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**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**FORM      10-QSB**

**QUARTERLY      REPORT UNDER SECTION 13 or 15 (d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934 **

*Commission      file number 333-63432*

**Atlantic      Wine Agencies Inc. **

| Florida                                        | 65-110237                          |
|------------------------------------------------|------------------------------------|
| (State                or other jurisdiction of | (I.R.S.                Employer    |
| incorporation                or organization)  | Identification                No.) |
|                                           |                               |

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**ITEM      1 FINANCIAL STATEMENTS**

| Description                                                                                                                                                                                                                                                      | Page                No. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                             |                    |
| FINANCIAL                INFORMATION:                                                                                                                                                                                                                            |                    |
| Financial                Statements                                                                                                                                                                                                                              |                    |
| Consolidated                Balance Sheets at September 30, 2006 and March 31, 2006, respectively                (Unaudited)                                                                                                                                     | 3                       |
| Consolidated                Statement of Operations for the Three Months Ended September 30,                2006 and                2005, respectively,                and Six Months Ended September 30, 2006 and 2005, respectively                (Unaudited) | 4                       |
| Consolidated                Statements of Cash Flows for the Nine Months Ended September 30,                2006 and                2005, respectively (Unaudited)                                                                                               | 5                       |
| Notes                to Consolidated Financial Statements (Unaudited)                                                                                                                                                                                            | 6                       |

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|                                                                                                                                   |   | September                30, |           | March                31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|----------------|--------------------------|--------|
|                                                                                                                                   |   | 2006                         |           | 2006                     |   |
|                                                                                                                                   |   | (Unaudited)                  |           |                     |   |
| CURRENT                ASSETS                                                                                                          |   |                         |           |                     |   |
| Cash                                                                                                                                   |   | $                            | 13,942         |                     | $      | 78,145 |   |
| Accounts                receivable, net                                                                                                |   |                         | 194,451        |                     |   | 507,065 |   |
| Inventory                                                                                                                              |   |                         | 599,115        |                     |   | 324,492 |   |
| Prepaid                expenses and other                                                                                              |   |                         | 8,536          |                     |   | 9,142 |   |
| Total                Current Assets                                                                                                    |   |                         | 816,044        |                     |   | 918,844 |   |
|                                                                                                                                   |   |                         |           |                     |   |   |   |
| OTHER                ASSETS                                                                                                            |   |                         |           |                     |   |   |   |
| Property,                plant and equipment, net                                                                                      |   |                         | 2,703,501      |                     |   | 2,945,682 |   |
| Trademark                                                                                                                              |   |                         | 1,426          |                     |   | 1,426 |   |
|                                                                                                                                   |   | $                            | 3,520,971      |                     | $      | 3,865,952 |   |
|                                                                                                                                        |   |                         |           |                     |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY                                                                              |   |                         |           |                     |   |   |   |
|                                                                                                                                   |   |                         |           |                     |   |   |   |
| CURRENT                LIABILITIES                                                                                                     |   |                         |           |                     |   |   |   |
| Due                to factoring agent                                                                                                  |   |                         | —        |                     |   | 99,595 |   |
| Loans                from principal shareholders                                                                                       |   |                         | 1,257,663      |                     |   | 1,259,863 |   |
| Accounts                payable                                                                                                        |   |                         | 228,796        |                     |   | 299,004 |   |
| Accrued                expenses                                                                                                        |   |                         | 228,568        |                     |   | 220,967 |   |
| Accrued                payroll taxes                                                                                                   |   |                         | 719            |                     |   | 25,926 |   |
| Total                Current Liabilities                                                                                               |   |                         | 1,715,746      |                     |   | 1,905,355 |   |
|                                                                                                                                   |   |                         |           |                     |   |   |   |
| STOCKHOLDERS’                EQUITY                                                                                              |   |                         |           |                     |   |   |   |
| Common                stock authorized 150,000,000 Shares; $0.00001 par value; issued and                outstanding 86,323,880 shares |   |                         | 868            |                     |   | 868 |   |
| Additional                contributed capital                                                                                          |   |                         | 7,829,536      |                     |   | 7,829,536 |   |
| Accumulated                deficit                                                                                                     |   |                         | (6,346,709     | )                        |   | (6,184,014 | ) |
| Accumulated                other comprehensive income                                                                                  |   |                         | 321,530314,207 |                     |   |   |   |
| Total                Stockholders’ Equity                                                                                        |   |                         | 1,805,225      |                     |   | 1,960,597 |   |
|                                                                                                                                   |   | $                            | 3,520,971      |                     | $      | 3,865,952 |   |

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|                                               |   | Three                Months Ended September 30, |       | Six                Months Ended September 30 |   |
|----------------------------------------------------|--------|-------------------------------------------------|------------|----------------------------------------------|--------|
|                                               |   | 2006                                            |       | 2005                                         |   | 2006 |   | 2005 |   |
|                                               |   |                                            |       |                                         |   |   |   |   |   |
| NET                SALES                           |   | $                                               | 44,640     |                                         | $      | 237,058 |   | $ | 100,599 |   | $ | 331,360 |   |
|                                               |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| COST                AND EXPENSES                   |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| Cost                of goods sold                  |   |                                            | 37,685     |                                         |   | 167,115 |   |   | 51,505 |   |   | 278,140 |   |
| Selling,                general and administrative |   |                                            | 124,627    |                                         |   | 495,785 |   |   | 169,812 |   |   | 914,780 |   |
| Depreciation                and amortization       |   |                                            | 24,779     |                                         |   | 16,599 |   |   | 50,865 |   |   | 35,388 |   |
| Total                Costs and Expenses            |   |                                            | 187,091    |                                         |   | 679,499 |   |   | 272,182 |   |   | 1,228,308 |   |
|                                               |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| OTHER                INCOME (EXPENSE)              |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| Insurance                claims                    |   |                                            | 310        |                                         |   |   |   |   | 9,505 |   |   |   |   |
| Interest                expense                    |   |                                            | (617       | )                                            |   |   |   |   | (617 | ) |   |   |   |
| Total                Other Income (Expense)        |   |                                            | (307       | )                                            |   |   |   |   | 8,888 |   |   |   |   |
|                                               |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| NET                LOSS                            |   | $                                               | (142,758   | )                                            | $      | (442,441 | ) | $ | (162,695 | ) | $ | (896,948 | ) |
|                                               |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| NET                LOSS PER SHARE                  |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| (basic                and fully diluted)           |   | $                                               | (0.01      | )                                            | $      | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) |
|                                               |   |                                            |       |                                         |   |   |   |   |   |   |   |   |   |
| WEIGHTED                AVERAGE SHARES OUTSTANDING |   |                                            | 86,323,880 |                                         |   | 84,838,077 |   |   | 86,323,880 |   |   | 84,838,077 |   |

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|                                                               |   | For                the Nine Months Ended |     |
|--------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                               |   | September                30,             |     |
|                                                               |   | 2006                                     |     | 2005 |   |
|                                                               |   | (Unaudited)                              |     | (Unaudited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                |   |                                     |     |   |   |
| Net                loss for period                                 |   | $                                        | (162,695 | ) | $ | (896,948 | ) |
| Non-cash                item included in net loss:                 |   |                                     |     |   |   |   |   |
| Depreciation                and amortization                       |   |                                     | 50,865   |   |   | 35,388 |   |
| Provision                for doubtful accounts                     |   |                                     | 75,600   |   |   |   |   |
| Changes                in operating assets and liabilities:        |   |                                     |     |   |   |   |   |
| Accounts                receivable                                 |   |                                     | 237,014  |   |   | 12,890 |   |
| Inventory                                                          |   |                                     | (274,623 | ) |   | 1,394,227 |   |
| Receivable                from officer                             |   |                                     |     |   |   | 43,221 |   |
| Interest                Receivable                                 |   |                                     |     |   |   | (79,139 | ) |
| Prepaid                expense and other                           |   |                                     | 606      |   |   | 43,690 |   |
| Overdraft                                                          |   |                                     |     |   |   | 1,044 |   |
| Accounts                payable                                    |   |                                     | (70,208  | ) |   | 432,408 |   |
| Accrued                expenses                                    |   |                                     | 7,601    |   |   | (113,752 | ) |
| Accrued                payroll taxes                               |   |                                     | (25,207  | ) |   | (65,181 | ) |
| Net                Cash Used In Operating Activities               |   |                                     | (161,047 | ) |   | 807,848 |   |
|                                                               |   |                                     |     |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                |   |                                     |     |   |   |   |   |
| Net                capital contribution                            |   |                                     |          |   |   | 6,441 |   |
| Loans                from shareholders                             |   |                                     | (2,200   | ) |   |   |   |
| Due                to factoring agent                              |   |                                     | (99,595  | ) |   |   |   |
| Due                to Dominion                                     |   |                                     | —  |   |   | (344,381 | ) |
| Net                Cash Used In Financing Activities               |   |                                     | (101,795 | ) |   | (337,940 | ) |
|                                                               |   |                                     |     |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                |   |                                     |     |   |   |   |   |
| Disposal                of fixed assets                            |   |                                     | 191,316  |   |   | 104,431 |   |
| Net                Cash Provided by (Used in) Investing Activities |   |                                     | 191,316  |   |   | 104,431 |   |
|                                                               |   |                                     |     |   |   |   |   |
| EFFECT                OF EXCHANGE RATE CHANGES ON CASH             |   |                                     | 7,323    |   |   | (561,292 | ) |
|                                                               |   |                                     |     |   |   |   |   |
| NET                INCREASE/ DECREASE IN CASH                      |   |                                     | (64,203  | ) |   | 13,047 |   |
| CASH                AND CASH EQUIVALENTS AT BEGINNING OF PERIOD    |   |                                     | 78,145   |   |   | 97,487 |   |
| CASH                AT END OF PERIOD                               |   | $                                        | 13,942   |   | $ | 110,534 |   |

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**Item      2. **
**Management’s      Discussion and Analysis of Financial Condition and Results of      Operation**

**RESULTS      OF OPERATIONS **

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**LIQUIDITY      AND CAPITAL RESOURCES **

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES **

**RECENTLY      ISSUED ACCOUNTING PRONOUNCEMENTS **

*"Accounting      for Certain Instruments with Characteristics of Both Liabilities and      Equity."*

*"Accounting      for Stock-Based Compensation - Transition and Disclosure - an Amendment to      FASB      Statement No. 123."*
*"Accounting      for Stock-Based Compensation,"*

**Item      3. Controls and Procedures.**

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**PART      II**

**Item      1. Legal Proceedings**

**Item      2. Changes in Securities**

**Item      3. Defaults Upon Senior Securities **

**Item      4. Submission of Matters to a Vote of Security Holders **

**Item      5. Other Information **

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

Exhibit      99.1

Exhibit      99.2

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**SIGNATURES**

**ATLANTIC      WINE AGENCIES INC.**

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