Summary of DRINKS AMERICAS HOLDINGS, LTD

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

The following discussion and analysis of the consolidated financial condition and results of operations should be read with "Selected Financial Data" and our consolidated financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under "Risk Factors" and elsewhere in this report.

RESULTS OF OPERATIONS

Year ended April 30, 2008 compared to year ended April 30, 2007

Net Sales: Net sales were $4,509,000 for the year ended April 30, 2008 compared to net sales of $6,085,000 for the year ended April 30, 2007, a decrease of 26%. The decrease is due to the impact of the launch of Trump Super Premium Vodka in October 2006.

Trump Super Premium Vodka sales aggregated $2,652,000, including Trump flavored vodkas, which were launched in February 2008, on 29,215 cases sold, which accounted for 59.0% of total dollar sales and 26.0% of total case sales for the year ended April 30, 2008. Trump Flavors accounted for $443,000 of sales on 4,393 cases sold. For the year ended April 30, 2007, Trump Super Premium Vodka sales aggregated $4,631,000 on 43,815 cases sold, which accounted for $76.1% of total dollar sales and 39.4% of total cases sales. This represents a dollar decrease of 42.7% and a case decrease of 33.3%. The launch and national pipeline fill-in of Trump Super Premium Vodka starting October 2006 accounted for a build in sales of the product in the prior year. Sales of all wine and spirits products aggregated $3,842,000 on 39,637 cases sold for the year ended April 30, 2008 compared to $5,575,000 on 52,936 cases for the year ended April 30, 2007. Net sales of Old Whiskey River Bourbon totaled $452,000 on 3,806 cases sold for the year ended April 30, 2008 compared to net sales of $341,000 on 2,647 cases sold for the year ended April 30, 2007. This represents a dollar increase of 32.4% and a case increase of 43.8%. Net sales of our Aguila Tequila aggregated $133,000 on 1,418 cases sold for the year ended April 30, 008 compared to $21,000 on 246 cases sold for the year ended April 30, 2007. This represents a dollar increase of 524.0% and a case increase of 476.4%. Net sales of our Damiana Liqueur aggregated $197,000 on 1,555 cases sold for the year ended April 30, 2008 compared to net sales of $175,000 on 1,383 cases sold for the year ended April 30, 2007. This represents a dollar increase of 12.1% and a case increase of 12.4%. Net sales of our premium imported wines totaled $392,000 on 3,396 cases sold for the year ended April 30, 008 compared to net sales of $373,000 on 4,380 cases sold for the year ended April 30, 2007. This represents a dollar increase of 5.2% and a case decrease of 22.1%. The dollar amount increased while cases decreased due to the liquidation of certain discontinued wines at below cost in the prior year. Net sales of our non alcoholic product, Newman's Own sparkling fruit beverages and sparkling waters increased to $667,000 on 75,141 cases sold for the year ended April 30, 2008 compared to $167,000 on 16,668 cases sold for the year ended April 30, 2007. This represents a dollar increase of 33.4% and a case increase of 28.5%. The Company has substantially improved the Newman's Own beverage products over the last year. We eliminated the high fructose corn syrup and replaced it with pure cane sugar and is now kosher certified. The Company has been expanding distribution of Newman's Own across the country. As a result, the case volume is increase nationally.

Gross margin: Gross profit was $1,685,000 for the year ended April 30, 2008 a decrease of $816,000, compared to gross profit of $2,501,000 for the year ended April 30, 2007. Gross margin for our wine and spirits business was 40.7% percent for the year ended April 30, 2008, which was within or target of 40 percent, compared to 42.6 percent for the prior year. Gross margin for our non alcoholic business was 21.8 percent for the year ended April 30, 2008 compared to 24.0 percent for the year ended April 30, 2007. The gross profit margin of our non alcoholic Newman's Own products is expected to improve with the implementation of alternate packaging which will lead to lower product costs. Gross margin of our wines increased to 36.4% for the year ended April 30, 2008 from 11.3% for the year ended April 30, 2007. This increase is the direct result of the aforementioned liquidation of certain wines in the prior year. Gross margin of Trump Super Premium Vodka, including Trump flavored vodka, decreased to 40.1% for the year ended April 30, 2008 compared to 45.7% for the year ended April 30, 2007. The gross margin decrease is largely due to the weakening dollar which has resulted in increased Trump Vodka component costs, the introduction of the lower-margin Trump 1.75 liter bottle, a decrease in the percentage of direct sales which leads to increased direct costs such as excise taxes and freight , as well as price support for Trump Super Premium Vodka necessary in order to achieve competitive pricing. The decrease in gross margin for our Trump Super Premium Vodka is expected to be mitigated by the reduction of price support and the transfer of bottle production to China.

Selling, general and administrative: Selling, general and administrative expenses totaled $7,838,000 for the year ended April 30, 2008, compared to $9,982,000 for the year ended April 30, 2007, a decrease of $1,969,000,000 or 19.8%. Total selling and marketing costs aggregated $3,900,000 for the year ended April 30, 2008 compared to $3,800,000 for the year ended April 30, 2007. General and administrative expenses aggregated $3,938,000 for the year ended April 30, 2008 compared to $6,200,000 for the year ended April 30, 2007. During the year ended April 30, 2007 the Company issued shares of its common stock to several employees, various distributors, consultants and professionals who contributed to our business and the successful launch of Trump Super Premium Vodka. In total , $1,800,000 of our selling, general and administrative expenses were paid by the issuance of our equity securities. For the year ended April 30, 2008 $230,000 of selling, general and administrative expenses were paid by the issuance of equity securities. There were additional one-time expenses recognized by the Company for the year ended April 30, 2007 relating to the Trump Super Premium Vodka launch including product development expenses aggregating $195,000. Product development costs for the year ended April 30, 2008 aggregated $58,000. Charges relating to purchase order financing aggregated $45,000 for the year ended April 30, 2008 compared to $245,000 for the year ended April 30, 3007. The decrease is due to our improved financial liquidity. For the year ended April 30, 2008, fees earned by our Board of Directors for serving on the board aggregated $175,000 compared to $300,000 for the year ended April 30, 2007. Due to limited working capital, prior to the year ended April 30, 2007, the members of our Board of Directors were not previously compensated for services rendered to us as members of our Board of Directors. Shipping and warehousing expenses have increased to $455,000 for the year ended April 30, 2008 compared to $255,000 for the year ended April 30, 2007. The increase is due to the warehousing of Trump Super Premium Vodka for a full twelve months of national availability in the current year as compared to eight months for the prior year. In addition, for the year ended April 30, 2008 we incurred higher freight charges than for the year ended April 30, 2007 ($190,000 compared to $107,000). The increase in freight charges is the result of fewer direct container sales of Trump Super Premium Vodka from our Netherlands warehouse as well as increased sales of our Newman's Own products. Selling expenses are expected to be reduced in the future as sales promotions for Trump Vodka become more targeted.

Other Income (expense): Other income totaled $7,000 for the year ended April 30, 2008 compared to expense of $1,137,000 for the year ended April 30, 2007. The significant decrease is due to the fact that nearly $1,100,000 was recognized as a loss on debt extinguishment for the year ended April 30, 2007 none was incurred for the year ended April 30, 2008. There has been a reduction in interest expense (interest expense was $164,000 for the year ended April 30, 2008 versus $771,000 for the year ended April 30, 2007) due to the extinguishment of much of our long term debt.

Income Taxes: We have incurred substantial net losses from our inception and as a result, have not incurred any income tax liabilities. Our federal net operating loss carry forward is approximately $25,000,000, which we can use to reduce taxable earnings in the future. No income tax benefits were recognized in fiscal 2008 and 2007 as we have provided valuation reserves against the full amount of the future carry forward tax loss benefit. We will evaluate the reserve every reporting period and recognize the benefits when realization is reasonably assured.

IMPACT OF INFLATION

Although management expects that our operations will be influenced by general economic conditions we do not believe that inflation has had a material effect on our results of operations.

SEASONALITY

As a general rule, the second and third quarters of our fiscal year (August-January) are the periods that we realize our greatest sales as a result of sales of alcoholic beverages during the holiday season. During the fourth quarter of our fiscal year (February-April) we generally realize our lowest sales volume as a result of our distributors working off inventory which remained on hand after the holiday season. The fourth quarter ended April 30, 2008 realized improved sales over the prior quarter predominantly due to the launch of Trump flavored vodka in February 2008. As we increase our non-alcoholic beverage sales, as a result of increased distribution of Newman's Own products, we would expect sales in first quarter of our fiscal year (May-July), to increase since the spring and summer tends to be the strongest periods for sales of non-alcoholic beverages.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Although our working capital position has been improved as a result of our December Private Placement of our preferred stock, we will need to continue to carefully manage our working capital and our business decisions will continue to be influenced by our working capital requirements. Lack of liquidity continues to negatively affect our business and curtail the execution of our business plan.

We have experienced net losses and negative cash flows from operations and investing activities since our inception in 2003. Net losses for the years ended April 30, 2008 and 2007 were $6,310,948 and $9,389,250, respectively. Cash used in operating activities for the year ended April 30, 2008 and 2007 were $3,848,266 and $8,901,392, respectively. We have to date funded our operations predominantly through bank borrowings, loans from shareholders and investors, and proceeds from the sale of our common stock, preferred stock, and warrants. Net cash provided by financing totaled $2,986,900 for the year ended April 30, 2008 compared to $9,615,291 for the year ended April 30, 2007.

On December 18, 2007 (the "Closing Date") the Company sold to three related investors (the "December Investors") an aggregate of 3,000 shares of our Series A Preferred Stock, $.001 par value (the "Preferred Stock"), at a cash purchase price of $1,000 per share, generating gross proceeds of $3,000,000 (the "December Financing"). The Preferred Stock is convertible into our common stock at $.50 per share, which, if all the Preferred Stock is converted, would result in the issuance of 6,000,000 shares of our common stock. The Preferred Stock has no voting or dividend rights. Out of the gross proceeds of the December Financing, we paid Midtown Partners & Co., LLC (the "Placement Agent") $180,000 in commissions and $30,000 for non-accountable expenses. We also issued, to the Placement Agent, warrants to acquire 600,000 shares of our Common Stock for a purchase price of $.50 per share (the "Placement Agent Warrants"), which warrants are exercisable for a five year period and contain anti-dilution provisions in the events of stock splits and similar matters. Both the commissions and expenses were accounted for as a reduction of Additional Paid in Capital.

The financing that we consummated in January 2007 (the "January Financing") provided participating investors (the "January Investors") rights to exchange the common stock they acquired for securities issued in subsequent financings consummated at a common stock equivalent of $2.00 per share or less. Under this provision, the January Investors have exchanged 4,444,445 shares of common stock for 8,000 shares of Preferred Stock (which Preferred Stock is convertible into an aggregate of 16,000,000 shares of our common stock). The 4,444,445 shares exchanged were accounted for as a reduction of Additional Paid in Capital and a reduction of Common Stock since the shares have been cancelled. Also in the January Financing, the January Investors acquired warrants to purchase 3,777,778 shares of our common stock at an exercise price of $3.00 per share (the "January Warrants"). The January Warrants contain full ratchet anti-dilution provisions, as to both the exercise price and the number of shares purchasable under the warrants, which due to the December Financing, would have resulted in the January Warrants representing the right to acquire 22,666,668 shares of our common stock, i.e., an additional 18,888,890 shares (the "Warrant Increment") at a reduced exercise price of $.50 per share. We have issued 5,000,000 shares of our common stock to the January Investors, in consideration of their waiver of the Warrant Increment (the "Waiver Shares"). This waiver will apply to future financings as well.

The provisions of the January Warrants which result in the reduction of the exercise price remain in place and, as a result of the December Financing, the exercise price of the January Warrants have been reduced to $.50 per share. The value of the Waiver Shares was determined to be $1,650,000 which was the market value of the 5,000,000 shares which were issued in consideration of the waiver at the date of grant. Each of our December Investors participated in the January Financing but not all of our January Investors participated in the December Financing.

We filed a Registration Statement covering the resale of 6,011,001 shares of our common stock issuable on the conversion of Preferred Stock issued to the December Investors and the January Investors. Such Registration Statement was declared effective by the Securities and Exchange Commission under the Securities and Exchange Act of 1934 on June 5, 2008. We do not have sufficient shares of common stock available to allow for the conversion of all of the preferred stock into common stock. We have agreed , and our board of directors previously approved amending our Certificate of Incorporation to increase the number of shares of common stock we are authorized to issue to 200,000,000 shares. Approval of our stockholders shall be required to effect such amendment under Delaware law and we expect to hold a special meeting of our stockholders for the purpose of securing such approval and note that shareholders representing over 50% of our outstanding common stock consented to such amendment.

The December Investors may allege that certain penalties are owed to them by the Company based on certain time requirements in the documentation relating to the December Financing. If such claim is successfully made, we may lack the liquidity to satisfy such claim.

On March 28, 2008 a consultant elected to convert $16,818 due him for consulting fees into shares of Company stock at a price of $0.37 per share, which was the market price on the date of the election, resulting in the Company issuing 45,455 shares to him..

On February 25, 2008 we reached an agreement with Shep Gordon to convert past due amounts owed aggregating $190,000 due him for consulting fees into shares of Company common stock at a price of $0.50 per share resulting in the Company issuing 380,000 shares to him. The market price of the Company's common stock at the date of the election to convert was $0.45 per share.

On January 17, 2008 the Company's Chief Executive Officer (CEO) elected to convert $25,000 due him for compensation into shares of Company common stock at a price of $0.50 per share resulting in the Company issuing 50,000 shares to him. The market price of the Company's common stock on the date of election was $0.18 per share.

From July 2007 through April 2008 the Company borrowed an aggregate of $522,303 from our CEO for working capital purposes. The borrowings bear interest at 12% per annum. As of April, 2008, $327,554 including interest has been repaid. For the year ended April 30, 2008 interest incurred on this loan aggregated $37,798. As of April 30, 2008 amounts owed to our CEO on these loans aggregated $232,547 including accrued interest.

In October 2006, the Company borrowed $250,000 and issued a convertible promissory note in like amount. This note is payable in October 2008 and is convertible into shares of our common stock at $0.60 per share. The note bears interest at 12% per annum and is payable quarterly commencing January 2007. At the option of the lender, interest can be paid in shares of Company common stock. During the year ended April 30, 2008 the Company issued the note holder an aggregate of 49,307 shares of our common stock to satisfy an aggregate of $29,583 of interest accrued through October 10, 2007 and in February 2008, the Company paid the note holder $7,742 for interest accrued through January 10, 2008. In connection with this borrowing we issued warrants to purchase 250,000 shares of our common stock for $0.60 per share. These warrants are exercisable for a five-year period from the date of issuance.

In June 2006, we entered into a $10 million, three-year, asset-based revolving credit facility with a financial institution to be used for working capital purposes. Under this line, we may borrow 85% of eligible accounts receivable, as defined under the agreement. Interest on the line accrues at 1.5% above the prime rate. Also, in June 8 2006, we entered into a secured purchase order financing facility with another financial institution. The amount we are able to borrow under these facilities will depend on our outstanding eligible accounts receivable, inventory and eligible purchase orders, respectively. Both of these facilities are secured by our assets. On April, 2008 $307,940 and $0 was outstanding on our revolving credit and purchase order facilities, respectively.

ROYALTIES/LICENSING AGREEMENTS

In November 2005, the Company entered into an eight-year license agreement for sales of Trump Super Premium Vodka. Under the agreement the Company is required to pay royalties on sales of the licensed product. The agreement provides for certain minimum royalty payments through November 2012 which if not satisfied could result in termination of the license.

Under our license agreement for Old Whiskey River, we are obligated to pay royalties of between $10 and $33 per case, depending on the size of the bottle.

Under our license agreement for Newman's Own, we are obligated to pay royalties of $.95 per twelve bottle case.

Under our license agreement for Damaina Liqueur we are obligated to pay a percentage of gross profits, less certain direct selling expenses through May 2008 and $3 per case thereafter.

Under our license agreement with Aguila Tequila we are obligated to pay $3 per case.

OTHER AGREEMENTS

In fiscal 2003 we entered into a consulting agreement with a company, Marvin Traub & Associates ("MTA"), owned 100% by Marvin Traub, a member of the Board of Directors. Under the agreement, MTA is being compensated at the rate of $100,000 per annum. As of April 30, 2008, we were indebted to MTA in the amount of $156,248.

In December 2002, we entered into a consulting agreement with Mr. Shep Gordon which provides for payment of $120,000 per year to Mr. Gordon, payable through June 2009. As of April 30, 2008, the aggregate amount owed to Mr. Gordon was approximately $30,000. We have an informal understanding with Mr. Shep Gordon pursuant to which he can convert all or a portion of the consulting fees which we owe to him into shares of our common stock at a conversion price negotiated from time to time. In February 2008 the Company issued 380,000 shares of its common stock to Mr. Gordon to satisfy $190,000 of consulting fees owed to Mr. Gordon as of January 31, 2008.

Since we were founded in 2002, the implementation of our business plan has been negatively affected by insufficient working capital. Business judgments have been substantially affected by the availability of working capital. Although our working capital position and our cash balance has been improved as a result of our December and January, 2007 private placement of our common stock, preferred stock and warrants, we will need to continue to carefully manage our working capital and our business decisions will continue to be influenced by our working capital requirements. Therefore, our short term business strategy will rely heavily on our cost efficient icon brand strategy and the resources available to us from our media and entertainment partners We will continue to focus on those of our products which we believe will provide the greatest return per dollar of investment with the expectation that as a result of increases in sales and the resulting improvement in our working capital position, we will be able to focus on those products for which market acceptance might require greater investments of time and resources. To that end, our short-term focus will be, for wine and spirits, Trump Super Premium Vodka, Old Whiskey River Bourbon, Damiana, Aquila Tequila, our select label wines, and in association with our recent joint venture with music icon Dr. Dre, a super premium cognac and a unique sparkling vodka. For the non-alcoholic beverages Newman's Own lightly sparkling fruit juice drinks and waters. In order for us to continue and grow our business, we will need additional financing which may take the form of equity or debt. There can be no assurance we will be able to secure the financing we require, and if we are unable to secure the financing we need, we may be unable to continue our operations. We anticipate that increased sales revenues will help to some extent, but we will need to obtain funds from equity or debt offerings, and/or from a new or expanded credit facility. In the event we are not able to increase our working capital, we will not be able to implement or may be required to delay all or part of our business plan, and our ability to attain profitable operations, generate positive cash flows from operating and investing activities and materially expand the business will be materially adversely affected.

OFF BALANCE SHEET ARRANGEMENTS

Not applicable.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are more fully described in Note 2 to the audited financial statements. 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, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions. We believe that the following critical accounting policies are subject to estimates and judgments used in the preparation of the financial statements.

The Company recognizes revenues when title passes to the customer, which is generally when products are shipped. The Company recognizes revenue dilution from items such as product returns, inventory credits, discounts and other allowances in the period that such items are first expected to occur. The Company does not offer its clients the opportunity to return products for any reason other than manufacturing defects. In addition, the Company does not offer incentives to its customers to either acquire more products or maintain higher inventory levels of products than they would in ordinary course of business. The Company assesses levels of inventory maintained by its customers through communications with its customers. Furthermore, it is the Company's policy to accrue for material post shipment obligations and customer incentives in the period the related revenue is recognized.

Accounts receivable are recorded at original invoice amount, less an allowance for uncollectible accounts that management believes will be adequate to absorb estimated losses on existing balances. Management estimates the allowance based on the collectability of accounts receivable and previous bad debt experience. Accounts receivable balances are written off upon management's determination that such accounts are uncollectible. Recoveries of accounts receivable previously written off are recorded when payments are received on those accounts. Management believes that credit risks are not material to the financial position of the Company or results of its operations.

The Company computes earning per share under the provisions of SFAS No. 128, Earnings per Share, whereby basic earning (loss) per shares is computed by dividing net income (loss) attributable to all classes of common shareholders by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is determined in the same manner as basic earnings per share except that the number of shares is increased to assume exercise of potentially dilutive and contingently issuable shares using the treasury stock method, unless the effect of such increase would be anti-dilutive. For the year ended April 30, 2008 and 2007, diluted losses per share amounts equal basic losses per share because the impact of the assumed exercise of contingently issuable shares would have been anti-dilutive.

Long Lived Assets. Long-lived assets, including intangible assets, property, furniture and equipment are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable based on certain judgments and estimates. These judgments and estimates include the determination of an event indicating impairment; the future undiscounted cash flows to be generated by the asset, including the estimated life of the asset and likelihood of alternative courses of action; and risks associated with those cash flows. An impairment charge is recorded equal to the difference between the carrying amount of the asset and its fair value.

Useful lives of long-lived assets are based on management's estimates of the periods that the assets will be productively utilized in the revenue-generation process. Factors that affect the determination of lives include prior experience with similar assets and product life expectations and management's estimate of the period that the assets will generate revenues.

The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standard 123 (revised 2004), Share-Based Payment (SFAS 123R) using the modified prospective approach. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees and non employees.