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 September 30, 1999

                                       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 November 9, 1999 was 2,378,409 shares.


<PAGE>
<TABLE>
<CAPTION>
                          CAPITAL BEVERAGE CORPORATION
                                   FORM 10-QSB
                               September 30, 1999
                                      INDEX




PART I.           FINANCIAL INFORMATION
                                                                                                 PAGE
Item 1.           Financial Statements (Unaudited)                                              NUMBER

<S>                                                                                                    <C>
                  Balance Sheet as of September 30, 1999                                               3

                  Statements of Operations for the three-month periods
                    ended September 30, 1999 and 1998 and the nine-month
                    periods ended September 30, 1999 and 1998                                          4

                  Statements of Cash Flows for the nine-month periods
                    ended September 30, 1999 and 1998                                                  5

                  Notes to Financial Statements                                                        6

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


PART II.          OTHER INFORMATION

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

Signatures                                                                                            10
</TABLE>
                                        2
<PAGE>
<TABLE>
<CAPTION>
                          CAPITAL BEVERAGE CORPORATION

                           CONSOLIDATED BALANCE SHEET

                                                                                     September 30,
                                                                                         1999
                                                                                      -----------
                                                                                     (Unaudited)
                                     ASSETS
CURRENT ASSETS:
<S>                                                                                   <C>
     Cash .........................................................................   $ 1,559,772
     Accounts receivable - trade, net of allowance for doubtful accounts of $60,000       683,143
     Inventories ..................................................................       874,055
     Prepaid expenses and other ...................................................       124,756
                                                                                      -----------
         TOTAL CURRENT ASSETS .....................................................     3,241,726

PROPERTY AND EQUIPMENT, less accumulated depreciation of $29,732 ..................        95,339

OTHER ASSETS: .....................................................................          --
     Intangible assets, less accumulated amortization of $600,000 .................     1,000,000
     Deposits .....................................................................         3,290
                                                                                      -----------

                                                                                      $ 4,340,355
                                                                                      ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable .............................................................   $   373,607
     Accrued expenses and taxes ...................................................       300,613
     Current portion of long-term debt ............................................        72,702
     Accrued dividends on preferred stock .........................................       333,113
                                                                                      -----------
         TOTAL CURRENT LIABILITIES ................................................     1,080,035
                                                                                      -----------
LONG-TERM DEBT ....................................................................       504,432
                                                                                      -----------
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 ..........................................................    (2,615,064)
                                                                                      -----------
         TOTAL STOCKHOLDERS' EQUITY ...............................................     2,755,888
                                                                                      -----------
                                                                                        4,340,355
                                                                                      ===========
</TABLE>

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

                                        3
<PAGE>
<TABLE>
<CAPTION>
                          CAPITAL BEVERAGE CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                        Three Months Ended September 30, Nine Months Ended September 30,
                                             --------------------------   --------------------------
                                                  1999         1998           1999         1998
                                             -------------------------------------------------------
                                              (Unaudited)   (Unaudited)    (Unaudited)    (Unaudited)

<S>                                          <C>            <C>            <C>            <C>
SALES ....................................   $ 4,030,213    $ 2,255,136    $ 9,391,316    $ 6,967,264

COST OF GOODS SOLD .......................     3,267,224      2,067,401      7,485,265      6,396,070
                                             -----------    -----------    -----------   ------------
GROSS PROFIT .............................       762,989        187,735      1,906,051        571,194
                                             -----------    -----------    -----------   ------------
OPERATING EXPENSES
     Selling and delivery ................       333,081        121,025        694,529        225,677
     General and administrative ..........       509,619        310,975      1,555,403      1,075,439
                                             -----------    -----------    -----------   ------------
                                                 842,700        432,000      2,249,932      1,301,116
                                             -----------    -----------    -----------   ------------
INCOME (LOSS) FROM OPERATIONS ............       (79,711)      (244,265)      (343,881)      (729,922)

INTEREST EXPENSE .........................       (13,544)       (14,217)       (40,381)       (43,653)

INTEREST INCOME ..........................        17,344         29,232         56,151         91,608
                                             -----------    -----------    -----------   ------------
NET INCOME (LOSS) ........................       (75,911)      (229,250)      (328,111)      (681,967)

PREFERRED STOCK DIVIDENDS ................       (21,000)       (21,000)       (63,000)       (63,000)
                                             -----------    -----------    -----------   ------------
NET LOSS APPLICABLE TO COMMON SHAREHOLDERS   $   (96,911) $    (250,250)   $  (391,111) $    (744,967)
                                             ===========    ===========    ===========   ============
LOSS PER  COMMON SHARE - BASIC AND DILUTED   $     (0.04) $       (0.11)   $     (0.16) $       (0.31)
                                             ===========    ===========    ===========   ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES .     2,378,409      2,378,409      2,378,409      2,378,409
                                             ===========    ===========    ===========   ============

</TABLE>
     The accompanying note is an integral part of the financial statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>
                          CAPITAL BEVERAGE CORPORATION

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                           Nine Months Ended September 30,
                                                             -------------------------
                                                                1999           1998
                                                             -------------------------
                                                             (Unaudited)    (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                          <C>            <C>
     Net loss ............................................   $  (328,111)   $  (681,967)
                                                             -----------    -----------
     Adjustments to reconcile net loss to
         net cash used in operating activities:
          Depreciation and amortization ..................       127,841        123,335

     Changes in assets and liabilities:
         (Increase) decrease in accounts receivable ......      (341,374)       498,468
         (Increase) in inventories .......................      (294,956)      (214,384)
         (Increase) decrease in prepaid expenses .........        31,843       (135,599)
         Decrease in deposits ............................        72,372           --
         Increase in accounts payable and accrued expenses       303,278         69,852
                                                             -----------    -----------
                                                                (100,995)       341,672
                                                             -----------    -----------
NET CASH USED IN OPERATING ACTIVITIES ....................      (429,106)      (340,295)
                                                             -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures ................................       (49,322)        (4,731)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Decrease in  note payable ...........................       (50,541)       (46,350)
                                                             -----------    -----------
NET DECREASE IN CASH .....................................      (528,969)      (391,376)

CASH - BEGINNING OF PERIOD ...............................     2,088,741      2,843,870
                                                             -----------    -----------
CASH - END OF PERIOD .....................................   $ 1,559,772    $ 2,452,494
                                                             ===========    ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:

     Cash paid for interest ..............................   $    40,381    $    43,653
                                                             ===========    ===========
     Cash paid for income taxes ..........................   $       --     $     9,620
                                                             ===========    ===========

</TABLE>

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

                                        5

<PAGE>

                          CAPITAL BEVERAGE CORPORATION

                    NOTE TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1999

                                   (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 OF FINANCIAL CONDITION AND
RESULTS 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  herein are also subject  generally to
  other  risks and  uncertainties  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 nine months ended September 30, 1999 were $9,391,316 as
  compared to sales of $6,967,264 for the nine months ended  September 30, 1998.
  Sales for the quarter ended  September 30, 1999 were $4,030,213 as compared to
  sales of  $2,255,136  for the quarter ended  September  30, 1998.  The cost of
  goods sold as a percentage of sales for the  nine-month  period in 1999 period
  was 80% as compared to 92% for the  comparable  1998  period.  The decrease in
  cost of  goods  sold as a  percentage  of  sales  for the  nine  months  ended
  September 30, 1999, is due primarily to the additional  sales of products from
  the Pittsburgh Brewery Co., which affords the Company a significantly  greater
  gross margin percentage.

         Selling,  general and administrative expenses for the nine-month period
  ended  September 30, 1999 were  $2,249,932  as compared to $1,301,116  for the
  respective  1998 period.  The increase in the nine months ended  September 30,
  1999  results  from  acquisition  expenses  as a result  of the due  diligence
  process associated with the Pittsburgh Brewery coupled with expansion into new
  products provided by the Pittsburgh Brewery Co.,certain  expenses increased as
  a result of added warehousing and salespeople  salaries,  automobile expenses,
  legal fees, office expenses, repairs and maintenance expenses.

        Interest expense for the nine-month  period ended September 30, 1999 was
  $40,381 as compared to $43,653 for the respective 1998 period. The decrease in
  the  nine-month  period ended  September  30, 1999 is due to the  reduction of
  debt.  Interest income for the nine-month  period ended September 30, 1999 was
  $56,151 as compared to $91,608 for the respective 1998 period. The decrease in
  the  nine-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 nine months ended  September 30,
      1999 was  $429,106.  The  increase in  inventories  of $294,956 was mostly
      offset  by an  increase  in  accounts  payable  and  accrued  expenses  of
      $303,278.

               WORKING CAPITAL DECREASED FROM $2,457,022 AT DECEMBER 31, 1998 to
      $2,161,691  at September  30, 1999 as a result of the net loss of $328,111
      for the nine-month period.

               At September 30, 1999, the Company's primary sources of liquidity
      were $1,559,772 in cash, $683,143 in accounts receivable.

               Management  believes it has sufficient sources of working capital
      to adequately meet the Company's needs through the end of 1999,

               CAP  Communications  Ltd. was formed in November 1998 to explore,
      as an ancillary to beverage  sales,  the rapidly  expanding  prepaid phone
      card  market.  Within New York City,  the bulk of phone  cards sales occur
      within  ethnic  neighborhoods,  with  major  sales  occurring  within  the
      Hispanic based  communities.  Given Capital  Beverage's  well  established
      position in local  Hispanic  retail  markets and its  connection  with the
      business  owners,  phone  cards may serve as a  significant  source of new
      revenues to Capital's  expanding beverage sales. The synergism of the two,
      beer sales and phone  cards,  may prove to be the  catalyst,  which sparks
      continued revenue growth for Capital Beverage. Working in conjunction with
      Orion  Telecommunications  Corporation,  with offices in New York, Capital
      Beverage  has begun an  infrastructure  development  to  explore  this new
      potential  market Orion has agreed to provide funding to Capital  Beverage
      which will allow  Capital  Beverage to determine  what course of action to
      take to make their card a success here in New York.

               YEAR 2000

               The Company recognizes that a challenging  problem exists in that
      many systems  worldwide do not have the capability of recognizing the year
      2000 or the years thereafter.  No easy  technological  "quick fix" has yet
      been  developed for this problem.  While the issue is not of  significance
      for the Company because of its minimal  reliance on computers,  this "Year
      2000  Computer  Problem"  creates  risk for the  Company  from  unforeseen
      problems in its own computer  systems and from third parties with whom the
      Company deals. Such failures of third parties' computer systems could have
      a material  adverse  effect on the  Company and its ability to conduct its
      business in the future.

                                       -8-


<PAGE>


PART II - OTHER INFORMATION

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  September  30,
1999.

                                       -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: November 9, 1999              /s/Carmine N. Stella, President and
                                       Chief Executive Officer,
                                       as  Registrant's duly authorized officer



                                    /s/Carol Russell,
                                       Secretary and Treasurer

                                      -10-