360 Global Wine Announces Results for the First Quarter of 2006

Improving Wine Business and Restatements for 2003-2005

Napa, California, UNITED STATES


SONOMA, Calif., May 23, 2006 (PRIMEZONE) -- 360 Global Wine Company (OTCBB:TSIX), a marketer and distributor of wines and wine-related products, has filed its financial results for the quarter ended March 31, 2006.

Revenues for the first quarter ended March 31, 2006, were approximately $4.2 million as compared to approximately $449,000 for the quarter ended March 31, 2005. This is an increase of approximately $3.9 million. In the first quarter of 2006, the majority of revenue resulted from the acquisition of Viansa Winery, which contributed $3.2 million to revenue. The Company reported gross profit of approximately $1.9 million in the first quarter of 2006 which compared favorably with gross profit of approximately $159,000 in the prior year's first quarter.

During the first quarter of 2006, the Company recorded an operating loss of $25.4 million. Of that operating loss, $24.0 million resulted from non-cash, non-recurring items. These items are stock based compensation of employees and members of the board of directors of $15.2 million, marketing sponsorships of $4.7 million and general and administrative consulting expenses of $4.1 million. All three of these items were paid in the Company's common stock. In addition, the Company incurred $0.6 million in legal fees.

Because Viansa was not acquired until the third quarter of 2005, both the sales, and general and administrative expenses were greater in the quarter ended March 31, 2006 than the comparable quarter in 2005. For the quarter ended March 31, 2006 the total sales and marketing expense was $6.0 million versus $0.3 million for the quarter ended March 31, 2005.

For the quarter ended March 31, 2006, the total general and administrative expense was $6.1 million versus $0.9 million for the quarter ended March 31, 2005. Of the difference, $4.0 million was related to consulting expenses that were paid in the Company's stock.

CEO Jake Shapiro commented, "This has been an exciting quarter for 360. We are encouraged with the progress we are making in the wine business. Revenues over the prior four quarters have been $449,000, $549,000, $5.0 million, and $6.7 million respectively. Seasonally, our strongest quarters are our third and fourth quarters. We are very encouraged by the performance of this first quarter in 2006. With the management team that has been built at 360, we are looking forward to exciting growth potential for the Company based upon both organic growth and strategic acquisitions. We do not feel the restatement of our financials will impact our daily operations or our plans for the future growth of our Company."

The Company has restated its financial statements for the years ended December 31, 2005, 2004 and 2003 as a result of the incorrect classification of the impact of the effect of warrants issued in connection with convertible debt transactions, and the determination of the value of embedded conversion features in convertible debt. These items should be recorded as financial instrument derivatives and recorded at their current value at the end of each reporting period. These adjustments will have the cumulative effect of increasing accumulated deficit by $28.6 million, and decreased additional paid-in capital by $7.6 million at December 31, 2005. It is important to note that these cumulative adjustments will not result in the Company incurring any additional cash obligations, but rather these amounts will be recorded as a reduction in future expenses over their lives. Accordingly, cash used in operations was $20,000 for the quarter ended March 31, 2006 compared to cash used in operations of $438,000 for the quarter ended March 31, 2005. During this period, net cash increased $208,000 for the period ending March 31, 2006.

The Company previously issued convertible debt and warrants to purchase shares of the Company's common stock in connection with certain financings, including its acquisition of the Viansa Winery. Pursuant to certain accounting rules, at the end of each quarter, the Company adjusts the carrying value of the derivative conversion features and the warrants and to recognize non-cash income or non-cash expense. An increase in the value of the derivatives results in a non-cash expense and a decrease in the value results in non-cash income to the Company. In March 2006, following its reverse split, the Company effectuated reductions in the conversion price of its convertible debt and lowered the exercise price of certain of its outstanding warrants to $3.50 per share. These reductions resulted in an increase of approximately $83 million in the value of the derivatives, which was included in other expense for the three month period ended March 31, 2006. The actual value of the derivatives may vary significantly in future quarters and, at the end of the Company's current quarter, may be higher or lower than $83 million, depending upon market conditions and the price of the Company's common stock.

About 360 Global Wine Company

360 Global Wine Company, based in Sonoma, California, a business that is developing a diversified wine company. Management has invested in, and plans to consolidate, a number of small and mid-sized wineries to build an efficient diversified operation with effective sales, marketing, and branding strength. The Company has acquired ownership interest in a prime wine property, developed a distribution network covering the US, significantly enhanced its management, and committed substantial resources to a dynamic brand-building campaign. During 2006, the Company is looking to expand and leverage its retail operations and build a significant wholesale operation serving restaurants and retail/liquor outlets.

Any statements made in this press release which are not historical facts contain certain forward-looking statements, as such term is defined in the Private Litigation Reform Act of 1995, concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results of the specific items described in this release, and the company's operations generally, to differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements, and we disclaim any obligation to update information contained in any forward-looking statement.



        

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