UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: ~~December~~ March 31, ~~2009~~ 2010

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

For the transition period from: to

Commission File No.: : 000-28865

GLOBAL BEVERAGES, INC.

(Exact name of registrant as specific in its charter)

Nevada		88-0373061
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
(State or Other Jurisdiction of Incorporation		(I.R.S. Employer Identification No.)
or Organization)

700 YARRAMAN ROAD, WYBONG

700 YARRAMAN ROAD, WYBONG
UPPER HUNTER VALLEY
NEW SOUTH WALES, AUSTRALIA 2333
	(Address of Principal Executive Offices)

~~UPPER HUNTER~~(+61) ~~VALLEY~~2 6547-8118 (Registrant's Telephone Number, Including Area Code)

~~NEW~~Indicate by ~~SOUTH~~check ~~WALES~~mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), ~~AUSTRALIA~~and (2) has been subject to ~~2333~~such filing requirements for the past 90 days. Yes þ No ¨

~~(Address~~Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of ~~Principal~~Regulation ~~Executive~~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 ¨ No

Offices)

(+61) 2 6547-8118

(Registrant's Telephone Number,

Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 ¨ No

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 “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o¨ No þ

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on ~~May~~August 2630, 2010 was $3944,~~000~~984,~~014~~590 based on the average ~~closing~~ closing bid and ask price of $0.50 for such common stock as of ~~May~~August 2630, 2010.

As of ~~May~~ 26August 30, 2010, there were 89,969,180 shares of the registrant’s common stock outstanding.

GLOBAL BEVERAGES, INC.

REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~DECEMBER~~MARCH 31, 2009

Contents

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		4
Item 1. Financial Statements.		F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation		13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.		4
Item 3. Quantitative and Qualitative Disclosures About Market Risk		167
Item 4T. Controls and Procedures		16
Item 4T. Controls and Procedures.		7
PART II – OTHER INFORMATION
Item 1. Legal Proceedings		189
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		189
Item 3. Defaults Upon Senior Securities		189
Item 5. Other Information		189
Item 6. Exhibits		189

FORWARD-LOOKING STATEMENTS

Some of the statements in this Quarterly Report on Form 10-Q are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

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

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

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

·	Our ability to raise capital to fund capital expenditures;

·	Grape and other fruit price volatility;

·	Our ability to find and retain skilled personnel;

·	Regulatory developments; and

·	General economic conditions.

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

PART I

FINANCIAL INFORMATION

Item 1 – Financial Statements

Statements

GLOBAL BEVERAGES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			June 30,
	March 31,			June 30,
	2009			2009
	2010			2009
	(Unaudited)			(Audited)
				(As Restated)
ASSETS
Current Assets
Cash	$	~~197~~401,~~242~~147		$	-
Accounts receivable, net		12,~~735~~216,~~723~~077			760,313
Due from related parties		~~661~~631,~~156~~252			-
Inventory		75,~~598~~486,~~712~~586			3,362,528
Other receivables		1,~~265~~160,~~877~~854			-
Other assets		~~803~~1,~~334~~393,388			~~190~~824,~~961~~741
Total Current Assets		1211,~~262~~289,~~043~~304			4,~~313~~947,~~802~~582
Property, plant and equipment, net		3,~~861~~909,~~410~~939			3,528,013
Intangible assets		4326,~~913~~809,~~139~~352			191,~~459~~911,~~248~~943
	$	6042,~~036~~008,~~592~~595		$	2710,~~301~~387,~~063~~538
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	4,~~260~~201,~~467~~017		$	1,929,~~055~~056
Loan payable		5892,~~536~~669			13,095
Line of credit		~~648~~620,~~934~~990			-
Deferred revenue		45,663			-
Convertible notes payable, net		431,780			-
Deferred revenue		6,512			-
Cash deficit		-			38,816
Capital lease, current portion		15,735			42,539
Capital lease		7,393			42,539
Due to related party		8,058,902			3,396,616
Shares to be issued		8,983			-
Total Current Liabilities		13,088,238			5,420,122
Due to related parties		6,478,869			3,396,616
Total Current Liabilities		11,898,213			5,420,122
Long Term Liabilities:
Convertible notes payable		607,500			-
Long-term debt		5,519,661			4,627,379
Long-term debt		5,271,363			4,627,379
Total Long Term Liabilities		5,519,661			4,627,379
Total Long Term Liabilities		5,878,863			4,627,379
Total Liabilities		17,417,874			10,047,501
Total Liabilities		18,967,101			10,047,501
Stockholder's Equity
Preferred stock, Series A, $.001 par value, 381,600 shares authorized 381,600 shares issued and outstanding		386			-
Preferred stock, Series B, $.001 par value, 55,000 shares authorized 55,000 shares issued and outstanding		55			55
Common stock, $.001 par value, 90,000,000 shares authorized 88,497,213 and 39,390,476 shares issued and outstanding respectively		88,497			39,390
Common stock, $.001 par value, 90,000,000 shares authorized 89,969,180 and 39,390,476 shares issued and outstanding respectively		89,969			39,390
Additional paid in capital		5740,~~429~~641,~~324~~519			3013,~~851~~938,~~807~~282
Subscription receivable		(55,000	)		(66,000	)
Statutory reserve		41,466			-
Shares to be issued		10,455			-
Subscription receivable		(49,500	)		(66,000	)
Other comprehensive income		(1874,~~025,487~~121	)		(456,752	)
Accumulated deficit		(15,~~378~~259,~~739~~053	)		(13,114,938	)
Total Stockholder's Equity		4124,~~069~~590,~~491~~721			17340,~~253,562~~037
	$	6042,~~036~~008,~~592~~595		$	2710,~~301~~387,~~063~~538

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

5F-1

GLOBAL BEVERAGES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the three months ended						For the ~~six~~nine months ended
	December 31,						December 31,
	March 31,						March 31,
	2009			2008			2009			2008
	2010			2009			2010			2009
Sales, net	$	14,~~994~~253,~~762~~194		$	~~478~~814,~~367~~488		$	59,~~164~~417,~~082~~276		$	1,~~087~~902,~~513~~001
Cost of sales		13,~~653~~478,~~650~~449			~~652~~389,~~996~~087			47,~~297~~776,~~728~~177			1,~~095~~484,~~680~~767
Gross profit (loss)		341,112			(174,629	)		866,354			(8,167	)
Gross profit		774,745			425,401			1,641,099			417,234
		-
Operating Expenses
Selling, general and administrative expenses		~~835~~885,~~565~~640			~~367~~239,~~376~~302			12,~~287~~173,~~704~~345			~~719~~959,~~823~~125
Total operating expenses		835,565			367,376			1,287,704			719,823
Amortization of intangibles		234,739			-			677,659			-
		-
Bad debt		18,368			-			41,835			-
Income (Loss) from operations		(494,453	)		(542,005	)		(421,350	)		(727,990	)
Total operating expenses		1,138,747			239,302			2,892,839			959,125
Income (Loss) from operations		(364,002	)		186,099			(1,251,740	)		(541,891	)
Other (Income) Expense
Interest income		(333	)		(~~326~~455	)		(3336	)		(3,~~121~~576	)
Interest expense		~~407~~256,~~053~~592			~~113~~133,~~196~~758			~~612~~868,~~263~~855			~~277~~411,~~685~~443
Acquisition costs		77(261,~~130~~870	)		-			~~141~~(120,~~116~~754	)		-
Other (income) expenses net		(83,~~041~~886	)		(32,~~397~~442	)		(1015,~~939~~252	)		(810,~~522~~964	)
Amortization of intangible		562,608			-			1,125,216			-
Gain on sale of fixed asset		-			95			427			(1,833	)
Bad debt		(15,104	)		-			23,467			-
Transaction gain (loss) on foreign currency		3,060			(1,413	)		(45,579	)		21,265
Gain on sale of fixed asset		-			(607	)		-			(1,928	)
Total Other (Income) Expense		(6,107	)		129,543			687,661			416,335
Transaction gain (loss) on foreign currency		64			22,625			(48,639	)		22,675
Income (Loss) before income taxes		(357,895	)		56,556			(1,939,401	)		(958,226	)
Total Other (Income) Expense		1,023,677			131,491			1,842,450			286,789
Provision for income taxes		204,714			-			204,714			-
Loss before income taxes		(1,518,131	)		(673,496	)		(2,263,800	)		(1,014,779	)
Net Income (loss)		(562,609	)		56,556			(2,144,115	)		(958,226	)
Provision for income taxes		-			-			-			-
Net loss		(1,518,131	)		(673,496	)		(2,263,800	)		(1,014,779	)
Other comprehensive income (loss)
Foreign currency translation		~~(195~~320,~~074~~890	)		(3389,~~279~~006	)		(~~738~~417,~~259~~369	)		(~~935~~89,941	)
Comprehensive income (loss)	$	(1241,~~713,205~~719	)	$	(~~706~~32,~~775~~450	)	$	(32,~~002~~561,~~059~~484	)	$	(1,~~015~~048,~~714~~167	)
Net loss per share:
Net income (loss) per share:
Basic & diluted	$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.03	)
Basic	$	(0.006	)	$	0.001		$	(0.02	)	$	(0.03	)
Diluted	$	(0.006	)	$	0.001		$	(0.02	)	$	(0.03	)
Weighted average number of shares outstanding:
Basic & diluted		88,497,213			38,000,000			88,497,213			38,000,000
Basic		88,497,213			38,000,000			88,497,213			38,000,000
Diluted		88,497,213			38,000,000			88,497,213			38,000,000

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

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

6F-2

GLOBAL BEVERAGES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~SIX~~NINE MONTH PERIODS ENDED ~~DECEMBER~~MARCH 31, ~~2009~~2010 AND ~~2008~~2009

	2009			2008
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(2,~~263~~144,~~800~~115	)	$	(1958,~~014,779~~226	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt		2341,~~467~~835			-
Depreciation and amortization		1822,~~206,768~~334			~~134~~188,~~499~~018
Salary forgiven for stock payment		11,000			11,000
Salary exchange for stock payment		16,500			16,500
(Increase) / decrease in assets:
Accounts receivables		(~~390~~827,~~044~~065	)		~~(168~~636,~~359~~069	)
Inventory		(3996,~~219,509~~669	)		~~402~~(501,~~654~~764	)
Other receivables		(~~670~~595,~~583~~812	)		~~(35~~20,~~121~~729	)
Deposits and prepaid expenses		3133,~~003~~956			-
Other assets		(~~112~~81,~~584~~581	)		(41194,~~091~~842	)
Increase in liabilities:
Accounts payable and accrued expenses		1,~~950~~741,~~734~~267			31162,~~069~~165
Income tax payable		71203,~~305~~724			-
Deferred revenue		31(7,~~199~~952	)		-
Total Adjustments		(1350,~~067,244~~537	)		~~334~~326,~~651~~875
Net cash used in operations		(31,~~331~~793,~~044~~578	)		(~~680~~631,~~128~~351	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiaries, net of cash acquired		147,380			-
Acquisition of property and equipment		(21,~~697~~699	)		(20,~~231~~020	)
Acquisition of intangible		-			(~~270~~267	)
Net cash provided by (used in) investing activities		125,~~683~~681			(20,~~501~~287	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt		~~175~~297,~~704~~603			~~115,406~~-
Proceeds from loan payable		607,500			-
Procceds (payment) from line of credit		~~107~~74,~~533~~162			-
Cash deficit financing		-			(12,~~769~~960	)
Capital lease payments		(3039,~~671~~497	)		(5568,~~496~~824	)
Receivable from related party		~~451~~254,~~619~~483			-
Payable to related party		2274,~~293,915~~450			-
Loans payable - related party		85720,~~141~~874			~~308~~1,~~777~~380,308
Net cash provided by (used in) financing activities		3,690,742			366,918
Net cash provided by financing activities		2,189,575			1,308,524
Effect of exchange rate changes on cash and cash equivalents		(~~249~~81,~~324~~715	)		~~333~~(656,~~711~~886	)
Net increase in cash and cash equivalents		~~236~~439,~~057~~963			-
Cash and cash equivalents, beginning balance		(38,816	)		-
Cash and cash equivalents, ending balance	$	~~197~~401,~~241~~147		$	-
SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Income tax payments	$	-990		$	-
Interest payments	$	~~311~~853,~~560~~850		$	~~218~~310,~~426~~679

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

7F-3

Global Beverages, Inc.

Notes to Condensed Consolidated Financial Statements

~~December~~March 31, ~~2009~~2010

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Our Condensed Consolidated Balance Sheet as of ~~December~~March 31, ~~2009~~2010, the Condensed Consolidated Statements of ~~Income~~Operations and Comprehensive Income for the three and ~~six~~ nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, and the Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008 have~~2009 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, which was filed on April 9, 2010. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the nine ~~three~~ months are not necessarily indicative of the results expected for the full year.

~~Our~~The ~~significant~~following ~~interim~~information ~~accounting~~is ~~policies~~unaudited. ~~include~~This ~~the~~report ~~addition~~should ofbe ~~overhead~~read ~~costs~~in conjunction towith our ~~work~~Annual inReport ~~process~~on ~~inventory~~Form ~~and~~10-K for the ~~recognition~~fiscal ofyear ~~income~~ended ~~taxes~~June ~~using~~30, ~~an estimated annual effective tax rate~~2009. ~~In addition the income and expenses from~~The ~~acquisitions~~following ~~are~~is ~~included~~a ~~from~~list ~~the date~~ of ~~acquisition~~our ~~forward.~~subsidiaries:

The following information is unaudited. All per share amounts assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to prior year amounts to conform to the 2009 presentation. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2009.

The following is a list of our subsidiaries:

Yarraman Estate, Pty., Ltd., Australia

Global Beverages Hong Kong, Ltd., Hong Kong

Asia Distributions ~~Systems~~Solutions Limited, Cayman Islands, and ~~it’s~~ its subsidiaries (“ADSL” or “Asia Distributions Solutions”):

Vitality Development holdings Limited – British Virgin Islands

Vitality Tianjin Beverage Co Ltd – People’s Republic of China

Highland Mist Holdings Ltd – British Virgin Islands

Tropical Splendor International Ltd – British Virgin Islands

Chendu Gao Li Yuan – People’s Republic of China

TBC Shanghai Ltd – People’s Republic of China

Global Beverages Asia Limited - Hong Kong

Global Beverages China Co Ltd – People’s Republic of China

Shanghai Runke Trading Co Ltd – People’s Republic of China

Panda Express China Limited – British Virgin Islands

Panda Xpress International Co Pte Ltd - Singapore

8F-4

~~During the~~Note ~~fiscal~~2 ~~first quarter of 2010, the Company adopted The FASB Accounting Standards~~– ~~Codification~~SIGNIFICANT ~~(ASC~~ACCOUNTING or Codification) and the Hierarchy of Generally Accepted Accounting Principles (GAAP) which establishes the Codification as the sole source for authoritative U.S. GAAP and will supersede all accounting standards in U.S. GAAP, aside from those issued by the SEC. The adoption of the Codification did not have an impact on the Company’s results of operations, cash flows or financial position. Since the adoption of the Accounting Standards Codification (ASC) the Company’s notes to the consolidated financial statements will no longer make reference to Statement of Financial Accounting Standards (SFAS) or other U.S. GAAP pronouncements.POLICIES

~~The Company~~Basis also adopted, in accordance with U.S. GAAP, the standards on business combinations and noncontrolling interests in Consolidated Financial Statements. These statements aim to improve, simplify, and converge internationally, the accounting for business combinations and the reporting of ~~noncontrolling~~ ~~interests~~Presentation ingoing consolidated financial statements. These statements have a significant impact on the manner in which the Company accounts for acquisitions beginning in the fiscal year 2010. Significant changes include the capitalization of in process research and development, expensing of acquisition related restructuring actions and transaction related costs and the recognition of contingent purchase price consideration at fair value at the acquisition date. In addition, changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period will be recognized in earnings rather than as an adjustment to the cost of acquisition. This accounting treatment for taxes is applicable to acquisitions that occurred prior and subsequent to the adoption of the standard. Operating profit attributable to noncontrolling interests are reported in Other (Income)Expense, net and the related tax impact to the Provision for Income Taxes. Additionally, equity attributable to noncontrolling interests is recorded in Other Non-Current Liabilities. The adoption of these standards did not have a material impact on the Company’s results of operations, cash flows or financial position.concern

~~Note~~ 2At March –31, 2010 the Company has a working capital deficiency of ~~INCOME~~$700,250. For ~~TAXES~~the three months ended March 31, 2010, the Company had a loss from operations of $364,002 of which $258,607 was from non-cash items. For the nine months ended March 31, 2010, the reported loss from operations was $1,251,740 including non-cash expenses of $880,669. Non-cash expenses consisted of $822,334 in amortization of intangibles and depreciation, $41,835 in bad debts and $16,500 from non-cash share based compensation. These conditions taken in conjunction with the Company’s history of operating losses raises doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is highly dependent upon management’s ability to increase operating cash flows, continued availability on its line of credit and the ability to obtain alternative financing to fund capital requirements and/or debt repayments coming due in the next twelve months. The accompanying financial statements do not include any adjustments that may result from the outcome of this uncertainty.

~~The~~Principles ~~worldwide effective income tax rates for the three months ended December 31, 2009 and 2008 were 0% and 0%, respectively. The effective rate was primarily due to net operating losses during this period~~ of ~~time.~~consolidation:

The consolidated financial statements included the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. All significant inter-company accounts and transactions have been eliminated in consolidation. For those consolidated subsidiaries where Company ownership is less than 100%, the outside stockholders' interests are shown as minority interests. Investments in affiliates over which the Company has significant influence but not a controlling interest are carried on the equity basis.

Use of estimates:

The preparation of these financial statements in accordance with accounting principles generally accepted in the United States (US GAAP) requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. These estimates form the basis for judgments made about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and judgments are based on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments routinely require adjustment. US GAAP requires estimates and judgments in several areas, including those related to impairment of goodwill and equity investments, revenue recognition, recoverability of inventory and receivables, the useful lives long lived assets such as property and equipment, the future realization of deferred income tax benefits and the recording of various accruals. The ultimate outcome and actual results could differ from the estimates and assumptions used.

F-5

Note 3 - INVENTORIES

	December 31,		June 30,
	March 31		June 30,
	2009		2009
	2010		2009
Work in progress	$	1,~~508~~623,~~624~~094	$	354,350
Bulk wine and cider		2,~~308~~100,~~778~~826		2,249,660
Finished goods		31,~~620~~574,~~433~~972		635,814
Winemaking and packaging materials		~~160~~187,~~877~~694		122,~~703~~704
Total	$	75,~~598~~486,~~712~~586	$	3,362,~~527~~528

Note 4 – INTANGIBLE ASSETS AND GOODWILL

Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2009. Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter of each year, or sooner, if warranted. Allocations of the purchase price for the acquisition of ADSL has been completed on a preliminary basis subject to year end valuation.

	March 31			June 30,
	2010			2009
Non amortizable intangibles	$	1,691,029		$	209,248

Amortizable intangibles		20,546,724			1,702,695
Accumulated amortization		(677,659	)		-
Net amortizable intangibles		19,869,065			1,702,695
Total intangibles	$	21,560,094		$	1,911,943

Goodwill	$	5,249,258		$	-

Intangibles and Goodwill	$	26,809,352		$	1,911,943

	December 31,			June 30,
	2009			2009
Non amortizable intangibles	$	10,610,668		$	10,384,848
Amortizable intangibles		29,178,484			9,074,400
Accumulated amortization		(1,125,216	)		-
Net amortizable intangibles		28,053,268			9,074,400
Total intangibles	$	38,663,936		$	19,459,248
Goodwill	$	5,249,203		$	-

Note 5 – RESTATEMENT

~~Note~~The accompanying 5consolidated –balance sheet, for the year ended June 30, 2009 has ~~BUSINESS~~been ~~SEGMENTS~~restated to correct an error related to the improper accounting method used to record the Sale Agreement with Yarraman Road Trust on May 26, 2009. We are required to account for this transaction in accordance with SAB 48 “the transfer of Nonmonetary assets by Promoters or Shareholders”, which requires the assets exchanged for the Series B Preferred stock to be valued at the carrying value of the holder. Accordingly we have reduced Intangible assets by $16,913,525 and Additional Paid in Capital by the same amount.

The Company had two principal operating segments during the six months ended December 31, 2009 which were: winery and distribution. These operating segments were determined based on the nature of the products offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decisionF-maker in deciding how to allocate resources and in assessing performance. The Company's chief executive officer and chief financial officer have been identified as the chief operating decision makers. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and other measurement factors of each respective segment.6

~~The Company~~Note ~~evaluates~~6 ~~performance based on several factors, of which the primary~~– ~~financial~~CONVERTIBLE ~~measure~~NOTES is business segment income before taxes. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The following table shows the operations of the Company's reportable segments:PAYABLE

10 In the fiscal second quarter of 2010 the Company entered in three convertible promissory notes due from October 1, 2011-December 2, 2011, for net proceeds of $607,500. The Notes are convertible into the Company’s common stock at prices ranging from $0.38-$.40 per share. As a result of the issuance of all of these Notes, the Company recorded a discount on the Convertible Debt of $160,099. The discount was amortized to interest expense during the three and nine months ended March 31, 2010 in the amount of $20,012 and $34,379, respectively.

	December 31, 2009
Revenues from unaffiliated customers:
Winery	$	908,965
Distribution		4,213,668
Consolidated	$	5,122,633
Operating income (loss):
Winery	$	(466,505	)
Distribution		127,326
Corporation (1)		(60,898	)
Consolidated	$	(400,077	)
Net income (loss) before taxes:
Winery	$	(1,046,713	)
Distribution		169,047
Corporation (1)		(1,338,402	)
Consolidated	$	(2,216,068	)
Net income (loss) :
Winery	$	(1,046,713	)
Distribution		169,047
Corporation (1)		(1,338,402	)
Consolidated	$	(2,216,068	)
Identifiable assets:
Winery	$	9,251,631
Distribution		12,426,432
Corporation (1)		38,147,511
Consolidated	$	59,825,574
Depreciation and amortization:
Winery	$	91,917
Distribution		1,548
Corporation (1)		1,109,814
Consolidated	$	1,203,279
Capital expenditures:
Winery	$	-
Distribution		(21,697	)
Corporation (1)		-
Consolidated	$	(21,697	)

Note 7 – LONG TERM DEBT AND LINE OF CREDIT

~~(1)~~ On ~~Unallocated~~December ~~loss~~21, ~~from~~2005, ~~Operating~~Yarraman ~~income~~Australia ~~(loss)~~entered into a loan arrangement with a financial institution located in Australia. As of March 31, 2010 and ~~Net~~June ~~income~~30, 2009 ~~(loss)~~the ~~before~~total ~~taxes~~amount due under this facility, inclusive of interest, is ~~are~~$5,519,661 ~~primarily~~and ~~related~~$4,627,379. This loan facility requires monthly interest payments due on the 15th of each month at the rate of 10% per annum, rising to ~~general~~16% ~~corporate~~per annum ~~expenses~~if the Company is late in its payments. The principal balance was originally due and payable on December 31, 2007. The loan is secured by certain property, plant and equipment of the Company as well as a guaranteed by the Yarraman Road Trust, a shareholder of the Company. This loan facility has been extended through to August 30, 2011 by the lender.

The Company has a line of credit with a bank in London with interest from 2% plus bank sterling base rate with various due dates. The loans are personally guaranteed by a director of the Company. As of March 31, 2010, outstanding balance was approximately $620,990.

Note 8 – RECEIVABLES AND PAYABLES TO RELATED PARTIES

The Company has various loans payable to a shareholder of the Company in the amount of $3,662,599. These loans range in annual interest rate from 6.5% to 20%.

The Company has a loan payable to a shareholder of the Company in the amount of $966,856, no interest, due on demand.

The Company has loan payable to a shareholder of the Company in the amount of $1,849,414, no interest, due on demand.

The Company has $631,252 receivable from a shareholder of the Company related to funds advanced to him by ADSL prior to being acquired by the Company. These amounts are due on demand.

Note 9 – BUSINESS SEGMENTS

The Company had two principal operating segments during the nine months ended March 31, 2010 which were: winery and distribution. These operating segments were determined based on the nature of the products offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company's chief executive officer and chief financial officer have been identified as the chief operating decision makers. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and other measurement factors of each respective segment.

F-7

The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The following table shows the operations of the Company's reportable segments for the three months and nine months ended March 31, 2010. Prior to July 1, 2009 and the acquisition of ADSL the company operated in one segment:

	9 Months Ended			3 Months Ended
	March 31, 2010			March 31, 2010
Revenues from unaffiliated customers:
Winery	$	2,048,573		$	1,120,583
Distribution		7,368,703			3,132,611
Consolidated	$	9,417,276		$	4,253,194
Operating income (loss):
Winery	$	(559,477	)	$	(259,512	)
Distribution		319,457			164,801
Corporation (1)		(1,011,720	)		(269,291	)
Consolidated	$	(1,251,740	)	$	(364,002	)
Net income (loss) before taxes:
Winery	$	(1,413,583	)	$	(524,275	)
Distribution		386,301			248,183
Corporation (1)		(912,119	)		(81,801	)
Consolidated	$	(1,939,401	)	$	(357,893	)
Net income (loss) :
Winery	$	(1,413,583	)	$	(524,275	)
Distribution		181,588			43,469
Corporation (1)		(912,120	)		(81,801	)
Consolidated	$	(2,144,115	)	$	(562,607	)
Identifiable assets: (2)
Winery	$	9,979,510		$
Distribution		10,379,978
Corporation (1)		21,649,108
Consolidated	$	42,008,596		$
Depreciation and amortization: (3)
Winery	$	142,346		$	75,391
Distribution		2,329			751
Corporation (1)		677,659			234,739
Consolidated	$	822,334		$	310,881
Capital expenditures: (3)
Winery	$	-		$	-
Distribution		(21,699	)		-
Corporation (1)		-			-
Consolidated	$	(21,699	)	$	-

F-8

(1). Unallocated loss from Operating income (loss) and Net income (loss) before taxes are primarily related to general corporate expenses.

(2)Total identifiable assets are the owned or allocated assets used by each business. Corporate assets consist of cash and cash equivalents, unallocated fixed assets of support divisions and common facilities, and certain other assets.

(3) Capital expenditures and depreciation and amortization expense include items attributable to the unallocated fixed assets of support divisions and common facilities.

Also, because all of the Company’s sales are derived from the sales of products outside of the United States, all long-lived assets are located outside the United States.

11Note 10 – ISSUANCE OF PREFERRED SHARES

~~Note~~ 6In June –2009 the Company issued 55,000 shares of Series B Convertible ~~EARNINGS~~Preferred ~~PER~~Stock (par ~~SHARE~~value $.001 per share). Each preferred share is immediately convertible into 1,000 shares of common stock upon the Company increasing its number of authorized common shares.

~~Earnings per~~ ~~share~~In ~~are~~the first ~~calculated~~quarter inof ~~accordance~~fiscal ~~with~~2010 ~~ASC~~the ~~260.~~Company ~~Net~~issued ~~loss~~381,600 ~~per~~shares ~~share~~of ~~for all~~Series A ~~periods~~Convertible ~~presented~~Preferred ~~has~~Stock (par ~~been~~value ~~stated to reflect the adoption of ASC 260~~$.001 ~~Basic net loss~~ per share ~~is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding during the period~~). ~~Diluted~~ ~~net~~Each ~~loss per~~ preferred share is ~~based~~immediately onconvertible ~~the~~into ~~assumption~~10 ~~that all dilutive convertible~~ shares ~~and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning~~ of ~~the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase~~ common stock at ~~the~~upon ~~average market price during~~ the ~~period. For the~~ ~~three~~Company ~~months~~increasing ~~ended~~its ~~December~~number ~~31,~~of ~~2009 and 2008 the Company’s~~ common ~~stock equivalents~~shares ~~have not been included for earning per share calculations as they are anti-dilutive~~authorized.

Note 711 – ~~BUSINESS~~EARNINGS ~~COMBINATIONS~~PER SHARE

~~During~~ Earnings per share are calculated in accordance with ASC 260. Net loss per share for all periods presented has been stated to reflect the ~~fiscal~~adoption ~~first~~of ~~quarter~~ASC 260. Basic net loss per share is computed by dividing loss available to common shareholders by the weighted average number of ~~2010,~~common shares outstanding during the ~~Company~~period. Diluted ~~acquired~~net ~~Asia~~loss ~~Distributions~~per share is based on the assumption that all dilutive ~~Solutions~~convertible ~~Limited,~~shares aand ~~Cayman~~stock ~~limited~~options ~~liability~~were ~~company~~converted ~~publicly~~or ~~traded~~exercised. inDilution ~~the~~is ~~United~~computed ~~Kingdom~~by applying the treasury stock method. Under this method, ~~with~~options ~~operations~~and warrants inare ~~China~~assumed ~~with~~to ~~specific~~be ~~focus~~exercised inat the ~~beverage industry,~~beginning ~~for~~of athe ~~purchase~~period ~~price~~(or at the time of ~~$26~~issuance,~~637~~ if later),~~465.~~ ~~The~~and as if funds obtained thereby were used to purchase ~~price~~common ~~for~~stock at the ~~acquisition~~ ~~was~~average ~~allocated~~market ~~primarily~~price toduring ~~intangible~~the ~~assets~~period. ~~(distribution~~For ~~system,~~the ~~client~~three ~~lists,~~months ~~brand~~and nine ~~names)~~months ended March 31, ~~goodwill~~2010 and ~~net~~2009 ~~tangible~~the Company’s ~~assets~~common stock equivalents have not been included for earning per share calculations as they are anti-dilutive.

Note 12 – BUSINESS COMBINATION

During the fiscal first quarter of 2010, the Company acquired Asia Distributions Solutions Limited, a Cayman limited liability company publicly traded in the United Kingdom, with operations in China with specific focus in the beverage industry, for a purchase price of $26,637,465 which purchase price was paid by the Company through the issuance of an aggregate of 59,561,535 shares of Common Stock, of which 8,982,831 shares have not yet been issued, and 381,600 shares of Series A Convertible Preferred Stock.

F-9

The transaction was accounted for under the purchase method of accounting. The Company purchased $4,204,101 in assets and assumed $2,624,929 in liabilities and recorded goodwill and other intangible assets of $25,058,293. This is a preliminary purchase price allocation, which is subject to adjustment. The measurement period for purchase price allocation ends as soon as information on the facts and circumstances become available, but will not exceed 12 months. Adjustment in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred.

Note 13 – BOARD RESOLUTION

On December 31, 2009 the Board of Directors passed a resolution to increase the authorized share capital to 410,000,000 shares, of which 400,000,000 will be common shares and 10,000,000 will be preferred shares. The Company expects completion of this process in September 2010.

Note 14 – SUBSEQUENT EVENTS

Pursuant to Financial Accounting Standards Board Accounting Standards Codification 855-10, we have evaluated all events or transactions that occurred from April 1, 2010 through the filing with the SEC.

On August 26, 2010, the Company filed a Notice of Exempt Offering of Securities on Form D for a proposed offering of securities pursuant to Rule 506 of Regulation D. The securities referred to in the foregoing will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. The foregoing disclosure shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This notice is being provided pursuant to and in accordance with Rule 135(c) under the Securities Act.

F-10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009

Results of Operations

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

	Three Months Ended Months Ended December 31,
	For the three months ended
	2009					2008
	March 31,
Sales, net	$	1,994,762		100	%	$	478,367		100	%
	2010					2009
Cost of sales	$	1,653,650		83	%	$	652,996		137	%
Sales, net	$	4,253,194		100	%	$	814,488		100	%
Gross profit (loss)	$	341,112		17	%	$	(174,629	)	-37	%
Cost of sales	$	3,478,449		82	%	$	389,087		48	%
Selling, general and administrative expenses	$	835,565		42	%	$	367,376		77	%
Gross profit (loss)	$	774,745		18	%	$	425,401		52	%
Other (Income) Expense	$	1,023,677		51	%	$	131,491		27	%
Total operating expenses	$	1,138,747		27	%	$	239,302		29	%
Loss before income taxes	$	(1,518,131	)	-76	%	$	(673,496	)	-141	%
Other (income) expense	$	(6,107	)	0	%	$	129,543		16	%
Provision for income taxes	$	-		0	%	$	-		0	%
Loss before income taxes	$	(357,895	)	-8	%	$	56,556		7	%
Net loss	$	(1,518,131	)	-76	%	$	(673,496	)	-141	%
Provision for income taxes	$	204,714		5	%	$	-		0	%
Net Income (loss)	$	(562,609	)	-13	%	$	56,556		7	%

~~Three~~Revenue. ~~Months~~Revenue ~~Ended~~was ~~December~~$4,253,194 in the three months ended March 31, ~~2009~~2010 ~~Compared~~compared to $814,488 ~~Three~~in ~~Months~~the ~~Ended~~three ~~December~~months ended March 31, 2009. The increase in revenues of ~~2008~~$3,438,706 or approximately 422% was primarily related to the inclusion of revenues generated by the business units acquired in the Asia Distribution Solutions transaction, and revenue generated from sale of grapes in the Australian operations.

~~Revenue.~~Cost of ~~Revenue~~Sales. Cost of revenue was $13,~~994~~478,~~762~~449 in the three months ended ~~December~~March 31, 2010 ~~2009~~ compared to $~~478~~389,~~367~~087 in the three months ended ~~December~~March 31, ~~2008.~~2009, ~~The~~an increase ~~in revenues~~ of $13,~~516~~089,~~395~~362. As a percentage of revenue, orcost ~~approximately~~of 76revenue was 82% in the three months ended March 31, 2010 compared to 48% in the three months ended March 31, 2009. The increase in cost was primarily related to the ~~inclusion of~~following ~~revenue~~items: ~~generated~~the byinclusion of the business units acquired in the Asia Distribution Solutions ~~Limited~~ transaction, and operating costs for the Jugiong vineyard in Australia.

~~Cost~~ ofGross ~~sales~~Profit. ~~Cost~~Gross ofprofit ~~sales~~ was $1774,~~653,650~~745 in the three months ended ~~December~~ March 31, 2010 ~~2009~~ compared to $~~652~~425,~~996~~401 in the three months ended ~~December~~March 31, ~~2008,~~2009. anAs a ~~increase~~percentage of $1revenues,~~000,654~~ ~~which~~gross profit was ~~primarily~~18% ~~attributable~~in to the ~~inclusion~~three ofmonths ~~the~~ended ~~business~~March ~~units~~31, ~~acquired~~2010 and 52% in the ~~Asia~~three ~~Distribution~~months ~~Solutions~~ended ~~Limited~~March ~~transaction~~31, 2009. The decrease in Asgross profit as a percentage of ~~revenue,~~revenues ~~cost~~is ofprimarily ~~revenue~~related ~~was~~to ~~83%~~the following items: the business units acquired in the ~~three~~Asia ~~months~~Distribution ~~ended~~Solutions ~~December 31~~transaction, ~~2009~~which ~~compared~~are tocurrently ~~137%~~selling inpredominantly lower margin local product, along with the ~~three~~sale ~~months~~of ~~ended~~grapes ~~December~~in 31the Australian operations, which ~~2008~~generates lower margins than sales of finished product.

~~Gross Profit~~Operating ~~(Loss)~~Expenses. ~~Gross~~Operating ~~profit~~expenses ~~was~~were $~~341~~1,~~112~~138,747 in the three months ended March ~~December~~ 31, ~~2009~~ 2010 compared to ~~a gross loss of~~ $~~174~~239,~~629~~302 in the three months ended ~~December~~March 31, ~~2008~~ 2009. This Asis aan ~~percentage~~increase of ~~revenues~~$899,445 ~~gross profit~~or ~~was~~approximately 17376% infrom the ~~three months ended December 31,~~ 2009 ~~and~~period ~~(37)% in~~ to the ~~three~~2010 ~~months ended December 31, 2008~~period.

Sales, General and Administrative Expenses. Sales, general and administrative expenses were $835,565 in the three months ended December 31, 2009 compared to $367,376 in the three months ended December 31, 2008. This is an increase of $468,189, or approximately 127%, from the 2008 period to the 2009 period and is primarily attributable to the inclusion of the business units acquired in the Asia Distribution Solutions Limited transaction.4

13 As a percentage of revenues, operating expenses were approximately 27% in the three months ended March 31, 2010 compared to 29% in the three months ended March 31, 2009. The acquisition of Asia Distribution Solutions created intangible assets that generated amortization expense. Amortization for the three months ended March 31, 2010 was $234,739 compared to $0 in the three months ended March 31, 2009. Without the amortization expense, operating expense decreased by 8%.

As aOther (Income) ~~percentage~~Expense. ofOther ~~revenues,~~income ~~sales~~was $(6,107) ~~general and administrative expenses decreased to approximately 35%~~ in the three months ended ~~December~~March 31, 2010 ~~2009~~compared ~~from~~to ~~77%~~$129,543 in the three months ended ~~December~~March 31, ~~2008~~2009. The ~~acquisition~~decrease in ofother ~~Asia~~expense ~~Distribution Solutions~~of ~~Limited~~$135,652 ~~added~~was ~~significant~~primarily ~~revenue~~due ~~with~~to ~~comparatively~~reduction ~~low~~in ~~additional~~previously ~~sales,~~recorded ~~general~~acquisition ~~and~~cost ~~administration~~of ~~costs~~Asia Distribution Solutions.

~~Other~~ Net Income (~~Expense~~Loss). ~~Other~~Our ~~expense~~net loss was $1(562,~~023,677~~609) in the three months ended ~~December~~ March 31, 2010 ~~2009~~ compared to a net income of $~~131~~56,~~491~~556 in the three months ended ~~December~~March 31, ~~2008~~2009. ~~The~~This increase in ~~other~~loss ~~expense of $892,186~~ was primarily ~~due~~attributable to income tax of $204,714 and amortization expense of intangible assets ~~acquired~~of ~~and increased interest expense~~$234,739.

~~Net~~ ~~Income~~Nine ~~(Loss).~~Months ~~Our~~Ended ~~net~~March ~~loss was $1,518,131 in the three months ended December~~ 31, ~~2009~~2010 ~~compared~~Compared to aNine ~~net~~Months ~~loss~~Ended ofMarch ~~$673,496 in the three months ended December~~ 31, ~~2008. This increase in loss was primarily attributable to an increase in our~~ ~~other~~2009 ~~expenses as described above.~~

Results of Operations

	Six Months Ended Months Ended December 31,
	For the nine months ended
	2009					2008
	March 31,
Sales, net	$	5,164,082		100	%	$	1,087,513		100	%
	2010					2009
Cost of sales	$	4,297,728		83	%	$	1,095,680		101	%
Sales, net	$	9,417,276		100	%	$	1,902,001		100	%
Gross profit (loss)	$	866,354		17	%	$	(8,167	)	-1	%
Cost of sales	$	7,776,177		83	%	$	1,484,767		78	%
Selling, general and administrative expenses	$	1,287,704		25	%	$	719,823		66	%
Gross profit (loss)	$	1,641,099		17	%	$	417,234		22	%
Other (Income) Expense	$	1,842,450		36	%	$	286,789		26	%
Total operating expenses	$	2,892,839		31	%	$	959,125		50	%
Loss before income taxes	$	(2,263,800	)	-44	%	$	(1,014,779	)	-93	%
Other (income) expense	$	687,661		7	%	$	416,335		22	%
Provision for income taxes	$	-		0	%	$	-		0	%
Loss before income taxes	$	(1,939,401	)	-21	%	$	(958,226	)	-50	%
Net loss	$	(2,263,800	)	-44	%	$	(1,014,779	)	-93	%
Provision for income taxes	$	204,714		2	%	$	-		0	%
Net income (loss)	$	(2,144,115	)	-23	%	$	(958,226	)	-50	%

~~Six~~Revenue. ~~Months~~Revenue ~~Ended~~was ~~December~~$9,417,276 in the nine months ended March 31, ~~2009~~2010 ~~Compared~~compared to $1,902,001 ~~Six~~in ~~Months~~the ~~Ended~~nine ~~December~~months ended March 31, 2009. The increase in revenues of ~~2008~~$7,515,275 or approximately 396%, was primarily related to the inclusion of revenues generated by the business units acquired in the Asia Distribution Solutions transaction, and revenue generated from sale of grapes in the Australian operations.

~~Revenue.~~Cost of ~~Revenue~~sales. Cost of revenue was $57,~~164~~776,~~082~~177 in the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 compared to $1,~~087~~484,~~513~~ 767 in the ~~six~~nine months ended March ~~December~~ 31, ~~2008.~~2009, ~~The~~an increase ~~in revenues~~ of $46,~~076~~291,~~569~~410. As a percentage of revenue, orcost ~~approximately~~of revenue 79was 83% in the nine months ended March 31, 2010 compared to 78% in the nine months ended March 31, 2009. The increase in cost was primarily related to the ~~inclusion~~following ~~of revenue~~items: ~~generated~~the byinclusion of the business units acquired in the Asia Distribution Solutions ~~Limited~~ transaction, and operating costs for the Jugiong vineyard in Australia.

~~Cost~~ ofGross Profit ~~sales~~(Loss). ~~Cost~~Gross ofprofit ~~sales~~ was $41,~~297~~641,~~728~~ 099 in the ~~six~~nine months ended March ~~December~~ 31, ~~2009~~ 2010 compared to $1417,~~095,680~~234 in the ~~six~~nine months ended ~~December~~March 31, ~~2008,~~2009. anAs ~~increase~~a percentage of $3revenues,~~202,048~~ ~~which~~gross profit was ~~primarily~~17% ~~attributable~~in to the ~~inclusion~~nine ofmonths ~~the~~ended ~~business~~March ~~units~~31, ~~acquired~~2010 compared to 22% in the ~~Asia~~nine ~~Distribution~~months ~~Solutions~~ended ~~Limited~~March ~~transaction.~~31, As2009. The decrease in gross profit as a percentage of ~~revenue,~~revenues ~~cost~~is primarily ofrelated ~~revenue~~to ~~was~~the ~~83%~~following items: the business units acquired in the Asia ~~six~~Distribution ~~months~~Solutions ~~ended~~transaction, which are currently selling ~~December~~predominantly 31lower margin local product, ~~2009~~along ~~compared~~with tothe ~~101%~~sale of grapes in the Australian ~~six~~operations, ~~months~~which ~~ended~~generates ~~December~~lower ~~31,~~margins than sales of finished ~~2008~~product.

Gross Profit (Loss). Gross profit was $866,354 in the six months ended December 31, 2009 compared to a gross loss of $8,167 in the six months ended December 31, 2008. As a percentage of revenues, gross profit was 17% in the six months ended December 31, 2009 and (1)% in the six months ended December 31, 2008 for the reasons discussed above.5

14 Operating Expenses. Operating expenses were $2,892,839 in the nine months ended March 31, 2010 compared to $959,125 in the nine months ended March 31, 2009. This is an increase of $1,933,714 or approximately 202% from the 2009 period to the 2010 period. The acquisition of Asia Distribution Solutions added significant additional revenue with comparatively low additional Sales, General and Administrative costs.

~~Sales,~~ ~~General and~~As ~~Administrative~~a ~~Expenses.~~percentage ~~Sales~~of revenues, operating ~~general~~expenses ~~and~~were ~~administrative~~approximately ~~expenses were~~31% ~~$1,287,704~~ in the ~~six~~nine months ended ~~December~~March 31, 2010 ~~2009~~ compared to ~~$719,823~~ approximately 50% in the ~~six~~nine months ended ~~December~~March 31, ~~2008. This is an increase of~~ ~~$567,881, or approximately 79%, from the 2008 period to the~~ 2009 ~~period and is primarily attributable to the inclusion of the business units acquired in the Asia Distribution Solutions Limited transaction~~.

~~As a~~Amortization ~~percentage~~for ~~of revenues, sales, general and administrative expenses decreased to approximately 25% in~~ the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 ~~from~~was ~~66%~~$677,659 compared to $0 in the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009. ~~The acquisition of Asia Distribution Solutions added significant revenue with comparatively low additional sales, general and administration costs.~~

Other (Income) (Expense). Other expense was $1687,~~842,450~~661 in the ~~six~~nine months ended ~~December~~ March 31, 2010 ~~2009~~ compared to $~~286~~416,~~789~~335 in the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009. The ~~increase~~ increase in other expense of $1271,~~555,66~~326 was primarily due to ~~amortization~~the ofincrease in interest ~~intangible~~expenses ~~assets~~from ~~acquired~~$411,443 ~~and~~to ~~increased~~$868,855 ~~interest~~from ~~expense~~loans.

Net ~~Income (~~Loss). Our net loss was $2,~~263~~144,~~800~~115 in the ~~six~~nine months ended ~~December~~March 31, ~~2009~~ 2010 compared to a net loss of $1958,~~014,779~~226 in the ~~six~~nine months ended ~~December~~March 31, ~~2008~~ 2009. This increase in loss was primarily attributable to an increase in ~~our~~income tax of $204,714, amortization of intangible assets of $677,659 and other expenses as described above.

Liquidity and Capital Resources

As of ~~December~~March 31, ~~2009~~2010, we had $~~197~~401,~~241~~147 of cash and cash equivalents and ~~negative working capital of~~ $~~826~~(700,~~195~~250) ~~as compared to $0 cash and cash~~of ~~equivalents and negative~~ working capital as of ~~$1,106,320,~~March ~~respectively, at December~~ 31, ~~2008~~2010.

During the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, net cash used in operating activities was $(31,~~331~~793,~~044~~578) and $(~~680~~631,~~128~~351), respectively. Net cash provided by investing activities totaled $125,~~683~~681 for the ~~six~~nine months ended ~~December~~March 31, ~~2009,~~ 2010, compared with ~~net cash used in investing activities of~~ $(20,~~501~~287) for the same period ended ~~December~~March 31, ~~2008~~2009. Net cash provided by financing activities totaled $32,~~690~~189,~~742~~575 for the ~~six~~nine months ended March ~~December~~ 31, ~~2009~~2010, compared to $~~366~~1,~~918~~308,524 for the same period ended ~~December~~March 31, ~~2008~~2009. The net change in our cash balance was ($38439,~~816)~~963 and $0 for the ~~six~~nine ~~months~~ ended ~~December~~ March 31, ~~2009~~2010 and ~~2008~~ 2009, respectively.

~~Our~~ ~~lack of~~During ~~liquidity~~our ~~could~~third ~~result~~fiscal inquarter ~~an interruption~~ of ~~our~~2010, ~~business~~we ~~and~~entered ~~has~~into ~~led our~~three ~~auditors~~convertible tonotes ~~express~~payable ~~doubt~~for ~~about our ability to continue as~~ a ~~going~~total ~~concern~~of ~~in their report on our financial statements for the year ended June 30~~$607, ~~2009~~500. ~~Our~~ Please ~~ability~~see toNote ~~fund~~6 ~~our~~of Item ~~operations~~1 isfor ~~dependent~~further atdetails ~~the present time on collections~~ of ~~our accounts receivable. We have experienced difficulties in~~ the ~~recent~~terms ~~past with collecting on our receivables. The failure~~ of ~~our customers~~these ~~to timely pay accounts receivable could force us to curtail our operations~~notes.

15 Our lack of liquidity could result in an interruption of our business and has led our management to express doubt about our ability to continue as a going concern as listed in our auditor’s report on our financial statements for the year ended June 30, 2009.

The Company is currently authorized to issue 90,000,000 shares of Common Stock. However, the Company has commitments to issue 152,680,585 shares of Common Stock. This includes 3,816,000 shares of Common Stock issuable upon conversion of the Series A Convertible Preferred Stock, 55,000,000 shares of Common Stock issued upon conversion of the Series B Convertible Preferred Stock.

On December 31, 2009, the Board of Directors approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of capital stock to 410,000,000 shares, of which 400,000,000 shares are Common Stock and 10,000,000 shares are Preferred Stock which may be issued in one or more series or classes as designated by the Board of Directors, from time to time, without the approval of stockholders. On July 21, 2010, the holders of a majority of the Company's outstanding voting securities approved the Articles of Amendment which will become effective after the Company has given notice to the remaining shareholders of the Company that the amendment is being effectuated.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4T. Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

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

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

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

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

Management's Report on Internal Control Over Financial Reporting.

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

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

167

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

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

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

Our management assessed the effectiveness of our internal control over financial reporting as of ~~December~~March 31, ~~2009~~2010. In making this assessment, ~~management~~ management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. Based on the assessment using those criteria, our management concluded that the internal control over financial reporting was not effective at ~~December~~March 31, ~~2009~~2010.

~~`While~~ weWhile we have designed a system of internal controls to supplement our existing ~~controls~~ ~~during our implementation of Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX 404")~~controls, ~~which has not been fully implemented,~~ we have been unable to complete testing of these controls and accordingly lack the documented evidence that we believe is necessary to support an assessment that our internal control over financial reporting is effective. Without such testing, we cannot conclude that there are any significant deficiencies or material weaknesses, nor can we appropriately remediate any such deficiencies that might have been detected.

Due to the nature of these material weaknesses in our internal control over financial reporting, there is more than a remote likelihood that misstatements which could be material to our annual or interim financial statements could occur that would not be prevented or detected.8

17This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management's report is not subject to attestation by our registered public accounting firm.

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

Changes in Internal Control over Financial Reporting.

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

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

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

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6. Exhibits

31.1+	Chief Executive Officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2+	Chief Financial Officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.1+

Chief Executive Officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

1831.2+ Chief Financial Officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+	Chief Executive Officer's Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Chief Financial Officer's Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.1+

Chief Executive Officer's Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2+

Chief Financial Officer's Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

+ Filed Herewith

199

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GLOBAL BEVERAGES, INC.
Date: May 27, 2010	By:	/s/ Ian Long
Date: August 30, 2010	By:	/s/ Ian Long
		Ian Long, President
Date: May 27, 2010	By:	/s/ Lawrence Lichter
Date: August 30, 2010	By:	/s/ Lawrence Lichter
		Lawrence Lichter, Chief Financial Officer

2010

Filing Compare · GLOBAL BEVERAGES, INC.