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
   ̈
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the transition period from 
to
 
 Commission
File Number 000-53085
 
 HARBREW
IMPORTS LTD. CORP.
 (Exact
Name of Registrant as Specified in Its Charter)
 Florida
              
              13-4362274(State
      or Other Jurisdiction
              
              (I.R.S.
      Employerof
      Incorporation or Organization)
              
              Identification
      No.)
 
 102 Buffalo Avenue,
Freeport, New York 11520
 (Address
of Principal Executive Offices)
 
 (516)
377-2636
 (Registrant’s
Telephone Number, Including Area Code)
 
 
 (Former
Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
 Indicate  by
check mark whether the registrant (1) filed all reports required to
be  filed by Section 13 or 15(d) of the Exchange Act 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 such filing requirements for the past 90
days.    Yes  x    No   ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, 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. (Check one):
  Large
      Accelerated Filer ̈
                Accelerated
      Filer   ̈Non-accelerated Filer  ̈
                Smaller Reporting
      Companyx(Do
      not check if a smaller reporting company)
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes   ̈    No  x
  As
of December 18, 2008, the registrant had outstanding 24,592,160 shares of common
stock.
  
  TABLE OF
CONTENTS
  PagePART
      I. FINANCIAL INFORMATIONITEM
      1. Financial Statements
                                                    
                                                    
                                                    1ITEM
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                                                    
                                                    
                                                    15ITEM
      3. Quantitative and Qualitative Disclosures About Market
    Risk
                                                    
                                                    
                                                    20ITEM
      4T. Controls and
      Procedures
                                                    
                                                    
                                                    20PART
      II. OTHER INFORMATIONITEM
      1. Legal Proceedings
                                                    
                                                    
                                                    22ITEM
      1A. Risk
      Factors
                                                    
                                                    
                                                    22ITEM
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                                                    
                                                    
                                                    23ITEM
      3. Defaults upon Senior Securities
                                                    
                                                    
                                                    23ITEM
      4. Submission of Matters to a Vote of Security Holders
                                                    
                                                    
                                                    23ITEM
      5. Other
      Information
                                                    
                                                    
                                                    24ITEM
      6.
      Exhibits
                                                    
                                                    
                                                    24SIGNATURES
                                                    
                                                    
                                                    26
  
  PART
I. FINANCIAL INFORMATION
 
 ITEM
1. Financial Statements
 
 Harbrew
Imports Ltd. Corp. and Subsidiary
 
 Consolidated
Balance Sheets
 
 September
      30,
                      
                      
                      December
      31,2008
                      
                      
                      2007(Unaudited)AssetsCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      1,511
                      
                      
                      $
                      43,664Accounts
      receivable, net of allowance for doubtful accounts of $ 35,000 and $ 0,
      respectively
                      
                      
                      119,797
                      
                      
                      
                      491,280Inventories
                      
                      
                      731,009
                      
                      
                      
                      1,319,426Prepaid
      expenses and other current assets
                      
                      
                      739,016
                      
                      
                      
                      310,406Total
      current assets
                      
                      
                      1,591,333
                      
                      
                      
                      2,164,776Property,
      plant and equipment, net
                      
                      
                      6,294
                      
                      
                      
                      6,994Restricted
      cash and cash equivalents
                      
                      
                      108,785
                      
                      
                      
                      108,785Total
      assets
                      
                      $
                      1,706,412
                      
                      
                      $
                      2,280,555Liabilities and Stockholders’ Equity
      (Deficiency)Current
      liabilities:Current
      portion of debt
                      
                      $
                      3,828,020
                      
                      
                      $
                      3,132,319Negative
      bank account balances
                      
                      
                      57,627
                      
                      
                      
                      -Accounts
      payable
                      
                      
                      1,101,570
                      
                      
                      
                      1,245,640Accrued
      expenses
                      
                      
                      754,523
                      
                      
                      
                      326,520Total
      current liabilities
                      
                      
                      5,741,740
                      
                      
                      
                      4,704,479Long
      term debt
                      
                      
                      2,275,934
                      
                      
                      
                      1,979,285Total
      liabilities
                      
                      
                      8,017,674
                      
                      
                      
                      6,683,764Stockholders’
      equity (deficiency):Preferred
      stock, $.001 par value; authorized 20,000,000 shares, none issued and
      outstanding
                      
                      
                      -
                      
                      
                      
                      -Common
      stock, $.001 par value; authorized 100,000,000 shares, issued and
      outstanding 24,592,160 and 16,336,200 shares, respectively
                      
                      
                      24,592
                      
                      
                      
                      16,336Additional
      paid-in capital
                      
                      
                      1,249,195
                      
                      
                      
                      379,257Retained
      earnings (deficit)
                      
                      
                      (7,585,049
                      )
                      
                      
                      (4,798,802
                      )Total
      stockholders’ equity (deficiency)
                      
                      
                      (6,311,262
                      )
                      
                      
                      (4,403,209
                      )Total
      liabilities and stockholders’ equity (deficiency)
                      
                      $
                      1,706,412
                      
                      
                      $
                      2,280,555
 
 See notes
to consolidated financial statements
  1
  Harbrew
Imports Ltd. Corp. and Subsidiary
 
 Consolidated
Statements of Operations
 (Unaudited)
 
 Three
      Months Ended
                            
                            
                            Nine
      Months EndedSeptember
      30,
                            
                            
                            September
      30,2008
                            
                            
                            2007
                            
                            
                            2008
                            
                            
                            2007(Unaudited)
                            
                            
                            (Unaudited)
                            
                            
                            (Unaudited)
                            
                            
                            (Unaudited)Sales
                            
                            $
                            252,322
                            
                            
                            $
                            358,861
                            
                            
                            $
                            1,058,363
                            
                            
                            $
                            713,078Cost
      of goods sold
                            
                            
                            167,725
                            
                            
                            
                            261,216
                            
                            
                            
                            817,694
                            
                            
                            
                            552,615Gross
      profit
                            
                            
                            84,597
                            
                            
                            
                            97,645
                            
                            
                            
                            240,669
                            
                            
                            
                            160,463Selling,
      general and administrative expenseSelling,
      marketing and promotion
                            
                            
                            110,595
                            
                            
                            
                            150,134
                            
                            
                            
                            350,619
                            
                            
                            
                            314,362Administrative
      compensation and benefits
                            
                            
                            552,055
                            
                            
                            
                            349,019
                            
                            
                            
                            1,120,691
                            
                            
                            
                            927,994Professional
      fees
                            
                            
                            108,729
                            
                            
                            
                            80,472
                            
                            
                            
                            296,278
                            
                            
                            
                            165,920Occupancy
      and warehousing
                            
                            
                            61,148
                            
                            
                            
                            252,728
                            
                            
                            
                            200,331
                            
                            
                            
                            370,639Travel
      and entertainment
                            
                            
                            25,051
                            
                            
                            
                            81,183
                            
                            
                            
                            216,195
                            
                            
                            
                            199,107Bad
      Debts
                            
                            
                            -
                            
                            
                            
                            37,894
                            
                            
                            
                            -
                            
                            
                            
                            37,894Office
                            
                            
                            (30,398
                            )
                            
                            
                            27,289
                            
                            
                            
                            33,210
                            
                            
                            
                            43,777Licenses
      and permits
                            
                            
                            4,694
                            
                            
                            
                            7,122
                            
                            
                            
                            36,484
                            
                            
                            
                            49,051Other
                            
                            
                            6,219
                            
                            
                            
                            (7,357
                            )
                            
                            
                            21,283
                            
                            
                            
                            31,986Total
                            
                            
                            838,093
                            
                            
                            
                            978,484
                            
                            
                            
                            2,275,091
                            
                            
                            
                            2,140,730Income
      (loss) from operations
                            
                            
                            (753,496
                            )
                            
                            
                            (880,839
                            )
                            
                            
                            (2,034,422
                            )
                            
                            
                            (1,980,267
                            )Interest
      income
                            
                            
                            44
                            
                            
                            
                            -
                            
                            
                            
                            44
                            
                            
                            
                            -Interest
      expense
                            
                            
                            (167,618
                            )
                            
                            
                            (169,316
                            )
                            
                            
                            (751,869
                            )
                            
                            
                            (314,569
                            )Merger
      fee
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (150,000
                            )Income
      (loss) before income taxes
                            
                            
                            (921,070
                            )
                            
                            
                            (1,050,155
                            )
                            
                            
                            (2,786,247
                            )
                            
                            
                            (2,444,836
                            )Income
      taxes
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      income (loss)
                            
                            $
                            (921,070
                            )
                            
                            $
                            (1,050,155
                            )
                            
                            $
                            (2,786,247
                            )
                            
                            $
                            (2,444,836
                            )Net
      income (loss) per share - basic and diluted
                            
                            $
                            (0.04
                            )
                            
                            $
                            (0.07
                            )
                            
                            $
                            (0.15
                            )
                            
                            $
                            (0.18
                            )Weighted
      average number of shares outstanding - basic and diluted
                            
                            
                            21,913,067
                            
                            
                            
                            15,740,783
                            
                            
                            
                            18,557,336
                            
                            
                            
                            13,789,952
  See notes
to consolidated financial statements
 2
 
 Harbrew
Imports Ltd. Corp. and Subsidiary
 
 Consolidated
Statements of Cash Flows
 (Unaudited)
 
 Nine
      Months EndedSeptember
      30,2008
                                
                                
                                2007(Unaudited)
                                
                                
                                (Unaudited)Cash
      flows from operating activities:Net
      income (loss)
                                
                                $
                                (2,786,247
                                )
                                
                                $
                                (2,444,836
                                )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
                                
                                
                                700
                                
                                
                                
                                3,009Amortization
      of debt discounts charged to interest expense
                                
                                
                                64,440
                                
                                
                                
                                5,072Stock-based
      compensation
                                
                                
                                546,004
                                
                                
                                
                                206,250Changes
      in operating assets and liabilities:Accounts
      receivable, net
                                
                                
                                371,483
                                
                                
                                
                                (116,293
                                )Inventories
                                
                                
                                588,417
                                
                                
                                
                                (266,674
                                )Prepaid
      expenses and other current assets
                                
                                
                                (130,199
                                )
                                
                                
                                (456,292
                                )Restricted
      cash and cash equivalents
                                
                                
                                -
                                
                                
                                
                                -Negative
      bank account balance
                                
                                
                                57,627
                                
                                
                                
                                22,602Accounts
      payable
                                
                                
                                (144,070
                                )
                                
                                
                                233,000Accrued
      expenses
                                
                                
                                428,003
                                
                                
                                
                                67,434Net
      cash provided by (used in) operating activities
                                
                                
                                (1,003,842
                                )
                                
                                
                                (2,746,728
                                )Cash
      flows from investing activities:Property,
      plant and equipment additions
                                
                                
                                -
                                
                                
                                
                                (3,009
                                )Cash
      flows from financing activities:Increases
      in debt, net
                                
                                
                                1,366,540
                                
                                
                                
                                2,779,300Repayment
      of debt
                                
                                
                                (404,851
                                )
                                
                                
                                (35,292
                                )Net
      cash provided by (used in)financing
    activities
                                
                                
                                961,689
                                
                                
                                
                                2,744,008Increase
      (decrease) in cash andcash equivalents
                                
                                
                                (42,153
                                )
                                
                                
                                (5,729
                                )Cash
      and cash equivalents, beginning of period
                                
                                
                                43,664
                                
                                
                                
                                26,045Cash
      and cash equivalents, end of period
                                
                                $
                                1,511
                                
                                
                                $
                                20,316Supplemental
      disclosures of cash flow information:Interest
      paid
                                
                                $
                                577,486
                                
                                
                                $
                                288,290Income
      taxes paid
                                
                                $
                                -
                                
                                
                                $
                                -
 
 See notes
to consolidated financial statements
  3
  Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
  1.
                ORGANIZATION
      AND NATURE OF BUSINESS
 
 Harbrew
Imports Ltd. Corp. (“Harbrew Florida”) was incorporated in Florida on January 4,
2007 under the name Stassi Harbrew Imports Corp. pursuant to the Bankruptcy
Court Approved Reorganization Plan for the Stassi Interaxx, Inc. (“Stassi”)
Reorganization approved on December 29, 2006.  On May 17, 2007,
Harbrew Florida acquired Harbrew Imports, Ltd. (“Harbrew New York”), a New York
corporation incorporated on September 8, 1999.  Pursuant to the
Amended and Restated Reorganization & Merger Agreement dated April 10, 2007,
288 creditors and shareholders of Stassi were issued 1,383,256 shares of Harbrew
Florida’s common stock and the two shareholders of Harbrew New York were issued
12,457,944 shares of Harbrew Florida’s common stock.
 
 Prior to
the merger on May 17, 2007, Harbrew Florida had no assets, liabilities, or
business operations.  Accordingly, the merger has been treated for
accounting purposes as a recapitalization by the accounting acquirer Harbrew New
York and the financial statements reflect the assets, liabilities, and
operations of Harbrew New York from its inception on September 8, 1999 to May
17, 2007 and Harbrew Florida  and Harbrew New York
thereafter.  Harbrew Florida and its wholly-owned subsidiary Harbrew
New York are hereafter referred to as the “Company”.
 
 The
Company sells various liquor products in North America under exclusive
distribution agreements.
 
 2.
                INTERIM
      FINANCIAL STATEMENTS
 
 The
unaudited financial statements as of September 30, 2008 and for the three and
nine months ended September 30, 2008 and 2007 have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q.  In the
opinion of management, the unaudited financial statements have been prepared on
the same basis as the annual financial statements and reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
financial position as of September 30, 2008 and the results of operations and
cash flows for the periods ended September 30, 2008 and 2007.  The
financial data and other information disclosed in these notes to the interim
financial statements related to those periods are unaudited. The results for the
three months ended September 30, 2008 are not necessarily indicative of the
results to be expected for any subsequent quarter of the entire year ending
December 31, 2008.  The balance sheet at December 31, 2007 has been
derived from the audited financial statements at that date.
 
 Certain
information and footnote disclosures normally included in financials statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations.  These unaudited
financial statements should be read in conjunction with the Company’s audited
financial statements and notes thereto for the year ended December 31, 2007 as
included in the Company’s annual report on Form 10-KSB filed December 4,
2008.
  4
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 3.
                INVENTORIES
 
 Inventories
consist of:
 
 Sept. 30, 2008
                      
                      
                      Dec. 31, 2007Danny
      DeVito's Premium Limoncello (liqueur) brand
                      
                      $
                      136,044
                      
                      
                      $
                      302,194Hot
      Irishman (Irish coffee) brand
                      
                      
                      127,543
                      
                      
                      
                      205,453Molly's
      (Irish cream liqueur) brand
                      
                      
                      43,400
                      
                      
                      
                      146,315Glen
      Master (scotch) brand
                      
                      
                      122,090
                      
                      
                      
                      139,618George
      Vesselle (champagne) brand
                      
                      
                      88,822
                      
                      
                      
                      110,703Other
                      
                      
                      213,110
                      
                      
                      
                      415,143Total
                      
                      $
                      731,009
                      
                      
                      $
                      1,319,426
  4.
                PREPAID
      EXPENSES AND OTHER CURRENT
ASSETS
 
 Prepaid
expenses and other current assets consist of:
 
 Sept. 30, 2008
                      
                      
                      Dec. 31, 2007Prepaid
      inventory purchases
                      
                      $
                      423,068
                      
                      
                      $
                      300,000Prepaid
      stock compensation paid to consultants
                      
                      
                      298,411
                      
                      
                      
                      -Other
                      
                      
                      17,537
                      
                      
                      
                      10,406Total
                      
                      $
                      739,016
                      
                      
                      $
                      310,406
  5.
              PROPERTY,
      PLANT AND EQUIPMENT, NET
 
 Property,
plant and equipment, net consist of:
 
 Sept. 30, 2008
                      
                      
                      Dec. 31, 2007Vehicles
                      
                      $
                      126,295
                      
                      
                      $
                      126,295Office
      equipment
                      
                      
                      15,711
                      
                      
                      
                      15,711Total
                      
                      
                      142,006
                      
                      
                      
                      142,006Accumulated
      depreciation
                      
                      
                      (135,712
                      )
                      
                      
                      (135,012
                      )Net
                      
                      $
                      6,294
                      
                      
                      $
                      6,994
  5
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 6.
              DEBT
 
 Debt
consists of:
  Sept. 30, 2008
                          
                          
                          Dec. 31, 2007Due
      under Purchase Order FinancingAgreement
                          
                          $
                          2,652,468
                          
                          
                          $
                          2,721,933Due
      under Discount Factoring Agreement
                          
                          
                          -
                          
                          
                          
                          231,424Convertible
      notes, interest at 7%, due  July 2, 2012 to July 2, 2013 - net
      of unamortized  discounts of $350,447 and $331,056,
      respectively
                          
                          
                          745,178
                          
                          
                          
                          599,5699%
      convertible debentures, interest at 9%, due  December 10, 2008
      to January 23, 2009 - net of  unamortized discounts of $4,448
      and $0, respectively
                          
                          
                          100,552
                          
                          
                          
                          -Interim
      loan convertible promissory notes issued from  July 22, 2008 to
      September 9, 2008, interest at 0%, due  the earlier of (1) one
      year after the date of issuance or  (2) completion of $3,000,000
      minimum new private  placement (in which case the notes will be
      automatically  converted into new units)
                          
                          
                          1,000,000
                          
                          
                          
                          -Convertible
      promissory notes, interest at 10%,  due October 25, 2007 to
      November 27, 2007
                          
                          
                          75,000
                          
                          
                          
                          175,000Due
      Donald Chadwell (owner of 6,228,972  shares of common stock),
      interest at 0%,  no repayment terms
                          
                          
                          763,000
                          
                          
                          
                          748,000Due
      Richard DeCicco (officer, director, and  owner of 8,959,932
      shares of common  stock) and affiliates, interest at
      0%,  no repayment terms
                          
                          
                          767,756
                          
                          
                          
                          631,716Notes
      payable secured by vehicles
                          
                          
                          -
                          
                          
                          
                          3,962Total
                          
                          
                          6,103,954
                          
                          
                          
                          5,111,604Less
      current portion of debt
                          
                          
                          (3,828,020
                          )
                          
                          
                          (3,132,319
                          )Long
      term debt
                          
                          $
                          2,275,934
                          
                          
                          $
                          1,979,285
  The
Purchase Order Financing Agreement was dated January 22, 2007, has a term of two
years, and provides for advances of credit from Capstone Capital Group I, LLC
(the “Secured Party”) to the Company.  Among other things, the
agreement provides for fees to the Secured Party equal to 2.5% for the first 30
days (or part thereof) that each advance is outstanding and 1.25% for every 14
days (or part thereof) that such advance remains outstanding, subject to minimum
fees of $325,000 for the first year and $425,000 for the second year of the
agreement.  Repayment of the advances are due the earlier of 60 days
from the date of an advance or the day on which any of the goods which are the
subject of such advance are shipped to a buyer.  Obligations to the
Secured Party are collateralized by substantially all the assets of the Company
and have been personally guaranteed by Richard DeCicco, the Company’s chief
executive officer. See also Note 11 to consolidated financial
statements.
 
 The
Discount Factoring Agreement was dated January 22, 2007 and provides for
financing of certain Company accounts receivable by Capstone Business Credit,
LLC (the “Factor”).  Among other things, the agreement provides for
commissions to the Factor equal to 2% for the first 30 days (or part thereof)
that each such account receivable is outstanding and 1% for every 14 days (or
part thereof) thereafter that such account receivable remains outstanding,
subject to minimum commissions of $420,000 for the first year and $540,000 for
the second year of the agreement.  Obligations to the Factor under the
agreement are collateralized by substantially all the assets of the Company and
have been personally guaranteed by Richard DeCicco, the Company’s chief
executive officer.  The agreement may be terminated by either party
upon the giving of not less than 30 days prior written notice of termination to
the other party. See also Note 11 to consolidated financial
statements.
  6
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 Fees and
commissions charged pursuant to the Purchase Order Financing Agreement and the
Discount Factoring Agreement are included in interest expense in the
accompanying statements of operations.
 
 Convertible
notes consisted of:
 
 Sept. 30, 2008
                              
                              
                              Dec. 31, 2007Convertible
      notes - face amount (convertible into a total of up to 2,191,250 and
      1,861,250 shares of common stock, respectively)
                              
                              $
                              1,095,625
                              
                              
                              $
                              930,625Discounts
      relating to the fair value of the warrants included in the sale of
      Units ($165,659 and $140,711, respectively) and the costs relating to
      the sale of Units ($262,251 and $207,751, respectively), net of
      accumulated amortization of $77,463 and $17,406,
    respectively
                              
                              
                              (350,447
                              )
                              
                              
                              (331,056
                              )Convertible
      notes, net of unamortized discounts
                              
                              $
                              745,178
                              
                              
                              $
                              599,569
 
 On July
20, 2007, the Company commenced a private placement offering of up to 60 Units
of securities at a price of $25,000 per Unit to accredited
investors.  Each Unit consists of (a) a 7% convertible promissory note
in the principal amount of $25,000 which is convertible into shares of the
Company’s common stock at a price of $0.50 per share and is due five years from
the date of issuance; (b) a five-year warrant to purchase 50,000 shares of
common stock exercisable at a price of $1.00 per share (the “Class A Warrant”);
and (c)  a five-year warrant to purchase 50,000 shares of common stock
exercisable at a price of  $1.50 per share (the “Class B
Warrant”).  Interest on the convertible promissory notes is payable
semiannually at the rate of 7% by issuance of additional notes.  In
the event that the Company’s common stock is not trading on the OTC Bulletin
Board, American Stock Exchange or the NASDAQ Stock Market one year from the date
of issuance of the notes, the rate of interest increases to 14% retroactive to
the date of issuance.  Basic Investors, Inc. (“Basic”), the placement
agent of the offering, is entitled to a placement agent fee of 10% of the gross
proceeds and a 3% non-accountable expense allowance.  Basic is also
entitled to receive one Unit for each ten Units sold in the
offering.
 
 On July
2, 2007, the Company sold 10 Units to Basic and affiliates for gross proceeds of
$250,000.  The warrants (to purchase up to 1,000,000 shares of Company
common stock) included in the Units were valued at $37,800 using the
Black-Scholes option pricing model and the following assumptions: $0.10 stock
price, risk free interest rate of 4%, volatility of 100%, and term of five
years.  The discount attributable to the $37,800 fair value of the
warrants and the $12,500 costs relating to the sale are being amortized over the
convertible notes’ term of five years as interest expense.  No
compensation was due Basic in connection with these sales.
 
 On August
27, 2007, the Company closed on the sale of an additional 10 Units for gross
proceeds of $250,000 and issued 1 Unit to Basic as part of their
compensation.  The discount attributable to the $41,580 fair value of
the warrants (to purchase up to 1,100,000 shares of Company common stock)
included in the Units (valued using the same assumptions described in the
preceding paragraph) and the $92,000 costs relating to the sale are being
amortized over the convertible notes’ term of five years as interest
expense.
  7
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 On
November 27, 2007, the Company closed on the sale of an additional 14.75 Units
for gross proceeds of $368,750 and issued 1.475 Units to Basic as part of their
compensation.  The net proceeds to the Company, after deducting
$47,938 placement agent fees paid to Basic, was $320,812.  The 16.225
Units consist of a total of $405,625 face value of convertible notes
(convertible into a total of up to 811,250 shares of common stock) and warrants
to purchase up to 1,622,500 shares of common stock.  The discount
attributable to the $61,331 fair value of the warrants (to purchase up to
1,622,500 shares of Company common stock) included in the Units (valued using
the same assumptions described in the second preceding paragraph) and the
$103,251 costs relating to the sale are being amortized over the convertible
notes’ term of five years as interest expense.
 
 On March
5, 2008, the Company closed on the sale of an additional 3.5 Units for gross
proceeds of $87,500 and issued .35 Units to Basic as part of their
compensation.  The net proceeds to the Company, after deducting
$11,375 placement agent fees paid to Basic, was $76,125  The 3.85
Units consist of a total of $96,250 face value of convertible notes (convertible
into a total of up to 192,500 shares of common stock) and warrants to purchase
up to 385,000 shares of common stock.  The discount attributable to
the $14,553 fair value of the warrants (to purchase up to 385,000 shares of
Company common stock) included in the Units (valued using the same assumptions
described in the third preceding paragraph) and the $35,500 costs relating to
the sale are being amortized over the convertible notes’ term of five years as
interest expense.
 
 On June
10, 2008, the Company closed on the sale of an additional .5 Units for gross
proceeds of $12,500 and issued .05 Units to Basic as part of their
compensation.  The net proceeds to the Company, after deducting $1625
placement agent fees paid   to Basic, was $10,875.  The
..55 Units consist of a total of $13,750 face value of convertible notes
(convertible into a total of up to 27,500 shares of common stock) and warrants
to purchase up to 55,000 shares of common stock.  The discount
attributable to the $2,079 fair value of the warrants (to purchase up to 55,000
shares of Company common stock) included in the Units (valued using the same
assumptions described in the fourth preceding paragraph) and the $4,500 costs
relating to the sale are being amortized over the convertible notes’ term of
five years as interest expense.
 
 On July
2, 2008, the Company closed on the sale of an additional 2 Units for gross
proceeds of $50,000 and issued .2 Units to Basic as part of their
compensation.  The net proceeds to the Company, after deducting $6,000
placement agent fees paid to Basic, was $44,000.  The 2.2 Units
consist of a total of $55,000 face value of convertible notes (convertible into
a total of up to 110,000 shares of common stock) and warrants to purchase up to
220,000 shares of common stock.  The discount attributable to the
$8,316 fair value of the warrants (to purchase up to 220,000 shares of Company
common stock) included in the Units (valued using the same assumptions described
in the fifth preceding paragraph) and the $14,500 costs relating to the sale are
being amortized over the convertible notes’ term of five years as interest
expense.
 
 As part
of the related agreements, the Company agreed to file a registration statement
with the SEC within 30 days to register the shares issuable upon conversion of
the Convertible notes and exercise of the warrants.  As of September
30, 2008, the Company has not filed such a registration statement since its
shares of common stock have not yet become publicly traded.  Other
than the retroactive increase in interest rate to 14% for failure to start
trading on the OTC Bulletin Board, American Stock Exchange or the NASDAQ Stock
Market one year from the date of issuance of the notes, there is no penalty
provision in these agreements for late filing of a registration
statement.
 
 8
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 At
September 30, 2008, 9% convertible debentures consisted of:
 
 Sept. 30, 2008Convertible
      debentures - face amount (convertible into a total of up to 210,000
      shares of common stock)
                        
                        $
                        105,000Discounts
      relating to the fair value of the warrants included in the debentures
      ($8,831), net of accumulated amortization of $4,383
                        
                        
                        (4,448
                        )Convertible
      debentures, net of unamortized discounts
                        
                        $
                        100,552
 
 In June
and July 2008, the Company sold to two investors a total of $105,000 principal
amount of 9% convertible debentures, including warrants exercisable for a period
of 5 years from the date of conversion to purchase up to 105,000 shares of
common stock at a price of $1.00 per share and up to 105,000 shares of common
stock at a price of $1.50 per share, for $105,000 cash.  The
debentures bear interest at the rate of 9% and are due six months from the date
of issuance.  The Company may elect to pay interest in cash or common
stock.  The holders of the debentures at their option may convert all
or any part of the principal amount outstanding plus accrued interest into
shares of common stock at the conversion price (initially $0.50 per
share).  The discount attributable to the $8,831 fair value of the
warrants (to purchase up to 210,000 shares of Company common stock), valued
using the Black-Scholes option pricing model and the following assumptions:
$0.10 stock price, risk free interest rate of 4%, volatility of 100%, and term
of 5.5 years, is being amortized over the respective debentures’ term of six
months as interest expense.
 
 The
convertible promissory notes were sold to 5 investors in October and November
2006 and provide that, if the Company provides the respective Holders with
actual notice of completion of the merger between Harbrew Florida and Harbrew
New York (which occurred May 17, 2007), the Holders are required to convert the
notes and all accrued interest then owing into common stock at a Conversion
Price of $1.50 per share.  If the share price of the common stock on
the day that is 120 days after the commencement of trading of the shares on the
OTC Bulletin Board or other such recognized exchange is less than $1.50 per
share, then the Conversion Price will be adjusted to such price and the
respective Holders will be issued the appropriate number of additional shares of
common stock.
 
 At
September 30, 2008, the accrued interest payable on convertible debt (included
in accrued expenses in the accompanying consolidated balance sheet) consisted
of:
 
 Sept. 30, 2008Convertible
      notes, interest at 7%, due July 2, 2012 to July 2, 2013
                      
                      $
                      114,959Convertible
      promissory notes, interest at 10%, due October 25, 2007 to November 27,
      2007
                      
                      
                      32,888Total
                      
                      $
                      147,847
  9


Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
  7.
              STOCKHOLDERS’
      EQUITY
 
 On June
28, 2007, the Company authorized the issuance of a total of 1,250,000 shares of
common stock to designees of Basic Investors, Inc. (“Basic”) for future services
to be rendered by such designees pursuant to a Business Consulting Agreement
executed with Basic.  The Company expensed the $125,000 estimated fair
value of these shares as professional fees (and recognized the issuance of the
1,250,000 shares) over the one year term of the Business Consulting
Agreement.  The fair value of the shares was estimated assuming the
shares were priced at $0.10 per share.
 
 On
January 15, 2008, the Company issued a total of 250,000 shares of common stock
to two attorneys in consideration of legal services.  The Company
included this issuance in its statement of operations for the three months ended
March 31, 2008 in professional fees at the $25,000 estimated fair value of the
shares.
 
 On July
14, 2008, the Company issued a total of 1,600,000 shares of the Company’s common
stock to two consulting firms pursuant to consulting agreements with terms of
one year.  The Company initially capitalized as prepaid expenses and
is amortizing the $160,000 estimated fair value of the shares over the one year
terms of the agreements as professional fees.
 
 On August
8, 2008, the Company issued 2,730,960 shares of common stock to its chief
executive officer in consideration of services rendered.  The Company
included this issuance in its statement of operations for the three months ended
September 30, 2008 in administrative compensation and benefits at the $273,096
estimated fair value of the shares.
 
 On August
8, 2008, the Company issued a total of 1,050,000 shares of common stock to
designees of Danny DeVito in consideration of services rendered. The Company
included this issuance in its statement of operations for the three months ended
September 30, 2008 in administrative compensation and benefits at the $105,000
estimated fair value of the shares.
 
 On August
11, 2008, the Company issued 2,000,000 shares of the Company’s common stock to a
consulting firm pursuant to a one year financial consulting
agreement.  The Company initially capitalized as prepaid expenses and
is amortizing the $200,000 estimated fair value of the shares over the one year
term of the agreement as professional fees.
 
 8.
              INCOME
      TAXES
 
 No
provision for income taxes was recorded in the periods presented since the
Company incurred net losses in these periods.
 
 Based on
management’s present assessment, the Company has not yet determined it to be more
likely than not that a deferred tax asset of $1,154,363 attributable to the
future utilization of the $3,395,185 net operating loss carry forward as of
December 31, 2007 will be realized.  Accordingly, the Company has
provided a 100% allowance against the deferred tax asset in the financial
statements at December 31, 2007.  The Company will continue to review
this valuation allowance and make adjustments as appropriate.  The
$3,395,185 net operating loss carry forward expires in 2027.
 
 Current
tax laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs.  Therefore, the
amount available to offset future taxable income may be limited.
 
 9.
              COMMITMENTS
      AND CONTINGENCIES
 
 Rental
agreement – The Company occupies its facilities in Freeport, New York under a
month to month agreement at a monthly rent of $14,350.  For the nine
months ended September 30, 2008 and 2007, rent expense was $128,726 and
$142,609, respectively.
 
 10
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 License
agreement – On April 26, 2007 and as amended November 1, 2007, the Company
entered into an exclusive License Agreement with Seven Cellos, LLC (“DDV”),
pursuant to which the Company was granted a limited license of certain rights in
and to Danny DeVito’s name, likeness and biography for use by the Company in
connection with the Danny DeVito Premium Limoncello brand.  The term
of the Agreement continues through perpetuity unless the agreement is
terminated.  In consideration for the license, the Company agreed to
pay royalties as follows: (a) 5% of Net Profits (as defined) to Behr Abrahamson
& Kaller, LLP (“BAK”), (b) a payment of 50% of the remaining Net Profits to
DDV after the payment described above; and (c) a payment of 2% of Net Profits to
Sichenzia Ross Friedman Ference LLP after payment of 50% of Net Profits to
DDV.  In addition, the Company granted DDV and others warrants to
purchase up to a total of 145,000 shares of Company common stock at an exercise
price equal to the lower of $1.00 per share or 85% of the 30 day average bid and
ask price, provided, however, that in no event shall the exercise price be less
than $0.50 per share.  Danny DeVito agreed to use reasonable efforts
to be available for a reasonable number of promotional appearances during each
consecutive 12 month period, the duration of which shall not exceed 2
days.  Pursuant to the agreement, Danny DeVito granted the Company a
right of first refusal for a period of 5 years to license any other liquor,
spirit or alcoholic beverage which Danny DeVito may determine to endorse or
develop.  A condition precedent to Danny DeVito’s performance under
the agreement are subject to the Company applying for a trademark for the brand
name “Danny DeVito’s Premium Limoncello” with Danny DeVito being designated as
50% co-owner of such trademark.  The Company has filed for this
trademark with the U.S. Patent and Trademark Office and, as of December 12,
2008, is awaiting disposition. The $2,717 estimated fair value of the 145,000
warrants (using the Black-Scholes option pricing model and the following
assumptions: $0.10 stock price, $0.50 exercise price, 4% risk free interest
rate, and 100% volatility) is being amortized over the exercise period of the
warrants as compensation and benefits.
 
 For the
periods presented, the Company calculated “Net Profits” from the brand to be
negative and thus did not pay or accrue any royalty’s expense under the License
Agreement.
 
 Employment
agreement with chief executive officer - On January 23, 2008, the Company
entered into an employment agreement with its chief executive officer Richard
DeCicco.  The agreement provides for a term of 5 years, commencing on
January 1, 2008.  The term can be extended by a written agreement of
the parties.  The agreement provides for annual compensation ranging
from $265,000 to $350,000.  In addition, if the Company enters into an
agreement and further sells any brand in the company’s portfolio, Mr. DeCicco
will receive 5% of such sale.  Mr. DeCicco is also entitled to
incentive bonus compensation, stock and/or options in accordance with Company
policies established by the Board of Directors.  The agreement
provides for the grant of a non-qualified ten year option to purchase up to
1,000,000 shares of common stock of the Company at an exercise price which shall
represent a discount to the market price.  The options shall be
granted pursuant to the 2008 incentive and non-qualified stock option plan which
the Company intends to implement.  Mr. DeCicco has the right to
terminate the agreement upon 60 days notice to the Company for any
reason.  Pursuant to the terms of the agreement, if Mr. DeCicco is
absent from work because of illness or incapacity cumulatively for more than 2
months in addition to vacation time in any calendar year, the Company may
terminate the agreement upon 30 days written notice.  The agreement
also provides that the agreement may be terminated upon 90 days notice to Mr.
DeCicco if: (A) there is a sale of substantially all of the Company’s assets to
a single purchaser or group of associated purchasers; (B) there is a sale,
exchange or disposition of 50% of the outstanding shares of the Company’s
outstanding stock; (C) the Company terminates its business or liquidates its
assets; or (D) there is a merger or consolidation of the Company in which the
Company’s shareholders receive less than 50% of the outstanding voting shares of
the new or continuing corporation.  Mr. DeCicco shall be entitled to
severance pay in the amount of 2 years compensation and medical and other
benefits in the event of a termination of the agreement under certain
circumstances.
 
 Employment
agreement with chief financial officer - On October 1, 2007, the Company entered
into an employment agreement with its chief financial officer William
Blacker.  The agreement provides for a term of 3 years, commencing on
October 1, 2007.  The term can be extended by a written agreement of
the parties.  The Company agreed to issue options to purchase shares
of its common stock to Mr. Blacker if and when the common stock becomes publicly
traded, as follows: (A) upon execution of the agreement, 100,000 options at an
exercise price of $0.05 per share; (B) on October 1, 2008, 100,000 options at an
exercise price of $0.15 per share; and (C) on October 1, 2009, 100,000 options
at an exercise price of $.75 per share.  Pursuant to the terms of the
agreement, Mr. Blacker is to receive an annual salary of
$150,000.  Mr. Blacker has the right to terminate the agreement upon
60 days notice to the Company for any reason.  The agreement further
provides that if the agreement is terminated for any reason other than willful
malfeasance by Mr. Blacker, Mr. Blacker shall be entitled to receive severance
pay in the amount of 6 months or the balance of the agreement’s term of
existence, whichever is greater, and shall receive all benefits under the
agreement.
 
 11
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 The
$16,850 estimated fair value of the 300,000 options (using the Black-Scholes
option pricing model and the following assumptions: $0.10 stock price, 4% risk
free interest rate, 100% volatility, and term of 3.5 years) is being amortized
over the 3 year term of the employment agreement as compensation and
benefits.
 
 10.
              STOCK
      OPTIONS AND WARRANTS
 
 A summary
of stock option and warrant activity for the nine months ended September 30,
2008 follows:
  StockOptions
                        
                        
                        WarrantsOutstanding
      at January 1, 2008
                        
                        
                        300,000
                        
                        
                        
                        3,887,500Granted
      and issued
                        
                        
                        1,000,000
                        
                        
                        
                        1,870,000Exercised
                        
                        
                        -
                        
                        
                        
                        -Forfeited/expired/cancelled
                        
                        
                        -
                        
                        
                        
                        -Outstanding
      at September 30, 2008
                        
                        
                        1,300,000
                        
                        
                        
                        5,757,500
  
 Stock
options outstanding at September 30, 2008 consist of:
  Date
                      
                      Number
                      
                      Number
                      
                      Exercise
                      
                      ExpirationGranted
                      
                      Outstanding
                      
                      Exercisable
                      
                      Price
                      
                      DateOctober
      1, 2007
                      
                      
                      100,000
                      
                      
                      
                      $
                      -
      0.05
                      
                      April
      1, 2011October
      1, 2007
                      
                      
                      100,000
                      
                      
                      
                      $
                      -
      0.15
                      
                      April
      1, 2011October
      1, 2007
                      
                      
                      100,000
                      
                      
                      
                      $
                      -
      0.75
                      
                      April
      1, 2011January
      1, 2008
                      
                      
                      1,000,000
                      
                      
                      
                      $
                      - 0.10
                      (a)
                      June
      30, 2013Total
                      
                      
                      1,300,000
                      
                      
                      
                      
                      -
  (a)
Estimated since exercise price is to be determined based on future stock
price.
 
 The
1,300,000 options are not exercisable until the Company’s common stock becomes
publicly traded. The 300,000 options granted on October 1, 2007 vest 100,000 on
October 1, 2007, 100,000 on October 1, 2008, and 100,000 on October 1,
2009.  As of September 30, 2008, there was $88,329 of total
unrecognized compensation cost relating to unexpired stock
options.  That cost is expected to be recognized $5,939 in the three
months ended December 31, 2008, $23,756 in 2009, $22,352 in 2010, $18,140 in
2011 and $18,142 in 2012.
 
 12
 Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
 Warrants
outstanding at September 30, 2008 consist of:
 
 Date
                    
                    Number
                    
                    
                    Number
                    
                    
                    Exercise
                    
                    ExpirationIssued
                    
                    Outstanding
                    
                    
                    Exercisable
                    
                    
                    Price
                    
                    DateApril
      26, 2007
                    
                    
                    120,000
                    
                    
                    
                    120,000
                    
                    
                    $
                    0.50
                    
                    April
      30, 2009July
      2, 2007
                    
                    
                    500,000
                    
                    
                    
                    500,000
                    
                    
                    $
                    1.00
                    
                    July
      2, 2012July
      2, 2007
                    
                    
                    500,000
                    
                    
                    
                    500,000
                    
                    
                    $
                    1.50
                    
                    July
      2, 2012August
      27, 2007
                    
                    
                    550,000
                    
                    
                    
                    550,000
                    
                    
                    $
                    1.00
                    
                    August
      27, 2012August
      27, 2007
                    
                    
                    550,000
                    
                    
                    
                    550,000
                    
                    
                    $
                    1.50
                    
                    August
      27, 2012November
      1, 2007
                    
                    
                    45,000
                    
                    
                    
                    45,000
                    
                    
                    $
                    0.50
                    
                    November
      30, 2009November
      8, 2007
                    
                    
                    811,250
                    
                    
                    
                    811,250
                    
                    
                    $
                    1.00
                    
                    November
      8, 2012November
      8, 2007
                    
                    
                    811,250
                    
                    
                    
                    811,250
                    
                    
                    $
                    1.50
                    
                    November
      8, 2012March
      5, 2008
                    
                    
                    192,500
                    
                    
                    
                    192,500
                    
                    
                    $
                    1.00
                    
                    March
      5, 2013March
      5, 2008
                    
                    
                    192,500
                    
                    
                    
                    192,500
                    
                    
                    $
                    1.50
                    
                    March
      5, 2013June
      10, 2008
                    
                    
                    27,500
                    
                    
                    
                    27,500
                    
                    
                    $
                    1.00
                    
                    June
      10, 2013June
      10, 2008
                    
                    
                    27,500
                    
                    
                    
                    27,500
                    
                    
                    $
                    1.50
                    
                    June
      10, 2013June
      10, 2008
                    
                    
                    25,000
                    
                    
                    
                    25,000
                    
                    
                    $
                    1.00
                    
                    December
      10, 2013June
      10, 2008
                    
                    
                    25,000
                    
                    
                    
                    25,000
                    
                    
                    $
                    1.50
                    
                    December
      10, 2013June
      11, 2008
                    
                    
                    30,000
                    
                    
                    
                    30,000
                    
                    
                    $
                    1.00
                    
                    December
      11, 2013June
      11, 2008
                    
                    
                    30,000
                    
                    
                    
                    30,000
                    
                    
                    $
                    1.50
                    
                    December
      11, 2013July
      2, 2008
                    
                    
                    110,000
                    
                    
                    
                    110,000
                    
                    
                    $
                    1.00
                    
                    January
      2, 2014July
      2, 2008
                    
                    
                    110,000
                    
                    
                    
                    110,000
                    
                    
                    $
                    1.50
                    
                    January
      2, 2014July
      23, 2008
                    
                    
                    50,000
                    
                    
                    
                    50,000
                    
                    
                    $
                    1.00
                    
                    January
      23, 2014July
      23, 2008
                    
                    
                    50,000
                    
                    
                    
                    50,000
                    
                    
                    $
                    1.50
                    
                    January
      23, 2014August
      11, 2008
                    
                    
                    1,000,000
                    
                    
                    
                    1,000,000
                    
                    
                    $
                    1.00
                    
                    August
      11, 2013Total
                    
                    
                    5,757,500
                    
                    
                    
                    5,757,500
 
 As of
September 30, 2008, there was $917 of total unrecognized compensation cost
relating to 165,000 of the unexpired warrants.  That cost is expected
to be recognized $334 in the three months ended December 31, 2008 and $583 in
2009.
 
 11.
              SUBSEQUENT
      EVENTS
 
 Litigation:
 
 On or
about January 24, 2008, Connecticut Container Corp., a wholesale distributor of
packaging materials, initiated litigation against the Company in the Supreme
Court of the State of New York in Nassau County.  The Plaintiff had
demanded payment of an aggregate of $31,693 in connection with certain amounts
allegedly owed by the Company.  On August 7, 2008, the Company settled
the litigation for the full amount, by agreeing to pay one-half of such amounts
on each of August 20, 2008 and September 20, 2008.  The Company paid
$24,250 and expects to pay the remaining $7,443 in December 2008.
 
 On
February 14, 2008, Chester Stewart, an individual, initiated a lawsuit in the
State of Connecticut Superior Court alleging breach of a promissory note in the
amount of $100,000.  The Company has retained counsel and is defending
the action.  Negotiations continue and the Company has responded to
all allegations as of the filing date of this report.
 
 On or
about July 24, 2008, Elite Marketing Concepts, a wholesale distributor of wine,
initiated litigation against the Company in the Supreme Court of New York in
Nassau County.  The Plaintiff has demanded payment in the amount of
$32,270 for goods sold and delivered to the Company by the
Plaintiff.  On August 15, 2008, an agreement was reached to pay Elite
$29,000 in two equal payments.  As of September 30, 2008, one payment
has been made in accordance with the agreement, leaving a remaining balance of
$14,500 due Elite.
 
 13
  Harbrew
Imports Ltd. Corp. and Subsidiary
 Notes
to Consolidated Financial Statements
 (Information
as of and for the Nine Months Ended September 30, 2008 and 2007 is
Unaudited)
  On
October 23, 2008, Thermo Plastic Tech, Inc., a manufacturer of thermo plastic
material, initiated litigation against the Company in the Superior Court of New
Jersey Law Division, Civil Part Union County. The Plaintiff has demanded payment
in the amount of $ 30,292 for goods sold and delivered to the Company by the
Plaintiff. The Company has retained counsel and is defending the
action.
 
 On
November 11, 2008, Albea, S.P.A d/b/a/ Agribon SRL, a wine maker in Italy,
initiated litigation against the Company in the Supreme Court of the State of
New York County of Nassau. The Plaintiff has demanded payment in the amount of
22,260 Euros (approximately $29,574). The Company has retained counsel and is
defending the action.
 
 At
September 30, 2008, the Company has included in liabilities amounts relating to
the above actions.  The Company believes that the ultimate resolution
of these matters will not have a material adverse effect on its financial
condition or operations.
 
 Debt:
 
 On August
21, 2008, the Company executed an agreement with Capstone Capital Group I, LLC
(“CCG”) and Capstone Business Credit, LLC (“CBC”) whereby the Company was to pay
$1,500,000 in full and complete satisfaction of all debts due by the Company to
both CCG and CBC (approximately $2,976,904 at August 21, 2008).  The
agreement called for an initial down payment in the amount of $150,000 (which
was paid), with the balance of $1,350,000 due on October 21, 2008.  On
November 7, 2008, the Company executed an amendment to the settlement agreement
whereby the amount of the note was increased to $2,664,406 and is due on or
before August 21, 2009. The note will bear interest at the rate of 16%. The
Company will receive 50% of all collections on sales made after November 7,
2008, less the applicable interest due within that month.
  14





ITEM 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations





The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and related notes included
in this report. This discussion includes forward-looking statements that involve
risks and uncertainties. As a result of many factors, our actual results may
differ materially from those anticipated in these forward-looking
statements.




Overview




We were
incorporated in Florida on January 4, 2007 under the name Stassi Harbrew Imports
Corp. pursuant to the Bankruptcy Court Approved Reorganization Plan for the
Stassi Reorganization approved on December
20, 2006.  Subsequently, we changed our name to Harbrew Imports
Ltd. Corp. On May 17, 2007, we and Harbrew Imports Ltd., a New York corporation
incorporated on September 8, 1999 (“Harbrew New York”),
merged.  Pursuant to the Amended and Restated Reorganization &
Merger Agreement dated April 10, 2007, 288 creditors and shareholders of ours
were issued 1,383,256 shares of common stock and the two stockholders of Harbrew
New York were issued 12,457,944 shares of common stock.




Prior to
the merger on May 17, 2007, we had no assets, liabilities, or business
operations.  Accordingly, the merger has been treated for accounting
purposes as a recapitalization by the accounting acquirer, Harbrew New York, and
the financial statements reflect the assets, liabilities, and operations of
Harbrew New York from its inception on September 8, 1999 to May 17, 2007 and us
thereafter.  References to our company are with respect to Harbrew New
York to May 17, 2007 and us thereafter.




We are in
the business of importing and wholesaling spirits, wine and beer to distributors
in the United States on a national basis and to retail licensees both on and off
premise in New York, through our wholesale license.  We are federally
licensed, maintaining licenses to both import and sell to wholesale licensed
distributors in 51 markets in the United States.  In addition to the
federal import and wholesale licenses, we maintain a federal customs bonded
facility license for our premises in Freeport, New York.  Within the
licensing category, we also maintain a New York State wholesale license and a
New York State warehousing license, permitting us to warehouse products of other
companies.




Results
of Operations




Three
Months ended September 30, 2008 Compared to Three Months ended September 30,
2007




Revenues





Total
revenues were $252,322 and $358,861 for the three months ended September 30,
2008 and 2007, respectively, a decrease of $106,539, or 30%.  This
reflects the changing product mix from whiskies and wines to Danny DeVito’s
Premium Limoncello. The introduction of Danny DeVito’s PremiumLimoncello commenced the
start of an aggressive marketing campaign which yielded $186,829 of sales in the
third quarter of 2008, compared to $94,887 in the same period of 2007. The sales
for the balance of the portfolio were mixed as we prioritized our sales effort
in line with the new product.





Cost
of Revenues





Cost of
revenues was $167,725 and $261,216 for the three months ended September 30, 2008
and 2007, respectively, a decrease of $93,491, or 36%.





The gross
profit for the three months ended September 30, 2008 and 2007 was $84,597 and
$97,645, respectively, a decrease of $13,048, or 13%. The decrease in gross
profit as a percentage of sales was lower than the decrease in sales reflecting
the shift in product emphasis to the higher margin products in preference to the
commodity brands.




15


Selling,
General and Administrative Expenses





Selling
general and administrative expenses for the three months ended September 30,
2008 and 2007 were $838,093 and $978,484, respectively, a decrease of $140,391,
or 14%. The decrease was due to reductions in advertising, marketing and
promotion of $39,539; warehouse, delivery and rent of $191,580; and travel and
entertainment of $56,132, offset by higher stock-based compensation in 2008. We
now utilize the direct selling personnel of both Southern Wine and Spirits and
Phoenix Beehive to distribute Danny DeVito’s Premium Limoncello and Molly’s
Irish Cream, respectively. These companies have sales forces in excess of 400
salespeople each and offer us significant benefit in getting the products
purchased by both on premises and off premises accounts.





Interest
Expense





Interest
expense for the three months ended September 30, 2008 and 2007 was $167,618 and
$169,316, respectively, a decrease of $1,698, or 1%, but approximately even with
last year.





Nine
Months ended September 30, 2008 Compared to Nine Months ended September 30,
2007





Revenues





Total
revenues were $1,058,363 and $713,078 for the nine months ended September 30,
2008 and 2007, respectively, an increase of $345,285, or 48%.  Sales
of Danny DeVito’s Premium Limoncello were $565,850, or $470,963 higher than the
soft launch period last year, and accounted for the majority of the sales
increase. The balance of the portfolio showed decreases in Molly’s Irish Cream,
whiskies and wines due to the increased competitive nature of the category, and
the focus on the main brand.





Cost
of Revenues





Cost of
revenues was $817,694 and $552,615 for the nine months ended September 30, 2008
and 2007, respectively, an increase of $265,079, or 48%.





The gross
profit for the nine months ended September 30, 2008 and 2007 was $240,669 and
$160,463, respectively, an increase of $80,206, or 50%. The increase in gross
profit resulted from the portfolio shift to Danny DeVito’s PremiumLimoncello, which produced
a higher gross profit versus the balance of the product line. Other products in
the sales category maintained their margin percentages while sales decreased as
the focus to Danny DeVito’s PremiumLimoncello
increased.





Selling,
General and Administrative Expenses





Selling,
general and administrative expenses for the nine months ended September 30, 2008
and 2007 were $2,275,091 and $2,140,730, respectively, an increase of $134,361,
or 6%. This resulted from increases in advertising, marketing and promotional
materials of $36,257; administrative compensation and benefits (including
stock-based compensation) of $192,697; professional fees of $130,358 and travel
and entertainment of $17,088, being offset by significantly lower costs of the
balance of the category as a result of reducing our wholesale operation.
Southern Wine and Spirits has taken the Danny DeVito’s Premium Limoncello brand
for distribution in the greater New York area and Phoenix Beehive has taken the
Molly’s Irish Cream brand for distribution within the same area. These companies
have sales forces in excess of 400 salespeople each and offer us significant
benefit in getting the products purchased by both on premises and off premises
accounts.





Interest
Expense





Interest
expense for the nine months ended September 30, 2008 and 2007 was $751,869 and
$314,569, respectively, an increase of $437,300, or 139%. The interest cost to
finance the loan for inventory and receivables, and the interest on the
convertible notes comprise the majority of this category.




16


Liquidity
and Capital Resources





As of
September 30, 2008, we had negative working capital of $4,150,407 compared to
negative working capital of $2,539,703 at December 31, 2007. Our balance of cash
and cash equivalents at September 30, 2008 was $1,511.




Our
primary uses of cash have been for selling and marketing expenses, employee
compensation, new product development and working capital. The main sources of
cash have been from the financing of purchase orders and the factoring of
accounts receivable. In addition, we issued convertible notes and promissory
notes to bridge the gap between our primary lender and our working capital
requirements. All funds received have been expended in the furtherance of
growing the business and establishing the brand portfolios. The following trends
are reasonably likely to result in a material decrease in our liquidity over the
near to long term:




·
            An
      increase in working capital requirements to finance higher level of
      inventories and accounts
receivable,




·
            Addition
      of administrative and sales personnel as the business
    grows,




·
            Increases
      in advertising, public relations and sales promotions for existing and new
      brands as the company expands within existing markets or enters new
      markets,




·
            Development
      of new brands to complement our celebrity portfolio,
  and




·
            The
      cost of being a public company and the continued increase in costs due to
      governmental compliance activities.




Net
Cash Used in Operating Activities




A
substantial portion of our available cash has been used to fund operating
activities. In general, these cash funding requirements are based on operating
losses, driven principally by our sizeable investment in selling and marketing,
and general expenses. The business has incurred significant losses since
inception.





For
the nine months ended September 30, 2008, net cash used in operating activities
was $1,003,842, consisting primarily of losses from operations of $2,786,247,
offset by a non-cash charge for stock-based compensation of $546,004, decreases
in receivables of $371,483, decreases in inventories of $588,417 and increases
in accrued expenses of $428,003. The uses of cash consisted of a reduction in
accounts payable of $144,070, and an increase in prepaid expenses and other
current assets (excluding non-cash stock-based compensation) of
$130,199.





Net
Cash Used in Investing Activities




For the
nine months ended September 30, 2008 and 2007, net cash used in investing
activities was $0 and $3,009, respectively, in the latter case reflecting small
investments in office equipment.




Net
Cash Provided by Financing Activities




For
the nine months ended September 30, 2008, funds provided from financing
activities amounted to $961,869.  The funds consisted of the issuance
of 7% convertible notes in the principal amount of $150,000, 9% convertible
debentures in the principal amount of $105,000 and interim loan convertible
promissory notes in the principal amount of $1,000,000; loans from Richard
DeCicco, our President, in the amount of $136,040 and a loan from an individual
lender in the amount of $15,000. Offsetting these sources of funds were
repayments to Capstone Business Credit, LLC, our purchase order financier, of
$300,889, and the repayment of $100,000 due on our 10% notes.




17


We
anticipate that we will need to make significant expenditures during the next 12
months, contingent upon raising capital.  These anticipated
expenditures are for advertising, marketing, promotional items, overhead and
working capital purposes. We cannot assure you that financing will be available
in amounts or on terms acceptable to us, if at all. We anticipate that we will
require up to $7,500,000 for funding our plan of operations for the next
twelve months, depending on revenues, if any, from operations.





By
adjusting our operations and development to the level of capitalization, we
believe we have sufficient capital resources to meet projected cash flow
deficits.  However, if during that period or thereafter, we are not
successful in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to us, this could have a
material adverse effect on our business, results of operations liquidity and
financial condition.





We will
still need additional investments in order to continue operations to cash flow
break even. We are seeking additional investments, but we cannot guarantee that
we will be able to obtain such investments.  Financing transactions
may include the issuance of equity or debt securities, obtaining credit
facilities, or other financing mechanisms. However, the lack of a trading price
of our common stock and a downturn in the U.S. stock and debt markets could make
it more difficult to obtain financing through the issuance of equity or debt
securities. Even if we are able to raise the funds required, it is possible that
we could incur unexpected costs and expenses, fail to collect significant
amounts owed to us, or experience unexpected cash requirements that would force
us to seek alternative financing. Further, if we issue additional equity or debt
securities, stockholders may experience additional dilution or the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of our common stock. If additional financing is not available
or is not available on acceptable terms, we will have to curtail our
operations.




Impact
of Inflation





We expect
to be able to pass inflationary increases for raw materials and other costs on
to our customers through price increases, as required, and do not expect
inflation to be a significant factor in our business.





Seasonality





Although
our operating history is limited, we do not believe our products are
seasonal.





Off-Balance
Sheet Arrangements





There are
no off-balance sheet arrangements between us and any other entity that have, or
are reasonably likely to have, a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.





Critical
Accounting Policies and Estimates





Basis
of Presentation





The
financial statements have been prepared on a “going concern” basis, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business.  However, as of September 30, 2008, we had
negative working capital of $4,150,407 and a stockholders’ deficiency of
$6,311,262.  Further, from inception to September 30, 2008, we
incurred losses of $7,585,049.  These factors create substantial doubt
as to our ability to continue as a going concern.  We expect to
improve our financial condition as recently launched products mature and brand
awareness increases, thereby increasing the profitability of our
operations.  Additionally, we intend to obtain new financing which
will primarily be used to market and promote Danny DeVito’s Premium Limoncello
and other new products.  However, we cannot assure you that we will be
successful in accomplishing these objectives.




18


Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ from those
estimates.





Fair
Value of Financial Instruments





Our
financial instruments consist of cash and cash equivalents, accounts receivable,
net, current portion of debt, negative bank account balance, accounts payable,
accrued expenses, and long term debt.  Except for long term debt, the
fair value of these financial instruments approximate their carrying amounts
reported in the balance sheets due to their short term maturity.





Cash
and Cash Equivalents





We
consider all liquid investments purchased with original maturities of three
months or less to be cash equivalents.





Accounts
Receivable, Net of Allowance for Doubtful  Accounts





We extend
unsecured credit to our customers in the ordinary course of business but
mitigate the associated risks by performing credit checks and actively pursuing
past due accounts.  An allowance for doubtful accounts is established
and recorded based on historical experience and the aging of the related
accounts receivable.





Inventories





Inventories
are stated at the lower of cost (first-in, first-out method) or market, with due
consideration given to obsolescence and to slow moving items.





Property,
Plant and Equipment, Net





Property,
plant and equipment, net is stated at cost less accumulated
depreciation.  Depreciation is calculated using the straight-line
method over the estimated useful lives of the respective assets.





Revenue
Recognition





Revenue
from product sales is recognized when all of the following criteria are met: (1)
persuasive evidence of an arrangement exists, (2) the price is fixed or
determinable, (3) collectability is reasonably assured, and (4) delivery has
occurred.  Persuasive evidence of an arrangement and fixed price
criteria are satisfied through purchase orders.  Collectability
criteria are satisfied through credit approvals.  Delivery criteria
are satisfied when the products are shipped to a customer and title and risk of
loss pass to the customer in accordance with the terms of sale.  We
have no obligation to accept the return of products sold other than for
replacement of damaged products.  Other than quantity price discounts
negotiated with customers prior to billing and delivery (which are reflected as
a reduction in sales), we do not offer any sales incentives or other rebate
arrangements to customers.





Shipping
and Handling Costs





Shipping
and handling costs are reported as selling, general and administrative expenses
in the accompanying statements of operations.




19


Advertising





Advertising
costs are expensed as incurred.





Stock-Based
Compensation





Stock-based
compensation is accounted for at fair value in accordance with Statement of
Financial Accounting Standards Nos. 123 and 123R.





Foreign
Currency Transactions





Gains and
losses arising on settlement of foreign currency denominated transactions or
balances are included in other selling, general and administrative
expenses.





Income
Taxes





Income
taxes are accounted for under the assets and liability
method.  Current income taxes are provided in accordance with the laws
of the respective taxing authorities.  Deferred income taxes are
provided for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carry forwards.  Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.  Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is not more likely than not that some portion or all of the deferred tax
assets will be realized.





Net
Income (Loss) per Share





Basic net
income (loss) per common share is computed on the basis of the weighted average
number of common shares outstanding during the period.





Diluted
net income (loss) per share is computed on the basis of the weighted average
number of common shares and dilutive securities (such as stock options and
convertible securities) outstanding.  Dilutive securities having an
anti-dilutive effect on diluted net income (loss) per share are excluded from
the calculation.





ITEM 3. Quantitative and Qualitative
Disclosures About Market Risk





Not
required.





ITEM 4T. Controls and
Procedures





Evaluation
of Disclosure Controls and Procedures





We
carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and our Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act. Based upon that evaluation, our Chief Executive Officer and
the Chief Financial Officer have concluded that our disclosure controls and
procedures were effective as of September 30, 2008, based on their evaluation of
these controls and procedures. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in reports it files or submits under the
Exchange Act is accumulated and communicated to management, including its
principal executive officer or officers and principal financial officer or
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.




20


Changes
in Internal Control over Financial Reporting





There
have been no significant changes in our internal control over financial
reporting identified in connection with the evaluation that occurred during our
last fiscal quarter that have materially affected, or that are reasonably likely
to materially affect, our internal controls over financial
reporting.


21


PART II. OTHER
INFORMATION





ITEM 1. Legal
Proceedings





From time
to time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business.  Litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business.




On or
about November 26, 2007, G.S. Schwartz & Co., Inc. initiated litigation
against us in the Supreme Court of New York (Docket No.
6003962/07).  Schwartz sought damages of $43,847.  The
complaint alleged that the plaintiff performed certain public relations on our
behalf for which it did not receive certain agreed upon fees.  We
submitted an answer on January 23, 2008.  On August 28, 2008, we
settled the lawsuit for $30,000, of which the entire amount has been paid in
full satisfaction of such claim.





On or
about January 24, 2008, Connecticut Container Corp., a wholesale distributor of
packaging materials, initiated litigation against us in the Supreme Court of the
State of New York in Nassau County (Docket No. 1458/08).  The
plaintiff had demanded payment of an aggregate of $31,693 in connection with
certain amounts allegedly owed by us.  On August 7, 2008, we settled
the litigation for the full amount. We agreed to pay one-half of such amount on
each of August 20, 2008 and September 20, 2008.  We paid $24,500 and
expect to pay the remaining $7,443 in December 2008.





On
February 14, 2008, Chester Stewart, an individual, initiated a lawsuit in the
State of Connecticut Superior Court (Docket No. D.N. HHD CV08-5018180S) alleging
breach of a promissory note in the amount of $100,000.  We have
retained counsel and are defending the action.  Negotiations continue
and we have responded to all allegations as of the filing date of this
report.





On or
about July 24, 2008, Elite Marketing Concepts, a wholesale distributor of wine,
initiated litigation against us in the Supreme Court of New York in Nassau
County (Docket No. 08-009338).  The plaintiff has demanded payment in
the amount of $32,270 for goods sold and delivered to us by the
plaintiff.  On August 15, 2008, we reached an agreement to pay Elite
$29,000 in two equal payments.  We paid the first $14,500 and expect
to pay the remaining $14,500 in December 2008.





On
October 23, 2008, Thermo Plastic Tech, Inc., a manufacturer of thermo plastic
material, initiated litigation against us in the Superior Court of New Jersey
Law Division, Civil Part, Union County (Docket No. UNN-L-3062-08). The plaintiff
has demanded payment in the amount of $30,292 for goods sold and delivered to us
by the plaintiff. We have retained counsel and are defending the
action.





On
November 11, 2008, Albea, S.P.A d/b/a/ Agribon SRL, a wine maker in Italy,
initiated litigation against us in the Supreme Court of the State of New York in
Nassau County (Docket No. 08-20104). The plaintiff has demanded payment in the
amount of 22,260 Euros (approximately $29,574). We have retained counsel and are
defending the action.





We
believe that the ultimate resolution of these matters will not have a material
adverse effect on our financial condition or operations. Apart from the legal
proceedings noted in the previous paragraphs, we are not party to any legal
proceedings, nor are we aware of any contemplated or pending legal proceedings
against us.





ITEM
1A.  Risk Factors





Not
required.




22


ITEM 2. Unregistered Sales of Equity
Securities and Use of Proceeds





Unregistered Sales of Equity
Securities during the Three Months ended September 30, 2008





From July
2007 to July 2008, we privately placed with accredited investors 40.75 units
consisting of (i) a 7% convertible promissory note in the principal amount of
$25,000 which is convertible into shares of common stock at a price of $.50 per
share and is due five years from the date of issuance, (ii) a five-year warrant
to purchase 50,000 shares of common stock exercisable at a price of $1.00 per
share; and (iii) a five-year warrant to purchase 50,000 shares of common stock
exercisable at a price of $1.50 per share.  Of these 40.75 units, two
were sold during the three months ended September 30, 2008. Interest on the 7%
convertible promissory notes is payable semi-annually at the rate of 7% per
annum by issuance of additional notes.  In the event that our common
stock is not trading on the OTC Bulletin Board, American Stock Exchange or
Nasdaq Capital Market one year from the date of issuance of the notes, the rate
of interest increases to 14% retroactive to the date of
issuance.  Basic Investors, the placement agent of the offering,
received a placement agent fee of 10% of the gross proceeds, a 3%
non-accountable expense allowance and one unit for each ten units sold in the
offering.




From July
to September 2008, we issued interim loan convertible promissory notes to six
accredited investors in the aggregate principal amount of $1,000,000. These
notes mature one year from issuance or, if earlier, upon the consummation of a
merger or combination or sale of all or substantially all of our stock or
assets.




On July
7, 2008, we entered into consulting agreements with The Bentley Asset Investment
Group and New Century Capital Consultants, Inc.  Pursuant to the terms
of the agreements, we issued to each 800,000 shares of common stock for
providing consulting services related to the further development of our business
and comprehensive marketing program.




In August
2008, we entered into a financial consulting agreement with MLF Group
LLC.  Pursuant to the terms of the agreement, we issued 2,000,000
shares of common stock and five-year warrants to purchase 1,000,000 shares of
common stock at an exercise price of $1.00 per share to the consultant for
providing financial consulting services, including a complete analysis of our
business and industry, the drafting of any documents needed to secure additional
equity participants or to seek merger and acquisition candidates, and advising
us in any business combination transaction.




On August
8, 2008, we issued 2,730,960 shares of common stock to Richard J. DeCicco, our
President, in consideration of services rendered and 1,050,000 shares of common
stock to designees of Danny DeVito in consideration of services
rendered.




All of
the above offerings and sales were deemed to be exempt under Rule 506 of
Regulation D and Section 4(2) of the Securities Act of 1933, as
amended.  No advertising or general solicitation was employed in
offering the securities.  The offerings and sales were made to a
limited number of persons, all of whom were accredited investors, business
associates of ours or executive officers of ours, and transfer was restricted in
accordance with the requirements of the Securities Act of 1933.  In
addition to representations by the above-referenced persons, we made independent
determinations that all of the above-referenced persons were accredited or
sophisticated investors, and that they were capable of analyzing the merits and
risks of their investment, and that they understood the speculative nature of
their investment.





ITEM 3. Defaults upon Senior
Securities





None.





ITEM 4. Submission of Matters to a
Vote of Security Holders





None.




23


ITEM 5. Other
Information





None.





ITEM 6. Exhibits





The
exhibits listed in the following Exhibit Index are filed as part of this
quarterly report.





Exhibit
      No.
                  
                  Description3.1
                  
                  Articles
      of Incorporation, as amended of Harbrew Imports Ltd. Corp.
    (1)3.2
                  
                  Certificate
      of Incorporation, as amended, of Harbrew Imports Ltd.
  (1)3.3
                  
                  Articles
      of Merger filed with the Secretary of State of the State of Florida.
      (1)3.4
                  
                  Amended
      and Restated Reorganization and Merger Agreement, filed May 17, 2007.
      (Included as part of Exhibit 3.3) (1)3.5
                  
                  Bylaws.
      (1)4.1
                  
                  Form
      of Note. (1)4.2
                  
                  Form
      of Warrants. (1)4.3
                  
                  Secured
      Promissory Note, dated as of August 21, 2008, issued by Harbrew Imports,
      Ltd. (2)4.4
                  
                  Amended
      and Restated Secured Promissory Note, dated as of November 7, 2008, issued
      by Harbrew Imports, Ltd. (3)10.2
                  
                  License
      Agreement between the company and Seven Cellos, LLC, dated April 26, 2007.
      (1)10.3
                  
                  Exclusive
      Manufacturing Agreement between Sorrento Delizie Di de Luca Antonino,
      dated August 14, 2007. (1)10.4
                  
                  Discount
      Factoring Agreement between Capstone Business Credit, LLC and Harbrew
      Imports, Ltd., dated as of January 22, 2007. (1)10.5
                  
                  Purchase
      Order Financing Agreement between Harbrew Imports, Ltd. and Capstone
      Capital Group, I, LLC, dated as of January 22, 2007.
(1)10.6
                  
                  Letter
      Agreement among Harbrew Imports, Ltd., Capstone Capital Group, I, LLC and
      Capstone Capital Group, II, LLC. (1)10.7
                  
                  First
      Amendment to Purchase Order Financing Agreement between Harbrew Imports,
      Ltd. and Capstone Capital Group, I, LLC, dated as of October 25, 2007.
      (1)10.8
                  
                  First
      Amendment to Discount Factoring Agreement between Harbrew Imports, Ltd.
      and Capstone Business Credit, LLC, dated as of October 25, 2007.
      (1)10.9
                  
                  Employment
      Agreement with Richard J. DeCicco, dated January 23, 2008.
    (1)10.10
                  
                  Employment
      Agreement with William S. Blacker, dated October 1, 2008.
    (1)10.11
                  
                  Addendum
      to License Agreement between Seven Cellos and Harbrew Imports, Ltd., dated
      November 1, 2007. (1)10.12
                  
                  Advisory
      Services Engagement Letter between The Griffin Group LLC and Harbrew
      Imports, Ltd., dated February 23, 2008. (3)10.13
                  
                  Consulting
      Agreement between Harbrew Imports, Ltd. and The Bentley Asset Investment
      Group, dated July 7, 2008. (3)10.14
                  
                  Consulting
      Agreement between Harbrew Imports, Ltd. and New Century Capital
      Consultants, Inc., dated July 7, 2008.
(3)




24




10.15
              
              Agreement
      to Engage MLF Group LLC as a Financial Consultant between Harbrew Imports,
      Ltd. and MLF Group LLC, dated July 31, 2008. (3)10.16
              
              Settlement
      Agreement, dated as of August 21, 2008, by and among Harbrew Imports,
      Ltd., Capstone Business Credit, LLC and Capstone Capital Group I, LLC.
      (2)10.17
              
              First
      Amendment to the Settlement Agreement, dated as of November 7, 2008, by
      and among Harbrew Imports, Ltd., Capstone Business Credit, LLC and
      Capstone Capital Group I, LLC. (3)31.1*
              
              Certification
      of Chief Executive Officer required by Rule
13(a)-14(a).31.2*
              
              Certification
      of Chief Financial Officer required by Rule
13(a)-14(a).32.1*
              
              Certifications
      pursuant to Sec. 906.





*
            Filed
      herewith.




(1)
            Incorporated
      by reference to the exhibits included with our Form 10, File No.
      000-53085, filed with the U.S. Securities and Exchange Commission on
      February 7, 2008.




(2)
            Incorporated
      by reference to the exhibits included with our Current Report on Form 8-K,
      dated August 21, 2008, and filed with the U.S. Securities and Exchange
      Commission on August 27, 2008.





(3)
            Incorporated
      by reference to the exhibits included with our Annual Report on Form
      10-KSB for the year ended December 31, 2007, filed with the U.S.
      Securities and Exchange Commission on December 4,
  2008.


25





SIGNATURES




In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




Dated:
 December 18, 2008




HARBREW
      IMPORTS LTD. CORP.By:
              /s/Richard J.
      DeCiccoRichard
      J. DeCiccoPresident,
      Secretary and Director(principal
      executive officer)By:
              /s/William S.
      BlackerWilliam
      S. BlackerChief
      Financial Officer and Vice President-Finance and
      Administration(principal
      financial and accounting
officer)




26