Sales of $1,296,665 and $375,033 for the nine months ended September 30, 2011 and September 30, 2010 respectively represented a decrease of 71% or $921,632. The increase in revenues is primarily due to an acquisition of Cherrybrook in the second quarter of 2011. We see same store sales growth of our products steady in the third quarter as compared to the same period in 2010.

10

Cost of Goods Sold

Cost of goods sold consists primarily of the costs of our ingredients, packaging, production and freight. Our cost of goods sold of $527,506 for the three months ended September 30, 2011 represents an increase of 94% or $496,195, as compared to the prior year cost of goods sold during same period in the amount of $31,311 which is a direct result of the Cherrybrook acquisition. Cost of goods sold, on a per unit basis, are effected by the Cherrybrook acquisition we anticipate the balance of 2011 in the 60% - 65% range which take into account slight variations in certain raw material and freight cost of ingredient costs. Overall, we have not experienced significant increases in raw material and packaging costs in 2011, while we are continuing to negotiate reductions and find lower-cost sources wherever possible. The high quality of our natural ingredients is of primary concern, as we constantly seek good sources. We are seeing a short term increase cost of goods sold from the new acquisition, but expect it to normalize throughout the year. We have implement prices increases which are being phased in during 2011 and first quarter 2012 which should increase the margin.

Cost of goods sold consists primarily of the costs of our ingredients, packaging, production and freight. Our cost of goods sold of $777,479 for the nine months ended September 30, 2011 represents an increase of 77% or 599,731, as compared to the prior year cost of goods sold during same period amount of in the $177,748. Cost of goods sold, on a per unit basis, are effected by the Cherrybrook acquisition we anticipate the balance of 2011 in the 60% - 65% range which take into account slight variations in certain raw material and freight cost of ingredient costs. Overall, we have not experienced significant increases in raw material and packaging costs in 2011, while we are continuing to negotiate reductions and find lower-cost sources wherever possible. The high quality of our natural ingredients is of primary concern, as we constantly seek good sources. We are seeing a short term increase cost of goods sold from the new acquisition, but expect it to normalize throughout the year. We have implement prices increases which are being phased in during 2011 and first quarter 2012 which should increase the margin.

Our gross profit increased to $279,329 in the three months ended September 30, 2011, from $54,187 during the same period in 2010, an increase of $225,142 or 81%. The gross profit as a percentage of sales are slightly down to 35% in the three months ended September 30, 2011 as compared to 63% in the same period of 2010.   We will see increases in weighted average cost of goods sold as a result of the Cherrybrook's product lines mix, but expect gross profit to normalize throughout the year back.

Our gross profit increased to $519,186 in the nine months ended September 30, 2011, from $197,285 during the same period in 2010, an increase of $321,901 or 62%. The gross profit as a percentage of sales are down to 40% in the nine months ended September 30, 2011 as compared to 53% in the same period of 2010. This gross profit margin change is primarily due to recent acquisition and historical costs of raw material and freight prices in 2010. We will see increases in weighted average cost of goods sold as a result of the Cherrybrook's product lines mix, but expect gross profit to normalize throughout the year back.

Selling and marketing expenses consist primarily of direct charges for staff compensation costs, advertising, sales promotion, marketing and trade shows. Selling and marketing costs increased to $203,343 in the three months ended September 30, 2011 from $48,615 during the same period in 2010, a net increase of $154,728 or 76%. Increases in distributor and in-store promotions associated with the Cherrybrook acquisition.

Selling and marketing expenses consist primarily of direct charges for staff compensation costs, advertising, sales promotion, marketing and trade shows. Selling and marketing costs decreased to $344,361 in the nine months ended September 30, 2011 from $185,067 during the same period in 2010, a net increase of $159,294 or 46%. Increases in distributor and in-store promotions associated with the Cherrybrook acquisition.

The focus of our sales efforts is primarily on increasing product placement in significant grocery chains nationwide. The trend in grocery stores is to offer more natural products. Our sales force is leveraging our strong position in natural food grocery stores throughout the nation, to establish new relationships with mainstream grocery stores.

11

General and Administrative Expenses

General and administrative expense consists primarily of the cost of executive, administrative, and finance personnel, as well as professional fees. General and administrative expenses increased to $91,629 during the three months ended September 30, 2011 from $46,627 in the same period of 2010, a net increase of $45,002 or 49% due to non-cash brokerage compensation accrued to convertible note. Actual cash general and administrative expenses decreased to $54,129 during the three months ended September 30, 2011 from $46,627 in the same period of 2010, a net increase of $7,502 or 14%. The overall increase in 2011 is primarily due to consolidation of operations.

General and administrative expense consists primarily of the cost of executive, administrative, and finance personnel, as well as professional fees and non-cash impairment of Tradenames. General and administrative expenses increased to $788,628 during the nine months ended September 30, 2011 from $199,390 in the same period of 2010, a net increase of $589,238 or 75% due to non- cash impairment of Tradenames and non-cash brokerage compensation accrued to convertible note. Actual cash general and administrative expenses increased to $165,883 during the nine months ended September 30, 2011 from $113,390 in the same period of 2010, a net increase of $52,493 or 32%. The overall increase in 2011 is primarily due to consolidation of operations.

With the Cherrybrook acquisition, we increase staffing levels. We believe that our existing executive and administrative staffing levels are sufficient to allow for moderate growth without the need to add personnel and related costs for the foreseeable future.

Our profit (loss) from operations increased to ($56,570) in the three months ended September 30, 2011 from a loss of $(48,015) in the same period of 2010. Cash spending as described above due to consolidation of expenses related to Cherrybrook acquisition while the non-cash loss increase was from the write down of Tradenames. During the three months ended September 30, 2011 the Company generated $20,608 in earnings before interest, taxes, depreciation and amortization (EBITDA) as compared to $721 in the same period of 2010.

Our profit (loss) from operations decreased to $(707,146) in the nine months ended September 30, 2011 from $(296,587) in the same period of 2010. Cash spending as described above due to consolidation of expenses related to Cherrybrook acquisition while the non-cash loss increase was from the write down of Tradenames. During the nine month ended September 30, 2011 the Company generated $4,191 in earnings before interest, taxes, depreciation and amortization (EBITDA) as compared to ($103,360) in the same period of 2010.

Interest expense increased to $15,299 in the three months ended September 30, 2011, compared to interest expense of $34,943 in the same period of 2010. The increase is due to the changes in long-term debt of Physicians Capital and, as a result of short term debt our Cherrybrook shareholder Republic Holdings loans obligation and increases of borrowing under a line of credit agreement.

Interest expense decreased to $23,154 in the nine months ended September 30, 2011, compared to interest expense of $90,118 in the same period of 2010. The increase is due to the changes in long-term debt of Physicians Capital and, as a result of short term debt our Cherrybrook shareholder Republic Holdings loans obligation and increases of borrowing under a line of credit agreement.

Our Net Income (Loss) increased to ($71,869) in the three months ended September 30, 2010 from a loss of $(82,958) in the same period of 2010. Earnings per share also improved in the three months ended September 30, 2011 to a negative of ($.01) per share from a loss of $(.02) per share in the same period of 2010.

Our Net Loss decreased to $(704,957) in the nine months ended September 30, 2011 from a loss of $(296,587) in the same period of 2010. Earnings per share also improved in the nine months ended September 30, 2011 to a negative of ($.07) per share from a loss of $(.06) per share in the same period of 2010. Net Income in the nine months ended September 30, 2011 without one-time charge to impairment of goodwill would be $(134,400) and earnings would be a negative of ($.01) per share.

12

Liquidity and Capital Resources

As of September 30, 2011, we had stockholders equity of $134,180 and working capital of $128,901, compared to stockholders equity of $3,265 and working capital of $(50,485) at September 30, 2010. Cash and cash equivalents were $111,991 as of September 30, 2011, as compared to $21,340 at September 30, 2010. This increase in our working capital was primarily a result of decreased borrowings which are classified as short term debt and recapitalized as preferred stock. In addition to our cash position on September 30, 2011, we had availability the ability to draw funds under both our lines of credit. Our change in cash and cash equivalents was primarily a result of the collection of accounts receivable.

We believe that the Company has sufficient working capital to support existing operations through 2011. Our primary capital source will be cash flow from operations in 2011. If our sales goals do not materialize as planned, we believe that the Company can become leaner and our costs can be managed to produce profitable operations. We have plan a equity and debt offerings in 2011 - 2012, which we hope to finance our operations growth primarily through private sales of common stock, preferred stock, convertible debt, a line of credit from a financial institution, and cash generated from operations.

Net cash provided (used in) operations during third quarter 2011 was ($178,265) compared with $(226,905) used in operations during the same period in 2010.  The increase in cash provided (used in) operations during third quarter 2011 was primarily due to the buildup of accounts payable and increased debt from the Cherrybrook acquisition.

Changes in net cash used in investing activities of $56,381 during third quarter 2011 compared with $0 during 2010 was a result in the acquisition of assets and new operations.

Net cash provided by financing activities of $189,582 during second quarter of 2011 compared with $240,621 during the same period 2010 was primarily due to increase in proceeds of additional paid in capital proceeds from the purchase of assets and shareholder loans to fund operations.

We believe that our current cash position and current line of credit availability will be limited but meet our cash needs throughout 2011.

At September 30, 2011, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. We believe in the quality and reasonableness of our critical accounting policies; however, it is likely that materially different amounts would be reported under different conditions or using assumptions different from those that we have applied. The accounting policies that have been identified as critical to our business operations and understanding the results of our operations pertain to revenue recognition and sales incentives, valuation of accounts and chargebacks receivable, inventories, property, plant and equipment, accounting for acquisitions, stock based compensation, segments and goodwill and intangible assets. The application of each of these critical accounting policies and estimates was discussed in our Annual Report on Form 10-K for the year ended December 31, 2010.

We primarily market cold beverage products, and as a result, quarterly results of operations reflect seasonal trends resulting from increased demand for our cold products in the warmer months of the year. Quarterly fluctuations in our sales volume and operating results are due to a number of factors relating to our business, including the timing of trade promotions, advertising and consumer promotions and other factors, such as seasonality, inclement weather and unanticipated increases in labor, commodity, energy, insurance or other operating costs. The impact on sales volume and operating results due to the timing and extent of these factors can significantly impact our business. For these reasons, you should not rely on our quarterly operating results as indications of future performance.

Inflation may cause increased ingredient, fuel, labor and benefits costs. For more information regarding ingredient costs, see the Company's Annual Report on Form 10-K for the year ended December 31, 2010. To the extent permitted by competition, we seek to recover increased costs through a combination of price increases, new product innovation and by implementing process efficiencies and cost reductions.

Certain statements contained in this Quarterly Report constitute "forward-looking statements" within the meaning of Rule 3b-6 of the Securities Exchange Act of 1934. These forward-looking statements include the following: (i) our intentions for growth through acquisitions as well as internal expansion; (ii) our beliefs regarding the integration of our brands and the resulting impact thereof; (iii) our statements regarding the introduction of new products and the impact on our revenues and margins; (iv) our beliefs regarding the positioning of our business for the future; (v) our beliefs that we will continue to derive benefits from new products; (vi) our belief that our cash and cash equivalent investments have no significant exposure to interest rate risk; and (vii) our belief that our sources of liquidity are adequate to fund our anticipated operating and cash requirements for the next twelve months. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following:

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Securities and Exchange Act of 1934 Rules 13a-15(e) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2011.In designing and evaluating the disclosure controls and procedures, management recognizes that any controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company are detected.