UNITED STATES SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

~~FORM~~ Form 10-K

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

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

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

~~For~~Commission ~~the~~File ~~fiscal~~Number: ~~year ended 2010~~000-50370

oPREMIER ~~TRANSITION~~BEVERAGE ~~REPORT~~GROUP ~~PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934~~CORP.

~~Commission~~(Exact ~~file~~name ~~number:~~of ~~000-50370~~registrant as specified in its charter)

DAM HOLDINGS, INC.

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

~~(Name~~501 ofMadison ~~Small~~Avenue, ~~Business~~Suite ~~Issuer in its charter)~~501

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

New York, NY 10022

P.O. Box 503, Totowa, NJ	07511
(Address of Principal Executive Offices)	(Zip Code)

(Address of principal executive offices)

~~Issuer's telephone number~~ (~~973~~646) ~~981~~ 820-~~8626~~0630

~~Securities~~(Registrant’s ~~registered~~telephone ~~pursuant~~number, including toarea ~~Section 12(b~~code) ~~of the Act: None~~

Securities registered pursuant to Section 12(gb) of the Act~~: Common Stock, $.00015 par value~~

~~Indicate~~Title byof ~~check~~Each ~~mark~~Class ifName ~~the~~of ~~registrant~~Each isExchange aon ~~well-known~~Which ~~seasoned~~Registered ~~issuer~~Common Stock, asno ~~defined~~par invalue ~~Rule 405 of the Securities Act.~~None

~~Yes~~Securities ~~o No~~registered xpursuant to Section 12(g) of the Act:

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act~~None

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

Indicate by ~~check~~checkmark ~~mark~~if ~~whether~~ the registrant ~~has~~is ~~submitted~~not ~~electronically and posted on its corporate Website, if any, every Interactive Data File~~ required to befile ~~submitted~~reports ~~and posted~~ pursuant to ~~Rule~~Section 13 ~~405~~or ~~of Regulation S-T~~ 15(~~section~~d) ~~232.406~~ of ~~this chapter) during~~ the ~~preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)~~Act. Yes ¨ No þ

~~Yes~~Indicate ~~o No~~by ocheckmark 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 ¨

1Indicate 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 ¨

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of ~~(1)~~delinquent ~~has~~filers ~~filed~~pursuant ~~all reports required~~ to beItem 405 ~~filed~~of byRegulation S-K ~~Section 13 or 15~~(d)§ 229.405 of ~~the~~this ~~Securities~~chapter) is ~~Exchange~~not ~~Act~~contained ~~during~~herein, ~~the~~and ~~preceding~~will 12not ~~months~~be ~~(or~~contained, ~~such~~to ~~shorter~~the ~~period~~best ~~that~~of ~~the~~ registrant’s ~~was~~knowledge, ~~required~~in todefinitive ~~file~~proxy ~~such~~or ~~reports),~~information statements ~~and~~incorporated ~~(2)~~by ~~has~~reference ~~been~~in ~~subject~~Part III toof ~~such~~this ~~filing~~Form 10-K ~~requirements~~or ~~for~~any atamendment ~~least~~to ~~the~~this ~~part 90 days~~Form 10-K. ¨

~~Yes~~Indicate ~~x No~~by ocheck 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):

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~¨ ifAccelerated ~~disclosure~~filer of¨ ~~delinquent~~Non-accelerated ~~filers~~filer in¨ ~~response~~Smaller toreporting ~~Item~~company ~~405~~þ of(Do ~~Regulation S-K is~~ not ~~contained~~check ~~hereof,~~if ~~and~~a ~~will~~smaller ~~not~~reporting be contained, to will 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. ocompany)

Indicate by check mark whether the registrant is a ~~large~~shell ~~accelerated~~company ~~filer,~~(as andefined ~~accelerated~~in ~~filer, a non~~Rule 12b-~~accelerated~~2 ~~filer,~~of orthe ~~a smaller reporting company~~Act). Yes ¨ No þ

oAs ~~Large~~of ~~accelerated~~April ~~filer~~24, o2012, the ~~Accelerated~~aggregate ~~filer~~market ovalue ~~Non~~of such common stock held by non-~~accelerated~~affiliates ~~filer~~was xapproximately ~~Smaller~~$1,188,059 ~~reporting~~using ~~company~~the closing price on that day of $.04 per share.

~~Indicate~~As byof ~~check~~April ~~mark~~24, ~~whether~~2012, there ~~the~~were ~~registrant~~61,201,483 isshares aof ~~shell~~the ~~company~~Company’s ~~(as~~common ~~defined~~stock inissued ~~Rule~~and ~~12b-2 of the Exchange Act)~~outstanding.

~~Yes~~Documents ~~o No~~Incorporated xBy Reference:

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarterNone. ~~The market value of the registrant's voting $.00015 par value common stock held by non-affiliates of the registrant was approximately $0.00.~~

~~Indicate~~SPECIAL ~~the~~FILING number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of December 31, 2010 was 1,291,939 shares of its $.00015 par value common stock. No stock.NOTE

NoWe ~~documents~~have ~~are~~not ~~incorporated~~yet ~~into~~filed the ~~text~~following byreports under ~~reference.~~the Securities Exchange Act of 1934:

2Quarterly 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.”

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

Table of Contents

DAM HOLDINGS, INC.

		Page
	PART I
Item 1.	Business	3
Item 1A .	Risk Factors	10
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 8.	Financial Statements and Supplementary Data	25
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	25
Item 9A.	Controls and Procedures	26
Item 9B.	Other Information	27

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	27
Item 11.	Executive Compensation	29
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence	30
Item 14.	Principal Accountant Fees and Services	30

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	30
SIGNATURES		32
EX-23.1
EX-31.1
EX-32.1

~~INDEX~~2

		Page
PART I		4
Item 1.	Description of Business	5
Item 2.	Description of Property	6
Item 3.	Legal Proceedings	7
Item 4.	(Removed and Reserved)	7
PART II		7
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	7
Item 6.	Selected Financial Data	8
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	8
Item 8.	Financial Statements and Supplementary Data.	13
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	13
Item 9A.	Controls and Procedures	13
Item 9B.	Other Information	14
PART III		15
Item 10.	Directors, Executive Officers and Corporate Governance.	15
Item 11.	Executive Compensation.	16
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	17
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	19
Item 14.	Principal Accounting Fees and Services.	20
PART IV		21
Item 15.	Exhibits, Financial Statement Schedules.	21
SIGNATURES		24

Table of Contents

PART I

~~SPECIAL~~ITEM ~~NOTE~~1. ~~REGARDING FORWARD-LOOKING STATEMENTS~~BUSINESS.

This annual report on Form 10-K and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies.Background

WeOn ~~have~~October ~~used the words "anticipate~~19," ~~"believe~~2011," pursuant ~~"could,"~~to ~~"estimate,"~~the ~~"expect,"~~terms ~~"intend,"~~of ~~"may,"~~an ~~"will,"~~Agreement ~~"plan," "predict," "project"~~ and ~~similar~~Plan ~~terms~~of ~~and~~Merger ~~phrases,~~between ~~including~~OSO ~~references~~USA ~~to assumptions~~LLC, ina ~~this~~Delaware ~~annual~~limited ~~report~~liability oncompany ~~Form 10-K~~ (“OSOLLC”) and our ~~incorporated~~wholly-owned ~~documents~~subsidiary, toOSO ~~identify~~Beverages ~~forward-looking statements~~Corp., ~~These~~OSOLLC ~~forward-looking~~merged ~~statements~~into ~~are~~OSO ~~made~~Beverages. ~~based~~OSO onBeverages ~~expectations~~was ~~and~~the ~~beliefs~~surviving ~~concerning~~corporation, and ~~future~~we ~~events~~issued ~~affecting~~the usprincipal ~~and~~members ~~are~~of ~~subject~~OSOLLC to50,000,000 ~~uncertainties~~newly ~~and~~issued ~~factors~~restricted ~~relating~~shares toof our ~~operations~~common ~~and~~stock ~~business~~as ~~environment,~~consideration for all of ~~which~~the ~~are~~outstanding ~~difficult~~membership tointerests ~~predict and many~~ of ~~which~~OSOLLC. ~~are~~Effective ~~beyond~~October ~~our~~19, ~~control~~2011, ~~that could cause~~ our ~~actual~~historical ~~results~~business toterminated, ~~differ~~and ~~materially from those matters expressed in or implied by these forward-looking~~we ~~statements. The following factors~~ are ~~among~~now ~~those~~engaged ~~that~~in ~~may~~the ~~cause~~business ~~actual~~set ~~results~~forth toin ~~differ~~Item ~~materially~~1 ~~from~~of ~~our~~this ~~forward-looking~~Annual ~~statements:~~Report.

● general economic and industry conditions; ● our history of losses, deficits and negative operating cash flows; ● our limited operating history; ● industry competition; ● environmental and government regulation; ● protection and defense of our intellectual property rights; ● reliance on, and the ability to attract, key personnel;Overview

~~You~~We ~~should~~are ~~keep~~a inconsumer ~~mind~~brand development ~~that~~company ~~any~~focused ~~forward-looking~~on ~~statement~~creating, ~~made~~marketing byand usselling incompelling ~~this~~functional ~~annual~~beverage ~~report~~brands. orFunctional ~~elsewhere~~beverages, ~~speaks only as of the date on~~ which include weenergy ~~make~~drinks, ~~it.~~energy ~~New~~shots, ~~risks~~ and ~~uncertainties~~enhanced ~~arise~~waters, ~~from~~among ~~time to time~~others, ~~and~~have itexpanded issubstantially ~~impossible~~in ~~for~~the uslast to10 ~~predict~~years ~~these events or how they may affect us. We have no duty to,~~ and dodisrupted the ~~not~~beverage ~~intend~~landscape ~~to,~~formerly ~~update~~dominated orby ~~revise~~soft ~~the~~drinks. ~~forward-looking~~The ~~statements~~functional inbeverage ~~this~~category ~~annual~~has ~~report~~uncovered ~~after~~a ~~the~~previously ~~date~~unexposed consumer ofneed ~~filing,~~that ~~except~~traditional asbeverages ~~may~~did benot ~~required by law~~address. InWe ~~light~~believe of these ~~risks~~beverages ~~and~~are ~~uncertainties,~~quickly ~~you~~becoming ~~should~~the ~~keep~~drink inof ~~mind~~choice for ~~that~~the ~~any~~younger ~~forward-looking~~generation, ~~statement~~having ~~made~~matured infrom ~~this~~“fad” ~~annual~~status ~~report~~into orthe ~~elsewhere~~mainstream ~~might not occur~~market.

InWe ~~this~~operate ~~annual~~a ~~report~~two-tiered strategy onthat ~~Form~~blends ~~10-K~~ the ~~terms~~large ~~"DAMH~~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” ~~"Company~~accounts include clubs," ~~"we~~bars," ~~"us"~~restaurants and ~~"our"~~hotels ~~refer~~and togenerally ~~DAM~~where ~~Holdings~~the product is consumed at the location. OSO holds a unique position as a premium energy beverage. With additional repackaging initiatives currently underway, OSO ~~Inc~~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. ~~and~~OSO’s ~~its~~positioning ~~subsidiaries~~is sophisticated, top-shelf energy with elegant packaging, unlike mass market ‘extreme-focused’ canned energy drinks.

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

We operate our business through 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.

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.

Products

We operate two distinct business units offering functional beverage products as follows:

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.

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.

~~Table~~The components of ~~Contents~~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.

~~Item~~Through ~~1. Description~~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 ~~Business~~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.

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

~~DAM~~• ~~Holdings,~~Developing ~~Inc.~~close ~~(“DAMH”),~~relationships ~~was~~with ~~incorporated~~retailers onthat ~~July~~ultimately ~~22,~~may ~~1999~~sell inour ~~the~~owned ~~State~~brands ~~of Nevada and is a non-operating holding company. Our principal operating subsidiary is Delaware American Motors LLC (“DAM”) which we acquired on May 13, 2008~~ in ~~a stock for stock exchange. DAM is a builder of high performance over~~ the ~~road motorcycles.~~future;

~~Our~~• ~~Motorcycle~~Understanding ~~Business~~retailers’ product preferences, priorities and perceptions;

~~DAM~~• ~~was~~Understanding ~~founded~~factors bywhich ~~our~~result ~~President Mark Klein on August 12, 2002 to be an uncompromising motorcycle design and craft enterprise. DAM has designed and built two Tech Twin American 13C motorcycles as the first models~~ in aretail ~~series~~success; ~~of high performance motorcycle products known as Delaware~~ and Pennsylvania. These motorcycles were completed in 2008 and the Pennsylvania debuted at the 2008 Sturgis AMD World Championship competition where it won the first place award in the Production Manufacture class. We expect our motorcycles to be sold in the United States. Our manufacturing operation is based in Paterson, New Jersey consisting primarily of motorcycle assembly and our repair and maintenance facility. For more information on Delaware American Motors, please visit www.dammotorcycles.com.

~~The~~• ~~Delaware~~Understanding ~~American~~price ~~Motors~~points that are attractive to consumers and retailers.

~~2008~~Industry ~~Sturgis AMD World Championship trophy winner the “Pennsylvania”~~Background

~~The~~Our ~~Delaware~~products ~~American~~compete in ~~Motors~~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 ~~Colony~~industry ~~series~~experienced impressive ~~“Delaware”~~growth ~~model~~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.

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.

~~Table~~Business ~~of Contents~~Strategy

Our ~~motorcycles~~business ~~were~~strategy revolves ~~designed~~around bythe ~~our~~concept inof ~~house~~building ~~staff~~powerful ofand ~~professionals~~relevant ~~and~~brands that are ~~hand~~distinct ~~assembled~~from existing products in ~~Paterson~~the byfunctional beverage uscategory. ~~from~~We ~~custom~~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 ~~stock~~build ~~parts~~retailer ~~manufactured~~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 ~~specifications~~owned brands.

~~Governmental~~Our ~~Regulations~~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.

~~Vehicles~~Marketing ~~intended for use on public roadways must satisfy regulations implemented by the United States Department of Transportation (“DOT”)~~ and by the corresponding agencies in other countries. Our vehicles and our manufacturing and repair facility are also subject to environmental regulations. Our vehicles are manufactured to meet all applicable government standards.Sales

~~Competitive~~Marketing ~~Conditions~~and Sales

~~The~~We ~~high~~believe ~~performance~~that ~~custom~~brand recognition ~~manufactured motorcycle market is highly competitive. The Company’s major competitors are based both within~~ and ~~outside~~brand ~~the~~loyalty ~~U.S.~~begin ~~and~~with ~~generally~~a ~~have~~strong ~~financial~~foundation ~~and marketing resources that are substantially greater than those~~ of ~~the~~loyal ~~Company.~~trend ~~They~~setters ~~also~~in ~~have~~specially ~~large~~chosen ~~worldwide~~venues ~~revenues~~ and ~~are~~markets. ~~more~~The energy ~~diversified~~beverage ~~than~~category ~~the~~includes ~~Company.~~products Infrom ~~addition~~numerous ~~to these larger~~newcomers, ~~established~~and ~~competitors,~~customers ~~the~~have ~~Company~~demonstrated ~~has~~an ~~custom~~ability ~~manufacturing~~to ~~shop~~quickly ~~competitors~~discern a ~~headquartered~~cheap inknock ~~the~~off ~~United~~from ~~States.~~a ~~These~~true ~~competitors generally offer high performance heavyweight motorcycles with traditional styling that compete directly with many of the Company’s products~~winner. ~~These~~Our ~~competitors~~product ~~currently~~introduction ~~have~~strategy ~~established production~~employs ~~and~~these ~~sales~~beliefs ~~volumes that are higher than the Company’s~~ and ~~have~~is ~~considerably~~evidenced ~~higher~~by ~~U.S.~~our market ~~share than the Company~~strategies.

~~Competition~~Historically, inOSO ~~the~~has been ~~high~~sold ~~performance~~to ~~custom~~exclusive ~~motorcycle~~venues ~~market~~and ison-premise ~~based~~accounts ~~upon~~primarily athrough ~~number~~relationships ofdeveloped ~~factors,~~by ~~including~~our ~~price~~founder, ~~quality,~~Fouad ~~reliability,~~Kallamni. Through ~~styling~~Mr. Kallamni’s network, ~~product~~OSO ~~features~~has been able to penetrate exclusive, ~~customer~~tight ~~preference~~knit ~~and~~on-premise ~~warranties.~~venues Inin ~~the~~New UYork City.~~S.,~~ Our ~~suggested~~general ~~retail~~market ~~prices~~penetration ~~for~~strategy ~~the~~includes ~~Company’s~~tactical, ~~motorcycles~~ground ~~range~~level ~~from~~campaigns ~~being~~aimed ~~comparable~~at toconverting ~~higher~~trend ~~than~~setting ~~suggested~~individuals from ~~retail~~the ~~prices~~complacency ~~for~~of ~~comparable~~mainstream ~~motorcycles~~energy ~~available~~drinks ininto the ~~market~~elegance of OSO energy beverages. ~~The~~Through ~~Company~~our ~~believes~~experience and research, we understand that ~~its~~the ~~high~~exclusive ~~performance~~on-premise ~~custom~~venues ~~products~~are ~~will~~where bepeople ~~able~~go to ~~command~~be aseen, ~~premium~~and ~~price~~where lifestyle trends are developed and perpetuated. ~~The~~On-premise ~~Company~~accounts ~~emphasizes~~include ~~quality,~~high ~~reliability~~end ~~and~~clubs, ~~styling~~bars, inupscale ~~its~~hotels, ~~products~~casinos, restaurants and ~~generally~~other ~~offers~~fine aestablishments where ~~two-year~~the ~~warranty~~product ~~for~~is ~~its~~consumed ~~motorcycles.~~“on ~~The~~the ~~Company’s~~premises”. ~~established~~They ~~competitors,~~are ~~such~~frequented asby ~~Harley-Davidson~~tastemakers, ~~have~~trendsetters, ~~the~~celebrities ~~financial~~and ~~ability~~people toof ~~offer~~importance ~~manufacturer~~in ~~financing,~~our ~~which~~target ~~the~~market. ~~Company~~Through ~~cannot~~building ~~presently~~OSO ~~offer~~from tothis ~~customers~~important ~~which~~ground islevel, we believe that we are securing a ~~substantial~~foundation ~~competitive~~that ~~advantage~~will ~~over~~provide the ~~Company~~groundwork for years of success in not only on-premise accounts but ultimately in retail at an appropriate time.

~~Employees~~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.

AsWhile ofour ~~December~~initial ~~31,~~penetration strategy ~~2010~~is beginning in New York, we ~~had~~have 1a ~~employee. We~~roadmap ~~have~~leading anto ~~employment~~other ~~agreement~~important ~~with~~cities Mrusing the same tactical strategy. ~~Klein~~Our ~~our~~near term ~~President~~focus will be on the East Coast, ~~Secretary~~including ~~and~~Miami, ~~Treasurer~~Boston, ~~that~~Philadelphia, ~~provides~~Atlanta ~~for~~and ~~his~~Washington ~~continued~~DC. ~~service~~From there we will seek to enter the ~~Company~~West ~~until~~Coast ~~either~~through ~~party~~Los ~~provides~~Angeles 2and ~~weeks~~Las ~~notice~~Vegas, toand ~~the~~Midwestern ~~other~~and ofSouthern ~~their~~markets ~~intent~~through toChicago ~~terminate~~and Austin. We ~~believe~~Upon completion of our ~~employee~~campaigns ~~relations~~in ~~are~~these ~~generally~~initial ~~good.~~cities, ~~Our~~we ~~employees~~will ~~are~~begin ~~not~~to ~~represented~~seek bynationwide adistribution ~~collective~~and ~~bargaining~~retail ~~unit~~relationships that will ultimately take OSO to the next level of maturity as it moves into the highly coveted mass market for energy drinks.

~~Item~~Our 2goal for each OSO market is to generate significant interest in our products through the initiatives detailed above to attract top tier distribution partners. ~~Description~~ We have identified certain desired distribution partners in several of ~~Property~~our planned markets, beginning with the East Coast.

The Company is the owner of certain proprietary technologies and copyrights.

~~Table~~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 ~~Contents~~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.

~~Item 3. Legal Proceedings~~Competition

~~None~~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.

~~Item~~Important 4factors 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. ~~(Removed~~ We also compete for distributors who will concentrate on marketing our products over those of our competitors, provide stable and ~~Reserved)~~reliable distribution, and secure adequate shelf space in retail outlets.

~~PART~~In IIthe 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.

~~Item~~Big 5beverage conglomerates have been taking market share by creating their own beverages, or through acquiring smaller proven functional beverage companies. ~~Market~~ Coca-Cola ~~for~~acquired ~~Registrant’s~~Glacéau ~~Common~~and ~~Equity~~its VitaminWater and Fuze Beverages, ~~Related~~while ~~Stockholder~~PepsiCo ~~Matters~~acquired sparkling beverage maker Izze natural, Ardea and ~~Issuer~~its ~~Purchases~~Airforce ofNutrisoda, ~~Equity~~and ~~Securities~~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.

~~(a) Market~~In ~~Information. Our~~order ~~common~~for ~~stock~~us ~~currently~~to be ~~trades~~successful oncompeting in the ~~OTC~~beverage ~~Bulletin~~industry, ~~Board~~we ~~under~~must ~~the~~provide ~~symbol~~an ~~“DAMH.”~~offering ~~The~~that ~~following~~differentiates ~~table~~itself ~~states~~from the ~~range~~competition. In ofDecember ~~the~~2011, ~~high~~we ~~and~~provided ~~low~~the ~~bid-prices~~market ~~per~~with ~~share~~an ofinside look at our ~~common~~new ~~stock~~packaging for ~~each~~OSO, ofwhich ~~the~~includes ~~calendar~~a ~~quarters~~sleek ~~since~~glass bottle version and a redesigned aluminum can. We believe our ~~stock~~packaging ~~began~~redesign ~~trading~~more inaccurately ~~July~~reflects ~~2007~~the top shelf premium identity to which we aspire, asand ~~reported~~is byunique in the ~~OTC~~energy ~~Bulletin~~drink ~~Board~~category. ~~These~~With ~~quotations~~our ~~represent~~CaptiveBrands ~~inter-dealer prices~~products, ~~without~~we ~~retail~~intend ~~mark-up,~~to ~~markdown,~~compete orwith ~~commission~~name brands by partnering with retailers to create store brands. By implementing this strategy, we align ourselves with the retailer and ~~may~~incentivize ~~not~~them ~~represent~~to ~~actual~~position ~~transactions.~~our ~~The~~products ~~last~~favorably in the store at a compelling price offor customers. Although we believe our ~~common~~strategies ~~stock~~are assound, ~~reported~~there can be no assurance that we will be able to execute effectively on these strategies or that the market ~~OTC~~will ~~Bulletin~~accept ~~Board~~them onor ~~December~~that ~~31,~~our ~~2010~~competition ~~was~~will ~~$0.01~~not ~~per~~be ~~share~~more successful in implementing similar strategies or counter strategies to our own.

	High		Low
Fiscal Year 2010
First Quarter	$	20.00	$	2.00
Second Quarter	$	14.00	$	5.00
Third Quarter	$	10.00	$	4.00
Fourth Quarter	$	0.01	$	0.01
Fiscal Year 2009
First Quarter	$	0.01	$	0.01
Second Quarter	$	0.16	$	0.01
Third Quarter	$	0.01	$	0.01
Fourth Quarter	$	0.01	$	0.01

Distribution and Production

(b) Holders. As of December 31, 2010, there were 175 shareholders of record of our common stock; this number does not include beneficial owners from whom shares are held by nominees in street name.Distribution

~~(c) Dividends. During~~We ~~the~~currently ~~last~~distribute our ~~two~~OSO ~~fiscal~~products ~~years~~through our wholly owned distributor, noFury ~~cash~~Distribution ~~dividends~~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 ~~declared~~in discussions onwith ~~the~~certain ~~Company’s~~key ~~common~~players. ~~stock~~We are currently aggressively seeking new or expanded relationships with third-party distributors and ~~management~~will ~~does~~continue ~~not~~to ~~anticipate~~pursue ~~that~~such ~~dividends~~relationships, providing a wider reach for our OSO products. However, we cannot assure you that we will be ~~paid~~successful; inand ~~the~~if ~~foreseeable~~we ~~future~~are not successful, we may need to curtail operations or cease operating our business.

(d) Securities authorized for issuance under equity compensation plans.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)(c)
Equity compensation plans approved by security holders (i)	200,000	$	1.00	740,000

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

Equity compensation plans not approved by security holders	None		N/A	None
Total	200,000	$	1.00	740,000

Manufacturing

______________
(i)	Includes the aggregate of all options that may be granted pursuant to the terms of the Company’s 2009 Consultant’s Stock Compensation Plan.
(ii)	The Company has no plans or agreements for the issuance of shares of common stock under any compensation plan or individual compensation arrangement other than upon the exercise of an option, warrant or right.

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.

~~The~~We ~~Company~~presently ~~has~~use noStarzinger for ~~compensation~~the ~~plan~~bottling ~~under~~and ~~which~~contract ~~equity~~packaging ~~securities~~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 ~~Company~~United ~~are~~States ~~authorized~~with adequate capacity for ~~issuance~~most ~~that~~of ~~was~~our ~~adopted~~products ~~without~~at commercially reasonable rates within a reasonably short time period. We continue to seek alternative and/or additional manufacturing and packing facilities in the ~~approval~~United States with adequate capacity for the production of ~~security~~our ~~holders~~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.

~~Item~~For 6our 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. ~~Selected~~ ~~Financial~~We ~~Data~~maintain an active network of contract packing vendor relationships both in the U.S. and overseas.

~~Not~~Our ~~applicable~~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.

~~Item~~Raw ~~7. Management’s Discussion and Analysis~~Materials

~~This~~The ~~Management’s~~principal ~~Discussion~~raw ~~and~~materials which ~~Analysis~~we ~~and~~use ~~other~~are ~~parts~~aluminum ofcans ~~this~~and ~~report~~ends, ~~contain~~labels, ~~forward-looking~~nutrive ~~statements that involve risks~~ and ~~uncertainties. All forward~~non-~~looking~~nutrive ~~statements included in this report are based on information available to us on the date hereof~~additives, concentrates and ~~except as required by law~~sweeteners, wethe ~~assume~~costs noof which ~~obligation~~are subject to ~~update any such forward-looking statements~~fluctuations. ~~Our~~ ~~actual results~~We ~~could differ materially from those anticipated in these forward-looking~~are ~~statements~~uncertain aswhether athe ~~result~~prices of athese ~~number~~or ofany ~~factors, including~~other ~~those~~raw ~~set~~materials ~~forth~~or iningredients ~~the~~will ~~section captioned "Risk Factors"~~continue into ~~Item~~fluctuate ~~1A and elsewhere~~ in ~~this report. The following should be read in conjunction with our audited financial statements and~~ the ~~related notes included elsewhere herein~~future.

~~Critical~~Generally, ~~Accounting~~the ~~Policies~~raw materials ~~Judgments~~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 ~~Estimates~~our aluminum cans.

~~This~~For ~~management's discussion and analysis of~~ our ~~financial~~OSO ~~condition and results of operations is based upon our consolidated financial statements~~products, ~~which have been prepared in accordance with U.S. generally accepted accounting principles. In preparing these financial statements,~~ we ~~are~~purchase ~~required~~beverage ~~to make estimates and judgments that affect the reported amounts of assets~~flavors, ~~liabilities~~concentrates, ~~revenues and expenses~~juices, ~~and related disclosures of contingent assets and liabilities. On an ongoing basis~~vitamins, wesweeteners ~~evaluate~~as ~~our~~well ~~estimates,~~as ~~including~~other ~~those~~ingredients ~~related~~through toa ~~doubtful~~sole ~~accounts~~supplier, Starzinger ~~stock-based~~GmbH. ~~compensation,~~We ~~investments,~~have ~~goodwill~~identified ~~and~~alternative ~~intangible~~suppliers ~~assets~~for ~~and~~many ~~income~~of ~~taxes~~the asingredients ~~well~~contained asin ~~contingencies~~our ~~and litigation~~beverages. We ~~base~~have ~~our estimates on~~identified ~~historical~~alternative ~~experience~~suppliers ~~and~~for onmany ~~various other assumptions that we believe are reasonable, the results~~ of ~~which form~~ the ~~basis~~supplements ~~for~~contained ~~making~~in ~~judgments~~many ~~about the carrying values~~ of ~~assets~~our ~~and~~beverages. ~~liabilities~~We ~~that~~seek ~~are~~to ~~not~~develop ~~readily~~back-up ~~apparent from other~~ sources. ~~Actual~~of ~~results~~supply for ~~may~~certain ~~differ~~of ~~from~~our ~~these~~flavors ~~estimates~~and ~~using~~concentrates, ~~different~~and ~~assumptions~~to orconclude ~~conditions.~~arrangements Wewith ~~believe~~suppliers ~~the~~which ~~following~~would ~~critical~~enable ~~accounting~~us ~~policies~~to ~~reflect~~obtain ~~the~~access to ~~more~~certain ~~significant~~concentrates ~~judgments~~or ~~and~~flavor ~~estimates~~formulas ~~used~~ in ~~the~~certain ~~preparation of our consolidated financial statements~~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.

~~Table~~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 ~~Contents~~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.

~~Revenue~~Intellectual ~~Recognition~~Property

~~The~~Our ~~Company~~intellectual ~~records~~property includes ~~revenues~~trademarks ~~only~~related ~~upon~~to ~~the~~OSO ~~occurrence~~as ofwell ~~all~~as oftrade secrets relating formulation and bottling which we have licensed from our sole officer. In general, trademark registrations expire 10 years from the ~~following~~filing ~~conditions:~~date or registration date. All trademark registrations may be renewed for a nominal fee.

~~The~~Although ~~Company~~we ~~has~~do ~~received~~not believe athat ~~binding~~we ~~purchase~~infringe ~~order~~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 ~~similar~~future ~~commitment~~technologies. ~~from~~Any ~~the~~such ~~customer~~claim, whether meritorious or ~~distributor~~not, ~~authorized~~could bybe time-consuming, result in costly litigation and could have a ~~representative~~material ~~empowered~~adverse toeffect ~~commit~~upon ~~the~~our ~~purchaser~~business, ~~(evidence~~results of aoperations and ~~sale);~~financial condition.

~~The~~We ~~purchase~~consider ~~price~~our ~~has~~trademarks and ~~been~~trade ~~fixed,~~secrets ~~based~~described onabove ~~the~~to ~~terms~~be of ~~the~~considerable ~~purchase~~value ~~order;~~and importance to our business.

~~The Company has delivered the product from its distribution center to a common carrier acceptable to the purchaser. The Company's customary shipping terms are FOB shipping point; and~~Seasonality

~~The~~Our ~~Company~~sales ~~deems~~are ~~the~~seasonal and ~~collection~~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 ~~amount~~colder ~~invoiced~~months. ~~probable~~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.

~~The Company provides no price protection. Product sales are net of promotional~~Employees

~~discounts~~We currently have three staff members under consulting agreements. In addition to this staff, ~~rebates~~we employ the services of several specialist independent contractors for design, artwork, sales and ~~return~~quality ~~allowances~~control. We consider our relations with our staff members to be good. 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.

~~The~~Securities ~~Company~~Exchange ~~does~~Act ~~not~~Reports ~~recognize~~and other ~~sales~~Available ~~taxes collected from customers as revenue.~~Information

~~Allowance~~We ~~for~~make ~~Doubtful~~available ~~Accounts~~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.

The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. The Company records an allowance for doubtful accounts receivable for credit losses at the end of each period based on an analysis of individual aged accounts receivable balances. As a result of this analysis, the Company believes that its allowance for doubtful accounts is adequate at December 31, 2010 and 2009. If the financial condition of the Company's customers should deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventory Valuation

We adjust the value of our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions and development of new products by our competitors. Inventories consist primarily of vehicles gas and electric, parts and supplies, and finished goods and are carried at the lower of cost (first-in, first-out method) or market.

Deferred Tax Asset Realization

We record a full valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made.

~~Table~~A copy of ~~Contents~~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.

~~Classification~~Item of1A. ~~Financial~~RISK ~~Instruments with Characteristics of Both Liability and Equity~~FACTORS

WeYou ~~account~~should ~~for~~carefully ~~financial~~consider ~~instruments~~the ~~that~~following risk wefactors ~~have issued and~~ that ~~have~~may ~~characteristics~~affect ofour ~~both liability and equity in accordance with SFAS No. 150~~business, ~~ACCOUNTING~~including ~~FOR~~our ~~CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS No. 150 specifies that mandatory redeemable~~ financial ~~instruments~~condition ~~are~~and toresults ~~be recorded as liabilities unless the redemption is required to occur upon the liquidation or termination~~ of ~~the issuer~~operations. ~~SFAS~~The ~~No.~~risks ~~150~~and also specifies that a financial instrument that embodies a conditional obligation that an issuer may settle by issuing a variable number of its equity shares is to be classified as a liability if, at inception, the value of the obligation is based solely oruncertainties ~~predominantly~~described onbelow ~~variations~~are ~~inversely related to changes in the fair value of the issuer's equity shares. Should a financial instrument~~ not ~~be classified as a liability under~~ the ~~provisions~~only ofrisks ~~SFAS No. 150,~~ we ~~further apply the criteria in Emerging Issues Task Force (EITF) Issue No~~face. ~~00-19,~~Additional ~~ACCOUNTING~~risks ~~FOR~~and ~~DERIVATIVE~~uncertainties ~~FINANCIAL~~not ~~INSTRUMENTS~~presently ~~INDEXED~~known ~~TO, AND POTENTIALLY SETTLED IN, A COMPANY'S OWN STOCK, which enumerates additional criteria~~ to ~~determine~~us ~~the~~or ~~appropriate~~that ~~classification~~we ascurrently deem ~~liability~~immaterial ~~or equity. We~~ also ~~evaluate the anti-dilution and/or beneficial conversion features that~~ may beimpair ~~included in~~ our ~~financial~~business. ~~instruments~~If inany ~~accordance~~of ~~with~~ the ~~provisions~~following ofrisks ~~SFAS~~actually ~~No. 133~~occur, ~~ACCOUNTING~~our ~~FOR~~business ~~DERIVATIVE~~could ~~INSTRUMENTS~~be ~~AND HEDGING ACTIVITIES~~harmed, ~~which may classify~~ the trading ~~feature~~price asof anour ~~embedded~~common ~~derivative~~stock ~~and~~could ~~require~~decline ~~that the financial instrument be bifurcated~~ and ~~the~~you ~~feature~~could ~~accounted~~lose ~~for~~all ~~separately. We evaluate each financial instrument on its own merits at inception~~ or ~~other~~part ~~prescribed measurement or valuation dates and may engage the services~~ of ~~valuation~~your ~~experts~~investment ~~and other professionals to assist us~~ in ~~our determination of the appropriate classification~~us.

~~Accounting~~Risks Related ~~for~~to ~~Stock-Based~~our ~~Compensation~~Company and our Business

~~Effective~~We ~~January~~have a 1,history ~~2006, we adopted the fair value recognition provisions~~ of ~~SFAS~~losses No. 123 (revised 2004), Share-Based Payment ("SFAS 123(R)"), using the modified-prospective transition method. Under the fair value recognition provisions of SFAS 123(R), share-based compensation cost is estimated at the grant date based on the fair value of the award and ismay ~~recognized~~not asachieve ~~expense,~~profitability ~~net~~in ~~of estimated pre-vesting forfeitures, ratably over~~ the ~~vesting~~foreseeable ~~period of the award~~future.

InWe ~~addition,~~have ~~the~~generated only ~~adoption~~limited ofrevenues ~~SFAS~~from ~~123R~~product ~~requires~~sales ~~additional~~and ~~accounting~~have ~~related~~incurred tonet ~~the~~losses, ~~income~~excluding ~~tax~~one-time ~~effects~~gains in 2011, of approximately $204,400, $49,000 and ~~disclosure~~$56,600 ~~regarding~~for the ~~cash~~fiscal ~~flow~~years ~~effects~~ended ~~resulting~~December ~~from~~31, ~~share-based~~2011, ~~payment~~December ~~arrangements~~31, 2010 and December 31, 2009, respectively. InAt ~~January~~December 31, ~~2005~~2011, ~~the~~our ~~SEC~~subsidiaries ~~issued~~had ~~Staff~~an ~~Accounting~~accumulated ~~Bulletin~~deficit ~~("SAB")~~of Noapproximately $836,153 on a consolidated basis. ~~107~~Since inception, ~~which~~we ~~provides~~have incurred ~~supplemental~~losses ~~implementation~~and ~~guidance~~have ~~for~~had ~~SFAS~~capital ~~123R~~and stockholders’ deficits and limited cash to fund operations. We ~~selected~~expect ~~the~~to ~~Black-Scholes~~incur additional ~~option-pricing~~operating ~~model~~losses, as ~~the~~well ~~most~~as ~~appropriate~~negative ~~fair-value~~cash ~~method~~flows from operations, for ~~our~~the ~~awards.~~foreseeable ~~Calculating~~future, ~~share-based~~as ~~compensation~~we ~~expense~~continue ~~requires~~to ~~the~~expand our ~~input~~marketing ofefforts ~~highly~~with ~~subjective~~respect ~~assumptions,~~to ~~including~~our ~~the~~products, ~~expected~~continue ~~term~~to ofseek ~~the~~new ~~share-based~~relationships ~~awards,~~with ~~stock~~distributors ~~price~~and ~~volatility,~~continue our research and ~~pre-vesting~~development ~~forfeitures~~of additional products. ~~The~~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 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 We estimate that we will require substantial additional financing at various intervals, including later in 2012, 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 on a number of factors, including the performance of our business and the market conditions for debt or equity financing.

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.

Our future capital requirements will depend upon many factors, including:

continued progress in owned and captive brand development programs;

competing commercial and market developments;

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

effects of our commercialization activities.

~~Table~~If we cannot secure adequate financing when needed, we may be required to delay, scale back or eliminate one or more of ~~Contents~~our product 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. In such event, our business, prospects, financial condition and results of operations may be materially adversely affected.

~~assumptions~~Because ~~used~~we inhave ~~calculating~~had ~~the~~only ~~fair value of stock-based awards represent our best estimates~~limited operations, ~~but~~investors ~~these~~may ~~estimates~~not ~~involve~~have ~~inherent uncertainties and the application of management judgment. As~~ a ~~result,~~sufficient ifhistory ~~factors~~on ~~change~~which ~~and we use different assumptions, our share-based compensation expense could be materially different in the future. In addition, we are required~~ to ~~estimate~~base ~~the~~an ~~expected~~investment ~~pre-vesting forfeiture rate and only recognize expense for those shares expected to vest~~decision. ~~If our actual forfeiture rate is materially different from our estimate, our share-based compensation expense could be significantly different from what we have recorded in the current period.~~

OnOur ~~November~~OSO ~~10,~~and ~~2005,~~CaptiveBrands business ~~the~~subsidiaries ~~FASB~~are ~~issued~~only ~~FASB~~recently ~~Staff Position No~~formed. ~~FAS~~In ~~123(R)-3~~October ~~"TRANSITION~~2011, ~~ELECTION~~OSO ~~RELATED~~Beverages ~~TO ACCOUNTING FOR TAX EFFECTS OF SHARE-BASED PAYMENT AWARDS" (FSP 123(R)-3)~~Corp. Weacquired ~~adopted~~OSO ~~the~~USA ~~alternative~~LLC, ~~transition~~an ~~method~~entity ~~provided~~that was formed in ~~the~~2009 ~~FASB~~and ~~Staff~~that ~~Position~~conducted ~~for~~limited ~~calculating~~business ~~the~~activities ~~tax~~during ~~effects~~2009, of2010 ~~stock-based~~and ~~compensation~~2011. ~~pursuant~~Our toCaptive ~~SFAS~~Brands ~~123R in the fourth quarter of fiscal 2006~~Corp. ~~The~~subsidiary was ~~alternative~~formed ~~transition method includes simplified methods to establish the beginning balance of the additional paid-~~in ~~capital~~January ~~pool~~2012. ~~(APIC~~Accordingly, ~~pool)~~we ~~related~~have toa ~~the~~limited ~~tax~~operating ~~effects~~history ofupon ~~employee~~which ~~stock-based~~investors ~~compensation,~~may ~~and~~evaluate toour ~~determine~~prospects ~~the~~for success. ~~subsequent~~Investors ~~impact~~must onconsider the ~~APIC~~risks ~~pool~~ and ~~Consolidated~~difficulties ~~Statements~~frequently ofencountered ~~Cash~~by ~~Flows~~early ofstage ~~the~~companies, ~~tax~~particularly ~~effects~~in ~~of employee~~rapidly ~~stock-based~~developing ~~compensation~~markets ~~awards~~such ~~that~~as ~~are~~the ~~outstanding~~functional ~~upon~~beverage ~~adoption of SFAS 123R~~industry. ~~The~~Such ~~adoption~~risks ~~did~~include, ~~not~~among ~~have~~others, athe ~~material impact on our results of operations and financial condition.~~following:

~~Prior~~· to January 1, 2006, we accounted for share-based payments to our employees and non-employee members of our board of directors under the recognition and measurement provisions of Accounting Principles Board ("APB") Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related guidance, as permitted by SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS 123"), and amended by SFAS No. 148, ACCOUNTING FOR STOCK-BASED COMPENSATION-TRANSITION AND DISCLOSURE ("SFAS 148"). We did not recognize any significant share-based employee compensation costs in our statements of operations prior to January 1, 2006, as options granted to employees and non-employee members of the board of directors generally had an exercise price equal to the fair value of the underlying common stock on the date of grant. As required by SFAS 148, prior to the adoption of SFAS 123(R), we provided pro forma disclosure of net income (loss) applicable to common shareholders as if the fair-value-based method defined in SFAS No. 123 had been applied. In the pro forma information for periods prior to 2006, we accounted for pre-vesting forfeitures as they occurred. Our operating results for prior periods have not been restated.competition;

~~Further~~· ~~details~~need ~~related~~for toacceptance ~~our Stock Plans and our adoption~~ of ~~SFAS 123R are provided in Note 1 – Description of Business and significant accounting policies and Note 9 – Capital Stock and Member Interests to our consolidated financial statements.~~products;

~~Results~~· ofability ~~Operations~~to anticipate and adapt to a competitive market;

~~Fiscal~~· ~~2010~~amount ~~Compared~~and Totiming ~~Fiscal~~of ~~2009~~operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and

~~Revenues~~· ~~and~~dependence ~~Cost~~upon ofkey ~~Sales~~personnel.

~~Revenue~~We ~~for~~cannot ~~2010~~be ~~was~~certain that ~~$3,885~~our ~~which~~strategy iswill anbe ~~decrease~~successful ~~from~~or ~~$49,168~~that inwe ~~2009. Cost~~will ofsuccessfully ~~sales~~address ~~for~~these ~~2010~~risks. ~~was~~In ~~$1,802~~the ~~which~~event isthat anwe ~~increase~~do ~~from~~not ~~$21,471~~successfully address inthese ~~2009. During~~risks, ~~2010~~our ~~the~~business, ~~Company~~prospects, ~~carried~~financial ~~out~~condition ~~its~~and ~~move~~results toof ~~new~~operations ~~quarters~~could ~~and~~be ~~performed~~materially ~~service~~ and ~~maintenance services for customers~~adversely affected.

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

InOur ~~2009,~~ability ~~selling~~to establish a market for our brands and products in new geographic distribution areas, ~~general~~as well as to maintain and ~~administrative~~expand ~~costs~~our ~~were~~existing ~~$280~~markets,~~812~~ depends ~~which~~on ~~decreased~~our ability to ~~$219~~establish and maintain successful relationships with reliable distributors,~~406~~ inretailers ~~2010~~and brokers strategically positioned to serve those areas. ~~This~~Our ~~change~~distributors, isretailers ~~primarily~~and brokers sell and distribute competing products, and our products may represent a ~~reflection~~small portion of ~~decreases~~their business. To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in ~~expenditures~~managing ~~for~~and ~~salaries~~selling our products, ~~consulting~~including re-stocking the retail shelves with our products, our sales and ~~operating~~profitability ~~expenses~~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 ~~motorcycle~~ability ~~manufacturing~~to ~~business~~competitively price our products and our ability to manufacture and deliver products in a timely manner.

We may 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 in that particular geographic area, thus limiting our ability to expand our market, which would likely materially adversely effect our business, prospects, financial condition and results of operations.

~~Table~~We ofcurrently ~~Contents~~distribute our products through our wholly owned subsidiary, Fury Distribution Holdings, and we may not be successful in attracting and maintaining key distributors.

Our ~~expenses~~marketing ~~for~~and sales ~~2010~~strategy ~~and~~depends ~~2009~~in ~~include~~large ~~$-0-~~part on the availability and ~~$75,658~~performance ~~respectively~~of planned distributors. We currently distribute our OSO products through our wholly owned subsidiary, ofFury ~~non-cash~~Distribution ~~stock~~Holdings ~~based~~LLC. ~~compensation~~We ~~expenses~~are actively seeking distribution relationships that can support our expected sales volumes. ~~For~~ ~~2010~~We ~~the~~may ~~principal~~not ~~components~~be ofable to service our ~~expenses~~accounts ~~are~~properly with our current distribution arrangement. We currently do not have, nor do we anticipate in the ~~accrued~~future ~~salary~~that ~~for~~we ~~our~~will ~~president~~be ofable ~~$114~~to establish,~~161~~ long-term contractual commitments from external distributors. We may not be able to attract distribution relationships or establish and ~~$72,000~~maintain ofnew successful ~~accrued~~relationships ~~legal~~with distributors in our current geographic markets or new geographic distribution areas, ~~accounting~~and we may have to incur additional expenditures to attract and ~~consulting~~maintain ~~fees~~key ~~for~~distributors ~~outside~~in ~~service~~one ~~providers~~or ~~all~~more of ~~which~~our ~~was~~distribution ~~paid~~areas ~~through~~in ~~the~~order to ~~issuance~~profitably ofexploit ~~promissory~~our ~~notes~~products.

~~Provision~~It ~~for~~is ~~Income~~difficult ~~Taxes~~to predict the timing and amount of our sales.

~~For~~In ~~the~~order ~~years~~to ~~ending~~reduce inventory ~~December 31~~costs, ~~2010~~distributors endeavor to order products from us on a “just in time” basis in quantities, and ~~2009~~at such times, based on the ~~Company~~demand ~~has~~for ~~incurred~~products ~~losses~~in ~~for~~a ~~tax~~particular ~~purposes~~distribution area. ~~The~~Accordingly, ~~tax~~there ~~asset~~is ~~generated~~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 ~~tax~~same ~~losses~~frequencies and ~~any~~volumes ~~temporary~~as ~~differences~~they ~~has~~may ~~been~~have ~~fully~~done ~~reserved~~in the past. In addition, we cannot accurately predict the number of cases to be sold by any of our distributors.

~~Net~~Our ~~Income~~business plan and future growth depends to a significant extent on our captive brands strategy. If we are unable to successfully implement this strategy, our business, prospects, financial condition and results of operations could be materially adversely affected.

~~The~~We ~~company~~intend ~~had~~to aallocate significant ~~loss~~resources ofto ~~$260,535~~our efforts in ~~2010~~our ~~compared~~Captive Brands subsidiary to ~~net~~develop ~~loss~~our ofcaptive ~~$317~~brands strategy through a turn key program we have developed specifically for retailers. These efforts may prove to be unsuccessful or unprofitable,~~608~~ in ~~2009.~~which ~~The~~case our ~~loss~~results ~~was~~of ~~due~~operations ~~primarily~~and financial condition may suffer. Our ability to ~~expenditures~~establish a market for ~~salaries,~~our ~~consulting~~brands and ~~operating~~products ~~expenses~~in the ~~for~~captive brands category depends on our ~~motorcycle~~ability ~~manufacturing~~to ~~business~~create compelling new brands with appealing brand identities and to ~~meet~~establish and maintain successful relationships with diverse retailers, including grocery stores. Our success in the captive brands channel therefore depends on our ~~public~~ability ~~reporting~~to ~~obligations~~secure and maintain exclusive relationships with retailers.

~~Liquidity~~Because products in the captive brands industry compete primarily on the basis of price, we may not be able to distinguish our captive brand products from those of larger, more well-established and ~~Capital~~substantially ~~Resources~~better financed companies in this industry, such as COTT Corporation, the Coca-Cola Company and PepsiCo, Inc., and may not be able to compete with these companies based solely on price. Our inability to successfully execute on our captive brands strategy would materially adversely affect our business, prospects, financial condition and results of operations.

AsWe ofmay ~~December~~incur ~~31,~~higher ~~2010,~~supply wecosts or ~~had~~be ~~negligible~~unable ~~cash~~to ofdeliver ~~$124~~products ~~and~~to ~~approximately~~our ~~$677,972~~customers inif ~~liabilities. To continue operations~~ we ~~require additional financing and~~ are ~~exploring~~unable ~~various~~to ~~methods~~maintain ~~for~~relationships ~~obtaining~~with ~~additional capital including short term borrowing and the issuance of~~ our ~~equity~~raw ormaterial ~~debt securities~~suppliers. ~~There is no assurance that additional capital will be available to us, or if available, will be made available on suitable terms.~~

~~Net~~Other ~~cash~~than ~~used~~water, the byprincipal ~~operating~~raw ~~activities~~materials ~~for~~necessary ~~the~~to ~~twelve~~produce ~~months~~our ~~ended~~products ~~December~~are 31caps, ~~2010~~aluminum ~~was~~cans $4and ends,~~117~~ ~~which~~bottles, ~~was~~labels, ~~primarily~~cartons ~~the~~and ~~result~~trays, concentrates, ofsweeteners ~~the~~and ~~net~~nutrive ~~loss. This~~and ~~compared~~non-nutrive toadditives. ~~net~~In ~~cash~~addition, ~~used~~the bysupply ~~operating activities~~ of ~~$61,494~~specific ~~for~~ingredients ~~the~~and ~~twelve~~packaging materials ~~months~~could ~~ended~~be ~~December~~materially ~~31,~~adversely ~~2009. Net~~affected ~~cash~~by ~~from~~economic ~~financing~~factors ~~activities~~such ~~for~~as ~~the~~industry ~~twelve~~consolidation, ~~months~~energy ~~ended~~shortages, ~~December 31~~governmental controls, ~~2010~~labor ~~was $-0- compared to $29~~disputes,~~047~~ ~~for~~natural ~~the twelve months ended December 31~~disasters, ~~2009. The~~acts ~~reductions in 2010 from 2009 are primarily a reflection~~ of ~~the~~war ~~deteriorating~~or ~~economy~~terrorism and ~~difficulties~~other infactors, ~~securing~~all ~~sources~~ of ~~investment~~which ~~and~~are ~~financing~~beyond our control.

~~Subsequent~~We ~~Events~~rely upon our ongoing relationships with our key flavor suppliers. We could suffer disruptions in our business if we are unable to source our flavors on acceptable terms from our key suppliers.

~~None~~Generally, flavor suppliers hold the proprietary rights to their flavors. Consequently, for our Captive Brands subsidiary especially, we do not have the list of ingredients or formula for our flavors and certain of our concentrates readily available to us, and we may be unable to obtain these flavors or concentrates from alternative suppliers on short notice. If we need to replace a flavor supplier, we could experience temporary disruptions in our ability to deliver products to our customers, which in turn could have a material adverse effect on our business, prospects, financial condition, and results of operations.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

Future Commitments

We do not have any material future commitments that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

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

~~Item~~We 8do not directly manufacture our products. ~~Financial~~ ~~Statements~~We outsource such manufacturing to bottlers and ~~Supplementary~~other ~~Data~~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.

~~Please~~Failure ~~refer~~ to ~~the~~accurately ~~pages~~estimate ~~beginning~~demand for ~~with~~our ~~F-1~~products could materially adversely affect our business and financial results.

~~Item~~We 9may not correctly estimate demand for our products. ~~Changes~~ InOur ability to estimate demand for our products is imprecise, particularly with new products, and ~~Disagreements~~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, cans, glass, labels, flavors, supplements, certain sweeteners, or packing arrangements, we might not be able to satisfy demand on a short-term basis. Industry-wide shortages of supplements and sweeteners have been experienced and could from time to time be experienced in the future. These kinds of shortages could interfere with ~~Accountants~~and/or delay production of certain of our products and could have a material adverse effect on ~~Accounting~~our business, prospects, financial condition and ~~Financial~~results ~~Disclosure~~of operation. We do not use hedging agreements or alternative instruments to manage this risk.

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

~~None~~To the extent the consolidation among mass retailers continues, a greater percentage of our sales could be concentrated in a smaller number of retailers, which may enhance our customers’ ability to negotiate more favorable terms and prices from us. 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 based deal negotiation. As a result of competitive practices or otherwise, we have in the past and may 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.

Disagreements with Accountants

None.

Item 9A. Controls And Procedures

Disclosure Controls and Procedures

Mark Klein, who is our chief executive officer and chief financial officer during this reporting period, has concluded that the disclosure controls and procedures were not effective as of December 31, 2010. These controls are meant to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The registrant had not filed its SEC filings since the third quarter of 2009. Management has only recently prepared and filed the required SEC reports. Management intends to implement internal controls to ensure that similar situations do not occur in the future and that required SEC filings will be timely.

Management’s Report on Internal Control over Financial Reporting

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

1. Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the registrant; and

~~Table~~Our inability ofto ~~Contents~~protect our trademarks and trade secrets may prevent us from successfully marketing our products and competing effectively.

3We regard our intellectual property, particularly our trademarks and trade secrets, to be of considerable value and importance to our business and our success. We ~~Provide~~rely ~~reasonable~~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 ~~regarding~~that ~~prevention~~the steps taken by us to protect these proprietary rights will be adequate or ~~timely~~that ~~detection~~third ofparties ~~unauthorized~~will ~~acquisition~~not infringe or misappropriate our trademarks, ~~use~~trade secrets or ~~disposition~~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 ~~the~~our ~~issuer~~management’s ~~assets~~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 ~~the~~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 ~~statements~~condition and results of operations.

~~Management~~As ~~conducted~~part anof ~~evaluation~~our ofcaptive brands ~~the~~strategy, ~~effectiveness~~we ofmay ~~our~~enter ~~internal~~into ~~control~~licensing ~~over~~agreements ~~financial~~under ~~reporting~~which aswe ofgrant ~~December~~our ~~31,~~licensing ~~2010,~~partners ~~based~~certain onrights ~~the~~to ~~framework~~use ~~established~~our trademarks inand ~~Internal~~other ~~Control-Integrated~~designs. ~~Framework~~Although ~~issued~~our byagreements ~~the~~require ~~Committee~~that ofa ~~Sponsoring~~licensing ~~Organizations~~partner’s use of ~~the~~our ~~Treadway~~trademarks ~~Commission~~and ~~(“COSO”). Based~~designs is onsubject ~~this~~to ~~assessment~~our control and approval, ~~management~~any ~~concluded~~breach ~~that~~of asthese provisions, or any other action by any of ~~December~~our 31licensing partners that is harmful to our brands, ~~2010~~goodwill and overall image, itcould ~~had~~have a material ~~weaknesses~~adverse ineffect ~~its~~on ~~internal~~our ~~control~~business, ~~procedures~~prospects, financial condition and results of operations.

ALitigation ~~material weakness is a control deficiency,~~ or ~~combination~~legal ofproceedings ~~control~~could ~~deficiencies,~~expose inus ~~internal~~to ~~control~~significant liabilities ~~over~~and ~~financial~~damage ~~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~~reputation. ~~As of December 31, 2010, we have concluded that our internal control over financial reporting was not effective as of December 31, 2010.~~

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 ~~Company’s~~cost ~~assessment~~of ~~identified~~litigation, ~~certain~~even if without merit, and the resulting distraction to management, could have a material ~~weaknesses~~adverse ~~which~~effect ~~are~~on ~~set~~our ~~forth~~business, ~~below:~~prospects, financial condition and results of operations.

~~Entity~~On ~~Level~~April ~~Controls~~19, 2012, we received a Civil Action Summons and Complaint from certain holders of promissory notes in the principal amount of $50,000 issued by our predecessor, Hybrid Dynamics Corporation, in 2008. The Complaint demands repayment of the principal and interest in the aggregate amount of $60,965, plus incidental and consequential damages and attorneys’ fees. See Item 3, Litigation.

WeOthers ~~have~~may ~~insufficient~~allege ~~corporate~~that ~~governance~~we ~~policies.~~infringe on ~~Our~~their ~~corporate~~intellectual ~~governance~~property ~~activities and processes are not always formally documented. Specifically~~rights, ~~decisions~~which ~~made~~could byresult ~~the~~in ~~board to be carried out by management should be documented and communicated on a timely basis to reduce~~ the ~~likelihood~~diversion of ~~any~~attention ~~misunderstandings~~and ~~regarding~~resources ~~key~~from ~~decisions affecting~~ our ~~operations~~business ~~and management~~operations.

WeOccasionally, ~~currently~~third parties ~~have~~may ~~insufficient~~assert ~~resources~~that ~~which~~we are, or may ~~restrict~~be, ~~our~~infringing ~~ability~~on toor ~~gather,~~misappropriating ~~analyze~~their ~~and~~intellectual ~~report~~property ~~information~~rights. ~~relative~~In tothese ~~the~~cases, we ~~financial~~intend ~~statements~~to indefend aagainst ~~timely~~claims ~~manner,~~or ~~including~~negotiate ~~insufficient~~licenses ~~documentation~~when ~~and~~we ~~review~~consider ofthese ~~the~~actions ~~selection~~appropriate. ~~and~~Intellectual ~~application~~property ofcases are ~~generally~~uncertain ~~accepted~~and ~~accounting~~involve ~~principles~~complex tolegal ~~significant~~and ~~non-routine~~factual ~~transactions~~questions. InIf ~~addition,~~we ~~the~~become ~~limited~~involved ~~size~~in ofthis ~~the~~type ~~accounting~~of ~~department~~litigation, ~~makes~~ it ~~impractical~~could toconsume significant ~~achieve~~resources anand ~~optimum~~divert ~~segregation~~our ofattention ~~duties~~from business operations.

~~Functional~~If ~~Controls~~we ~~and~~are ~~Segregation~~found to infringe on the intellectual property rights of ~~Duties~~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.

WeIf 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 exist. In order to remedy this situation we ~~would~~lose ~~need~~the toservices ~~hire additional staff to provide segregation~~ of ~~duties.~~our ~~Currently~~President, our itoperations iscould ~~not~~be ~~feasible~~disrupted toand ~~hire~~our ~~additional~~business ~~staff~~could tobe ~~obtain optimal segregation of duties~~harmed. ~~Management intends to reassess this matter during the current fiscal year to determine whether improvement in segregation of duties is feasible.~~

~~Management~~Our ~~believes~~business ~~that~~plan relies significantly on the ~~material~~continued ~~weaknesses~~services ~~set~~of ~~forth~~our ~~above~~President, ~~were~~Fouad ~~the~~Kallamni. ~~result~~If ofwe were to lose the ~~scale~~services of Mr. Kallamni, our ~~operations~~ability ~~and~~to ~~are~~continue ato ~~circumstance~~execute ~~due~~our tobusiness ~~our~~plan ~~small~~could ~~size~~be materially impaired. ~~Management~~ ~~believes~~Although ~~these~~Mr. ~~weaknesses~~Kallamni ~~did~~does not have aan ~~material~~employment agreement ~~effect~~with onus ~~our~~(he ~~financial~~currently ~~results~~serves ~~and~~on ~~intends~~consulting tobasis ~~take~~pending ~~remedial~~the ~~actions~~receipt ~~upon~~of ~~receiving~~additional funding), ~~for~~we ~~our~~are ~~business~~not ~~operations~~aware of any facts or circumstances that suggest Mr. Kallamni might leave us. We do not have key man life insurance on Mr. Kallamni.

The inability to attract and retain key personnel would directly affect our efficiency and results of operations.

Our success depends on our ability to attract and retain highly qualified employees in such areas as production, distribution, sales, marketing and finance. We compete to hire new employees. Our operating results could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs. Any unplanned turnover, particularly involving our key personnel, could negatively impact our operations, financial condition and employee morale.

~~Table~~Our ofbusiness ~~Contents~~and financial results may be materially and adversely affected if we fail to manage our expanding operations successfully.

WeOur ~~are~~success ~~committed~~depends, in part, on our ability to ~~improving~~manage our ~~financial~~expanding ~~organization~~operations. AsRecently, ~~part~~we have commenced the expansion of ~~this~~our ~~commitment,~~business weand ~~will~~beverage offerings ~~increase~~through the addition of new products to be launched to supplement our ~~personnel~~current ~~resources~~product offering of OSO. Our principal strategy is to expand our business in new distribution channels and ~~technical~~markets ~~accounting~~and ~~expertise~~with ~~within~~new ~~the~~beverage ~~accounting~~offerings ~~function~~through ~~when~~a ~~funds~~turnkey captive ~~are~~brands ~~available~~program. The success of this strategy depends on our ability to usmanage and integrate new beverages into new channels and markets with retailers. Furthermore, our new product lines may not prove to be profitable.

WeGlobal ~~will~~or ~~continue~~regional tocatastrophic events ~~monitor~~could ~~and~~impact ~~evaluate the effectiveness of~~ our ~~internal~~operations ~~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~~results. We ~~intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies, including:~~

~~(1)~~Our ~~Adding~~business ~~personnel~~can ~~with~~be affected by major natural disasters or widespread outbreaks of infectious diseases such as avian influenza or severe acute respiratory. Such events could impair our ability to manage our business in the ~~depth~~U.S., could disrupt our supply of ~~knowledge~~raw materials, and ~~time~~could impact ~~commitment~~production, totransportation ~~provide~~and adelivery ~~greater~~of ~~level~~products. In addition, such events could cause disruption of ~~review~~regional ~~for~~or ~~corporate~~global economic ~~activities;~~activity, which can affect consumers’ purchasing power in the affected areas and, therefore, reduce demand for our products.

~~(2)~~If ~~Continuing~~we toare ~~update~~unable ~~the~~to ~~documentation~~build ofand ~~our~~sustain proper ~~internal~~information ~~control~~technology ~~processes~~infrastructure, ~~including formal risk assessment of~~ our ~~financial~~business ~~reporting~~could ~~processes;~~suffer. ~~and~~

~~(3)~~We ~~Soliciting~~depend ~~independent~~on ~~directors~~information technology to ~~enhance~~improve ~~corporate~~the ~~governance~~effectiveness of our operations and ~~Board~~to ~~composition~~interface with our customers, as well as to maintain financial accuracy and efficiency. We could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions, or the loss of or damage to intellectual property through security breach, if we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure. Notwithstanding our implementation of security measures, our information systems could potentially be penetrated by outside parties intent on extracting or corrupting information or disrupting business processes. Such unauthorized access could disrupt our business and result in the loss of assets, which would have a material adverse effect on our business, prospects, financial condition, and results of operations.

We ~~intend~~could tobe ~~consider~~exposed ~~the~~to ~~results~~product ofliability claims ~~our~~for ~~remediation~~personal ~~efforts~~injury ~~and~~or ~~related~~possibly ~~testing as part of our assessment of the effectiveness of our internal control over financial reporting~~death.

~~Changes~~We currently do not carry product liability insurance. Although we intend to purchase this insurance when funds are available to do so, there can be no assurance that the coverage obtained will be sufficient to cover any or all product liability claims. If our product liability insurance is not obtained or is inadequate in ~~Internal~~amount, ~~Control~~a ~~over~~product ~~Financial~~liability ~~Reporting~~claim would likely have a material adverse effect upon our business, prospects, financial condition and results of operations.

~~There~~If ~~were~~we noare ~~changes~~unable into ~~our~~maintain ~~internal~~brand image ~~control~~and ~~over~~product ~~financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31~~quality, ~~2010,~~or ~~that~~if ~~have~~we ~~materially~~encounter ~~affected,~~other orproduct ~~are~~issues ~~reasonably~~such ~~likely~~as toproduct ~~materially affect~~recalls, our ~~internal~~business ~~control~~may ~~over financial reporting~~suffer.

~~PART~~Our ~~III~~success depends on our ability to maintain brand image for our existing products and effectively build up brand image for new products and brand extensions. There can be no assurance, however, that additional expenditures and our advertising and marketing will have the desired impact on our products’ brand 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.

~~Item~~In addition, 10because of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. ~~Directors~~ Product recalls could affect our profitability and could negatively affect brand image. We do not maintain recall insurance. Adverse publicity surrounding obesity concerns, ~~Executive~~water ~~Officers~~usage and ~~Corporate~~other ~~Governance~~concerns could negatively affect our overall reputation and our products’ acceptance by consumers.

(a) Directors and executive officers:

Name		Age		Position
Mark S. Klein		51		President, Treasurer, Secretary and Director since 2006

The directors of the Company are elected to serve until the next annual shareholders' meeting or until their respective successors are elected and qualified. Officers of the Company hold office until the meeting of the Board of Directors immediately following the next annual shareholders' meeting or until removal by the Board of Directors.

MARK S. KLEIN is a graduate of the American Motorcycle Institute and certified technician. Mr. Klein opened his first independent service facility in 1979, held northeast distribution rights for Yoshimura racing parts and from that, developed Cycle Connection, Inc., a highly successful super-bike racing team. He also developed the first branded store for Ducati Motors in Manhattan, New York and served on the Ducati Dealer Development Group for several years.

~~Table~~Rising ofenergy ~~Contents~~and freight costs may have an adverse impact on our sales and earnings.

~~(b) Significant~~Recent ~~Employees~~volatility in the global oil markets has resulted in rising fuel prices, which many shipping companies are passing on to their customers by way of higher base pricing and/or increased fuel surcharges. Although we work with suppliers to mitigate raw material price increases, energy surcharges on our raw materials may continue to increase as well. Due to the price sensitivity of our products, we do not anticipate that we will be able to pass all of these increased costs on to our customers.

~~None~~Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

~~(c) Family~~U.S. ~~relationships~~generally accepted accounting principles and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported results.

~~None~~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.

~~(d) Involvement~~We are required to maintain 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 ~~certain~~achieving ~~legal~~their ~~proceedings~~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 and financial results.

~~None.~~Risks Related to Our Industry

~~(e) Section~~The ~~16(A)~~beverage ~~Beneficial~~industry ~~Ownership~~is ~~Reporting~~highly competitive, ~~Compliance~~especially in the functional beverage category and increased competition could hurt our business.

~~Section~~The ~~16(a)~~beverage ofindustry is ~~the~~highly ~~Exchange~~competitive. ~~Act~~The ~~requires~~principal ~~the~~areas ~~Company's~~of ~~officers~~competition ~~and~~are ~~directors~~pricing, ~~and~~packaging, ~~persons~~development ~~who own more than 10%~~ of anew ~~registered~~products ~~class~~and offlavors ~~the Company's equity securities, to file reports of ownership~~ and marketing ~~changes in ownership with the SEC~~campaigns. ~~Officers,~~ ~~directors~~Our ~~and~~products ~~greater~~compete ~~than~~with ~~10%~~a ~~percent~~wide ~~shareholders~~range ~~are required by SEC regulation to furnish the Company with copies~~ of ~~all~~drinks ~~Section~~produced ~~16(~~by a) ~~forms~~relatively ~~they~~large ~~file. To~~number ~~the best~~ of ~~the Company's knowledge~~manufacturers, most ~~with the exception~~ of ~~those~~which ~~persons~~have ~~disclosed~~substantially ingreater ~~this report~~financial, nomarketing ~~reports~~and ~~have~~distribution ~~been~~resources ~~filed by any other persons who claim ownership of more~~ than ~~10%~~we ~~of the Company's equity securities~~do.

~~(f) Code~~Important factors affecting our ability to compete successfully include taste and flavor of ~~Ethics~~products, 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 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.

We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Ethics is designed to deter wrongdoing and promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of our Code of Ethics to an appropriate person or persons identified in the code; and (v) accountability for adherence to our Code of Ethics.

Item 11. Executive Compensation

The following table sets forth certain information with respect to annual compensation paid in 2008 and 2008 to the Company's executive officers.

Name and Principal Position

Year

Annual Compensation

Awards

Payouts

All Other Compensation

Mark S. Klein (i)

2010

None

President, Secretary, Treasurer and Director

2009

None

45,925

None

50,000

______________________ (i) Mr. Klein has a Key Employee Agreement with the Company dated as of May 6, 2008 which provides for annual compensation of $96,000. The 2010 Annual Compensation does not include $114,161 of accrued and unpaid compensation owing as to the year ending December 31, 2010. The 2009 Annual Compensation includes compensation payments of 752,500 shares of common stock and a $50,000 promissory note.

~~Table~~If we are unable to maintain brand image and product quality or encounter product issues, such as product recalls, our business, prospects, financial condition, and results of ~~Contents~~operations could be materially adversely affected.

~~(b) Outstanding~~Our ~~equity~~business ~~awards~~is atsubstantially dependent ~~fiscal~~upon ~~year-end~~awareness and market acceptance of our products and brands by our target market consumers between the ages of 18 and 34, and our success depends on our ability to maintain brand image for our 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 owned brands or captive 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.

~~None~~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.

~~(c) Compensation~~Change in consumer preferences may reduce demand for some of ~~Directors~~our products.

~~The~~Market ~~Executive~~data ~~Officer~~indicates that ofconsumers ~~the~~are ~~Company~~seeking ~~also~~greater ~~serves~~variety asin ~~the~~their ~~sole~~beverages. ~~director~~Our offuture success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages and be competitive in the ~~Company~~areas of quality and health. ~~The~~ ~~Company~~We ~~did~~can ~~not~~provide no ~~make~~assurances ~~any~~that ~~separate~~consumers ~~director~~will ~~compensation~~continue ~~payments~~to ofpurchase ~~fees,~~our ~~stock~~products ~~awards,~~in ~~option~~the ~~awards~~future. Additionally, ~~non-equity~~our ~~incentive~~branded ~~plan~~products ~~compensation~~are considered premium products and to maintain market share during recessionary periods we may have to reduce profit margins, ~~non-qualified~~which ~~deferred~~would ~~compensation~~adversely affect ~~earnings~~our results of operations. Some beverage brands and/or ~~other~~products ~~compensation~~may be limited to ~~any~~a product lifecycle of ~~its~~a ~~directors~~few years before consumers’ preferences change. The ~~Company~~beverages ~~does~~we ~~not~~currently ~~pay~~market ~~its~~are ~~directors~~in ~~for~~varying stages of their ~~service~~lifecycles, asand awe ~~director~~can provide no assurance that such beverages will become or remain profitable for ~~attending~~us. ~~meetings~~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 ~~the~~operations ~~directors~~if we misjudge such preferences. If our revenues decline, our business, prospects, financial condition and results of operations would be materially adversely affected.

~~Item~~Our ~~12. Security~~sales ~~Ownership~~are ofaffected ~~Certain~~by ~~Beneficial Owners and Management and Related Stockholder Matters~~seasonality

~~The~~As ~~following~~is ~~table~~typical ~~sets~~in ~~forth~~the beverage ~~information~~industry, asour ofsales ~~December~~are ~~31,~~seasonal. ~~2010~~We have experienced greatest sales volume during the second and third calendar quarters, generally ~~with~~Memorial ~~respect~~Day to ~~the~~Labor ~~beneficial~~Day. ~~ownership~~As ofa result, our working capital requirements and cash flow vary substantially throughout the ~~Company’s~~year. ~~common~~Consumer ~~stock~~demand byfor ~~each~~our ~~person~~products ~~known~~is also affected by ~~the~~weather ~~Company~~conditions. toCool, bewet ~~the~~Spring ~~beneficial~~or ~~owner~~Summer ofweather ~~more~~could ~~than~~result in ~~five~~decreased ~~percent~~sales of ~~the~~our ~~outstanding~~beverages ~~common~~and ~~stock~~could ~~and~~have bya ~~directors~~material ~~and~~adverse ~~officers~~effect ofon ~~the~~our ~~Company~~business, ~~both~~prospects, ~~individually~~financial condition and results asof ~~a group~~operations.

~~(a) Security~~Changes ~~ownership~~in ofthe ~~certain~~legal ~~beneficial~~and ~~owners~~regulatory environment ~~and~~in ~~management~~the jurisdictions in which we operate could increase our costs or reduce our revenues.

~~The~~As ~~following~~a ~~table~~beverage ~~indicates~~producer, we ~~how~~must ~~many~~comply ~~shares~~with ofvarious ~~our~~federal, ~~common~~state, ~~stock~~provincial, ~~were~~local ~~beneficially~~and ~~owned~~foreign aslaws relating to production, packaging, quality, labeling and distribution, including, in the U.S., those of ~~December~~the 31federal Food, ~~2010~~Drug and Cosmetic Act, bythe ~~(1) each~~Fair ~~person~~Packaging ~~known~~and byLabeling usAct, the Federal Trade Commission Act, the Nutrition Labeling and Education Act and California Proposition 65. We are also subject to bevarious federal, state, provincial, local and foreign environmental laws and workplace regulations. These laws and regulations include, in the ~~owner~~U.S., ofthe ~~more~~Occupational ~~than~~Safety 5%and ofHealth ~~our~~Act, ~~outstanding~~the ~~shares~~Unfair ofLabor ~~common~~Standards ~~stock~~Act, ~~(2) our~~the ~~directors~~Clean Air Act, ~~(3) our~~the ~~executive~~Clean ~~officers~~Water Act, the Comprehensive Environmental Response, Compensation, and ~~(4) our~~Liability ~~directors~~Act, the Resource Conservation and ~~executive~~Recovery ~~officers~~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 ~~group~~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.

In general, “beneficial ownership” includes those shares a director or executive officer has sole or shared power to vote or transfer (whether or not owned directly) and rights to acquire common stock through the exercise of stock options or warrants those are exercisable currently or become exercisable within 60 days. Except as indicated otherwise, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. We based our calculation of the percentage owned on 1,291,939 shares outstanding on December 31, 2010. The address of each director, executive officer and certain beneficial owners is listed below:

~~Table~~Significant additional labeling or warning requirements may inhibit sales of ~~Contents~~affected products.

Name and Address	Number of Shares Beneficially Owned		Percent of Class
Mark S. Klein Director, President, Secretary and Treasurer P.O. Box 503 Totowa, NJ 07511		772,863		59.84	%
David S. Lee P.O. Box 503 Totowa, NJ 07511		119,154		9.23	%
Sharp Capital LP 800 Third Ave., 27th Floor New York, NY 10022		89,365		6.92	%
Frank Basile c/o Sharp Capital LP 800 Third Ave., 27th Floor New York, NY 10022		89,365		6.92	%
All officers and directors as a group (1 person)		772,863		59.84	%

Various jurisdictions may seek 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, or 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.

~~(b) Changes~~Risks Related into ~~control~~our Common Stock

~~Our~~We ~~articles~~are ~~of incorporation and by-laws do~~ not ~~contain~~current ~~any~~in ~~provisions having an anti-takeover effect, except that~~ our articles of incorporation authorize the issuance of common and preferred stock. Our articles of incorporation were amended on October 25, 2006 to grant the Company’s board of directors the power to issue such shares and to establish their terms. For example, the directors have the power to establish terms for the preferred stock which would cause the preferred stock may rank prior to the common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. Accordingly, the issuance of sharesfilings ofunder ~~preferred stock may discourage bids for~~ the common stock or may otherwise adversely affect the market price of the common stock. If issued, the preferred stock could also render more difficult, or discourage, a merger, tender offer or proxy contest relative to the Company, and make the removal of incumbent management more difficult. Our board of directors has no present intention to issue preferred stock for such purposes. Our articles of incorporation prohibit cumulative voting with respect to any matters brought to a vote by our stockholders. The Company filed Definitive Schedule 14F describing the amendment to its articles of incorporation with the Securities & Exchange ~~Commission~~Act onof ~~October 5, 2006.~~1934

We are not current in our filings with the Securities and Exchange Commission. We expect to become current in such filings in the very near future, but before that time the Company is not providing investors with current information relating to its business that an investor would reasonably require access to in order to make an informed decision whether to purchase our common stock. See “Special Filing Note”.

The price of our common stock is volatile, and the public market for our common stock is limited. If you invest in our common stock, the value of your investment could decline, and there may be a limited market in which to sell shares of our common stock which you have purchased.

The trading price of our common stock has been and continues to be subject to fluctuations. 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:

the development of our business;

continued negative cash flow;

relatively low price per share;

relatively low public float;

variations in quarterly operating results;

general trends in the functional beverage industry;

the number of holders of our common stock; and

the interest of securities dealers in maintaining a market for our common stock.

~~Table~~As long as there is only a limited public market for our common stock, the sale of ~~Contents~~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 common stock.

~~Item~~We have 1361,201,483 shares of common stock outstanding as of April 24, 2012. ~~Certain~~ ~~Relationships~~Of ~~and~~these ~~Related~~shares, ~~Transactions~~approximately 50,000,000 ~~and~~are ~~Director~~restricted ~~Independence~~shares under Rule 144 of the Securities Act of 1933.

~~(a) Transactions~~Any ~~with~~future ~~related~~equity ~~persons~~or debt issuances by us, including the exercise of outstanding warrants, may have dilutive or adverse effects on our existing shareholders.

~~Other~~We ~~than~~may asissue ~~disclosed~~additional shares ~~below~~of common stock, ~~none~~convertible ofsecurities ~~the~~or ~~present~~warrants ~~directors,~~that ~~officers~~could ordilute ~~principal~~your ~~shareholders~~ownership ofin ~~the~~our ~~Company,~~company ~~nor~~and ~~any~~may ~~family~~include ~~member~~terms that ofgive ~~the~~new ~~foregoing,~~investors ~~have~~rights orthat ~~have~~are ~~had~~superior ~~any~~to ~~interest,~~yours. ~~direct~~The orsale ~~indirect,~~of insubstantial ~~any~~amounts ~~transaction~~of our common stock, the ~~amount~~issuance of substantial ~~which~~amounts ~~exceeds~~of ~~the~~warrants ~~lesser~~and ofoptions ~~$120,000~~granting orthe ~~one~~right ~~percent~~to receive shares of our common stock or the ~~average~~prospect of ~~the~~such ~~Company’s~~sales or ~~total~~issuances ~~assets~~could atmaterially ~~year-end~~adversely ~~for~~affect the ~~last~~market ~~three~~price ~~completed~~of ~~fiscal~~our ~~years~~common stock. Moreover, ~~within~~any ~~the~~issuances ~~last~~by ~~fiscal~~us ~~year,~~of orequity insecurities may ~~any~~be ~~proposed~~at ~~transaction. Management~~or ~~believes~~below the ~~following~~prevailing ~~transactions~~market ~~are~~price ~~fair~~of toour ~~the~~common ~~Company~~stock and ~~similar~~in toany ~~terms~~event ~~that~~may have a dilutive impact on your ownership interest, which could because ~~obtained~~the ~~from~~market ~~unrelated~~price ~~third~~of ~~parties~~our common stock to decline.

~~None~~We expect to experience significant fluctuations in quarterly operating results. These fluctuations may cause cash shortfalls and materially affect our results of operations, which would have an adverse effect on our common stock trading price.

~~(b) Parents~~Because of the nature 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.

~~None~~We have not paid cash dividends, and it is unlikely that we will pay cash dividends in the foreseeable future.

~~(c) Promoters~~We ~~and~~plan ~~control~~to ~~persons~~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 foreseeable future. We 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.

~~None~~Our common stock is considered to be a “penny stock.”

~~(d) Corporate~~Our ~~Governance~~common stock will be considered a “penny stock” as that term is defined in Rule 3a5-1 promulgated under the Exchange Act.

~~(i) Director~~Penny ~~independence~~stocks are stocks:

~~The~~· ~~directors of the Company are the executive officers of the Company and are shareholders of the Company. Members of the Company's management may become associated~~ with ~~other firms involved in~~ a ~~range~~price of ~~business~~less ~~activities. Consequently,~~than ~~there are potential inherent conflicts of interest in their acting as officers and directors of the Company~~$5.00 ~~Insofar~~per ~~as the officers and directors are engaged in other business activities, management anticipates they will devote as much time to the Company's affairs as is reasonably needed.~~share;

~~The~~· ~~officers and directors are, so long as they are officers or directors of the Company, subject to the restriction~~ that all opportunities contemplated by the Company's plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to the Company and the companies that they are ~~affiliated~~not ~~with~~traded on ~~an equal basis. A breach of this requirement will be~~ a ~~breach~~“recognized” ofnational the fiduciary duties of the officer or director. If the Company or the companies in which the officers and directors are affiliated with both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if the Company should decline to do so. Except as set forth above, the Company has not adopted any other conflict of interest policy with respect to such transactions.exchange;

whose prices are not quoted on the NASDAQ automated quotation system; or

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.

~~Table~~Section 15(g) of the ~~Contents~~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 account. We urge potential investors to obtain and read this disclosure carefully before purchasing any shares that are deemed to be “penny stock.”

~~(ii) Board~~Rule ~~meetings~~15g-9 ~~and~~promulgated under ~~committees;~~the ~~annual~~Exchange ~~meeting~~Act ~~attendance~~requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any “penny stock” to that investor. This procedure requires the broker-dealer to:

~~The~~· ~~Board~~obtain offrom ~~Directors~~the ~~does~~investor ~~not~~information ~~meet~~about onhis aor ~~regular~~her ~~basis~~financial ~~and~~situation, ~~take~~investment ~~action~~experience as and ~~when~~investment ~~required. The Company does not have any standing audit, nominating, or compensation committees of the Board of Directors.~~objectives;

~~Item~~· ~~14. Principal~~reasonably ~~Accountant~~determine, ~~Fees~~based on that information, that transactions in penny stocks are suitable for the investor and ~~Services~~that the investor has enough knowledge and experience to be able to evaluate the risks of “penny stock” transactions;

	For the year ended
	2010		2009
Audit Fees	$	8,000	$	8,000
Audit-Related Fees		0		0
Tax Fees		0		0
All Other Fees		0		0

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

~~Audit~~· ~~Fees~~receive ~~consist~~a ofsigned ~~fees~~and ~~billed~~dated ~~for~~copy ~~professional~~of ~~services~~the ~~rendered~~statement ~~for~~from the ~~audit~~investor, ofconfirming ~~our~~that ~~financial~~it ~~statements~~accurately ~~and~~reflects ~~review of~~ the ~~interim~~investor’s financial ~~statements~~situation, ~~included~~investment inexperience ~~quarterly reports~~ and ~~services~~investment ~~that are normally provided by our independent accountants in connection with statutory and regulatory filings or engagements~~objective.

~~Audit-Related~~Compliance ~~Fees~~with ~~consist~~these requirements ofmay ~~fees~~make ~~billed~~it more difficult for ~~assurance~~investors ~~and~~in ~~related~~our ~~services~~common ~~that~~stock ~~are~~to ~~reasonably~~resell ~~related~~their shares to ~~the performance~~third ofparties. ~~the~~Accordingly, our ~~audit~~common orstock ~~review~~should ofonly ~~the~~be ~~Company's~~purchased ~~consolidated~~by ~~financial~~investors ~~statements~~who understand that such investment is a long-term and illiquid investment and are ~~not~~capable ~~reported~~of ~~under~~and ~~"Audit~~prepared ~~Fees~~to bear the risk of holding the common stock for an indefinite period of time."

~~Tax~~ITEM ~~Fees consist of fees billed for professional services for tax compliance, tax advice and tax planning~~1B. ~~These~~ ~~services~~UNRESOLVED ~~include~~STAFF ~~assistance regarding federal and state tax compliance, tax audit defense, customs and duties, and mergers and acquisitions~~COMMENTS.

~~All Other Fees consist of fees billed for products and services provided by the principal accountant, other than those services described above~~None.

~~Audit~~ITEM ~~Committee~~2. ~~Pre-Approval Procedures~~PROPERTIES.

~~Our~~We ~~Board~~rent ofspace ~~Directors~~for our ~~serves~~inventory as ~~our~~required ~~audit~~through ~~committee. Our~~short ~~Board~~term ofarrangements ~~Directors approves the engagement of our independent auditors, and meets~~ with ~~our~~third ~~independent auditors to approve the annual scope of accounting services to be performed and the related fee estimates~~parties. It ~~also~~We ~~meets~~rent ~~with~~ our ~~independent~~corporate ~~auditors,~~headquarters onfor a ~~quarterly~~fixed ~~basis, following completion~~ rate of ~~their~~$2,500 ~~quarterly~~per ~~reviews~~month ~~and~~on ~~annual~~an ~~audit~~informal ~~and~~month ~~prior~~ to ~~our~~month ~~earnings~~basis ~~announcements,~~from ifa ~~any,~~non-affiliated tothird ~~review~~party ~~the~~effective ~~results~~August ~~of their work. During the course of the year~~15, ~~our chairman has the authority to pre-approve requests for services that were not approved in the annual pre-approval process~~2011. ~~The~~Our ~~chairman~~corporate headquarters ~~reports~~are ~~any~~located ~~interim pre-approvals~~ at ~~the~~501 ~~following~~Madison ~~quarterly~~Avenue, ~~meeting. At~~Suite ~~each of the meetings~~501, ~~management~~New ~~and our independent auditors update the Board of Directors with material changes to any service engagement and related fee estimates as compared to amounts previously approved. During 2008~~York, ~~all audit~~ ~~and non-audit services performed by~~NY ~~our independent accountants were pre-approved by the Board of Directors in accordance with the foregoing procedures~~10022.

ITEM 3.

LEGAL PROCEEDINGS.

On April 19, 2012, we 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.

~~Table of Contents~~PART II

~~PART~~ITEM IV5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~Item~~Market ~~15. Exhibits, Financial Statement Schedules.~~Information

~~(a) Exhibits~~Our common stock is currently traded on the OTCQB under the symbol “PBGC”.

Exhibit Number		EXHIBIT
3(i)		Certificate of Incorporation (1)(6)
3(ii)		Articles of Incorporation-ByLaws (1)(6)
3(iii)		Amendments to Articles of Incorporation (1)(6)
3(iv)		Amendments to the Articles of Incorporation October 30, 2003 (2)
4.1		Description of Securities (1)(6)
4.1(i)		Sample Common Stock Share Certificate (1)(6)
4.1(ii)		Description of Securities (2)
4.1(iii)		Sample $0.0001 par value Common Stock Share Certificate (2)
4.1(iv)		Share Escrow Agreement (2)
4.1(iv)(a)		Share Escrow Agreement with signatures (3)
4.1(v)		Form of Lock-Up Agreement (2)
4.1(v)(a)		Lock-Up Agreement of Hugo Barrientos (3)
4.1(v)(b)		Lock-Up Agreement of Omar A. Barrientos (3)
4.1(v)(c)		Lock-Up Agreement of Omar G. Barrientos (3)
4.1(v)(d)		Lock-Up Agreement of Elizabeth Schroeder & Isabel Barrientos (3)
4.1(v)(e)		Lock-up Agreement of Elizabeth Schroeder (3)
4.1(v)(f)		Lock-Up Agreement of Gene Fairchild (3)
4.1(v)(g)		Lock-Up Agreement of Charles A. Koenig (3)
4.1(v)(h)		Lock-Up Agreement of John E. Rayl (3)
4.1(v)(i)		Lock-Up Agreement of Elisa Giordano (3)
4.1(v)(j)		Lock-Up Agreement of Christopher H. Giordano (3)
4.1(v)(k)		Lock-Up Agreement of Michael Giordano (3)
4.1(v)(l)		Lock-Up Agreement of Nicholas Giordano (3)
4.1(v)(m)		Lock-Up Agreement of Birchwood Capital Advisors, Inc. (3)
4.1(vi)(a)		Class A Warrant Agreement dated November 20, 2007 (9)
4.1(vi)(b)		Sample Class A Warrant Certificate (9)
4.1(vii)		Sample Series A Convertible Stock Certificate (9)
4.2		Resolution to Incorporate Spin-Off dated June 16, 1999 (1)(6)
4.3		Resolution for the Transfer of Intellectual Assets dated August 14, 2002 (1)(6)
4.4		Resolution Stock Dividend dated September 20, 2002 (1)(6)
4.5(i)		Payment Agreement Omar Barrientos (1)(6)
4.5(ii)		Payment Agreement Chris Giordano (1)(6)
4.5(iii)		Payment Agreement John E. Rayl (1)(6)
4.5(iv)		Payment Agreement Charles A. Koenig (1)(6)
4.6(i)		Resolution to Issue Stock to Omar Barrientos (1)(6)
4.6(ii)		Resolution to Issue Stock to Chris Giordano (1)(6)
4.6(iii)		Resolution to Issue Stock to John E. Rayl (1)(6)
4.6(iv)		Resolution to Issue Stock to Charles A. Koenig (1)(6)
4.7(i)		Subscription Agreement Omar Barrientos (1)(6)

The following table shows, for each quarter of fiscal 2011 and 2010, the high and low closing sales prices as reported by OTC Markets.

	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

As of April 24, 2012, 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 April 24, 2012 was $0.04 per share.

Dividends

We have never declared or paid any cash dividends with respect to our common stock. We do not anticipate paying cash dividends on our common stock in the foreseeable future. Any future determination with regard to the payment of dividends will be at the discretion of the Board of Directors and will be dependent upon our future earnings, financial condition, applicable dividend restrictions and capital requirements and other factors deemed relevant by the Board of Directors.

Stock Repurchases

None.

Sales of Unregistered Securities

On October 19, 2011, we issued 50,000,000 restricted shares 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.

ITEM 6.

SELECTED FINANCIAL DATA.

Not applicable.

~~Table~~ITEM of7. ~~Contents~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

4.7(ii)		Subscription Agreement Chris Giordano (1)(6)
4.7(iii)		Subscription Agreement John E. Rayl (1)(6)
4.7(iv)		Subscription Agreement Charles A. Koenig (1)(6)
4.8		Resolution of Board of Directors dated May 31, 1997 re: rights of Preferred Stock of USA Sunrise Beverages, Inc. (6)
*4.9(i)		8% Convertible Secured Promissory Note and Security Agreement issued to Arturo Montepara dated November 12, 2008 in the principal amount of $5,000
*4.9(ii)		8% Convertible Secured Promissory Note and Assignment issued to David S. Lee dated December 17, 2008 in the principal amount of $100,000
5.0		Opinion of Counsel dated August 7, 2003 (1)(6)
6.0		2005 Stock Option Plan (7)
10.1		Letter of Intent with Paul Miller Sr. Trust Dated March 31, 2003 (1)(6)
10.2		Stock Purchase Agreement Among The Purchasers Executing This Agreement and Omar Barrientos and Other Stockholders of USA Sunrise Beverage, Inc. dated September 23, 2002 (3)
10.2.a		Stock Purchase Agreement Among The Purchasers Executing This Agreement and Omar Barrientos and Other Stockholders of USA Sunrise Beverage, Inc. dated September 23, 2002 with Schedule I, Appendix A and Exhibit A thereto (4)
10.2b		Sunrise USA Beverages, Inc. Shareholder Solicitation Letter (6)
10.6		Quit Claim Deed and Release dated August 18, 1998 between Dakota Mining and Construction, Inc. and USA Sunrise Beverages, Inc. (6)
10.8		Loan Agreement between Omar Barrientos and USA Sunrise Beverages, Inc. dated January 1, 1994 (6)
10.9		Note Agreement between Dr. Neil Kurti and USA Sunrise Beverages, Inc. dated November 11, 1995 (6)
10.9(i)		Note Satisfaction and Release between Dr. Neil Kurti and USA Sunrise Beverages, Inc. dated September 6, 2002 (3)
10.9(ii)		Agreement For Satisfaction and Release between Paul Miller Sr. Trust and USA Sunrise Beverages, Inc. dated September 4, 2002. (3)
10.9(iii)		Satisfaction of Judgment of Dr. Vincent E. Eilers dated January 19, 2004 (3)
10.9(iv)		Satisfaction and Release between Tesoro Corporation and USA Sunrise Beverages, Inc. executed June, 2002 (3)
12.1		Code of Ethics (8)
*21.1		List of Subsidiaries
*31.1		Rule 13a-14(a)/15d-14(a) Certifications
*32.1		Section 1350 Certifications
		* Filed herewith

The following discussion of our financial condition and results of operations contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and 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 beginning of this Report, below in this section and in the section above entitled “Risk Factors.” You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Report. Except as required by law, 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.

Overview

We are a consumer brand development company focused on creating, marketing and selling compelling functional beverage brands. 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 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 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.

We measure our results primarily through case sales of our products. However, historically, a lack of available capital has significantly limited our sales efforts, the effect of which can been be seen in our results of operations. In October 2011 we entered into a merger transaction intended to provide us with an attractive capital structure to secure financing for production of our products, among other things. We expect that having full stock of our OSO products will have a positive effect on our go forward results of operations. We intend to begin reporting our quarterly case sales as a relevant metric in our financial statements beginning after the quarter in which we have full stock of our products.

Results of Operations

Years Ended December 31, 2011 and 2010

Revenue

For the year ended December 31, 2011, revenue was $95,101, a decrease of $77,992, or 45.1%, from $173,093 in revenue for the year ended December 31, 2010. Our revenues were affected negatively by a lack of available for sale inventory due to financing constraints. In 2010, we offered both flavors of our OSO energy beverage, and in 2011 we only offered our original flavor due to lack of available financing for our products.

~~Table~~For the year ended December 31, 2011, sales allowances and discounts, which are netted from revenue, totaled $8,016, a decrease of ~~Contents~~$5,539, or 40.9%, from $13,555 for the comparable period. The decrease was a primarily a result of lower revenues in 2011 which affected the corresponding sales allowances and discounts. On a percentage of total sales basis, sales allowances and discounts represented 7.5% of total sales in 2011 versus 7.3% in 2010. The increase in percentage sales allowances reflected our efforts to maintain key accounts during period in which we lacked full inventory to satisfy demand. We expect to continue to offer aggressive sales allowances and discounts to our accounts during periods of high growth to attract accounts and combat other promotional efforts from our competitors.

(1)	Incorporated by reference to the attachments filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB filed with the United States Securities and Exchange Commission (the “Commission”) on August 19, 2003 (File #000-50370) (the “Form 10-SB”)
(2)	Incorporated by reference to the Exhibits filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB Amendment No. 1 filed with the Commission on June 4, 2004 (File #000-50370) (the “Form 10-SB/A1”)
(3)	Incorporated by reference to the Exhibits filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB Amendment No. 2 filed with the Commission on November 15, 2004 (File #000-50370) (the “Form 10-SB/A2”)
(4)	Incorporated by reference to the Exhibits filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB Amendment No. 3 filed with the Commission on March 11, 2005 (File #000-50370) (the “Form 10-SB/A3”)
(5)	Incorporated by reference to the Exhibits filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB Amendment No. 4 filed with the Commission on May 23, 2005 (File #000-50370) (the “Form 10-SB/A4”)
(6)	Incorporated by reference to the Exhibits filed with the Registration Statement of Sunrise USA, Incorporated on Form 10-SB Amendment No. 5 filed with the Commission on July 20, 2005 (File #000-50370) (the “Form 10-SB/A5”)
(7)	Incorporated by reference to the Exhibits filed with the Form 14C Information Statement of Sunrise USA, Incorporated, filed with the Commission on February 28, 2006 (File #000-50370) (the “Form 14C”)
(8)	Incorporated by reference to the Exhibits filed with the Form 10K of Sunrise USA, Incorporated, filed with the Commission on March 31, 2006 (File #000-50370)
(9)	Incorporated by reference to the Exhibits filed with the Form 10KSB of Hybrid Dynamics Corporation, for the year ending December 31, 2007 (File #000-50370)

Gross Profit

~~(b) Reports~~For the year ended December 31, 2011, gross profit was $62,884, a decrease of $52,985, or 45.7%, from $115,869 in gross profit for the year ended December 31, 2010. On a percentage of net sales basis, gross profit was 66.1% in 2011 versus 66.9% in 2010. 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 ~~Form~~a ~~10-K: None~~percentage basis even at the lower volumes experienced in 2011.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31, 2011 were $255,975, an increase of $116,008, or 83%, from $139,967 for the year ended December 31, 2010. Selling, general and administrative expenses increased primarily as a result of increased professional fees and expenses related to our merger with DAM Holdings and preparation to enter the public markets. In addition, in the fourth quarter of 2011, we entered into consulting agreements with key individuals that resulted in higher consulting expenses in 2011 versus 2010, primarily as a result of our certain internal requirements to operate as a public company. As part of our growth and expansion plan, we also incurred certain rebranding expenses including designs for corporate identity, packaging, and collateral materials, including websites, in 2011 that were not incurred in 2010.

Other Income (Expense)

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.

Interest Expense

Interest expense was $29,799 for the year ended December 31, 2011, an increase of $4,898 from $24,901 for the year ended December 31, 2010. We finance our products through the issuance of notes to certain third party lenders. The notes typically have a funded amount and a face amount, and do not bear interest. We recognize interest as the difference between the face amount and the funded amount, amortized over the life of the note.

Net Income

Net loss for the year ended December 31, 2011 was $204,359, an increase of $155,360 from a loss of $48,999 for the year ended December 31, 2010. 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 and Capital Resources

As of December 31, 2011, we had a working capital deficit of $453,630. Included in the deficit were accounts payable and accrued expenses of $218,586 and notes payable in the amount of $353,803. The majority of our working capital deficit is related to outstanding balances from our merger transaction with Dam Holdings, which we expect to satisfy through negotiated repayments and retirements in due course. We receive cash through the sale of our products through our wholly owned distributor, Fury Distribution Holdings LLC. To date, we have financed our operations, primarily the production of inventory, through the issuance of debt to private investors.

~~Table~~As of ~~Contents~~December 31, 2011 and 2010, we had cash and cash-equivalents of $21,862 and $2,521, respectively. 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.

~~SIGNATURES~~Net cash provided by 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. For the year ended 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. 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.

InNote ~~accordance~~Purchase Agreement. We have in place a Note Purchase Agreement with ~~Section~~Prestwick 13Circle orService 15Corp. (d“Prestwick”) which provides for maximum non-interest bearing advances to us of ~~the~~$387,100, ~~Exchange~~of ~~Act~~which $187,100 has been advanced and is evidenced by an unsecured convertible promissory note in that amount. Prestwick has defaulted on its obligation to purchase, and the ~~registrant~~Company has ~~caused~~issued ~~this~~a ~~report~~demand letter with respect to bethe ~~signed~~remaining onbalance ~~its~~of ~~behalf~~$200,000. byAlthough Prestwick has provided repeated assurances that funding will occur under the ~~undersigned~~Note Purchase Agreement, ~~thereunto~~there ~~duly~~is ~~authorized~~no assurance that funding will in fact occur.

Dated September 20, 2011	By:	/s/ MARK KLEIN
		Mark Klein
		President, Chief Executive Officer, Principal Financial Officer and Sole Director

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.

*21.1	List of Subsidiaries
*31.1	Rule 13a-14(a)/15d-14(a) Certifications
*32.1	Section 1350 Certifications
	* Filed herewith

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 from the issuance of these equity securities and secured promissory notes will provide sufficient capital for its operations through August 2012.

We also intend to offer $500,000 of 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.

Our capital requirements depend on several factors and are primarily related to our product development expenses and inventory purchases. We may seek to sell equity or debt or obtain a credit facility in addition to our current planned equity placement. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders, and incurring additional indebtedness would result in an increase in our fixed obligations and could result in borrowing covenants that would restrict our operations. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If financing is not available when required or is not available on acceptable terms, we may be unable to continue to grow our business. In addition, we may be unable to take advantage of business opportunities or respond to competitive pressures. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

~~Table~~Our inability to raise equity capital to support our 2012 operating plans and production of ~~Contents~~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 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.

~~DAM~~Contractual ~~Holdings, Inc. and Subsidiaries~~Obligations

IWe Nentered Dinto Econsulting agreements Xwith certain key members of our business effective October 1, 2011. Under these consulting agreements, we are contractually obligated to pay certain consultants a monthly retainer for their services.

Report of Independent Registered Public Accounting Firm	F-2
Comparative Consolidated Balance Sheet December 31, 2010 and 2009	F-3
Consolidated Statement of Operations For the Years Ended December 31, 2010 and 2009	F-4
Consolidated Statement of Cash Flow For the Years Ended December 31, 2010 and 2009	F-5 to F-6
Statement of Stockholder’s and Member’s Equity For the Years Ended December 31, 2010 and 2009	F-7
Notes to the Consolidated Financial Statements	F-8 to F-20

Off-balance Sheet Arrangements

FWe have no off-balance sheet 1arrangements.

~~Table~~Critical ofAccounting ~~Contents~~Policies

~~REPORT~~The OFdiscussion ~~INDEPENDENT~~and ~~REGISTERED~~analysis of ~~PUBLIC~~our ~~ACCOUNTING~~financial ~~FIRM~~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.

ToITEM ~~the~~7A. ~~Board~~QUANTITATIVE ofAND ~~Directors~~QUALITATIVE ofDISCLOSURES ABOUT MARKET RISK.

~~DAM~~Item ~~Holdings,~~is ~~Inc~~inapplicable. ~~and Subsidiaries~~

WeITEM ~~have audited the accompanying consolidated balance sheets of DAM Holdings, Inc~~8. ~~and~~FINANCIAL ~~Subsidiaries~~STATEMENTS ~~(“the~~AND ~~Company)~~SUPPLEMENTARY ~~as of December 31, 2010 and 2009, and the related consolidated statement of operations, stockholders’ deficit and cash flows for the years ended December 31, 2010 and 2009~~DATA. ~~These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.~~

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated statements are free of material misstatement. The ~~Company is not required to have, nor were we engaged to perform an audit of the Company’s internal control over~~ financial ~~reporting.~~statements ~~Our audit included consideration~~ of ~~internal control over financial reporting as a basis for designing audit procedures that are appropriate in~~ the ~~circumstances, but not for the purpose of expressing an opinion on the effectiveness of the~~ Company~~’s internal control over financial~~ ~~reporting.~~are ~~Accordingly,~~set weforth ~~express~~beginning ~~no such opinion. An audit includes examining,~~ on apage ~~test~~F-1 ~~basis,~~immediately ~~evidence~~following ~~supporting~~ the ~~amounts~~signature ~~and~~page ~~disclosures~~of inthis the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentationreport. ~~We believe that our audit provides a reasonable basis for our opinion.~~

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DAM Holdings, Inc. and Subsidiaries as of December 31, 2010 and 2009 and the results of its operations, and cash flows for the years ended December 31, 2010 and 2009 in conformity with accounting principles generally accepted in the United States of America.

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

~~The~~Item ~~Company's~~9. ~~financial~~Changes ~~statements~~in ~~are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets~~ and ~~liquidation~~Disagreements ofWith ~~liabilities~~Accountants inon ~~the~~Accounting ~~normal course of business. The Company has accumulated deficit of $2,866,787 as of December 31, 2010~~ and ~~has~~Financial incurred a net loss of $260,535 for the year ended December 31, 2010. These factors as discussed in notes to the financial statements raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3 to the consolidated financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Disclosure

~~/s/ Gruber & Company, LLC~~None.

~~Gruber & Company, LLC Lake Saint Louis, Missouri September 19, 2011~~25

FITEM -9A. 2CONTROLS AND PROCEDURES.

~~Table~~Disclosure ofControls ~~Contents~~and Procedures

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

~~Comparative~~Management’s ~~Consolidated~~Report ~~Balance~~on ~~Sheet~~Internal Control over Financial Reporting

AsOur 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, ~~December~~our 31principal executive and financial officer, ~~2010~~or persons performing similar functions, and ~~2009~~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:

	December 31			December 31
	2010			2009
	(Audited)			(Audited)
ASSETS
Current Assets:
Cash	$	124		$	696
Accounts Receivable		-			-
Prepaid Expenses		295			6,295
Inventory (net of valuation reserve of $11,623 and $13,580 respectively)		94,552			92,738
Total Current Assets		94,971			99,729
Equipment		8,339			36,608
Less: Accumulated Depreciation		(7,853	)		(22,008	)
Total Equipment		486			14,600
Total Assets	$	95,457		$	114,329
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable	$	198,218		$	118,903
Accrued Payroll Taxes Payable		29,980			56,550
Promissory Notes Payable Officers		186,083			61,979
Promissory Notes Payable		200,677			111,825
Current Portion of Long Term Notes Payable		63,014			87,052
Total Current Liabilities		677,972			436,309
Total Liabilities		677,972			436,309
Stockholders' Deficit
Preferred Stock - $0.0001 par value, 900,000 shares
authorized no shares issued and outstanding		-			-
Series A Preferred Stock - $5 stated value, 660,000 shares
authorized 60,000 shares issued and outstanding		300,000			300,000
Series B Preferred Stock - $500 stated value, 2,000 shares
authorized 30 shares issued and outstanding		15,000			15,000
Common Stock - $.00015 par value, 99,000,000 shares
authorized, 1,291,939 shares issued and outstanding		194			194
Additional Paid-In Capital		1,969,078			1,969,078
Accumulated Deficit		(2,866,787	)		(2,606,252	)
Total Stockholders' Deficit		(582,515	)		(321,980	)
Total Liabilities and Stockholders' Deficit	$	95,457		$	114,329

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

~~The~~2. ~~accompanying~~Provide ~~notes~~reasonable assurance that transactions are anrecorded ~~integral~~as ~~part~~necessary ofto ~~these~~permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the registrant; and

F3. -Provide 3reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

~~Table~~Management conducted an evaluation of ~~Contents~~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.

~~DAM~~A ~~HOLDINGS~~material weakness is a control deficiency, or ~~INC~~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 ~~SUBSIDIARIES~~concluded that our internal control over financial reporting was not effective as of December 31, 2011.

~~Consolidated~~The ~~Statement~~Company’s ofassessment ~~Operations~~identified certain material weaknesses which are set forth below:

~~For~~Entity ~~the~~Level ~~Years Ended December 31, 2010 and 2009~~Controls

	For The Year Ending December 31
	2010			2009
	(Audited)			(Audited)
Revenues	$	3,885		$	49,188
Cost of Goods Sold		1,802			21,471
Gross Profit		2,083			27,717
Operating Expenses
General and Administrative		219,406			238,823
Stock based compensation		-			75,658
Depreciation and amortization		5,696			12,999
Total Operating Expenses		225,102			327,480
Other Expenses
Interest expense		(43,047	)		17,845
Other income		5,531			-
Net Income (Loss)	$	(260,535	)	$	(317,608	)
Basic net loss per share before extraordinary item	$	(0.20	)	$	(3.59	)
Basic net income from extraordinary item	$	-		$	-
Basic net loss per share	$	(0.20	)	$	(3.59	)
Weighted average shares outstanding		1,291,939			88,467

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

~~The accompanying notes are an integral part of these financial statements~~26

FWe 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 4transactions. In addition, the limited size of the accounting department makes it impractical to achieve an optimum segregation of duties.

~~Table~~Functional Controls and Segregation of ~~Contents~~Duties

~~DAM~~We ~~HOLDINGS~~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 ~~INC~~is not feasible to hire additional staff to obtain optimal segregation of duties. &Management ~~SUBSIDIARIES~~intends to reassess this matter during the current fiscal year to determine whether improvement in segregation of duties is feasible.

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

~~For~~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 ~~Years~~function ~~Ended~~when ~~December~~funds 31are 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, ~~2010~~as necessary and ~~2009~~as funds allow. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies, including:

	For The Year Ending December 31
	2010			2009
	(Audited)			(Audited)
Cash Flows from Operating Activities
Net (Loss)	$	(260,535	)	$	(317,608	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation & amortization		5,696			12,999
Stock based compensation expenses		-			75,658
Officers compensation contributed to capital					172,410
Changes in assets and liabilities:
Accounts receivable		-			244
Prepaid expenses		(6,000	)		(4,045	)
Inventory		(1,814	)		(6,989	)
Accounts payable		79,315			62,386
Accrued payroll and payroll taxes		118,145			(56,549	)
Notes Payable		61,076			-
Net Cash Used in Operating Activities		(4,117	)		(61,494	)
Cash Flows Used in Investing Activities:
Sale of equipment		3,545			(32,807	)
Cash Flows Used in Investing Activities		3,545			(32,807	)
Cash Flows From Financing Activities:
Sale of securities for cash, net		-			15,100
Proceeds from notes payable		-			16,700
Payment on notes payable		-			(2,753	)
Net Cash From Financing Activities		-			29,047
Net (Decrease) Increase in Cash	$	(572	)	$	(65,254	)
Cash at Beginning of Period		696			65,950
Cash at End of Period	$	124		$	696

(1)

Adding personnel with the depth of knowledge and time commitment to provide a greater level of review for corporate activities;

~~Supplemental~~(2) ~~Disclosures~~Continuing to update the documentation of ~~Cash~~our ~~Flow~~internal ~~Information:~~control processes, including formal risk assessment of our financial reporting processes; and

~~Cash~~(3) ~~paid~~Soliciting ~~during~~independent ~~the~~directors ~~periods~~to ~~ending~~enhance ~~December~~corporate ~~31:~~governance and Board composition.

	2010		2009
Interest	$	-0-	$	1,172
Income taxes	$	-0-	$	-0-

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

FChanges -in 5Internal Control over Financial Reporting

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

~~Supplemental~~ITEM Schedule of Non-cash Investing and Financing Activities; For the year ended December 31, 2010: The Company issued promissory notes in payment of accrued officers compensation and accounts payable due shareholders in the amount of $193,6719B. ~~For~~OTHER ~~the year ended December 31, 2009: The Company issued common stock for services in the amount of $54,594~~INFORMATION. The Company issued promissory notes in payment of accrued officers compensation and accounts payable due shareholders in the amount of $150,000. The Company issued common stock to convert a note payable in the amount of $108,876. The Company issued common stock in termination of a royalty agreement in the amount of $7,549. The Company issued common stock pursuant to antidilution agreements in the amount of $8,360. An officer and two shareholders contributed services and indebtedness to the capital of the Company in the amounts of $172,410 and $140,670, respectively.

~~The accompanying notes are an integral part of these financial statements~~None.

FPART ~~- 6~~III

~~Table~~ITEM of10. ~~Contents~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

~~DAM HOLDINGS, INC. & SUBSIDIARIES~~Directors

~~Statements~~Our Board of ~~Stockholder’s~~Directors ~~Deficit~~as of April 24, 2012 is as follows:

For the Years Ending December 31, 2010 and 2009

Director		Age		Director Since
Fouad Kallamni		34		October 2011

	Preferred Stock				Class A Preferred				Class B Preferred				Common Stock				Additional		Accumulated			Total
	Number of				Number of				Number of				Number of				Paid-in		Retained			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		(Deficit)			(Deficit)
Balance, December 31, 2008		-	$	-		60,000	$	300,000		-	$	-		56,628	$	8	$	1,474,310	$	(2,288,644	)	$	(514,326	)
										.
Shares issued for cash:
Shares of Series B preferred stock										30		15,000											15,000
Shares of common stock														400		-		100					100
Shares issued in conversion of debt														118,653		18		108,858					108,876
Shares issued in termination of royalty agreement														28,371		4		7,545					7,549
Share issued for services														863,350		130		54,464					54,594
Shares issued in payment of accounts payable														50,000		8		2,388					2,395
Shares issued under antidilution agreements														174,537		26		8,334					8,360
Indebtedness contributed by shareholders																		140,670					140,670
Compensation contributed by shareholders																		172,410					172,410
Net loss																				(317,608	)		(317,608	)
Balance, December 31, 2009		-	$	-		60,000	$	300,000		30	$	15,000		1,291,939	$	194	$	1,969,078	$	(2,606,252	)	$	(321,980	)
Net loss																				(260,535	)		(260,535	)
Balance, December 31, 2010		-	$	-		60,000	$	300,000		30	$	15,000		1,291,939	$	194	$	1,969,078	$	(2,866,787	)	$	(582,515	)

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 ~~accompanying~~Fresh ~~notes~~Market ~~are~~and another ~~integral~~retail ~~part~~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 ~~these~~event ~~financial~~marketing ~~statements~~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.

FExecutive ~~- 7~~Officers

~~Table~~Our sole executive officer as of ~~Contents~~April 24, 2012 was as follows:

DAM HOLDINGS, INC. & SUBSIDIARIES

Name		Age		Position		Officer Since
Fouad Kallamni		34		President		October 2011

~~NOTES~~Please TOrefer ~~CONSOLIDATED~~to ~~FINANCIAL~~Mr. ~~STATEMENTS~~Kallamni’s biography in the preceding section “Directors.”

~~NOTE~~Code 1of ~~– DESCRIPTION OF BUSINESS~~Ethics

~~DAM~~The Holdings, Inc. (“DAMH”) is a Nevada corporation incorporated on July 22, 1999. DAMH is a non-operating holding company owning 100% of the capital stock of Delaware American Motors, Inc. a Nevada corporation (“DAM”) and DAMCompany’s Code ~~wholly~~of ~~owned~~Ethics ~~subsidiary~~may ~~Delaware~~be ~~American~~found ~~Motors LLC a Delaware limited liability company (DAMLLC) which was acquired in a purchase acquisition transaction completed~~ on ~~May 13, 2008 (~~the ~~“DAM Acquisition Date”). DAMLLC was organized in 2002 as a custom motorcycle manufacturer and is the~~ Company’s ~~principal operating subsidiary. DAMH~~website, ~~DAM and DAMLLC are collectively referred to hereafter as the “Company”~~www.premierbeveragegroup.com.

~~2009~~Section 16(a) ~~Reverse~~Beneficial ~~Split~~Ownership Reporting ~~of Common Stock~~Compliance

OnSection 16(a) of ~~September~~the ~~14,~~Securities ~~2009~~Exchange ~~(the~~Act ~~“Effective~~of ~~Date”)~~1934, ~~the~~as ~~Company~~amended, ~~filed~~requires anour ~~amendment~~directors toand ~~its~~executive ~~articles~~officers, ofand ~~incorporation~~persons ~~which~~who ~~reduced~~own ~~the~~more ~~number~~than 10% of ~~shares~~our ofcommon ~~issued~~stock ~~and~~(collectively, ~~outstanding~~“Reporting ~~common~~Persons”) ~~stock~~to ~~$0.00015~~file ~~par~~with ~~value~~the ~~from~~Securities ~~13,758,706~~and ~~shares~~Exchange toCommission ~~68,794~~(SEC) initial ~~shares;~~reports aof ~~200:1~~ownership ~~reverse~~and ~~split~~reports ~~(the~~of ~~“Reverse~~changes ~~Split”). All~~in ~~references~~ownership toof our common stock. inReporting ~~the~~Persons ~~accompanying~~are ~~financial~~also ~~statements~~required ~~and~~by ~~these~~SEC regulations ~~notes~~to ~~have~~furnish ~~been~~us ~~adjusted~~with tocopies ~~the~~of ~~number~~all ofsuch ~~shares~~ownership ofreports ~~common~~they ~~stock~~file. ~~equivalent~~SEC regulations also require us to ~~DAMH’s~~identify ~~$0.00015~~in ~~par~~this Report ~~value~~any ~~common~~Reporting ~~stock~~Person who failed to file any such report on a ~~post-reverse~~timely ~~split~~ basis.

~~NOTE~~To 2the –Company’s knowledge ~~SUMMARY~~based OFsolely ~~SIGNIFICANT~~on ~~ACCOUNTING~~a ~~POLICIES~~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:

Principles of Consolidation

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

~~The~~Audit ~~accompanying consolidated financial statements include the accounts of all subsidiaries after elimination of all intercompany accounts, transactions, and profits.~~Committee

~~Use~~We do not have an Audit Committee. All functions of ~~Estimates~~an audit committee are performed by Mr. Kallamni as our sole director

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.28

~~Revenue~~ITEM ~~Recognition~~11. EXECUTIVE COMPENSATION.

~~Revenue~~Summary ~~from~~Compensation ~~product sales is recognized at the time products are shipped and title transfers. Allowances for returned products, charge backs and other credits are estimated and recorded as revenue is recognized.~~Table

FThe -following 8table shows all compensation awarded, earned by or paid to our Named Executive Officers for the fiscal years ended December 31, 2011 and 2010, to the extent applicable.

Table of Contents

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

~~Cash~~1 ~~and~~Mr. ~~Cash~~Kallamni ~~Equivalents~~was appointed President of the Company on November 8, 2011.

~~The~~2 ~~Company~~Mr. ~~considers~~Kallamni ~~all~~does ~~highly~~not ~~liquid~~have an ~~investments~~employment ~~purchased~~agreement with anthe ~~original~~Company. ~~maturity~~He ofwas ~~three~~compensated ~~months~~in or2011 ~~less~~pursuant to bea ~~cash~~one ~~equivalents.~~year ~~Cash~~consulting isagreement ~~held~~at ~~primarily~~the inrate ~~one~~of $25,325 ~~bank.~~for Atthe ~~December 31,~~month ~~2010~~of October and ~~2009~~at the ~~Company~~rate ~~had~~of $10,000 per month thereafter. Of that amount, $25,325 was paid in cash onand the ~~hand~~balance of $~~124~~20,000 ~~and~~was accrued pending the closing of a round of financing of $~~696~~1 ~~respectively~~million or more.

~~Accounts~~3 ~~Receivable~~Mr. ~~Allowances~~Klein resigned as President, Secretary and Director effective October 19, 2011.

~~Management~~Outstanding ~~maintains~~Equity ~~allowances~~Awards ~~for~~at ~~doubtful~~Fiscal Year-End ~~accounts~~2011 for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.Table

~~Inventories~~There were no equity awards held by our Named Executive Officer as of December 31, 2011.

~~Inventories~~Director are stated at the lower of cost (first-in, first-out) or market. The Company has recorded an allowance for slow moving and obsolete inventory of $11,623 at December 31, 2010 and $13,580 at December 31, 2009.Compensation

	2010		2009
Motorcycles for sale	$	83,246	$	83,246
Parts and supplies		22,929		23,072
Less valuation allowance		11,623		13,580
	$	94,552	$	92,738

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

~~Property,~~ITEM ~~Plant~~12. ~~and~~SECURITY ~~Equipment~~OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

~~Property,~~The ~~plant~~following ~~and~~table sets ~~equipment~~forth ~~are carried at original cost. Expenditures for betterments and additions are capitalized, while maintenance and repairs are charged to operations~~ as ~~incurred. Upon sale, retirement or other disposition~~ of ~~property,~~April ~~plant and equipment~~24, ~~the~~2012 ~~cost~~certain ~~and~~information ~~accumulated~~regarding ~~depreciation are eliminated from~~ the ~~accounts~~beneficial ~~and~~ownership ~~gain~~of orour ~~loss~~outstanding iscommon ~~included~~stock inby the ~~statement~~following persons ofor ~~income.~~groups:

~~Depreciation~~• iseach ~~computed~~person who, ~~generally~~to ~~using~~our ~~the~~knowledge, ~~straight~~beneficially ~~line~~owns ~~method~~more ~~over~~than ~~the~~5% ~~following estimated useful lives~~ of ~~the~~our ~~various~~common ~~classes~~stock; ~~of assets:~~and

	Years
Buildings and improvements		40
Machinery and equipment		10
Office furniture and equipment		3 – 7

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

~~Trademarks~~As of April 24, ~~Patents~~2012 there were 61,201,483 shares of common stock issued and ~~Copyrights~~outstanding, held by approximately 212 holders of record, although there are a larger number of beneficial owners. Unless otherwise indicated, each person's address is c/o Premier Beverage Group Corp, 501 Madison Avenue, Suite 501, New York, NY 10022.

~~The~~Beneficial ~~direct~~ownership is ~~costs~~determined ~~associated~~in accordance with ~~the~~SEC ~~filing~~rules ofand ~~the~~includes ~~Company’s~~shares ~~copyrights,~~over ~~trademarks~~which ~~and~~the ~~patents~~indicated ~~have~~beneficial ~~been~~owner ~~capitalized~~exercises voting and/or investment ~~are~~power. ~~amortized~~Shares ~~over~~of ~~the~~common ~~effective~~stock ~~period~~subject ofto ~~the~~options ~~related~~or ~~trademarks~~warrants orcurrently ~~patents~~exercisable ~~once~~or ~~granted~~exercisable ~~(20~~within ~~and~~60 days of 21March 27, ~~years).~~2012 ~~The~~are ~~Company~~deemed ~~follows~~outstanding ~~ASC~~for ~~Topic~~computing ~~360,~~the ~~formerly~~percentage ~~SFAS~~ownership ~~144~~of ~~“Accounting~~the ~~for~~person holding the ~~Impairment~~options or ~~Disposal~~warrants, but ofare ~~Long-Lived~~not ~~Assets,~~deemed ~~which~~outstanding ~~requires~~for acomputing ~~review~~the percentage ownership of ~~the~~any ~~Company’s~~other ~~trademarks~~person. ~~and~~Except ~~patents~~as beotherwise ~~made~~indicated ~~whenever~~and ~~events~~subject to orcommunity ~~changes~~property inlaws ~~circumstances~~where ~~indicate~~applicable, ~~that~~we believe the ~~carrying~~beneficial ~~amount~~owners of the ~~patents~~common ~~may~~stock ~~not~~listed bebelow, ~~recoverable.~~based Ason ofinformation furnished ~~the~~by ~~date~~them, ofhave ~~these~~sole ~~consolidated~~voting ~~financial~~and ~~statements,~~investment nopower ~~such~~with ~~events~~respect ~~have~~to ~~occurred~~the shares listed opposite their names.

~~F - 9~~29

Table of Contents

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

~~Long~~Equity ~~Lived~~Compensation ~~Assets~~Plan Information

~~Long-lived~~We ~~assets~~have consist primarily of property and equipment. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. The Company evaluates whether impairment exists for property and equipment on the basis of undiscounted expected future cash flows from operations before interest. If impairment exists, the carrying amount of the long-lived assets is reduced to its estimated fair value, less any costs associated with the final settlement. For the years ended December 31, 2010 and 2009 there was no ~~impairment~~equity ~~of the Company’s long-lived assets~~compensation plans.

~~Income~~ITEM ~~Taxes~~13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

~~The~~There ~~Company~~have ~~follows~~been ~~ASC~~no related ~~740~~person ~~Income~~transactions ~~Taxes,~~required ~~formerly~~to ~~SFAS~~be ~~No.~~disclosed ~~109,~~pursuant Accounting for Income Taxes, which requires the use of the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Future tax benefits, including net operating loss carryforwards, are recognized to ~~the~~Item 404(a) ~~extent~~or ~~that~~Item 407(a) ~~realization~~ of ~~such benefits is more likely than not to occur~~Regulation S-K.

~~Fair~~Fouad ~~Value~~Kallamni, ofour sole ~~Financial~~director, ~~Instruments~~is our President and is not an “independent” director.

~~The~~ITEM ~~Company’s financial instruments consist of long-term debt, interest rate swaps, accounts receivable, and accounts payable~~14. ~~The~~PRINCIPAL ~~carrying~~ACCOUNTANT ~~amount~~FEES ofAND ~~these financial instruments approximated their fair value~~SERVICES.

~~ASC~~Liebman ~~Topic~~Goldberg ~~825~~& Hymowitz ~~formerly~~LLP ~~SFAS~~audited ~~159~~our ~~“The~~financial ~~Fair~~statements ~~Value Option~~ for ~~Financial~~the ~~Assets~~year ~~and~~ended ~~Financial Liabilities” issued to define fair value~~December 31, ~~establish~~2011 ~~a framework for measuring fair value~~ and ~~to expand disclosures about fair value measurements. This standard does not change~~ the ~~requirements~~financial tostatements ~~apply~~of ~~fair~~our ~~value~~predecessor entity infor ~~existing~~year ~~accounting~~ended ~~standards.~~December ~~Under this standard~~31, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts2010. ~~The standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability.~~

ToAudit ~~increase consistency~~ and ~~comparability~~Related in fair value measurements, this standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy disclosed is based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:Fees

●The ~~Level~~following 1table sets ~~inputs~~forth ~~are~~the ~~quoted~~aggregate ~~prices~~fees ~~(unadjusted)~~billed inby ~~active~~Liebman ~~markets~~Goldberg ~~for~~& ~~identical~~Hymowitz ~~asset~~LLP orfor ~~liabilities~~professional ~~that~~services ~~the~~rendered ~~company~~in ~~has~~fiscal ~~the~~years ended ~~ability~~December 31, to2011 ~~access~~and as2010, ~~of the reporting date~~respectively.

F - 10

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

~~Table~~1 “Audit Fees” represent fees for professional services provided in connection with the audit of ~~Contents~~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. We did not file any Forms 10-Q in 2011.

~~● Level~~ 2 ~~inputs~~“Audit-Related ~~are~~Fees” ~~inputs~~generally ~~other~~represent ~~than~~fees ~~quoted~~for ~~prices~~assurance ~~included~~and ~~within~~related ~~Level~~services 1reasonably ~~that~~related ~~are~~to ~~observable for~~ the ~~asset~~performance orof ~~liability,~~the ~~either~~audit ~~directly~~ or ~~indirectly~~review ~~through~~of ~~corroboration~~our ~~with~~financial ~~observable market data~~statements.

~~● Level~~ 3 ~~inputs~~“Tax ~~are~~Fees” ~~unobservable~~generally ~~inputs,~~represent ~~such~~fees ~~as internally developed pricing models~~ for ~~the~~tax ~~asset or liability due to little or no market activity for the asset or liability~~advice.

~~There were no recurring or non-recurring fair value measurements for either the year ended December 31, 2010 or 2009.~~PART IV

InItem ~~March~~15. ~~2008,~~Exhibits ~~the FASB issued a standard to amend~~ and ~~expand~~Financial ~~the~~Statement disclosure requirements of derivative instruments with the intent to provide users of the financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how these derivatives are accounted for and how the respective reporting entity’s financial statements are affectedSchedules. ~~The Company adopted this standard on January 1, 2009.~~

~~The~~(a) Documents ~~Company~~filed ~~has~~as nopart ~~derivative~~of ~~instruments~~this Report atare ~~December~~as ~~31, 2010 or 2009.~~follows:

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

~~Basic~~2) Financial ~~earnings~~Statement ~~per~~Schedules: All ~~common~~schedules ~~share~~have isbeen ~~computed~~omitted ~~based~~because onthey ~~the weighted average number of common shares outstanding during the period. Diluted earnings per common share~~ are ~~computed~~not ~~similarly~~applicable ~~but~~or ~~include~~not ~~the~~required, ~~effect~~or of the ~~assumed~~required ~~exercise~~information ofis ~~dilutive~~included ~~stock~~in ~~options and vesting of restricted stock under~~ the financial ~~treasury~~statements ~~stock~~or ~~method~~notes thereto.

	2010				2009
Net loss		$	(260,535	)	$	(317,608	)
Weighted average common shares outstanding			1,291,939			88,467
Plus: dilutive options assumed exercised			-			-
Plus: weighted average non-vested restricted stock			-			-
Less: shares assumed repurchased with proceeds from exercise			-			-
Weighted average common and potentially issuable common shares outstanding			1,291,939			88,467
Basic earnings (loss) per common share		$	(0.20	)	$	(3.59	)
Diluted earnings per common share		$	n/a		$	n/a

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

~~Common share equivalents of 215,600 shares at December 31, 2010 and 2009 were not included in diluted earnings per share as they were anti-dilutive.~~30

~~F - 11~~EXHIBIT INDEX

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

Research and Development

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

~~All~~(1) ~~costs~~Incorporated incurred to establish the technological feasibility of new products or technology to be sold, leased, or otherwise marketed are charged to expense. Technological feasibility is established when a product design and a working model of the product have been completed and confirmed by ~~testing.~~reference ~~Costs~~from ~~to produce or purchase technology incurred subsequent to establishing technological feasibility are capitalized. Capitalization of costs ceases when~~ the ~~product~~Registration isStatement ~~available~~on ~~for~~Form ~~general~~10-SB ~~release~~on toAugust customers. Costs to perform consulting or development services are charged to cost of revenues in the period in which the corresponding revenues are recognized. Costs of maintenance and customer support are charged to expense when related revenue is recognized or when these costs are incurred19, ~~whichever occurs first.~~2003

~~All~~(2) ~~costs~~Incorporated ~~associated~~by ~~with~~reference ~~the~~from ~~development, production and sale of~~ the ~~DAM~~Registration ~~and~~Statement ~~Pukka~~on ~~technologies~~Form ~~have~~10-SB ~~been~~Amendment ~~expensed~~No. in1 ~~the~~filed ~~periods~~on toJune ~~which~~4, ~~they relate.~~2004

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

~~In January 2010, the Financial Accounting Standards Board~~ (~~“FASB”~~4) ~~issued~~Incorporated ~~Accounting~~by ~~Standards~~reference ~~Update~~from (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements,” an amendment to Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” The standard requires disclosure for transfers in and out of Level 1 and Level 2, as well as the ~~disclosure~~Quarterly ofReport ~~Level 3 activity~~ on aForm ~~gross,~~10-QSB ~~rather~~filed ~~than~~on ~~net,~~November ~~basis. The guidance also requires enhancements to certain existing disclosures. The amendments are effective as of the beginning of our fiscal year 2011~~15, or July 1, 2010, except for the new requirements regarding Level 3 activity, which is deferred until the beginning of fiscal year 2012. The guidance is not expected to have an impact on the Company’s consolidated financial statements.2007

In December 2010, the FASB issued guidance to clarify disclosure requirements for pro-forma information on revenues and earnings for business combinations. This guidance clarifies that where comparative financial statements are presented, revenue and earnings of the combined entity should be disclosed as though the business combination(s5) ~~that~~Incorporated ~~occurred~~by ~~during~~reference ~~the~~from ~~current reporting period had occurred as of~~ the ~~beginning~~Quarterly ofReport ~~the~~on ~~comparable~~Form ~~prior annual reporting period. This guidance also expands disclosure requirements to include a description of the nature and amount of material, non~~10-~~recurring~~QSB ~~pro-forma~~filed ~~adjustments~~on ~~directly~~November ~~attributable to the business combination included in the reported pro-forma revenue and earnings. The Company adopted the provisions of this guidance effective January 1~~14, ~~2011 and there was no impact on the consolidated condensed financial statements resulting from the adoption of this guidance.~~2008

In(6) ~~December~~Incorporated 2010, the FASB issued amended goodwill impairment testing guidance for reporting units with an overall nil or negative carrying amount, but a positive goodwill balance. This amended guidance requires that for these reporting units, the second stage of goodwill impairment testing should be performed when it is considered more likely than not that goodwill impairment exists. This assessment should be made by ~~considering~~reference ~~whether~~from ~~there are any adverse qualitative factors indicating impairment of~~ the ~~goodwill.~~Quarterly ~~The~~Report ~~standard~~on isForm ~~effective~~10-QSB ~~for~~filed ~~our~~on ~~fiscal~~August ~~year beginning July 1~~13, ~~2011 and is not expected to have an impact on the Company’s consolidated financial statements.~~2009

F(7) Incorporated by reference from the Quarterly Report on Form 10-QSB 12filed on November 18, 2009

~~Table~~(8) ofIncorporated ~~Contents~~by reference from the Current Report on Form 8-K filed on December 1, 2011

We(9) ~~have~~Incorporated ~~determined~~by ~~that~~reference ~~all~~from ~~other~~the ~~recently~~Annual ~~issued~~Report ~~accounting~~on ~~standards~~Form ~~will~~10-KSB ~~not~~for ~~have~~the ayear ~~material~~ending ~~impact~~December ~~on our Consolidated Financial Statements~~31, ~~or do not apply to our operations.~~2007

~~NOTE~~(10) 3Incorporated –by ~~GOING~~reference ~~CONCERN~~from the Current Report on Form 8-K filed on October 27, 2011

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company incurred a net loss of $260,535 and $317,608 for the years ended December 31, 2010 and 2009 respectively and as of December 31, 2010 the Company has an accumulated deficit of $2,866,787 and a working capital deficit of $583,001. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern.

~~The~~(11) ~~Company’s~~Incorporated ~~ability~~by toreference ~~continue~~from asthe aCurrent ~~going~~Report ~~concern is dependent upon its ability to raise capital through equity and debt financing or other means~~ on ~~desirable~~Form ~~terms.~~8-K Iffiled ~~the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained~~ on ~~favorable~~October ~~terms~~24, management may be required to, liquidate available assets, restructure the company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.2011

~~NOTE~~(12) 4Incorporated –by ~~PLAN~~reference OFfrom ~~0PERATIONS~~the Current Report on Form 8-K filed on December 15, 2011

~~The~~(13) ~~current~~Incorporated ~~economic~~by ~~environment~~reference infrom the ~~U.S.~~Current ~~and~~Report ~~abroad though slightly improved overall during 2010 has continued to deteriorate throughout 2010 in respect to the motorsport industry. The effect of this deterioration~~ on ~~the~~Form Company is expected to be significant. The Company is a young company with a new brand and a high dollar value luxury product. Over the next twelve months we intend to build our brand name “Delaware American Motors” based upon the introduction of the Tech Twin American 13C Series and Tech Twin American Signature Series of high8-~~performance~~K/A ~~heavy~~filed ~~weight~~on ~~motorcycles.~~December ~~Competition in the heavyweight motorcycle market is based upon a number of factors~~23, including price, quality, reliability, styling, product features, customer preference and warranties. In the U.S., suggested retail prices for the Company’s motorcycles range from being comparable to, to higher than the suggested retail prices for comparable motorcycles available in the market.2011

~~Our~~(14) ~~plan~~Incorporated ofby ~~operation~~reference ~~for~~from the ~~coming~~Annual ~~year~~Report ~~is to focus~~ on ~~obtaining~~Form ~~the~~10-KSB ~~financing~~for ~~necessary to undertake our goals of: (i)~~ the ~~development~~year ofending ~~our~~December ~~Tech Twin American 13C Series and Tech Twin American Signature Series of motorcycles~~31, ~~(ii) undertake selling efforts of these products and (iii) undertake the development of our brand.~~2005

~~NOTE 5 – PROPERTY, PLANT AND EQUIPMENT~~SIGNATURES

~~Property~~Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ~~plant~~the ~~and~~registrant ~~equipment~~has atduly ~~December~~caused ~~31:~~this report to be signed on its behalf by the undersigned, thereunto duly authorized.

F - 13

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

~~Table of Contents~~32

	2010		2009
Machinery, plant and equipment	$	8,339	$	36,608
Accumulated depreciation		7,853		22,008
	$	486	$	14,600

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~Depreciation~~To ~~expense~~The ~~was~~Board ~~$5,696~~of ~~and $12,999 for the years ended December 31, 2010 and 2009 respectively.~~Directors

~~NOTE~~Premier 6Beverage –Group ~~DEBT AND COMMITTMENTS~~Corp.

~~The~~New ~~Company’s~~York, ~~debt~~New ~~consists of the following notes payable at December 31:~~York

	2010		2009
Commercial credit and cards payable	$	85,679	$	73,706
Secured convertible promissory note		6,065		5,403
Unsecured convertible promissory notes		56,949		87,052
Unsecured demand promissory notes		386,759		167,402
Total		535,452		333,563
Less current portion		535,452		333,563
Long-term debt	$	-	$	-

We have audited the accompanying consolidated balance 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.

~~Commercial~~We ~~Credit~~conducted ~~Cards~~our ~~Payable~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test 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. We believe that our audits provide a reasonable basis for our opinion.

~~Accounts~~In ~~payable~~our ~~includes accounts payable due vendors~~opinion, ~~and~~the ~~certain~~consolidated ~~commercial~~financial statements ~~obligations~~referred ~~due~~to ~~banks~~above ~~under~~present afairly, ~~commercial~~in ~~line~~all ofmaterial ~~credit~~respects, ~~loan~~the ~~with~~financial aposition ~~balance due~~ of ~~$14,450~~Premier ~~and~~Beverage ~~amounts~~Group ~~due~~Corp. onand Subsidiaries ~~various~~as ~~bank~~of ~~credit~~December ~~cards.~~31, ~~Interest~~2011 ~~rates~~and ~~vary on~~ the ~~line~~results of ~~credit~~its ~~loan~~operations and ~~the~~cash ~~bank~~flows ~~credit~~for ~~card~~each ~~obligations~~of atthe ~~rates~~years ~~ranging~~in ~~from~~the ~~5.5%~~two toyear ~~24%~~period ended ~~per~~December ~~annum~~31, ~~all~~2011, ~~are~~ in ~~default~~conformity ~~and~~with ~~are~~its ~~currently~~accounting ~~due~~principles ~~and~~generally ~~each~~accepted ~~account~~in ~~includes~~ the ~~personal~~United ~~repayment~~States ~~guarantee~~ of ~~the Company's President~~America.

~~Secured~~The ~~Convertible~~accompanying ~~Promissory~~consolidated ~~Notes~~financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company 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.

~~The~~Liebman ~~Company~~Goldberg ~~has~~& ~~a $5~~Hymowitz,~~000~~ 10% Convertible Secured Promissory Note (the “10% Secured Note”). The 10% Secured Note was due on May 12, 2009 and bears an annual rate of interest of ten percent (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 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. The Company also paid 25 shares of common stock as bonus interest at a fair value of $250. 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 and is being amortized over the term of the note. The accompanying financial statements include $500 and $3,203 of interest expense and additional interest in respect of the beneficial conversion feature for the years ending December 31, 2010 and 2009, respectively.LLP

FGarden -City, 14New York

~~Table~~September of9, ~~Contents~~2013

On May 30, 2009 the Company issued an aggregate of 118,653 shares of common stock to a note holder in full conversion of a secured convertible promissory in the principal amount of $100,000 originally issued on December 17, 2008. The accompanying financial statements include $8,340 of interest expense for the year ending December 31, 2009.F-1

~~Unsecured~~PREMIER ~~Convertible~~BEVERAGE ~~Promissory~~GROUP ~~Notes~~CORP. AND SUBSIDIARIES

~~The Company has four~~ (4)formerly ~~unsecured~~known 6% Convertible Promissory Notes payable in the aggregate amount of $50,000 (the “Convertible Notes”). The Convertible Notes bear interest at the rate of 6% per annum and are 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 the maturity date 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 $3,000 and $3,182 of interest expense for the year ending December 31, 2010 and 2009, respectively. The unsecured convertible promissory notes are in default with a total aggregate amount due of $56,949 as ofDAM ~~December 31~~Holdings, ~~2010~~Inc.)

~~Unsecured~~CONSOLIDATED ~~Demand~~BALANCE ~~Promissory Notes~~SHEETS

~~The~~DECEMBER Company has unsecured demand promissory notes in the aggregate principal amount of $361,444 issued for wages and services rendered. The notes include a note in the principal amount of $177,861 issued to the president of the Company. The notes were issued in 2010 and 2009. Each note bears interest at the rate of 12% per annum. The accompanying financial statements include $24,715 and $702 of interest expense for the years ending December 31, ~~2010~~2011 ~~and~~AND ~~2009, respectively and there is a total aggregate balance due on December 31,~~ 2010 ~~and 2009 of $386,759 and $167,402, respectively.~~

Conversion Feature of Convertible Promissory Notes

	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

InSee ~~accordance~~notes 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~~consolidated ~~Convertible~~financial 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.statements

~~Facilities Lease~~F-2

~~The~~PREMIER ~~Company~~BEVERAGE ~~rented~~GROUP ~~8,300 sq~~CORP. ~~ft.~~AND of office, garage and storage space in a single facility located in Paterson, New Jersey. The lease was for an initial term of 60 months from April, 2006 at $2,500 per month and includes 2 five year renewal terms at an increase in monthly payments to $3,100 per month and $3,600 per month, respectively. The accompanying financial statements SUBSIDIARIES

F(formerly -known 15as DAM Holdings, Inc.)

~~Table~~CONSOLIDATED ofSTATEMENTS ~~Contents~~OF OPERATIONS

include rent expense of $30,000 for the year ended December 31, 2009, respectively. Upon sale of the building the Company opted to terminate the lease effective December 31, 2009. Office and storage space is presently provided by an officer of the Company.

	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

~~Key~~See ~~Employee~~notes ~~Agreements~~to consolidated financial statements

On May 8, 2008 the Company entered into a Key Employee Agreement with its President. The terms of the agreement provides that the executive is employed on an “at will” basis at an annual rate of compensation of $96,000, having an initial term of two years. Each agreement also provides that any intellectual property originated by the executive during his term of the agreement shall be the property of the Company.F-3

~~The~~PREMIER ~~accompanying~~BEVERAGE ~~consolidated~~GROUP ~~financial~~CORP. ~~statements~~AND ~~include an aggregate of $114,161 and $119,957 of executive officer compensation expense for the years ending December 31, 2010 and 2009 respectively.~~SUBSIDIARIES

~~NOTE~~(formerly 7known –as ~~CAPITAL~~DAM ~~STOCK~~Holdings, Inc.)

~~Preferred~~CONSOLIDATED ~~Stock~~STATEMENTS OF STOCKHOLDERS' DEFICIT

~~The~~YEARS ~~Company~~ENDED ~~has~~DECEMBER ~~an aggregate total of 1~~31,~~000,000~~ ~~shares~~2011 ofAND authorized preferred stock with 338,000 shares of $.0001 par value undesignated preferred stock, 660,000 shares designated as Series A Preferred Stock and 2,000 shares designated as Series B Preferred Stock. The 338,000 shares of undesignated preferred stock, if issued, will carry liquidation preferences and other rights, as determined by the Board of Directors.2010

Series A 8% Convertible Preferred Stock

																	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	)

~~The~~See ~~Company~~notes has 660,000 shares of 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-voting, (c) includes a dividend of 8% per annum paid annually, (d) may be redeemed at any time for an amount equal to ~~the~~consolidated ~~Stated~~financial 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.statements

~~The terms of these shares have been adjusted pursuant to an Anti~~F-Dilution Agreement with the purchasers such that the purchasers may 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 0.22 shares of Common Stock. This adjustment does not affect the terms of the remaining authorized but un-issued shares of Series A Preferred Stock.4

FPREMIER -BEVERAGE 16GROUP CORP. AND SUBSIDIARIES

~~Table~~(formerly ofknown ~~Contents~~as DAM Holdings, Inc.)

~~Series~~CONSOLIDATED BSTATEMENTS 8%OF ~~Convertible~~CASH ~~Preferred Stock~~FLOWS

The Company has 2,000 shares of preferred stock designated as “Series B 8% Convertible Preferred Stock” (the “Series B Preferred Stock”) authorized with 30 shares issued and outstanding as of the date of this report having an aggregate stated value of $15,000. Each share of Series B Preferred Stock has an initial issue price or face value of $500.00 (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.

	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	$	-		$	-

~~Shares~~See ofnotes ~~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%~~consolidated offinancial 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 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 of the daily closing prices for the 10 consecutive trading days commencing 12 trading days before the day in question.statements

~~Common Stock~~F-5

~~The~~NOTE ~~Company has authorized 99,000,000 shares of common stock $.00015 par value per share (the “Common Stock”). As of December 31, 2010, the Company has~~ 1~~,291,939~~ ~~shares~~–BUSINESS ofAND ~~Common Stock issued and outstanding. The Company’s shares of Common Stock are traded on the Over the Counter Pink Sheets (“PK”) electronic quotation system, the trading symbol is DAMH.~~RECAPITALIZATION

OnPremier ~~May~~Beverage 8,Group ~~2009~~Corp. (the “Company”) develops, ~~entered~~markets ~~into~~and andistributes ~~agreement~~functional ~~with~~beverages. ~~the~~The ~~members~~Company’s ofproducts ~~Garden~~include ~~Rise~~OSO, ~~Investments~~a ~~LTD~~premium ~~LLC~~energy ~~for~~beverage ~~the~~sold primarily ~~termination~~to ofon-premise avenues, ~~Royalty~~including ~~Agreement dated August 31~~restaurants, ~~2006~~night ~~in exchange for an aggregate of 28~~clubs,~~371~~ ~~shares~~and ~~of our common stock~~hotels. The ~~accompanying~~Company ~~financial~~also ~~statements~~operates ~~include~~a ~~$7,549~~turnkey ofprivate ~~stock~~label business ~~based compensation expense~~ for ~~the~~retailers ~~year~~and ~~ended~~food ~~December~~manufacturers ~~31,~~seeking ~~2009 related~~ to ~~the~~offer ~~termination~~functional ~~of the royalty agreement~~beverages.

OnThe ~~May~~Company ~~31,~~is ~~2009~~ a ~~noteholder~~Nevada ~~agreed~~corporation toincorporated on ~~convert~~July ~~his~~22, ~~promissory note to shares of common stock~~1999. The Company ~~issued~~is ana ~~aggregate~~holding ofcompany ~~118,653~~which ~~shares~~owns 100% of ~~common~~the capital stock inof ~~conversion~~OSO ofBeverages ~~this~~Corp., ~~note~~a ~~and~~Delaware corporation (“OBC”), which in ~~satisfaction~~turn ofwholly anowns ~~anti-dilution~~Fury ~~agreement~~Distribution ~~with~~Holdings, ~~the~~LLC ~~noteholder. The~~a ~~accompanying~~New ~~financial~~York ~~statements~~limited ~~include~~liability $8company (“FDH”),~~340~~ ofand ~~interest~~100% ~~expense~~of ~~for~~ the ~~year~~capital ~~ending~~stock ~~December~~of 31Captive Brands Corp, ~~2009~~a Delaware corporation.

On ~~December~~October 2019, ~~2009~~2011, pursuant to the ~~Company~~terms of ~~issued~~an ~~174,537~~Agreement ~~shares~~and Plan of ~~common~~Merger ~~stock~~(the ~~pursuant~~“OSO toMerger”) ~~anti-dilution~~between ~~agreements~~OSO ~~plus~~USA ~~400~~LLC, ~~shares~~a ofDelaware ~~common~~limited ~~stock~~liability ~~issued~~company ~~for~~("OSO") and ~~$100~~OBC, inOSO ~~cash~~merged into OBC. ~~The~~ ~~accompanying~~OBC ~~financial~~was ~~statements~~the ~~include~~surviving $8corporation,~~360~~ and the principal members of ~~stock~~OSO ~~based~~were ~~compensation~~issued ~~expense~~50,000,000 innewly issued ~~respect~~restricted shares of ~~these~~the ~~shares~~Company’s common stock (“Merger Consideration”) as consideration for ~~the~~all ~~year~~of ~~ending~~the outstanding ~~December~~membership ~~31,~~interests ~~2009~~of OSO.

FUpon -completion 17of the OSO Merger, there were 61,176,676 shares of 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.

~~Table~~After the OSO Merger, the Company sold the DAM Holdings, Inc. operating assets for nominal consideration. Because the owners and management of ~~Contents~~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.

OnNOTE December 20, 2009 the Company issued 863,350 shares of common stock for services. Of this 110,850 shares of common stock were issued pursuant to the terms of the 2008 and 2009 Consultant Stock Compensation Plans in payment of $2~~,395~~ of- ~~prior~~SUMMARY ~~year~~OF ~~services~~SIGNIFICANT and $3,880 of current period compensation expense and 752,500 shares were issued to the Company’s President for payment of $45,925 of accrued wages. The accompanying financial statements include $49,804 of stock based compensation expense for the year ending December 31, 2009.ACCOUNTING POLICIES

~~Class~~Principles Aof ~~Warrants~~Consolidation:

AtThe ~~December~~consolidated ~~31,~~financial ~~2009~~statements include the ~~Company~~accounts ~~had~~of ~~Class~~Premier ABeverages ~~Warrants~~Group ~~issued~~Corp. ~~pursuant to~~ and its ~~Series~~wholly Aowned ~~Preferred~~subsidiaries, ~~Stock~~OSO ~~Private~~Beverages ~~Placement~~Corp ~~Unit~~its ~~Offering. The~~wholly ~~terms~~owned ofsubsidiary, Fury ~~these~~Distribution ~~Class~~Holdings, ALLC ~~Warrants~~(hereafter ~~have~~referred ~~been adjusted pursuant~~ to ~~the~~as ~~Anti-Dilution Agreement with~~ the ~~Unit~~“Company” ~~purchasers~~or ~~such~~“Premier”). ~~that~~No ~~the~~operations ~~purchasers~~were conducted ~~may~~in ~~purchase~~2011 ~~13,333~~by ~~shares of~~ the Company’s ~~common~~other ~~stock~~subsidiary, atCaptive anBrands ~~exercise price of $45~~Corp.00 ~~per~~All ~~share~~significant atintercompany ~~any~~balances ~~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~~ transactions have ~~traded~~been ~~above~~eliminated ~~$1.50~~in ~~for 10 consecutive trading days~~consolidation.

~~Class~~Use Bof ~~Warrants~~Estimates

The ~~Company~~preparation ~~has~~of ~~outstanding~~financial ~~Class~~statements in Baccordance ~~Warrants~~with ~~for~~accounting principles generally accepted in the ~~purchase~~United ofStates ~~600~~requires ~~shares~~management ofto ~~common~~make ~~stock~~estimates atand anassumptions that ~~exercise~~affect ~~price~~the reported amounts of ~~$25.00~~assets ~~per~~and ~~share. The~~liabilities ~~Class~~and Bdisclosures ~~Warrants~~of ~~(a)~~contingent ~~may~~assets beand ~~exercised~~liabilities at ~~any~~the ~~time~~date ~~before~~of the ~~expiration~~financial ~~or redemption~~statements, ~~(b)~~and ~~may~~the bereported ~~called~~amounts ~~for~~of ~~redemption~~revenues ~~for~~and aexpenses ~~redemption~~during ~~price~~the ofreporting $0period.01 ~~per~~Actual ~~warrant~~results ~~and~~could ~~(c)~~differ from ~~expire~~those onestimates. ~~June~~Significant ~~30,~~estimates ~~2014.~~include ~~The~~the ~~Company~~useful ~~may~~life ~~call~~of fixed assets and assumptions used in the ~~Warrants~~fair atvalue ~~any~~of ~~time~~stock-based compensation.

~~Selling~~Revenue ~~Agent Warrants~~Recognition

The Company ~~granted~~recognizes arevenue ~~selling~~in ~~agent~~accordance with ~~rights~~Accounting toStandards ~~purchase~~Codification 2subtopic 605-10,~~497~~ ~~shares~~Revenue ofRecognition ~~the~~(“ASC ~~Company’s~~605-10”) ~~common~~which ~~stock~~requires atthat four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an ~~exercise~~arrangement exists; (2) delivery has occurred; (3) the selling price ofis ~~fifty-four~~fixed ~~dollars~~or determinable; and (~~$54~~4) collectability is reasonably assured.00 Determination of criteria (3) ~~per~~and ~~share~~(4) atare ~~any~~based ~~time~~on ~~prior~~management's tojudgments regarding the ~~date~~fixed nature of ~~expiration~~the selling prices of ~~January~~the 31products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, ~~2013~~estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

~~2009~~ASC ~~Consultant~~605-10 ~~Stock~~incorporates ~~Compensation~~Accounting ~~Plan~~Standards Codification subtopic 605-25, Multiple-Element Arrangements (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing ASC 605-25 on the Company's financial position and results of operations was not significant.

~~The~~Revenues ~~2009~~on ~~Consultant Stock Compensation Plan provides for~~ the ~~issuance~~sale of ~~up to 1~~products,~~000,000~~ ~~shares~~net of estimated ~~Company’s~~costs ~~$0.00015 shares~~ of ~~Common~~returns ~~Stock~~and atallowance, aare ~~price~~recognized toat bethe notime ~~less~~products ~~than~~are ~~the~~shipped ~~fair~~to ~~value~~customers, oflegal ~~the~~title ~~Company’s~~has ~~shares~~passed, and ofall ~~common~~significant ~~stock~~contractual onobligations ~~the date~~ of ~~grant. On December 22, 2009~~ the Company ~~filed~~have ~~SEC~~been ~~Form S-8 in registration of shares to be issued pursuant to this plan~~satisfied. As ofProducts ~~the~~are ~~date~~generally ofsold ~~this~~on ~~report~~open heaccounts ~~Company~~under credit ~~has~~terms ~~issued~~customary ~~pursuant~~ to the ~~Plan~~geographic ~~60,000~~region ~~shares~~ of ~~common~~distribution. ~~stock~~The ~~and~~Company ~~granted~~performs ~~options~~ongoing ~~for~~credit ~~the~~evaluations ~~purchase~~ of ~~200,000~~the ~~shares~~customers and ofgenerally ~~common~~does ~~stock~~not atrequire ancollateral ~~exercise~~to ~~price~~secure ofthe ~~$1.00~~accounts ~~per share~~receivable.

~~Shares Available For Future Issuance~~F-6

~~The~~Accounts Company has 296,727 shares of common stock reserved for future issuance upon conversion of convertible debt, conversion of shares of convertible preferred stock, exercise of warrants and options and for future issuance under the Company’s 2009 Consultants Stock Compensation Plan summarized as of December 31, 2010 is presented below:Receivable

FThe Company assesses the realization of its receivables by performing ongoing credit evaluations of its customers' financial condition. Through 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 18experience. Allowance for doubtful accounts for accounts receivable was $5,966 as of December 31, 2011 and $4,738 as of December 31, 2010, respectively. Bad debt expense was $14,433 and $5,268 for the year ended December 31, 2011 and 2010, respectively.

~~Table~~Income ~~of Contents~~taxes

			Conversion Rate		Number of
	Amount		Per Share		Shares
Shares of common stock authorized						99,000,000
Shares of common stock outstanding						1,291,939
Shares of common stock reserved for:
Secured convertible promissory note	$	6,065	$	0.12		50,541
Unsecured convertible promissory notes		56,949		40.00		1,423
Series A convertible preferred stock		300,000		22.50		13,333
Series B convertible preferred stock		15,000		1.00		15,000
Class A warrants				45.00		13,333
Class B warrants				25.00		600
2009 Consultants Stock Compensation Plan
Vested options outstanding				1.00		200,000
Reserved for future grant						740,000
Selling agent warrants				54.00		2,497
Shares of common stock available for future issuance						96,671,334

Deferred income tax assets 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.

~~Summary~~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 ~~Common~~the ~~Stock~~position. ~~Warrants~~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, 2011 and ~~Options~~2010, ~~Outstanding~~the Company has not recorded any unrecognized tax benefits.

AThe ~~summary~~tax ofyears ~~the~~remaining ~~status~~open offor ~~warrants~~examination are ~~and~~2008, ~~options granted at December 31~~2009, 2010 and ~~changes during the periods then ended is presented below:~~2011.

	2010					2009
			Weighted					Weighted
	Number		Average			Number		Average
	of		Exercise			of		Exercise
	Options		Price			Options		Price
Outstanding - beginning of year		216,430		$	4.39		15,830		$	46.40
Granted		-			-		200,600			1.07
Vested		-			-		-			-
Forfeited		-			-		-			-
Expired		-			-		-			-
Outstanding - end of year		216,430		$	4.39		216,430		$	4.39
Exercisable at December 31, 2010		216,430		$	4.39		216,430		$	4.39

Inventories

FInventory consisted of finished goods is stated at the lower of cost (first-in, 19first-out method) or market.

~~Table~~Property ofand ~~Contents~~Equipment

AProperty ~~summary~~and ofequipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the ~~status~~straight-line ofmethod over the ~~warrants~~asset's estimated useful life, which is three years for computer assets and ~~options~~five ~~outstanding~~years atfor ~~December~~furniture ~~31,~~and ~~2010~~all isother ~~presented~~equipment. ~~below:~~Expenditures for maintenance and repairs are expensed as incurred.

Warrants Outstanding								Warrants Exercisable
					Weighted
					Average		Weighted					Weighted
					Remaining		Average					Average
Exercise			Number		Contractual		Exercise			Number		Exercise
Prices			Outstanding		Life		Price			Exercisable		Price
	$	45.00		13,333		2.00		$	45.00		13,333		$	45.00
	$	25.00		600		3.08		$	25.00		600		$	25.00
	$	54.00		2,497		2.08		$	54.00		2,497		$	54.00
	$	1.00		200,000		9.00		$	1.00		200,000		$	1.00

Net Loss per Share

~~NOTE~~The 8Company –follows ~~INCOME~~Accounting ~~TAXES~~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 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.

The Company has available at December 31, 2010 an unused operating loss carryforward of approximately $2,866,000 which may be applied against future taxable income and which expires in the years 2027 and 2029. The amount of and ultimate realization of the benefits from the operating loss carryforward for income tax purposes is dependent, in part, upon the tax laws then in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the net deferred tax asset associated with the Company’s net operating loss carryforward and allowances for uncollectible accounts, the Company has established a valuation allowance equal to their tax effect and, therefore, no deferred tax asset has been recognized.Reclassification

	2010		2009
Deferred tax assets:
Net operating loss and credit carryforwards	$	1,089,080	$	930,451
Less valuation allowance		1,089,080		930,451
Total deferred tax assets	$	-	$	-

Certain reclassifications have been made to prior periods' data to conform to the current year's presentation. These reclassifications had no effect on reported income or losses.

~~NOTE~~Fair 9Value -of ~~ABANDONMENT~~Financial ~~OF SUBSIDIARY~~Instruments

~~During~~The ~~the~~Company ~~fiscal~~has ~~quarter~~adopted the required provisions of ~~the~~Topic ~~current~~820, ~~fiscal~~“Fair ~~year~~Value ~~the~~Measurements”. ~~Company~~Those ~~ceased~~provisions ~~support~~relate ~~for~~to our financial assets and ~~abandoned~~liabilities ~~Pukka~~carried ~~USA,~~at fair ~~Inc~~value and our fair value disclosures related to financial assets and liabilities. Topic 820 defines fair value, expands related disclosure requirements and ~~its~~specifies ~~subsidiary~~a ~~companies~~hierarchy (of valuation techniques based on the ~~Pukka~~nature ~~Group)~~of the inputs used to develop the fair value measures. ~~The~~ ~~Pukka~~Fair ~~Group~~value ~~has~~is ~~been~~defined ~~inactive~~as ~~since~~the ~~2008~~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. ~~The~~ ~~abandonment~~There ~~and~~are ~~other~~three ~~adjustments~~levels ~~resulted~~of inputs to fair value measurements - Level 1, meaning the use of quoted prices for identical instruments in noactive ~~net~~markets; ~~gain~~Level 2, meaning the use of quoted prices for similar instruments in active markets or ~~loss~~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.

~~NOTE~~The 10Company’s –financial ~~MATERIAL~~instruments are ~~SUBSEQUENT~~carried ~~EVENTS~~at ~~AND~~fair ~~CONTINGENCIES~~value, including, cash 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.

The Company has evaluated subsequent events through the time September 19, 2011 which is the date the consolidated financial statements were issued. No events have occurred through September 19, 2011, that requires disclosure or recognition in these financial statements.F-7

FImpairment of Long-Lived 20Assets

The 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 the net 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.

Recent Accounting Pronouncements

A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to the consolidated financial statements of the Company.

NOTE 3 - GOING CONCERN MATTERS

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 $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.

The Company has undertaken further steps as part of a plan to improve operations 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.

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.

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

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2011 and 2010 is summarized as follows:

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

	$	1,644		$	-

Depreciation expense for the years ended December 31, 2011 and 2010 was $97 and $0, respectively.

NOTE 5 - ACCRUED EXPENSES

Accrued expenses are comprised of the following:

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

	$	100,417	$	67,749

F-8

NOTE 6 - NOTES PAYABLE

Notes payable are comprised of the following:

	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

The Company has a $5,000 10% Convertible Secured Promissory Note (the “10% Secured Note”). The 10% Secured Note was due on May 12, 2009 and bears an annual rate of interest of ten percent (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 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. The accompanying financial statements include $125 and $500 of interest expense for the year ending December 31, 2011 and 2010, respectively. 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 a $72,500 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 $54,299, resulting in an original issuance discount of $18,201. In accordance with the original issuance discount of the secured note, amortization of imputed interest expense of $4,550 and $13,651 have been recorded in 2011 and 2010, respectively, representing full amortization of the original issuance discount. The note had a maturity date of March 11, 2011 and has been paid in full.

In May 2011, the Company entered into a $53,500 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 accordance with the original 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. The note has a maturity date of May 2, 2012.

On December 9, 2011, the Company issued a senior 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 pursuant to which the Company granted a first lien on all of its assets. 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 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 time at $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 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 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.

Unsecured Convertible Promissory Notes

In June 2009, we entered into a $49,444 demand note with Fury 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.

F-9

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 ($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 of interest expense for 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.

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.

On 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. Prestwick has defaulted on its obligation to fund an additional $200,000 under the NPA.

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.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Facilities Lease

The 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 month. Rent expense was $14,250 and $2,500 for 2011 and 2010, respectively.

Key Employee Agreements

Effective October 1, 2011, the Company entered into a consulting agreement with its President. The terms of the agreement provide 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. The accrued portion may be paid in cash or in stock, or by any combination thereof, at the election of the Company. The consulting agreement has a term of one year.

NOTE 8 – CAPITAL STOCK

Preferred Stock

The Company has an aggregate total of 1,000,000 shares of authorized preferred stock with 338,000 shares of $.0001 par value undesignated preferred stock, 660,000 shares designated as Series A Preferred Stock and 2,000 shares designated as Series B Preferred Stock. The 338,000 shares of undesignated preferred stock, if issued, will carry liquidation preferences and other rights, as determined by the Board of Directors.

Series A 8% Convertible Preferred Stock

The Company has 660,000 shares of 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-voting, (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 terms of these shares have been adjusted pursuant to an Anti-Dilution Agreement with the purchasers such that the purchasers may 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 0.22 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 B 8% Convertible Preferred Stock

F-10

Shares of 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 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 of the daily closing prices for the 10 consecutive trading days commencing 12 trading days before the day in question.

Common Stock

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.

Holders of our common stock are entitled to one vote per share and to receive dividends when and 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 up of the Company. 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 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.

Class A Warrants

At December 31, 2011 the 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.

Selling Agent Warrants

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.

Shares Available For Future Issuance

As of December 31, 2011, the Company has 1,999,542 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:

			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	$	100,000	$	0.20		500,000
Secured convertible promissory note (1)		6,567		0.0975		67,354
Unsecured convertible promissory notes		59,955		40.00		1,499
Unsecured convertible promissory note		187,100		0.135		1,385,926
Series A convertible preferred stock		300,000		22.50		13,333
Series B convertible preferred stock		15,000		1.00		15,000
Class A warrants				45.00		13,333
Class B warrants				25.00		600
2009 Consultants Stock Compensation Plan
Reserved for future grant						263
Selling agent warrants				54.00		2,497

Shares of common stock available for future issuance						35,798,712

F-11

(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, 2011 was $0.13, resulting in a conversion price of $0.0975 as of December 31, 2011, and a result reserve for future issuance of 67,354 shares.

Summary of Common Stock Warrants and Options Outstanding

A summary of the status of warrants and options granted at December 31, and changes during the periods then ended is presented below:

	2011					2010
				Weighted				Weighted
	Number			Average		Number		Average
	of			Exercise		of		Exercise
	Options			Price		Options		Price

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

On October 10, 2011, holders of options to purchase 200,000 shares of our common stock at price of $1.00 per share voluntarily forfeited their options.

On December 15, 2011, the Company issued 89,807 restricted shares of our common stock to a warrant holder upon its exercise of the common stock purchase warrant granted in connection with a loan. The warrant was exercised for all 200,000 shares on a cashless basis, and accordingly the Company received no proceeds.

A summary of the status of the warrants and options outstanding at December 31, 2011 is presented below:

Warrants Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Prices		Outstanding		Life		Price		Exercisable		Price
$	45.00		13,333		1.00	$	45.00		13,333	$	45.00
$	25.00		600		2.08	$	25.00		600	$	25.00
$	54.00		2,497		1.08	$	54.00		2,497	$	54.00

NOTE 9 – INCOME TAXES

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 difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:

	2011			2010
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	)
		-			-

F-12

At December 31, 2011, the significant components of the deferred tax assets (liabilities) are summarized below:

	2011
Deferred tax assets:
Net Operating Losses		5,414
Beneficial conversion features		9,011
Total deferred tax assets		14,425

Deferred tax liabilities:
		-
Total deferred tax liabilities		-

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

As of December 31, 2011, the Company had U.S. Federal and state net operating loss carryforwards of approximately $14,000, 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 has provided a full valuation allowance against its net deferred tax assets, since in the opinion of management based upon the earnings history of the Company; it is more likely than not that the benefits of these assets will not be realized.

The Company 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.

The Company is subject to income tax in the U.S., and certain state jurisdictions. The Company has not been audited by the U.S. Internal Revenue Service, or any states in connection with income taxes. The periods from December 31, 2009 to December 31, 2011 remain open to examination by the U.S. Internal Revenue Service, and state tax authorities.

The Company recognizes interest and penalties related to unrecognized tax benefits, if incurred, as a component of income tax expense.

NOTE 10 – SALE OF STOCK OF SUBSIDIARY

On October 27, 2011, the Company sold all of the stock of its wholly-owned subsidiary Delaware American Motors, Inc. (“Delaware American”). The purchase price was $10.00, and the purchaser was Mark S. Klein, the Company’s former director and Chief Executive Officer. There was no formula or principle followed in determining the purchase price. In connection with the sale, Mr. Klein agreed to assume any debt or obligation of the Company which pertains to or is related to the business of Delaware American and its subsidiary Delaware American Motors, LLC and to indemnify the Company in respect of these debts or obligations as provided in a separate Assumption and Indemnification Agreement. In connection with the sale of 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.

NOTE 11 - FAIR VALUE MEASUREMENT

The Company adopted the provisions of ASC 825-10 on October 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

F-13

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs 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.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

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.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to the beginning retained earnings and no impact on the unaudited condensed consolidated financial statements.

The 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.

At December 31, 2011 and 2010, there were no identified assets or liabilities measured at fair value on a recurring basis.

NOTE 12 – SUBSEQUENT EVENTS

In preparing the accompanying consolidated financial statements, the Company has reviewed events that have occurred after December 31, 2011, through the date of issuance of the financial statements.

Issuance of Promissory Notes

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.

Default on Senior Secured Indebtedness

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

Legal Proceedings

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

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

F-14

Note Conversion

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

Refinancing

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

New Financing

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

Note Exchange

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

Authorization of Additional Shares of Common Stock

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

Production Financing

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

F-15

Filing Compare · Premier Beverage Group Corp