<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


                                   FORM 10-Q

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

               For the quarterly period ended SEPTEMBER 30, 1999

                                       OR

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

                        Commission file number: 0-24048

                             GEERLINGS & WADE, INC.
             (Exact name of registrant as specified in its charter)


          MASSACHUSETTS                                        04-2935863
  (State or other jurisdiction                              (I.R.S. Employer
of incorporation or organization)                          Identification No.)

960 TURNPIKE STREET, CANTON, MA                                   02021
(Address of principal executive offices)                        (Zip Code)

(Registrant's telephone number, including area code):  (781) 821-4152

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

                             Yes [X]     No [ ]

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:

                   Par Value          Date               Number of Shares
                   ---------          ----               ----------------
Common Stock        $ .01      November 15, 1999            3,848,405
<PAGE>

                             GEERLINGS & WADE, INC.
                                     INDEX


                                                                            Page
                                                                            ----
PART I.  FINANCIAL INFORMATION

         Item 1. Financial Statements

                 Balance Sheets as of December 31, 1998 and
                 September 30, 1999 (Unaudited)...........................    2

                 Statements of Operations for the Quarters Ended
                 September 30, 1998 and September 30, 1999 and for
                 the Nine months Ended September 30, 1998 and
                 September 30, 1999 (Unaudited)...........................    3

                 Statements of Cash Flows for the Nine months Ended
                 September 30, 1998 and September 30, 1999 (Unaudited)....    4

                 Notes to Financial Statements............................    5

         Item 2. Management's Discussion and Analysis of Financial
                 Condition and Results of Operations......................    7

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K..................................   13

SIGNATURES................................................................   14

                                       1
<PAGE>

                        PART I.   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



                             GEERLINGS & WADE, INC.
                                 BALANCE SHEETS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                        December 31,     September 30,
                                                           1998              1999
                                                        -----------       -----------
<S>                                                     <C>               <C>
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                          $ 4,289,646       $ 3,006,892
     Accounts receivable                                    610,382         1,143,287
     Inventory                                            8,213,801        10,653,497
     Prepaid mailing costs                                1,357,950           627,559
     Prepaid expenses and other assets                      833,376           761,637
     Prepaid Taxes                                              ---           713,221
     Deferred income taxes                                   87,119            87,119
                                                        -----------       -----------

          Total Current Assets                           15,392,274        16,993,212
                                                        -----------       -----------

PROPERTY AND EQUIPMENT, AT COST                           2,514,299         2,560,689
     Less--Accumulated Depreciation                       1,646,580         1,146,764
                                                        -----------       -----------
                                                            867,719         1,413,925
                                                        -----------       -----------

DEFERRED INCOME TAXES, NET                                  493,436           493,436
                                                        -----------       -----------
OTHER ASSETS                                                451,799           398,049
                                                        -----------       -----------

                                                        $17,205,228       $19,298,622
                                                        ===========       ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                   $ 3,401,392       $ 3,900,009
     Current portion of deferred revenue                  1,089,659           845,922
     Accrued expenses                                       924,561         1,445,936
                                                        -----------       -----------

          Total Current Liabilities                       5,415,612         6,191,867
                                                        -----------       -----------

DEFERRED REVENUE, LESS CURRENT PORTION                      384,940           505,345
                                                        -----------       -----------

PURCHASE PRICE ADVANCE FROM LIQUID HOLDINGS                     ---         1,250,000
                                                        -----------       -----------
STOCKHOLDERS' EQUITY:
     Preferred stock, $.01 par value -
         Authorized-1,000,000 shares
          Outstanding-none                                      ---               ---
     Common stock, $.01 par value-
          Authorized-10,000,000 shares-
       Issued and outstanding-3,789,495 and
          3,848,405 shares in 1998 and
          1999, respectively                                 37,895            38,484

     Additional paid-in capital                           9,759,371        10,033,416
     Retained earnings                                    1,607,410         1,279,510
                                                        -----------       -----------

            Total Stockholders' Equity                   11,404,676        11,351,410
                                                        -----------       -----------

                                                        $17,205,228       $19,298,622
                                                        ===========       ===========
</TABLE>

                                       2
<PAGE>

                             GEERLINGS & WADE, INC.
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                              Three Months Ended                   Nine Months Ended
                                                       September 30,      September 30,       September 30,      September 30,
                                                           1998              1999                1998               1999
                                                        ----------         ----------         -----------        -----------
<S>                                                    <C>                <C>                 <C>                <C>
Sales                                                   $7,034,645         $7,362,390         $22,619,598        $24,451,667

Cost of Sales                                            3,597,633          3,651,336          11,687,250         12,482,967
                                                        ----------         ----------         -----------        -----------

Gross Profit                                             3,437,012          3,711,054          10,932,348         11,968,700

Selling, general and administrative expenses             3,072,220          3,422,423           9,906,799         11,819,712

Merger related expenses                                        ---            696,664                 ---            696,664
                                                        ----------         ----------         -----------        -----------

Income (loss) from operations                              364,792           (408,033)          1,025,549           (547,676)

Other expense                                                  ---             50,742                 ---             50,742

Interest income                                             13,951              6,954              15,316             33,719

Interest expense                                               ---                ---              20,616                ---
                                                        ----------         ----------         -----------        -----------

Income (loss) before income taxes                          378,743           (451,821)          1,020,249           (564,699)

Provision (benefit) for income taxes                       158,300           (189,700)            414,900           (236,800)
                                                        ----------         ----------         -----------        -----------

Net income (loss)                                       $  220,443         $ (262,121)        $   605,349        $  (327,899)
                                                        ==========         ==========         ===========        ===========
Net income (loss) per share
        Basic                                                $0.06             $(0.07)              $0.16             $(0.09)
                                                        ==========         ==========         ===========        ===========
        Diluted                                              $0.06             $(0.07)              $0.16             $(0.09)
                                                        ==========         ==========         ===========        ===========
Weighted average common shares and common
 equivalents outstanding
        Basic                                            3,787,814          3,847,524           3,785,358          3,840,780
                                                        ==========         ==========         ===========        ===========
        Diluted                                          3,788,076          3,847,524           3,799,678          3,840,780
                                                        ==========         ==========         ===========        ===========
</TABLE>

                                       3
<PAGE>

                             GEERLINGS & WADE, INC.
                            STATEMENT OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Nine Months Ended
                                                                                 September 30,       September 30,
                                                                                     1998                1999
                                                                               -----------------  -------------------
<S>                                                                            <C>                <C>
CASH FLOW FROM OPERATING ACTIVITIES:
   Net income (loss)                                                                $   605,348          $  (327,899)
   Adjustments to reconcile net income (loss) to net cash provided by
       operating activities --
         Depreciation and amortization                                                  407,365              396,432
         Deferred income taxes                                                              ---                  ---
         Loss from disposition of fixed asset                                               ---               50,742
   Changes in current assets and liabilities --
         Accounts receivable                                                             51,496             (532,905)
         Inventory                                                                    2,772,444           (2,439,696)
         Prepaid mailing costs                                                          (55,241)             730,391
         Prepaid expenses                                                                65,074               76,506
         Prepaid income taxes                                                               ---             (713,221)
         Accounts payable                                                               855,742              498,617
         Deferred revenue                                                                64,426             (123,332)
         Accrued expenses                                                              (750,632)             521,375
                                                                                    -----------          -----------
              Net cash (used in) provided by operating activities                     4,016,022           (1,862,990)
                                                                                    -----------          -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                                                  (90,889)            (957,506)
   Proceeds from the sale of property and equipment                                      80,000                  ---
   Change in other assets                                                              (307,609)              13,109
                                                                                    -----------          -----------
             Net cash used in investing activities                                     (318,498)            (944,397)
                                                                                    -----------          -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase price advance from Liquid Holdings                                                             1,250,000
   Borrowings on line of credit                                                       1,651,090                  ---
   Repayments on line of credit                                                      (2,633,485)                 ---
   Proceeds from stock purchase plan                                                     29,674              274,634
                                                                                    -----------          -----------
             Net cash provided by (used in) financing activities                       (952,721)           1,524,634
                                                                                    -----------          -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                  2,744,803           (1,282,753)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                          358,043            4,289,645
                                                                                    -----------          -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                            $ 3,102,846          $ 3,006,892
                                                                                    ===========          ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:
   Cash paid during the period -
   Interest                                                                         $    20,616          $       ---
                                                                                    ===========          ===========
   Income taxes paid                                                                $ 1,087,631          $   562,389
                                                                                    ===========          ===========

</TABLE>


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

                                       4
<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

1.  Basis of Presentation
    ---------------------

The interim period information set forth in these financial statements is
unaudited and may be subject to normal year-end adjustments.  In the opinion of
management, the information reflects all adjustments, which consist of normal
recurring accruals that are considered necessary to present a fair statement of
the results of operations of Geerlings & Wade, Inc. (the "Company") for the
interim periods presented.  The operating results for the quarter ended
September 30, 1999 are not necessarily indicative of the results to be expected
for the fiscal year ending December 31, 1999.

The financial statements presented herein should be read in conjunction with the
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.  Certain information in these footnote
disclosures normally included in financial statements has been condensed or
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission.

2.  Basic and Diluted Net Income Per Common Share
    ---------------------------------------------

The Company applies the provisions of Statement of Financial Accounting
Standards No. 128, Earnings Per Share, which Statement establishes standards for
computing and presenting earnings per share.  For the quarters ending September
30, 1998 and September 30, 1999, 381,333 and 425,467 of anti-dilutive shares,
respectively, have been excluded from the weighted average number of common and
dilutive potential common shares outstanding.  For the nine months ending
September 30, 1998 and September 30, 1999, 367,275 and 425,467 of anti-dilutive
shares, respectively have been excluded from the weighted average number of
common and dilutive potential common shares outstanding.

Basic and diluted net income (loss) per share is as follows:


<TABLE>
<CAPTION>
                                                               Quarter Ended September 30,  Nine months Ended September 30,
                                                                  1998           1999            1998        1999
                                                               ----------     -----------     ----------  -----------
<S>                                                            <C>             <C>             <C>         <C>
Net income (loss)                                              $  220,443      $ (262,121)     $  605,349  $ (327,899)
                                                               ==========      ==========      ==========  ==========

Basic weighted average shares outstanding                       3,787,814       3,847,524       3,785,358   3,840,780
Weighted average common equivalent shares computed
 under the treasury stock method                                      262             ---          14,320         ---
                                                               ----------      ----------      ----------  ----------
Diluted weighted average shares outstanding                     3,788,076       3,847,524       3,799,678   3,840,780
                                                               ==========      ==========      ==========  ==========

Basic net income (loss) per share                              $     0.06      $     (.07)     $     0.16  $     (.09)
                                                               ==========      ==========      ==========  ==========
Diluted net income (loss) per share                            $     0.06      $     (.07)     $     0.16  $     (.09)
                                                               ==========      ==========      ==========  ==========
</TABLE>


3. Comprehensive Income (Loss)
   ---------------------------

SFAS No. 130, Comprehensive Income, requires that all items recognized under
accounting standards as components of comprehensive income (loss) be reported in
financial statements.  It also requires that an entity aggregate items of other
comprehensive income (loss) (e.g., foreign currency translation adjustments and
unrealized gains and losses on certain marketable securities) by their nature in
its financial statements.  The Company did not have any items of comprehensive
income (loss) for the quarters ended September 30, 1998 and September 30, 1999,
and therefore, total comprehensive income (loss) was the same as reported net
income (loss) for those periods.

4. Merger Agreement
-------------------

     On September 27, 1999 the Company entered into an Agreement and Plan of
Merger by and among the Company, Liquid Holdings Inc. ("Liquid Holdings") and
Liquid Acquisition Corp., a wholly-owned subsidiary of Liquid Holdings (the
"Merger Agreement"). The Company has scheduled a special meeting of stockholders
for December 8, 1999 at 3:00 p.m. to consider and vote upon the proposal to
approve and adopt the Merger Agreement. If the Company's stockholders


                                       5
<PAGE>

approve the Merger Agreement and the other conditions to closing set forth in
the Merger Agreement are met, Liquid Acquisition Corp. will be merged with and
into the Company with the Company being the surviving corporation (the
"Merger"). As a result of the Merger, each stockholder will receive $10.00 in
cash for each share of the Company's common stock held by such stockholder. In
addition, each outstanding option to purchase the Company's common stock will be
accelerated and cancelled immediately prior to the Merger and converted into the
right to receive cash for the difference, if positive, between $10.00 a share
and the exercise price of the option. The Merger will be accounted for under
the purchase method of accounting and will be a taxable transaction under the
Internal Revenue Code. In connection with the execution of the Merger Agreement,
two directors of the Company, who own 1,314,000 shares of the Company's common
stock (approximately 34% of the shares of the Company's common stock
outstanding), have agreed to vote all shares of common stock owned by them in
favor of the Merger Agreement. In addition, the Company has entered into an
agreement pursuant to which it has granted Liquid Holdings, or an affiliate of
Liquid Holdings, an option to purchase, upon the termination of the Merger
Agreement under certain specified circumstances, up to 271,667 shares of
authorized but unissued shares of Company common stock at a purchase price of
$10.00 per share. The Company expects the Merger to be consummated in the first
quarter of 2000 subject to approval of the Company's stockholders, certain
antitrust and alcoholic beverage regulatory approvals and satisfaction of the
other closing conditions set forth in the Merger Agreement. Additional
information regarding the Merger can be found in the Company's current report on
Form 8-K dated September 27, 1999 and the Company's Proxy Statement dated
October 26, 1999.

                                       6
<PAGE>

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

GENERAL

     Geerlings & Wade, Inc. (the "Company") is a direct marketer of premium
wines and wine-related merchandise by selling to retail consumers via direct
mail, the Internet and stores.  The Company currently maintains licensed
facilities in fifteen states.  Federal, state and local laws strictly govern the
sale of wine in each market served by the Company.

     On September 27, 1999 the Company entered into an Agreement and Plan of
Merger by and among the Company, Liquid Holdings Inc. ("Liquid Holdings") and
Liquid Acquisition Corp., a wholly-owned subsidiary of Liquid Holdings (the
"Merger Agreement"). The Company has scheduled a special meeting of stockholders
for December 8, 1999 at 3:00 p.m. to consider and vote upon the proposal to
approve and adopt the Merger Agreement. If the Company's stockholders approve
the Merger Agreement and the other conditions to closing set forth in the Merger
Agreement are met, Liquid Acquisition Corp. will be merged with and into the
Company with the Company being the surviving corporation (the "Merger"). As a
result of the Merger, each stockholder will receive $10.00 in cash for each
share of the Company's common stock held by such stockholder. In addition, each
outstanding option to purchase the Company's common stock will be accelerated
and cancelled immediately prior to the Merger and converted into the right to
receive cash for the difference, if positive, between $10.00 a share and the
exercise price of the option. The Merger will be accounted for under the
purchase method of accounting and will be a taxable transaction under the
Internal Revenue Code. In connection with the execution of the Merger Agreement,
two directors of the Company, who own 1,314,000 shares of the Company's common
stock (approximately 34% of the shares of the Company's common stock
outstanding), have agreed to vote all shares of common stock owned by them in
favor of the Merger Agreement. In addition, the Company has entered into an
agreement pursuant to which it has granted Liquid Holdings, or an affiliate of
Liquid Holdings, an option to purchase, upon the termination of the Merger
Agreement under certain specified circumstances, up to 271,667 shares of
authorized but unissued shares of Company common stock at a purchase price of
$10.00 per share. The Company expects the Merger to be consummated in the first
quarter of 2000 subject to approval of the Company's stockholders, certain
antitrust and alcoholic beverage regulatory approvals and satisfaction of the
other closing conditions set forth in the Merger Agreement. Additional
information regarding the Merger can be found in the Company's current report on
Form 8-K dated September 27, 1999 and the Company's Proxy Statement dated
October 26, 1999.

IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

     The Company may occasionally make forward-looking statements and estimates
such as forecasts and projections of the Company's future performance or
statements of management's plans and objectives.  These forward-looking
statements may be contained in SEC filings, press releases and oral statements,
among others, made by the Company.  Actual results could differ materially from
those in such forward-looking statements.  Therefore, no assurance can be given
that the results in such forward-looking statements will be achieved.  Important
factors could cause the Company's actual results to differ from those contained
in such forward-looking statements, including, among other things, the factors
mentioned in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 on file with the U.S. Securities and Exchange Commission.

QUARTERS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999

Sales

     Sales increased $327,000, or 4.7%, from $7,035,000 in the quarter ended
September 30, 1998 to $7,362,000 in the quarter ended September 30, 1999.  Sales
levels largely depend on response rates and circulation (number) of "house
mailings" which are product offerings sent via the U.S. Postal Service to
existing customers and of "acquisition mailings" which are product offerings
sent via the U.S. Postal Service to potential new customers.  Catalog, retail
store and Internet sales also contribute to total sales.  The increase in sales
resulted primarily from an increase in sales placed over the Internet on
www.geerwade.com of $337,000 from $28,000 in 1998 to $365,000 in 1999.  Improved
response rates to third quarter acquisition mailings in 1999 also contributed to
the increase in sales.  Sales from house mailings declined slightly during the
quarter, which reflects that existing customers have switched from purchasing by
telephone to purchasing over the Internet.  The Company did not mail any special
mailings to preferred customers offering one or two select wines ("Jay Essa
letters") in 1999 but mailed 53,000 Jay Essa Letters in 1998, which generated
sales from existing customers.  The Company did not mail a catalog in either the
third quarter of 1998 or 1999.  Sales, exclusive of wine accessory sales,
increased 2.4% in markets, defined by the shipping region of each facility, in
which the Company has operated for at least one year.  The number of twelve-
bottle equivalent cases ("cases"), exclusive of wine reservation sales, sold by
the Company increased by 2,001, or 2.9%, from 68,065 in the quarter ended
September 30, 1998 to 70,066 in the quarter ended September 30, 1999.  The
average case price, exclusive of wine reservation sales, increased by $0.25, or
0.3%, from $99.83 in the quarter ended September 30, 1998 to $100.08 in the
quarter ended September 30, 1999.  The minor increase in average case price
reflects a slight increase in pricing policy for the Company's products.  The
average number of cases purchased per customer order was 1.13 in the quarter
ended September 30, 1999 compared to 1.15 in the same fiscal period of 1998.
The average number of cases per order was reduced by increased sales resulting
from acquisition mailings since the average cases per order from first time
buyers is significantly less than average cases per order from existing
customers.

Gross Profit

     Gross profit increased $274,000, or 8.0%, from $3,437,000 in the quarter
ended September 30, 1998 to $3,711,000 in the quarter ended September 30, 1999.
Gross profit as a percentage of sales increased from 48.9% in the quarter ended
September 30, 1998 to 50.4% in the quarter ended September 30, 1999.  Gross
profit attributable to wine sales increased $2.12 per case, or 4.3%, from $49.25
per case in the quarter ended September 30, 1998 to $51.37 per case in the
quarter ended September 30, 1999.  The increase in gross profit percentage
resulted primarily because the Company was able to purchase wines at lower costs
and take advantage of a favorable foreign exchange rate environment.  However,
this increase was offset by selling accessories on www.geerwade.com at reduced
prices since the end of the second quarter of 1999 in order to encourage greater
e-commerce sales.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses increased $1,047,000, or
34.1%, from $3,072,000 in the quarter ended September 30, 1998 to $4,119,000 in
the quarter ended September 30, 1999 and increased as a percentage of sales from
43.7 % in the quarter ended September 30, 1998 to 55.9% in the quarter ended
September 30, 1999. The net increase in selling, general and

                                       7
<PAGE>

administrative expenses is largely attributable to legal and investment banking
expenses of $697,000 related to the Merger Agreement executed on September 27,
1999 with Liquid Holdings. Excluding these merger-related expenses, selling,
general and administrative expenses would have increased $350,000, or 11.3%,
from $3,072,000 in 1998 to $3,422,000 in 1999. Marketing expenses increased
$41,000 from $818,000 in 1998 to $859,000 in 1999. Also, order fulfillment and
overhead expenses were higher due to higher sales, additional salary expense
necessary to integrate the new Avexxis software system, higher depreciation for
the new software and www.geerwade.com site, and operating the Texas retail
facility.

Interest and Other Expense

     Interest income decreased from $13,951 in the quarter ended September 30,
1998 to $6,954 in the quarter ended September 30, 1999. This decrease in
interest income was due to having lower cash balances invested during the third
quarter of 1999 as compared to the third quarter of 1998.  There was no interest
expense in either the third quarter of 1998 or the third quarter of 1999.  Other
expense increased by $51,000 due to a loss for the disposal of the Company's
original software system.

                                       8
<PAGE>

NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999

Sales

     Sales increased $1,832,000, or 8.1%, from $22,620,000 in the nine months
ended September 30, 1998 to $24,452,000 in the nine months ended September 30,
1999. The increase in sales resulted primarily from sales generated by mailing
winter and spring catalogs which offer wines and wine accessories, Passport Wine
Club which was acquired in July 1998, Jay Essa letters and house mailings and
Internet sales. Internet sales increased $996,000 from $38,000 in 1998 to
$1,034,000 in 1999. Passport Wine Club sales increased $547,000 from $163,000 in
1998 (commencing in July 1998) to $710,000 in 1999. Sales generated from
acquisition mailings were lower, due to lower response rates to acquisition
mailings mailed in the first six months of 1999 compared with response rates to
acquisition mailings for the same period in 1998. Sales, exclusive of wine
accessory sales, increased 4.8% in markets, defined by the shipping region of
each facility, in which the Company has operated for at least one year. The
number of cases, exclusive of wine reservation sales, sold by the Company
increased by 11,667, or 5.3%, from 219,846 in the nine months ended September
30, 1998 to 231,513 in the nine months ended September 30, 1999. The average
case price increased by $1.06, or 1.1%, from $100.02 in the nine months ended
September 30, 1998 to $101.08 in the nine months ended September 30, 1999. The
stability in the average case price reflects a consistent pricing strategy. The
average number of cases purchased per customer order was 1.12 in the nine months
ended September 30, 1999 and 1998.

Gross Profit

     Gross profit increased $1,037,000, or 9.5%, from $10,932,000 in the nine
months ended September 30, 1998 to $11,969,000 in the nine months ended
September 30, 1999.  Gross profit as a percentage of sales increased from 48.3%
in the nine months ended September 30, 1998 to 48.9% in the nine months ended
September 30, 1999.  Gross profit attributable to wine sales, exclusive of wine
reservation sales, increased $2.71 per case, or 5.6%, from $48.20 per case in
the nine months ended September 30, 1998 to $50.91 per case in the nine months
ended September 30, 1999.  The increase in gross profit percentage and average
gross profit per case resulted from improved purchasing practices, favorable
foreign exchange rates and lower costs for certain domestic wine varietals.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses increased $2,609,000, or
26.3%, from $9,907,000 in the nine months ended September 30, 1998 to
$12,516,000 in the nine months ended September 30, 1999.  As a percentage of
sales, these expenses increased from 43.8% in the nine months ended September
30, 1998 to 51.1% in the nine months ended September 30, 1999.  The net increase
in selling, general and administrative expenses is attributable to a) higher
overhead primarily related to adding the Texas facility and Newbury Street store
and to additional staffing, b) legal and investment banking expenses of $697,000
related to the Merger Agreement executed on September 27, 1999 with Liquid
Holdings and c) significantly higher marketing expenses due to increased
acquisition mailings during 1999 and mailing 639,000 winter and spring catalogs
in 1999.  In 1998, no catalogs were mailed to customers in the first nine months
of the year.

Interest and Other Expense

     Interest income increased by $18,403 for the nine months ended September
30, 1999 compared to the comparable period in 1998 due to higher invested cash
balances.  Interest expense decreased by $20,616 from $20,616 in the nine months
ended September 30, 1998 to $0 in the nine months ended September 30, 1999, as a
result of not needing to borrow under the Company's line of credit during 1999.
Other expense increased by $51,000 due to a loss for the disposal of the
Company's original software system.

                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

PROVISION FOR INCOME TAXES

     The Company's provision for income taxes for the quarter ended September
30, 1999 reflects an approximate 42% effective income tax rate anticipated for
the full year ended December 31, 1999.   During the quarter ended September 30,
1999, the Company recorded a benefit for income taxes of $190,000 and recorded a
deferred benefit for income taxes of $237,000 for the nine months ended
September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary working capital needs include purchases of inventory,
software development and advertising expenses related to e-commerce sites and
the cost of acquisition mailings and other expenses associated with promoting
sales.  As of September 30, 1999, the Company had cash and cash equivalents
totaling $3,007,000.  On September 27, 1999, at the time the Company entered
into the Merger Agreement, Liquid Holdings paid the Company $1.25 million, which
is recorded on the accompanying balance sheet as Purchase Price Advance from
Liquid Holdings.  This amount is not refundable except under certain limited
circumstances.  The $1.25 million paid to the Company by Liquid Holdings can be
used by the Company for normal corporate purposes, subject to compliance with
the terms of the Merger Agreement.  The Company's credit facility with
BankBoston, a revolving, discretionary, demand line of credit with a maximum
principal amount equal to the lesser of 50% of qualifying inventory or $5.0
million (the "Line of Credit"), expired during the third quarter.  The Company
has initiated discussions with BankBoston to renew this Line of Credit.  The
Line of Credit bore interest at BankBoston's base rate (which approximates the
prime rate) plus one-half of a percent and was collateralized by substantially
all of the assets of the Company.

     For the year to date ending September 30, 1999, net cash of $944,000 was
used by operating activities, resulting principally from net losses and
increases in accounts receivable and inventory and decreases in deferred revenue
and accrued expenses, which reductions were offset by decreases in prepaid
mailings costs and prepaid expenses and increases in accounts payable.

     The Company invested $940,000 in computer hardware and software for the
Avexxis system, for www.geerwade.com and the Company's new e-commerce site,
www.winebins.com, and in equipment and furniture for the Texas retail facility.

     At December 31, 1998 and September 30, 1999, the Company had working
capital of $9,977,000 and $10,801,000, respectively. The increase in working
capital was primarily due to increases in accounts receivable, inventory and
prepaid taxes plus receipt of $1.25 million of the Purchase Price Advance from
Liquid Holdings and decreases in current deferred revenue and was offset by
decreases in cash, prepaid mailing costs and prepaid expenses and other assets
and increases in accounts payable and accrued expenses.

     Even in the absence of the renewal of the Line of Credit, the Company
presently believes that cash flows from operations and current cash will be
sufficient to meet the Company's working capital and capital expenditure
requirements for the foreseeable future.

EXCHANGE RATES

     The Company engages, from time to time, in currency-hedging activities
related to firm commitments for the purchase of inventories in an effort to fix
costs and manage the impact of exchange rate fluctuations.  The Company has two
foreign exchange lines of credit, which allow the Company to enter into forward
currency exchange contracts of up to $1,000,000 maturing on any one day.  As of
September 30, 1999, the Company had three forward currency exchange contracts to
purchase approximately 3.35 million French francs (FF) (equivalent to
approximately $.54 million.)

YEAR 2000 COMPLIANCE

The year 2000 issue relates to computer programs and systems that recognize
dates using two digit year data rather than four digit year data.  As a result,
such programs and systems may fail or provide incorrect information when using
dates after December 31, 1999.  If the year 2000 issue were to cause disruptions
to the Company's internal information technology systems or to the information
technology systems of entities with whom the Company has commercial
relationships, material adverse effects to the Company's operations could
result.

     The Company's internal computer programs and operating systems consist of
programs and systems relating to virtually all segments of the Company's
business, including merchandising, customer database management and marketing,
order-processing, fulfillment, inventory management, customer service and
financial reporting.  These programs and systems are primarily comprised of:

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<PAGE>

     "Front-end" systems.  These systems automate and manage business functions
     such as order-taking and order-processing, inventory management,
     fulfillment operations at the Company's retail facilities and financial
     reporting.  Users within the Company interface with these systems through
     personal computers via a local area network and from distant locations
     through a private network using the Internet.  These users also use and
     access through their personal computers off-the-shelf e-mail, word
     processing, spreadsheet and other commercial software applications.

     Customer database management systems.  These systems facilitate the storage
     of customer data and direct response and catalog mailings for the Company.
     Currently, the Company's internal customer database management system is
     integrated with the existing front-end system of the Company.

     Telecommunications systems.  These systems enable the Company to manage
     its order-taking and customer service functions.

     Voicemail systems.  These systems are used for receiving and storing
     messages to employees at various Company facilities.

     Ancillary services systems.  These include such systems as heating,
     ventilation and air conditioning control systems and security systems.

     The Company has completed detailed assessments of its internal front-end
systems, its customer database management systems, and its personal computers
and local area networks to assess the potential impact of the year 2000 issue.
These assessments were completed by the Company's existing workforce at no
identifiable incremental cost. In addition, a national computer consulting and
services company visited the Company's Canton, Massachusetts facility in October
1999 to assess the Company's year 2000 remediation efforts and has issued a
report stating that the Company is year 2000 ready provided that certain minor
procedures are conducted prior to December 31, 1999.  Based upon these
assessments and the Company's purchase and installation of a new software system
for front-end processing and a new production database, both of which are year
2000 compliant, the Company believes that all of its systems and equipment will
operate correctly when processing data that include dates after December 31,
1999, provided that minor remediation software is installed prior to year end.
The Company has scheduled the installation of the remediation software for this
month.  In addition to addressing the year 2000 issue, the Company's new
software and hardware system will enhance the functionality and capability of
the Company's entire computer system.  The Company plans to conduct further
assessments and tests of its systems and equipment to insure that all potential
year 2000 issues have been addressed.

     The Company has completed assessments of its internal telecommunications
systems and its internal voicemail and ancillary services systems.  The Company
has been advised by its telephone system vendor that its telephone and voicemail
systems are year 2000 compliant. The Company has completed nearly all of its
remediation efforts relating to its other systems and does not anticipate that
such remediation will cause the Company to incur material costs or present
implementation challenges that cannot be addressed prior to the end of calendar
year 1999.

     The computer programs and operating systems used by entities with whom the
Company has commercial relationships also pose potential problems relating to
the year 2000 issue, which may affect the Company's operations in a variety of
ways.  Although these risks are more difficult to assess than those posed by
internal programs and systems, the Company completed its assessment of such
programs and systems in October 1999.  The Company believes that the programs
and operating systems used by entities with which it has commercial
relationships generally fall into two categories.

     First, the Company relies on programs and systems used by providers of
services necessary to reach and communicate with the Company's customers.
Examples of such providers include the U.S. Postal Service, United Parcel
Service ("UPS"), telephone companies, customer list processors and rental
agencies, printers and banks.  Services provided by such entities affect almost
all facets of the Company's operations, including processing of orders, printing
and mailing of direct response mail and catalogs, shipping of goods and certain
financial services (e.g., credit card processing).  Programs and services in
this first category generally are not specific to the Company's business and
disruptions in their availability would likely have a negative impact on most
enterprises within the direct marketing industry and on many enterprises outside
the direct marketing industry.  The Company believes that all of the most
reasonably likely worst case scenarios involving disruptions to its operations
stemming from the year 2000 issue relate to programs and systems in this first
category.  The Company has been provided status reports from its primary service
providers such as UPS, Paymentech and credit card

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<PAGE>

companies stating that their respective operations will be year 2000 compliant
before December 31, 1999. The Company intends to continue requesting from its
regular vendors and service providers representations that they are or will be
year 2000 compliant or ready by the end of 1999. To the extent it is practical,
the Company will continue to test any of its systems that interface with third
parties to ensure year 2000 compliance.

     Second, the Company relies on programs and systems used by vendors of
products marketed by the Company.  Risks posed by the year 2000 issue relating
to programs and systems in this second category are minimal and correctable
since these vendors are relatively small companies and generally rely on off-
the-shelf software programs and hardware.  The Company continues to solicit
representations from the entities with which it has significant commercial
relationships that their programs and systems are or will be by the end of 1999
year 2000 compliant or ready.


ITEM 3:   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The following discussion about the Company's market risk disclosures
involves forward-looking statements.  Actual results could differ materially
from those projected in the forward-looking statements.  The Company is exposed
to market risk related to foreign currency exchange rates.  The Company does not
use derivative financial instruments for speculative or trading purposes.  The
Company enters into foreign exchange forward contracts to reduce its exposure to
currency fluctuations on vendor accounts payable denominated in foreign
currencies.  The objective of these contracts is to neutralize the impact of
foreign currency exchange rate movements on the Company's operating results.
The gains and losses on these contracts are included in earnings when the
underlying foreign currency denominated transaction is recognized.  Gains and
losses related to these instruments for the quarters ended September 30, 1999
and 1998 were not material to the Company.  Looking forward, the Company does
not anticipate any material adverse effect on its financial position, results of
operations or cash flows resulting from the use of these instruments.  However,
there can be no assurance that these strategies will be effective or that
transaction losses can be minimized or forecasted accurately.

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<PAGE>

PART II. OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              10.40  Lease Amendment between the Company and Flint Lee Limited
                     Partnership dated June 22, 1999.

              10.41  Lease Amendment between the Company and William Eddy dated
                     October 1, 1999.

              10.42  Lease Agreement between the Company and Cader Lane
                     Associates dated September 27, 1999.

              27     Financial Data Schedule


(b) The following filing was made on Form 8-K during the third quarter: 1.  On
September 28, 1999, a Form 8-K was filed reporting the Agreement and Plan of
Merger by and among Liquid Holdings Inc., Liquid Acquisition Corp. and the
Company dated September 27, 1999.

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<PAGE>

                                   SIGNATURES

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


                                    GEERLINGS & WADE, INC.
                                    (Registrant)


                                    By: /s/ Jay L. Essa
                                       -------------------------
                                    Name:  Jay L. Essa
                                    Title: President and Chief
                                           Executive Officer



                                    By: /s/ David R. Pearce
                                        -------------------------
                                    Name:  David R. Pearce
                                    Title: Vice President and Chief
                                           Financial Officer


Dated: November 15, 1999

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