<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For Quarter Ended March 31, 2000
                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to
                                                           --------

                         Commission file number: 0-13181
                                                 -------

                          CAPITAL BEVERAGE CORPORATION
                          ----------------------------
             (Exact Name of Registrant as Specified in its Charter)

                  Delaware                          13-3878747
                  --------                          ----------
           State or other jurisdiction of         (I.R.S. Employer
           incorporation or organization          Identification No.)

                 1111 East Tremont Avenue, Bronx, New York 10460
                 -----------------------------------------------
               (Address of Principal Executive Office) (Zip Code)

                                 (718) 409-2337
                                 --------------
               (Registrant's telephone number including area code)

    Indicate  by check mark  whether  the  registrant  (1) has filed all reports
    required to be filed by Section 13 or 15(d) of the  Securities  Exchange Act
    of 1934 during the preceding 12 months (or for such shorter  period that the
    registrant  was  required to file such  reports) and (2) has been subject to
    such filing requirements for the past 90 days.

             Yes    X                        No
                -----------

    The  number  of shares  of  registrant's  Common  Stock,  $.001  par  value,
    outstanding as of May 15, 2000 was 2,378,409 shares.








<PAGE>






                          CAPITAL BEVERAGE CORPORATION
                                   FORM 10-QSB
                                 March 31, 2000

                                      INDEX
                                                                           PAGE
                                                                          NUMBER

PART I.  FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements (Unaudited)

               Balance Sheet as of March 31, 2000                             3

               Statement of Operations for the three-months
                  ended March 31, 2000 and 1999                               4

               Statement of Cash Flows for the three-months
                  ended March 31, 2000 and 1999                               5

         Note to Financial Statements                                         6

Item 2.  Management's Discussion and Analysis or Plan of Operations          7-8


PART II. OTHER INFORMATION

Item 6.  Exhibits and reports on Form 8-K                                     9

Signatures                                                                   10



<PAGE>
                          CAPITAL BEVERAGE CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2000
                                   (UNAUDITED)



                                     ASSETS

CURRENT ASSETS:
     Cash                                                            $  781,107
     Accounts receivable - trade,
      net of allowance for doubtful accounts of $75,000                 892,360
     Inventories                                                      1,309,970
     Prepaid expenses and other                                         173,487
                                                                     -----------
         TOTAL CURRENT ASSETS                                         3,156,924

PROPERTY AND EQUIPMENT, less accumulated depreciation of $37,638        107,982

OTHER ASSETS:
     Intangible assets, less accumulated amortization of $680,000       920,000
     Deposits                                                             3,290
                                                                     -----------
                                                                     $4,188,196
                                                                     ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                $  949,333
     Accrued expenses and taxes                                         175,527
     Current portion of long-term debt                                   75,918
     Current portion of capital lease obligations                         6,472
     Accrued dividends on preferred stock                               375,113
                                                                     -----------
         TOTAL CURRENT LIABILITIES                                    1,582,363
                                                                     -----------

CAPITAL LEASE OBLIGATIONS                                                45,793

LONG-TERM DEBT                                                          465,652


STOCKHOLDERS' EQUITY:
  7% Cumulative Series B Preferred Stock,
   par value $.01; issued and outstanding
   300,000 shares (Liquidation value $1,200,000)                          3,000
  Common stock, $ .001 par value; authorized 20,000,000 shares;
   issued and outstanding 2,378,409 shares                                2,379
  Additional paid-in capital                                          5,365,573
  Accumulated deficit                                                (3,276,564)
                                                                     -----------
         TOTAL STOCKHOLDERS' EQUITY                                   2,094,388
                                                                     -----------
                                                                     $4,188,196
                                                                     ===========

                The accompanying note is an integral part of the
                             financial statements.

                                        3
<PAGE>

                           CAPITAL BEVERAGE CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                       2000              1999
                                                    ----------------------------
                                                    (Unaudited)      (Unaudited)


SALES                                                $ 4,070,820    $ 1,994,222

COST OF GOODS SOLD                                     3,477,796      1,628,903
                                                      -----------    ----------

GROSS PROFIT                                             593,024        365,319
                                                      -----------    ----------

OPERATING EXPENSES
     Selling and delivery                                375,758        158,213
     General and administrative                          491,183        478,691
                                                      -----------    ----------
                                                         866,941        636,904
                                                      -----------    ----------

LOSS FROM OPERATIONS                                    (273,917)      (271,585)

INTEREST EXPENSE                                         (12,729)       (13,516)

INTEREST INCOME                                           10,670         20,247
                                                       -----------    ----------

NET LOSS                                                (275,976)      (264,854)

PREFERRED STOCK DIVIDENDS                                (21,000)       (21,000)
                                                        ----------    ----------

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS           $  (296,976)   $  (285,854)
                                                       ===========    ==========

LOSS PER  COMMON SHARE - BASIC AND DILUTED           $     (0.12)   $     (0.12)
                                                       ===========    ==========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES .             2,378,409       2,378,409
                                                       ===========    ==========











                The accompanying note is an integral part of the
                             financial statements.

                                        4
<PAGE>
                          CAPITAL BEVERAGE CORPORATION

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                           2000         1999
                                                    ----------------------------
                                                       (Unaudited)  (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                             $ (275,976)   $ (264,854)
                                                       ----------     ----------
 Adjustments  to  reconcile  net
  loss to net cash  (used  in)  provided  by
  operating activities:

 Depreciation and amortization                            44,124        41,634

 Changes in assets and liabilities:
  Increase in accounts receivable                       (188,763)      (23,592)
  Increase (decrease) in inventories                    (353,316)      113,905
  Increase (decrease) in prepaid expenses                (38,389)       20,887
  Decrease in other assets                                36,567          --
  Increase in accounts payable and accrued expenses      678,446       172,346
                                                       ----------    ----------
                                                         178,669       325,180
                                                       ----------    ----------

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES      (97,307)       60,326
                                                       ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures                                       --          (8,386)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal payments of capital lease obligations          (1,546)         --
 Decrease in  note payable                               (17,974)      (16,484)
                                                        ----------    ---------
NET CASH USED IN BY FINANCING ACTIVITIES                 (19,520)      (16,484)
                                                        ----------    ---------

NET (DECREASE) INCREASE IN CASH                         (116,827)       35,456

CASH - BEGINNING OF PERIOD                               897,934     2,088,741
                                                       ----------    ----------

CASH - END OF PERIOD                                  $  781,107    $2,124,197
                                                       ==========    ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:

     Cash paid for interest                           $   12,727    $   13,516
                                                       ==========    ==========

     Cash paid for income taxes                       $   30,727    $     --
                                                       ==========    ==========











                      The accompanying note is an integral
                       part of the financial statements.

                                        5
<PAGE>

                          CAPITAL BEVERAGE CORPORATION

                    NOTE TO CONSOLIDATED FINANCIAL STATEMENTS

                                 March 31, 2000

                                   (Unaudited)


1.       BASIS OF PRESENTATION

                  The accompanying  financial statements reflect all adjustments
         which,  in  the  opinion  of  management,  are  necessary  for  a  fair
         presentation  of the  financial  position and the results of operations
         for the interim periods presented.

                  Certain  financial  information  which is normally included in
         financial  statements is prepared in accordance with generally accepted
         accounting principles,  but which is not required for interim reporting
         purposes has been  condensed  or omitted.  The  accompanying  financial
         statements should be read in conjunction with the financial  statements
         and notes  thereto  contained in the  Company's  Annual  Report on Form
         10-KSB.






                                       -6-

<PAGE>



         MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         The  following  discussion   and analysis  provides  information  which
         management  believes  is relevant to an assessment and understanding of
         the Company's   results of operations  and  financial  condition.  This
         discussion  should be read in conjunction with the financial statements
         and notes thereto appearing elsewhere herein.

         Statements  in this Form 1O-QSB  that are not  statements of historical
         or current fact   constitute  "forward-looking  statements"  within the
         meaning of the  Private Securities  Litigation Reform Act of 1995. Such
         forward-looking   statements   involve    known  and   unknown   risks,
         uncertainties  and other  unknown  factors  that could cause the actual
         results of the Company to be  materially  different from the historical
         results  or from any   future  results  expressed  or  implied  by such
         forward-looking   statements. In addition to statements that explicitly
         describe such risks  and  uncertainties,  readers are urged to consider
         statements   labeled with the terms  "believes,"  "belief,"  "expects,"
         "intends,"    "anticipates"   or   "plans"   to   be    uncertain   and
         forward-looking.  The forward- looking statements   contained erein are
         also  subject  generally  to other  risks and  unc ertainties  that are
         described from time to time in the  Company's  reports and registration
         statements filed with the Securities and Exchange Commission.

         Results of Operations

         Sales for the  three  months  ended March 31, 2000 were  $4,070,820  as
         compared to sales  of  $1,994,222  for the three months ended March 31,
         1999.  The increase  in the three months ended March 31, 2000  resulted
         from the  addition  of the popular  Heineken  brand.  The cost of goods
         sold as a percentage  of sales for the  three-month  period in 2000 was
         85% as compared  to 82% for the comparable 1999 period. The increase in
         cost of goods sold  as a percentage of sales for the three months ended
         March 31,2000,  is due primarily to the addition of the  Heineken brand
         which sold as a lead  item at a lower gross margin than products in our
         primary brand portfolio.

         Selling,  general  and   administrative  expenses  for the  three-month
         period ended  March 31, 2000 were  $866,941 as compared to $636,904 for
         the   respective  1999  period.  The increase in the three months ended
         March  31,  2000   results  from  the  increased  cost to  deliver  the
         substantially higher sales generated in this period.

         Interest  expense for the   three-month  period ended March 31,2000 was
         $12,729 as compared to $13,516 for  the  respective  1999  period.  The
         decrease in the   three-month  period ended March 31,2000 is due to the
         reduction  of debt.  Interest income for the  three-month  period ended
         March 31, 2000 was  $10,670 as  compared to $20,247 for the  respective
         1999 period.  The decrease in the  three-month period resulted from the
         decrease in average cash balance invested in the Vista account.







                                       -7-

<PAGE>





         Liquidity and Capital Resources

         Cash used in  operations  for the three months ended March 31, 2000 was
         $97,307.  The  increase in  inventories  of  $353,316  was offset by an
         increase in accounts payable and accrued expenses of $678,446.

         Working  capital   decreased  from  $1,812,050  at December 31, 1999 to
         1,574,561  at  March 31,  2000 as a result of the  losses  incurred  in
         operations.

         At March 31, 2000,  the Company's  primary   sources of liquidity  were
         $781,107 in cash,  $892,360 in  accounts  receivable  and $1,309,970 in
         inventories.

         Management  believes it  has sufficient  sources of working  capital to
         adequately meet the Company's needs through the end of 2000.



























                                       -8-

<PAGE>




PART II - OTHER INFORMATION


Item 1.      LEGAL PROCEEDINGS
             -----------------

                     Not applicable

Item 2.      CHANGES IN SECURITIES AND USE OF PROCEEDS
             -----------------------------------------

                     Not applicable

Item 3.      DEFAULTS UPON SENIOR SECURITIES
             -------------------------------

                     Not applicable

Item 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
             ---------------------------------------------------

                    Not applicable

Item 5.      OTHER INFORMATION
             -----------------

                    Not applicable

Item 6.      EXHIBITS AND REPORTS ON FORM 8-K
             --------------------------------

                    (a)      Exhibits:

                   Number    Description

                    27       Financial Data Schedule

                    (b)      Reports on Form 8-K

             No reports on Form 8-K were filed during the quarter  ended
             March 31, 2000.


                                       -9-

<PAGE>



                                   SIGNATURES


    Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                       CAPITAL BEVERAGE CORPORATION



Date: May 15, 2000                     /s/Carmine N. Stella, President and
                                       Chief Executive Officer,
                                       as  Registrant's duly authorized officer



                                       /s/Carol Russell,
                                       Secretary and Treasurer




                                      -10-