Exhibit No. 99.3

                UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

     The following Unaudited Pro Forma Combined Financial  Statements of Capital
Beverage  and  Prospect  give effect to the  acquisition  of certain  assets and
liabilities  of  Prospect  by  Capital.  Accordingly,  Capital is treated as the
acquirer for  accounting  purposes  accounted  for under the purchase  method of
accounting  prescribed by Accounting  Principles  Board Opinion No. 16, Business
Combinations.  In connection with the acquisition,  the Company's  stockholders'
entered  into a voting  agreement  with the  stockholders'  of Prospect  whereby
Prospect  stockholders'  have the right to elect 50% of the  Company's  Board of
Directors'.  These pro forma statements are presented for illustrative  purposes
only.  The pro  forma  adjustments  are based  upon  available  information  and
assumptions  that management  believes are  reasonable.  The Unaudited Pro Forma
Combined  Financial  Statements do not purport to represent  what the results of
operations or financial position of Capital Beverage would actually have been if
the merger had in fact  occurred  on January 1, 2001 or January 1, 2000,  nor do
they  purport to project  the results of  operations  or  financial  position of
Capital  Beverage for any future period or as of any date,  respectively.  Under
the purchase method of accounting,  tangible and identifiable  intangible assets
acquired and liabilities assumed are recorded at their estimated fair values and
useful lives of assets acquired and liabilities assumed are based on preliminary
valuation and are subject to final valuation adjustments.

     These Unaudited Pro Forma Combined Financial  Statements do not give effect
to any  restructuring  costs or to any potential cost savings or other operating
efficiencies  that could  result from the merger  between  Capital  Beverage and
Prospect.

     The  consolidated  financial  statements  of Capital  Beverage for the year
ended  December  31,  2000,  are derived  from  audited  consolidated  financial
statements and are included in the Form 10-KSB/A as filed by Capital Beverage on
June 4, 2001,  with the Securities  and Exchange  Commission.  The  consolidated
financial  statements  of Capital  Beverage for the three months ended March 31,
2001,  are derived from  unaudited  consolidated  financial  statements  and are
included in the Form 10-QSB as filed by Capital  Beverage on May 15, 2001,  with
the Securities and Exchange Commission.

     You  should  read the  financial  information  in this  section  along with
Capital Beverage's historical consolidated financial statements and accompanying
notes in prior  Securities and Exchange  Commission  filings and in this amended
Current Report on Form 8-K.

<PAGE>
                          Capital Beverage Corporation
                   Unaudited Pro Forma Combined Balance Sheet
                                 March 31, 2001


<TABLE>
<CAPTION>

                                                                                  Pro Forma adjustments
                                                                            -----------------------------------
                                             CAPITAL          PROSPECT            DR                 CR              Pro Forma
                                          --------------    ------------    ----------------   ----------------   ---------------
Assets

<S>                                      <C>              <C>                                                    <C>
Cash                                     $     137,924    $        -                                             $       137,924
Accounts receivable, net                       421,540          171,838                                                  593,378
Inventories                                    529,239        1,456,664                                                1,985,903
Prepaid expenses and other                      17,145            1,033                                                   18,178
                                          --------------    ------------                                          ---------------
   Total Current Assets                      1,105,848        1,629,535                                                2,735,383

Property and equipment                         241,265           57,707                                                  298,972

Intangible assets                              760,000        5,028,946   $         960,731                            6,749,677
Deferred expenses                              225,539             -                                                     225,539
Other assets                                    32,703          130,780                                                  163,483
                                          --------------    ------------                                          ---------------

   Total Assets                          $   2,365,355    $   6,846,968                                          $    10,173,054
                                          ==============    ============                                          ===============

Liabilities and Stockholders' Equity

Accounts payable                         $     339,813    $   2,518,677                                          $     2,858,490
Note payable-bank                                 -           3,726,772                                                3,726,772
Accrued expenses and taxes                     179,092           49,809                                                  228,901
Loan payable - stockholder                        -              70,000                                                   70,000
Customer deposits payable                         -             121,791                                                  121,791
Current portion of long-term debt               82,786             -                                                      82,786
Current portion of
 capital lease obligations                      40,785             -                                                      40,785
Accrued dividends on preferred stock           200,000             -                                                     200,000
                                          --------------    ------------                                          ---------------
   Total Current Liabilities                   842,476        6,487,049                                                7,329,525

Capital lease obligations                      155,292             -                                                     155,292

Long-term debt                                 382,866          940,650                                                1,323,516

Stockholders' equity (deficit):
Common Stock, 2,678,409 actual shares;
      3,178,409 pro forma shares                 2,679             -                           $           500             3,179
Additional paid-in capital                   5,368,273        2,221,674           2,221,674            379,500         5,747,773
Accumulated deficit                         (4,386,231)      (2,802,405)                             2,802,405        (4,386,231)
                                          --------------    ------------                                          ---------------
   Total Stockholders' Equity (deficit)        984,721         (580,731)                                               1,364,721
                                          --------------    ------------                                          ---------------

                                         $   2,365,355    $   6,846,968                                         $     10,173,054
                                          ==============    ============                                          ===============


</TABLE>



              See notes to unaudited pro forma financial statements

<PAGE>

                          Capital Beverage Corporation
                          Unaudited Pro Forma Combined
                            Statements of Operations
                          Year Ended December 31, 2000

<TABLE>
<CAPTION>

                                                                                    Pro Forma adjustments
                                                                              -----------------------------------
                                     CAPITAL                PROSPECT                 DR                CR               Pro Forma
                               ------------------    ---------------------    ----------------   ----------------    ---------------
<S>                          <C>                   <C>                                                             <C>
Net sales                    $       17,172,121    $         18,870,473                                            $   36,042,594
Cost of sales                        14,537,102              16,243,991                                                30,781,093
                               -------------------   ---------------------                                           ---------------
Gross profit                          2,635,019               2,626,482                                                 5,261,501
                               -------------------   ---------------------                                           ---------------

Selling and delivery                  1,214,583               1,596,933                                                 2,811,516
General and administrative            2,418,094               2,450,116     $       48,000                              4,868,210
                               -------------------   ---------------------                                           ---------------
 Total Operating Expenses             3,632,677               4,047,049                                                 7,679,726
                               -------------------   ---------------------                                           ---------------

Operating Loss                         (997,658)             (1,420,567)                                               (2,418,225)

Interest income                          29,689                     935                                                    30,624
Interest expense                        (55,872)               (449,545)                                                 (505,417)
                                -------------------   ---------------------                                          ---------------
Net Loss                             (1,023,841)             (1,869,177)                                               (2,893,018)

Preferred stock dividends               (45,500)                   -                                                      (45,500)
Income taxes                               -                       (625)                                                     (625)
                                -------------------   ---------------------                                          ---------------

Net loss applicable
 to common shareholders      $       (1,069,341)    $        (1,869,802)                                           $   (2,939,143)
                                ===================   =====================                                          ===============

Net loss per share
 - Basic and diluted         $            (0.42)    $             -                                                $        (0.97)
                                ===================   =====================                                          ===============

WEIGHTED AVERAGE SHARES               2,528,409                   -                500,000                              3,028,409
                                ===================   =====================                                          ===============


</TABLE>



              See notes to unaudited pro forma financial statements


<PAGE>


                          Capital Beverage Corporation
                          Unaudited Pro Forma Combined
                            Statements of Operations
                        Three Months Ended March 31, 2001

<TABLE>
<CAPTION>

                                                                                Pro Forma adjustments
                                                                          ------------------------------------
                                       CAPITAL              PROSPECT             DR                CR                Pro Forma
                                  ----------------     ----------------   ----------------    ----------------   ----------------
<S>                             <C>                  <C>                                                       <C>
Net sales                       $       2,632,568    $       4,474,369                                         $       7,106,937
Cost of sales                           2,154,529            3,609,787                                                 5,764,316
                                  ----------------     ----------------                                          ----------------
Gross profit                              478,039              864,582                                                 1,342,621

Selling and delivery                      233,020              382,649                                                   615,669
General and administrative                566,961              674,330  $       12,000                                 1,253,291
                                  ----------------     ----------------                                          ----------------
 Total Operating Expenses                 799,981            1,056,979                                                 1,868,960

Operating Loss                           (321,942)            (192,397)                                                 (526,339)

Interest income                               120                  184                                                       304
Interest expense                          (15,048)            (124,699)                                                 (139,747)
                                  ----------------     ----------------                                          ----------------

Net Loss                        $        (336,870)   $        (316,912)                                        $        (665,782)
                                  ================     ================                                          ================

Net loss per share
 - Basic and diluted            $           (0.13)   $            -                                            $           (0.21)
                                  ================     ================                                          ================

WEIGHTED AVERAGE SHARES                 2,678,409                 -            500,000                                 3,178,409

</TABLE>


              See notes to unaudited pro forma financial statements

<PAGE>
                          Capital Beverage Corporation
                         Unaudited Pro Forma Adjustments

Pro Forma adjustments reflect the following transaction:

Pro Forma adjustments - Statements of Operations Year Ended December 31, 2000
-----------------------------------------------------------------------------

                                                       DR               CR
                                                       --               --

Amortization expense                            $    48,000
 Accumulated amortization - Intangible assets                     $   48,000

To amortize increase in intangible assets over 20 years


Pro Forma adjustments - Balance Sheet March 31, 2001
----------------------------------------------------

Additional paid-in capital                        2,221,674
Intangible assets                                   580,731
 Accumulated deficit                                               2,802,405

Intangible assets                                   380,000
 Common Stock                                                            500
 Additional paid-in capital                                          379,500

To record the  acquisition  of certain  assets and  liabilities  of  Prospect by
Capital Beverage for five hundred thousand  (500,000) shares of Capital Beverage
common stock.  The  acqusition  was  accounted for under the purchase  method of
accounting.  The common  stock issued to Prospect  shareholders  was recorded at
$.76  ($.84  closing  price  on May 4,  2001  less a 10%  discount)  per  share.
Prospect's  accumulated  deficit and additional  paid-in capital were eliminated
against intangible assets.


Pro Forma  adjustments - Statements  of Operations  Three Months Ended March 31,
2001
--------------------------------------------------------------------------------

Amortization expense                                 12,000
 Accumulated amortization - Intangible assets                         12,000

To amortize increase in intangible assets over 20 years




The following summarizes the purchase of Prospect Beverage, Inc.

 Purchase price including acquisition costs  $         380,000

 Fair value of liabilities assumed                   7,427,699

 Fair value of assets acquired                      (6,846,968)
                                                ----------------

 Excess cost assigned to intangible assets   $         960,731
                                                ================



             See notes from unaudited pro forma financial statements
<PAGE>

           NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS


DISTRIBUTION RIGHTS

     Distribution  rights are  stated at cost,  less  accumulated  amortization.
Amortization is computed using the  straight-line  method over an estimated life
of 20 years  based  upon  the term of the  agreement  which  is  indefinite  and
management's expectations related to current competitive market conditions.

