UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-QSB








(Mark
One)





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





For the
quarterly period ended: March 31, 2008





OR





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








For the
transition period from ____________ to _____________








Commission
File Number: 333-120949








NASCENT
WINE COMPANY, INC.


(Exact
name of registrant as specified in its charter)





Nevada
            82-0576512(State
      or other jurisdiction of
            (I.R.S.
      Employerincorporation
      or organization)
            Identification
      No.)








2355
      B Paseo de las AmericasSan
      Diego, Ca.
            92154(Address
      of principal executive offices)
            (Zip
      Code)








(619)
661 0458


(Registrant's
telephone number, including area code)








N/A


(Former
name, former address and former fiscal year, if
changed since last report)








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


Yes [x]
No [_]




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





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE


PRECEDING
FIVE YEARS:





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.


Yes [_]
No [_]





APPLICABLE
ONLY TO CORPORATE ISSUERS:





The
number of shares of common stock outstanding as of May 15, 2008
was 84,394,333.

















NASCENT
WINE COMPANY, INC. AND SUBSIDIARIES











TABLE OF
CONTENTS




PagePART
      I - FINANCIAL INFORMATIONUnaudited
      Financial StatementsConsolidated
      Balance Sheets
              4Consolidated
      Statements of Operations
              5Consolidated
      Statements of Cash Flows
              6Consolidated Statements of Stockholders’ Equity
              7Notes
      to Financial Statements
              8Management's
      Discussion and Analysis or Plan of Operation
              19Controls
      and Procedures
              32PART
      II - OTHER INFORMATIONItem
      1.  Legal Proceedings
              35Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
              35Item
      3.  Defaults On Senior Securities
              35Item
      4.  Submission of Matters to a Vote of Security
      Holders
              35Item
      5.  Other Information
              35Item
      6.
              35(a)
      Exhibits
              35SIGNATURES
      AND CERTIFICATES
              36
 
 2








UNAUDITED
FINANCIAL STATEMENTS





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting and pursuant to the rules and regulations of the Securities and
Exchange Commission ("Commission"). While these statements reflect all normal
recurring adjustments which are, in the opinion of management, necessary for
fair presentation of the results of the interim period, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the audited financial statements and footnotes that are included in the
Company's December 31, 2007 annual report on Form 10-KSB previously filed with
the Commission on April 15 , 2008.














3





Nascent Wine Company, Inc., and
      SubsidiariesConsolidated  Balance
      Sheets(Unaudited)March 31,
    2008
              
              
              December 31,
      2007ASSETSCurrent
    AssetsCash
              
              $
              785,788
              
              
              $
              1,165,814Accounts receivable (less
      allowance of $639,464 atMarch 31, 2008 and December 31,
      2007)
              
              
              7,819,708
              
              
              
              7,763,114Inventory
              
              
              7,408,122
              
              
              
              5,504,209Investment
              
              
              
              238,318Prepaid and other current
      assets
              
              
              2,658,666
              
              
              
              1,694,084Total Current
      Assets
              
              
              18,672,284
              
              
              
              16,365,539Property, plant and
      equipment,  net
              
              
              2,116,457
              
              
              
              2,119,044Amortizable intangibles assets,
      net
              
              
              16,828,603
              
              
              
              17,251,375Goodwill
              
              
              14,166,968
              
              
              
              14,166,968Total
Assets
              
              $
              51,784,312
              
              
              $
              49,902,926LIABILITIES AND
      STOCKHOLDERS'  EQUITYCurrent
      LiabilitiesAccounts
      payable
              
              $
              5,704,867
              
              
              $
              5,054,079Accrued
      expenses
              
              
              2,742,872
              
              
              
              1,633,591Accrued
      interest
              
              
              358,670
              
              
              
              279,351Line of
    credit
              
              
              50,000
              
              
              
              249,000Notes
    payable
              
              
              1,128,252
              
              
              
              1,306,766Acquisition
      loans
              
              
              7,700,000
              
              
              
              7,700,000Capital leases - current
      portion
              
              
              220,430Shareholder
      loans
              
              
              1,009,335
              
              
              
              672,048Total Current
      Liabilities
              
              
              18,914,426
              
              
              
              16,894,835Capital leases - long-term
      portion
              
              
              678,546
              
              
              
              -Total
      Liabilities
              
              
              19,592,972
              
              
              
              16,894,835Stockholders'  EquityPreferred stock, 5,000,000
      authorized:
                      Series A convertible preferred
      stock, $.001 par value;1,875,000 shares issued and
      outstanding atMarch 31, 2008 and December 31,
      2007.
              
              
              1,875
              
              
              
              1,875Series B convertible preferred
      stock, $.001 par value;375,000 shares issued and
      outstandingat March 31, 2008 and December 31,
      2007.
              
              
              375
              
              
              
              375Common stock, $0.001 par
      value; 195,000,000 sharesauthorized; 84,425,538
      shares issued and outstandingat March 31, 2008 and December 31,
      2007.
              
              
              84,426
              
              
              
              84,426Additional paid-in
      capital
              
              
              43,909,910
              
              
              
              44,351,978Accumulated other comprehensive
      loss
              
              
              3,062
              
              
              
              32,447Deficit
      accumulated
              
              
              (11,808,308
              )
              
              
              (11,463,009
              )Total Stockholders'
      Equity
              
              
              32,191,340
              
              
              
              33,008,092Total
      Liabilities and Stockholder's Equity
              
              $
              51,784,312
              
              
              $
              49,902,927See accompanying notes to
      Consolidated Financial Statements







4




Nascent Wine Company, Inc., and
      SubsidiariesConsolidated  Statement
      of OperationsFor the Three Months
      EndedMarch 31,
    2008
              
              
              March 31,
    2007Net
Revenues
              
              $
              16,000,470
              
              
              $
              5,134,927Cost of
    Revenue
              
              
              13,167,625
              
              
              
              4,161,354Gross
Profit
              
              
              2,832,845
              
              
              
              973,573Operating
      ExpensesDistribution
              
              
              772,523
              
              
              
              337,024Sales and
      Marketing
              
              
              535,680
              
              
              
              165,108General and
      Administrative
              
              
              1,719,844
              
              
              
              800,422Depreciation
              
              
              121,818
              
              
              
              34,564Amortization
              
              
              456,129
              
              
              
              216,875Total Operating
      Expenses
              
              
              3,605,994
              
              
              
              1,553,993Loss from
      Operations
              
              
              (773,149
              )
              
              
              (580,420
              )Other Income
      (Expense)Interest
    Income
              
              
              5,502
              
              
              
              3,041Interest
      Expense
              
              
              (127,923
              )
              
              
              (114,125
              )Warrants issued for
      interest
              
              
              442,068
              
              
              
              442,068Other income
      (expense),net
              
              
              183,067
              
              
              
              -Total Other Income
      (Expense)
              
              
              502,714
              
              
              
              (553,152
              )Loss Before Provision for Income
      Taxes
              
              
              (270,435
              )
              
              
              (1,133,572
              )Provision for Income
      Taxes
              
              
              74,864
              
              
              
              -Net Loss
              
              $
              (345,299
              )
              
              $
              (1,133,572
              )Net (Loss) Per Share Basic and
      Fully Diluted
              
              $
              0.01
              
              
              $
              (0.02
              )Weighted average number of
      Commonoutstanding basic and fully
      diluted
              
              
              72,706,940
              
              
              
              52,074,208See accompanying notes to
      Consolidated Financial Statements


5




Nascent Wine Company, Inc., and
      SubsidiariesConsolidated  Statement
      of Cash FlowsFor the Three Months
      EndedMarch 31,
    2008
              
              
              March 31,
    2007Cash Flows from Operating
      ActivitiesNet loss
              
              $
              (345,299
              )
              
              $
              (1,133,572.00
              )Adjustment to reconcile net loss
      to net cash provided by operations:Depreciation
              
              
              108,246
              
              
              
              34,564Amortization
              
              
              455,772
              
              
              
              216,875Warrant
      issued for interest expense (recapture)
              
              
              (442,068
              )
              
              
              442,068Shared-based
      compensation
              
              
              
              
              
              
              4,000Changes in
      operating working capital:(Increase)/decrease
      in accounts receivable
              
              
              (5,450,890
              )
              
              
              (1,178,653
              )(Increase)/decrease
      in inventory
              
              
              (1,199,449
              )
              
              
              (643,849
              )(Increase)/decrease
      in prepaids and other assets
              
              
              (1,071,772
              )
              
              
              (15,506
              )Increase/(decrease)
      in accounts payable
              
              
              5,837,064
              
              
              
              1,328,652Increase/(decrease)
      in accrued expense
              
              
              641,873
              
              
              
              (61,569
              )Increase/(decrease)
      in accrued interest
              
              
              79,319
              
              
              
              69,785Increase/decrease)
      in other taxes
              
              
              (7,281
              )
              
              
              -Increase/(decrease)
      in deferred lease
              
              
              
              
              
              
              (4,213
              )Net
      change in operating working captital
              
              
              (1,049,186
              )
              
              
              192,154Net Cash Used in
      Operations
              
              
              (1,394,485
              )
              
              
              (941,418
              )Cash Flows From Investing
      ActivitiesPurchased
      fixed assets
              
              
              (103,984
              )
              
              
              (112,659
              )Other
      investment
              
              
              242,761
              
              
              
              -Net Cash Provided by (Used in)
      Investments Activities
              
              
              138,777
              
              
              
              (112,659
              )Cash Flows from
      Financing  ActivitiesLine of credit
      advances
              
              
              50,000
              
              
              
              -Decrease in bridge
      loans payable
              
              
              -
              
              
              
              (150,000
              )Capital
      leases
              
              
              (516,792
              )
              
              
              -Advances -
      shareholder's loan
              
              
              337,288
              
              
              
              (40,520
              )Notes payble, net of
      pymts
              
              
              988,254
              
              
              
              (116,100
              )Common stock
      subscribed-net  of expenses
              
              
              -
              
              
              
              927,818Net Cash Provided by Financing
      Activities
              
              
              858,750
              
              
              
              621,198Effect of Exchange Rate Changes on
      Cash
              
              
              16,931
              
              
              
              (408
              )Net Decrease in
      Cash
              
              
              (380,027
              )
              
              
              (433,287
              )Cash--Beginning of
      Period
              
              
              1,165,814
              
              
              
              476,375Cash - Ending of
      Period
              
              $
              785,787
              
              
              $
              43,088Supplemental Disclosure of
      Non-Cash Investing and Financing Activities:Issuance of common stock in lieu
      of payment of shareholders' loans
              
              $
              -
              
              
              $
              23,500Issuance of common stock for
      services
              
              $
              -
              
              
              $
              4,000Warrants issued and attached to
      debt
              
              $
              -
              
              
              $
              43,750Warrant issued for interest
      (recapture)
              
              $
              442,068
              
              
              $
              43,750$
              48,604
              
              
              $
              45,201See accompanying notes to
      Consolidated Financial Statements




6




Nascent Wine Company, Inc., and
      SubsidiariesConsolidated Statement of
      Stockholders' EquityTOTALSTOCKHOLDERS'PREFERRED
      SHARES
              
              
              COMMON SHARES
              
              
              ADDITIONAL
              
              
              
              
              
              
              
              
              
              
              
              ACCUMULATEDPar Vaue
              
              
              
              
              
              Par Vaue
              
              
              PAID-IN
              
              
              SUBSCRIBED
              
              
              COMPRENHENSIVE
              
              
              INCOME
              
              
              EQUITYShares
              
              
              $
              0.001
              
              
              Shares
              
              
              $
              0.001
              
              
              CAPITAL
              
              
              STOCK
              
              
              INCOME
              
              
              (DEFICIT)
              
              
              (DEFICIT)Balance December 31,
      2006
              
              
              
              
              
              
              
              
              
              52,050,000
              
              
              $
              52,050
              
              
              $
              16,314,477
              
              
              $
              2,334,727
              
              
              $
              (15
              )
              
              $
              (2,056,904
              )
              
              $
              16,644,335-Preferred shares issed for
      stock
              
              
              2,250,000
              
              
              
              2,250
              
              
              
              -
              
              
              
              -
              
              
              
              15,142,027
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              15,144,277for cashShares issued for
      service
              
              
              -
              
              
              
              -
              
              
              
              316,023
              
              
              
              316
              
              
              
              162,055
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              162,371Shares issued for
      loans
              
              
              -
              
              
              
              -
              
              
              
              3,002,545
              
              
              
              3,003
              
              
              
              1,265,899
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,268,902Shares issued for
      trucks
              
              
              -
              
              
              
              -
              
              
              
              77,170
              
              
              
              77
              
              
              
              30,791
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,868Shares issued for
      cash
              
              
              -
              
              
              
              -
              
              
              
              28,484,900
              
              
              
              28,485
              
              
              
              9,585,424
              
              
              
              (2,334,727
              )
              
              
              -
              
              
              
              -
              
              
              
              7,279,182Shares issued for
      acquisitions
              
              
              -
              
              
              
              -
              
              
              
              244,900
              
              
              
              245
              
              
              
              119,755
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              120,000Warrants
    issued
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,616,800
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,616,800Shares issued for finders
      fee
              
              
              -
              
              
              
              -
              
              
              
              250,000
              
              
              
              250
              
              
              
              114,750
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              115,000Net loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (9,406,105
              )
              
              
              (9,406,105
              )Translation
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              32,462
              
              
              
              -
              
              
              
              32,462-
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Comprehensive  loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (9,373,643
              )Balance December 31,
      2007
              
              
              2,250,000
              
              
              
              2,250
              
              
              
              84,425,538
              
              
              
              84,426.00
              
              
              
              44,351,978
              
              
              
              -
              
              
              
              32,447
              
              
              
              (11,463,009
              )
              
              $
              33,008,092Net loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (345,299
              )
              
              
              (345,299
              )Warrant interes
      expense
                (recapture)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (442,068
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (442,068
              )Translation (loss)
      gain
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (29,385
              )
              
              
              
              
              
              
              (29,385
              )Comprehensive
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              --Balance March 31,
      2008
              
              
              2,250,000
              
              
              $
              2,250
              
              
              
              84,425,538
              
              
              $
              84,426
              
              
              $
              43,909,910
              
              
              $
              -
              
              
              $
              3,062
              
              
              $
              (11,808,308
              )
              
              $
              32,191,340See accompanying notes to
      Consolidated Financial Statements




7




NOTE 1 -
COMPANY OVERVIEW





COMPANY
HISTORY





The
Company was incorporated under the laws of the State of Nevada, on December 31,
2002 (Date of inception). The Company had minimal operations until July 1, 2006
after the Company purchased the license to distribute Miller Beer in Baja
California, Mexico from Piancone Group International, Inc. ("PGII"). The
Purchase price consisted of issuing 17,500,000 par value $0.001 shares of common
stock at a valued at $0.45 per share ($7,875,000) and a cash payment of $800,000
to Miller Beer as a settlement of debt of the previous license holder. The
Company commenced its distribution of Miller Beer during July 2006. The Company
incorporated Best Beer S.A. de C. V. (Best Beer) during May 2006 in order to
distribute in Baja California





In
October, 2006 the Company purchased the assets and assumed liabilities of PGII.
The purchase price consisted of the Company issuing 15,000,000 shares of $0.001
par value common stock, valued at $6,000,000.





In
November, 2006 the Company purchased the outstanding common stock of Palermo
Italian Foods, LLC (Palermo) issuing 1,250,000 shares of common stock at $0.80
per share ($1,000,000) and $1.000,000 in cash.





On May
11, 2007, the Company acquired Pasani\Eco paying $2,000,000 in cash, issuing
notes payable in the amount of $1,500,000 with interest at 8% and $2,500,000
without interest Pasani/Eco: are distribution companies based in Mexico City and
San Antonio, Texas. The Company paid an additional $500,000 in November, 2007
and $3,500,000 is payable May 26, 2008 with interest on the $1,000,000. The
notes may be converted to common stock at $1.40 per share





In July,
2007 the Company acquired Groupo Sur Promociones de Mexico S.A. de C.V. (Groupo
Sur) and related companies issuing a note payable in the amount of $4,500,000 at
6% interest. The Company paid $300,000 against the note. The remaining balance
is payable $700,000 payable upon request, $1,500,000 on June 30, 2008 and
$2,000,000 with interest on December 31, 2008. The note is payable in cash or
convertible into shares at the market closing sales price on the day immediately
prior to the conversion. Grupo Sur purchase agreement contained a contingent
earn-out. The Company had additional expenses of $50,000 related to this
acquisition.





In
October 2007 the Company acquired all of the outstanding capital stock of Targa,
S.A. de C.V. (Targa) for $4,000,000. The Company paid $3,550,000 at the close
and deposited $250,000 in an escrow account which has been
released.





The above
mentioned transactions were accounted for pursuant to Statement of Financial
Accounting Standard 141 (`SFAS 141') Business Combinations. A discussion of
these transactions are included elsewhere herein.




In
accordance with SFAS #7, the Company was considered a development stage company
until it started operations on July 1, 2006.




NOTE 2 -
GOING CONCERN





The
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. As of March 31, 2008 the Company had cash of
$785,788 and a working capital deficit of $242,000. The Company had a net loss
of $345,299 and $1,133,572 for the three months ended March 31, 2008 and 2007,
respectively.





The Company is currently in discussion with several lending
institutions for a working capital credit facility and additional
financing.  These credit facilities in conjunction with internally
generated funds should besufficient
to fund our operations for the next twelve months; however, there can be no
assurance fundingwill be
available at terms and conditions acceptable to us.




8




The
accompanying financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.





NOTE 3 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.





PRINCIPLES OF
CONSOLIDATION





The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, Best Beer S.A. de C. V., (Best Beer),
International Food Services, Inc. (IFS) and Palermo Italian Foods, LLC
(Palermo), for the three months  ended March 31, 2007. For the three
months ended March  31, 2008 the accompanying consolidated statements
include Best Beer , IFS., Palermo , Eco Pak, Inc (Eco Pac) Pasani S.A. de C.V.
(Pasani) , Grupo Sur Promociones de Mexico S.A. de C.V. (Grupo Sur) and Targa
S.A. de C.V. (Targa ).





The
financial statements have been consolidated with the parent company and all
inter-company transactions and balances have been eliminated in
consolidation.





BASIS OF PREPARATION OF
FINANCIAL STATEMENTS





The
accompanying financial statements are prepared in accordance with U.S. Generally
Accepted Accounting Principals (GAAP). The financial statements have been
prepared assuming that the Company will continue as a going
concern.





USE OF
ESTIMATES





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





REVENUE
RECOGNITION





The
Company reports revenue using the accrual method, in which revenues are recorded
as services are rendered or as products are delivered and billings are
generated, in accordance with SEC Staff Accounting Standard 101 Revenue
Recognition. In accordance with aforementioned guidance, revenue is recognized
when the following criteria are met: (i) persuasive evidence of an arrangement
exits; (ii) price is fixed determinable; (iii) delivery has occurred or services
have been rended ; and (iv) collectability is reasonably assured..





ACCOUNTS
RECEIVABLE





The
Company has reviewed the outstanding trade accounts receivable and provided a
reserve for slow paying accounts of approximately $639,464 at March 31, 2008 and
$638,363 at December 31, 2007. The Company has insured all its trade
receivables during the first half 2008. Additionally, the Company has developed
standard credit policies.





INVENTORIES





Inventories
are accounted for on the first-in, first-out basis. Any products reaching their
expiration dates are written off. The Company has determined it does not require
a provision for slow moving and or obsolete inventory  for the three
months ended March  31, 2008 and March 31, 2007.





PROPERTY AND
EQUIPMENT





Property
and equipment is stated at cost and depreciated using the straight-line method
over the estimated useful life of the assets, which is three to ten
years.






9





BUSINESS
COMBINATIONS





Acquisitions
require significant estimates and judgments related to the fair value of assets
acquired and liabilities assumed to which the transaction costs are allocated
under the purchase method of accounting. Certain liabilities are subjective in
nature. We reflect such liabilities based upon the most recent information
available. The ultimate settlement of such liabilities may be for amounts that
are different from the amounts initially recorded. A significant amount of
judgment also is involved in determining the fair value of assets acquired.
Different assumptions could yield materially different results.





INTANGIBLE
ASSETS





The
Company accounts for intangible assets in accordance with SFAS 144 " ACCOUNTING
FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. THE COMPANY acquired
long-lived assets during the three months ended March 31, 2007
and  March 31, 2007, respectively. The acquired long -lived assets are
attributed to acquisitions completed during 2007 and 2006. The Company reviewed
the carrying values of its long-lived assets for possible impairment as of
March  31, 2008 or whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be recoverable and\or
annually. No impairment losses were recorded in the three
months  ended March  31, 2008.





LOSS PER
SHARE





Basic
loss per share is calculated by dividing net loss by the weighted-average number
of shares of common shares outstanding. Diluted loss per share includes the
component of basic loss per share and also gives effect to dilutive common stock
equivalents. Potential dilutive common stock equivalents include stock options,
warrants and preferred stock which convert into common stock.





TAXES ON
INCOME





The
Company follows Statement of Financial Accounting Standard No. 109 "Accounting
for Income Taxes" (SFAS No. 109) for recording the provision for income taxes.
Deferred tax assets and liabilities are computed based upon the differences
between the financial statement and income tax basis of assets and liabilities
using the enacted marginal tax rate applicable when the related asset or
liability is expected to be realized or settled. Deferred income tax expense or
benefit is based on the change in the asset or liability each period. If
available evidence suggests that is more likely than not that some portion or
all of the deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax asset to the amount that is more likely than
not to be realized. Future changes in such valuation allowance are included in
the provision for deferred income taxes in the period of change.





Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classification of assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or non-current depending on the periods in
which the temporary differences are expected to reverse.





ADVERTISING





The
Company expenses advertising as incurred. Advertising expense was approximately
$26,064 and $63,385 for the three months ended March 31, 2008 and
2007, respectively.






10





RECENT ACCOUNTING
PRONOUNCEMENTS





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities - an amendment of FASB Statement No. 133," which changes
the disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under SFAS No. 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity's financial position, financial performance, and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008.




NOTE 4 -
PROPERTY AND EQUIPMENT




Property and equipment consists of
      the following at March 31:March 31,
                2008
              
              
              December 31,
                2007Distribution
      equipment
              
              $
              1,050,571
              
              
              $
              830,124Office furniture and
      equipment
              
              
              18,538
              
              
              
              179,321Computer
              
              
              538,546
              
              
              
              383,147Autos and
      trucks
              
              
              1,233,257
              
              
              
              1,269,093Leasehold
      improments
              
              
              272,577
              
              
              
              325,627Totals
              
              $
              3,113,489
              
              
              
              2,987,312Accumulated
      depreciation
              
              $
              (997,032
              )
              
              
              (868,268
              )Property and equipment
      net
              
              $
              2,116,457
              
              
              $
              2,119,044
  Depreciation for the three months ended
March 31, 2008 and 2007 were $121,818 and, $34,564
respectively.


NOTE
      5 - GOODWILL AND INTANGIBLES ASSETSMarch
      31,
                            2008
                          
                          
                          December
      31,
                            2007(in
      thousands)Intangibles
      subject to amortization:Miller
      Beer Distrtibution Licenses
                          
                          
                          8,675
                          
                          
                          
                          8,675Customer
      relations
                          
                          
                          2,110
                          
                          
                          
                          2,110Client
      lists
                          
                          
                          500
                          
                          
                          
                          500Trademarks
                          
                          
                          7,500
                          
                          
                          
                          7,500Non-Compete
      Agreement
                          
                          
                          340
                          
                          
                          
                          34019,125
                          
                          
                          
                          19,125Accumulated
      amortization:
                          
                          
                          (2,296
                          )
                          
                          
                          (1,874
                          )Intangibles
      subject to amortization, net
                          
                          $
                          16,829
                          
                          
                          $
                          17,251Goodwill:Acquisition
      of PGII
                          
                          $
                          4,913
                          
                          
                          $
                          4,913Acquisition
      of Palermo
                          
                          
                          2,523
                          
                          
                          
                          2,523Acquisition
      of Pasani
                          
                          
                          2,407
                          
                          
                          
                          2,407Acquisition
      of Grupo sur
                          
                          
                          1,757
                          
                          
                          
                          1,757Acquisition
      of Targa
                          
                          
                          2,567
                          
                          
                          
                          2,567Total
      Goodwill
                          
                          $
                          14,167.00
                          
                          
                          $
                          14,167.00Intangible
      asset amortization expense was $456,129 for the three months ended March
      31, 2008 and $216,875March
      31, 2007. Amortization expense for each of the next five years is
      estimated to be approximately $6,407,000.


The
Company determined in accordance with SFAS No. 131 DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION that its subsidiaries meets the criteria
to be deemed one reporting unit. Pursuant to SFAS No. 142 "GOODWILL AND OTHER
INTANGIBLE ASSETS" the Company tested its goodwill and intangibles for
impairment and determined that estimated fair value exceed the carrying
value.





In
performing the fiscal 2007 annual test, the Company assumed an income tax rate
of 30% and a discount rate of 17%.





Determining
the fair value of a reporting unit under the first step of the goodwill
impairment test and determining the fair value of individual assets and
liabilities of a reporting unit under the second step of the goodwill impairment
test is judgmental in nature and often involves the use of significant estimates
and assumptions. These estimates and assumptions could have a significant impact
on whether or not an impairment charge is recognized and also the extent of such
charge. The Company's estimates of fair value utilized in goodwill and
intangible asset tests may be based upon a number of factors, including
assumptions about the projected future cash flows, discount rate, growth rate,
determination of market comparables, technological change, economic conditions,
or changes to the Company's business operations. Such changes may result in
impairment charges recorded in future periods.





The
Company evaluated the remaining useful lives of its finite-lived purchased
intangible assets to determine if any adjustments to the useful lives were
necessary or if any of these assets had indefinite lives and were therefore not
subject to amortization. The Company determined that no adjustments to the
useful lives of its finite-lived purchased intangible assets were
necessary.






11


NOTE 6 -
ACQUISITION AND BANK LOANS





Acquisition
Loans





Origin
            Interest
      Rate
            Due
      Dates
            AmountACQUISITION
      OF TRADEMARKS
            NONE
            May
      26, 2008
            $  2,500,000ACQUISITION
      OF PASANI
            8%
            May
      26, 2008
            1,000,000Upon
      Request $700,000June
      30, 2008, $1,500,000 andACQUISITION
      OF GRUPO SUR
            6%
            December
      31, 2008, $2,000,000
            4,200,000$  7,700,000





BANK
LOANS





The
Company had the following bank loans at December 31, 2007:





Bank
            Interest
      rates
            Due
      Dates
            AmountBank
      of Florida
            7.75%
            On
      demand
            $   249,000Frost
      Bank
            Prime
      + 1%
            May
      8, 2008
            32,000Cyril
      Capital, LLC
            8.00%
            August
      14, 2008
            500,000City
      National Bank
            8.75%
            December
      31, 2008
            22,000Source
      One
            2%
      per month
            December
      31, 2008
            250,000Pentech
            14.75%
            November
      15, 2008
            75,000$  1,128,252





NOTE 7 -
BRIDGE LOANS





During
2006 and early 2007 the Company obtained Bridge loan financing in varying
amounts with interest payable at rate 8% annually. As additional consideration
to obtain the loans due in one year, the Company issued warrants to the lenders
to purchase shares of common stock at a price per share of $0.25 to $0.84. The
difference between the price to purchase shares and the closing price of the
stock on the date of grant of the warrants has been written off as all loans
have been paid.





NOTE 8 -
STOCKHOLDERS' EQUITY





COMMON
STOCK





The
Company is authorized to issue 195,000,000 shares of common stock at $.001 par
value, and 5,000,000 shares of preferred stock at $.001 par value.





On April
12, 2006, the Company did a 20 for 1 forward split. The balance of shares issued
after the split was 86,568,800. On April 27, 2006, 69,068,800 shares were
cancelled.




12




On April
27, 2006, the Company issued 17,500,000 shares of common stock to acquire the
distribution rights for Miller Beer in Baja California, Mexico at a per share
value of $0.45 per share ($7,875,000) and paid off the debt of the previous
license holder to Miller Beer ($800,000). The total cost of the license was
$8,675,000. The Company is amortizing the acquisition over 10 year and will
evaluate the value of the intangible asset on an annual basis.





During
the year ended December 31, 2007 the Company issued 316,023 shares of common
stock for services rendered in the amount of $162,371 and 3,002,545 shares of
common stock to redeem notes payable to shareholders in the amount of
$1,268,902. The Company issued 77,170 shares of common stock for a truck valued
at $30,868, 244,900 shares of common stock as a finder's fee for the Targa
acquisition ($120,000) and 250,000 shares of common stock for the finder's fee
for the York preferred stock transaction ($115,000). The Company received
subscriptions for an additional 21,539,900 shares of common stock during the
year and issued 28,484,900 shares for cash, including the 6,945,000 shares
subscribed at December 31, 2006 in the amount of $2,334,727 for a total of
$9,585,424.





At
March  31, 2008 the Company had outstanding warrants (not including
the York warrants-see below) to purchase 18,120,476 shares of common stock at a
price of between $0.25 and $1.05 expiring in 2010. If all warrants were
exercised the Company would receive $7,070,000.





PREFERRED
STOCK





On July
3, 2007 the Company issued 1,000,000 shares of its Series A and Series B
Convertible Preferred Stock, par value $0.001 per share at $8.00 per share
($8,000,000) to an affiliate York Capital Management (York). The Series A and
Series B Convertible Preferred Stock is convertible into 20,000,000 shares of
the Company's common stock, par value $0.001, of the Company, based upon a
conversion price of $0.40 per share and a liquidation amount of $8.00 per share.
The Preferred stock are entitled to a dividend of 15% payable quarterly in
preferred stock for three years.





In
addition the Company issued the following warrants to purchase:





Series
      A-1
              Warrants
            500,000
      shares of Series A preferred $8.00 per share stock
            Immediately
      exercisable and expire July 3, 2010Series
      A-2
              Warrants
            375,000
      shares of Series A preferred $8.00 per share stock
            Immediately
      exercisable and expire July 3, 2014Series
      B
              Warrants
            Variable
      shares of Series of the average of the convertible preferred stock
      depended Per Share Market Value of and expire July 3, 2014 on the per
      market value of common stock 30 days Immediately exercisable shares
      preceding date of exercise.





In
October and November 2007 York exercised their warrants acquiring 2,250,000
shares of preferred stock in the amount of $15,144,276 convertible into
45,000,000 shares of common stock.





The
Company paid a cash finder's fee of $560,000 and issued to the finder an
aggregate of 1,600,000 common share warrants, each warrant exercisable to
purchase one share of common stock at any time until July 3, 2010 at a purchase
price of $0.40 per share.






13





NOTE 9 -
ACQUISITIONS OF PASANI, S.A. DE C.V.(PASANI) AND ECO PAC DISTRUBUTING, LLC
(ECO), GRUPO SUR PROMOCIONES DE MEXICO S.A. DE C.V. (GRUPO SUR) AND TARGA, S.A.
DE C.V.





ACQUISITION
OF PASANI, S. A. DE C.V. AND ECO PAC DISTRUBUTING, LLC (ECO)





On May
11, 2007, the Company acquired Pasani\Eco paying $2,000,000 in cash, issuing
notes payable in the amount of $1,000,000 with interest at 8% and $2,500,000
without interest, distribution companies based in Mexico City. The Company paid
an additional $500,000 in November, 2007 and $3,500,000 is payable May 26, 2008
with interest on the $1,000,000. The notes may be converted to common stock at
$1.40 per share





Current
      assets
            
            $
            3,376,853Property,
      plant and equipment
            
            
            172,017Customer
      relations
            
            
            670,000Trade
      name
            
            
            1,600,000Non-compete
      agreement
            
            
            70,000Goodwill
            
            
            2,406,997Current
      liabilities
            
            
            (2,295,877
            )TOTAL
      PURCHASE PRICE
            
            $
            6,000,000





ACQUISITION
OF GRUPO SUR PROMOCIONES DE MEXICO S.A. DE C.V.





In July,
2007 the Company acquired Groupo Sur Promociones de Mexico S.A. de C.V. (Groupo
Sur) and related companies issuing a note payable in the amount of $4,500,000 at
6% interest. The Company paid $300,000 against the note. The remaining balance
is payable $700,000 upon request, $1,500,000 on June 30, 2008 and $2,000,000
with interest on December 31, 2008. The note is payable in cash or convertible
into shares at the market closing sales price on the day immediately prior to
the conversion. Grupo Sur purchase agreement contained a contingent earn-out.
Grupo Sur has been in the Mexican market for 30 years and is one of the leading
field marketing and below the line marketing organization in Mexico with 4,500
contract employees servicing 240,000 retail accounts including supermarkets and
convenience stores. Grupo Sur's expertise includes merchandising, promotions,
sampling, retail data collection and sales and marketing of retail
products.





Current
      assets
            
            $
            2,356,722Property
      and equipment
            
            
            158,349Customer
      relations
            
            
            1,150,000Trade
      name
            
            
            600,000Non-compete
      agreement
            
            
            200,000Goodwill
            
            
            1,756,498Current
      liabilities
            
            
            (1,671,569
            )TOTAL
      PURCHASE PRICE
            
            $
            4,550,000





ACQUISITION
OF TARGA, S.A. DE C.V.





In
October 2007 the Company acquired all of the outstanding capital stock of Targa,
S.A. de C.V. (Targa) for $4,000,000. The Company paid $3,550,000 at the close
and deposited $250,000 in an escrow which has subsequently been
released.






14





Targa is
a cheese processor and distributor of imported cheeses into Mexico. Its offices
and distribution center is located in Tijuana, Mexico.





Current
      assets
            
            $
            2,482,524Property
      and equipment
            
            
            319,612Customer
      relations
            
            
            290,000Trade
      name
            
            
            1,300,000Non-compete
      agreement
            
            
            70,000Goodwill
            
            
            2,567,307Current
      liabilities
            
            
            (3,029,443
            )TOTAL
      PURCHASE PRICE
            
            $
            4,000,000






NOTE 10 -
SEGMENT INFORMATION





The
Company operates in one reportable business segment. The Company conducts its
business through its subsidiaries in the Mexico. The Company has historically
disclosed summarized financial information for the geographic area of operations
as if they were segments in accordance with SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information."





Such
summarized financial information concerning the Company's geographical
operations is shown in the following tables:





United
      States
            
            
            MexicoNet
      loss for the three months ended March 31, 2008
            
            $
            5,433,954
            
            
            $
            3,407,151Net
      loss for the three months ended March 31, 2007
            
            $
            1,124,162
            
            
            $
            9,410Long
      lived assets (net) at March 31, 2008
            
            $
            1,004,383
            
            
            $
            1,112,074Long
      lived assets (net) at March 31, 2007
            
            $
            345,556
            
            
            $
            321,105





NOTE 11 -
RELATED PARTY TRANSACTIONS





The
Company has unsecured loans from stockholders totaling $1,009,335 at March 31,
2008. The loans have various due dates and contain interest rates ranging from
10% to 18%. All loans are due on demand.





On May 3,
2006, we acquired the exclusive rights from Piancone Group International, Inc.
to market Miller Beer in Baja California, Mexico, in exchange for 17,500,000
shares of our common stock. At that time, neither Sandro Piancone nor Piancone
Group was an affiliate. Concurrent with the acquisition of these rights, Sandro
Piancone became our Chief Executive Officer and a director. In June 2006, we
acquired substantially all of the assets of Piancone Group in exchange for the
issuance of 15,000,000 shares of our common stock. Sandro Piancone, our Chief
Executive Officer and a director, was the Chief Executive Officer, a director
and the controlling stockholder of Piancone Group International, Inc. at the
time its assets were acquired by us. We believe our purchase of Piancone Group's
assets was fair and reasonable.






15


NOTE 12
-COMMITMENTS AND CONTINGENCIES





OPERATING
LEASES





The
Company maintains its corporate offices in San Diego, California including
warehouse space. In addition it maintains warehouse space and offices in , Miami
Lakes, Florida, San Antonio, Texas, Tijuana, La Pax, Ensenada, Mexicali, Cabo
San Lucas, Puerto Penasco, Mexico City, Monterey, Guadalajara, Cancun and
Juarez, Mexico. The Company currently has total leases of 212,000 square feet at
a cost of $80,000 per month. ADD 2007 acquisitions and truck leases





The total
rent paid in the year ended December 31, 2007 was $596,000 as compared to
$142,800 for the year ended December 31, 2006. Future payments on the operating
leases are as follows:





2008
            
            $
            1,083,8362009
            
            $
            860,7012010
            
            $
            628,2532011
            
            $
            486,9522012
            
            $
            373,871Thereafter
            
            
            42,100





DIVIDEND
CONTINGENCY





The
holders Series A and the Series B convertible preferred stock commencing on the
date of issuance and for a period of three years following the issuance date
shall be entitled to receive a quarterly dividend at a rate of fifteen percent
of the stated liquidation preference amount. The dividends are payable in
additional shares of Series A and the Series B convertible preferred stock The
Board of Directors has not declared dividends for the Series A and Series B
convertible preferred stock.





CONTINGENCY
TO ISSUE ADDITIONAL COMMON STOCK





NASCENT
WINE COMPANY, INC.





Fees for
Failure to Timely File SB-2


Fee
base:         28,247,500  shares








Date
            
            Add'l
      Shares
              to
      be Issued
            
            
            Closing
              Price/share
            
            
            Expense
              Amount08/28/07
            
            
            282,475
            
            
            $
            0.20
            
            
            $
            56,495.0009/04/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0009/11/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0009/18/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0009/25/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0010/02/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0010/09/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0010/16/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0010/23/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.0010/30/07
            
            
            282,475
            
            
            $
            0.20
            
            
            
            56,495.00Totals
            
            
            2,824,750
            
            
            
            
            
            
            $
            564,950.00





Expense
      per quarter ended:September
      30, 2007
            
            $
            282,475.00December
      31, 2007
            
            
            282,475.00Total
      FY2007 expense
            
            $
            564,950.00






16





Per the
terms of the share purchase agreement completed on June 28, 2007, Nascent Wine
Company, Inc. was required to file with the SEC a share registration statement
within 60 days of the share sale transaction. Furthermore, a failure by the
registrant to perform would result in a 1% of the total shares sold per week
penalty in shares, up to a 10% maximum penalty, payable to the investors
(discussed elsewhere herein). The company filed the SB-2 to register the shares
on November 14, 2007.





CONCENTRATION
OF SALES TO SINGLE CUSTOMER





For the
period from acquisition to year ended December 31, 2007, over 66% of Grupo Sur
Promociones' revenue  or 23% of our company-wide revenue, was
generated by Procter & Gamble. The loss of Procter & Gamble would
significantly reduce our revenue and our potential profitability.





LEGAL
PROCEEDING





From time
to time we are involved with legal proceedings, claims and litigation arising in
the ordinary course of business. As of the date of this FORM
10-QSB  we are not a party to any pending material legal
proceedings





Note [ ]
Pro forma Statement of Operations for the three Months ended March 31,2007
assuming Pasani, Grupo Sur and Targa were acquired at the beginning of
2007.




As
                Reported
              
              
              Pasani
              
              
              Grupo
      Sur
              
              
              Targa
              
              
              TotalREVENUE
              
              $
              5,134
              
              
              
              2,019
              
              
              
              6,799
              
              
              
              2,092
              
              
              $
              16,044GROSS
      PROFIT
              
              
              973
              
              
              
              550
              
              
              
              782
              
              
              
              330
              
              
              
              2,635LOSS
      FROM OPERATIONS
              
              
              (580
              )
              
              
              145
              
              
              
              173
              
              
              
              (16
              )
              
              
              (278
              )NET
      LOSS
              
              $
              (1,134
              )
              
              
              145
              
              
              
              173
              
              
              
              (37
              )
              
              $
              (853
              )
   17
 
 NOTE -13
SUBSEQUENT EVENTS





On April
1, 2008 the Company entered in a $1,000,000 (one million dollars) senior bridge
loan agreement with Genesis Merchants Partners, LP. The terms are: (i) interest
of 14% per annum, payable monthly; (ii) the loan will have a base period of 180
days from closing and will become due and payable, 107% of principal will become
due; the bridge loan may be extended for a period of 360 days from closing and
will be due and payable, 115% of principal will be due and payable. A closing
fee of 3% of principal will be due at time of closing. If the loan is extended
an additional 2% closing fee will be due. The loan is secured by the assets of
the Company. The term of the senior bridge loan requires it to be paid-off from
to be repaid from the proceeds of a working capital credit agreement the Company
may enter into, however, there can be no assurance that a working capital credit
agreement will be available to the Company.














18





MANAGEMENT'S
DISCUSSION AND PLAN OF OPERATION


STATEMENT
OF OPERATIONS DATA








Three
      Months
              Ended
              March
      31, 2008
            
            
            Year
      Ended
              December
      31,
              2007Revenue
            
            $
            16,000,470
            
            
            $
            5,134,927Loss
      from Operations
            
            $
            773,149
            
            
            $
            580,420Net
      Loss
            
            $
            345,299
            
            
            $
            1,133,572Net
      Loss per share of common stock
            
            $
            0.01
            
            
            $
            0.02BALANCE
      SHEET DATAWorking
      Capital( deficit)
            
            $
            (
      242.000
            )
            
            $
            (529,000
            )Total
      Assets
            
            $
            18,672,000
            
            
            $
            16,365,000Total
      Liabilities
            
            $
            18,914,000
            
            
            $
            16,893,000Shareholders'
      Equity
            
            $
            51,784,312
            
            
            $
            49,902,926




ITEM 7. MANAGEMENT
DISCUSSION AND ANALYSIS





The
following discussion should be read in conjunction with the historical
consolidated financial statements and the related notes and the other financial
information included the Company’s the Annual Report on Form 10-KSB for the year
Ended December 31, 2007. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of any
number of factors





OVERVIEW





We market
and distribute more than 2,000 food and food-related products to over 2,300
customers throughout Mexico. Our customers include grocery stores, convenience
stores, hotels, resorts, cafeterias, schools, industrial caterers and
restaurants. We distribute a full line of frozen foods, such as meats, fully
prepared entrees and desserts, and a full line of canned and dry goods, fresh
meats and imported specialties. We also distribute a wide variety of
food-related items such as disposable napkins, plates and cups, and have the
exclusive right to distribute Miller beer in Baja California. In addition to
sales and distribution of food products, we merchandise and promote food and
beverage products using point of purchase displays and related store
merchandising techniques in over 240,000 retail food stores primarily in Mexico
through our Grupo Sur Promociones operating unit.





We were
incorporated in Nevada in December 2002 as a wine distribution company. In April
2006, we acquired the right to distribute Miller beer in Baja California. In
October 2006 we acquired the assets of Piancone Food Group, Inc. and in November
2006 we acquired all of the outstanding common stock of Palermo Foods, LLC. Both
of these companies distribute food products primarily in Mexico.





We are
primarily a specialized importer. However, we believe that, over the next
decade, Mexico will begin to see U.S.-style; "multi-supplier" companies enter
this market. Our goal is to become a leader in this market. Due to the unique
challenges in Mexico described above, major U.S. distributors such as Sysco,
Inc. and U.S. Foodservice, Inc. may not choose to enter this market directly.
The primary competitive advantages of these companies are the economies of scale
and large-scale logistical systems they have established. We believe those
systems may be difficult to implement in Mexico at this time. Therefore, we
believe that the larger distribution companies in Mexico may be companies using
a distribution and sales system organically grown and operated in Mexico, such
as ours.






19





RECENT
ACQUISITIONS





In May
2007, we acquired all of the outstanding stock of two food distributors, Pasani
S.A. de C.V. and Eco-Pak Distributing. In July 2007, we acquired Grupo Sur
Promociones, a primarily Mexican merchandising and promotion company. In October
2007, we acquired all of the outstanding common stock of Comercial Targa, S.A.,
De C.V., a Mexican food distributor specializing in cheeses and other dairy
products. References to our operations include the operations of all of these
acquired companies.


Elsewhere
herein:





For
      the three months ended
            
            
            Inc/DecMarch
      31,
            
            
            over(unaudited)
            
            
            20072008
            
            
            
            
            
            2007Revenue
            
            
            16,000,470
            
            
            
            100.0
            
            
            $
            5,134,927
            
            
            
            100
            
            
            
            10,865,543
            
            
            
            67.9Cost
      of Revenue
            
            
            13,167,625
            
            
            
            82.3
            
            
            
            4,161,354
            
            
            
            81.0
            
            
            
            9,006,271
            
            
            
            56.3--Gross
      Profit
            
            $
            2,832,845
            
            
            
            17.7
            
            
            
            973,573
            
            
            
            19.0
            
            
            
            1,859,272
            
            
            
            11.6Operating
      Expenses:Distribution
            
            
            772,523
            
            
            
            4.8
            
            
            
            337,024
            
            
            
            6.6
            
            
            
            435,499
            
            
            
            2.7Sales
      and Marketing
            
            
            535,680
            
            
            
            3.3
            
            
            
            165,108
            
            
            
            3.2
            
            
            
            370,572
            
            
            
            2.3General
      and Administrative
            
            
            1,719,844
            
            
            
            10.7
            
            
            
            800,422
            
            
            
            15.6
            
            
            
            919,422
            
            
            
            5.7Depreciation
            
            
            121,818
            
            
            
            0.8
            
            
            
            34,564
            
            
            
            0.7
            
            
            
            87,254
            
            
            
            .05Amortization
            
            
            456,129
            
            
            
            2.9
            
            
            
            216,875
            
            
            
            4.2
            
            
            
            239,254
            
            
            
            1.5Total
      Operating Expenses
            
            
            3,605,994
            
            
            
            22.5
            
            
            
            1,553,993
            
            
            
            30.3
            
            
            
            2,052,001
            
            
            
            12.8-
            
            
            
            
            
            
            
            -
            
            
            
            -Loss
      from Operations
            
            
            (773,149
            )
            
            
            (4.8
            )
            
            
            (580,420
            )
            
            
            (11.3
            )
            
            
            (192,729
            )
            
            
            (1.2
            )-
            
            
            
            
            
            
            
            -
            
            
            
            -Other
      Income(Expense)
            
            
            
            
            
            
            -
            
            
            
            
            
            
            
            -
            
            
            
            -Interest
      Income
            
            
            5,502
            
            
            
            0.0
            
            
            
            3,041
            
            
            
            0.1
            
            
            
            2,461
            
            
            
            0.0Interest
      Expense
            
            
            (127,923
            )
            
            
            (0.8
            )
            
            
            (114,125
            )
            
            
            (2.2
            )
            
            
            (13,798
            )
            
            
            (0.1
            )Warrants
      issued for interest
            
            
            442,068
            
            
            
            
            
            
            
            (442,068
            )
            
            
            (8.6
            )
            
            
            884,136
            
            
            
            5.5Other
      Income(Expense)
            
            
            183,067
            
            
            
            1.1
            
            
            
            -
            
            
            
            -
            
            
            
            183,067
            
            
            
            1.1502,714
            
            
            
            3.1
            
            
            
            (553,152
            )
            
            
            (10.8
            )
            
            
            1,055,866
            
            
            
            6.6-
            
            
            
            
            
            
            
            -
            
            
            
            -Loss
      before taxes
            
            
            (270,435
            )
            
            
            (1.7
            )
            
            
            (1,133,572
            )
            
            
            (22.1
            )
            
            
            863,137
            
            
            
            5.4-
            
            
            
            
            
            
            
            -
            
            
            
            -Provision
      for income tax
            
            
            74,864
            
            
            
            0.5
            
            
            
            -
            
            
            
            -
            
            
            
            74,864
            
            
            
            0.5-
            
            
            
            
            
            
            
            -
            
            
            
            -Net
      Loss
            
            $
            (345,299
            )
            
            
            (2.2
            )
            
            $
            (1,133,572
            )
            
            
            (22.1
            )
            
            
            788,273
            
            
            
            4.9






20





(1) All
costs incurred to bring product to our warehouses and distributions centers are
included in cost of revenue. These items include shipping and handling costs,
agent and broker fees, letter of credit fees, customs duty, inspection costs,
inbound freight and internal transfer costs. Costs associated with our own
distribution and warehousing are recorded in operating expenses. Our gross
margins may not be comparable to others in the industry as some entities may
record and classify these costs differently.





RESULTS
OF OPERATIONS: THREE MONTHS ENDED MARCH 31, 2008 COMPARED TO THREE MONTHS ENDED
MARCH 31, 2007





Revenue
for the Quarter ended March 31, 2008 of $16,000,000 increased $10,866,000 from
the Quarter ended March, 31, 2007.  The increase reflects the three
months revenue of Best Beer, Palermo, and our 2007 acquisitions (i) Pasani (May
2007), (ii) Grupo Sur (July 2007) and (iii) Targa (October 2007) compared to the
2007 revenue which reflected only Best Beer and Palamero. Pro forma
revenue for the Quarter ended March 31, 2007 was $16,044,000 which is in line
with 2008 revenue.





Gross
Profit of approximately $2,833,000 or 18% of revenue for the Quarter ended March
31, 2008, increased approximately $1,859,000 from approximately $974,000 from
the same period in, 2007. The
increase reflects  the three months gross profit of  Best
Beer , Palermo, and our 2007 acquisitions (i) Pasani (May 2007), (ii) Grupo Sur
(July 2007) and (iii) Targa (October 2007) compared to the 2007 gross profit
which reflected of Best Beer and Palamero. Pro forma gross profit for the
Quarter ended 2007 was $2,635,000 of 16% of Pro forma revenue. The
increase  of approximately  $197,000 from the  pro
forma quarter ended  2007 reflects Best Beer increase of $500,000
offset  in part  by lower margins  from the other
operating companies.





Operating
Expenses:





Distribution
expense of $773,000 for the three months ended March 31, 2008 increased $436,000
or 2.7% from $337,000 for the same period in 2007.





Sales and
Marketing expense of $536,000 for the three months ended March 31, 2008
increased  $371,000 or 2.3% from $165,000 for the same period in
2007.





General
and Administrative expense of 1,719,000 for the three months ended March 31,
2008 increased  $919,000 or 5.7% from $800,000 for the same period
last year.





The
operating expenses for the three months ended March 31, 2008 includes Best Beer
, Palermo, and our 2007 acquisitions (i) Pasani (May 2007), (ii) Grupo Sur (July
2007) and (iii) Targa (October 2007) compared to the 2007 gross profit which
reflected only Best Beer and Palamero. The
increase in operating expenses also reflect the opening of 17 distributions
centers, leasing 48 new trucks and distribution equipment, increase in
professional fees, communications costs, insurance costs and upgrading financial
organization.





Amortization
and depreciation expenses for the three months ended March 31, 2008 of
approximately $578,000 includes $456,129 of non-cash amortization and increase
of $239,254 from the same period in 2007. The increase is for the most part
results from the acquisitions of Pasani, Grupo Sur and Targa.






21





Interest
expense for the three months ended March 31, 2008 was approximately $128,000 an
increase of approximately $14,000 from the same period last in 2007. Interest
expense included acquisition loans, shareholder and bank loans.





Other
income of $183,000 for three month ended March 31, 2008 included $125,000 of
exchange gain.




Warrant
expense recapture of approximately $442,000 for year ended December 31, 2007
resulted, for the most part, from the issuance of warrants in support of raising
funds and finders' fees.





Net loss
of $9,406,000 or $0.14 loss per common and fully diluted shares for the year
ended December 31, 2007 can be attributed to 2007 being a transition year. We
incurred costs including those associated with financing acquisitions and
professional fees and non- cash amortization, related to these acquisitions
which more than offset our $6,800,000 gross profit.





EBITDA
for the three month ended March 31, 2008 was a deficit of
$195,000.  Pro forma EBITDA for the same perod in 2007 was
$11,000.




EBITDA
              
              2008
              
              
              2007Loss
      from operations
              
              $
              (773,000
              )
              
              $
              (580,000
              )AdjustmentsAdd:Pasani
              
              
              
              
              
              
              145,000Grupo
      Sur
              
              
              
              
              
              
              170,000Targa
              
              
              
              
              
              
              (16,000
              )Amortization
              
              
              456,000
              
              
              
              217,000Depreciation
              
              
              122,000
              
              
              
              75,000578,000
              
              
              
              591,000EBITDA-(deficit)
              
              $
              (195,000
              )
              
              $
              11,000
 
 22
  RECONCILIATION


In
non-GAAP financial measure of pro forma reveneu, gross profit and EBITDA below,
we have included unaudited prior year net sales of Pasani, S.A. de CV, Grupo
Promociones De Mexico S.A. DE C.V. and Targa, S.A. de CV. This information is
provided to present the results as if we had owned these entries during three
months ended March 31, 2007. The revenue and gross margin figures for these
acquisitions was internally prepared and unaudited, and have not been reviewed
by our independent accountants. A reconciliation of the non-GAAP financial
measures contained in this report to the most comparable GAAP measures is as
follows:


For the
three months ended March 31, 2008
  As
                Reported
              
              
              Pasani
              
              
              Grupo
      Sur
              
              
              Targa
              
              
              TotalREVENUE
              
              $
              5,134
              
              
              
              2,019
              
              
              
              6,799
              
              
              
              2,092
              
              
              $
              16,044GROSS
      PROFIT
              
              
              973
              
              
              
              550
              
              
              
              782
              
              
              
              330
              
              
              
              2,635OPERATION
      INCOME (LOSS)
              
              
              (580
              )
              
              
              145
              
              
              
              173
              
              
              
              (16
              )
              
              
              (278
              )NET
      LOSS
              
              $
              (1,134
              )
              
              
              145
              
              
              
              173
              
              
              
              (37
              )
              
              $
              (853
              )
   
 23


Our
quarterly consolidated results of operations have fluctuated, and we expect will
continue to fluctuate in the future due to organic growth and
expansion.





SUMMARIZED
QUARTERLY DATA (UNAUDITED)


( in
thousands)





Fiscal Year 2008 Quarters1st
            
            
            2nd
            
            
            3rd
            
            
            4th
            
            
            TotalNet
      sales
            
            $
            16,000
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Gross
      Profit
            
            
            2,832Net
      earnings (loss)
            
            $
            (345
            )
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Earnings
      (loss) per Common Share:(1)Basic
      and Diluted
            
            $
            (0.01
            )










Fiscal
      Year 2007 Quarters1st
            
            
            2nd
            
            
            3rd
            
            
            4th
            
            
            TotalNet
      sales
            
            $
            5,134
            
            
            $
            7,791
            
            
            $
            12,490
            
            
            $
            16,983
            
            
            $
            42,398Gross
      Profit
            
            
            973
            
            
            
            1,209
            
            
            
            2,159
            
            
            
            2,482
            
            
            
            6,823Net
      earnings (loss)
            
            $
            (1,133
            )
            
            $
            (2,696
            )
            
            $
            (2,575
            )
            
            $
            (2,436
            )
            
            $
            (8,840
            )Earnings
      (loss) per Common Share:(1)Basic
      and Diluted
            
            
            (0.02
            )
            
            
            (0.05
            )
            
            
            (0.03
            )
            
            
            (0.04
            )
            
            
            (0.14
            )








(1)
Earnings per share are computed individually for each of the quarters presented;
therefore, the sum of the quarterly earnings per share may not necessarily equal
the total for the year.





LIQUIDITY
AND CAPITAL RESOURCES





The
consolidated financial statements have been prepared assuming that we will
continue as a going concern. The Company has had net losses for the years ended
December 31, 2007 and December 31, 2006, respectively.





We
commenced operations in 2006 and acquired the Miller Beer license and started-up
our Best Beer company, acquired Palermo and raised substantial equity financing.
Additionally, we completed three acquisitions in 2007. The costs associated with
these acquisitions and the associated cost of funding the acquisitions was a
major contributor to the generation of these losses. We are installing certain
control metrics to assist management in maximizing operating
income.





The Company is currently in discussion with
several lending institutions for a working capital credit facility and additional
financing.  These credit facilities in conjunction with internally
generated funds should besufficient
to fund our operations for the next twelve months; however, there can be no
assurance fundingwill be
available at terms and conditions acceptable to us.




24




Cash
Flow




AS
      OF
              MARCH
      31
            
            
            AS
      OF DECEMBER 312008
            
            
            2007NET
      CASH USED FOR OPERATING ACTIVITIES
            
            
            (1,394,485
            )
            
            $
            (941,418
            )NET
      CASH USED FOR INVESTING ACTIVITIES
            
            
            138,777
            
            
            
            (112,659
            )NET
      CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            858,750
            
            
            
            621,198EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
            
            
            16,931
            
            
            
            408.00NET
      INCREASE  ( DECREASE)  IN CASH
            
            
            (380,027
            )
            
            
            (433,287
            )Cash
      - Beginning
            
            
            1,165,814
            
            
            
            476,375Cash
      - Ending
            
            $
            785,787
            
            
            $
            43,088





Cash used
in operations of $1,394,000 results for the most from an increase in accounts
receivable and inventory
supporting the ramp-up of sales offset in part by an increase in accounts
payable.





Cash
provided by financing activities of $ 900,000 results from notes payable and
increase in Shareholders
$ 1,325,000 offset in part by increase capital leases of $ 500,000.





The
Company is currently in discussion with several lending institutions for a
working capital credit facility and additional
financing.  These credit facilities in conjunction with internally
generated funds should be sufficient
to fund our operations for the next twelve months; however, there can be no
assurance funding will be
available at terms and conditions acceptable to us.





25





Quarter
            
            
            Year
      endedended
      March 31,
            
            
            December
      31,2008
            
            
            2007
            
            
            IncreaseCurrent
      Assets:Cash
            
            $
            786,000
            
            
            $
            1,166,000
            
            
            $
            (380,000
            )Accounts
      Receivable
            
            
            7,820,000
            
            
            
            7,763,000
            
            
            
            47,000Inventory
            
            
            7,408,000
            
            
            
            5,504,000
            
            
            
            1,904,000Investments
            
            
            -
            
            
            
            238,000
            
            
            
            (238,000
            )Prepaid
            
            
            2,658,000
            
            
            
            1,694,000
            
            
            
            949,000Total
      Current Assets
            
            $
            18,672,000
            
            
            $
            16,365,000
            
            
            $
            2,282,000Current
      Liabilities:Accounts
      Payable
            
            $
            5,705,000
            
            
            $
            5,054,000
            
            
            $
            1,133,000Accrued
      Liabilities
            
            
            2,743,000
            
            
            
            1,634,000
            
            
            
            627,000Accrued
      Interest
            
            
            359,000
            
            
            
            279,000
            
            
            
            80,000Line
      credit
            
            
            299,000
            
            
            
            249,000
            
            
            
            50,000Notes
      Payable
            
            
            879,000
            
            
            
            569,000
            
            
            
            310,000Acquisition
      Loans
            
            
            7,700,000
            
            
            
            7,700,000
            
            
            
            -Capital
      Leases
            
            
            220,000
            
            
            
            737,000
            
            
            
            (517,000
            )Shareholders
      Loans
            
            
            1,009,000
            
            
            
            672,000
            
            
            
            337,000Total
      Current Liabilities
            
            $
            18,914,000
            
            
            $
            16,894,000
            
            
            $
            2,020,000Working
      Capital  (Deficit)
            
            $
            (242,000
            )
            
            $
            (529,000
            )
            
            $
            262,000





Working
Capital deficit of $242,000 as of March 31, 2008 reflects an improvement
of $262,000 from December 31, 2007.  Current assets
increased  $ 2,282,000 resulting principally for 1.900,000 increase
$2,200,000  offset in part by reductions in Targa’s inventory to
support. The increased supports higher Best Beer Sales.  Current
liabilities increased $2,020,000 resulting from increased inventory, notes
payable and shareholders loans.





On April
1, 2008 we entered into a $1,000,000 senior bridge loan agreement with Genesis
Merchants Partners, LP. The terms are: (i)interest of 14% per annum, payable
monthly; (ii) the loan is due and payable within 180 days, at that time 107% of
principal will become due and payable; The bridge loan may be extended to 360
days from closing at the Company's option, at that time 115% of principal will
be due and payable.




26




A closing
fee of 3% of principal will at time of closing. If the loan is extended an
additional 2% closing fee will be due. The loan is secured by the assets of the
Company. The senior bridge loan is required to be repaid from the proceeds of a
working capital credit agreement the Company may enter into.





The Three
month ended March 31, 2007 reflect Nascent, Best Beer and Palermo operations.
See Note -Acquisitions included elsewhere herein.




On May
12, 2008, the Company was granted an extension until May 26, 2008 to pay in full
a promissory note (the "Pasani Note") payable to Alejandro Gutierrez
Pederzini and Leticia Gutierrez Pederzini in the principal amount of $1,000,000
plus interest, that was originally due on May 12, 2008. The
Company  originally issued the Note to these individuals in
connection with the Company's acquisition of all of the outstanding common stock
of Pasani S.A. De C.V. ("Pasani") from them.  The Pasani Note is
secured  by a pledge granted to these individuals of all of the
common stock of Pasani





On May
12, 2007, Alejandro Gutierrez Pederzini, also, granted the Company an extension
until May 26, 2008 to purchase from him certain trade marks that were sold under
the Stock Purchase Agreement with Pasani. The purchase price for the trade
marks was $2,500,000.




On May
14, 2008, Mr. James E. Buckman and Mr. Yehuda “Mitch” Wolf resigned from the
board of directors of the Company effective immediately. Messrs.
Buckman and Wolf informed us that they were resigning in order to avoid the
possibility of any conflict of interest due to the fact that the we recently
commenced discussions with York Capital Management (“York”) regarding a possible
transaction between the parties.  Messrs. Buckman and Wolf are
employed by York and were appointed to the Nascent’s board of directors in
connection with York’s investment in the Company,




We are
indebted to the former owners ("Sellers") ofGrupo Sur Promociones de Mexico. S.A.
de CV. ("Grupo Sur") in the amount of $700,000 representing the
balance due upon the closing of our stock purchase agreement with the
Sellers pursuant to which we acquired all of the outstanding common stock of
Grupo Sur.  We are also obligated to make two additional payments
under the  purchase agreement, comprised of a payment of $1,500,000 due on
June 30,2008, and a second payment of $2,000,000 due on December 31,
2008.





Additionally
the purchase agreement called for a payment to the Sellers of $1,500,000 in our
restricted stock, if Grupo Sur met certain financial performance objectives for
the twelve months ended December 31,2007 as verified by our auditors. To date
these objectives have not been verified by our auditors and no stock has been
issued to the Sellers.





Subsequently,
the Sellers have refused to allow us to operate Grupo Sur or communicate
with Grupo Sur's auditors.





We are in
discussions with third party lenders and investors to finance the payment of the
Pasani and Grupo Sur obligations. However, there can be no assurance that any
equity or debt financing will be available to us to satisfy either
obligation.






27





INFLATION





We
believe that the relatively moderate rates of inflation in recent years have not
had a significant impact on our revenue. However, from time to time inflation
has an impact on commodity related products.





CONTRACTUAL
OBLIGATIONS





The
following table summarizes our contractual obligations at December 30, 2007 and
the effects we expect such obligations to have on liquidity and cash flow in
future periods.








Payments
      Due by Period
              (In
      Thousands)Total
            
            
            Less
      Than
              1
      Year
            
            
            2-3
              Years
            
            
            3-5
              Years
            
            
            More
      than
              5
      YearsDebt
      obligations (1)
            
            $
            9,887
            
            
            $
            9,887
            
            
            
            --
            
            
            
            --
            
            
            
            --Operating
      leases
            
            $
            3,776
            
            
            $
            1,804
            
            
            $
            ,489
            
            
            $
            374
            
            
            $
            42





Note 1.
Includes the acquisition notes $7,700,000.





FORWARD-LOOKING
STATEMENTS





This
Quarterly Report contains forward-looking statements about Nascen Wine Company,
Inc.'s business, financial condition and prospects that reflect management's
assumptions and beliefs based on information currently available. We can give no
assurance that the expectations indicated by such forward-looking statements
will be realized. If any of our management's assumptions should prove incorrect,
or if any of the risks and uncertainties underlying such expectations should
materialize, Nascent's actual results may differ materially from those indicated
by the forward-looking statements.





The key
factors that are not within our control and that may have a direct bearing on
operating results include, but are not limited to, acceptance of our services,
our ability to expand our customer base, managements' ability to raise capital
in the future, the retention of key employees and changes in the regulation of
our industry.




There may
be other risks and circumstances that management may be unable to predict. When
used in this Quarterly Report, words such as, "BELIEVES," "EXPECTS," "INTENDS,"
"PLANS," "ANTICIPATES," "ESTIMATES" and similar expressions are intended to
identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.





The
information contained in this section has been derived from our consolidated
financial statements and should be read together with our consolidated financial
statements and related notes included elsewhere in this annual report. The
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those expressed or
implied in these forward-looking statements as a result of various factors,
including those set forth at the end of this section under "Factors That May
Impact Our Results of Operations"





RECENT ACCOUNTING
PRONOUNCEMENTS




In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities - an amendment of FASB Statement No. 133," which changes
the disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under SFAS No. 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity's financial position, financial performance, and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008.The Company
is currently evaluating the impact, if any, this statement will have on its
financial position, cash flows, or results of operations.




CRITICAL ACCOUNTING
POLICIES





Management's
discussion and analysis of our financial condition and results of operations is
based upon our consolidated financial statements, which have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission. The preparation of these financial statements requires management to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We evaluate these estimates, including those related to bad
debts, inventories, intangible assets, income taxes, and contingencies and
litigation, on an ongoing basis. We base these estimates on historical
experiences and on various other assumptions that we believe are reasonable
under the circumstances. These assumptions form our basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.





We
believe the following critical accounting policies and the related estimates and
assumptions discussed below are among those most important to an understanding
of our consolidated financial statements.





REVENUE
RECOGNITION





The
Company reports revenue using the accrual method, in which revenues are recorded
as services are rendered or as products are delivered and billings are
generated, in accordance SEC Staff Accounting Standard 101 Revenue Recognition.
In accordance with aforementioned guidance revenue is recognized when the
following criteria are met: (i) persuasive evidence of the customer arrangement
exits; (ii) price is fixed and determinable; (iii) acceptance has occurred; and
(iv) collectiverity is deemed probale.





ACCOUNTS
RECEIVABLE





The
Company has reviewed the outstanding trade accounts receivable and provided a
reserve for slow paying accounts of approximately $639,464 and $639,464 at
March 31, 2008 and December 31, 2007, respectively. The Company plans to insure
all its trade receivables during the first half 2008. Additionally, the Company
has developed standard credit policies.





INVENTORIES





Inventories
are accounted for on the first-in, first-out basis. Any products reaching their
expiration dates are written off. The Company has determined it does not require
a provision for slow moving and or obsolete inventory for nine months ended
March 31, 2008 and the year ended December 31, 2007.





PROPERTY AND
EQUIPMENT





Property
and equipment is stated at cost and depreciated using the straight-line method
over the estimated useful life of the assets, which is three to ten
years.






31





BUSINESS
COMBINATION





Acquisitions
require significant estimates and judgments related to the fair value of assets
acquired and liabilities assumed to which the transaction costs are allocated
under the purchase method of accounting. Certain liabilities are subjective in
nature. We reflect such liabilities based upon the most recent information
available. The ultimate settlement of such liabilities may be for amounts that
are different from the amounts initially recorded. A significant amount of
judgment also is involved in determining the fair value of assets acquired.
Different assumptions could yield materially different results.





INTANGIBLE





The
Company accounts for intangible assets in accordance with Statement Financial
Accounting Standard 144 "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED
ASSETS (SFAS 144). The Company acquired long-lived assets during the year ended
December 31,2007 and year ended December 31, 2006, respectively. The acquired
long -lived assets are attributed to acquisitions completed during 2007 and
2006. The company reviewed the carrying values of its long-lived assets for
possible impairment as of December 31, 2007 or whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable and\or annually. No impairment losses were recorded in the three
months ended March 31, 2008 and year ended December 31, 2007.





LOSS PER
SHARE





Basic
loss per share is calculated by dividing net loss by the weighted-average number
of shares of common shares outstanding. Diluted loss per share includes the
component of basic loss per share and also gives effect to dilutive common stock
equivalents. Potential dilutive common stock equivalents include stock options,
warrants and preferred stock which convert into common stock.





TAXES ON
INCOME





The
Company follows Statement of Financial Accounting Standard No. 109 "Accounting
for Income Taxes" (SFAS No. 109) for recording the provision for income taxes.
Deferred tax assets and liabilities are computed based upon the differences
between the financial statement and income tax basis of assets and liabilities
using the enacted marginal tax rate applicable when the related asset or
liability is expected to be realized or settled. Deferred income tax expense or
benefit is based on the change in the asset or liability each period. If
available evidence suggests that is more likely than not that some portion or
all of the deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax asset to the amount that is more likely than
not to be realized. Future changes in such valuation allowance are included in
the provision for deferred income taxes in the period of change.





Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classification of assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or non-current depending on the periods in
which the temporary differences are expected to reverse.





ADVERTISING





The
Company expenses advertising as incurred. Advertising expense were approximately
$26,064 and $63,385 for the three months ended March 31, 2008 and 2007,
respectively.






32





Item 4.   Controls
and Procedures




Evaluation
of disclosure controls and procedures




As of
December  2007, we carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive
Officer and 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) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act.”) pursuant to Rules 13a-15 and 15d-15 under the
Exchange Act. These controls and procedures are designed to provide assurance
that information required to be disclosed in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms and that such
information is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, in a manner that is intended to
allow timely decisions regarding required disclosures.




As a
result of this evaluation and recognizing the material weaknesses that we
identified in our Annual Report on Form 10-KSB for the year ended
December 31, 2007.  In making this determination, we took into
account the remedial actions that we are taking or planning to take with respect
to these material weaknesses .


In any
case, based on a number of factors, including our performance of manual
procedures to provide assurance of the proper collection, evaluation and
disclosure of the information included in our consolidated financial statements,
management has concluded that the consolidated financial statements included in
this Quarterly Report on Form 10-Q fairly present, in all material
respects, our financial position, results of operations and cash flows for the
periods presented in conformity with GAAP and that they are free of material
errors.


Internal
control over financial reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over
financial reporting is a process designed under the supervision of our principal
executive and principal financial officers to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP.




Under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting as of
December 31, 2007 based on the criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”).




As a
result of the material weaknesses described in  our Annual Report on
Form 10-K for the year ended December 31, 2007, we did not
maintain effective internal control over financial reporting based on the
criteria established in Internal Control-Integrated Framework issued by
COSO.






33




Since we
originally identified those material weaknesses in connection with the
preparation of our financial statements for the period
ended  December 31, 2007, we have been working to identify and
remedy the causes of the problems that led to the existence of those material
weaknesses, and we believe that:





·
              we
      identified the primary causes of and appropriate remedial actions for
      these problems;




·
              we
      have, except as otherwise noted below and subject to the completion of
      testing that we are conducting and plan to complete as of
      December 31, 2008, remedied substantially all of these material
      weaknesses; and




·
              we
      are continuing to implement additional appropriate corrective measures to
      enable us to determine that those material weaknesses have been fully
      remedied.




With
respect to testing, we have adopted, and pursued during the fourth quarter of
2007, a program that is designed to evaluate whether the remedial actions we
have taken have been in effect for a sufficient period of time to determine
their effectiveness as well as to test the effectiveness of those remedial
actions. Notwithstanding our efforts, there is a risk that we ultimately may be
unable to achieve the goal of fully remedying these material weaknesses and that
the corrective actions that we have implemented and are continuing to implement
may not fully remedy the material weaknesses that we have identified or prevent
similar or other control deficiencies or material weaknesses from having an
adverse impact on our business and results of operations or our ability to
timely make required SEC filings in the future.


The
remedial actions that we have taken to remedy these material weaknesses may be
regarded as material changes in our internal control over financial reporting
that have occurred since December 31, 2007. Due, among other things, to the
difficulties that we experienced in preparing timely financial statements..
Those changes include the following:




1. For
all periods ended on or after December 31, 2007, we adopted procedures to
conduct additional detailed transaction reviews and control activities to
confirm that our financial statements for each period present fairly, in all
material respects, our financial position, results of operations and cash flows
for the periods presented in conformity with GAAP.




2. These
reviews and control activities include performing physical inventories and
detailed account reconciliations of all material line-item accounts reflected on
our Consolidated Balance Sheets and Consolidated Statements of Operations in
order to confirm the accuracy of, and to correct any material inaccuracies in,
those accounts as part of the preparation of our financial
statements.


3. For
periods ended on or after December 31, 2007, with respect to our failure to
maintain a timely and accurate period-end financial statement closing process
and our failure to effectively monitor our accounting function and our oversight
of financial controls, we introduced new leadership to our accounting and
financial functions and in certain operating functions. This included appointing
a new Chief Financial Officer effective appointing a new controller
and  appointing  new  subsidiary
controllers.




4. For
periods ended on or after December 31, 2007, we reaffirmed and clarified our
account reconciliation policies through additional procedural details and
guidelines for completion, which expressly require (a) reconciliations of
all material accounts no less frequently than monthly, (b) that any
discrepancies noted be resolved in a timely fashion and (c) that all
proposed reconciliations be reviewed in detail and on a timely basis by
appropriate personnel to determine the accuracy and appropriateness of the
proposed reconciliation.




34




PART II.
OTHER INFORMATION








Item 1A. Risk
Factors




There
have been no material changes from the risk factors as previously disclosed in
our Annual Report on Form 10-KSB for the year ended December 31,
2007.





Item1B. Legal proceedings




From time
to time we are involved with legal proceedings, claims and litigation arising in
the ordinary course of business. As of the date of this 10-QSB, we have a
dispute with the former owners of  Grupo Sur.  The sellers of Grupo
Sur have refused to allow us to operate the Company or contact the public
accountant.  We have advised the sellers of our rights under the Purchase
Agreement.





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





NONE





Item
3. Defaults on Senior Securities





NONE





Item
4. Submission of Items to a Vote




NONE





Item
5. Other Information





NONE





Item
6. UPDATE


(a)   Exhibits





The
following Exhibits are incorporated herein by reference or are filed with this
report as indicated below.





Exhibit
      No.
            DescriptionExhibit
      31
            Certification
      of Chief Executive Officer and Chief Financial Officer Pursuant to Section
      302 of the Sarbanes-Oxley ActExhibit
      32
            Certification
      of Chief Executive Officer and Chief Financial Officer Pursuant to Section
      906 of the Sarbanes-Oxley Act





b)
Reports on 8K during the quarter:





None





35






SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, hereunto
duly authorized.




Nascent Wine Company,
      Inc.Dated:
      May 21, 2008
              By:
              /s/ Sandro
      PianconeSandro
      PianconeChief
      Executive Officer
  Pursuant
to the requirements of the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.




/s/
      Sandro Piancone
              Chief
      Executive Officer and Director
              Date:
      May 21, 2008Sandro
      Piancone/s/
      Victor Petrone
              President
      and Director
              Date:
      May 21, 2008Victor
      Petrone/s/
      Peter V. White
              Chief
      Financial Officer and Treasurer
              Date:
      May 21, 2008Peter
      V. White












36