Drinks Americas Holdings, Ltd. Intends to File a Registration Statement for a Rights Offering Issuance of Shares of Voting Preferred Stock

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Jan 14, 2010, 07:01 ET

WILTON, Conn., Jan. 14 /PRNewswirel/ -- (http://www.myprgenie.com) -- Drinks Americas Holdings, Ltd. (OTC Bulletin Board: DKAM), a leading owner, developer and marketer of premium beverages associated with renowned icons, announced today that the Company is planning to register an up to $30,000,000 Rights Offering with the Securities and Exchange Commission for tradable transferable subscription rights to purchase Units worth up to $30,000,000. Each holder of the Company's outstanding shares of Common Stock as of the Rights Offering record date will receive a dividend of one (1) Right for each five hundred (500) shares of Common Stock owned. Each Right shall be exercisable into one (1) Unit, to consist of (i) one (1) voting share of Preferred Stock (the "Preferred Stock") and (ii) one (1) 3-year cash exercise Warrant (the "Warrants") exercisable into one (1) share of Preferred Stock. Rightholders may also exchange their respective shares of Common Stock in lieu of cash for up to 50% of the amount of Rights that such investor is exercising at a ratio of five thousand (5,000) shares of Common Stock for each one (1) Unit. Any shares exchanged to the Company will be put into Treasury. The Preferred Stock shall carry an eight percent (8%) dividend (the "Dividend") for three years, payable annually in cash or in kind at the Company's option. Should the Company elect to make such payment in kind in lieu of cash, it shall give the Preferred Stock holders a minimum of ten business days notice via a press release or an 8K. The Preferred Stock shall be perpetual so that it shall receive equity treatment and shall have no restrictive covenants to prevent the Company from incurring future indebtedness. The Warrants will be exercisable into additional shares of Preferred Stock for a 3-year period at an exercise price as set in the prospectus, subject to anti-dilution adjustments.

The subscription price of the rights, and the price of the Units and final structure of the securities underlying each Unit (which will be made up of Preferred Stock and Warrants) shall be set by the Company's Board of Directors with advice from the dealer manager and our securities attorneys prior to the filing of the final prospectus with the SEC. The Unit subscription price will be based on the trading price of the Company's Common Stock on the pricing date. The Warrant exercise price will be based on a premium to the Unit subscription price.

The Company will seek to have the Rights trade on the OTC Bulletin Board for approximately twenty (20) trading days once approved by the OTC Bulletin Board for trading and once we have been approved for a ticker symbol.

Forward-Looking Statements

Statements in this press release relate to future events. Such statements are forward-looking statements and are based on present information that the Company has related to its existing business circumstances. Investors are cautioned that such forward-looking statements are subject to inherent risks and that actual results may differ materially from such forward-looking statements. Further, investors are cautioned that the Company does not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations. The Company makes such forward-looking statements under the provisions of the "safe harbor" section of the Private Securities Litigation Reform Act of 1995.

The complete terms of the rights offering will be contained in the registration statement for the rights offering filed by the Company with the Securities and Exchange Commission.

THIS RELEASE DOES NOT CONSTITUTE AN OFFER, OR THE SOLICITATION OF AN OFFER, TO BUY OR SELL ANY SECURITY OR TO SUBSCRIBE TO THE RIGHTS OFFERING.

About Drinks Americas Holdings, Ltd.

Drinks Americas develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned icon celebrities. Drinks Americas' portfolio of premium alcoholic beverages includes Olifant Vodka, Trump Super Premium Vodka and Willie Nelson's Old Whiskey River Bourbon, Rheingold Beer, Kid Rock's Badass Beer and Aguila Tequila. The Company also has a partnership with Universal Music's Interscope, Geffen, A&M Records to jointly develop and launch beverage products.

Drinks Americas was founded in 2004 by J. Patrick Kenny, a leading expert in beverage sales and marketing. Mr. Kenny developed his industry expertise in a variety of management positions at the world's leading beverage companies, including Joseph E. Seagram and Sons and The Coca-Cola Company. He has also acted as advisor to several Fortune 500 beverage marketing companies, and has participated in a variety of beverage industry transactions.

For further information, please visit our website at www.drinksamericas.com.