EXECUTIVE LEVEL OVERVIEW

Our Business Model

Our plan of operation during the next 12 months is to focus on the non-alcoholic single serving beverage business, developing and marketing milk based products in two fast growing segments; sports recovery and functional dairy, We do not directly manufacture our products but instead outsource the manufacturing process to a third party contract packer. Our efforts were focused in our first full year operations primarily on developing our first energy drink which is called VisViva™ which sales began in late March 2008. We have since tabled that product.

Milk, while the second highest beverage consumed in America in terms of overall volume, is still under-represented in the American single serve ready-to-drink beverage industry. While known for generations by nutritionists and more recently identified by sports, hydration, metabolism and protein professionals and scientists as "mother nature's most perfect food", milk has yet to be successfully branded and commercialized.

We completed research and development work in developing our latest dairy based product which is called "Phase IIIŽ Recovery" and is designed for the third phase of exercise, the "after phase" of before, during and after. This product is the first milk based protein drink ever to be produced in America and is shelf-stable with a twelve (12) months long shelf life. We started to sell this new product in February 2010. Our co-pack partner, O-AT-KA Milk Products, is the largest retort milk processor in America, located in Batavia, New York and has the most advanced retort processor and know-how to produce this product with state-of-the-art milk filtration systems as well as the packaging of this product in new Ball Container aluminum eco-friendly re-sealable bottles. The primary target for Phase III RecoveryŽ is active sports minded males and females from ages 15 to 35, but we will target active sports and exercise consumers at all levels. Gyms, sports teams, body builders and even high-endurance athletes are all beginning to focus on sports recovery drinks which we consider the "next generation" sports drink. We anticipate the development of other dairy based drink products in late 2012 or early 2013, depending upon available capital.

We organized a Scientific Advisory Board of three well known experts that have extensive experience in sports nutrition. This board is helpful in communicating the scientific benefits of our sports recovery drink as well as new functional milk drinks. Their contacts in the world of sports will be very important in our sales efforts, especially in the early days.

We plan to initially focus on the largest markets for beverages in the eastern United States. We intend to develop key working partnerships with regional direct store delivery (DSD) beverage distributors in these markets and will support them with field representatives to assure sufficient shelf compliance. Regional distributors have lost four major beverage lines in the last couple of years including Monster Energy (moved to Anheuser Bush), Fuze (purchased by Coca-Cola), Vitamin Water (purchased by Coca-Cola, and the V-8 brands (now distributed by Coca-Cola). We will develop regionally exclusive DSD agreements that are desperately needed by the distributors to replace these losses as well as shipping direct to our customers via our own warehouse system.

We will pre-sell in four sales channels; grocery, convenience, drug and sports and gym specialty. Certain accounts like chained convenience stores, grocery and drug stores will require warehouse distribution. The shelf-stable and long shelf life attributes of our products will accommodate any and all distribution and warehouse systems. To accommodate this business, we will employ beverage brokers and work with the "tobacco & candy" and food service warehouse distributors like McLane Company and Sysco Foods.

The pricing and gross profit margin for the products will vary. Each product delivers different functionality and utilizes different types of packaging and package sizes. Without exception, these products will command premium pricing due to the functionality and value-added formulation and will therefore be priced according to the nearest competitive brands in their respective spaces. The functional milk drinks are also expected to command approximately the same percentage margin due to the premium pricing commanded by the experiential functionality. Singles will obtain higher margin than multi-packs.

Plan of Operations

We are continuing to seek other sources of financing to develop our business plan, implement our sales and marketing plan and to meet other operational expense requirements. Historically, we have had to rely on convertible debt financings to cover operating costs. Based on the available cash, we have no assurance that we will be able to obtain additional funding to sustain our limited operations. If we do not obtain additional funding, we may need to cease operations until we do so and, in that event, may consider a sale of the rights to our product line(s) and intangible assets such as our trademarks or a joint venture partner that will provide funding to the enterprise. However, certain of our debt obligations totaling $5,005,539 are secured by our assets. Failure to fulfill our obligations under these notes and related agreements could lead to the loss of these assets, which would be detrimental to our operations.

Our future operations are totally dependent upon obtaining additional funding. Past fundings have been subject to defaults by the company's inability to meet due dates for certain notes payable, thereby triggering anti-dilution rights which created the need to issue additional shares of common stock and/or additional warrants to purchase additional shares of common stock in order to extend the applicable due dates for certain notes payable. There can be no assurance that these defaults will not happen again in the future, thereby creating the potential need for additional issuances of shares of common stock and/or warrants, assuming the holders agree to further extensions.

We will consider equity and/or convertible debt financings, either or both of a private sale or a registered public offering of our common stock; however, at this time and with the current economy, it seems unlikely that we can obtain an underwriter.

We anticipate that, depending on market conditions and our plan of operations, we may incur operating losses in the future based mainly on the fact that we may not be able to generate enough gross profits from our sales to cover our operating expenses and to increase our sales and marketing efforts. Our most recently developed "Phase IIIŽ Recovery" drink product was introduced in early 2010 and based on historical spending, we anticipate a need of funding in the range of $1,500,000 to $2,100,000 for the next twelve months to meet our business plan and operating needs only. This figure does not include any new product research and development activities.

This discussion and analysis of our consolidated financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles that are generally accepted in the United States of America. Our fiscal year end is March 31.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical estimates included in our financial statements are the following:

Financial Instrument Valuation

In estimating the fair value of our hybrid financial instruments that are required to be carried as liabilities at fair value pursuant to the FASB Accounting Standards Codification for the period ended March 31, 2012, we use all available information and appropriate techniques including outside consultants to develop our estimates. However, actual results could differ from our estimates.

Derivative Financial Instruments

We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have and will frequently enter into certain other financial instruments and contracts, such as debt financing arrangements and freestanding warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts or (iii) may be net-cash settled by the counterparty to a financing transaction. As required by the FASB Accounting Standards Codification, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. However, we are allowed to elect fair value measurement of the hybrid financial instruments, on a case-by-case basis, rather than bifurcate the derivative. We believe that fair value measurement of the hybrid convertible promissory notes arising from our various financing arrangements provides a more meaningful presentation of that financial instrument.

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective measuring of fair values. In selecting the appropriate technique(s), we consider, among other factors, the nature of the instrument, the market risks that such instruments embody and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, we generally use the Black-Scholes-Merton option valuation technique, since it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. For complex hybrid instruments, such as convertible promissory notes that include embedded conversion options, puts and redemption features embedded in them, we generally use techniques that embody all of the requisite assumptions (including credit risk, interest-rate risk, dilution and exercise/conversion behaviors) that are necessary to fair value these more complex instruments. For forward contracts that contingently require net-cash settlement as the principal means of settlement, we project and discount future cash flows applying probability-weightage to multiple possible outcomes.

Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, our income will reflect the volatility in these estimate and assumption changes.

Impairment of Long-Lived Assets

Our long-lived assets consist principally of intangible assets, and to a much lesser extent, furniture and equipment. We evaluate the carrying value and recoverability of our long-lived assets when circumstances warrant such evaluation by applying the provisions of the FASB Accounting Standards Codification which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Recent accounting pronouncements

In December 2011, the Financial Accounting Standards Board issued an Accounting Standards Update ("ASU") that provides amendments for disclosures about offsetting assets and liabilities. The amendments require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The amendments are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Disclosures required by the amendments should be provided retrospectively for all comparative periods presented. For the Company, the amendment is effective for fiscal year 2014. The Company is currently evaluating the impact these amendments may have on its disclosures.

In June 2011, the Financial Accounting Standards Board issued an ASU that provides amendments on the presentation of comprehensive income. The amendments require that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. The amendments do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments do not change the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense or benefit related to the total of other comprehensive income items. In both cases, the tax effect for each component must be disclosed in the notes to the financial statements or presented in the statement in which other comprehensive income is presented. The amendments do not affect how earnings per share is calculated or presented. The amendments are effective for fiscal years and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively. For the Company, the amendment is effective for fiscal 2013. The effect of adoption will have minimum impact on the Company as the Company's current presentation of comprehensive income follows the two-statement approach.

RESULTS OF OPERATIONS

Revenues

As we recently started to recognize revenue, there is no meaningful comparison
with prior periods.

Consolidated Revenues
                            For The Years Ended March 31,
                             2012                  2011           $ Change       % Change
Revenues                $       406,315       $        61,327     $ 344,988          562.5 %
Less slotting expense                 -                     -             -              -
Less discounts                  (29,878 )             (10,967 )     (18,911 )        172.4 %
Net Revenues            $       376,437       $        50,360     $ 326,077          647.5 %

All revenues were generated in the United States. The increase in our revenues for the year ended March 31, 2012 as compared to the prior year ended March 31, 2011 is the result of increased customer accounts mainly in the fourth quarter for our Phase IIIŽ Recovery product.

Slotting fees are common in the large store channels and represent cash payments made for rights to place our products on customer retail shelves for a stipulated period of time. A component of our growth plan includes increasing penetration in the large store channel which may be subject to future slotting fees. There were no recorded slotting fees for the years ended March 31, 2012 and March 31, 2011.

We plan to increase our revenues during the next twelve months by implementing marketing and sales promotion programs to introduce our new "Phase IIIŽ Recovery" drink to new markets in the 2012 calendar year, increasing our internal sales force, securing additional national distributors, expanding our products offering, increasing our volume per outlet and implementing new grass roots marketing and sample programs.

Consolidated Product and Shipping Costs       For The Years Ended March 31
                                                2012                 2011          $ Change       % Change
Product costs                              $       278,300       $      42,613     $ 235,687          553.1 %
Shipping costs                                      38,300               9,346        28,954          309.8 %
Inventory Obsolescence                               2,137                   -         2,137            N/A
 Total costs                               $       318,737       $      51,959     $ 266,778          513.4 %

The computation of the percentage of expenses to revenues is not meaningful at this time and is not representative of expected future operations.

Product and shipping costs for the year ended March 31, 2012 were higher over the year ended March 31, 2011 mainly due to the increased customers for the sales of the Phase IIIŽ Recovery product.

Operating Expenses                             For The Years Ended March 31
                                                  2012                2011         $ Change       % Change
Salaries, taxes and employee benefit costs   $       535,690       $   311,471     $ 224,219           72.0 %
Marketing and promotion                              461,272           265,358       195,914           73,8 %
Consulting fees                                       82,645            40,329        42,316          104.9 %
Professional and legal fees                          228,799           260,951       (32,152 )        -12.3 %
Travel and entertainment                              47,308              (427 )      47,735       -11179.2 %
Product development costs                              2,074             7,900        (5,826 )        -73.7 %
Stock compensation expense                           165,068           195,000       (29,932 )        -15.3 %
Other overhead expenses                              374,902           468,441       (93,539 )        -20.0 %
  Total operating expenses                   $     1,897,758       $ 1,549,023     $ 348,735           22.5 %

Salaries, taxes and employee benefit costs For the year ended March 31, 2012, total expenses of $535,690 were higher by $224,219 over last year's comparable figures of $311,471, partly due to the Company's policy to record non cash payments for past due salaries in stock compensation expense instead of salary expense. From the $224,219 increase, an amount of $195,000 was recorded in stock compensation expense for the year ended March 31, 2011 for issued common stock to Roy Warren and Tommy Kee and none in 2012, (see the Stock compensation expense section below) which contributed to most of the increase. The table below reflects a net increase of $29,219 in which this amount was caused by the increase of employees during the year ended March 31, 2012.

                                           3/31/2012      3/31/2011       Variance

Salaries                                   $  535,690     $  311,471     $  224,219
Stock compensation expense for employees            -        195,000       (195,000 )
Net variance                               $  535,690     $  506,471     $   29,219

Marketing and promotion
For the year ended March 31, 2012, we incurred total marketing and promotion costs of $461,272 as compared to $265,358 for the year ended March 31, 2011 for an increase of $195,914 or 73.8%. This increase was due primarily to increased broker commissions costs of $69,234, Walgreen's advertising expense for $65,000, increased sample costs of $18,379 and increase in various marketing programs including costs associated with the use of athlete endorsements for our Phase IIIŽ Recovery drink.

Consulting fees
Consulting fees of $82,645 for the year ended March 31, 2012 were $42,316 or 104.9% higher than last year's figures mainly due to the use of more outside sales consultants and merchandisers in selling our Phase IIIŽ Recovery product in 2012.

Professional and legal fees
These costs related to the use of outside legal, accounting and auditing firms. Total costs for the year ended March 31, 2012 of $228,799 were $32,152 lower than the previous year's comparable costs of $260,951, mainly due to a decrease use of legal services.

Travel and entertainment

These costs increased over the prior year ending March 31, 2011 by $47,735 mainly due to increased travel activities for promoting our Phase IIIŽ Recovery product in new markets primarily in the northeastern United States.

Product development costs
These costs decreased over the prior year ending March 31, 2011 mainly due to the fact that most development costs for our new product, Phase IIIŽ Recovery, were incurred in the previous year. Due to limited capital, we have delayed the development of other potential new products.

Stock compensation expense
For the year ended March 31, 2012, we recorded stock compensation expense of $165,068 mainly for services rendered to outside vendors as well as the costs of issued stock options to employees. For the year ended March 31, 2011, these costs for a total of $195,000 related to the recording of costs associated with the conversions of past due salaries for the company's CEO, Roy Warren, for $125,000 and for the company's CFO, Tommy Kee, for $70,000 as we record all issuances of common stock to employees in this account instead of salary expense for non-cash identification purposes.

Other operating expenses
The total costs decreased by $93,539 or 20% over the prior year mainly due to decreased investor relations costs of $79,720. The other main components of this category represent Board of Directors' fees and rent expense.

Other Income (Expense)

Derivative income/(expense)
Derivative income/(expense) arises from changes in the fair value of our derivative financial instruments and, in rare instances, day-one losses when the fair value of embedded and freestanding derivative financial instruments issued or included in financing transactions exceed the proceeds or other basis. In addition, the fair value of our financial instruments that are recorded at fair value will change in future periods based upon changes in our trading market price and changes in other assumptions and market indicators used in the valuation techniques. Future changes in these underlying internal and external market conditions will have a continuing effect on derivative income/expense associated with our derivative financial instruments.

The following table summarizes the effects on our income (expense) associated with changes in the fair values of our financial instruments that are carried at fair value from inception through March 31, 2012:

Inception through March 31, 2012 Our financing arrangements giving rise to derivative instruments and the income effects:
Day-on derivative losses:

  $   600,000   Original Face Value Convertible Note Financing                     $     (2,534,178 )
  $   500,000   Original Face Value Convertible Note Financing                             (899,305 )
  $   100,000   Original Face Value Convertible Note Financing                           (1,285,570 )
  $    55,000   Original Face Value Short Term Bridge Loan Financing                        (12,700 )
  $   120,000   Original Face Value Convertible Note Financing                              (72,251 )
  $    60,000   Original Face Value Convertible Note Financing                              (38,542 )
  $   200,000   Original Face Value Convertible Note Financing                             (119,136 )
  $    27,778   Original Face Value Convertible Note Financing                               (6,378 )
  $   161,111   Original Face Value Convertible Note Financing                              (45,846 )
  $   111,112   Original Face Value Convertible Note Financing                             (185,657 )
  $    50,000   Original Face Value Convertible Note Financing                             (182,843 )
  $    55,000   Original Face Value Convertible Note Financing                              (80,135 )
  $   137,500   Original Face Value Convertible Note Financing                           (1,023,463 )
  $    55,000   Original Face Value Convertible Note Financing                              (55,641 )
  $   400,000   Original Face Value Convertible Note Financing                             (730,079 )
  $   600,000   Original Face Value Convertible Note Financing                           (1,420,653 )
  $   221,937   Original Face Value Convertible Note Financing                             (295,144 )
  $   500,000   Original Face Value Convertible Note Financing                             (288,718 )
 $  1,000,000   Original Face Value Convertible Note Financing                           (1,215,164 )

                                                                                      Inception
                                                                                       through
                                                                                    March 31, 2012

Derivative income (expense):
  $   600,000   Original Face Value Convertible Note Financing                     $      3,311,574
  $   500,000   Original Face Value Convertible Note Financing                            1,658,448
  $   100,000   Original Face Value Convertible Note Financing                            1,163,487
  $   120,000   Original Face Value Short Term Bridge Loan Financing                        213,769
  $   120,000   Original Face Value Short Term Bridge Loan Financing                        213,769
  $    60,000   Original Face Value Short Term Bridge Loan Financing                        106,885
  $    33,000   Original Face Value Short Term Bridge Loan Financing                         58,786
  $    55,000   Original Face Value Short Term Bridge Loan Financing                         63,162
  $   243,333   Original Face Value Convertible Note Financing                              134,424
  $    60,833   Original Face Value Convertible Note Financing                                6,602
  $   120,000   Original Face Value Convertible Note Financing                               41,039
  $    60,000   Original Face Value Convertible Note Financing                               27,358
  $   200,000   Original Face Value Convertible Note Financing                              111,662
. . .