10QSB 1 nascent_10q-033107.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2007 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. Employer incorporation or organization) Identification No.) 2355 Paseo de las Americas San 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 [ ] 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: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: April 20, 2007 52,118,750 shares outstanding -------------------------------------------------------------------------------- NASCENT WINE COMPANY, INC. AND SUBSIDIARIES TABLE OF CONTENTS PAGE ---- PART I - FINANCIAL INFORMATION 3 Unaudited Financial Statements 3 Consolidated Balance Sheets 4 Consolidated Statements of Operations 5 Consolidated Statements of Cash Flows 6 Notes to Financial Statements 7 Management's Discussion and Plan of Operation 11 Controls and Procedures 13 PART II - OTHER INFORMATION 13 Item 1. Legal Proceedings Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Item 3. Defaults On Senior Securities Item 4. Submission of Items to a Vote Item 5. Other Information Item 13. (a) Exhibits (b) Reports on Form 8K SIGNATURES AND CERTIFICATES 14 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 financial statements and footnotes that are included in the Company's December 31, 2006 annual report on Form 10-KSB previously filed with the Commission on April 17, 2007, and subsequent amendments made thereto. 3 NASCENT WINE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) MARCH 31, 2007 DECEMBER 31, 2006 -------------- ----------------- ASSETS Current assets: Cash $ 43,088 $ 476,376 Accounts receivable 1,623,671 1,327,153 Inventory 1,781,192 1,137,459 Prepaid and deposits 191,932 177,976 ------------ ------------ TOTAL CURRENT ASSETS 3,639,883 3,118,964 Property and equipment, net 666,661 593,691 Other assets: Acquisition of distribution rights of Miller Beer (net) 7,893,126 8,110,000 Goodwill 11,936,217 11,936,217 ------------ ------------ TOTAL ASSETS $ 24,135,887 $ 23,758,872 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,522,648 $ 2,179,342 Accrued expenses 333,734 137,037 Accrued interest 323,152 276,991 Credit cards 170,189 62,784 Bank loans 317,152 324,849 Loans payable, less un-amortized debt interest 1,224,073 932,005 Other loans payable 142,705 309,434 Shareholder loans 2,346,785 2,440,148 ------------ ------------ TOTAL CURRENT LIABILITIES 7,380,438 6,662,590 Long term debt 219,125 186,672 ------------ ------------ TOTAL LIABILITIES 7,599,563 6,849,262 Stockholders' equity: Preferred stock, $0.001 par value, 5,000,000 shares authorized no shares issued and outstanding -- -- Common stock, $0.001 par value, 195,000,000 shares authorized 52,118,750 and 52,050,000 shares issued and outstanding as of March 31, 2007 and December 31,2006, respectively 52,119 52,050 Additional paid-in capital 16,341,909 16,314,478 Subscribed stock less cost to sell 3,262,545 2,334,727 Accumulated other comprehensive loss 13,040 (1) Deficit accumulated (3,133,289) (1,791,644) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 16,536,324 16,909,610 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,135,887 $ 23,758,872 ============ ============ The accompanying notes are an integral part of these financial statements. 4 NASCENT WINE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE FOR THE THREE MONTHS ENDED MONTHS ENDED MARCH 31, 2007 MARCH 31, 2006 -------------- -------------- REVENUES $ 5,134,927 $ 389 COST OF REVENUES 4,161,354 243 ------------ ------------ GROSS PROFIT 973,573 146 OPERATING EXPENSES General and administrative expenses 1,553,993 3,931 ------------ ------------ TOTAL OPERATING EXPENSES 1,553,993 3,931 LOSS FROM OPERATIONS (580,420) (3,785) OTHER INCOME AND (EXPENSE) Interest income 3,041 -- Interest expense (556,193) -- Provision for income taxes -- -- ------------ ------------ NET LOSS $ 1,133,572 $ (3,785) ============ ============ NET (LOSS) PER SHARE - BASIC AND FULLY DILUTED $ (0.02) $ (0.00) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND FULLY DILUTED 52,074,208 4,328,400 ============ ============ The accompanying notes are an integral part of these financial statements. 5 NASCENT WINE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS FOR THE THREE MONTHS ENDED MARCH 31, 2007 ENDED MARCH 31, 2006 -------------------- -------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(1,133,572) $ (3,785) Adjustment to reconcile net loss to net cash used for operating activities: Shares issued for expenses 4,000 -- Depreciation 34,564 164 Amortization of distribution rights 216,875 -- Warrants issued for interest 442,068 -- Changes in operating assets and liabilities: Increase in accounts receivable (1,178,653) -- (Increase) decrease in inventory (643,849) 243 Increase in deposits (15,506) -- Increase in accrued interest 69,785 -- Increase in accounts payable 1,221,247 -- Increase in credit cards 107,405 Decrease in accrued expense (61,569) -- Decrease in deferred lease (4,213) ----------- ----------- NET CASH USED FOR OPERATING ACTIVITIES (941,418) (3,378) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (112,659) (611) ----------- ----------- NET CASH USED FOR INVESTING ACTIVITIES (112,659) (611) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in bridge loans payable (150,000) -- Decrease in shareholder loans (40,520) -- Decrease in bank loans (116,100) -- Common stock subscribed-net of expenses 927,818 -- ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 621,198 -- EFFECT OF EXCHANGE RATE CHANGES ON CASH (408) -- ----------- ----------- NET INCREASE (DECREASE) IN CASH (433,287) (3,989) Cash - Beginning 476,375 14,254 ----------- ----------- CASH - Ending $ 43,088 $ 10,265 =========== =========== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITY: Issuance of stock for shareholder loans $ 23,500 $ -- =========== =========== Issuance of stock for services $ 4,000 $ -- =========== =========== Warrants issued and attached to debt $ 43,750 $ -- =========== =========== Interest paid $ 45,201 $ -- =========== =========== The accompanying notes are an integral part of these financial statements.
6 NASCENT WINE COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 (UNAUDITED) NOTE A - COMPANY OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------------------------------------ COMPANY OVERVIEW ---------------- 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 it acquired the rights to distribute Miller Beer in Baja California, Mexico from Piancone Group International, Inc. (PGII), issuing 17,500,000 shares of common stock at the par value $0.45 per share ($7,875,000) and paying off $800,000 debt of previous license holder. It started its distribution operations as of July 1, 2006. In accordance with SFAS #7, the Company was considered a development stage company until it started operations on July 1, 2006. The Company incorporated Best Beer S.A. de C. V. (Best Beer) in May 2006 in order to distribute in Baja California. The Company acquired the assets of Piancone Group International, Inc., which was merged into Nascent, and Palermo Italian Foods, LLC in the fourth quarter of 2006. 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., International Foodservice Specialists, Inc. and Palermo Italian Foods, LLC. The financial statements have been consolidated with the parent company and all inter-company transactions and balances have been eliminated in consolidation. FOREIGN CURRENCY TRANSLATION ---------------------------- The Company translates the foreign currency financial statements of its foreign operations in accordance with Generally Accepted Accounting Principles by translating balance sheet accounts at the appropriate historical or current exchange rate on the balance sheet date and the income statement accounts using the prevailing exchange rates at the transaction date. Translation gains and losses are recorded in stockholders' equity and realized gains and losses are reflected in operations. BASIS OF PREPARATION OF FINANCIAL STATEMENTS -------------------------------------------- The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting standards (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. INVENTORIES ----------- Inventories are accounted for on the first-in, first-out basis. Any products reaching their expiration dates are written off. 7 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. ALLOWANCE FOR DOUBTFUL ACCOUNTS ------------------------------- The Company has not had sufficient experience with bad debts to establish a policy. However, the Company has reviewed all accounts and determined that an allowance for uncollectible accounts required at March 31, 2007 is $50,000 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. IMPAIRMENT OF LONG-LIVED ASSETES -------------------------------- The Company acquired long-lived assets during the last six month of the year ended December 31, 2006. The company will review the carrying values of its long-lived assets for possible impairment 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 2007. 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. STOCK - BASED COMPENSATION -------------------------- The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123r share based payment. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees and non employees. The Company did not grant any new employee options and no options were cancelled or exercised during the three months ended March 31, 2007. EARNINGS PER SHARE --------------------------- Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. 8 GOING CONCERN ------------- The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company commenced operations distributing Miller beer and other products in Baja California, Mexico starting July 1, 2006. NOTE B - NOTES PAYABLE ---------------------- The Company has obtained Bridge loan financing. The balance at March 31, 2007 is $1,926,000 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 9,045,000 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 $1,759,750 is being written off over the life of the loans (one year). The un-amortized interest, $701,927 has been deducted from total of the loans payable at March 31, 2007. Interest amortized during the period was $442,068.` NOTE C - STOCKHOLDERS' EQUITY ----------------------------- 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 split. The balance of shares issued after the split was 86,568,800. On April 27, 2006, 69,068,800 shares were cancelled. 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 three months ended March 31, 2007 the Company issued 10,000 shares of common stock for services rendered in the amount of $4,000 and 58,750 shares of common stock to redeem notes payable to shareholders in the amount of $23,500. The Company received subscriptions for an additional 2,781,250 shares of common stock in the amount of $1,112,500 less expenses of $184,682. 9 NOTE D- SEGMENT INFORMATION ---------------------------- The Company has adopted FAS Statement No. 131, "Disclosures about Segments of a Business Enterprise and Related Information". United States Mexico ------------- ------ Net loss for the three months ended March 31, 2007 $ 1,124,162 $ 9,410 Net loss for the three months ended March 31, 2006 $ 3,785 $ -- Long lived assets (net) at March 31, 2007 $ 345,556 $ 321,105 Long lived assets (net) at March 31, 2006 $ 2,011 $ --
NOTE E - RELATED PARTY TRANSACTIONS ----------------------------------- The Company has unsecured loans form stockholders totaling $2,519,785 at March 31, 2007. The loans have various due dates and contain interest rates ranging from 0% to 18%. The maturities of notes payable at March 31, 2007 are as follows: For the twelve months ending March 31 ------------------------------------- 2008 $ 2,397,785 2009 $ 122,000 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. NOTE F - PRO FORMA STATEMENT OF OPERATIONS ------------------------------------------ Pro Forma Statement of operation including PGII and Palermo, which were acquired in the fourth quarter of 2006. PRO FORMA FOR FOR THE THREE THE THREE MONTHS MONTHS ENDED ENDED MARCH 31, MARCH 31, 2007 2006 -------------- ---------------- REVENUES $ 5,134,927 $ 3,617,797 COST OF REVENUES 4,161,354 2,926,811 ----------- ----------- GROSS PROFIT 973,573 690,986 OPERATING EXPENSES General and administrative expenses 1,553,993 701,889 ----------- ----------- LOSS FROM OPERATIONS (580,420) (10,903) OTHER INCOME AND (EXPENSE) Interest income 3,041 -- Interest expense (556,572) (70,149) Provision for income taxes -- -- ----------- ----------- NET LOSS $ 1,133,572 $ (81,051) =========== =========== Note G - SUBSEQUENT EVENT ------------------------- On April 27, 2007 the Company issued convertible promissory notes in the amount of $3,500,000, at an interest rate of 18%. The notes are secured by any and all of the Company's assets, and real, personal or mixed properties. The lenders received warrants to purchase 875,000 shares of common stock expiring April 27, 2012. Certain penalties apply if repayment is not received on certain future dates. 10 MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION FORWARD-LOOKING STATEMENTS This Quarterly Report contains forward-looking statements about Nascent 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". OVERVIEW The Company is incorporated in Nevada and until May 2006 the company was a development stage company. In May the company secured the distribution rights for Miller Beer in Baja California, Mexico, and began distributing food products and beer in July 2006. The company acquired two additional distribution companies operations, Piancone Group International, Inc. and Palermo Italian Food, LLC expanding the Mexico operations, offering more than 2,000 food and food-related products to over 1,300 customers primarily in the Baja California region of Mexico and Miami Florida at the year end 2006. 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, Mexico. We believe that prompt and accurate delivery of orders, close contact with customers and the ability to provide a full array of products and services to assist customers in their food service operations are of primary importance in the marketing and distribution process. We offer daily delivery to certain customer locations and have the capability of delivering special orders on short notice. Through our 56 member sales force, we stay informed of the needs of our customers and acquaint them with new products and services. We also provide ancillary services to our customers relating to food service distribution such as providing product usage reports and other data, menu-planning advice, food safety training and assistance in inventory control. 11 Quarter ended March 31, 2007 as compared to Quarter ended March 31, 2006 In order to make the quarter comparative we are including the Pro Forma Statement of operation including PGII and Palermo, which were acquired in the fourth quarter of 2006. PRO FORMA FOR FOR THE THREE THE THREE MONTHS MONTHS ENDED ENDED MARCH 31, MARCH 31, 2007 2006 -------------- ---------------- REVENUES $ 5,134,927 $ 3,617,797 COST OF REVENUES 4,161,354 2,926,811 ----------- ----------- GROSS PROFIT 973,573 690,986 OPERATING EXPENSES General and administrative expenses 1,553,993 701,889 ----------- ----------- LOSS FROM OPERATIONS (580,420) (10,903) OTHER INCOME AND (EXPENSE) Interest income 3,041 -- Interest expense (556,572) (70,149) Provision for income taxes -- -- ----------- ----------- NET LOSS $ 1,133,572 $ (81,051) =========== =========== We generated revenues of $5,135,000 compared to $3,618,000 for the three months ended March 31, 2007 and 2006 respectively. The increase is due primarily to the increase in sales of Miller Beer, the distribution contract we acquired in May 2006. Gross profit for the period ended March 31, 2007 was $974.000 (19%) of sales as compared to 691,000 (19) of sales for the same period in 2006. In addition to increasing sales volumes the Company is also striving to increase the percentage of gross profit. Selling, general and administrative expenses were $1,554,000 for the three months ended March 31, 2007 as compared to 702,000 for the same period 2006. The increase is due to the increase in amortization of the Miller Beer license $216,000, legal and other professional fees associated with the continued financing $307,000 and the opening of additional distribution warehouses in Puerto Penasco, Mexicali and Cabo San Lucas $150,000 By combining corporate duties and sales efforts we plan to eliminate a substantial amount of overhear. Net loss from operation $580,000 is the result of all the factors above. The Company will continue to increase sales and margins on sales and reducing overhead expenses. Net loss of $1,134,000 is a result of the Company's debt interest of $556,000. The Company continues on working to convert debt to equity. Liquidity and capital resources The Company had a cash balance of $43,088 at March 31, 2007 as compared to $476,376 at December 31, 2007. The Company has been able to raise capital for operations, which include $1,179,000 increase in accounts receivable, $644,000 increase in inventories with only a $1,221,000 increase in payables, a net increase of $602,000 in just this first quarter. In addition the Company paid down debt of $306,000 during this quarter. The Company expects to finance the capital needed with additional issuances of its securities. In order to fund the Company's growth, the Company has engaged Brookstreet Securities Corporation to provide investment banking services. There is no assurance that the Company will be able to secure additional financing. 12 Item 8-A. CONTROLS AND PROCEDURES ----------------------- EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and 15d-15(e) as of the end of the period Marxh 31, 2007, have concluded that its disclosure controls and procedures are effective to reasonably ensure that material information required to be disclosed by the Company in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by Securities and Exchange Commissions' Rules and Forms and that such information is accumulated and communicated to our Management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no changes made during our most recently completed fiscal quarter in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Chief Executive Officer and Chief Financial Officer confirm that the review of the Controls and Procedures was conducted for the period ended March 31, 2007. PART II. OTHER INFORMATION Item 1. Legal proceedings NONE 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. (a) Exhibits -------- The following Exhibits are incorporated herein by reference or are filed with this report as indicated below. Exhibit No. Description ----------- ----------- * Exhibit 10.1 Subscription Agreement * Exhibit 10.2 Warrant Agreement * Exhibit 10.3 Escrow Agreement * Exhibit 10.4 Standstill Agreement * Exhibit 10.5 Agreement for the purchase and sale of assets between Vacation and Cruise Resources, Inc. and Joystar, Inc. dated August 11, 2005. * Exhibit 10.6 Employment Agreement with William M. Alverson. Exhibit 31 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act Exhibit 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 * Previously filed with the Securities and Exchange Commission 13 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 11, 2007 By: /s/ Sandro Piancone -------------------------------- Sandro Piancone, Chief 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 Date: 5/11/07 ------------------------ Sandro Piancone /s/ Victor Petrone President and Director Date: 5/11/07 ------------------------ Victor Petrone /s/ William Lindberg Chief Financial Officer Date: 5/11/07 ------------------------ William Lindberg 14