ~~life~~adverse ~~insurance~~effect on ~~Mr.~~our ~~Kallamni~~business, prospects, financial condition, and results of operations.

~~The~~ We ~~inability~~could tobe ~~attract~~exposed ~~and~~to ~~retain key~~product ~~personnel~~liability ~~would~~claims ~~directly~~for ~~affect~~personal ~~our~~injury ~~efficiency~~or ~~and~~possibly ~~results of operations~~death.

~~Our~~ We ~~success~~currently ~~depends on~~do ~~our~~not ~~ability~~carry toproduct ~~attract~~liability ~~and~~insurance. ~~retain~~Although ~~highly~~we ~~qualified~~intend ~~employees~~to inpurchase ~~such~~this ~~areas~~insurance aswhen ~~production,~~funds ~~distribution,~~are ~~sales,~~available ~~marketing~~to ~~and finance.~~do Weso, ~~compete~~there tocan ~~hire~~be ~~new~~no ~~employees.~~assurance ~~Our~~that ~~operating~~the ~~results~~coverage ~~could~~obtained will be ~~adversely~~sufficient ~~affected~~to bycover ~~increased~~any ~~costs~~or ~~due~~all toproduct ~~increased competition~~liability ~~for~~claims. ~~employees,~~If ~~higher~~our ~~employee~~product ~~turnover~~liability orinsurance ~~increased~~is ~~employee~~not ~~benefit~~obtained ~~costs.~~or ~~Any~~is ~~unplanned~~inadequate ~~turnover~~in amount, ~~particularly involving~~a ~~our~~product ~~key~~liability ~~personnel,~~claim ~~could~~would ~~negatively~~likely ~~impact~~have a material adverse effect upon our ~~operations~~business, prospects, financial condition and ~~employee~~results ~~morale~~of operations.

14 If we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our business may suffer.

Our ~~business~~success depends on our ability to maintain brand image for our existing products and ~~financial~~effectively ~~results may~~build up brand image for new products and brand extensions. There can be ~~materially~~no assurance, however, that additional expenditures and ~~adversely~~our ~~affected~~advertising ifand wemarketing ~~fail~~will tohave ~~manage~~the desired impact on our ~~expanding~~products’ ~~operations~~brand ~~successfully~~image and on consumer preferences. Product quality issues, real or imagined, or allegations of product contamination, even when false or unfounded, could tarnish the image of the affected brands and may cause consumers to choose other products.

~~Our success depends,~~ inIn ~~part~~addition, onbecause ~~our~~of ~~ability~~changing togovernment ~~manage~~regulations ~~our~~or ~~expanding~~implementation ~~operations. Recently~~thereof, weor ~~have~~allegations ~~commenced the expansion~~ of ~~our~~product ~~business~~contamination, ~~and~~we ~~beverage offerings~~may ~~through~~be ~~the~~required ~~addition~~from oftime ~~new products~~ to betime ~~launched~~ to ~~supplement~~recall ~~our~~products ~~current~~entirely ~~product~~or ~~offering~~from ofspecific ~~OSO~~markets. ~~Our~~Product ~~principal strategy~~recalls iscould toaffect ~~expand~~ our ~~business~~profitability ~~in new distribution channels~~ and ~~markets~~could ~~and~~negatively ~~with~~affect ~~new~~brand ~~beverage~~image. ~~offerings~~We ~~through~~do anot ~~turnkey captive~~maintain ~~brands~~recall ~~program~~insurance. ~~The~~Adverse ~~success~~publicity ofsurrounding ~~this~~obesity ~~strategy~~concerns, ~~depends~~water onusage ~~our~~and ~~ability~~other toconcerns ~~manage~~could ~~and~~negatively ~~integrate~~affect ~~new~~our ~~beverages~~overall ~~into~~reputation ~~new channels~~ and ~~markets with retailers. Furthermore,~~ our ~~new~~products’ ~~product~~acceptance ~~lines~~by ~~may not prove to be profitable~~consumers.

~~Global~~ Rising orenergy ~~regional~~and ~~catastrophic events~~freight ~~could~~costs may have an adverse impact on our ~~operations~~sales and ~~financial results~~earnings.

~~Our~~ Recent ~~business~~volatility ~~can~~in ~~be affected~~the byglobal ~~major~~oil ~~natural~~markets ~~disasters~~has orresulted ~~widespread~~in ~~outbreaks~~rising offuel ~~infectious~~prices, ~~diseases~~which ~~such~~many asshipping ~~avian~~companies ~~influenza~~are orpassing ~~severe~~on ~~acute~~to ~~respiratory. Such~~their ~~events~~customers ~~could~~by ~~impair~~way ~~our~~of ~~ability~~higher tobase ~~manage~~pricing ~~our~~and/or ~~business~~increased infuel ~~the U~~surcharges.~~S.,~~ ~~could~~Although ~~disrupt~~we ~~our~~work ~~supply~~with ofsuppliers to mitigate raw ~~materials~~material price increases, ~~and~~energy ~~could impact~~surcharges ~~production,~~on ~~transportation~~our ~~and~~raw ~~delivery~~materials ofmay ~~products.~~continue Into ~~addition,~~increase ~~such~~as ~~events~~well. ~~could~~Due ~~cause~~to ~~disruption~~the ofprice ~~regional~~sensitivity orof ~~global economic~~our ~~activity~~products, ~~which~~we ~~can~~do ~~affect~~not ~~consumers’~~anticipate ~~purchasing~~that ~~power~~we inwill ~~the~~be ~~affected~~able ~~areas~~to ~~and,~~pass ~~therefore,~~all ~~reduce~~of ~~demand~~these ~~for~~ increased costs on to our ~~products~~customers.

If Changes wein ~~are~~accounting ~~unable~~standards toand ~~build~~subjective assumptions, estimates and ~~sustain proper~~judgments ~~information~~by ~~technology~~management ~~infrastructure,~~related ~~our~~to ~~business~~complex accounting matters could ~~suffer.~~significantly affect our financial results.

~~We depend on information~~ ~~technology~~U.S. togenerally ~~improve~~accepted ~~the~~accounting ~~effectiveness~~principles ~~of our operations~~ and torelated ~~interface with our customers~~pronouncements, asimplementation ~~well~~guidelines ~~as to maintain financial accuracy~~ and ~~efficiency.~~interpretations Wewith ~~could~~regard ~~be subject~~ to ~~transaction~~a ~~errors,~~wide ~~processing~~variety ~~inefficiencies, the loss~~ of ~~customers,~~matters ~~business disruptions,~~that orare ~~the~~relevant ~~loss of or damage~~ to ~~intellectual~~our ~~property through security breach~~business, ifsuch weas dostock-based ~~not~~compensation, ~~allocate~~trade promotions, and ~~effectively manage~~income ~~the~~taxes ~~resources~~are ~~necessary~~highly tocomplex ~~build~~ and ~~sustain~~involve ~~the~~many ~~proper~~subjective ~~technology infrastructure. Notwithstanding our implementation of security measures~~assumptions, ~~our~~estimates ~~information~~and ~~systems~~judgments ~~could potentially be penetrated~~ by ~~outside~~our ~~parties~~management. ~~intent~~Changes onto ~~extracting~~these orrules ~~corrupting information~~ or ~~disrupting~~their ~~business~~interpretation ~~processes.~~or ~~Such~~changes ~~unauthorized access could disrupt our business and result~~ in ~~the~~underlying ~~loss of assets~~assumptions, ~~which~~ ~~would~~estimates ~~have~~or ajudgments ~~material~~by ~~adverse effect on~~ our ~~business,~~management ~~prospects,~~could ~~financial~~significantly ~~condition,~~change ~~and~~our ~~results~~reported ~~of operations~~results.

~~We could be exposed to product liability claims for personal injury or possibly death.~~ 15

~~We currently do not~~ ~~carry~~If ~~product liability insurance. Although~~ we ~~intend to purchase this insurance when funds~~ are ~~available~~unable to domaintain ~~so,~~effective ~~there~~disclosure ~~can be~~controls noand ~~assurance~~procedures ~~that~~and ~~the~~internal ~~coverage~~control ~~obtained~~over ~~will~~financial bereporting, ~~sufficient to cover any or all product liability claims. If~~ our ~~product~~stock ~~liability insurance~~price isand ~~not~~investor ~~obtained~~confidence ~~or is inadequate~~ in ~~amount, a product liability claim would likely have a material adverse effect upon~~ our ~~business,~~Company ~~prospects,~~could ~~financial~~be ~~condition~~materially and ~~results~~adversely ~~of operations~~affected.

If We we are ~~unable~~required to maintain ~~brand image~~both disclosure controls and ~~product~~procedures ~~quality~~and internal control over financial reporting that are effective. Because of their inherent limitations, internal control over financial reporting, however well designed and operated, can only provide reasonable, and not absolute, assurance that the controls will prevent or ifdetect wemisstatements. ~~encounter~~Because ~~other~~of ~~product~~these ~~issues~~and ~~such~~other asinherent ~~product~~limitations ~~recalls~~of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions. The failure of controls by design deficiencies or absence of adequate controls could result in a material adverse effect on our business ~~may~~and ~~suffer~~financial results.

In ~~addition,~~The ~~because~~beverage ofindustry ~~changing~~is ~~government~~highly ~~regulations or implementation thereof~~competitive, orespecially ~~allegations~~in ofthe ~~product~~functional ~~contamination,~~beverage wecategory ~~may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability~~ and ~~could~~increased ~~negatively~~competition ~~affect brand image. We do not maintain recall insurance. Adverse publicity surrounding obesity concerns, water usage and other concerns~~ could ~~negatively~~hurt ~~affect~~ our ~~overall reputation and our products’ acceptance by consumers~~business.

15 The beverage industry is highly competitive. The principal areas of competition are pricing, packaging, development of new products and flavors and marketing campaigns. Our products compete with a wide range of drinks produced by a relatively large number of manufacturers, most of which have substantially greater financial, marketing and distribution resources than we do.

~~Rising~~ Important ~~energy~~factors affecting our ability to compete successfully include taste and ~~freight~~flavor ~~costs~~of ~~may~~products, ~~have~~trade anand ~~adverse~~consumer ~~impact on~~promotions, ~~our~~rapid ~~sales~~and effective development of new, unique cutting edge products, attractive and ~~earnings~~different packaging, branded product advertising and pricing. Our products compete with all liquid refreshments and with products of much larger and substantially better financed competitors, including the products of numerous nationally and internationally known producers such as The Coca-Cola Company, PepsiCo Inc. and Red Bull GmbH. We also compete with companies that are smaller or primarily local in operation. Our products also compete with private label brands such as those carried by grocery store chains, convenience store chains, and club stores.

~~Recent volatility~~ inIf ~~the~~we ~~global oil markets has resulted in rising fuel prices, which many shipping companies~~ are ~~passing~~unable on to ~~their~~maintain ~~customers by~~brand ~~way~~image ofand ~~higher~~product ~~base~~quality ~~pricing and/~~or ~~increased~~encounter ~~fuel~~product ~~surcharges. Although we work with suppliers to mitigate raw material price increases~~issues, ~~energy~~such ~~surcharges on our raw materials may continue to increase~~ as ~~well.~~product ~~Due~~recalls, ~~to the price sensitivity of~~ our ~~products~~business, we doprospects, ~~not~~financial ~~anticipate~~condition, ~~that~~and weresults ~~will be able to pass all~~ of ~~these~~operations ~~increased~~could ~~costs~~be onmaterially toadversely ~~our customers~~affected.

~~Changes~~ Our inbusiness ~~accounting~~is ~~standards~~substantially dependent upon awareness and ~~subjective~~market ~~assumptions, estimates~~acceptance of our products and ~~judgments~~brands by ~~management~~our ~~related~~target market consumers between the ages of 18 and 34, and our success depends on our ability to ~~complex~~maintain ~~accounting~~brand ~~matters~~image ~~could~~for ~~significantly~~our ~~affect~~existing products and effectively build up brand image for new products and brand extensions. There can be no guarantees that additional expenditures in marketing and advertising will have the desired impact on our products’ brand image and on consumer preferences. Any failure of our brands to maintain or increase acceptance or market penetration would likely have a material adverse effect on our business, prospects, financial condition and results of operations.

~~U.S.~~ In ~~generally~~addition, ~~accepted accounting~~product ~~principles~~quality ~~and~~issues, ~~related~~real ~~pronouncements~~or imagined, ~~implementation~~or ~~guidelines~~allegations ~~and~~of ~~interpretations~~product ~~with~~contamination, ~~regard~~even towhen afalse ~~wide~~or ~~variety~~ unfounded, could tarnish the image of ~~matters~~the ~~that~~affected ~~are~~brands ~~relevant~~and may cause consumers to ~~our~~choose ~~business,~~other ~~such~~products. asWe ~~stock-based~~may ~~compensation,~~be ~~trade~~required ~~promotions,~~from ~~and~~time ~~income~~to ~~taxes~~time ~~are~~to ~~highly complex~~recall ~~and~~products ~~involve~~entirely ~~many~~or ~~subjective~~from ~~assumptions,~~specific ~~estimates~~markets ~~and~~due ~~judgments~~to bychanging ~~our~~government ~~management.~~regulations, ~~Changes~~allegations toof ~~these~~product ~~rules~~contamination or ~~their~~lack ~~interpretation or~~of ~~changes~~consumer interest in ~~underlying~~certain ~~assumptions,~~products. ~~estimates~~Product orrecalls ~~judgments~~could byaffect our ~~management~~profitability and could ~~significantly~~negatively ~~change~~affect ~~our~~brand ~~reported~~image. We ~~results~~do not maintain recall insurance.

If we are unable to maintain effective disclosure controls and procedures and internal control over financial reporting, our stock price and investor confidence in our Company could be materially and adversely affected.16

~~We are required to~~ ~~maintain~~Change both disclosure controls and procedures and internal control over financial reporting that are effective. Because of their inherent limitations, internal control over financial reporting, however well designed and operated, can only provide reasonable, and not absolute, assurance that the controls will prevent or detect misstatements. Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in ~~achieving~~consumer ~~their~~preferences ~~goals~~may ~~under~~reduce ~~all~~demand ~~potential future~~for ~~conditions.~~some ~~The failure~~ of ~~controls by design deficiencies or absence of adequate controls could result in a material adverse effect on~~ our ~~business and financial results~~products.

~~Risks~~ ~~Related~~Market todata indicates that consumers are seeking greater variety in their beverages. Our ~~Industry~~future success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages and be competitive in the areas of quality and health. We can provide no assurances that consumers will continue to purchase our products in the future. Additionally, our branded products are considered premium products and to maintain market share during recessionary periods we may have to reduce profit margins, which would adversely affect our results of operations. Some beverage brands and/or products may be limited to a product lifecycle of a few years before consumers’ preferences change. The beverages we currently market are in varying stages of their lifecycles, and we can provide no assurance that such beverages will become or remain profitable for us. The beverage industry is subject to changing consumer preferences, and shifts in consumer preferences may materially adversely affect our business, prospects, financial condition and results of operations if we misjudge such preferences. If our revenues decline, our business, prospects, financial condition and results of operations would be materially adversely affected.

~~The beverage industry is highly~~ ~~competitive,~~Our ~~especially~~sales inare ~~the~~affected ~~functional~~by ~~beverage category and increased competition could hurt our business.~~ seasonality

~~The~~ As is typical in the beverage industry is, ~~highly~~our ~~competitive~~sales are seasonal. ~~The~~We ~~principal~~have ~~areas~~experienced ofgreatest ~~competition~~sales ~~are~~volume ~~pricing~~during the second and third calendar quarters, ~~packaging~~generally Memorial Day to Labor Day. As a result, ~~development~~our ofworking ~~new~~capital ~~products~~requirements and ~~flavors~~cash ~~and marketing~~flow ~~campaigns~~vary substantially throughout the year. ~~Our~~Consumer demand for our products ~~compete~~is ~~with~~also aaffected ~~wide~~by ~~range~~weather ofconditions. ~~drinks~~Cool ~~produced~~and/or bywet aspring ~~relatively~~or ~~large~~summer ~~number~~weather ofcould ~~manufacturers, most~~result in decreased sales of ~~which~~our beverages and could have ~~substantially~~a ~~greater~~material ~~financial~~adverse effect on our business, ~~marketing~~prospects, ~~and~~financial ~~distribution~~condition ~~resources~~and ~~than~~results weof dooperations.

~~Important factors~~ ~~affecting~~Changes ~~our~~in ~~ability~~the tolegal ~~compete successfully include taste~~ and ~~flavor~~regulatory ofenvironment ~~products,~~in trade and consumer promotions, rapid and effective development of new, unique cutting edge products, attractive and different packaging, branded product advertising and pricing. Our products compete with all liquid refreshments and with products of much larger and substantially better financed competitors, including the ~~products~~jurisdictions ofin ~~numerous~~which ~~nationally~~we ~~and~~operate ~~internationally~~could ~~known~~increase ~~producers~~our ~~such~~costs ~~as The Coca-Cola Company, PepsiCo Inc. and Red Bull Gmbh. We also compete with companies that are smaller~~ or ~~primarily~~reduce ~~local~~our ~~in operation~~revenues. ~~Our products also compete with private label brands such as those carried by grocery store chains, convenience store chains, and club stores.~~

16 As a beverage producer, we must comply with various Federal, state, provincial, local and foreign laws relating to production, packaging, quality, labeling and distribution, including, in the U.S., those of the Federal Food, Drug and Cosmetic Act, the Fair Packaging and Labeling Act, the Federal Trade Commission Act, the Nutrition Labeling and Education Act and California Proposition 65. We are also subject to various Federal, state, provincial, local and foreign environmental laws and workplace regulations. These laws and regulations include, in the U.S., the Occupational Safety and Health Act, the Unfair Labor Standards Act, the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Federal Motor Carrier Safety Act, laws governing equal employment opportunity, customs and foreign trade laws and regulations, laws relating to the maintenance of fuel storage tanks, laws relating to water consumption and treatment, and various other federal statutes and regulations. These laws and regulations may change as a result of political, economic, or social events. Such regulatory changes may include changes in food and drug laws, laws related to advertising, accounting standards, taxation requirements, competition laws and environmental laws, including laws relating to the regulation of water rights and treatment. Changes in laws, regulations or government policy and related interpretations may alter the environment in which we do business, which may materially adversely affect our business, prospects, financial condition, and results of operations.

~~If we are unable to maintain brand~~ ~~image~~Significant ~~and~~additional ~~product~~labeling ~~quality~~ or ~~encounter~~warning ~~product~~requirements ~~issues,~~may ~~such~~inhibit assales ~~product recalls, our business, prospects, financial condition, and results~~ of ~~operations could be materially adversely~~ affected products.

~~Our~~ Various ~~business~~jurisdictions ismay ~~substantially dependent~~seek ~~upon~~to ~~awareness~~adopt ~~and~~significant ~~market~~additional ~~acceptance~~product oflabeling ~~our~~or ~~products~~warning ~~and~~requirements ~~brands~~relating byto ~~our~~the ~~target~~chemical ~~market~~content ~~consumers~~or ~~between~~perceived ~~the~~adverse ~~ages~~health consequences of ~~18 and~~certain ~~34,~~of ~~and~~ our ~~success~~products. ~~depends~~These ontypes ~~our~~of ~~ability~~requirements, if they become applicable to ~~maintain~~one ~~brand~~or ~~image~~more ~~for~~of our ~~existing~~major products ~~and~~under ~~effectively~~current ~~build~~or upfuture ~~brand image~~environmental ~~for~~or ~~new~~health ~~products~~laws ~~and~~or ~~brand~~regulations, ~~extensions~~may inhibit sales of such products. ~~There~~In ~~can~~California, bea nolaw ~~guarantees~~requires that ~~additional~~a ~~expenditures~~specific inwarning ~~marketing~~appear ~~and~~on ~~advertising will~~any ~~have~~product that includes a component listed by the ~~desired~~state ~~impact~~as onhaving ~~our~~been ~~products’~~found ~~brand~~to ~~image~~cause ~~and~~cancer onor ~~consumer~~birth ~~preferences~~defects. ~~Any~~This ~~failure~~law recognizes no generally applicable quantitative thresholds below which a warning is not required. If a component found in one of our ~~owned~~products ~~brands~~is ~~or captive~~added ~~brands~~ to ~~maintain~~the list, or ~~increase~~if ~~acceptance~~the increasing sensitivity of detection methodology that may become available under this law and related regulations as they currently exist, or ~~market~~as ~~penetration~~they ~~would~~may ~~likely~~be ~~have~~amended, results in the detection of an infinitesimal quantity of a ~~material~~listed ~~adverse~~substance ~~effect~~in onone of our ~~business~~beverages produced for sale in California, ~~prospects,~~ ~~financial~~the ~~condition~~resulting ~~and~~warning ~~results~~requirements ofor ~~operations~~adverse publicity could affect our sales.

In addition, product quality issues, real or imagined, or allegations of product contamination, even when false or unfounded, could tarnish the image of the affected brands and may cause consumers to choose other products. We may be required from time to time to recall products entirely or from specific markets due to changing government regulations, allegations of product contamination or lack of consumer interest in certain products. Product recalls could affect our profitability and could negatively affect brand image. We do not maintain recall insurance.17

~~Market data indicates~~ ~~that~~The ~~consumers~~price ~~are~~of ~~seeking~~our ~~greater~~common ~~variety~~stock inis ~~their beverages. Our future success will depend~~volatile, ~~in part, upon our continued ability to develop~~ and ~~introduce~~the ~~different~~public ~~and~~market ~~innovative~~for ~~beverages~~our ~~and~~common bestock ~~competitive~~is ~~in the areas of quality and health~~limited. If Weyou ~~can~~invest ~~provide no assurances that consumers will continue to purchase our products~~ in ~~the future. Additionally,~~ our ~~branded~~common ~~products are considered premium products and to maintain market share during recessionary periods we may have to reduce profit margins~~stock, ~~which~~the ~~would~~value ~~adversely affect our results~~ of ~~operations.~~your ~~Some~~investment ~~beverage~~could ~~brands~~decline, and~~/or~~ ~~products~~there may be ~~limited to~~ a ~~product~~limited ~~lifecycle of a few years before consumers’ preferences change. The beverages we currently~~ market ~~are~~ in ~~varying~~which ~~stages of their lifecycles, and we can provide no assurance that such beverages will become or remain profitable for us. The beverage industry is subject~~ to ~~changing~~sell ~~consumer preferences,~~shares ~~and shifts in consumer preferences may materially adversely affect our business, prospects, financial condition and results~~ of ~~operations if we misjudge such preferences. If~~ our ~~revenues~~common ~~decline,~~stock ~~our~~which ~~business,~~you ~~prospects,~~have ~~financial condition and results of operations would be materially adversely affected~~purchased.

~~Our~~ The ~~sales~~trading price of our common stock has been and continues to be subject to fluctuations. As a non-reporting company, potential investors are ~~affected~~warned by ~~seasonality~~OTC Markets that we may not be providing current information upon which an investment decision can be made. Generally, stock prices may fluctuate in response to a number of events and factors, such as quarterly variations in operating results, changes in recommendations by security analysts, the operating and stock performance of other companies that investors may deem as comparable and news reports relating to trends in the marketplace, among other factors. Aside from these factors, significant volatility in the market price of our common stock may arise due to factors such as:

As· ~~is typical in~~ the ~~beverage~~ ~~industry,~~development our sales are seasonal. We have experienced greatest sales volume during the second and third calendar quarters, generally Memorial Day to Labor Day. As a result, our working capital requirements and cash flow vary substantially throughout the year. Consumer demand for our products is also affected by weather conditions. Cool, wet Spring or Summer weather could result in decreased sales of our ~~beverages and could have a material adverse effect on our~~ business~~, prospects, financial condition and results of operations.~~;

~~Changes~~· incontinued ~~the~~negative ~~legal~~cash ~~and regulatory environment in the jurisdictions in which we operate could increase our costs or reduce our revenues.~~ flow;

As· arelatively ~~beverage~~low ~~producer, we~~price ~~must~~per comply with various federal, state, provincial, local and foreign laws relating to production, packaging, quality, labeling and distribution, including, in the U.S., those of the federal Food, Drug and Cosmetic Act, the Fair Packaging and Labeling Act, the Federal Trade Commission Act, the Nutrition Labeling and Education Act and California Proposition 65. We are also subject to various federal, state, provincial, local and foreign environmental laws and workplace regulations. These laws and regulations include, in the U.S., the Occupational Safety and Health Act, the Unfair Labor Standards Act, the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Federal Motor Carrier Safety Act, laws governing equal employment opportunity, customs and foreign trade laws and regulations, laws relating to the maintenance of fuel storage tanks, laws relating to water consumption and treatment, and various other federal statutes and regulations. These laws and regulations may change as a result of political, economic, or social events. Such regulatory changes may include changes in food and drug laws, laws related to advertising, accounting standards, taxation requirements, competition laws and environmental laws, including laws relating to the regulation of water rights and treatment. Changes in laws, regulations or government policy and related interpretations may alter the environment in which we do business, which may materially adversely affect our business, prospects, financial condition, and results of operations.share;

17· relatively low public float;

~~Significant~~· ~~additional~~variations ~~labeling~~in orquarterly ~~warning~~operating ~~requirements may inhibit sales of affected products.~~results;

~~Various~~· ~~jurisdictions may~~general ~~seek~~trends to adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of certain of our products. These types of requirements, if they become applicable to one or more of our major products under current or future environmental or health laws or regulations, may inhibit sales of such products. In California, a law requires that a specific warning appear on any product that includes a component listed by the state as having been found to cause cancer or birth defects. This law recognizes no generally applicable quantitative thresholds below which a warning is not required. If a component found in ~~one of our products is added to~~ the ~~list,~~functional orbeverage if the increasing sensitivity of detection methodology that may become available under this law and related regulations as they currently exist, or as they may be amended, results in the detection of an infinitesimal quantity of a listed substance in one of our beverages produced for sale in California, the resulting warning requirements or adverse publicity could affect our sales.industry;

~~Risks Related~~· tothe number of holders of our ~~Common~~common ~~Stock~~stock; and

We· ~~are~~the ~~not~~interest ~~current~~of insecurities ~~our~~dealers ~~filings under~~in ~~the~~maintaining ~~Securities~~a ~~Exchange~~market ~~Act~~for ofour ~~1934~~common stock.

~~We are not current~~ inAs ~~our~~long ~~filings~~as ~~with~~there ~~the~~is ~~Securities~~only ~~and~~a ~~Exchange~~limited ~~Commission.~~public Wemarket ~~expect~~for toour ~~become~~common ~~current~~stock, inthe ~~such~~sale ~~filings~~of ina ~~the~~significant ~~very~~number ~~near~~of ~~future, but~~shares ~~before~~of ~~that~~our ~~time~~common ~~the~~stock ~~Company~~at isany ~~not~~particular ~~providing~~time ~~investors~~could ~~with~~be ~~current~~difficult ~~information~~to ~~relating~~achieve toat ~~its~~the ~~business~~market ~~that~~prices anprevailing ~~investor would~~immediately ~~reasonably~~before ~~require~~such ~~access~~shares toare inoffered ~~order~~and tocould ~~make~~cause ana ~~informed~~severe ~~decision~~decline ~~whether~~in tothe ~~purchase~~price of our common stock. ~~See “Special Filing Note”.~~

~~The~~ We ~~price~~have 61,201,483 shares of ~~our~~ common stock ~~is volatile,~~outstanding ~~and~~as ~~the~~of ~~public~~March ~~market~~31, ~~for our common stock is limited~~2013. IfOf ~~you~~these ~~invest in our common stock~~shares, ~~the~~approximately ~~value of your investment could decline~~50,000,000 ~~and~~are ~~there~~restricted ~~may~~shares beunder aRule ~~limited~~144 ~~market~~of inthe ~~which~~Securities toAct ~~sell shares~~ of ~~our common stock which you have purchased~~1933.

~~The trading price~~ ofAny ~~our~~future ~~common~~equity ~~stock~~or ~~has~~debt ~~been~~issuances ~~and~~by ~~continues to be subject to fluctuations. Generally~~us, ~~stock~~including ~~prices~~the ~~may~~exercise ~~fluctuate in response to a number~~ of ~~events~~outstanding ~~and factors~~warrants, ~~such as quarterly variations in operating results, changes in recommendations by security analysts, the operating and stock performance of other companies that investors~~ may ~~deem~~have asdilutive ~~comparable~~or ~~and~~adverse ~~news~~effects ~~reports~~on ~~relating to trends in the marketplace, among other factors. Aside from these factors, significant volatility in the market price of~~ our ~~common~~existing ~~stock may arise due to factors such as:~~shareholders.

· We may issue additional shares of common stock, convertible securities or warrants that could dilute your ownership in our company and may include terms that give new investors rights that are superior to yours. The sale of substantial amounts of our common stock, the ~~development~~issuance of substantial amounts of warrants and options granting the right to receive shares of our ~~business;~~common stock or the prospect of such sales or issuances could materially adversely affect the market price of our common stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline.

· We ~~continued~~expect ~~negative~~to experience significant fluctuations in quarterly operating results. These fluctuations may cause cash ~~flow;~~shortfalls and materially affect our results of operations, which would have an adverse effect on our common stock trading price.

· Because ~~relatively~~of ~~low~~the ~~price~~nature ~~per~~of our business, we believe that quarter-to-quarter comparisons of results of our operations are not necessarily meaningful. Our quarterly results of operations may fluctuate significantly in the future as a result of a variety of factors, many of which are outside our control. These and other factors result in an uneven revenue stream. Any significant shortfall in revenues could have an immediate and adverse effect on our business and financial condition. Such variations may lead to significant volatility of our share; price. Because our revenue stream is not predictable, you should not rely on the results of any single quarter as an indication of our future performance.

~~· relatively low public float;~~18

·We variationshave not paid cash dividends, and it is unlikely that we will pay cash dividends in quarterlythe operatingforeseeable results;future.

· We ~~general~~plan ~~trends~~to use all of our earnings, to the extent we have earnings, to fund our operations. We do not plan to pay any cash dividends in the ~~functional~~foreseeable ~~beverage~~future. We ~~industry;~~cannot guarantee that we will, at any time, generate sufficient surplus cash that would be available for distribution as a dividend to the holders of our common stock. Investors should not expect to receive cash dividends on our common stock.

· Our ~~the~~common ~~number~~stock ofis ~~holders~~considered ofto ~~our~~be ~~common~~a ~~stock;~~“penny ~~and~~stock.”

· Our ~~the~~common ~~interest~~stock ofwill ~~securities~~be ~~dealers~~considered a “penny stock” as that term is defined in ~~maintaining~~Rule a3a5-1 ~~market~~promulgated ~~for~~under ~~our~~the ~~common~~Exchange ~~stock~~Act.

18 Penny stocks are stocks:

As· ~~long~~with ~~as there is only~~ a limited public market for our common stock, the sale of a significant number of shares of our common stock at any particular time could be difficult to achieve at the market prices prevailing immediately before such shares are offered and could cause a severe decline in the price of ~~our~~less ~~common~~than ~~stock~~$5.00 per share;

~~We have~~· ~~61,201,483~~that ~~shares of common stock outstanding as of April 24, 2012. Of these shares, approximately 50,000,000~~ are ~~restricted~~not ~~shares~~traded ~~under~~on ~~Rule~~a ~~144~~“recognized” ofnational ~~the Securities Act of 1933.~~exchange;

~~Any~~· ~~future~~whose ~~equity~~prices orare ~~debt~~not ~~issuances~~quoted byon ~~us, including~~ the ~~exercise~~NASDAQ ofautomated ~~outstanding~~quotation ~~warrants,~~system; ~~may have dilutive~~ or ~~adverse effects on our existing shareholders.~~

We· ~~may issue additional shares~~ of ~~common~~issuers ~~stock,~~with ~~convertible~~net ~~securities~~tangible orassets ~~warrants~~less ~~that~~than ~~could dilute your ownership in our company and may include terms that give new investors rights that are superior to yours. The sale of substantial amounts of our common stock~~$2,000,000 ~~the~~(if ~~issuance of substantial amounts of warrants and options granting~~ the ~~right~~issuer tohas ~~receive~~been ~~shares~~in ofcontinuous ~~our~~operation ~~common~~for ~~stock~~at orleast ~~the~~three ~~prospect~~years) ~~of such sales~~ or ~~issuances could materially adversely affect the market price of our common stock. Moreover~~$5,000,000 ~~any~~(if ~~issuances by us of equity securities may be at or below the prevailing market price of our common stock and~~ in ~~any~~continuous ~~event~~operation ~~may~~for ~~have~~less athan ~~dilutive~~three ~~impact on your ownership interest~~years), ~~which~~or ~~could~~with ~~cause~~average ~~the~~revenue ~~market price~~ of ~~our~~less ~~common~~than ~~stock to decline~~$600,000.

We Section ~~expect~~15(g) toof ~~experience~~the ~~significant fluctuations~~Exchange Act and Rule 15g-2 promulgated thereunder require broker-dealers dealing in ~~quarterly~~penny ~~operating~~stocks ~~results.~~to ~~These~~provide ~~fluctuations~~potential ~~may~~investors ~~cause~~with ~~cash~~a ~~shortfalls~~document disclosing the risks of penny stocks and ~~materially~~to ~~affect~~obtain ~~our~~a ~~results~~manually signed and dated written receipt of ~~operations,~~ ~~which~~the ~~would~~document ~~have~~before aneffecting ~~adverse~~any ~~effect~~transaction onin ~~our~~a ~~common~~“penny stock” ~~trading~~for ~~price~~the investor’s account. We urge potential investors to obtain and read this disclosure carefully before purchasing any shares that are deemed to be “penny stock.”

~~Because of the nature~~ ofRule ~~our business, we believe that quarter~~15g-~~to-quarter~~9 ~~comparisons~~promulgated ofunder ~~results~~the ofExchange ~~our~~Act ~~operations~~requires ~~are~~broker-dealers ~~not~~in ~~necessarily~~penny ~~meaningful.~~stocks ~~Our quarterly~~to ~~results~~approve ~~of operations may fluctuate significantly in~~ the ~~future~~account ~~as a result~~ of aany ~~variety~~investor offor ~~factors,~~transactions ~~many of which are outside our control. These and other factors result~~ in ansuch ~~uneven~~stocks ~~revenue~~before ~~stream.~~selling ~~Any~~any ~~significant~~“penny ~~shortfall~~stock” ~~in revenues could have an immediate and adverse effect on our business and financial condition. Such variations may lead~~ to ~~significant~~that ~~volatility of our share price~~investor. This ~~Because~~procedure ~~our~~requires ~~revenue stream is not predictable, you should not rely on~~ the ~~results~~broker-dealer ~~of any single quarter as an indication of our future performance.~~to:

We· ~~have~~obtain ~~not~~from ~~paid~~the ~~cash~~investor ~~dividends, and~~information itabout ishis ~~unlikely~~or ~~that~~her wefinancial ~~will~~situation, ~~pay~~investment ~~cash~~experience ~~dividends~~and ininvestment ~~the foreseeable future.~~objectives;

We· ~~plan~~reasonably ~~to use all of our earnings~~determine, tobased ~~the~~on ~~extent~~that ~~we have earnings~~information, tothat ~~fund~~transactions ~~our~~in ~~operations.~~penny Westocks doare ~~not~~suitable ~~plan~~for ~~to pay any cash dividends in~~ the ~~foreseeable future.~~investor Weand ~~cannot guarantee~~ that wethe ~~will,~~investor athas ~~any~~enough ~~time,~~knowledge ~~generate~~and ~~sufficient~~experience ~~surplus~~to ~~cash that would~~ be ~~available~~able ~~for distribution as a dividend~~ to evaluate the ~~holders~~risks of ~~our~~“penny ~~common~~ stock.” ~~Investors should not expect to receive cash dividends on our common stock.~~transactions;

~~Our~~· ~~common~~provide ~~stock~~the isinvestor ~~considered~~with ~~to be~~ a ~~“penny~~written ~~stock.”~~statement setting forth the basis on which the broker-dealer made his or her determination; and

~~Our~~· ~~common~~receive ~~stock~~a ~~will be~~signed ~~considered~~and adated ~~“penny~~copy ~~stock”~~of asthe ~~that~~statement ~~term~~from isthe ~~defined~~investor, inconfirming ~~Rule~~that ~~3a5-1~~it ~~promulgated~~accurately ~~under~~reflects the ~~Exchange~~investor’s ~~Act~~financial situation, investment experience and investment objective.

~~Penny~~ Compliance ~~stocks~~with these requirements may make it more difficult for investors in our common stock to resell their shares to third parties. Accordingly, our common stock should only be purchased by investors who understand that such investment is a long-term and illiquid investment and are ~~stocks:~~capable of and prepared to bear the risk of holding the common stock for an indefinite period of time.

~~· with a price of less than $5.00 per share;~~19

·ITEM ~~that~~1B. ~~are~~UNRESOLVED ~~not~~STAFF ~~traded on a “recognized” national exchange;~~COMMENTS.

~~· whose prices are not quoted on the NASDAQ automated quotation system; or~~ None.

·ITEM ~~of issuers with net tangible assets less than $~~2~~,000,000~~. ~~(if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average revenue of less than $600,000~~PROPERTIES.

19 We rent space for our inventory as required through short term arrangements with third parties. Our corporate headquarters are located at 501 Madison Avenue, Suite 501, New York, NY 10022, pending relocation upon receipt of additional financing. We have no fixed rental obligation.

~~Section~~ITEM 15(g) of the Exchange Act and Rule 15g-2 promulgated thereunder require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a “penny stock” for the investor’s account3. WeLEGAL ~~urge potential investors to obtain and read this disclosure carefully before purchasing any shares that are deemed to be “penny stock~~PROCEEDINGS.”

~~Rule~~ On ~~15g-9~~July ~~promulgated under~~27, ~~the~~2012, ~~Exchange~~we ~~Act~~received ~~requires~~notice ~~broker-dealers~~that ina ~~penny~~default ~~stocks~~judgment had been entered against the Company with respect to ~~approve~~a civil action summons and complaint filed in the ~~account~~Superior Court of ~~any~~New ~~investor~~Jersey, Passaic County, for ~~transactions~~the innon-payment ~~such stocks~~of ~~before~~certain ~~selling~~unsecured ~~any~~promissory ~~“penny~~notes ~~stock”~~issued toby ~~that~~the ~~investor~~Company’s predecessor, DAM Holdings, Inc., ~~This~~in ~~procedure~~the ~~requires~~amount of $66,051. The repayment of these notes has been guaranteed in full by a third party in connection with the ~~broker~~merger of OSO USA LLC into our wholly-~~dealer~~owned subsidiary, OSO Beverages Corp. The Company intends to: pursue its remedies against such third party with respect to this judgment.

~~· obtain from the investor information about his or her financial situation, investment experience and investment objectives;~~ PART II

·ITEM ~~reasonably~~5. ~~determine,~~MARKET ~~based~~FOR onREGISTRANT’S ~~that~~COMMON ~~information~~EQUITY, ~~that~~RELATED ~~transactions~~STOCKHOLDER inMATTERS ~~penny~~AND ~~stocks~~ISSUER ~~are~~PURCHASES ~~suitable~~OF ~~for~~EQUITY ~~the investor and that the investor has enough knowledge and experience to be able to evaluate the risks of “penny stock” transactions;~~SECURITIES.

· Market ~~provide the investor with a written statement setting forth the basis on which the broker-dealer made his or her determination; and~~Information

· Our ~~receive~~common astock ~~signed~~is ~~and~~currently ~~dated~~traded ~~copy~~on of the ~~statement~~OTCQB ~~from~~under the ~~investor,~~symbol ~~confirming that it accurately reflects the investor’s financial situation, investment experience and investment objective~~“PBGC”.

~~Compliance with these~~ ~~requirements~~The ~~may~~following ~~make~~table itshows, ~~more difficult~~ for ~~investors~~each inquarter ~~our~~of ~~common~~fiscal ~~stock~~2012 toand ~~resell their shares to third parties. Accordingly~~2011, ~~our~~ ~~common~~the ~~stock~~high ~~should only be purchased by investors who understand that such investment is a long-term~~ and ~~illiquid~~low ~~investment and~~closing ~~are~~sales ~~capable~~prices ofas ~~and~~reported ~~prepared~~by toOTC ~~bear the risk of holding the common stock for an indefinite period of time~~Markets.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

	High		Low
2012:
Fourth quarter	$	0.011	$	0.0022
Third quarter	$	0.0175	$	0.01
Second quarter	$	0.08	$	0.013
First quarter	$	0.31	$	0.05
2011:
Fourth quarter	$	1.05	$	0.08
Third quarter	$	1.05	$	0.25
Second quarter	$	0.25	$	0.25
First quarter	$	0.25	$	.01

~~None~~ As of March 31, 2013, there were 61,201,483 shares of common stock issued and outstanding, held by approximately 212 holders of record, although there are a larger number of beneficial owners. The closing price on March 30, 2013 was $0.0075 per share.

~~ITEM 2. PROPERTIES.~~ Dividends

We ~~rent~~have ~~space~~never ~~for our~~declared ~~inventory~~or aspaid ~~required~~any ~~through~~cash ~~short~~dividends ~~term~~with ~~arrangements~~respect ~~with~~to ~~third~~our ~~parties~~common stock. We ~~rent~~do ~~our~~not ~~corporate~~anticipate ~~headquarters~~paying ~~for~~cash adividends ~~fixed~~on ~~rate of~~our ~~$2,500~~common ~~per~~stock ~~month~~in onthe anforeseeable ~~informal~~future. ~~month~~Any future determination with regard to ~~month~~the ~~basis~~payment ~~from~~of adividends ~~non-affiliated~~will ~~third~~be ~~party~~at ~~effective~~the ~~August~~discretion ~~15,~~of ~~2011.~~the ~~Our~~Board ~~corporate headquarters~~of ~~are~~Directors ~~located~~and atwill ~~501~~be ~~Madison~~dependent ~~Avenue,~~upon ~~Suite~~our ~~501~~future earnings, ~~New~~financial ~~York~~condition, NYapplicable ~~10022~~dividend restrictions and capital requirements and other factors deemed relevant by the Board of Directors.

~~ITEM 3. LEGAL PROCEEDINGS.~~20

~~On April 19, 2012,~~ weStock received a Civil Action Summons and Complaint from four holders of unsecured convertible promissory notes (“Notes”) in the aggregate principal amount of $50,000 issued by our predecessor, Hybrid Dynamics Corporation, in 2008. The Complaint was filed on February 15, 2012 in the Superior Court of New Jersey, states that the Company’s failure to pay the Notes constitutes a default and breach of contract, and demands repayment of principal and interest in the aggregate amount of $60,965, plus incidental and consequential damages and attorneys’ fees. We are considering our response to this Complaint. Pursuant to an Indemnification Agreement entered into with Eric Brown, an affiliate of Prestwick Circle Service Corp. (see “Note Purchase Agreement” discussed in Item 7 herein) on October 19, 2011 as part of the merger transaction with OSO USA LLC, we have been indemnified by Mr. Brown in the event that we pay any indebtedness evidenced by Notes. If the event that we make any such payments, we will demand that we be made whole pursuant to the Indemnification Agreement.Repurchases

20 None.

~~PART II~~ Sales of Unregistered Securities

~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.~~ None

~~Market~~ITEM ~~Information~~6. SELECTED FINANCIAL DATA. Not applicable

~~Our~~ITEM ~~common~~7. ~~stock~~MANAGEMENT’S isDISCUSSION ~~currently~~AND ~~traded~~ANALYSIS ~~on the~~OF ~~OTCQB~~FINANCIAL ~~under~~CONDITION ~~the~~AND ~~symbol~~RESULTS ~~“PBGC”~~OF OPERATIONS.

The following ~~table~~discussion ~~shows~~of our financial condition and results of operations contains forward-looking statements that involve risks and uncertainties, ~~for~~such ~~each~~as ~~quarter~~ statements of ~~fiscal~~our ~~2011~~plans, objectives, expectations and ~~2010~~intentions. As described at the beginning of this Annual Report on Form 10-K, our actual results could differ materially from those anticipated in these forward-looking statements. Factors that could contribute to such differences include those discussed at the ~~high~~beginning of this Report, below in this section and ~~low~~in ~~closing~~the ~~sales~~section ~~prices~~above entitled “Risk Factors.” You should not place undue reliance on these forward-looking statements, which apply only as ~~reported~~of the date of this Report. Except as required by ~~OTC~~law, ~~Markets~~we undertake no obligation to update any forward-looking statements to reflect new information, events or circumstances after the date of this Report, or to reflect the occurrence of unanticipated events. You should read the following discussion and analysis in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Report.

	High		Low
2011:
Fourth quarter	$	1.05	$	0.08
Third quarter	$	1.05	$	0.25
Second quarter	$	0.25	$	0.25
First quarter	$	0.25	$	0.01
2010:
Fourth quarter	$	0.01	$	0.01
Third quarter	$	0.01	$	0.01
Second quarter	$	0.016	$	0.01
First quarter	$	0.016	$	.016

Overview

As We ofcurrently ~~April~~have ~~24,~~insufficient ~~2012~~working capital to carry on normal day-to-day operations. Although we continue to serve customers on a limited basis from existing inventory, ~~there~~ ~~were~~we 61are unable to purchase additional inventory or actively market our products to new accounts. We have no payroll,~~201,483~~ ~~shares~~and the majority of ~~common~~consulting ~~stock~~fee ~~issued~~obligations incurred in 2011 and ~~outstanding~~2012 have been accrued. Our principal focus since the end of the first quarter of 2012 has been finding additional capital. There can be no assurance that such capital will be available as necessary to meet our working capital requirements or, ~~held~~if the capital is available, that it will be on reasonable terms acceptable us. The issuances of additional equity and convertible debt securities by ~~approximately~~the ~~212~~Company ~~holders~~will result in dilution in the equity interests of ~~record~~our current stockholders. Obtaining commercial loans, ~~although~~assuming ~~there are~~those aloans ~~larger~~would ~~number~~be ofavailable, ~~beneficial~~will ~~owners~~increase our liabilities and future cash commitments. ~~The~~If ~~closing~~we ~~price~~are unable to obtain financing in the amounts and on ~~April~~terms 24deemed acceptable, ~~2012~~the ~~was~~business ~~$0.04~~and ~~per~~future ~~share~~success may be adversely affected.

~~Dividends~~ We are a consumer brand development company focused on creating, marketing and selling compelling functional beverage brands. Our flagship brand, OSO, is a premium energy beverage offered primarily to high profile on-premise venues in New York City. “On-premise” accounts include clubs, bars, restaurants and hotels. OSO holds a unique position as a premium energy beverage. With additional repackaging initiatives in the planning stages, 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.

We ~~have~~measure ~~never~~our ~~declared or~~results ~~paid~~primarily ~~any~~through ~~cash~~case ~~dividends~~sales ~~with~~of ~~respect to~~ our ~~common stock~~products. WeHowever, dohistorically, ~~not~~a ~~anticipate~~lack ~~paying~~of ~~cash~~available ~~dividends~~capital onhas significantly limited our ~~common~~sales ~~stock~~efforts, in the ~~foreseeable~~effect ~~future~~of which can be seen in our results of operations. ~~Any~~In ~~future~~October ~~determination~~2011 we entered into a merger transaction intended to provide us with ~~regard~~an attractive capital structure to ~~the~~secure ~~payment~~financing for production of ~~dividends~~our ~~will~~products, beamong atother things. However, a participant in the ~~discretion~~merger oftransaction that had committed to provide financing to us in the ~~Board~~ amount of ~~Directors~~approximately $200,000 defaulted, and ~~will~~as bea ~~dependent~~direct ~~upon~~result ~~our~~of ~~future~~this ~~earnings,~~default ~~financial~~we ~~condition,~~were ~~applicable~~able ~~dividend~~to ~~restrictions~~engage ~~and~~in ~~capital requirements~~only ~~and~~a ~~other~~limited ~~factors~~range ~~deemed~~of ~~relevant~~operation bys during the ~~Board~~fourth quarter of ~~Directors~~2011 and were required to seek additional capital throughout 2012.

~~Stock Repurchases~~21

~~None~~ We operate our business through our wholly owned subsidiary, OSO Beverages Corp. We distribute our OSO products through our wholly owned subsidiary, Fury Distribution Holdings LLC.

~~Sales~~ Results of ~~Unregistered Securities~~Operations

~~On October 19, 2011,~~ weYears ~~issued~~Ended 50December 31,~~000,000~~ ~~restricted~~2012 ~~shares~~and ~~of our common stock in connection with the merger of OSO USA LLC into OSO Beverages Corp., our wholly-owned subsidiary. See Item I, “Background”. On December 15,~~ 2011, ~~we issued 89,807 restricted shares of our common stock upon the cashless exercise of a warrant to purchase 200,000 shares of our common stock.~~

~~None of these sales~~ of securities was registered under the Securities Act of 1933 in reliance on the exemption from registration in Section 4(2) of the Act, as a transaction not involving any public offering. Each of the persons and/or entities receiving our securities qualified as an accredited or sophisticated investor and each acknowledged that they were acquiring the shares as investments for their own account and without any intention to sell or otherwise dispose of the shares. These securities were issued as restricted securities and the certificates were stamped with restrictive legends to prevent any resale without registration under the Act or in compliance with an exemption.Revenue

~~ITEM~~ For 6the year ended December 31, 2012, revenue was $53,685, a decrease of $41,416, or 43.5%, ~~SELECTED~~from ~~FINANCIAL~~$95,101 ~~DATA~~in revenue for the year ended December 31, 2011. Our revenues were affected negatively by a lack of available for sale inventory due to financing constraints. Our ability to generate new customers and sales volumes has been hindered by our lack of a full product suite, including both original and lite flavors.

~~Not~~ Gross ~~applicable.~~Profit

21 For the year ended December 31, 2012, gross profit was $36,230, a decrease of $26,654, or 42.4%, from $62,884 in gross profit for the year ended December 31, 2011. On a percentage of net sales basis, gross profit was 67.5% in 2012 versus 66.1% in 2011. The decrease in gross profit was a direct result of the decrease in sales due to the lack of available stock as described herein. Our production costs and margins remained relatively the same on a percentage basis even at the lower volumes experienced in 2012.

~~ITEM~~ Selling, 7.General ~~MANAGEMENT’S~~and ~~DISCUSSION~~Administrative ~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~Expenses

~~The following~~ ~~discussion~~Selling, ofgeneral ~~our financial condition~~ and ~~results~~administrative ofexpenses ~~operations~~for ~~contains~~the ~~forward-looking~~year ~~statements~~ended ~~that~~December 31, ~~involve~~2012 ~~risks~~were ~~and uncertainties~~$357, ~~such~~885, asan ~~statements~~increase of ~~our plans~~$101, ~~objectives~~910, ~~expectations~~or ~~and intentions~~39.8%, Asfrom ~~described~~$255,975 atfor the ~~beginning~~year ofended ~~this Annual Report on Form~~December ~~10-K~~31, ~~our actual results could differ materially from those anticipated in these forward-looking statements~~2011. ~~Factors that could contribute to such differences include those discussed at the beginning of this Report~~Selling, ~~below~~general ~~in this section~~ and ~~in the~~administrative ~~section~~expenses ~~above~~increased ~~entitled~~primarily ~~“Risk Factors.” You should not place undue reliance on these forward-looking statements, which apply only~~ as ofa ~~the~~result ~~date~~ of ~~this~~increased ~~Report.~~professional ~~Except~~fees asand ~~required~~expenses byrelated ~~law, we undertake no obligation~~ to ~~update~~operating ~~any~~as ~~forward-looking statements~~a topublic ~~reflect new information~~company, ~~events~~including orprofessional ~~circumstances~~fees ~~after~~and ~~the~~consulting ~~date~~expenses offor ~~this~~our ~~Report,~~team ~~or to reflect the occurrence of unanticipated events~~members. In ~~You~~2011, ~~should~~we ~~read~~were ~~the~~only ~~following~~operating ~~discussion~~as ~~and~~a ~~analysis~~public incompany ~~conjunction~~for ~~with~~less ~~our~~than ~~consolidated~~3 ~~financial statements and the accompanying notes thereto included elsewhere in this Report~~months.

~~Overview~~ Other Income (Expense)

~~We are a consumer brand~~ ~~development~~In ~~company focused on creating~~2011, ~~marketing~~we ~~and~~recognized ~~selling compelling functional beverage brands. We operate~~ a ~~two~~non-~~tiered strategy~~cash ~~that~~gain ~~blends~~on the ~~large~~settlement ~~upside potential~~ of ~~developing and owning proprietary brands with~~ a ~~lower~~debt ~~risk,~~due ~~predictable captive brands strategy. Our flagship brand, OSO, is~~ a ~~premium~~third ~~energy~~party ~~beverage~~of ~~offered primarily to high profile on-premise venues in New York City~~$18,628. Concurrent ~~“On-premise”~~with ~~accounts~~our ~~include~~merger ~~clubs, bars, restaurants~~ and ~~hotels.~~subsequent ~~OSO~~Note ~~holds~~Purchase ~~a unique position as a premium energy beverage. With additional repackaging initiatives currently underway~~Agreement, ~~OSO~~we ~~intends~~paid tothe ~~further~~third ~~differentiate~~party ~~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~~$7,195 ~~top-shelf~~as ~~energy~~full ~~with~~and ~~elegant~~final ~~packaging,~~settlement ~~unlike~~of ~~mass~~the ~~market ‘extreme-focused’ canned energy drinks~~debt.

~~In addition to OSO,~~ weInterest 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.Expense

We Interest ~~measure~~expense ~~our~~was ~~results primarily~~$160,455 ~~through~~for ~~case~~the ~~sales~~year ofended ~~our~~December ~~products. However~~31, ~~historically~~2012, aan ~~lack~~increase of ~~available~~$130,656 ~~capital~~from ~~has~~$27,799 ~~significantly~~for ~~limited~~the ~~our sales~~year ~~efforts~~ended December 31, ~~the~~2011. We ~~effect~~finance ofour ~~which~~products ~~can~~through ~~been~~the beissuance ~~seen~~of innotes ~~our~~to ~~results~~certain ofthird ~~operations~~party lenders. InThe ~~October~~notes ~~2011~~typically wehave ~~entered~~a ~~into~~funded aamount ~~merger~~and ~~transaction intended~~a toface ~~provide~~amount, usand ~~with~~do annot ~~attractive~~bear ~~capital~~interest. We ~~structure~~recognize tointerest ~~secure~~as ~~financing~~the ~~for~~difference ~~production~~between ofthe ~~our~~face ~~products,~~amount ~~among~~and ~~other~~the ~~things. We~~funded ~~expect~~amount, ~~that~~amortized ~~having~~over ~~full~~the ~~stock~~life of ~~our~~the ~~OSO~~note. In ~~products~~addition, ~~will~~we have aincurred ~~positive~~and ~~effect~~amortized onas ~~our~~interest gothe ~~forward~~value ~~results~~of beneficial conversion features associated with certain of ~~operations~~our convertible notes. On WeApril ~~intend to~~2, ~~begin~~2012, ~~reporting~~we ~~our~~defaulted ~~quarterly~~on ~~case~~a ~~sales~~senior secured promissory note and began accruing penalties as ainterest ~~relevant~~for ~~metric~~the inremainder ~~our~~of ~~financial~~2012. Each ~~statements~~of ~~beginning~~these ~~after~~factors contributed to the ~~quarter~~large increase in ~~which we~~interest ~~have~~expense ~~full~~for ~~stock~~the of2012 ~~our products~~period.

~~We operate our business~~ ~~through~~Net ~~our wholly owned subsidiaries, OSO Beverages Corp. and Captive Brands Corp. We distribute our OSO products through our wholly owned subsidiary, Fury Distribution Holdings LLC.~~Loss

~~Results~~ Net loss for the year ended December 31, 2012 was $482,690, an increase of ~~Operations~~$278,331 from a loss of $204,359 for the year ended December 31, 2011. The increase was primarily a result of higher selling, general and administrative expenses as discussed herein, primarily due to expenses related to the merger and expenses related to operating a public company, and higher interest expense related to the amortization of beneficial conversion features related to our convertible notes and accrued penalties on our senior secured notes that defaulted April 1, 2012.

~~Years Ended December 31, 2011 and 2010~~22

~~Revenue~~ Liquidity and Capital Resources

~~For~~ As ~~the~~of ~~year ended~~ December 31, ~~2011~~2012, ~~revenue~~we ~~was~~had a working capital deficit of $95811,~~101,~~740. Included ain ~~decrease~~the deficit were accounts payable of $77100,~~992~~458, oraccrued ~~45.1%,~~expenses ~~from~~of $~~173~~375,~~093~~108, inand ~~revenue~~the ~~for~~current portion of notes payable in the ~~year~~amount ~~ended~~of ~~December 31~~$367, ~~2010~~053. ~~Our~~The ~~revenues~~majority ~~were~~of ~~affected~~our ~~negatively~~working bycapital adeficit ~~lack~~is ofrelated ~~available~~to ~~for~~outstanding ~~sale~~convertible ~~inventory~~debt ~~due~~and toaccrued ~~financing~~penalties ~~constraints.~~and Inconsulting ~~2010~~expenses, which we ~~offered~~ ~~both~~expect ~~flavors~~to satisfy through negotiated repayments and retirements in due course. We receive cash through the sale of our ~~OSO~~products ~~energy~~through ~~beverage~~our wholly owned distributor, ~~and~~Fury inDistribution ~~2011~~Holdings LLC. To date, we ~~only~~have ~~offered~~financed our ~~original~~operations, ~~flavor~~primarily ~~due~~the toproduction ~~lack~~of inventory, through the issuance of ~~available~~debt ~~financing for~~to ~~our~~private ~~products~~investors.

22 As of December 31, 2012 and 2011, we had cash and cash-equivalents of $-0- and $21,862, respectively. Cash used in operations during the years ended 2012 was $113,768, compared to cash used by operations of $158,184 in 2011. Our cash flows from operations were largely affected by the effect of operating as a public company, in which we incurred substantial operating expenses.

~~For the year ended~~ ~~December 31,~~Net ~~2011,~~cash ~~sales~~provided ~~allowances~~by ~~and~~financing ~~discounts,~~activities ~~which~~for ~~are~~the ~~netted~~year ~~from~~ended ~~revenue~~December 31, ~~totaled~~2012 ~~$8,016,~~was ~~a decrease of~~ $591,~~539~~906, ~~or 40.9%,~~which ~~from~~reflected ~~$13,555~~our ~~for~~issuance ~~the comparable period. The decrease was a primarily a result~~ of ~~lower~~notes ~~revenues~~payable into ~~2011~~lenders ~~which~~to ~~affected the~~finance ~~corresponding~~inventory ~~sales allowances~~ and ~~discounts~~working capital. For Onthe ayear ~~percentage~~ended ofDecember ~~total~~31, ~~sales basis~~2011, ~~sales~~our ~~allowances~~net ~~and~~cash ~~discounts~~provided ~~represented 7.5%~~by offinancing ~~total~~activities ~~sales~~was in$179,266, ~~2011~~which ~~versus~~reflected ~~7.3%~~our inissuance ~~2010.~~of ~~The~~notes ~~increase~~payable into ~~percentage~~lenders ~~sales allowances reflected our efforts~~ to ~~maintain key~~finance ~~accounts~~inventory ~~during~~and ~~period~~convertible innotes ~~which~~for weour ~~lacked~~entrance ~~full~~into ~~inventory~~the topublic ~~satisfy demand~~markets. We expect to continue to ~~offer~~finance ~~aggressive~~our ~~sales allowances~~inventory ~~and~~production ~~discounts~~through tothe ~~our~~issuance ~~accounts~~of ~~during~~notes ~~periods~~payable, ofand ~~high~~potentially ~~growth~~through tothe ~~attract~~issuance ~~accounts~~of ~~and~~equity ~~combat~~securities ~~other~~should ~~promotional~~financing ~~efforts from~~be ~~our~~available ~~competitors~~to us on agreeable terms.

~~Gross~~ Note ~~Profit~~Purchase Agreement. We have in place a Note Purchase Agreement with Prestwick Circle Service Corp. (“Prestwick”) which provides for maximum non-interest bearing advances to us of $387,100, of which $202,100 has been advanced and $187,100 is evidenced by an unsecured convertible promissory note in that amount. Prestwick has defaulted on its obligation to purchase, and we have issued a demand letter with respect to the remaining balance.

~~For~~ The ~~the~~note ~~year~~purchased ~~ended December 31,~~pursuant ~~2011,~~to ~~gross~~the ~~profit~~Note ~~was~~Purchase ~~$62,884,~~Agreement ais ~~decrease~~convertible ofinto ~~$52,985,~~shares orof ~~45.7%,~~our ~~from~~common ~~$115,869~~stock inat ~~gross~~any ~~profit~~time ~~for~~by the ~~year ended~~holder ~~December 31,~~at ~~2010~~$0.135 Onper ashare. ~~percentage~~On ofApril ~~net~~23, ~~sales basis~~2013, ~~gross~~we ~~profit~~exercised ~~was~~our ~~66.1%~~right into ~~2011~~convert ~~versus~~the ~~66.9%~~note indated ~~2010.~~to ~~The~~shares ~~decrease in~~of ~~gross~~the ~~profit~~Company’s ~~was~~Common aStock. ~~direct~~The ~~result~~conversion ofresulted ~~the decrease~~ in ~~sales~~our ~~due~~issuance ~~to the lack~~ of ~~available~~1,385,926 ~~stock~~restricted asshares ~~described~~of ~~herein.~~our ~~Our~~Common ~~production costs~~Stock ~~and~~to ~~margins remained relatively~~ the ~~same~~holder onin afull ~~percentage~~cancellation ~~basis~~of ~~even at~~ the ~~lower volumes experienced in 2011~~note.

~~Selling~~ On March 28, ~~General~~ 2012, we issued $70,000 of our 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 ~~Administrative~~are ~~Expenses~~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. The March 2012 Notes matured December 31, 2013 and are in technical default, although no default has been declared.

~~Selling~~ Throughout 2012, ~~general~~we ~~and administrative~~sought ~~expenses~~to ~~for~~raise ~~the~~capital ~~year~~to ~~ended~~operate ~~December 31,~~our ~~2011~~business. ~~were~~Apart ~~$255,975,~~from anthe ~~increase~~March of2012 ~~$116~~Notes,~~008,~~ orwe ~~83%,~~were ~~from~~unsuccessful ~~$139,967 for~~in ~~the~~obtaining ~~year~~any ~~ended December 31, 2010~~financing. ~~Selling,~~There ~~general~~can ~~and~~be ~~administrative~~no ~~expenses~~assurance ~~increased~~that ~~primarily~~additional asfinancing awill ~~result~~be ofavailable ~~increased professional~~in ~~fees~~amounts ~~and~~or ~~expenses~~on ~~related~~terms acceptable to ~~our~~us, ~~merger~~if ~~with~~at ~~DAM~~all. ~~Holdings~~If ~~and~~financing ~~preparation~~is tonot ~~enter~~available ~~the~~when ~~public~~required ~~markets.~~or Inis ~~addition, in~~not ~~the~~available ~~fourth~~on ~~quarter~~acceptable ~~of 2011~~terms, we ~~entered~~may ~~into~~be ~~consulting~~unable ~~agreements~~to ~~with~~continue ~~key~~to ~~individuals~~grow ~~that~~our ~~resulted~~business. inIn ~~higher~~addition, ~~consulting~~we ~~expenses in~~may ~~2011~~be ~~versus~~unable ~~2010,~~to ~~primarily~~take asadvantage ~~a result~~ of ~~our~~business ~~certain~~opportunities ~~internal~~or ~~requirements~~respond to ~~operate~~competitive ~~as a public company~~pressures. AsAny ~~part~~ of ~~our growth~~these ~~and~~events ~~expansion~~could ~~plan,~~have wea ~~also~~material ~~incurred~~and ~~certain~~adverse ~~rebranding~~effect ~~expenses~~on ~~including~~our ~~designs~~business, ~~for~~results ~~corporate~~of ~~identity,~~operations ~~packaging,~~ and ~~collateral~~ ~~materials,~~financial ~~including websites, in 2011 that were not incurred in 2010~~condition.

~~Other~~ Our ~~Income~~inability ~~(Expense)~~to raise equity capital to support our 2012 operating plans and production of our products, along with our current working capital deficiency, continues to raise substantial doubt about our ability to continue as a going concern. Our audited financial statements for the years ended December 31, 2012 and 2011 were prepared assuming we would continue as a going concern, which contemplates that we will continue in operation for the foreseeable future and will be able to realize assets and settle liabilities and commitments in the normal course of business. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that could result should we be unable to continue as a going concern.

In 2011, we recognized a non-cash gain on the settlement of a debt due a third party of $18,628. Concurrent with our merger with DAM Holdings Inc. and subsequent Note Purchase Agreement, we paid the third party $7,195 as full and final settlement of the debt.23

~~Interest~~ Contractual ~~Expense~~Obligations

~~Interest expense~~ ~~was~~We ~~$29,799~~entered ~~for~~into ~~the~~consulting ~~year~~agreements ~~ended~~with ~~December~~certain ~~31,~~key ~~2011,~~members ~~an increase~~ of ~~$4,898~~our ~~from~~business ~~$24,901~~effective ~~for~~October ~~the year ended December 31~~1, ~~2010~~2011. Under ~~We finance~~these ~~our~~consulting ~~products~~agreements, ~~through~~we ~~the~~are ~~issuance~~contractually ofobligated ~~notes~~ to pay certain ~~third~~consultants ~~party~~a ~~lenders.~~monthly ~~The~~retainer ~~notes~~for ~~typically~~their ~~have~~services. aWe ~~funded~~were ~~amount~~unable ~~and a~~to ~~face~~fulfill ~~amount,~~our ~~and~~obligations doto ~~not~~these ~~bear~~consultants ~~interest.~~after WeMarch ~~recognize~~31, ~~interest~~2012, and as ~~the~~a ~~difference~~consequence, ~~between~~we ~~the~~owe ~~face~~these ~~amount~~consultants ~~and~~$280,000 in the ~~funded~~aggregate ~~amount, amortized~~which ~~over~~is ~~the~~reflected ~~life~~in ofaccrued ~~the note~~expenses.

~~Net~~ Off-balance ~~Income~~Sheet Arrangements

~~Net loss for the year~~ ~~ended~~We ~~December 31,~~have ~~2011~~no ~~was~~off-balance ~~$204,359,~~sheet ~~an increase of $155,360 from a loss of $48,999 for the year ended December 31, 2010~~arrangements. The increase was primarily a result of higher selling, general and administrative expenses as discussed herein, primarily due to expenses related to the merger with DAM Holdings and expenses related to preparing for and operating a public company.

~~Liquidity~~ Critical ~~and~~Accounting ~~Capital Resources~~Policies

As The ofdiscussion ~~December~~and ~~31, 2011,~~analysis weof ~~had~~our afinancial ~~working~~condition ~~capital~~and ~~deficit~~results of ~~$453~~operations is based upon our consolidated financial statements,~~630.~~ ~~Included~~which have been prepared in ~~the~~accordance ~~deficit~~with ~~were~~accounting ~~accounts~~principles ~~payable~~generally ~~and~~accepted ~~accrued~~in ~~expenses~~the U.S. The preparation of ~~$218,586~~ these financial statements requires us to make estimates and ~~notes~~judgments ~~payable~~that inaffect the ~~amount~~reported amounts of ~~$353~~assets,~~803.~~ ~~The~~liabilities, ~~majority~~revenues and expenses, and related disclosure of ~~our~~contingent ~~working~~assets ~~capital~~and ~~deficit~~liabilities. isOn ~~related~~an toon-going ~~outstanding~~basis, ~~balances~~we ~~from~~ evaluate our ~~merger~~estimates ~~transaction~~based ~~with~~on ~~Dam~~historical ~~Holdings,~~experience ~~which~~and on various other assumptions that we ~~expect~~believe to ~~satisfy~~be ~~through~~reasonable ~~negotiated~~under ~~repayments~~the ~~and~~circumstances, ~~retirements~~the inresults ~~due~~of ~~course. We~~which ~~receive~~form ~~cash~~our ~~through~~basis for making judgments about the ~~sale~~carrying values of ~~our~~assets ~~products~~and ~~through~~liabilities ~~our~~that ~~wholly~~are ~~owned~~not ~~distributor,~~readily ~~Fury~~apparent ~~Distribution~~from ~~Holdings~~other ~~LLC~~sources. ToActual ~~date~~results may differ from these estimates under different assumptions or conditions, we ~~have~~or ~~financed~~if management made different judgments or utilized different estimates. Many of our ~~operations~~estimates or judgments are based on anticipated future events or performance, ~~primarily~~and ~~the~~as ~~production~~such ofare ~~inventory~~forward-looking in nature, ~~through~~and ~~the~~are ~~issuance~~subject ofto ~~debt~~many risks and uncertainties, including those discussed below and elsewhere in this Report. We do not undertake any obligation to ~~private~~update ~~investors~~or revise this discussion to reflect any future events or circumstances.

23 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~As of December 31,~~ ~~2011~~Item ~~and~~is ~~2010, we had cash and cash-equivalents of $21,862 and $2,521, respectively~~inapplicable. Cash used in operations during the years ended 2011 was $158,184, compared to cash provided by operations of $28,361 in 2010. Our cash flows from operations were largely affected by the effect of the merger transaction with our merger with Dam Holdings, in which we incurred substantial operating expenses to effect the transaction.

~~Net cash provided~~ byITEM ~~financing activities for the year ended December 31, 2011 was $179,266, which reflected our issuance of notes payable to lenders to finance inventory, merger transaction expenses, and working capital~~8. ~~For~~FINANCIAL ~~the~~STATEMENTS ~~year~~AND ~~ended~~SUPPLEMENTARY ~~December 31, 2010, our net cash used in financing activities was $34,326, which reflected higher repayments on production loans than issuances of new production loans~~DATA. We expect to continue to finance our inventory production through the issuance of notes payable, and potentially through the issuance of equity securities should financing be available to us on agreeable terms.

~~Note Purchase Agreement.~~ WeThe ~~have~~financial instatements ~~place a Note Purchase Agreement with Prestwick Circle Service Corp. (“Prestwick”) which provides for maximum non-interest bearing advances to us~~ of ~~$387,100,~~the ofCompany ~~which~~are ~~$187,100~~set ~~has~~forth ~~been~~beginning ~~advanced and is evidenced by an unsecured convertible promissory note in that amount. Prestwick has defaulted~~ on ~~its~~page ~~obligation~~F-1 toimmediately ~~purchase,~~following ~~and~~ the ~~Company~~signature ~~has~~page ~~issued a demand letter with respect to the remaining balance~~ of ~~$200,000.~~this ~~Although Prestwick has provided repeated assurances that funding will occur under the Note Purchase Agreement, there is no assurance that funding will in fact occur~~report.

The note purchased pursuant to the Note Purchase Agreement is convertible into shares of our common stock at any time by the holder at $0.135 per share. We may require the holder to convert its notes into shares of our common stock, unless the conversion would result in the holder then owning more than 4.99% of our common stock. We may require at our election conversion of all remaining notes after April 18, 2012 regardless of the then ownership position of the holder.

Report of Liebman Goldberg & Hymowitz LLP, Independent Registered Public Accounting Firm		F-1

Consolidated balance sheets as of December 31, 2012 and 2011		F-2

Consolidated statements of operations for the years ended December 31, 2012 and 2011		F-3

Consolidated statements of stockholders’ deficiency for the years ended December 31, 2012 and 2011		F-4

Consolidated statements of cash flows for the years ended December 31, 2012 and 2011		F-5

Notes to consolidated financial statements		F-6 – F-16

On December 9, 2011, we issued a senior secured promissory note in the amount of $100,000 to a third party lender. The note provided for original issue discount of $20,000, with the result that our net proceeds were $80,000. The note is due on the earlier to occur of (i) March 31, 2012, (ii) the receipt of the remaining proceeds in the amount of $200,000 from a Note Purchase Agreement entered into with a third party investor on October 24, 2011 and (iii) the receipt of $200,000 of proceeds from our planned private placement of equity securities. We also entered into a security agreement with the lender pursuant to which we granted a first lien on all of our assets to secure repayment of the note. The note may be converted into shares of our common stock by the lender at any time at $0.20 per share.

~~We expect that the net~~ ~~proceeds~~ITEM ~~from~~9A. ~~the~~CONTROLS ~~issuance~~AND ~~of these equity securities and secured promissory notes will provide sufficient capital for its operations through August 2012~~PROCEDURES.

~~We also intend to offer~~ ~~$500,000~~Disclosure ofControls our restricted shares of common stock solely to accredited investors pursuant to a private placement commencing in July 2012. We believe that the placement of these securities, if successful, will satisfy our liquidity needs through the remainder of 2012. Pending the receipt of the proceeds of this offering, the Company will operate with minimal staff and overhead and will not enter into employment agreements with key personnel. Production of inventory will be limited to purchases financed through debt, and sales and marketing will be continued on an organic basis with current resources. No assurance can be provided that this offering will occur or be successful.Procedures

~~Our~~ Fouad ~~capital~~Kallamni, ~~requirements depend~~who onwas ~~several~~our ~~factors~~principal executive and ~~are~~financial ~~primarily~~officer ~~related~~after tothe ~~our~~merger ~~product~~of ~~development~~OSO ~~expenses~~USA ~~and~~LLC ~~inventory~~into ~~purchases.~~the WeCompany ~~may~~on ~~seek~~October ~~to sell~~19, ~~equity~~2011 or(see ~~debt~~Item or1, ~~obtain~~Business) aand ~~credit~~for ~~facility~~the inremainder ~~addition~~of tothe ~~our~~reporting ~~current~~period ~~planned~~which ~~equity~~ended ~~placement.~~on ~~The~~December ~~sale~~31, of2012, ~~additional~~has ~~equity or~~concluded ~~convertible~~that ~~debt~~the ~~securities~~disclosure ~~could~~controls ~~result~~and inprocedures ~~additional~~were ~~dilution~~neither toeffective ~~our~~prior ~~stockholders,~~to ~~and~~the ~~incurring~~merger ~~additional~~or ~~indebtedness~~as ~~would result~~of inDecember an31, ~~increase~~2012. inThese ~~our~~controls ~~fixed~~are ~~obligations~~meant ~~and~~to ~~could~~ensure ~~result~~that ininformation ~~borrowing~~required ~~covenants~~to ~~that~~be ~~would~~disclosed ~~restrict~~by ~~our~~the ~~operations.~~issuer ~~There can~~in bethe noreports ~~assurance~~ that ~~financing~~it ~~will~~files beor ~~available~~submits inunder ~~amounts~~the orExchange onAct ~~terms~~is ~~acceptable~~recorded, ~~to us~~processed, ifsummarized atand ~~all.~~reported, Ifwithin ~~financing~~the istime ~~not~~periods ~~available when~~specified ~~required~~in orthe isCommission’s ~~not~~rules ~~available~~and onforms ~~acceptable~~and ~~terms,~~to weensure ~~may~~that beinformation ~~unable~~required to ~~continue~~be todisclosed ~~grow~~by ~~our~~an ~~business.~~issuer Inin ~~addition,~~the wereports ~~may~~that ~~be unable~~it tofiles ~~take~~or ~~advantage~~submits ofunder ~~business~~the ~~opportunities~~Act oris ~~respond~~accumulated toand ~~competitive~~communicated ~~pressures.~~to ~~Any~~the ofissuer's ~~these~~management, ~~events~~including ~~could~~its ~~have~~principal aexecutive ~~material~~ and ~~adverse~~principal ~~effect~~financial onofficers, ~~our~~or ~~business~~person or persons performing similar functions, ~~results~~as ofappropriate ~~operations~~to ~~and~~allow ~~financial~~timely ~~condition~~decisions regarding required disclosure.

24 During 2014, management intends to implement internal controls to ensure that required SEC filings will be timely.

~~Our inability to raise~~ ~~equity~~Management’s ~~capital~~Report to support our 2012 operating plans and production of our products, along with our current working capital deficiency, continues to raise substantial doubt about our ability to continue as a going concern. Our audited financial statements for the years ended December 31, 2011 and 2010 were prepared assuming we would continue as a going concern, which contemplates that we will continue in operation for the foreseeable future and will be able to realize assets and settle liabilities and commitments in the normal course of business. These financial statements do not include any adjustments to reflect the possible future effects on ~~the~~Internal ~~recoverability~~Control ~~and~~over ~~classification~~Financial ~~of assets or the amounts and classifications of liabilities that could result should we be unable to continue as a going concern.~~Reporting

~~Contractual~~ Our ~~Obligations~~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:

We1. ~~entered~~Pertain ~~into~~to ~~consulting agreements~~the ~~with~~maintenance ~~certain~~of ~~key~~records ~~members~~that in reasonable detail accurately and fairly reflect the transactions and dispositions of ~~our~~the ~~business~~assets ~~effective~~of ~~October~~the 1,issuer; ~~2011~~2. ~~Under~~Provide ~~these~~reasonable ~~consulting~~assurance ~~agreements,~~that wetransactions are ~~contractually obligated~~recorded as necessary to ~~pay~~permit ~~certain~~preparation ~~consultants~~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 ~~monthly~~material ~~retainer~~effect ~~for~~on ~~their~~the ~~services~~financial statements.

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

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 noconcluded ~~off-balance sheet~~that ~~arrangements~~our internal control over financial reporting was not effective as of December 31, 2012.

~~Critical~~ The ~~Accounting~~Company’s ~~Policies~~assessment identified certain material weaknesses which are set forth below:

~~The discussion and analysis~~ ofEntity ~~our~~Level financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Report. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.Controls

~~ITEM~~ We 7Ahave insufficient corporate governance policies. ~~QUANTITATIVE~~Our ~~AND~~corporate ~~QUALITATIVE~~governance ~~DISCLOSURES~~activities ~~ABOUT~~and ~~MARKET~~processes ~~RISK~~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.

~~Item is inapplicable.~~25

~~ITEM~~ We 8currently 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. ~~FINANCIAL~~In ~~STATEMENTS~~addition, ~~AND~~the ~~SUPPLEMENTARY~~limited ~~DATA~~size of the accounting department makes it impractical to achieve an optimum segregation of duties.

~~The financial statements of the Company~~ ~~are~~Functional ~~set~~Controls ~~forth~~and ~~beginning~~Segregation ~~on page F-1 immediately following the signature page~~ of ~~this report.~~Duties

Report of Liebman Goldberg & Hymowitz LLP, Independent Registered Public Accounting Firm		F-1
Consolidated balance sheets as of December 31, 2011 and 2010		F-2
Consolidated statements of operations for the years ended December 31, 2011 and 2010		F-3
Consolidated statements of stockholders’ deficiency for the years ended December 31, 2011 and 2010		F-4
Consolidated statements of cash flows for the years ended December 31, 2011 and 2010		F-5
Notes to consolidated financial statements		F-6 – F-15

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.

~~Item~~ Management 9.believes ~~Changes~~that inthe material weaknesses set forth above were the result of the scale of our operations and ~~Disagreements~~are ~~With~~a ~~Accountants~~circumstance due to our small size. Management believes these weaknesses did not have a material effect on ~~Accounting~~our financial results and ~~Financial~~intends ~~Disclosure~~to take remedial actions upon receiving funding for our business operations.

~~None~~ 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.

~~ITEM~~ We ~~9A.~~intend ~~CONTROLS~~to ~~AND~~consider ~~PROCEDURES~~the results of our remediation efforts and related testing as part of our assessment of the effectiveness of our internal control over financial reporting.

~~Disclosure~~ Changes ~~Controls~~in ~~and~~Internal ~~Procedures~~Control over Financial Reporting

~~Fouad~~ There ~~Kallamni,~~were ~~who~~no ~~was~~changes in our ~~President, principal~~internal ~~executive~~control ~~officer~~over ~~and principal~~ financial ~~officer~~reporting ~~after~~(as ~~the~~defined ~~merger~~in ofRule ~~OSO~~13a-15(f) ~~USA~~under ~~LLC into~~ the ~~Company~~Exchange ~~on October 19, 2011 (see Item 1, Business~~Act) ~~and~~that ~~for~~occurred ~~the~~during ~~remainder of~~ the ~~reporting~~year ~~period which~~ ended on December 31, ~~2011~~2012, ~~has concluded~~ that ~~the~~ ~~disclosure~~have ~~controls~~materially ~~and~~affected, ~~procedures were neither effective prior to the merger~~ or ~~as of December 31, 2011. These controls~~ are ~~meant~~ toreasonably ~~ensure~~likely ~~that information required~~ to bematerially ~~disclosed by the issuer in the reports that it files or submits under the Act is recorded~~affect, ~~processed,~~our ~~summarized~~internal ~~and~~control ~~reported,~~over 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~~reporting.

~~Management’s Report on Internal~~ ~~Control~~ITEM ~~over~~9B. ~~Financial~~OTHER ~~Reporting~~INFORMATION.

~~Our management is responsible for establishing~~ ~~and maintaining internal controls over financial reporting and disclosure controls~~None. 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;~~26

2. PART 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; andIII

3 ITEM 10. ~~Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition~~DIRECTORS, ~~use~~EXECUTIVE orOFFICERS ~~disposition~~AND ofCORPORATE ~~the issuer’s assets that could have a material effect on the financial statements~~GOVERNANCE.

~~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.Directors

A Our ~~material~~Board ~~weakness~~of isDirectors aas ~~control deficiency, or combination~~ of ~~control~~March ~~deficiencies~~31, in2013 ~~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.~~follows:

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

Director		Age		Director Since
Fouad Kallamni		35		October 2011

~~Entity~~ Mr. ~~Level~~Kallamni ~~Controls~~is the founder of our predecessor and oversees all of our business activities, including brand and product development. He has more than five years direct experience in the development and marketing of both private and captive functional beverages brands. In addition, he has extensive experience in full service marketing, special events and promotions planning directed at building brand experience through lifestyle, entertainment, fashion and nightlife, all directly relevant to the marketing of specialty beverages targeted at a specific demographic. Between 2006 and 2011, Mr. Kallamni was Chief Executive Officer and Director of PriLabs, Inc., a marketer of exclusive brand (private label) functional beverage programs with retailers. Mr. Kallamni founded PriLabs and built its business from inception, counting top tier retailers among its clients, including Walgreens, Duane Reade, Stop & Shop, Roundys and CVS. In 2010, Mr. Kallamni co-founded and is a partner of Casablanca Foods, LLC, a marketer of specialty Moroccan Foods with customers such as Wegmans, Food Emporium, Crate & Barrel, Stop & Shop, The Fresh Market and other retail chains. During the period 2000 through 2002, Mr. Kallamni was a managing partner at The Incompass Group, a full service marketing, special events and promotions company based in New York that builds brand experience through lifestyle, entertainment, fashion and nightlife. Mr. Kallamni also has experience in public relations at The Varick Group, where he served as head of event marketing and promotions during the period 2002 through 2004. The Varick Group worked with such clients as Nike, Pepsi, LG, Virgin, Def Jam, Maverick Records, Bad Boy and Prince.

~~We have insufficient corporate governance~~ ~~policies.~~Executive 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.Officers

26 Our sole executive officer as of March 31, 2013 was as follows:

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.

Name		Age		Position		Officer Since
Fouad Kallamni		35		President		October 2011

~~Functional~~ Please ~~Controls~~refer ~~and~~to ~~Segregation of~~Mr. ~~Duties~~Kallamni’s biography in the preceding section “Directors.”

~~We have an inadequate segregation of duties~~ ~~consistent~~Code ~~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.Ethics

~~Management believes that the material weaknesses~~ ~~set~~OurCode ~~forth above were the result~~ of ~~the~~Ethics ~~scale~~may ofbe ~~our~~found ~~operations and are a circumstance due to our small size. Management believes these weaknesses did not have a material effect~~ on ~~our~~the ~~financial~~Company’s ~~results~~website, ~~and intends to take remedial actions upon receiving funding for our business operations~~www.premierbeveragegroup.com.

~~We are committed to improving our financial~~ ~~organization.~~Section 16(a) AsBeneficial ~~part~~Ownership ofReporting 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:Compliance

Section 16(1a) ~~Adding~~of ~~personnel~~the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who own more than 10% of our common stock (collectively, “Reporting Persons”) to file with the ~~depth~~Securities and Exchange Commission (SEC) initial reports of ~~knowledge~~ownership and ~~time~~reports ~~commitment~~of changes in ownership of our common stock. Reporting Persons are also required by SEC regulations to ~~provide~~furnish aus ~~greater~~with ~~level~~copies of ~~review~~all ~~for~~such ~~corporate~~ownership ~~activities;~~reports they file. SEC regulations also require us to identify in this Report any Reporting Person who failed to file any such report on a timely basis.

~~(2)~~ To ~~Continuing~~the toCompany’s ~~update~~knowledge based solely on a review of the ~~documentation~~copies of ~~our~~such ~~internal~~reports ~~control~~furnished ~~processes~~to the Company, ~~including~~no ~~formal~~person ~~risk~~failed ~~assessment~~to offile, ~~our~~on ~~financial~~a ~~reporting~~timely ~~processes;~~basis, ~~and~~reports required by the Exchange Act during 2012:

~~(3)~~ Audit ~~Soliciting independent directors to enhance corporate governance and Board composition.~~Committee

We ~~intend~~do tonot ~~consider~~have ~~the~~an ~~results~~Audit ofCommittee. ~~our remediation~~All ~~efforts~~functions ~~and~~of ~~related~~an ~~testing~~audit ascommittee ~~part~~are ofperformed ~~our~~by ~~assessment~~Mr. ofKallamni ~~the~~as ~~effectiveness of~~ our ~~internal~~sole ~~control over financial reporting~~director.

~~Changes in Internal Control over Financial Reporting~~27

~~There were no changes in our internal control~~ ~~over~~ITEM ~~financial~~11. ~~reporting~~EXECUTIVE (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reportingCOMPENSATION.

~~ITEM~~ Summary ~~9B.~~Compensation ~~OTHER INFORMATION.~~Table

~~None~~ The following table shows all compensation awarded, earned by or paid to our Named Executive Officers for the fiscal years ended December 31, 2012 and 2011 , to the extent applicable.

PART III

Name and						Stock		Option		All Other
Principal				Bonus		Awards		Awards		Compensation
Position	Year	Salary ($)²		($)		($)⁽¹⁾		($)⁽¹⁾		($)⁽²⁾			Total ($)
Fouad Kallamni¹	2011	$	25,325	$		$		$	0	$	0	$	25,325
President	2012		15,000		0		0		0		0		15,000
Mark Klein³	2011		0		0		0		0		0		0

~~ITEM~~ 1 10Mr. ~~DIRECTORS,~~Kallamni ~~EXECUTIVE~~was ~~OFFICERS~~appointed ~~AND~~President ~~CORPORATE~~of ~~GOVERNANCE~~the Company on November 8, 2011.

~~Directors~~ 2 Mr. Kallamni does not have an employment agreement with the Company. He was compensated in 2011 pursuant to a one year consulting agreement at the rate of $25,325 for the month of October and at the rate of $10,000 per month thereafter. Of that amount, $25,325 was paid in cash and the balance of $20,000 was accrued. In 2012, the Company paid Mr. Kallamni $15,000 in cash and accrued the balance owed of $75,000 pursuant to the consulting agreement. Total compensation accrued but not paid to Mr. Kallamni for 2011 and 2012 is $97,000.

~~Our~~ 3 ~~Board~~Mr. ofKlein ~~Directors~~resigned as ofPresident, ~~April~~Secretary ~~24, 2012~~and isDirector aseffective ~~follows:~~October 19, 2011.

Director		Age		Director Since
Fouad Kallamni		34		October 2011

Outstanding Equity Awards at Fiscal Year-End 2011 Table

27 There were no equity awards held by our Named Executive Officer as of December 31, 2012.

~~Mr. Kallamni~~ is the founder of our predecessor and oversees all of our business activities, including brand and product development. He has more than five years direct experience in the development and marketing of both private and captive functional beverages brands. In addition, he has extensive experience in full service marketing, special events and promotions planning directed at building brand experience through lifestyle, entertainment, fashion and nightlife, all directly relevant to the marketing of specialty beverages targeted at a specific demographic. Between 2006 and 2011, Mr. Kallamni was Chief Executive Officer and Director of PriLabs, Inc., a marketer of exclusive brand (private label) functional beverage programs with retailers. Mr. Kallamni founded PriLabs and built its business from inception, counting top tier retailers among its clients, including Walgreens, Duane Reade, Stop & Shop, Roundys and CVS. In 2010, Mr. Kallamni co-founded and is a partner of Casablanca Foods, LLC, a marketer of specialty Moroccan Foods with customers such as Wegmans, Food Emporium, Crate & Barrel, Stop & Shop, The Fresh Market and other retail chains. During the period 2000 through 2002, Mr. Kallamni was a managing partner at The Incompass Group, a full service marketing, special events and promotions company based in New York that builds brand experience through lifestyle, entertainment, fashion and nightlife. Mr. Kallamni also has experience in public relations at The Varick Group, where he served as head of event marketing and promotions during the period 2002 through 2004. The Varick Group worked with such clients as Nike, Pepsi, LG, Virgin, Def Jam, Maverick Records, Bad Boy and Prince.Compensation

~~Executive~~ Mr. ~~Officers~~Kallamni received no compensation for his services to the Company as a director.

~~Our~~ITEM ~~sole~~12. ~~executive~~SECURITY ~~officer~~OWNERSHIP asOF ofCERTAIN ~~April 24,~~BENEFICIAL ~~2012~~OWNERS ~~was~~AND asMANAGEMENT ~~follows:~~AND RELATED SHAREHOLDER MATTERS.

Name		Age		Position		Officer Since
Fouad Kallamni		34		President		October 2011

The following table sets forth as of March 31, 2013 certain information regarding the beneficial ownership of our outstanding common stock by the following persons or groups:

~~Please~~ • ~~refer~~each person who, to ~~Mr.~~our ~~Kallamni’s~~knowledge, ~~biography in~~beneficially ~~the~~owns ~~preceding~~more ~~section~~than ~~“Directors.”~~5% of our common stock; and

~~Code~~ • ofthe ~~Ethics~~Named Executive Officer (who is also the Company’s sole director) identified in the Summary Compensation Table above.

~~The Company’s~~ ~~Code~~As of ~~Ethics~~March ~~may~~31, be2013 ~~found~~there onwere ~~the~~61,201,483 ~~Company’~~shares of common stock issued and outstanding, held by approximately 212 holders of record, although there are a larger number of beneficial owners. Unless otherwise indicated, each person's ~~website~~address is c/o Premier Beverage Group Corp, ~~www~~501 Madison Avenue, Suite 501, New York, NY 10022.~~premierbeveragegroup.com.~~

~~Section~~ Beneficial ownership is determined in accordance with SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 ~~16(a)~~days ~~Beneficial~~of ~~Ownership Reporting~~March 31, ~~Compliance~~2013 are deemed outstanding for computing the percentage ownership of the person holding the options or warrants, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated and subject to community property laws where applicable, we believe the beneficial owners of the common stock listed below, based on information furnished by them, have sole voting and investment power with respect to the shares listed opposite their names.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who own more than 10% of our common stock (collectively, “Reporting Persons”) to file with the Securities and Exchange Commission (SEC) initial reports of ownership and reports of changes in ownership of our common stock. Reporting Persons are also required by SEC regulations to furnish us with copies of all such ownership reports they file. SEC regulations also require us to identify in this Report any Reporting Person who failed to file any such report on a timely basis.28

To the Company’s knowledge based solely on a review of the copies of such reports furnished to the Company, the following persons have failed to file, on a timely basis, reports required by the Exchange Act during 2011:

		Options/Warrants
		Currently Exercisable	Total Beneficial	Percent of
Name and Address of Beneficial Owner	No. of Shares	or Within 60 Days	Ownership	Total
Named Executive Officer and Director
Fouad Kallamni	31,500,000	0	31,500,000	51.5
Other Principal Shareholders
Core Equity Group, LLC	5,000,000	0	5,000,000	8.2

Name and Principal Position		Number of Late Reports
Fouad Kallamni, Director and President		1

Equity Compensation Plan Information

~~Audit~~ We ~~Committee~~have no equity compensation plans.

~~We do not have an~~ ~~Audit~~ITEM ~~Committee~~13. ~~All~~CERTAIN ~~functions~~RELATIONSHIPS ofAND anRELATED ~~audit~~TRANSACTIONS, ~~committee~~AND ~~are~~DIRECTOR ~~performed by Mr~~INDEPENDENCE. ~~Kallamni as our sole director~~

28 There have been no related person transactions required to be disclosed pursuant to Item 404(a) or Item 407(a) of Regulation S-K.

~~ITEM~~ Fouad ~~11.~~Kallamni, ~~EXECUTIVE~~our ~~COMPENSATION~~sole director, is our President and is not an “independent” director.

~~Summary~~ ITEM ~~Compensation~~14. ~~Table~~PRINCIPAL ACCOUNTANT FEES AND SERVICES.

~~The following table~~ ~~shows~~Liebman ~~all~~Goldberg ~~compensation~~& ~~awarded,~~Hymowitz ~~earned~~LLP byaudited ~~or paid to~~ our ~~Named~~financial ~~Executive~~statements ~~Officers~~ for the ~~fiscal~~ years ended December 31, ~~2011~~ 2012 and ~~2010, to the extent applicable~~2011.

Name and Principal Position	Year	Salary ($)2		Bonus ($)		Stock Awards ($)(1)		Option Awards ($)(1)		All Other Compensation ($)(2)		Total ($)
Fouad Kallamni1	2011	$	25,325	$		$		$	0	$	0	$	25,325
President
Mark Klein3	2011		0		0		0		0		0		0
President and Secretary	2010		0		0		0		0		0		0

Audit and Related Fees

1 The ~~Mr.~~following ~~Kallamni~~table ~~was~~sets ~~appointed President~~forth of the ~~Company~~aggregate onfees ~~November~~billed 8by Liebman Goldberg & Hymowitz LLP for professional services rendered in the years ended December 31, 2012 and 2011, respectively.

2 Mr. Kallamni does not have an employment agreement with the Company. He was compensated in 2011 pursuant to a one year consulting agreement at the rate of $25,325 for the month of October and at the rate of $10,000 per month thereafter. Of that amount, $25,325 was paid in cash and the balance of $20,000 was accrued pending the closing of a round of financing of $1 million or more.

	2012		2011
Audit Fees¹	$	17,500	$	18,250
Audit-Related Fees²
Tax Fees
All Other Fees³

3 Mr. Klein resigned as President, Secretary and Director effective October 19, 2011.

¹	“Audit Fees” represent fees for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements included in our reports on Form 10-Q, and audit services provided in connection with other statutory or regulatory filings.
²	“Audit-Related Fees” generally represent fees for assurance and related services reasonably related to the performance of the audit or review of our financial statements.
³	“Tax Fees” generally represent fees for tax advice.

~~Outstanding Equity Awards at Fiscal~~ ~~Year-End 2011 Table~~PART IV

~~There~~ ~~were~~Item no15. ~~equity~~Exhibits ~~awards~~and ~~held~~Financial byStatement ~~our Named Executive Officer as of December 31, 2011~~Schedules.

~~Director~~ (a) Documents ~~Compensation~~filed as part of this Report are as follows:

~~Mr.~~ 1) Financial ~~Kallamni~~Statements: ~~received no~~The ~~compensation~~consolidated ~~for~~financial ~~his~~statements, ~~services~~related tonotes ~~the~~and ~~Company~~report asof aindependent ~~director~~registered public accounting firm are included in Item 8 of Part II of this Report.

~~ITEM~~ 2) Financial ~~12.~~Statement ~~SECURITY~~Schedules: ~~OWNERSHIP~~All OFschedules ~~CERTAIN~~have ~~BENEFICIAL~~been ~~OWNERS~~omitted ~~AND~~because ~~MANAGEMENT~~they ~~AND~~are ~~RELATED~~not ~~SHAREHOLDER~~applicable ~~MATTERS~~or not required, or the required information is included in the financial statements or notes thereto.

~~The following table~~ ~~sets~~3) Exhibits: ~~forth~~The asrequired ofexhibits ~~April~~are ~~24,~~included ~~2012~~at ~~certain information regarding~~ the ~~beneficial~~end ~~ownership~~ of ~~our~~this ~~outstanding~~Report ~~common~~and ~~stock~~are bydescribed in the ~~following persons~~exhibit ~~or groups:~~index.

~~• each person who, to our knowledge, beneficially owns more than 5% of our common stock; and~~29

~~• the Named Executive~~ ~~Officer (who is also the Company’s sole director) identified in the Summary Compensation Table above.~~EXHIBIT INDEX

As The offollowing ~~April~~exhibits ~~24,~~are ~~2012 there~~filed ~~were~~as ~~61,201,483~~part ~~shares~~ of ~~common~~this ~~stock~~Annual ~~issued~~Report ~~and~~on ~~outstanding,~~Form 10-K ~~held~~or ~~by approximately 212 holders of record, although there~~ are aincorporated ~~larger~~herein ~~number~~by ~~of beneficial owners~~reference. ~~Unless~~Where ~~otherwise~~an ~~indicated,~~exhibit ~~each person's address~~ is ~~c/o Premier~~ ~~Beverage~~incorporated ~~Group~~by ~~Corp~~reference, ~~501~~the ~~Madison~~document ~~Avenue,~~to ~~Suite~~which ~~501,~~it ~~New~~is ~~York,~~cross NYreferenced ~~10022~~is made.

Beneficial ownership is determined in accordance with SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days of March 27, 2012 are deemed outstanding for computing the percentage ownership of the person holding the options or warrants, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated and subject to community property laws where applicable, we believe the beneficial owners of the common stock listed below, based on information furnished by them, have sole voting and investment power with respect to the shares listed opposite their names.

Exhibit Number		Exhibit

3.1		Articles of Incorporation⁽¹⁾
3.2		Amendments to Articles of Incorporation^{(1),(2),(4),(7)}
3.3		Articles of Merger of Premier Beverage Group Corp. into DAM Holdings, Inc.⁽⁸⁾
3.4		By-Laws⁽¹⁾
4.1		Description of Securities^(1),(2),(3)
4.2		Certificate of Designation Series A Preferred Stock⁽⁴⁾
4.3		Certificate of Designation Series B Preferred Stock⁽⁶⁾
4.4		Class A Warrant Agreement⁽⁹⁾
4.5		Form of Class A Warrant Certificate⁽⁹⁾
4.6		Specimen Common Stock Certificate⁽²⁾
10.1		Form of 6% Convertible Promissory Notes⁽⁵⁾
10.2		Stock Purchase Agreement⁽¹⁰⁾
10.3		Assumption and Indemnification Agreement⁽¹⁰⁾
10.4		Form of Unsecured Promissory Note⁽¹⁰⁾
10.5		Form of Note Purchase Agreement⁽¹⁰⁾
10.6		Agreement and Plan of Merger of OSO USA LLC into OSO Beverages Corp.⁽¹¹⁾
10.8		Indemnification Agreement⁽¹⁷⁾
10.9		Form of Senior Secured Promissory Note⁽¹²⁾
10.10		Form of Security Agreement⁽¹²⁾
10.11		Consulting Agreement with Fouad Kallamni⁽¹⁵⁾
10.12		Consulting Agreement with Core Equity Group LLC⁽¹⁵⁾
10.13		Consulting Agreement with Richard Fisher⁽¹⁵⁾
10.14		Form of unsecured Convertible Promissory Noteissued in aggregate principal amount of $70,000⁽¹⁶⁾
14.1		Code of Ethics⁽¹⁴⁾
16.1		Letter from Former Auditor⁽¹³⁾
21.1		Subsidiaries of Registrant⁽¹⁷⁾
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^*

		^*Filed herewith

⁽¹⁾	Incorporated by reference from the Registration Statement on Form 10-SB on August 19, 2003
⁽²⁾	Incorporated by reference from the Registration Statement on Form 10-SB Amendment No. 1 filed on June 4, 2004
⁽³⁾	Incorporated by reference from the Registration Statement on Form 10-SB Amendment No. 5 filed on July 20, 2005
⁽⁴⁾	Incorporated by reference from the Quarterly Report on Form 10-QSB filed on November 15, 2007
⁽⁵⁾	Incorporated by reference from the Quarterly Report on Form 10-QSB filed on November 14, 2008
⁽⁶⁾	Incorporated by reference from the Quarterly Report on Form 10-QSB filed on August 13, 2009
⁽⁷⁾	Incorporated by reference from the Quarterly Report on Form 10-QSB filed on November 18, 2009
⁽⁸⁾	Incorporated by reference from the Current Report on Form 8-K filed on December 1, 2011

Name and Address of Beneficial Owner	No. of Shares		Options/Warrants Currently Exercisable or Within 60 Days		Total Beneficial Ownership		Percent of Total
Named Executive Officer and Director
Fouad Kallamni		31,500,000		0		31,500,000		51.5
Other Principal Shareholders
Core Equity Group, LLC		5,000,000		0		5,000,000		8.2

	30

Equity Compensation Plan Information

⁽⁹⁾	Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2007
⁽¹⁰⁾	Incorporated by reference from the Current Report on Form 8-K filed on October 27, 2011
⁽¹¹⁾	Incorporated by reference from the Current Report on Form 8-K filed on October 24, 2011
⁽¹²⁾	Incorporated by reference from the Current Report on Form 8-K filed on December 15, 2011
⁽¹³⁾	Incorporated by reference from the Current Report on Form 8-K/A filed on December 23, 2011
⁽¹⁴⁾	Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2005
⁽¹⁵⁾	Incorporated by reference from the Annual Report on Form 10-K for the year ending December 31, 2011
⁽¹⁶⁾	Incorporated by reference from the Quarterly Report on Form 10-Q for the quarter ending March 31, 2012
⁽¹⁷⁾	Incorporated by reference from the Annual Report on Form 10-K for the year ending December 31, 2011

~~We have no equity compensation~~ ~~plans.~~SIGNATURES

~~ITEM~~ Pursuant to the requirements of Section 13. ~~CERTAIN~~or ~~RELATIONSHIPS~~15(d) ~~AND~~of ~~RELATED~~the ~~TRANSACTIONS~~Securities Exchange Act of 1934, ~~AND~~the ~~DIRECTOR~~registrant ~~INDEPENDENCE~~has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

There have been no related person transactions required to be disclosed pursuant to Item 404(a) or Item 407(a) of Regulation S-K.

	PREMIER BEVERAGE GROUP CORP.
	By:	/s/ Fouad Kallamni
		Fouad Kallamni
		President and Sole Director
		March 13, 2014

~~Fouad Kallamni, our sole director, is our President and is not an “independent” director.~~31

~~ITEM~~ REPORT ~~14.~~OF ~~PRINCIPAL~~INDEPENDENT ~~ACCOUNTANT~~REGISTERED ~~FEES~~PUBLIC ~~AND~~ACCOUNTING ~~SERVICES.~~FIRM

~~Liebman Goldberg &~~ ~~Hymowitz~~To ~~LLP~~The ~~audited~~Board ~~our financial statements for the year ended December 31, 2011 and the financial statements~~ of ~~our predecessor entity for year ended December 31, 2010.~~Directors

~~Audit~~ Premier ~~and~~Beverage ~~Related~~Group ~~Fees~~Corp.

~~The following table~~ ~~sets~~New ~~forth the aggregate fees billed by Liebman Goldberg & Hymowitz LLP for professional services rendered in fiscal years ended December 31~~York, ~~2011~~New ~~and 2010, respectively.~~York

	2011		2010
Audit Fees1	$	18,250	$	17,500
Audit-Related Fees2
Tax Fees
All Other Fees3

We have audited the accompanying consolidated balance sheets of Premier Beverage Group Corp. and Subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ (deficit) and cash flows for each of the years in the two year period ended December 31, 2012. Premier Beverage Group Corp. and Subsidiaries management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

1 We ~~“Audit~~conducted ~~Fees”~~our ~~represent~~audits ~~fees~~in ~~for~~accordance ~~professional~~with ~~services~~the ~~provided~~standards inof ~~connection~~the ~~with~~Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit ofto ~~our~~obtain ~~annual~~reasonable assurance about whether the financial statements ~~and~~are ~~review~~free of ~~our~~material ~~quarterly~~misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial ~~statements~~reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in ~~our~~the ~~reports~~circumstances, but not for the purpose of expressing an opinion on ~~Form~~the ~~10-Q~~effectiveness of the Company’s internal control over financial reporting. Accordingly, ~~and~~we express no such opinion. An audit ~~services~~also ~~provided~~includes examining, on a test basis, evidence supporting the amounts and disclosures in ~~connection~~the ~~with~~financial ~~other~~statements, ~~statutory~~assessing orthe ~~regulatory~~accounting ~~filings~~principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We ~~did~~believe ~~not~~that ~~file~~our ~~any~~audits ~~Forms~~provide ~~10-Q~~a inreasonable ~~2011~~basis for our opinion.

2 In ~~“Audit-Related~~our ~~Fees”~~opinion, ~~generally~~the ~~represent~~consolidated ~~fees~~financial ~~for~~statements ~~assurance~~referred ~~and~~to ~~related~~above ~~services~~present ~~reasonably~~fairly, ~~related~~in toall material respects, the ~~performance~~financial position of Premier Beverage Group Corp. and Subsidiaries as of December 31, 2012 and 2011 and the ~~audit~~results orof ~~review~~its operations and cash flows for each of ~~our~~the ~~financial~~years ~~statements~~in the two year period ended December 31, 2012, in conformity with its 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. As discussed in Note 3 ~~“Tax~~to ~~Fees”~~the ~~generally~~consolidated ~~represent~~financial ~~fees~~statements, ~~for~~the ~~tax~~Company ~~advice~~has a working capital deficiency and has suffered recurring losses from operations. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~PART IV~~ Liebman Goldberg & Hymowitz, LLP

~~Item~~ Garden ~~15.~~City, ~~Exhibits~~New ~~and Financial Statement Schedules.~~York

~~(a) Documents filed as part of this~~ ~~Report~~March ~~are~~13, ~~as follows:~~2014

F-1~~) Financial Statements: The consolidated financial statements, related notes and report of independent registered public accounting firm are included in Item 8 of Part II of this Report.~~

~~2) Financial Statement Schedules:~~ ~~All~~PREMIER ~~schedules~~BEVERAGE ~~have~~GROUP ~~been~~CORP. ~~omitted~~AND ~~because they are not applicable or not required, or the required information is included in the financial statements or notes thereto.~~SUBSIDIARIES

~~3) Exhibits: The~~ ~~required~~CONSOLIDATED ~~exhibits~~BALANCE ~~are included at the end of this Report and are described in the exhibit index.~~SHEETS

30 DECEMBER 31, 2012 AND 2011

EXHIBIT INDEX

	2012		2011
ASSETS
Current assets:
Cash	$	-	$	21,862
Accounts receivable, net		4,637		32,424
Inventory		20,485		20,571
Prepaid expenses		5,757		23,297
Deferred financing costs		-		20,605
Total current assets		30,879		118,759

Property and equipment, net		1,064		1,644

Total assets	$	31,943	$	120,403

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	100,458	$	118,168
Accrued expenses		375,108		100,418
Notes payable - current portion		367,053		115,022
Total current liabilities		842,619		333,608

Long term liabilities:
Notes payable - long term, net		75,000		238,781
Total long term liabilities		75,000		238,781

Total liabilities		917,619		572,389

Commitments and contingencies

Stockholders' deficit:

Preferred stock-$0.0001 par value, 1,000,000 shares authorized and designated as follows:
Series A Preferred stock-$5 stated value, 660,000 shares authorized, 60,000 shares issued and outstanding as of December 31, 2012 and 2011, respectively		300,000		300,000
Series B Preferred stock-$500 stated value, 2,000 shares authorized, 30 shares issued and outstanding as of December 31, 2012 and 2011, respectfully		15,000		15,000
Common stock-0.00015 par value, 99,000,000 shares authorized, 61,201,483 shares issued and outstanding as of December 31, 2012 and 2011, respectively		9,180		9,180
Additional paid in capital		108,987		59,987
Accumulated deficit		(1,318,843)		(836,153)
Total stockholders' deficit		(885,676)		(451,986)

Total liabilities and stockholders' deficit	$	31,943	$	120,403

~~The following exhibits~~ ~~are~~See ~~filed~~notes ~~as part of this Annual Report on Form 10-K or are incorporated herein by reference. Where an exhibit is incorporated by reference, the document~~ to ~~which~~consolidated itfinancial ~~is cross referenced is made.~~statements

Exhibit Number		Exhibit
3.1		Articles of Incorporation(1)
3.2		Amendments to Articles of Incorporation(1),(2),(4),(7)
3.3		Articles of Merger of Premier Beverage Group Corp. into DAM Holdings, Inc.(8)
3.4		By-Laws(1)
4.1		Description of Securities(1),(2),(3)
4.2		Certificate of Designation Series A Preferred Stock(4)
4.3		Certificate of Designation Series B Preferred Stock(6)
4.4		Class A Warrant Agreement(9)
4.5		Form of Class A Warrant Certificate(9)
4.6		Specimen Common Stock Certificate(2)
10.1		Form of 6% Convertible Promissory Notes(5)
10.2		Stock Purchase Agreement(10)
10.3		Assumption and Indemnification Agreement(10)
10.4		Form of Unsecured Promissory Note(10)
10.5		Form of Note Purchase Agreement(10)
10.6		Agreement and Plan of Merger of OSO USA LLC into OSO Beverages Corp.(11)
10.8		Indemnification Agreement*
10.9		Form of Senior Secured Promissory Note(12)
10.10		Form of Security Agreement(12)
10.11		Consulting Agreement with Fouad Kallamni*
10.12		Consulting Agreement with Core Equity Group LLC*
10.13		Consulting Agreement with Richard Fisher*
14.1		Code of Ethics(14)
16.1		Letter from Former Auditor(13)
21.1		Subsidiaries of Registrant*
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*
		*Filed herewith

	F-2

~~(1)~~ PREMIER ~~Incorporated~~BEVERAGE byGROUP ~~reference~~CORP. ~~from~~AND ~~the Registration Statement on Form 10-SB on August 19, 2003~~SUBSIDIARIES

~~(2)~~ CONSOLIDATED ~~Incorporated~~STATEMENT byOF ~~reference from the Registration Statement on Form 10-SB Amendment No. 1 filed on June 4, 2004~~OPERATIONS

(3) Incorporated by reference from the Registration Statement on Form 10-SB Amendment No. 5 filed on July 20, 2005

	Years Ended December 31,
	2012		2011
Revenue:
Sales, net	$	53,685	$	95,101
Cost of goods sold		17,455		32,217
Gross profit		36,230		62,884

Operating expenses:
Selling, general and administrative		357,885		255,975
Depreciation		580		97
Total operating expenses		358,465		256,072

Net loss from operations		(322,235)		(193,188)

Other expense
Gain on settlement of debt		-		18,628
Interest expense		(160,455)		(29,799)
Total other expense (net)		(160,455)		(11,171)

Net (loss) before provision for income taxes		(482,690)		(204,359)

Provision for income taxes (benefit)		-		-

Net loss	$	(482,690)	$	(204,359)

Net loss per common share, basic	$	(0.01)	$	(0.00)

Weighted average number of common shares, basic		61,201,483		52,222,827

~~(4)~~ See ~~Incorporated~~notes byto ~~reference~~consolidated ~~from~~financial ~~the Quarterly Report on Form 10-QSB filed on November 15, 2007~~statements

~~(5) Incorporated by reference from the Quarterly Report on Form 10~~F-~~QSB filed on November 14, 2008~~3

~~(6)~~ PREMIER ~~Incorporated~~BEVERAGE byGROUP ~~reference~~CORP. ~~from~~AND ~~the Quarterly Report on Form 10-QSB filed on August 13, 2009~~SUBSIDIARIES

~~(7)~~ CONSOLIDATED ~~Incorporated~~STATEMENT byOF ~~reference~~STOCKHOLDERS' ~~from the Quarterly Report on Form 10-QSB filed on November 18, 2009~~DEFICIT

~~(8)~~ YEARS ~~Incorporated~~ENDED byDECEMBER ~~reference~~31, ~~from~~2012 ~~the~~AND ~~Current Report on Form 8-K filed on December 1,~~ 2011

(9) Incorporated by reference from the Annual Report on Form 10-KSB for the year ending December 31, 2007

													Additional
	Preferred stock			Series A Preferred			Series B Preferred			Common stock			Paid In		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit			Total
Balance, January 1, 2010, adjusted for recapitalization	-	$	-	60,000	$	300,000	2,000	$	15,000	50,000,000	$	7,500	$	-	$	(428,086)	$	(105,586)
Effect of reverse merger:
Common stock issued to acquire OSO USA, LLC	-		-	-		-	-		-	11,111,676		1,667		-		(203,708)		(202,041)
Common stock issued for cashless exercise of warrants	-		-	-		-	-		-	89,807		13		(13)		-		-
Beneficial conversion feature relating to convertible note	-		-	-		-	-		-			-		60,000		-		60,000
Net (loss)	-		-	-		-	-		-	-		-		-		(204,359)		(204,359)
Balance, December 31, 2011	-	$	-	60,000	$	300,000	2,000	$	15,000	61,201,483	$	9,180	$	59,987	$	(836,153)	$	(451,986)

Beneficial conversion feature relating to convertible note	-		-	-		-	-		-	-		-		49,000		-		49,000
Net (loss)	-		-	-		-	-		-	-		-		-		(482,690)		(482,690)
Balance, December 31, 2012	-	$	-	60,000	$	300,000	2,000	$	15,000	61,201,483	$	9,180	$	108,987	$	(1,318,843)	$	(885,676)

~~(10)~~ See ~~Incorporated~~notes byto ~~reference~~consolidated ~~from~~financial ~~the Current Report on Form 8-K filed on October 27, 2011~~statements

31F-4

~~(11)~~ PREMIER ~~Incorporated~~BEVERAGE byGROUP ~~reference~~CORP. ~~from~~AND ~~the Current Report on Form 8-K filed on October 24, 2011~~SUBSIDIARIES

~~(12)~~ CONSOLIDATED ~~Incorporated~~STATEMENTS byOF ~~reference~~CASH ~~from the Current Report on Form 8-K filed on December 15, 2011~~FLOWS

(13) Incorporated by reference from the Current Report on Form 8-K/A filed on December 23, 2011

	Year Ended December 31,
	2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(482,690)	$	(204,359)
Adjustments to net (loss) to net cash (used in) operating activities:
Depreciation expense		580		97
Amortization of deferred financing costs		20,605		17,442
Bad debt expense		-		14,433
Beneficial conversion feature in connection with convertible note payable		69,504		11,681
Gain on forgiveness of debt		-		(18,628)
Changes in operating assets and liabilities:
Accounts receivable		27,787		(17,631)
Inventory		86		(7,824)
Prepaid and other current assets		17,540		(16,115)
Accounts payable and accrued expenses		264,726		62,720
Net cash (used in) operating activities		(81,862)		(158,184)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-		(1,741)
Net cash (used in) investing activities		-		(1,741)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable		85,000		215,289
Repayments of notes payable		(25,000)		(36,023)
Net cash provided by (used in) financing activities		60,000		179,266

Net (decrease) increase in cash		(21,862)		19,341

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

Net cash, end of the year	$	-	$	21,862

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

~~(14)~~ See ~~Incorporated~~notes byto ~~reference~~consolidated ~~from~~financial ~~the Annual Report on Form 10-KSB for the year ending December 31, 2005~~statements

~~SIGNATURES~~F-5

~~Pursuant to the requirements of Section 13~~ orNOTE ~~15(d)~~1 of–BUSINESS ~~the~~AND ~~Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~RECAPITALIZATION

	PREMIER BEVERAGE GROUP CORP.
	By:	/s/ Fouad Kallamni
		Fouad Kallamni
		President and Sole Director
		September 13, 2013

Premier Beverage Group Corp. (the “Company”) develops, markets and distributes functional beverages. The Company’s products include OSO, a premium energy beverage sold primarily to on-premise venues, including restaurants, night clubs, and hotels. The Company also operates a turnkey private label business for retailers and food manufacturers seeking to offer functional beverages.

32 The Company is a Nevada corporation incorporated on July 22, 1999. The Company is a holding company which owns 100% of the capital stock of OSO Beverages Corp., a Delaware corporation (“OBC”), which in turn wholly owns Fury Distribution Holdings, LLC a New York limited liability company (“FDH”), and 100% of the capital stock of Captive Brands Corp, a Delaware corporation.

~~REPORT~~ On OFOctober ~~INDEPENDENT~~19, ~~REGISTERED~~2011, ~~PUBLIC ACCOUNTING~~pursuant ~~FIRM~~to the terms of an Agreement and Plan of Merger (the “OSO Merger”) between OSO USA LLC, a Delaware limited liability company ("OSO") and OBC, OSO merged into OBC. OBC was the surviving corporation, and the principal members of OSO were issued 50,000,000 newly issued restricted shares of the Company’s common stock (“Merger Consideration”) as consideration for all of the outstanding membership interests of OSO.

To Upon ~~The~~completion ~~Board~~of the OSO Merger, there were 61,176,676 shares of ~~Directors~~common stock issued and outstanding, including the Merger Consideration which constituted approximately 82% of the issued and outstanding shares of common stock. On November 25, 2011, the Company changed its name from Dam Holdings, Inc. to Premier Beverage Group Corp.

~~Premier~~ After ~~Beverage~~the ~~Group~~OSO Merger, the Company sold the DAM Holdings, Inc. operating assets for nominal consideration. Because the owners and management of OSO obtained voting and operating control of Dam Holdings, Inc. in the OSO Merger, the transaction has been accounted for as a recapitalization of OSO Beverages Corp. accompanied by the issuance of its common stock for outstanding common stock of Dam Holdings, Inc, which was recorded at a nominal value. The accompanying financial statements and related notes give retroactive effect to the recapitalization as if it had occurred on January 1, 2010, and accordingly all share and per share amounts have been adjusted.

~~New~~ NOTE ~~York,~~2 ~~New~~– ~~York~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~We have audited the accompanying consolidated~~ ~~balance~~Principles ~~sheets~~ of Premier Beverage Group Corp. and Subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ (deficit) and cash flows for each of the years in the two year period ended December 31, 2011. Premier Beverage Group Corp. and Subsidiaries management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.Consolidation

We The ~~conducted~~consolidated ~~our~~financial ~~audits~~statements ininclude ~~accordance with~~ the ~~standards~~accounts of ~~the~~Premier ~~Public~~Beverages ~~Company~~Group ~~Accounting Oversight Board (United States)~~Corp. ~~Those standards require that we plan~~ and its ~~perform the~~wholly ~~audit~~owned tosubsidiaries, ~~obtain~~OSO ~~reasonable~~Beverages ~~assurance~~Corp ~~about~~its ~~whether~~wholly ~~the~~owned ~~financial~~subsidiary, ~~statements~~Fury ~~are~~Distribution ~~free of material misstatement. The Company is not required to have~~Holdings, ~~nor~~LLC ~~were~~(hereafter wereferred ~~engaged~~ to ~~perform,~~as anthe ~~audit~~“Company” ofor ~~its internal control over financial reporting~~“Premier”). ~~Our~~No ~~audit~~operations ~~included consideration~~were ofconducted ~~internal control over financial reporting as a basis for designing audit procedures that are appropriate~~ in ~~the circumstances,~~2011 ~~but~~or ~~not~~2012 ~~for~~by the ~~purpose of expressing an opinion on the effectiveness of the~~ Company’s ~~internal~~other ~~control over financial reporting. Accordingly~~subsidiary, weCaptive ~~express~~Brands ~~no such opinion~~Corp. All Ansignificant ~~audit~~intercompany ~~also~~balances ~~includes~~and ~~examining,~~transactions onhave abeen ~~test~~eliminated ~~basis, evidence supporting the amounts and disclosures~~ in ~~the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation~~consolidation. ~~We believe that our audits provide a reasonable basis for our opinion.~~

~~In our opinion, the consolidated financial~~ ~~statements~~Use ~~referred to above present fairly, in all material respects, the financial position~~ of Premier Beverage Group Corp. and Subsidiaries as of December 31, 2011 and the results of its operations and cash flows for each of the years in the two year period ended December 31, 2011, in conformity with its accounting principles generally accepted in the United States of America.Estimates

The ~~accompanying~~preparation ~~consolidated~~of financial statements ~~have~~in ~~been~~accordance ~~prepared~~with ~~assuming~~accounting ~~that~~principles ~~the~~generally ~~Company~~accepted ~~will~~in ~~continue~~the asUnited aStates ~~going~~requires ~~concern.~~management Asto ~~discussed~~make inestimates ~~Note~~and 3assumptions tothat affect the ~~consolidated financial~~reported ~~statements,~~amounts ~~the~~of ~~Company~~assets ~~has~~and aliabilities ~~working~~and ~~capital~~disclosures ~~deficiency~~of ~~and~~contingent ~~has~~assets ~~suffered~~and ~~recurring~~liabilities ~~losses~~at ~~from~~the ~~operations.~~date ~~These~~of ~~factors raise~~the ~~substantial~~financial ~~doubt~~statements, ~~about~~and ~~its~~the ~~ability~~reported toamounts ~~continue~~of asrevenues aand ~~going~~expenses ~~concern.~~during ~~Management's~~the ~~plans~~reporting ~~regarding~~period. ~~those~~Actual ~~matters~~results ~~also~~could ~~are described~~differ infrom ~~Note~~those 3estimates. ~~The~~Significant ~~consolidated~~estimates ~~financial~~include ~~statements~~the douseful ~~not~~life ~~include~~of ~~any~~fixed ~~adjustments~~assets ~~that~~and ~~might~~assumptions ~~result~~used ~~from~~in the ~~outcome~~fair value of ~~this~~ ~~uncertainty~~stock-based compensation.

~~Liebman~~ Revenue ~~Goldberg & Hymowitz, LLP~~Recognition

~~Garden~~ The ~~City~~Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, ~~New~~Revenue ~~York~~Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

~~September~~ Revenues 9on the sale of products, ~~2013~~net of estimated costs of returns and allowance, are recognized at the time products are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Products are generally sold on open accounts under credit terms customary to the geographic region of distribution. The Company performs ongoing credit evaluations of the customers and generally does not require collateral to secure the accounts receivable.

~~F-1~~ Accounts Receivable

~~PREMIER~~ The ~~BEVERAGE~~Company ~~GROUP~~assesses ~~CORP~~the realization of its receivables by performing ongoing credit evaluations of its customers' financial condition. ~~AND~~Through ~~SUBSIDIARIES~~these evaluations, the Company may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The Company’s reserve requirements are based on the best facts available to the Company and are reevaluated and adjusted as additional information is received. The Company’s reserves are also based on amounts determined by using percentages applied to certain aged receivable categories. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. Allowance for doubtful accounts for accounts receivable was $5,966 as of December 31, 2012 and $5,966 as of December 31, 2011, respectively. Bad debt expense was $-0- and $14,433 for the year ended December 31, 2012 and 2011, respectively.

~~(formerly known as DAM Holdings, Inc.)~~F-6

~~CONSOLIDATED~~ Income ~~BALANCE SHEETS~~taxes

~~DECEMBER~~ Deferred ~~31,~~income ~~2011~~tax ~~AND~~assets ~~2010~~and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

	2011			2010
ASSETS
Current assets:
Cash	$	21,862		$	2,521
Accounts receivable, net		32,424			29,226
Inventories		20,571			12,747
Prepaid expenses		23,297			7,182
Deferred financing costs		20,605			-
Total current assets		118,759			51,676
Property and equipment, net		1,644			-
Total assets	$	120,403		$	51,676
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	118,168		$	33,647
Accrued expenses		100,418			67,749
Notes payable, net of unamortized debt discount of $48,319 and $-0- as of December 31, 2011 and 2010, respectively		353,803			55,866
Total current liabilities		572,389			157,262
Commitments and contingencies		-			-
Stockholders' deficit:
Preferred stock-$0.0001 par value, 1,000,000 shares authorized and designated as follows:
Series A Preferred stock-$5 stated value, 660,000 shares authorized, 60,000 shares issued and outstanding as of December 31, 2011 and 2010		300,000			300,000
Series B Preferred stock-$500 stated value, 2,000 shares issued and outstanding as of December 31, 2011 and 2010		15,000			15,000
Common stock-$0.00015 par value, 99,000,000 shares authorized, 61,201,483 and 50,000,000 shares issued and outstanding as of December 31, 2011 and 2010, respectively		9,180			7,500
Additional paid in capital		59,987			-
Accumulated deficit		(836,153	)		(428,086	)
Total stockholders' deficit		(451,986	)		(105,586	)
Total liabilities and stockholders' deficit	$	120,403		$	51,676

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of December 31, 2012 and 2011, the Company has not recorded any unrecognized tax benefits.

~~See~~ The ~~notes~~tax toyears ~~consolidated~~remaining ~~financial~~open ~~statements~~for examination are 2008 and all subsequent years.

~~F-2~~ Inventory

~~PREMIER~~ Inventory ~~BEVERAGE~~consisted ~~GROUP~~of ~~CORP.~~finished ~~AND~~goods ~~SUBSIDIARIES~~is stated at the lower of cost (first-in, first-out method) or market.

~~(formerly~~ Property ~~known~~and ~~as DAM Holdings, Inc.)~~equipment

~~CONSOLIDATED~~ Property ~~STATEMENTS~~and OFequipment ~~OPERATIONS~~are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is three years for computer assets and five years for furniture and all other equipment. Expenditures for maintenance and repairs are expensed as incurred.

	Year ended December 31,
	2011			2010
Revenue:
Sales, net	$	95,101		$	173,093
Cost of goods sold		32,217			57,224
Gross profit		62,884			115,869
Operating expenses:
Selling, general and administrative		255,975			139,967
Depreciation expense		97			-
Total operating expenses		256,072			139,967
Net (loss) from operations		(193,188	)		(24,098	)
Other income (expense)
Gain on settlement of debt		18,628			-
Interest expense		(29,799	)		(24,901	)
Total other income (expense)		(11,171	)		(24,901	)
Net (loss) before provision for income taxes		(204,359	)		(48,999	)
Provision for income taxes (benefit)		-			-
Net (loss)	$	(204,359	)	$	(48,999	)
Net (loss) per common share, basic and fully diluted	$	(0.00	)	$	(0.00	)
Weighted average number of common shares, basic and fully diluted		52,222,827			50,000,000

Net Loss per Share

~~See~~ The Company follows Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants along with common shares issuable upon convertible notes toand ~~consolidated~~preferred ~~financial~~stock ~~statements~~have been excluded as common stock equivalents in the diluted loss per share because there effect is anti-dilutive on the computation. Fully diluted shares outstanding were 61,201,483 for the year ended December 31, 2012 and 2011, respectively.

~~F-3~~ Reclassification

~~PREMIER~~ Certain ~~BEVERAGE~~reclassifications ~~GROUP~~have ~~CORP~~been made to prior periods' data to conform to the current year's presentation. These ~~AND~~reclassifications ~~SUBSIDIARIES~~had no effect on reported income or losses.

~~(formerly~~ Fair ~~known~~Value asof ~~DAM~~Financial ~~Holdings, Inc.)~~Instruments

~~CONSOLIDATED~~ The ~~STATEMENTS~~Company OFhas ~~STOCKHOLDERS' DEFICIT~~adopted the required provisions of Topic 820, “Fair Value Measurements”. Those provisions relate to our financial assets and liabilities carried at fair value and our fair value disclosures related to financial assets and liabilities. Topic 820 defines fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs to fair value measurements - Level 1, meaning the use of quoted prices for identical instruments in active markets; Level 2, meaning the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; and Level 3, meaning the use of unobservable inputs. Observable market data should be used when available.

~~YEARS~~ The ~~ENDED~~Company’s ~~DECEMBER~~financial 31instruments are carried at fair value, ~~2011~~including, ~~AND~~cash ~~2010~~equivalents. Virtually all of the Company’s valuation measurements are Level 1 measurements. The adoption of Topic 820 did not have a significant impact on the Company’s consolidated financial statements

																	Additional
	Preferred stock				Series A Preferred				Series B Preferred				Common stock				Paid In			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2010, adjusted for recapitalization		-	$	-		60,000	$	300,000		2,000	$	15,000		50,000,000	$	7,500	$	-		$	(379,087	)	$	(56,587	)
Net loss		-		-		-		-		-		-		-		-		-			(48,999	)		(48,999	)
Balance, December 31, 2010		-		-		60,000		300,000		2,000		15,000		50,000,000		7,500		-			(428,086	)		(105,586	)
Effect of reverse merger:
Common stock issued to acquire OSO USA, LLC		-		-		-		-		-		-		11,111,676		1,667		-			(203,708	)		(202,041	)
Common stock issued for exercise of warrants cashless basis		-		-		-		-		-		-		89,807		13		(13	)		-			-
Beneficial conversion feature relating to convertible note		-		-		-		-		-		-				-		60,000			-			60,000
Net loss		-		-		-		-		-		-		-		-		-			(204,359	)		(204,359	)
Balance, December 31, 2011		-	$	-		60,000	$	300,000		2,000	$	15,000		61,201,483	$	9,180	$	59,987		$	(836,153	)	$	(451,986	)

Impairment of Long-Lived Assets

~~See~~ The ~~notes~~Company reviewed the long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine if impairment exists, the Company compares the estimated future undiscounted cash flows from the related long-lived assets to ~~consolidated~~the ~~financial~~net ~~statements~~carrying amount of such assets. Once it has been determined that an impairment exists, the carrying value of the asset is adjusted to the fair value. Factors considered in the determination of the fair value include current operating results, trends and the present value of estimated expected future cash flows.

F-47

~~PREMIER~~ Recent ~~BEVERAGE~~Accounting ~~GROUP CORP. AND SUBSIDIARIES~~Pronouncements

~~(formerly~~ There ~~known~~were asvarious ~~DAM~~updates ~~Holdings~~recently issued, ~~Inc~~most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.)

~~CONSOLIDATED~~ NOTE ~~STATEMENTS~~3 OF- ~~CASH~~GOING ~~FLOWS~~CONCERN MATTERS

	Year ended December 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(204,359	)	$	(48,999	)
Adjustments to net (loss) to net cash provided by operating activities:
Depreciation expense		97			-
Amortization of deferred financing costs		17,442			24,901
Bad debt expense		14,433			5,268
Beneficial conversion feature in connection with convertible note payable		11,681
Gain on forgiveness of debt		(18,628	)		-
Changes in operating assets and liabilities:
Accounts receivable		(17,631	)		(4,156	)
Inventory		(7,824	)		(19,043	)
Prepaid and other current assets		(16,115	)		2,990
Accounts payable and accrued expenses		62,720			67,400
Net cash (used in) provided by operating activities		(158,184	)		28,361
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,741	)		-
Net cash (used in) provided by investing activities		(1,741	)		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable		215,289			72,500
Repayments of notes payable		(36,023	)		(106,826	)
Net cash provided by (used in) financing activities		179,266			(34,326	)
Net increase (decrease) in cash		19,341			(5,965	)
Cash; beginning of the year		2,521			8,486
Cash; end of the year	$	21,862		$	2,521
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for interest	$	-		$	-
Cash paid during period for taxes	$	-		$	-

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 $482,690 and $204,359 for the years ended December 31, 2012 and 2011, respectively. Additionally, the Company has negative working capital (total current liabilities exceeded total current assets) of $811,740 as of December 31, 2012. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

~~See~~ The ~~notes~~Company has undertaken further steps as part of a plan to ~~consolidated~~improve ~~financial~~operations ~~statements~~with the goal of sustaining our 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.

~~F-5~~ The Company’s continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. 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.

~~NOTE~~ There 1can ~~–BUSINESS~~be ~~AND~~no ~~RECAPITALIZATION~~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.

~~Premier Beverage Group Corp. (the “Company”)~~ ~~develops,~~NOTE ~~markets~~4 ~~and~~– ~~distributes~~PROPERTY ~~functional~~AND beverages. The Company’s products include OSO, a premium energy beverage sold primarily to on-premise venues, including restaurants, night clubs, and hotels. The Company also operates a turnkey private label business for retailers and food manufacturers seeking to offer functional beverages.EQUIPMENT

~~The Company is a Nevada corporation incorporated~~ onProperty ~~July~~and ~~22,~~equipment ~~1999. The~~as ~~Company is a holding company which owns 100%~~ of ~~the~~December ~~capital stock of OSO Beverages Corp.~~31, a2012 ~~Delaware corporation (“OBC”), which in turn wholly owns Fury Distribution Holdings, LLC a New York limited liability company (“FDH”),~~ and ~~100%~~2011 ofis ~~the~~summarized ~~capital~~as ~~stock of Captive Brands Corp, a Delaware corporation.~~follows:

On October 19, 2011, pursuant to the terms of an Agreement and Plan of Merger (the “OSO Merger”) between OSO USA LLC, a Delaware limited liability company ("OSO") and OBC, OSO merged into OBC. OBC was the surviving corporation, and the principal members of OSO were issued 50,000,000 newly issued restricted shares of the Company’s common stock (“Merger Consideration”) as consideration for all of the outstanding membership interests of OSO.

	2012		2011
Office furniture and equipment	$	1,741	$	1,741
Less: accumulated depreciation		(677)		(97)

	$	1,064	$	1,644

~~Upon~~ Depreciation ~~completion~~expense offor the ~~OSO~~years ~~Merger,~~ended ~~there were~~December 6131,~~176,676~~ ~~shares~~2012 ~~of common stock issued~~ and ~~outstanding,~~2011 ~~including~~was ~~the~~$580 ~~Merger Consideration which constituted approximately 82% of the issued~~ and ~~outstanding shares of common stock. On November 25~~$97, ~~2011, the Company changed its name from Dam Holdings, Inc to Premier Beverage Group Corp.~~respectively

~~After the OSO Merger, the Company sold~~ ~~the~~NOTE ~~DAM~~5 ~~Holdings,~~- ~~Inc.~~ACCRUED operating assets for nominal consideration. Because the owners and management of OSO obtained voting and operating control of Dam Holdings, Inc. in the OSO Merger, the transaction has been accounted for as a recapitalization of OSO Beverages Corp. accompanied by the issuance of its common stock for outstanding common stock of Dam Holdings, Inc, which was recorded at a nominal value. The accompanying financial statements and related notes give retroactive effect to the recapitalization as if it had occurred on January 1, 2010, and accordingly all share and per share amounts have been adjusted.EXPENSES

~~NOTE~~ Accrued 2expenses -are ~~SUMMARY~~comprised OFof ~~SIGNIFICANT~~the ~~ACCOUNTING POLICIES~~following:

Principles of Consolidation:

	2012		2011
Consulting fees	$	286,500	$	54,000
Sales commissions		8,008		28,418
Professional fees		18,000		18,000
Accrued penalties		62,600		-
	$	375,108	$	100,418

The consolidated financial statements include the accounts of Premier Beverages Group Corp. and its wholly owned subsidiaries, OSO Beverages Corp its wholly owned subsidiary, Fury Distribution Holdings, LLC (hereafter referred to as the “Company” or “Premier”). No operations were conducted in 2011 by the Company’s other subsidiary, Captive Brands Corp. All significant intercompany balances and transactions have been eliminated in consolidation.F-8

~~Use~~ NOTE of6 ~~Estimates~~- NOTES PAYABLE

~~The preparation of financial statements~~ inNotes ~~accordance~~payable ~~with~~are ~~accounting~~comprised ~~principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts~~ of ~~assets and liabilities and disclosures of contingent assets and liabilities at~~ the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the useful life of fixed assets and assumptions used in the fair value of stock-based compensation.following:

Revenue Recognition

					Interest
	December 31, 2012		December 31, 2011		Rate		Maturity Date
Notes Payable - Current Portion
Secured Promissory Note	$	48,500	$	48,500	0	%	5/2/2012
Secured Convertible 10% Promissory Note		7,067		6,567	10	%	5/12/2009
Unsecured Convertible 6% Promissory Notes		62,955		59,955	6	%	8/8/2010 - 9/8/2010
Unsecured Convertible Promissory Note		202,100		-	0	%	4/24/2013
Unsecured Convertible 8% Promissory Notes, net of amortized debt discount of $27,815 at December 31, 2012		46,431		-	8	%	12/31/2013
Total Notes Payable - Current Portion	$	367,053	$	115,022

Notes Payable - Long Term
Unsecured Convertible Promissory Note		-		187,100	0	%	4/24/2013
Senior Secured Convertible Promissory Note, net of amortized debt discount of $0 and $48,319 at December 31, 2012 and December 31, 2011, respectively	$	75,000	$	51,681	0	%	12/31/2014	(1)
Total Notes Payable - Long Term	$	75,000	$	238,781

Total Notes Payable	$	442,053	$	353,803

~~The Company recognizes revenue in accordance~~ ~~with Accounting Standards Codification subtopic 605-10, Revenue Recognition~~ (~~“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (~~1) ~~persuasive~~This ~~evidence~~debt ofwas anreclassified ~~arrangement~~from ~~exists;~~current ~~(2)~~to ~~delivery~~long-term ~~has occurred;~~pursuant ~~(3)~~to ~~the~~ASC ~~selling price is fixed or determinable; and (4) collectability is reasonably assured~~470-10-45-14. ~~Determination~~ ~~of criteria~~On ~~(3)~~May and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers19, ~~estimated returns and allowances~~2013, ~~and other~~this ~~adjustments~~debt ~~are~~was ~~provided~~refinanced ~~for~~through in the ~~same~~issuance ~~period~~of ~~the~~long-term ~~related~~convertible ~~sales are recorded~~notes.

~~ASC~~ In ~~605-10~~May ~~incorporates~~2011, ~~Accounting~~the ~~Standards Codification~~Company ~~subtopic~~entered ~~605-25~~into a $53,500 ~~Multiple~~non-~~Element~~interest ~~Arrangements~~bearing ~~(“ASC~~note ~~605-25”). ASC~~for ~~605-25~~the ~~addresses~~purchase ~~accounting~~of ~~for arrangements~~inventory. ~~that~~This ~~may~~note ~~involve~~is secured by the ~~delivery~~Company's oraccounts ~~performance~~receivable and inventory and precludes the issuance of ~~multiple~~any ~~products,~~other ~~services~~indebtedness ~~and/~~pari passu or ~~rights~~senior to ~~use~~it. ~~assets~~This note is subject to a mandatory monthly cash flow recapture provision whereby payments are made against this note pursuant to a formula. The ~~effect~~ funded amount under the note was $40,003, resulting in an original issuance discount of ~~implementing~~$13,497. In ~~ASC~~accordance ~~605-25~~with onthe original issuance discount of the ~~Company's~~secured ~~financial~~note, ~~position~~amortization expense of $8,998 has been charged in 2011, and ~~results~~$4,499 has been charged in 2012. As of ~~operations~~December ~~was~~31, ~~not~~2012, ~~significant~~the note has a balance of $48,500. The note had a maturity date of May 2, 2012 and is now in technical default; however, no default has been declared by the holder.

~~Revenues~~ The onCompany has a $5,000 10% Convertible Secured Promissory Note (the ~~sale~~“10% ofSecured ~~products~~Note”). The 10% Secured Note was due on May 12, ~~net~~2009 and bears an annual rate of ~~estimated~~ ~~costs~~interest of ~~returns~~ten ~~and~~percent ~~allowance~~(10%). The 10% Secured Note is secured by assignment of a motorcycle engine from the Company’s prior wholly owned subsidiary, ~~are~~Delaware ~~recognized~~American Motors, Inc. The 10% Secured Note may be converted by the holder into shares of the Company’s common stock at a price equal to seventy-five percent (75%) of the ~~time~~market ~~products~~price ~~are~~of ~~shipped~~the Company’s shares on the date of conversion limited to ~~customers~~not more than 300,000 ~~legal~~shares. ~~title~~At ~~has~~the ~~passed~~date of issuance, ~~and~~ ~~all~~the ~~significant~~Company ~~contractual~~determined ~~obligations~~that the fair value of the ~~Company~~beneficial ~~have~~conversion ~~been~~feature ~~satisfied.~~in ~~Products~~respect ~~are~~of ~~generally~~this ~~sold~~10% Secured Note on ~~open~~the ~~accounts~~date ~~under credit~~the ~~terms~~note ~~customary~~was issued to be equal to $4,054 using the ~~geographic~~Black-Scholes ~~region~~model which amount has been recorded as a debt discount was amortized over the term of ~~distribution.~~the note. The ~~Company~~accompanying ~~performs~~financial ~~ongoing~~statements ~~credit~~include ~~evaluations~~$500 of interest expense for each of the ~~customers~~ years ending December 31, 2012 and ~~generally~~2011. The ~~does~~10% ~~not~~Secured ~~require~~Note ~~collateral~~is toin ~~secure~~default ~~the~~with ~~accounts~~a ~~receivable~~total aggregate amount due of $7,067 as of December 31, 2012.

F- The Company has four unsecured 6% Convertible Promissory Notes payable in the aggregate original principal amount of $50,000 (the “Convertible Notes”). The Convertible Notes bear interest at the rate of 6% per annum and were due on dates ranging from August 8, 2010 through September 8, 2010. The Convertible Notes may be converted into shares of the Company’s common stock at the election of the holder at any time prior to their maturity date (24 months after issue) at the rate of thirty dollars ($30.00) per share. Interest may, at the election of the Company, be paid in shares of the Company’s common stock at the rate of one hundred ($100.00) per share. The accompanying financial statements include $3,000 of interest expense for each of the years ending December 31, 2012 and 2011. The unsecured convertible promissory notes are in default with a total aggregate amount due of $62,955 as of December 31, 2012. 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 these unsecured promissory notes issued by the Company’s predecessor, DAM Holdings, Inc., in the amount of $66,051. 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.

~~Accounts Receivable~~F-9

~~The Company assesses the realization of~~ ~~its~~In ~~receivables~~accordance bywith ~~performing~~Emerging ~~ongoing~~Issues ~~credit~~Task ~~evaluations~~Force of(“EITF”) ~~its customers' financial condition~~No. ~~Through these evaluations~~00-27, ~~the Company~~“Application ~~may become aware~~ of aEITF ~~situation~~Issue ~~where~~No. a98-5, ~~customer~~‘Accounting ~~may~~for ~~not~~Convertible beSecurities ~~able~~with toBeneficial ~~meet~~Conversion ~~its~~Features ~~financial~~or ~~obligations~~Contingently ~~due~~Adjustable toConversion ~~deterioration of its financial viability~~Rates’, ~~credit ratings or bankruptcy. The Company’s reserve requirements are based on the best facts available~~ to ~~the~~Certain ~~Company~~Convertible ~~and are reevaluated and adjusted as additional information is received~~Instruments. ~~The~~” We ~~Company’s reserves are also based on amounts~~ determined bythere ~~using percentages applied~~ to ~~certain~~be ~~aged~~no ~~receivable~~value ~~categories. These~~attributable ~~percentages are~~to ~~determined~~the bybeneficial aconversion ~~variety~~features of ~~factors~~the ~~including,~~Convertible ~~but~~Notes ~~not~~in ~~limited~~that ~~to,~~the ~~current~~effective ~~economic~~conversion ~~trends,~~price ~~historical payment and bad debt write-off experience. Allowance for doubtful accounts for accounts receivable was $5,966 as~~ of ~~December~~those ~~31,~~shares ~~2011 and $4,738 as of December 31, 2010, respectively. Bad debt expense~~ was ~~$14,433~~greater ~~and~~than ~~$5,268 for~~ the ~~year~~FMV ~~ended December~~price ~~31,~~of ~~2011~~our ~~and~~common ~~2010, respectively~~stock.

~~Income~~ On ~~taxes~~October 24, 2011, the Company entered into Note Purchase Agreement (“NPA”) with Prestwick Circle Service Corp (“Prestwick”). The NPA provides for maximum non-interest bearing advances to the Company of $387,100 over a period commencing October 25, 2011 and ending November 11, 2011. Pursuant to the NPA, the Company issued an Unsecured Convertible Promissory Note (“Note”) in the amount of $187,100 to Prestwick on October 25, 2011. In March 2012, an additional $15,000 was advanced to the Company under the Note Purchase Agreement with Prestwick Circle Services Corp. Prestwick remains in default on its obligation to fund an additional $200,000 under the NPA.

~~Deferred~~ The ~~income~~Note ~~tax~~may ~~assets~~be ~~and~~convertible ~~liabilities are~~in ~~determined~~shares ~~based~~of on the ~~estimated~~Company’s ~~future~~common ~~tax~~stock ~~effects~~at ofany ~~net~~time ~~operating~~by ~~loss~~the ~~and~~holder ~~credit~~at ~~carryforwards~~$0.135 ~~and~~per ~~temporary~~share. ~~differences between~~The Company may require the ~~tax~~holder ~~basis~~to convert its Notes into shares of ~~assets~~its ~~and~~common ~~liabilities~~stock ~~and~~45 ~~their~~days ~~respective~~after ~~financial~~the ~~reporting~~closing ~~amounts~~of ~~measured~~the atOSO Merger, unless the ~~current~~conversion ~~enacted tax~~would ~~rates~~result in the holder then owning more than 4.99% of our common stock. The Company ~~records~~may anrequire ~~estimated~~at ~~valuation~~its ~~allowance~~election onconversion ~~its~~of ~~deferred~~all ~~income~~remaining ~~tax~~Notes ~~assets~~anytime ifafter itApril is19, ~~not~~2012 ~~more~~regardless ~~likely~~of ~~than not~~the ~~that~~then ~~these~~ownership ~~deferred~~position ~~income~~of ~~tax~~the ~~assets~~holder. On ~~will~~April be23, ~~realized~~2013, the Note was converted by the Company into shares of the Company’s common stock (see Subsequent Events note entitled “Note Conversion”).

~~The~~ On December 9, 2011, the Company ~~recognizes~~issued a ~~tax~~senior ~~benefit~~secured ~~from an~~promissory ~~uncertain~~note ~~tax~~in ~~position~~the ~~only~~amount ifof it$100,000 to a third party lender. The note is ~~more~~secured ~~likely~~by ~~than~~a ~~not~~security ~~that~~agreement with the ~~tax~~lender ~~position~~pursuant ~~will~~to bewhich ~~sustained~~the Company granted a first lien on ~~examination~~all byof ~~taxing~~its ~~authorities, based~~assets. The note is due on the ~~technical~~earlier ~~merits~~to occur of (i) March 31, 2012, (ii) the ~~position.~~receipt ~~The~~of ~~tax~~the ~~benefits~~remaining ~~recognized~~proceeds in the ~~consolidated~~amount ~~financial~~of ~~statements~~$200,000 from ~~such~~a Note Purchase Agreement entered into with a ~~position~~ ~~are~~third ~~measured~~party ~~based~~investor on October 24, 2011 and (iii) the ~~largest~~receipt ~~benefit~~of ~~that~~$200,000 ~~has~~of proceeds from a ~~greater~~planned ~~than~~private ~~50%~~placement ~~likelihood~~of equity securities. In April 2012, the Company repaid $25,000 of ~~being~~the ~~realized~~principal ~~upon~~balance. ~~ultimate~~The ~~settlement~~funded amount under the note was $80,000, resulting in an original issuance discount of $20,000. As In accordance with the original issuance discount of ~~December 31~~the secured note, amortization expense of $3,894 has been charged in 2011, ~~and~~with ~~2010~~a remaining unamortized original issue discount of $16,106. The note may be converted into shares of the Company’s ~~has~~common ~~not~~stock ~~recorded~~by the lender at any ~~unrecognized~~time ~~tax~~at ~~benefits~~$0.20 per share. The Company also issued the lender a three year common stock purchase warrant for the purchase of 200,000 shares of the Company’s common stock at an exercise price of $0.20 per share.

In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the notes. The ~~tax~~Company ~~years~~allocated ~~remaining~~a ~~open~~portion ~~for~~of ~~examination are~~the ~~2008~~proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $60,000 ~~2009~~of the proceeds, ~~2010~~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 a total of $11,681 of the debt discount in 2011 and $48,319 in 2012.

~~Inventories~~ 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 a total of $21,185 of the debt discount as interest in 2012, with a remaining unamortized debt discount of $27,815. See subsequent event entitled “Note Exchange”. The March 2012 Notes matured December 31, 2013 and are in technical default; however, no default has been declared.

~~Inventory~~ On ~~consisted~~April of1, ~~finished~~2012, ~~goods~~the ~~is stated~~Company atdefaulted in the ~~lower~~payment of ~~cost~~a ~~(first-~~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~~-out~~ ~~method)~~security orinterest ~~market~~in all of the Company’s assets. The obligation was restructured in May 2013 (see Subsequent Events note entitled “Refinancing”).

~~Property~~ NOTE ~~and~~7 ~~Equipment~~– COMMITMENTS AND CONTINGENCIES

~~Property and equipment are stated at cost,~~ ~~less~~Facilities accumulated depreciation. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is three years for computer assets and five years for furniture and all other equipment. Expenditures for maintenance and repairs are expensed as incurred.Lease

~~Net~~ The ~~Loss~~Company rents its principal facilities on an informal month-to-month basis from a non-affiliated third party in the amount of $2,500 per ~~Share~~ month. Rent expense was $17,650 and $14,250 for 2012 and 2011, respectively.

~~The Company follows Accounting Standards Codification subtopic 260~~F-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants along with common shares issuable upon convertible notes and preferred stock have been excluded as common stock equivalents in the diluted loss per share because there effect is anti-dilutive on the computation. Fully diluted shares outstanding were 61,201,483 for the year ended December 31, 2011.

~~Reclassification~~ Key Employee Agreements

~~Certain~~ Effective ~~reclassifications~~October ~~have~~1, ~~been~~2011, ~~made to~~the ~~prior~~Company ~~periods'~~entered ~~data~~into toa ~~conform~~consulting toagreement with its President. The terms of the ~~current~~agreement ~~year's~~provide ~~presentation~~that the consultant shall be compensated at a rate of $15,000 per month (other than the first month, in which the rate of compensation was $25,325, of which $15,325 was paid), of which $5,000 shall be paid in cash and the remainder accrued until the Company completes a financing of approximately $1,000,000. ~~These~~ ~~reclassifications~~The ~~had~~accrued noportion ~~effect~~may onbe ~~reported income~~paid in cash or ~~losses~~ in stock, or by any combination thereof, at the election of the Company. The consulting agreement had a term of one year.

~~Fair~~ NOTE ~~Value~~8 of– ~~Financial~~CAPITAL ~~Instruments~~STOCK

~~The Company has adopted the required provisions~~ ofPreferred Topic 820, “Fair Value Measurements”. Those provisions relate to our financial assets and liabilities carried at fair value and our fair value disclosures related to financial assets and liabilities. Topic 820 defines fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs to fair value measurements - Level 1, meaning the use of quoted prices for identical instruments in active markets; Level 2, meaning the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; and Level 3, meaning the use of unobservable inputs. Observable market data should be used when available.Stock

The Company’s ~~financial~~has ~~instruments are~~an ~~carried~~aggregate attotal ~~fair~~of ~~value~~1,000,000 ~~including~~shares of authorized preferred stock with 338,000 ~~cash~~shares ~~equivalents~~of $.0001 ~~Virtually~~par ~~all~~value ofundesignated ~~the~~preferred ~~Company’s~~stock, ~~valuation~~660,000 ~~measurements~~shares ~~are~~designated ~~Level~~as ~~1 measurements.~~Series A Preferred Stock and 2,000 shares designated as Series B Preferred Stock. The ~~adoption~~338,000 shares of ~~Topic~~undesignated ~~820~~preferred ~~did~~stock, ~~not~~if ~~have~~issued, awill ~~significant~~carry ~~impact~~liquidation onpreferences ~~the~~and ~~Company’s~~other ~~consolidated~~rights, ~~financial~~as ~~statements~~determined by the Board of Directors.

~~F-7~~ Series A 8% Convertible Preferred Stock

~~Impairment~~ The Company has 660,000 shares of ~~Long~~preferred stock designated as “Series A 8% Convertible Preferred Stock” authorized with 60,000 shares issued and outstanding as of the date of this report having an aggregate stated value of $300,000. Each share of Series A Preferred Stock (a) has a stated value of $5.00 per share (“Stated Value”), (b) is non-~~Lived~~voting, ~~Assets~~(c) includes a dividend of 8% per annum paid annually, (d) may be redeemed at any time for an amount equal to the Stated Value plus all accumulated and unpaid dividends, (e) may be converted into 10 shares of $0.00015 par value common stock, and has a (f) liquidation preference of $5.00 per share plus all accumulated and unpaid dividends.

The ~~Company~~terms ~~reviewed~~of ~~the~~these ~~long-lived~~shares ~~assets for~~have ~~impairment~~been ~~whenever~~adjusted ~~events~~pursuant orto ~~changes~~an inAnti-Dilution ~~circumstances~~Agreement ~~indicate~~with ~~that~~ the ~~carrying~~purchasers ~~amount~~such ofthat the ~~assets~~purchasers may ~~not~~now beconvert ~~fully~~their ~~recoverable. To~~shares ~~determine~~of ifSeries ~~impairment~~A ~~exists,~~Preferred ~~the~~Stock ~~Company~~into ~~compares~~13,300 ~~the~~shares ~~estimated~~of ~~future~~the ~~undiscounted~~Company’s ~~cash~~common ~~flows~~stock ~~from~~at ~~the~~an ~~related~~exercise ~~long-lived assets~~conversion toratio ~~the~~of ~~net~~one ~~carrying~~(1) ~~amount~~share of ~~such~~Preferred ~~assets.~~Stock ~~Once~~to it0.22 ~~has~~shares ~~been determined that an impairment exists, the carrying value~~ of ~~the~~ ~~asset~~Common ~~is adjusted to the fair value~~Stock. This ~~Factors~~adjustment ~~considered~~does innot affect the ~~determination~~terms of the ~~fair~~remaining ~~value~~authorized ~~include~~but ~~current~~un-issued ~~operating~~shares ~~results, trends and the present value~~ of ~~estimated~~Series ~~expected~~A ~~future~~Preferred ~~cash flows~~Stock.

~~Recent~~ Series ~~Accounting~~B ~~Pronouncements~~8% Convertible Preferred Stock

A The ~~variety~~Company has 2,000 shares of ~~proposed~~preferred orstock ~~otherwise~~designated ~~potential accounting~~as ~~standards~~“Series ~~are~~B ~~currently~~8% ~~under~~Convertible ~~study~~Preferred byStock” ~~standard~~(the ~~setting~~“Series ~~organizations~~B ~~and~~Preferred ~~various~~Stock”) ~~regulatory~~authorized ~~agencies.~~with ~~Due~~30 toshares ~~the~~issued ~~tentative~~ and ~~preliminary~~outstanding ~~nature~~as of ~~those~~the ~~proposed~~date ~~standards~~of this report having an aggregate stated value of $15,000. Each ~~management~~share of Series B Preferred Stock has ~~not~~an ~~determined~~initial ~~whether~~issue ~~implementation~~price or face value of ~~such~~$500.00 ~~proposed~~(the ~~standards would~~“Original Issue Price”) and may be ~~material~~converted tointo shares of the ~~consolidated~~Company’s ~~financial~~$0.00015 ~~statements~~par value common stock (the “Common Stock”) at any time at the election of the holder. The Series B Preferred Stock may also be redeemed by the Company upon the cash payment per share of $500.00 plus any unpaid dividends thereon. The Series B Preferred Stock is non-voting.

~~NOTE~~ Shares 3of Series B Convertible Preferred Stock may be converted into fully paid and nonassessable shares of Common Stock of the Company at a price (the "Conversion Price") equal to 50% of the Market Price per share of Common Stock on the date of conversion (but the Conversion Price shall not be less than $5.00 per share (the "Minimum Price") or greater than $25.00 per share (the "Maximum Price") with respect to the Stated Value of each share of Series B Convertible Preferred Stock and on the basis of the post-reverse ~~GOING~~split ~~CONCERN~~shares ~~MATTERS~~of Common Stock. Such option may be exercised by any holder on an all or none basis on or after July 1, 2010. The Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices for the 10 consecutive trading days commencing 12 trading days before the day in question.

~~The accompanying financial statements have~~ ~~been~~Common 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 $204,359 for the year ended December 31, 2011 and a net loss of $48,999 for the year ended December 31, 2010. Additionally, the Company has negative working capital (total current liabilities exceeded total current assets) of $453,630 as of December 31, 2011. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.Stock

The Company has ~~undertaken~~authorized ~~further~~99,000,000 ~~steps as~~shares ~~part~~ of acommon ~~plan~~stock to$.00015 ~~improve~~par ~~operations~~value ~~with~~per ~~the~~share ~~goal of sustaining our operations for~~ (the ~~next~~“Common ~~twelve~~Stock”). As ~~months and beyond to address its lack~~ of ~~liquidity~~December by31, ~~raising~~2012 ~~additional~~and ~~funds~~2011, ~~either in~~ the ~~form~~Company ofhas ~~debt or equity or some combination thereof. However~~61,201,483 ~~there can~~shares beof noCommon ~~assurance~~Stock ~~that~~issued ~~the~~and outstanding. The Company’s ~~can~~shares ~~successfully~~of ~~accomplish~~Common ~~these~~Stock ~~steps~~are ~~and~~traded oron ~~business~~the ~~plans,~~Over ~~and it is uncertain that~~ the ~~Company~~ ~~will~~Counter ~~achieve~~electronic aquotation ~~profitable~~system ~~level~~under ofthe ~~operations~~trading ~~and~~symbol ~~be able to obtain additional financing~~PBGC.

~~The~~ Holders ~~Company’s~~of ~~continued~~our ~~existence is~~common ~~dependent~~stock ~~upon~~are ~~management’s~~entitled ~~ability~~to one vote per share and to ~~develop~~receive ~~profitable~~dividends ~~operations~~when and ~~resolve~~as ~~its~~declared ~~liquidity~~by ~~problems~~the Board of Directors and to share ratably in our assets legally available for distribution in the event of the liquidation, dissolution or winding up of the Company. ~~The~~ Holders ~~accompanying financial~~of ~~statements~~our common stock do not ~~include~~have subscription, redemption or conversion rights, nor do they have any ~~adjustments~~preemptive ~~relating~~rights. toHolders ~~the~~of ~~recoverability~~our ~~and~~common ~~classification~~stock do not have cumulative voting rights, which means that the holders of ~~asset~~more ~~carrying~~than ~~amounts or~~half of the ~~amount~~outstanding ~~and~~shares ~~classification~~of common stock can elect all of ~~liabilities~~our ~~that~~directors, ~~might~~if ~~result~~they ~~should~~choose to do so. In such event, the ~~Company~~holders of the remaining shares would not be ~~unable~~able to ~~continue~~elect any directors. The Board is empowered to fill any vacancies on the Board. Except as otherwise required by the Nevada law, all stockholder action is taken by vote of a ~~going~~majority ~~concern~~of the outstanding shares of the our common stock voting as a single class present at a meeting of stockholders at which a quorum (consisting of a majority of the outstanding shares of our common stock) is present in person or by proxy.

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.F-11

Class A Warrants

~~NOTE~~ At 4December –31, ~~PROPERTY~~2012 ~~AND~~the ~~EQUIPMENT~~Company had Class A Warrants issued pursuant to its Series A Preferred Stock Private Placement Unit Offering. The terms of these Class A Warrants have been adjusted pursuant to the Anti-Dilution Agreement with the Unit purchasers such that the purchasers may purchase 13,333 shares of the Company’s common stock at an exercise price of $45.00 per share at any time prior to December 31, 2012 the date of expiration of the Class A Warrants and may be called for redemption at a redemption price of $2.00 per warrant at any time after the Company’s shares of common stock have traded above $1.50 for 10 consecutive trading days.

~~Property and equipment as of December 31,~~ ~~2011~~Selling ~~and~~Agent ~~2010 is summarized as follows:~~Warrants

	2011			2010
Office furniture and equipment	$	1,741		$	-
Less: accumulated depreciation		(97	)		-
	$	1,644		$	-

The Company granted a selling agent rights to purchase 2,497 shares of the Company’s common stock at an exercise price of fifty-four dollars ($54.00) per share at any time prior to the date of expiration of January 31, 2013. These warrants expired on January 31, 2013.

~~Depreciation expense for the years ended December 31, 2011 and~~ ~~2010~~Shares ~~was~~Available ~~$97~~For ~~and~~Future ~~$0, respectively.~~Issuance

~~NOTE~~ As 5of -December ~~ACCRUED~~31, ~~EXPENSES~~2012, the Company has 3,578,850 shares of common stock reserved for future issuance upon conversion of convertible debt, conversion of shares of convertible preferred stock and exercise of warrants and options:

Accrued expenses are comprised of the following:

			Conversion Rate		Number of
	Amount		Per Share		Shares
Shares of common stock authorized						99,000,000
Shares of common stock outstanding						61,201,483
Shares of common stock reserved for:
Senior secured convertible promissory note	$	75,000	$	0.20		375,000
Secured convertible promissory note (1)		7,067		0.0017		300,000
Unsecured convertible promissory notes		62,955		40.00		1,574
Mandatory convertible promissory note		187,100		0.135		1,385,926
Unsecured convertible promissory notes		74,246		0.05		1,484,920
Series A convertible preferred stock		300,000		22.50		13,333
Series B convertible preferred stock		15,000		1.00		15,000
Class B warrants				25.00		600
2009 Consultants Stock Compensation Plan Reserved for future grant						263
Selling agent warrants				54.00		2,497
						64,780,596

Shares of common stock available for future issuance						34,219,404

	2011		2010
Consulting fees	$	54,000	$	-
Sales commissions		28,417		17,188
Professional fees		18,000		50,561
	$	100,417	$	67,749

(1)

The secured convertible promissory note has a conversion feature equal to 75% of the closing price of the common stock, up to a maximum of 300,000 shares. Our common stock at December 31, 2012 was $0.0023, resulting in a conversion price of $0.001725 as of December 31, 2012, and as a result reserve for future issuance of 300,000 shares (the maximum amount under the note).

~~F-8~~ Summary of Common Stock Warrants and Options Outstanding

~~NOTE~~ A 6summary -of ~~NOTES~~the ~~PAYABLE~~status of warrants and options granted at December 31, and changes during the periods then ended is presented below:

Notes payable are comprised of the following:

	2012			2011
		Weighted			Weighted
	Number	Average		Number	Average
	of	Exercise		of	Exercise
	Options	Price		Options	Price

Outstanding - beginning of year	16,430	$	4.39	216,430	$	4.39
Granted	-	$	-	200,000	$	0.20
Vested	-		-	-		-
Exercised	-	$	-	(200,000)	$	0.20
Forfeited	-	$	-	(200,000)	$	1.00
Expired	13,333		45.00	-		-
Outstanding - end of year	3,097	$	48.38	16,430	$	4.39
Exercisable at December 31,	3,097	$	48.38	16,430	$	4.39

	2011		2010
Demand Note	$	-	$	24,843
Secured Promissory Note		48,500		31,023
Senior Secured Convertible Promissory Note, net of amortized debt discount of $48,319		51,681		-
Secured Convertible 10% Promissory Note		6,567		-
Unsecured Convertible 6% Promissory Notes		59,955		-
Unsecured Convertible Promissory Note		187,100		-
	$	353,803	$	55,866

	F-12

~~The Company has a $5,000 10% Convertible~~ ~~Secured~~On ~~Promissory~~October ~~Note (the “~~10%, ~~Secured Note”). The 10% Secured Note was due on May 12~~2011, ~~2009~~holders ~~and bears an annual rate~~ of ~~interest~~options ofto ~~ten~~purchase ~~percent~~200,000 ~~(10%). The 10% Secured Note is secured by assignment of a motorcycle engine. The 10% Secured Note may be converted by the holder into~~ shares of ~~the~~our ~~Company’s~~ common stock at a price ~~equal to seventy-five percent (75%)~~ of the market price of the Company’s shares on the date of conversion limited to not more than 300,000 shares. At the date of issuance, the Company determined that the fair value of the beneficial conversion feature in respect of this 10% Secured Note on the date the note was issued to be equal to $~~4,054 using the Black-Scholes model which amount has been recorded as a debt discount was amortized over the term of the note~~1. ~~The~~00 ~~accompanying~~per ~~financial~~share ~~statements~~voluntarily ~~include~~forfeited ~~$125~~their ~~and $500 of interest expense for the year ending December 31, 2011 and 2010, respectively~~options. ~~The 10% Secured Note is in default with a total aggregate amount due of $6,567 as of December 31, 2011.~~

~~In March of 2010 the Company entered~~ ~~into~~On aDecember ~~$72~~15,~~500~~ ~~non-interest~~2011, ~~bearing note for~~ the ~~purchase of inventory. This note is secured by the~~ Company's ~~accounts receivable~~issued ~~and~~89,807 ~~inventory~~restricted ~~and~~shares ~~precludes the issuance~~ of ~~any~~our ~~other~~common ~~indebtedness~~stock ~~pari passu or senior~~ to ~~it. This note is subject to~~ a ~~mandatory~~warrant ~~monthly~~holder ~~cash~~upon ~~flow~~its ~~recapture~~exercise ~~provision~~of ~~whereby~~the ~~payments~~common ~~are~~stock ~~made~~purchase ~~against~~warrant ~~this~~granted ~~note~~in ~~pursuant~~connection towith a ~~formula~~ loan. The ~~funded~~warrant ~~amount under the note~~ was ~~$54,299,~~exercised ~~resulting~~for inall ~~an original issuance discount of $18~~200,~~201. In accordance~~000 ~~with~~shares ~~the~~on ~~original~~a ~~issuance~~cashless ~~discount of the secured note~~basis, ~~amortization of imputed interest expense of $4,550~~ and ~~$13,651~~ ~~have~~accordingly ~~been recorded in 2011 and 2010, respectively, representing full amortization of~~ the ~~original issuance~~Company ~~discount. The~~received ~~note~~no ~~had a maturity date of March 11, 2011 and has been paid in full~~proceeds.

In On ~~May~~December ~~2011~~31, ~~the Company entered into a $53~~2012,~~500~~ non-interest bearing note for the purchase of inventory. This note is secured by the Company's accounts receivable and inventory and precludes the issuance of any other indebtedness pari passu or senior to it. This note is subject to a mandatory monthly cash flow recapture provision whereby payments are made against this note pursuant to a formula. The funded amount under the note was $40,003, resulting in an original issuance discount of $13,~~497. In~~333 ~~accordance~~Class ~~with~~A ~~the original~~Warrants ~~issuance discount of the secured note, amortization of imputed interest expense of $8,998 has been charged in 2011, with a remaining unamortized original issue discount of $4,499~~expired. ~~The note has a maturity date of May 2, 2012.~~

~~On December 9, 2011, the Company issued~~ aA ~~senior~~summary ~~secured promissory note in the amount~~ of ~~$100,000 to a third party lender. The note is secured by a security agreement with~~ the ~~lender~~status ~~pursuant to which the Company granted a first lien on all~~ of ~~its assets. The note is due on~~ the ~~earlier~~warrants ~~to occur of (i) March 31, 2012, (ii) the receipt of the remaining proceeds in the amount of $200,000 from a Note Purchase Agreement entered into with a third party investor on October 24, 2011~~ and ~~(iii)~~options ~~the~~outstanding receipt of $200,000 of proceeds from a planned private placement of equity securities. The funded amount under the note was $80,000, resulting in an original issuance discount of $20,000. In accordance with the original issuance discount of the secured note, amortization expense of $3,894 has been charged in 2011, with a remaining unamortized original issue discount of $16,106. The note may be converted into shares of the Company’s common stock by the lender at ~~any~~December ~~time at $0.20 per share. The Company also issued the lender a three year common stock purchase warrant for the purchase of 200~~31,~~000~~ ~~shares~~2012 of the Company’s common stock at an exercise price of $0.20 per share. 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 $60,000 of the proceeds, which is ~~equal~~presented 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.below:

Unsecured Convertible Promissory Notes

Warrants Exercisable
			Weighted
			Average		Weighted		Weighted
			Remaining		Average		Average
Exercise		Number	Contractual		Exercise	Number	Exercise
Prices		Outstanding	Life		Price	Exercisable	Price

$	25.00	600	1.08	$	25.00	600	$	25.00
$	54.00	2,497	0.08	$	54.00	2,497	$	54.00

~~In June 2009, we entered into a $49,444~~ ~~demand~~NOTE ~~note~~9 ~~with~~– ~~Fury~~INCOME Distribution, Inc., a minority shareholder of the Company, primarily for the purchase of certain point of sale marketing materials and accounts receivable. The demand note does not bear interest and had an original maturity date of December 31, 2009. The demand note was paid in full in October 2011.TAXES

~~F-9~~ The Company follows Accounting Standards Codification subtopic 740, Income Taxes (“ASC 740”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse.

~~The Company has four unsecured 6% Convertible~~ ~~Promissory Notes payable in the aggregate original principal amount of $50,000 (the “Convertible Notes”).~~ The ~~Convertible~~ ~~Notes~~difference ~~bear~~between ~~interest~~income attax ~~the~~expense ~~rate~~computed ofby 6%applying ~~per annum and were due on dates ranging from August 8, 2010 through September 8, 2010. The Convertible Notes may be converted into shares of~~ the ~~Company’s~~federal ~~common~~statutory ~~stock~~corporate attax ~~the election of the holder at any time prior to their maturity date (24 months after issue) at the~~ rate of thirty dollars ($40.00) per share. Interest may, at the election of the Company, be paid in shares of the Company’s common stock at the rate of one hundred ($100.00) per share. The accompanying financial statements include $750 and ~~$3,000~~actual ofincome ~~interest~~tax expense ~~for~~is ~~the year ending December 31, 2011 and 2010, respectively. The unsecured convertible promissory notes are in default with a total aggregate amount due of $59,955~~ as ~~of December 31, 2011.~~follows:

In accordance with Emerging Issues Task Force (“EITF”) No.00-27, “Application of EITF Issue No. 98-5, ‘Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Rates’, to Certain Convertible Instruments.” We determined there to be no value attributable to the beneficial conversion features of the Convertible Notes in that the effective conversion price of those shares was greater than the FMV price of our common stock.

	2012		2011
Income taxes using U.S. federal statutory rate	34.0	%	34.0	%
State income taxes, net of federal benefit	4.7		4.7
Change in Valuation allowance	(38.7)		(38.7)
	-		-

On At ~~October 24~~December 31, ~~2011~~2012, the ~~Company~~significant ~~entered into~~components ~~Note Purchase Agreement (“NPA”) with Prestwick Circle Service Corp (“Prestwick”). The NPA provides for maximum non-interest bearing advances to the Company~~ of ~~$387,100 over a period commencing October 25, 2011 and ending November 11, 2011. Pursuant to~~ the ~~NPA,~~deferred ~~the~~tax ~~Company~~assets ~~issued an Unsecured Convertible Promissory Note~~ (~~“Note”~~liabilities) inare ~~the~~summarized ~~amount of $187,100 to Prestwick on October 25, 2011. Prestwick has defaulted on its obligation to fund an additional $200,000 under the NPA.~~below:

The Note may be convertible in shares of the Company’s common stock at any time by the holder at $0.135 per share. The Company may require the holder to convert its Notes into shares of its common stock 45 days after the closing of the OSO Merger, unless the conversion would result in the holder then owning more than 4.99% of our common stock. The Company may require at its election conversion of all remaining Notes anytime after April 19, 2012 regardless of the then ownership position of the holder.

	2012		2011
Deferred tax assets:
Net Operating Losses	$	169,253	$	5,414
Beneficial conversion features		17,548		9,011
Total deferred tax assets	$	186,801	$	14,425

Deferred tax liabilities:

Total deferred tax liabilities	$	-	$	-

Valuation allowance		(186,801)		(14,425)
Net deferred tax assets	$	-	$	–

~~NOTE 7 – COMMITMENTS AND CONTINGENCIES~~F-13

~~Facilities~~ As ~~Lease~~of December 31, 2012, the Company had U.S. federal and state net operating loss carryforwards of approximately $201,000, which expire at various dates from through 2031. These net operating loss carryforwards may be used to offset future taxable income and thereby reduce the Company’s U.S. federal income taxes. Section 382 of the Internal Revenue Code of 1986 (the “Code”) imposes an annual limit on the ability of a corporation that undergoes a greater than 50% ownership change to use its net operating loss carry forwards to reduce its tax liability. The Company may be subject to a limitation as a result of the Company’s initial public offering in 2006 and other transactions related to its stock ownership. These potential limitations could affect the utilization of the carryforwards prior to their expiration.

The Company ~~rents~~has ~~its~~provided ~~principal~~a ~~facilities on~~full anvaluation ~~informal~~allowance ~~month-to-month~~against ~~basis~~its ~~from~~net adeferred ~~non-affiliated~~tax ~~third~~assets, ~~party~~since in the ~~amount~~opinion of ~~$2,500~~management ~~per~~based ~~month.~~upon ~~Rent~~the ~~expense~~earnings ~~was~~history ~~$14,250 and~~of ~~$2,500~~the ~~for~~Company; ~~2011~~it ~~and~~is ~~2010,~~more ~~respectively~~likely than not that the benefits of these assets will not be realized.

~~Key~~ The ~~Employee~~Company ~~Agreements~~complies with the provisions of FASB ASC 740-10 in accounting for its uncertain tax positions. ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Management has determined that the Company has no significant uncertain tax positions requiring recognition under ASC 740-10.

~~Effective~~ The ~~October 1, 2011, the~~ Company ~~entered~~ ~~into~~is asubject ~~consulting~~to ~~agreement~~income ~~with~~tax ~~its~~in ~~President. The terms of~~ the ~~agreement~~U.S., ~~provide~~and ~~that~~certain ~~the~~state ~~consultant~~jurisdictions. ~~shall~~The beCompany ~~compensated at~~has anot ~~rate~~been ofaudited ~~$15,000~~by ~~per month (other than~~ the ~~first~~U.S. ~~month,~~Internal inRevenue ~~which the rate of compensation was $25~~Service,~~325,~~ ofor ~~which~~any ~~$15,325~~states ~~was paid), of which $5,000 shall be paid~~ in ~~cash~~connection ~~and~~with ~~the~~income ~~remainder accrued until the Company completes a financing of approximately $1,000,000~~taxes. The ~~accrued~~periods ~~portion~~from ~~may~~December be31, ~~paid~~2009 into ~~cash~~December ~~or in stock~~31, or2012 byremain ~~any~~open ~~combination~~to ~~thereof,~~examination atby the ~~election of the Company~~U. ~~The~~S. ~~consulting~~Internal ~~agreement~~Revenue ~~has~~Service, aand ~~term~~state oftax ~~one year~~authorities.

~~NOTE~~ The 8Company –recognizes ~~CAPITAL~~interest ~~STOCK~~and penalties related to unrecognized tax benefits, if incurred, as a component of income tax expense.

~~Preferred~~ NOTE ~~Stock~~10 – SALE OF STOCK OF SUBSIDIARY

~~The~~ On ~~Company~~October ~~has~~27, an2011, ~~aggregate~~the ~~total~~Company sold all of ~~1,000,000 shares~~the stock of ~~authorized~~its ~~preferred~~wholly-owned ~~stock~~subsidiary ~~with~~Delaware ~~338~~American Motors,~~000~~ ~~shares~~Inc. of(“Delaware $American”).~~0001~~ ~~par~~The ~~value~~purchase ~~undesignated~~price ~~preferred~~was ~~stock~~$10.00, ~~660,000~~and ~~shares~~the ~~designated as~~purchaser ~~Series~~was AMark ~~Preferred~~S. ~~Stock~~Klein, the Company’s former director and ~~2,000~~Chief ~~shares~~Executive ~~designated~~Officer. asThere ~~Series~~was Bno ~~Preferred~~formula ~~Stock~~or principle followed in determining the purchase price. ~~The~~ ~~338~~In connection with the sale,~~000~~ ~~shares~~Mr. Klein agreed to assume any debt or obligation of ~~undesignated preferred~~the ~~stock,~~Company ifwhich ~~issued,~~pertains ~~will~~to ~~carry~~or ~~liquidation~~is ~~preferences~~related to the business of Delaware American and ~~other~~its ~~rights~~subsidiary Delaware American Motors, LLC and to indemnify the Company in respect of these debts or obligations as ~~determined~~provided byin a separate Assumption and Indemnification Agreement. In connection with the ~~Board~~sale of ~~Directors~~Delaware American, the Company recorded a non-cash gain on sale of subsidiary of $284,529 which was recorded in retained earnings immediately following the merger.

~~Series~~ NOTE A11 8%- ~~Convertible~~FAIR ~~Preferred~~VALUE ~~Stock~~MEASUREMENT

The Company ~~has~~adopted ~~660,000~~the ~~shares~~provisions of ~~preferred stock~~ASC ~~designated~~825-10 ason ~~“Series~~October A1, 8%2008. ~~Convertible~~ASC ~~Preferred~~825-10 ~~Stock”~~defines ~~authorized~~fair ~~with~~value ~~60,000~~as ~~shares~~the ~~issued~~price ~~and~~that ~~outstanding as~~would ofbe ~~the~~received ~~date~~from ofselling ~~this~~an ~~report~~asset ~~having~~or paid to transfer a liability in an ~~aggregate~~orderly ~~stated~~transaction ~~value~~between ofmarket ~~$300,000~~participants at the measurement date. ~~Each~~ ~~share~~When ofdetermining ~~Series~~the Afair ~~Preferred~~value ~~Stock~~measurements ~~(a) has~~for aassets ~~stated~~and ~~value~~liabilities ofrequired ~~$5.00~~or ~~per~~permitted ~~share~~to ~~(“Stated~~be ~~Value”),~~recorded ~~(b)~~at isfair ~~non-voting~~value, ~~(c)~~the ~~includes~~Company aconsiders ~~dividend~~the ofprincipal 8%or ~~per~~most ~~annum paid~~advantageous ~~annually,~~market ~~(d)~~in ~~may~~which beit ~~redeemed~~would attransact ~~any~~and ~~time~~considers ~~for~~assumptions anthat ~~amount~~market ~~equal~~participants towould ~~the~~use ~~Stated~~when ~~Value~~pricing ~~plus~~the ~~all~~asset ~~accumulated~~or ~~and~~liability, ~~unpaid~~such ~~dividends, (e)~~as ~~may~~inherent berisk, ~~converted~~transfer ~~into~~restrictions, 10and ~~shares~~risk of $0nonperformance.~~00015~~ ~~par~~ASC 825-10 establishes a fair value ~~common~~hierarchy ~~stock,~~that ~~and~~requires ~~has~~an aentity ~~(f)~~to ~~liquidation~~maximize ~~preference~~the use of ~~$5.00~~observable ~~per~~inputs ~~share plus~~and ~~all~~minimize ~~accumulated~~the ~~and~~use ~~unpaid~~of ~~dividends~~unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

~~The terms of these shares have been adjusted~~ ~~pursuant~~Level to1 ~~an Anti~~-~~Dilution~~ ~~Agreement~~Quoted ~~with~~prices ~~the~~in ~~purchasers~~active ~~such~~markets ~~that~~for ~~the~~identical ~~purchasers~~assets ~~may~~or ~~now convert their shares of Series A Preferred Stock into 13,300 shares of the Company’s common stock at an exercise conversion ratio of one (1) share of Preferred Stock to 0~~liabilities.~~22 shares of Common Stock. This adjustment does not affect the terms of the remaining authorized but un-issued shares of Series A Preferred Stock.~~

~~Series~~ Level B2 8%- ~~Convertible~~Observable ~~Preferred~~inputs ~~Stock~~other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

~~The Company has 2,000 shares of preferred~~ ~~stock~~Level ~~designated~~3 as- ~~“Series~~Unobservable Binputs 8%to ~~Convertible Preferred Stock” (~~the ~~“Series~~valuation Bmethodology ~~Preferred~~that ~~Stock”)~~are ~~authorized with~~significant 30to ~~shares issued and outstanding as of~~ the ~~date~~measurement of ~~this~~fair ~~report having an aggregate stated~~ value of ~~$15,000. Each share~~assets ~~of Series B Preferred Stock has an initial issue price~~ or ~~face value of $500~~liabilities.00 (the “Original Issue Price”) and may be converted into shares of the Company’s $0.00015 par value common stock (the “Common Stock”) at any time at the election of the holder. The Series B Preferred Stock may also be redeemed by the Company upon the cash payment per share of $500.00 plus any unpaid dividends thereon. The Series B Preferred Stock is non-voting.

~~F-10~~ To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

~~Shares of Series B Convertible Preferred~~ ~~Stock~~Upon ~~may~~adoption ~~be converted into fully paid and nonassessable shares~~ of ~~Common~~ASC ~~Stock~~825-10, ofthere ~~the~~was ~~Company~~no atcumulative aeffect ~~price~~adjustment ~~(the "Conversion Price") equal~~ to ~~50% of~~ the ~~Market~~beginning ~~Price~~retained ~~per~~earnings share of Common Stock on the date of conversion (but the Conversion Price shall not be less than $5.00 per share (the "Minimum Price") or greater than $25.00 per share (the "Maximum Price") with respect to the Stated Value of each share of Series B Convertible Preferred Stock and onno ~~the~~impact ~~basis of the post-reverse split shares of Common Stock. Such option may be exercised by any holder~~ on ~~an all or none basis on or after July 1, 2010. The Market Price per share of Common Stock on any date shall be deemed to be~~ the ~~average~~unaudited ofcondensed consolidated ~~the~~financial ~~daily closing prices for the 10 consecutive trading days commencing 12 trading days before the day in question~~statements.

~~Common~~ The ~~Stock~~carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable, the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise, only available information pertinent to fair value has been disclosed.

The Company has authorized 99,000,000 shares of common stock $.00015 par value per share (the “Common Stock”). As of December 31, 2011, the Company has 61,201,483 shares of Common Stock issued and outstanding. The Company’s shares of Common Stock are traded on the Over the Counter electronic quotation system under the trading symbol PBGC.F-14

~~Holders of our common stock are entitled~~ toAt ~~one~~December ~~vote~~31, ~~per~~2012 ~~share~~ and to2011, ~~receive~~there ~~dividends~~were ~~when~~no ~~and~~identified ~~as declared by the Board of Directors and to share ratably in our~~ assets ~~legally~~ ~~available for distribution in the event of the liquidation, dissolution~~ or ~~winding~~liabilities upmeasured ofat ~~the~~fair ~~Company.~~value Holders of our common stock do not have subscription, redemption or conversion rights, nor do they have any preemptive rights. Holders of our common stock do not have cumulative voting rights, which means that the holders of more than half of the outstanding shares of common stock can elect all of our directors, if they choose to do so. In such event, the holders of the remaining shares would not be able to elect any directors. The Board is empowered to fill any vacancies on ~~the Board. Except as otherwise required by the Nevada law, all stockholder action is taken by vote of~~ a ~~majority~~recurring of the outstanding shares of the our common stock voting as a single class present at a meeting of stockholders at which a quorum (consisting of a majority of the outstanding shares of our common stock) is present in person or by proxybasis.

~~Class~~ NOTE A12 ~~Warrants~~– SUBSEQUENT EVENTS

~~At December 31, 2011 the Company had Class~~ AIn ~~Warrants~~preparing ~~issued pursuant to its Series A Preferred Stock Private Placement Unit Offering. The terms of these Class A Warrants have been adjusted pursuant to~~ the ~~Anti-Dilution~~accompanying ~~Agreement~~consolidated ~~with~~financial ~~the Unit purchasers such that the purchasers may purchase 13~~statements,~~333~~ ~~shares of~~ the Company’s ~~common~~has ~~stock~~reviewed atevents anthat ~~exercise~~have ~~price~~occurred ofafter ~~$45.00 per share at any time prior to~~ December 31, 2012 , through the date of ~~expiration~~issuance of the ~~Class~~financial ~~A Warrants and may be called for redemption at a redemption price of $2~~statements.~~00 per warrant at any time after the Company’s shares of common stock have traded above $1.50 for 10 consecutive trading days.~~

~~Selling~~ Note ~~Agent Warrants~~Conversion

~~The~~ On ~~Company~~April

Item 1A. RISK FACTORS

Risks Related to our Company and our Business

ChangeRisks inRelated consumerto preferences may reduce demand for some of our products.Common Stock

·We variationshave not paid cash dividends, and it is unlikely that we will pay cash dividends in quarterlythe operatingforeseeable results;future.

Filing Compare · Premier Beverage Group Corp