**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-Q**




(Mark
      One)




**x 
QUARTERLY
      REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF**


**1934**




For
      the
      quarterly period ended September 30, 2008




**o TRANSITION
      REPORT
      UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT**




For
      the
      transition period from ________________ to _______________




(Commission
      file number)




**THE
      SAINT JAMES COMPANY**


(Exact
      name of registrant as specified in its charter)





NORTH
                CAROLINA
            56-1426581(State
                of Incorporation)
            (IRS
                Employer Identification No.)




**Broadway
      Plaza, 520 Broadway, Suite 350 Santa Monica CA 90401**


(Address
      of Principal Executive Offices)




**(310)
      739-5696**


(Registrant's
      Telephone Number)




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
      past 12 months (or for such shorter period that the registrant was required
      to
      file such reports), and (2) has been subject to the filing requirements for
      the
      past 90 days.


Yes
x No
o




Indicate
      by check mark whether the registrant is a large accelerated file, an accelerated
      filer, a non-accelerated filer, or a smaller reporting company. See the
      definitions of "large accelerated filer," "accelerated filer" and "smaller
      reporting company" in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer o Accelerated
      filer o
      Non-accelerated filer
o (Do not check if a smaller
      reporting company)  Smaller reporting
      company x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes x No
o


Indicate
      the number of share outstanding of each of the issuer's classes of common stock,
      as of the latest practicable date.




As
      of
      November 17, 2008, the Registrant had 11,999,057 shares of its common stock
      issued and outstanding.










THE
      SAINT
      JAMES COMPANY




Index





Page
                NumberA
                Note About Forward Looking Statements
            
            2PART
                I.
            FINANCIAL
                INFORMATION
            
            3Item
                1.
            Condensed
                Financial Statements (Unaudited)
            
            4Condensed
                  Balance Sheet as of September 30, 2008 and December 31, 2007
            
            5Condensed
                Statements of Operations For the Three and Nine Months Ended September
                30,
                2008 and 2007 and the Period from January 1, 1999 (Inception of the
                Current Development Stage) to September 30, 2008
            
            6Condensed
                Statement of Stockholders' Deficit for the Period from January 1,
                1999
                (Inception of the Current Development Stage) to September 30, 2008
            
            7Condensed
                Statements of Cash Flows for the Nine Months ended September 30,
                2008 and
                2007 and the Period from January 1, 1999 (Inception of the Current
                Development Stage) to September 30, 2008
            
            8Notes
                to the Condensed Financial Statements
            
            10Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and Results of Operations
            
            16Item
                4.
            Controls
                and Procedures
            
            20PART
                II
            OTHER
                INFORMATION
            
            20Item
                5.
            Other
                Information
            
            20Item
                6.
            Exhibits
            
            21SIGNATURES
            
            
            22










*A
      Note About Forward-Looking Statements*





This
      Quarterly Report on Form 10-Q contains “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995 that are based
      on management's current expectations. These statements may be identified by
      their use of words like “plans,” “expect,” “aim,” “believe,” “projects,”
“anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other
      expressions that indicate future events and trends. All statements that address
      expectations or projections about the future, including statements about our
      business strategy, expenditures, and financial results, are forward-looking
      statements. We believe that the expectations reflected in such forward-looking
      statements are accurate. However, we cannot assure you that such expectations
      will occur.





Actual
      results could differ materially from those in the forward looking statements
      due
      to a number of uncertainties including, but not limited to, those discussed
      in
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations. Factors that could cause future results to differ from these
      expectations include general economic conditions; further changes in our
      business direction or strategy; competitive factors; market uncertainties;
      and
      an inability to attract, develop, or retain consulting or managerial agents
      or
      independent contractors. As a result, the identification and interpretation
      of
      data and other information and their use in developing and selecting assumptions
      from and among reasonable alternatives requires the exercise of judgment. To
      the
      extent that the assumed events do not occur, the outcome may vary substantially
      from anticipated or projected results, and accordingly, no opinion is expressed
      on the achievability of those forward-looking statements. No assurance can
      be
      given that any of the assumptions relating to the forward-looking statements
      specified in the following information are accurate, and we assume no obligation
      to update any such forward-looking statements. You should not unduly rely on
      these forward-looking statements, which speak only as of the date of this
      Quarterly Report. Except as required by law, we are not obligated to release
      publicly any revisions to these forward-looking statements to reflect events
      or
      circumstances occurring after the date of this report or to reflect the
      occurrence of unanticipated events.





2





The
      accompanying notes are an integral part of these financial statements.




**PART
      I. FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**


**The
        Saint James Company**
 **(A
        Development Stage Company)**
  **Condensed
        Financial Statements**
 (unaudited)
 
 ***As
        of September 30, 2008 and***
 ***For
        Each of the Three and Nine Month Periods Ended September 30, 2008 and 2007
        and***
 ***for
        the Period from January 1, 1999 (Inception of the Current Development
        Stage)***
 ***to
        September 30, 2008***
  3
  **The
        Saint James Company**
 **(A
        Development Stage Company)**
  **Index
        to the Condensed Financial Statements**
 ***As
        of September 30, 2008 and***
 ***For
        Each of the Three and Nine Month Periods Ended September 30, 2008 and
        2007***
 ***and
        for the Period From January 1, 1999 (Inception of the Current***
 ***Development
        Stage) to September 30, 2008***
 *(unaudited)*
 Condensed
                    Financial Statements of The Saint James Company (a North
                    CarolinaCorporation):Condensed
                    Balance Sheet as of September 30, 2008 and December31,
                    2007
                
                
                5Condensed
                    Statements of Operations for Each of the Three andNine
                    Month Periods Ended September 30, 2008 and2007
                    and the Period from January 1, 1999 (Inceptionof
                    the Current Development Stage) to September 30,2008
                
                
                6Condensed
                    Statements of Shareholders' Equity (Deficit) for thePeriod
                    from January 1, 1999 (Inception of theCurrent
                    Development Stage) to September 30, 2008
                
                
                7Condensed
                    Statements of Cash Flows for Each of the Nine MonthPeriods
                    Ended September 30, 2008 and 2007 and thePeriod
                    from January 1, 1999 (Inception of theCurrent
                    Development Stage) to September 30, 2008
                
                
                8Notes
                    to the Condensed Financial Statements
                
                
                10
   4
  **The
        Saint James Company**
 **(A
        Development Stage Company)**
  **Condensed
        Balance Sheet**
 (unaudited)
 ***September
        30, 2008 and December 31, 2007***
  *ASSETS*As
                    of
                
                
                As
                    ofSeptember
                    30, 2008
                
                
                December
                    31, 2007Current
                    assets:Artwork
                
                $
                -
                
                $
                50,000Total
                    current assets
                
                
                -
                
                
                50,000**Total
                    assets**
                
                $
                -
                
                $
                50,000*LIABILITIES
                    AND STOCKHOLDERS' EQUITY (DEFICIT)*Current
                    liabilities:Accounts
                    payable and accrued liabilities
                
                $
                53,213
                
                $
                13,213Related
                    party payable
                
                
                25,000
                
                
                -Total
                    current liabilities
                
                
                78,213
                
                
                13,213**Total
                    liabilities**
                
                **$**
                **78,213**
                ****
                **$**
                **13,213**Stockholders'
                    equity (deficit):Common
                    stock, $.001
                    par value, 50,000,000 sharesauthorized,
                    11,999,057 shares issued and outstanding
                
                $
                11,999
                
                $
                11,999Additional
                    paid in capital
                
                
                3,730,717
                
                
                3,650,579Accumulated
                    deficit
                
                
                (3,820,929
                )
                
                (3,625,791
                )**Total
                    stockholders' equity (deficit)**
                
                **$**
                **(78,213**
                **)**
                **$**
                **36,787****Total
                    liabilities and stockholders' equity**
                
                **$**
                **-**
                ****
                **$**
                **50,000**
  The
          accompanying notes are an integral part of the combined financial
          statements.
  5
 **The
            Saint James Company**
 **(A
            Development Stage Company)**
  **Condensed
            Statements of Operations**
 (unaudited)
 ***For
            Each of the Three and Nine Month Periods Ended September 30, 2008 and
            2007***
 ***and
            for the Period From January 1, 1999 (Inception of the Current***
 ***Development
            Stage) to September 30, 2008***
 DevelopmentStageJanuary
                    1,For
                    the Nine Month
                
                For
                    the Three Month
                
                1999
                    toPeriod
                    Ended September 30,
                
                Period
                    Ended September 30,
                
                September
                    30,2008
                
                2007
                
                2008
                
                2007
                
                2008Operating
                    expenses:General
                    and administrative
                
                
                145,138
                
                
                -
                
                
                67,500
                
                
                -
                
                
                322,357Impairment
                  of artwork
                
                
                50,000
                
                
                -
                
                
                50,000
                
                
                -
                
                
                50,000Total
                    operatingexpenses
                
                
                195,138
                
                
                -
                
                
                117,500
                
                
                -
                
                
                372,357Loss
                    from operations
                
                
                (195,138
                )
                
                -
                
                
                (117,500
                )
                
                -
                
                
                (372,357
                )Other
                    income (expense):Other
                    income (expense)
                
                
                -
                
                
                28,582
                
                
                -
                
                
                28,582
                
                
                37,067Interest
                    expense
                
                
                -
                
                
                (512
                )
                
                -
                
                
                (171
                )
                
                (5,407
                )Total
                    other income(expense)
                
                
                -
                
                
                28,070
                
                
                -
                
                
                28,411
                
                
                31,660**Net
                    income (loss)**
                
                $
                **(195,138**
                **)**
                $
                **28,070**
                
                **$**
                **(117,500**
                **)**
                $
                **28,411**
                
                **$**
                **(340,697**
                **)****Income
                    (Loss) per share - basic**Net
                    income (loss) per share -basic
                
                $
                (0.02
                )
                $
                0.00
                
                $
                (0.01
                )
                $
                0.00
                
                $
                (0.07
                )Weighted
                    average sharesoutstanding
                
                
                11,999,057
                
                
                11,999,057
                
                
                11,999,057
                
                
                11,999,057
                
                
                4,652,990
  The
          accompanying notes are an integral part of the combined financial
          statements.
  6
 **The
          Saint James Company**
 **(A
          Development Stage Company)**
  **Condensed
          Statements of Shareholders' Equity (Deficit)**
 (unaudited)
 ***For
          the Period From January 1, 1999 (Inception of the Current***
 Development
          Stage) to September 30, 2008
  AdditionalCommon
                    Stock
                
                
                Paid
                    In
                
                
                AccumulatedShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                Total**Balance,
                    December 31, 1998**
                
                
                **999,057**
                
                **$**
                **999**
                ****
                **$**
                **3,460,568**
                ****
                **$**
                **(3,480,232**
                **)**
                **$**
                **(18,665**
                **)**Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (6,115
                )
                
                (6,115
                )**Balance,
                    December 31, 1999**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,460,568**
                
                
                **(3,486,347**
                **)**
                ****
                **(24,780**
                **)**Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (22,670
                )
                
                (22,670
                )**Balance,
                    December 31, 2000**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,460,568**
                
                
                **(3,509,017**
                **)**
                ****
                **(47,450**
                **)**Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (4,382
                )
                
                (4,382
                )**Balance,
                    December 31, 2001**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,460,568**
                
                
                **(3,513,399**
                **)**
                ****
                **(51,832**
                **)**Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (4,314
                )
                
                (4,314
                )**Balance,
                    December 31, 2002**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,460,568**
                
                
                **(3,517,713**
                **)**
                ****
                **(56,146**
                **)**Capital
                    contribution
                
                
                -
                
                
                -
                
                
                27,239
                
                
                -
                
                
                27,239Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (54,644
                )
                
                (54,644
                )**Balance,
                    December 31, 2003**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,487,807**
                
                
                **(3,572,357**
                **)**
                ****
                **(83,551**
                **)**Capital
                    contribution
                
                
                -
                
                
                -
                
                
                10,769
                
                
                -
                
                
                10,769Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (47,640
                )
                
                (47,640
                )**Balance,
                    December 31, 2004**
                
                
                **999,057**
                
                
                **999**
                
                
                **3,498,576**
                
                
                **(3,619,997**
                **)**
                ****
                **(120,422**
                **)**Issuance
                    of common stock forassets
                
                
                5,000,000
                
                
                5,000
                
                
                45,000
                
                
                -
                
                
                50,000Issuance
                    of common stock forservices
                
                
                6,000,000
                
                
                6,000
                
                
                54,000
                
                
                -
                
                
                60,000Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (33,182
                )
                
                (33,182
                )**Balance,
                    December 31, 2005**
                
                
                **11,999,057**
                
                
                **11,999**
                
                
                **3,597,576**
                
                
                **(3,653,179**
                **)**
                ****
                **(43,604**
                **)**Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (682
                )
                
                (682
                )**Balance,
                    December 31, 2006**
                
                
                **11,999,057**
                
                
                **11,999**
                
                
                **3,597,576**
                
                
                **(3,653,861**
                **)**
                ****
                **(44,286**
                **)**Forgiveness
                    of debt by officers
                
                
                -
                
                
                -
                
                
                53,003
                
                
                -
                
                
                53,003Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                28,070
                
                
                28,070**Balance,
                    December 31, 2007**
                
                
                **11,999,057**
                
                
                **11,999**
                
                
                **3,650,579**
                
                
                **(3,625,791**
                **)**
                ****
                **36,787**Contribution
                    of payments madeby
                    significant stockholders
                
                
                -
                
                
                -
                
                
                80,138
                
                
                -
                
                
                80,138Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (195,138
                )
                
                (195,138
                )**Balance,
                    September 30, 2008**
                
                
                **11,999,057**
                
                **$**
                **11,999**
                ****
                **$**
                **3,730,717**
                ****
                **$**
                **(3,820,929**
                **)**
                **$**
                **(78,213**
                **)**
  The
          accompanying notes are an integral part of the combined financial
          statements.
  7
  **The
          Saint James Company**
 **(A
          Development Stage Company)**
  **Condensed
          Statements of Cash Flows**
 (unaudited)
 ***For
          Each of the Nine Month Periods Ended September 30, 2008 and
          2007***
 ***and
          for the Period From January 1, 1999 (Inception of the Current***
 ***Development
          Stage) to September 30, 2008***
  DevelopmentStageJanuary
                    1,For
                    the Nine Month
                
                1999
                    toPeriod
                    Ended September 30,
                
                September
                    30,2008
                
                2007
                
                2008*Cash
                    flows used in operating activities:*Net
                    income (loss)
                
                $
                (195,138
                )
                $
                28,070
                
                $
                (340,697
                )Adjustments
                    to reconcile net income (loss) tonet
                    cash (used in) operating activities:Common
                    stock issued for services
                
                
                -
                
                
                -
                
                
                60,000Gain
                    on settlement judgment
                
                
                -
                
                
                (28,582
                )
                
                (37,067
                )Write
                    off of impaired artwork
                
                
                50,000
                
                
                -
                
                
                50,000Decrease
                    (increase) in assets:Increase
                    in accounts payable andaccrued
                    liabilities
                
                
                40,000
                
                
                -
                
                
                65,616Related
                    party payables
                
                
                25,000
                
                
                -
                
                
                25,000Increase
                    (decrease) in liabilities:Increase
                    in accrued interest
                
                
                -
                
                
                512
                
                
                5,285**Cash
                    used in operating activities**
                
                
                **(80,138**
                **)**
                ****
                **-**
                ****
                ****
                **(171,863**
                **)***Cash
                    flows provided by financing activities:*Advances
                    from related parties
                
                
                -
                
                
                -
                
                
                53,003Additional
                    capital contribution
                
                
                -
                
                
                -
                
                
                38,008Capital
                    contributions of services
                
                
                80,138
                
                
                -
                
                
                80,138**Cash
                    provided by financing activities**
                
                
                **80,138**
                
                
                **-**
                
                
                **171,149****Net
                    increase (decrease) in cash**
                
                
                **-**
                
                
                **-**
                
                
                (714
                )**Cash
                    at beginning of period**
                
                
                **-**
                
                
                **-**
                
                
                **714****Cash
                    at end of period**
                
                $
                -
                
                $
                -
                
                $
                -
  The
        accompanying notes are an integral part of the combined financial
        statements.
  8
  **The
          Saint James Company**
 **(A
          Development Stage Company)**
  **Condensed
          Statements of Cash Flows**
 (unaudited)
 ***For
          Each of the Nine Month Periods Ended September 30, 2008 and
          2007***
 ***and
          for the Period From January 1, 1999 (Inception of the Current***
 ***Development
          Stage) to September 30, 2008***
 *Supplemental
              Disclosure of Cash Flow Information*
 DevelopmentStageJanuary
                      1,1999
                      toPeriod
                      Ended September 30,
                  September
                      30,2008
                  
                  2007
                  
                  2008Cash
                      paid during the fiscal years for:Interest
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Income
                      taxes
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -*Non-Cash
                      Transactions*Contribution
                      of accrued services by owners:Accrued
                      expenses
                  
                  $
                  80,138
                  
                  $
                  -
                  
                  $
                  80,138Additional
                      paid in capital
                  
                  $
                  (80,138
                  )
                  $
                  -
                  
                  $
                  (80,138
                  )Issuance
                      of shares for artworkArtwork
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  (50,000
                  )Common
                      stock
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  5,000Additional
                      paid in capital
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  45,000Issuance
                      of shares in satisfaction of accountspayable:Accounts
                      payable
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  (60,000
                  )Common
                      stock
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  6,000Additional
                      paid in capital
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  54,000
 The
            accompanying notes are an integral part of the combined financial
            statements.
  9
  **The
        Saint James Company**
 **(A
        Development Stage Company)**
  **Notes
        to the Condensed Financial Statements**
 (unaudited)
 ***As
        of September 30, 2008,***
 ***For
        Each of the Three and Nine Month Periods Ended September 30, 2008 and
        2007,***
 ***and
        for the Period From January 1, 1999***
 ***(Inception
        of the Current*** ***Development
        Stage) to September 30, 2008***
  **1.**
              **Organization**
  *History*
  The
        Company was originally named Chem-Waste Corporation and incorporated in January
        1984 in North Carolina. From 1984 through 1998, the Company designed,
        manufactured, sold and serviced equipment and systems for the treatment of
        contaminated insoluble organic materials. Due to intense competition in their
        specific segment of the waste disposal industry the Company elected to
        discontinue that business segment’s operations in 1998.
  *Change
        of the Company Name and Domicile*
  In
        1998,
        the Company shareholders voted to change the Company’s name to The Saint James
        Company and to change the Company’s domicile from North Carolina to Delaware.
        The Company incorporated The Saint James Company in Delaware, as an operating
        subsidiary to effect these changes. The Company’s management believed that all
        required formalities and procedures were completed but the required Articles
        of
        Merger were not filed with the appropriate state entities.
  Based
        upon Company management’s inaccurate belief that the two companies were
        successfully merged together; share certificates of the Saint James Company
        were
        issued to the Company shareholders and the shareholders' certificates
        representing ownership of the Company common stock were canceled. Management
        plans to reissue the Company’s share certificates as soon as practical and
        cancel the Saint James Company shares that were wrongfully issued.
  In
        2007,
        the Company officially changed its name to The Saint James Company. The
        Company does not currently have active business operations but is actively
        searching for a potential purchaser or merger candidate. See Note 7 - Subsequent
        Event.
  **2.**
              **Summary
                  of Significant Accounting Policies and
                  Estimates**
  *Basis
        of Presentation*
  The
        accompanying unaudited condensed 10-Q financial statements are prepared on
        a
        consistent basis in accordance with accounting principles generally accepted
        in
        the United States (“GAAP”) for interim financial information and with the
        instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
        they do
        not include all of the information
        and footnotes required by GAAP for complete financial statements. In the
        opinion
        of management, all adjustments (consisting of normal recurring accruals and
        consolidation and elimination entries) considered necessary for a fair
        presentation have been included. Operating results for the three-month and
        nine-
        month periods ended September 30, 2008 are not necessarily indicative of
        the
        results that may be expected for the year ending December 31, 2008. For further
        information, refer to the consolidated financial statements and footnotes
        thereto included in our Annual Report on Form 10-KSB for the year ended December
        31, 2007.
  10
 **The
            Saint James Company**
 **(A
            Development Stage Company)**
  **Notes
            to the Condensed Financial Statements**
 **(unaudited)**
 ***As
            of September 30, 2008,***
 ***For
            Each of the Three and Nine Month Periods Ended September 30, 2008 and
            2007,***
 ***and
            for the Period From January 1, 1999***
 ***(Inception
            of the Current Development Stage) to September 30,
            2008***
 **2.**
              **Summary
                  of Significant Accounting Policies and Estimates,
                  Continued**
  *Use
        of Estimates*
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reporting amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the periods. Management makes these estimates using the best information
        available at the time the estimates are made; however, actual results could
        differ materially from these estimates.
  *Reclassification
        of Accounts*
  Certain
        reclassifications have been made to prior-year comparative financial statements
        to conform to the current year presentation. These reclassifications had
        no
        effect on previously reported results of operations or financial position.
  *Impairment
        of Long-Lived Assets*
  The
        Company records impairment losses on long-lived assets used in operations
        and
        finite lived intangible assets when events and circumstances indicate the
        assets
        might be impaired and the undiscounted cash flows estimated to be generated
        by
        those assets are less than their carrying amounts. The impairment loss is
        measured by comparing the fair value of the asset to its carrying
        amount.
  *Fair
        Value of Financial Instruments*
  The
        Company’s financial instruments consist of accounts payable and accrued
        liabilities at September 30, 2008. The recorded values of current assets
        and
        liabilities approximate their fair values based on their short-term nature.
        The
        recorded values of notes payable and long-term debt approximate their fair
        values, as interest approximates market rates.
  11
 **The
            Saint James Company**
 **(A
            Development Stage Company)**
  **Notes
              to the Condensed Financial Statements**
 (unaudited)
 ***As
              of September 30, 2008,***
 ***For
              Each of the Three and Nine Month Periods Ended September 30, 2008 and
              2007,***
 ***and
              for the Period From January 1, 1999***
 ***(Inception
              of the Current*** ***Development
              Stage) to September 30, 2008***
 2.
              **Summary
                  of Significant Accounting Policies and Estimates,
                  Continued**
  *Income
        Taxes*
  Deferred
        tax assets and liabilities are recognized for the future tax consequences
        attributable to differences between the financial statement carrying amounts
        of
        existing assets and liabilities and their respective tax bases. Deferred
        tax
        assets, including tax loss and credit carryforwards, and liabilities are
        measured using enacted tax rates expected to apply to taxable income in the
        years in which those temporary differences are expected to be recovered or
        settled. The effect on deferred tax assets and liabilities of a change in
        tax
        rates is recognized in income in the period that includes the enactment date.
        Deferred income tax expense represents the change during the period in the
        deferred tax assets and deferred tax liabilities. The components of the deferred
        tax assets and liabilities are individually classified as current and
        non-current based on their characteristics. Deferred tax assets are reduced
        by a
        valuation allowance when, in the opinion of management, it is more likely
        than
        not that some portion or all of the deferred tax assets will not be
        realized.
  *Basic
        Net Earnings(Loss) per Share*
  In
        accordance with FASB Statement No. 128, “Earnings Per Share,” we calculate basic
        net income (loss) per share by using the weighted average number of common
        shares outstanding during the periods presented. The Company does not have,
        and
        has not had, any dilutive equity instruments since inception.
  *Recent
        Accounting Pronouncements*
  In
        February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
        Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits an entity
        to
        choose, at specified election dates, to measure eligible financial instruments
        and certain other items at fair value that are not currently required to
        be
        measured at fair value. An entity shall report unrealized gains and losses
        on
        items for which the fair value option has been elected in earnings at each
        subsequent reporting date. Upfront costs and fees related to items for which
        the
        fair value option is elected shall be recognized in earnings as incurred
        and not
        deferred. SFAS 159 also establishes presentation and disclosure requirements
        designed to facilitate comparisons between entities that choose different
        measurement attributes for similar types of assets and liabilities. SFAS
        159 is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007 (January 1, 2008 for the Company) and interim periods within
        those fiscal years. At the effective date, an entity may elect the fair value
        option for eligible items that exist at that date. The entity shall report
        the
        effect of the first remeasurement to fair value as a cumulative effect
        adjustment to the opening balance of retained
        earnings. The Company is currently evaluating the impacts and disclosures
        of
        this standard, but would not expect SFAS 159 to have a material impact on
        its
        results of operations.
  12
 **The
              Saint James Company**
 **(A
              Development Stage Company)**
  **Notes
                to the Condensed Financial Statements**
 (unaudited)
 ***As
                of September 30, 2008,***
 ***For
                Each of the Three and Nine Month Periods Ended September 30, 2008
                and
                2007,***
 ***and
                for the Period From January 1, 1999***
 ***(Inception
                of the Current*** ***Development
                Stage) to September 30, 2008***
 2.
                **Summary
                    of Significant Accounting Policies and Estimates,
                    Continued**
  In
        December 2007, the FASB issued FASB 141R, Business Combinations ("FASB 141R").
        Under FASB 141R, an entity is required to recognize the assets acquired,
        liabilities assumed, contractual contingencies and contingent consideration
        measured at their fair value at the acquisition date for any business
        combination consummated after the effective date. It further requires that
        acquisition-related costs are to be recognized separately from the acquisition
        and expensed as incurred. This statement is effective for financial statements
        issued for fiscal years beginning after December 15, 2008. Accordingly, we
        will
        adopt FASB 141R effective January 1, 2009.
  **3.**
              **Impairment
                  Loss**
  The
        animation cell artwork that the Company originally acquired in 2005 for
        5,000,000 shares of its own common stock valued at $0.01 per share was assessed
        for recoverability of its carrying value in the quarter ended September 30,
        2008. The Company’s management determined that an impairment loss of $50,000 had
        occurred. The impairment loss is recorded as a separate line item in the
        Statement of Operations for the Three and Nine Month Periods ended September
        30,
        2008
  **4.**
              **Equity
                  Transactions**
  On
        December 15, 2005, the Company entered into a purchase agreement with The
        Saint
        James LLC Collection, LLC and purchased Limited Edition Animation Cell Art
        Collection for 5,000,000 shares of the Company’s common stock. The 5,000,000
        shares were valued at $0.01 per share.
  On
        February 15, 2004, the Company entered into a consulting agreement
        with Wynthrop Barrington, Inc., which is in business of providing
        management consulting services, security related services and advice with
        respect to SEC and NASD rules and regulations, business advisory and development
        services, product development services, product marketing and sales services.
        The consulting services obtained from Wynthrop Barrington, Inc., resulted
        in
        $60,000 of accounts payable at February 20, 2005 which were then paid to
        the
        consultant(s) by issuance of the Company stock of 6,000,000 shares at $0.01
        per
        share.
  13
 **The
              Saint James Company**
 **(A
              Development Stage Company)**
  **Notes
              to the Condensed Financial Statements**
 (unaudited)
 ***As
              of September 30, 2008,***
 ***For
                Each of the Three and Nine Month Periods Ended September 30, 2008
                and
                2007,***
 ***and
                for the Period From January 1, 1999***
 ***(Inception
                of the Current*** ***Development
                Stage) to September 30, 2008***
 5.
                **Related
                    Party
                    Transactions**
  As
        of
        December 31, 2006, certain current and former officers, who are still
        shareholders, advanced the Company $53,003 to pay for administrative costs
        incurred by the Company. The advances were non-interest bearing and payable upon
        demand. In September 2007, these amounts were forgiven and recorded by the
        Company as additional paid in capital.
  **6.**
              **Financial
                  Results, Liquidity and Management's
                  Plan**
  The
        Company has zero assets at September 30, 2008, current liabilities of $78,213,
        an accumulated deficit of $3,820,929 and has incurred net losses for the
        nine-month period ended September 30, 2008 of $195,138 and net losses for
        the
        period from January 1, 1999 (inception of the current development stage)
        to
        September 30, 2008 of $340,697. These factors raise substantial doubt about
        the
        Company's ability to continue as a going concern. The Company has not been
        successful in generating sufficient working capital through the issuance
        of
        common stock or been able to implement its business plan to effectively sustain
        ongoing operations. The financial statements do not include any adjustments
        that
        might be necessary if the Company is unable to continue as a going concern.
        In
        October 2008, the Company entered into an agreement to obtain financing
        necessary to acquire an operating business (Note 7 - Subsequent
        Event).
  **7.**
              **Subsequent
                  Event**
  On
        October 21, 2008, we entered into a Heads of Agreement (the “HOA”) with Neqtar
        Wines PTY LTD (“Neqtar”), pursuant to which Neqtar and we agreed on certain
        potential terms of a potential future transaction. On March 17, 2008, Neqtar
        and
        Samson Investment Company (“Samson”) entered into a letter of intent (the “LOI”)
        setting forth certain terms of a proposed acquisition by Samson, or its nominee,
        of all of Neqtar’s outstanding shares of common stock. On October 20, 2008, we
        entered into a Designation, Assignment, and Assumption Agreement with Samson,
        in
        which we were designated by Samson as its nominee under the LOI, and Samson
        conveyed all of its right, title, and interest in the same to us and we granted
        a five-year warrant to Samson to purchase 120,000 shares of our common stock
        at
        a per-share exercise price of $10.00. As a result of our designation as Samson’s
        nominee under the LOI, we entered into preliminary transaction negotiations
        with
        Neqtar, which culminated in the execution of the HOA. Pursuant to the HOA,
        the
        actions described
        in items i) through vi) below have been taken in connection with the potential
        future transaction between Neqtar and us:
  i)
              we
                  will own all of the shares of Neqtar’s common
                  stock;
  14
 **The
          Saint James Company**
 **(A
          Development Stage Company)**
  ****Notes
          to the Condensed Financial Statements****
 (unaudited)
 ***As
              of September 30, 2008,***
 ***For
                Each of the Three and Nine Month Periods Ended September 30, 2008
                and
                2007,***
 ***and
                for the Period From January 1, 1999***
 ***(Inception
                of the Current*** ***Development
                Stage) to September 30, 2008***
 **7.**
              **Subsequent
                  Event, Continued**
 
 ii)
              we
                  will lease, and eventually may purchase, certain facilities from
                  Neqtar;
  iii)
              Neqtar
                  will be obligated to purchase a specified amount of wine from us
                  annually;
  iv)
              we
                  will own certain of Neqtar’s
                  inventory;
  iv)
              we
                  will grant Neqtar a security interest in substantially all of our
                  assets
                  and those assets acquired from Neqtar;
                  and
  vi)
              we
                  will own certain of Neqtar’s
                  trademarks.
  In
        addition, Neqtar and we expect to make certain representations and warranties
        to
        each other in a definitive transaction document that is standard and customary
        in the wine industry for transactions. The Proposed Neqtar Transaction is
        subject to certain conditions precedent, including, but not limited to, the
        transfer of certain of SdS Beverages’ assets to Neqtar, satisfactory completion
        of certain due diligence regarding Neqtar and the Proposed Neqtar Transaction,
        a
        financing condition, receipt of an independent appraisal valuing Neqtar’s fair
        market value not less than $27 million in the aggregate, and the making of
        certain revisions to documents between Neqtar and Fosters.
  In
        contemplation of the Proposed Neqtar Transaction or a similar future
        transaction, on June 6, 2008 we engaged an investment bank to advise and
        assist
        us in respect of the financing contingency for the Proposed Neqtar
        Transaction.
  15




**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS**




THE
      FOLLOWING PRESENTATION OF OUR MANAGEMENT’S DISCUSSION AND ANALYSIS SHOULD BE
      READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL
      INFORMATION INCLUDED ELSEWHERE IN THIS REPORT.


The
        independent registered public accounting firm's report on the Company's
        financial statements as of December 31, 2007, and for each of the years in
        the
        two-year period then ended, includes a "going concern" explanatory paragraph
        that describes substantial doubt about the Company's ability to continue
        as a
        going concern. Management's plans in regard to the factors prompting the
        explanatory paragraph are discussed below and also in Note 2 to the unaudited
        quarterly financial statements.
  **OVERVIEW**
  On
        December 15, 2005, we entered into a purchase agreement with The Saint James
        Collection, LLC (an unaffiliated entity) to purchase a Limited Edition Animation
        Art Collection (the “Art Collection”) in exchange for 5,000,000 shares of our
        common stock. The 5,000,000 shares of common stock were valued at $0.01 per
        share for a total value of $50,000. We intended on marketing the Art Collection
        and establishing relationships with distributors to sell the art. Due to
        our
        limited resources, however, we were not able to pursue those business objectives
        and as of September 30, 2008, we concluded that the $50,000 previously
        attributable to the Art Collection had become fully impaired.
  Our
        management had been seeking a potential merger candidate or purchaser for
        us to
        minimize the loss to our stockholders. On October 21, 2008, we entered into
        a
        Heads of Agreement with Neqtar Wines PTY LTD (“Neqtar”), pursuant to which
        Neqtar and we agreed on certain potential terms of a potential future
        transaction, the result of which will be that, if that transaction closes,
        we
        will indirectly own a winery in Australia.
  **RESULTS
        OF OPERATIONS**
  *For
        the Three Months Ended September 30, 2008 compared to the Three Months Ended
        September 30, 2007*
  During
        the three months ended September 30, 2008 and 2007, we did not have any
        revenues.
  During
        the three months ended September 30, 2008, our total operating expenses were
        $67,500, all of which were general and administrative expenses, compared
        to no
        operating expenses during the three months ended September 30, 2007. The
        expenses were the result of our becoming current in our filings under the
        Securities Exchange Act of 1934, as amended, and activities related to the
        assistance that we provided to a broker-dealer in its successful efforts
        to
        prosecute a Form 211 with the OTC Compliance Unit of FINRA to obtain authority
        to place quotations on the OTC Bulletin Board.
  During
        the three months ended September 30, 2008, we had a net loss of $117,500,
        compared to income of $28,411 during the three months ended September 30,
        2007.
        The decrease of $145,911 was a result of the $67,500 increase in general
        and
        administrative expenses discussed above, the $50,000 full impairment of the
        Art
        Collection, and a decrease in net other income of $28,411 that had been
        primarily derived from a gain on settlement judgment.
  *For
        the Nine Months Ended September 30, 2008 compared to the Nine Months Ended
        September 30, 2007*
  During
        the nine months ended September 30, 2008 and 2007, we did not have any
        revenues.
  During
        the nine months ended September 30, 2008, our total operating expenses were
        $145,138, all of which were general and administrative expenses, compared
        to no
        operating expenses during the nine months ended September 30, 2007. The expenses
        were the result of our becoming current in our filings under the Securities
        Exchange Act of 1934, as amended, and activities related to the assistance
        that
        we provided to a broker-dealer in its successful efforts to prosecute a Form
        211
        with the OTC Compliance Unit of FINRA to obtain authority to place quotations
        on
        the OTC Bulletin Board.
  16
 During
        the nine months ended September 30, 2008, we had a net loss of $195,138,
        compared to income of $28,070 during the nine months ended September 30,
        2007.
        The decrease of $223,208 was a result of the $145,138 increase in general
        and
        administrative expenses discussed above, the $50,000 full impairment of the
        Art
        Collection, and a decrease in net other income of $28,070 that had been
        primarily derived from a gain on settlement judgment.
  **FINANCIAL
        CONDITION AND LIQUIDITY**
  At
        September 30, 2008, we had no assets. We had total liabilities of $78,213,
        all
        current. Net cash used by operating activities during the nine months ended
        September 30, 2008 was $80,138. During the nine months ended September 30,
        2008,
        the net cash provided was represented by the net loss of $195,138, which
        was
        adjusted for non-cash items consisting of the write-off of the impaired Art
        Collection accounts payable, accrued liabilities, and related party payables.
        During the nine months ended September 30, 2007, we neither used nor were
        provided cash through our operating activities.
  During
        the nine months ended September 30, 2008, we had cash flows provided by
        financing activities of $80,138, resulting from capital contributions of
        services. During the nine months ended September 30, 2007, we did not have
        any
        cash flows from financing activities.
  During
        the nine months ended September 30, 2008, certain unpaid professional fees
        were
        incurred by us in connection with our activities during such period. These
        fees,
        legal and accounting, totaled $40,000. We will require additional equity
        and/or
        debt to pay our outstanding liabilities, to meet our ongoing operating expenses,
        and to satisfy the financial requirements of the proposed transaction with
        Neqtar. There is no assurance that we will be able to obtain such funds on
        terms
        or at a time acceptable to us, or at all.
 
 **OFF-BALANCE
        SHEET ARRANGEMENTS**
 
 We
        have
        no off-balance sheet arrangements at September 30, 2008.
 
 **CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES**
 
 Our
        discussion and analysis of our financial condition and results of operations
        are
        based on our financial statements, which have been prepared in accordance
        with
        accounting principles generally accepted in the United States of America.
        The
        preparation of these financial statements requires us to make estimates and
        judgments that affect the reported amounts of assets, liabilities and expenses.
        On an ongoing basis, we evaluate our estimates and judgments, including those
        related to accrued expenses, fair valuation of stock related to stock-based
        compensation and income taxes. We based our estimates on historical experience
        and on various other assumptions that we believe to be reasonable under the
        circumstances, the results of which form the basis for making judgments about
        the carrying values of assets and liabilities that are not readily apparent
        from
        other sources. Actual results may differ from these estimates under different
        assumptions or conditions.
 
 Use
        of
        Estimates
 
 In
        preparing the financial statements, management is required to make estimates
        and
        assumptions that affect the reported amounts of assets and liabilities as
        of the
        date of the statements of financial condition, revenues, and expenses for
        the
        period then ended. Actual results may differ significantly from those estimates.
        Significant estimates made by management include, but are not limited to,
        stock-based compensation, valuation of debt discounts, and useful life of
        property and equipment.
 
 17
 Accounts
        Receivable
 
 We
        have a
        policy of reserving for uncollectible accounts based on its best estimate
        of the
        amount of probable credit losses in its existing accounts receivable. We
        periodically review our accounts receivable to determine whether an allowance
        is
        necessary based on an analysis of past due accounts and other factors that
        may
        indicate that the realization of an account may be in doubt. Account balances
        deemed to be uncollectible are charged to the allowance after all means of
        collection have been exhausted and the potential for recovery is considered
        remote.
 
 Inventories
 
 Inventories
        are stated at the lower of cost or market utilizing the first-in, first-out
        method and consist of raw materials related to our products. We intend to
        write
        down inventory for estimated obsolescence or unmarketable inventory based
        upon
        assumptions and estimates about future demand and market conditions. If actual
        market conditions become less favorable than those projected by us, additional
        inventory write-downs might be required.
 
 Property
        and Equipment
 
 Property
        and equipment are carried at cost. Depreciation and amortization are provided
        using the straight-line method over the estimated economic lives of the assets.
        The cost of repairs and maintenance is expensed as incurred; major replacements
        and improvements are capitalized. When assets are retired or disposed of,
        the
        cost and accumulated depreciation are removed from the accounts, and any
        resulting gains or losses are included in income in the year of
        disposition.
 
 Revenue
        Recognition
 
 We
        follow
        the guidance of the SEC’s Staff Accounting Bulletin No. 104, “Revenue
        Recognition in Financial Statements.” In general, we record revenue when
        persuasive evidence of an arrangement exists, services have been rendered
        or
        product delivery has occurred, the sales price to the customer is fixed or
        determinable, and collectability is reasonably assured.
 
 The
        following policies reflect our specific criteria for our revenue stream:
        We
        generate revenue from the sale of our beverage products. Revenues from the
        sale
        of these items are recognized upon delivery of the product to the customer.
        Consideration given by us to a customer (including a reseller of our products)
        such as slotting fees is accounted for as a reduction of revenue when recognized
        in our income statement.
 
 Stock
        Based Compensation
 
 We
        adopted Statement of Financial Accounting Standards No. 123 (revised 2004), *Share
        Based Payment* (“SFAS
        No. 123R”). SFAS No. 123R establishes the financial accounting and reporting
        standards for stock-based compensation plans. As required by SFAS No. 123R,
        we
        recognized the cost resulting from all stock-based payment transactions
        including shares issued under our stock option plans in the financial
        statements.
 
 Non-Employee
        Stock-Based Compensation
 
 The
        cost
        of stock based compensation awards issued to non-employees for services are
        recorded at either the fair value of the services rendered or the instruments
        issued in exchange for such services, whichever is more readily determinable,
        using the measurement date guidelines enumerated in Emerging Issues Task
        Force
        Issue (“EITF”) 96-18, “Accounting for Equity Instruments That Are Issued to
        Other Than Employees for Acquiring, or in Conjunction with Selling, Goods
        or
        Services” (“EITF 96-18”).
 
 18
 Recent
        Accounting Pronouncements
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No.
        157, “Fair Value Measurements” (“FAS 157”). This Statement defines fair value as
        used in numerous accounting pronouncements, establishes a framework for
        measuring fair value in generally accepted accounting principles and expands
        disclosure related to the use of fair value measures in financial statements.
        The Statement is to be effective for the Company’s financial statements issued
        in 2008; however, earlier application is encouraged. The adoption of this
        interpretation did not have an impact on the Company’s financial position,
        results of operations, or cash flows.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin No. 108, *considering
        the Effects of Prior Year Misstatements when quantifying Misstatements in
        Current Year Financial Statements* (“SAB
        108”). SAB 108 requires companies to evaluate the materiality of identified
        unadjusted errors on each financial statement and related financial statement
        disclosure using both the rollover approach and the iron curtain approach,
        as
        those terms are defined in SAB 108. The rollover approach quantifies
        misstatements based on the amount of the error in the current year financial
        statement, whereas the iron curtain approach quantifies misstatements based
        on
        the effects of correcting the misstatement existing in the balance sheet
        at the
        end of the current year, irrespective of the misstatement’s year(s) of origin.
        Financial statements would require adjustment when either approach results
        in
        quantifying a misstatement that is material. Correcting prior year financial
        statements for immaterial errors would not require previously filed reports
        to
        be amended. If a company determines that an adjustment to prior year financial
        statements is required upon adoption of SAB 108 and does not elect to restate
        its previous financial statements, then it must recognize the cumulative
        effect
        of applying SAB 108 in fiscal 2006 beginning balances of the affected assets
        and
        liabilities with a corresponding adjustment to the fiscal 2006 opening balance
        in retained earnings. SAB 108 is effective for interim periods of the first
        fiscal year ending after November 15, 2006. The adoption of SAB 108 did not
        have
        an impact on the Company’s financial statements.
 
 In
        December 2006, FASB Staff Position No. EITF 00-19-2, *“Accounting
        for Registration Payment Arrangements,”* was
        issued. The FSP specifies that the contingent obligation to make future payments
        or otherwise transfer consideration under a registration payment arrangement,
        whether issued as a separate agreement or included as a provision of a financial
        instrument or other agreement, should be separately recognized and measured
        in
        accordance with SFAS No. 5, *“Accounting
        for Contingencies.”* The
        Company believes that its current accounting is consistent with the
        FSP.
 
 In
        February 2007, the FASB issued SFAS No. 159, *“The
        Fair Value Option for Financial Assets and Financial Liabilities, Including
        an
        Amendment of FASB Statement No. 115* , *”* under
        which entities will now be permitted to measure many financial instruments
        and
        certain other assets and liabilities at fair value on an
        instrument-by-instrument basis. This Statement is effective as of the beginning
        of an entity’s first fiscal year that begins after November 15, 2007. Early
        adoption is permitted as of the beginning of a fiscal year that begins on
        or
        before November 15, 2007, provided the entity also elects to apply the
        provisions of SFAS 157. The Company is currently assessing the impact, if
        any,
        that the adoption of SFAS 159 will have on its financial
        statements.
 
 In
        May
        2007, the FASB issued FASB Staff Position No. FIN 48-1, *Definition
        of Settlement in FASB Interpretation No. 48* (the
“FSP”). The FSP provides guidance about how an enterprise should determine
        whether a tax position is effectively settled for the purpose of recognizing
        previously unrecognized tax benefits. Under the FSP, a tax position could
        be
        effectively settled on completion of examination by a taxing authority if
        the
        entity does not intend to appeal or litigate the result and it is remote
        that
        the taxing authority would examine or re-examine the tax position. The Company
        does not expect that this interpretation will have a material impact on its
        financial position, results of operations, or cash flows.
 
 In
        December 2007, the FASB issued SFAS No. 141(R), *“Business
        Combinations,”* which
        replaces SFAS No. 141, *“Business
        Combinations,”* which,
        among other things, establishes principles and requirements for how an acquirer
        entity recognizes and measures in its financial statements the identifiable
        assets acquired, the liabilities assumed (including intangibles) and any
        noncontrolling interests in the acquired entity. SFAS No. 141(R) applies
        prospectively to business combinations for which the acquisition date is
        on or
        after the beginning of the first annual reporting period beginning on or
        after
        December 15, 2008. We are currently evaluating what impact our adoption of
        SFAS
        No. 141(R) will have on our financial statements.
 
 In
        December 2007, the FASB issued SFAS No. 160, “*Noncontrolling
        Interests in Consolidated Financial Statements, an amendment of ARB No.
        51.”*SFAS No.
        160 amends ARB 51 to establish accounting and reporting standards for the
        noncontrolling interest in a subsidiary and for the deconsolidation of a
        subsidiary. It also amends certain of ARB 51’s consolidation procedures for
        consistency with the requirements of SFAS No. 141(R). SFAS No. 160 is effective
        for fiscal years, and interim periods within those fiscal years, beginning
        on or
        after December 15, 2008. We are currently evaluating what impact our adoption
        of
        SFAS No. 160 will have on our financial statements.
 
 Other
        accounting standards that have been issued or proposed by the FASB or other
        standards-setting bodies that do not require adoption until a future date
        are
        not expected to have a material impact on the financial statements upon
        adoption.




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**ITEM
      4. CONTROLS AND PROCEDURES**





We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our Principal Executive Officer (who is also our
      Principal Financial Officer), of the effectiveness of the design and operation
      of our disclosure controls and procedures as of the end of the period covered
      by
      this report. Based on the foregoing, our Principal Executive Officer concluded
      that our disclosure controls and procedures were effective at the reasonable
      assurance level.




There
      has
      been no change in our internal controls over financial reporting during our
      most
      recent fiscal quarter that has materially affected, or is reasonably likely
      to
      materially affect, our internal controls over financial reporting.




**PART
      II. OTHER INFORMATION**





**ITEM
      5. OTHER INFORMATION**





On
      September 19, 2008, Bruce M. Cosgrove resigned as our Chief Executive Officer
      and as one of our directors and, in connection therewith, Mr. Cosgrove and
      we
      entered into a Resignation Agreement and General Release (the “Agreement”).
      Pursuant to various employment-related statutes and revocation rights, however,
      Mr. Cosgrove’s resignation was not effective until the close of business on
      September 26, 2008. In connection with the Agreement, we agreed to pay to Mr.
      Cosgrove $25,000 and he released us from all claims, demands, actions,
      grievances, or other legal responsibilities of any kind that he may have
      otherwise had based on his tenure with us as our Chief Executive Office and
      director. In addition, effective September 26, 2008, Stuart Hamilton also
      resigned as one of our directors. Further, effective on September 26, 2008,
      our
      sole remaining director, Wayne Gronquist, became our acting Chief Executive
      Officer and Chief Financial Officer.





On
      October 21, 2008, we entered into a Heads of Agreement (the “HOA”) with Neqtar
      Wines PTY LTD (“Neqtar”), pursuant to which Neqtar and we agreed on certain
      potential terms of a potential future transaction. On March 17, 2008, Neqtar
      and
      Samson Investment Company (“Samson”) entered into a letter of intent (the “LOI”)
      setting forth certain terms of a proposed acquisition by Samson, or its nominee,
      of all of Neqtar’s outstanding shares of common stock. On October 20, 2008, we
      entered into a Designation, Assignment, and Assumption Agreement with Samson,
      in
      which we were designated by Samson as its nominee under the LOI, and Samson
      conveyed all of its right, title, and interest in the same to us and we granted
      a five-year warrant to Samson to purchase 120,000 shares of our common stock
      at
      a per-share exercise price of $10.00. As a result of our designation as Samson’s
      nominee under the LOI, we entered into preliminary transaction negotiations
      with
      Neqtar, which culminated in the execution of the HOA.





Pursuant
      to the HOA, we agreed that, upon the close of the potential future transaction
      between Neqtar and us, and in exchange for our tender of a certain
      to-be-determined purchase price (the “Proposed Neqtar Transaction”):





·
              we
                  will own all of the shares of Neqtar’s common
                  stock;




·
              we
                  will lease, and eventually may purchase, certain facilities from
                  Neqtar;




·
              Neqtar
                  will be obligated to purchase a specified amount of wine from us
                  annually;




·
              we
                  will own certain of Neqtar’s
                  inventory;




·
              we
                  will grant Neqtar a security interest in substantially all of our
                  assets
                  and those assets acquired from Neqtar; and we will own certain
                  of Neqtar’s
                  trademarks.




In
      addition, Neqtar and we expect to make certain representations and warranties
      to
      each other in a definitive transaction document that are standard and customary
      in the wine industry for transactions of this size and magnitude. The Proposed
      Neqtar Transaction is subject to certain conditions precedent, including, but
      not limited to, the transfer of certain of SdS Beverages’ assets to Neqtar,
      satisfactory completion of certain due diligence regarding Neqtar and the
      Proposed Neqtar Transaction, a financing condition, receipt of an independent
      appraisal valuing Neqtar’s fair market value not less than $27 million in the
      aggregate, and the making of certain revisions to documents between Neqtar
      and
      Fosters.





In
      contemplation of the Proposed Neqtar Transaction or a similar future
      transaction, on June 6, 2008, we engaged an investment bank to advise and assist
      us in respect of the financing contingency for the Proposed Neqtar Transaction





20





**ITEM
      6. EXHIBITS**





**Exhibit**
            
            **Description
                of Exhibit**10.1
            
            Resignation
                Agreement and General Release dated September 19, 2008 between Bruce
                M.
                Cosgrove and The Saint James Company (Incorporated by reference to
                Exhibit
                99.3 to that certain Current Report on Form 8-K filed by the Company
                with
                the Securities and Exchange Commission on October 2,
                2008.)





10.2
            Heads
                of Agreement, dated October 21, 2008, between Neqtar Limited and
                The Saint
                James Company. (Incorporated by reference to Exhibit 10.2 to that
                certain
                Current Report on Form 8-K filed by the Company with the Securities
                and
                Exchange Commission on October 27, 2008.)




10.3
            Letter
                of Intent to Purchase Neqtar Wines PTY LTD and all Related Real Property
                and Interests of Seller, dated March 17, 2008, between Samson Investment
                Company and Neqtar Wines PTY LTD. (Incorporated by reference to Exhibit
                10.3 to that certain Current Report on Form 8-K filed by the Company
                with
                the Securities and Exchange Commission on October 27, 2008.)




10.4
            Designation,
                Assignment, and Assumption Agreement, dated October 20, 2008, between
                Samson Investment Company and The Saint James Company. (Incorporated
                by
                reference to Exhibit 10.4 to that certain Current Report on Form
                8-K filed
                by the Company with the Securities and Exchange Commission on October
                27,
                2008.)




10.5
            Common
                Stock Purchase Warrant in favor of Samson Investment Company, dated
                October 20, 2008. (Incorporated by reference to Exhibit 10.5 to that
                certain Current Report on Form 8-K filed by the Company with the
                Securities and Exchange Commission on October 27, 2008.)





31.1*
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley
                Act




32.1*
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley
                Act







*
      Filed herewith.





21





**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      Report to be signed on its behalf by the undersigned, thereunto duly
      authorized.


THE
                SAINT JAMES COMPANY
                (Registrant)November
                18, 2008
            
            */s/
                Wayne Gronquist*Wayne
                Gronquist
                Chief
                  Executive Officer





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