                                  SCHEDULE 14C
                                 (Rule 14c-101)

                  INFORMATION REQUIRED IN INFORMATION STATEMENT
                            SCHEDULE 14C INFORMATION
                 Information Statement Pursuant to Section 14(c)
          of the Securities Exchange Act of 1934 (Amendment No. ______)


Check the appropriate box:
[X] Preliminary Information Statement      [ ] Confidential, for use of the
[ ] Definitive Information Statement           Commission only (as permitted by
                                               Rule 14c-5(d)(2))

                          CAPITAL BEVERAGE CORPORATION
                (Name of Registrant as Specified in Its Charter)

Payment of Filing Fee (Check the appropriate box):

         [X] No Fee Required.
         [ ] Fee computed on table below per Exchange Act Rules 14c- 5(g) and
0-11.

         1) Title of each class of securities to which transaction applies:

                     Common Stock, par value $.001 per share

         2) Aggregate number of securities to which transaction applies:

                  3,792,045 shares of Common Stock Outstanding

         3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
                                       N/A

         4) Proposed maximum aggregate value of transaction:

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         5) Total Fee Paid.

            -------------------------------------------------------------------

         Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

         1) Amount Previously Paid:

            -------------------------------------------------------------------
         2) Form, Schedule or Registration Statement No.:

            -------------------------------------------------------------------
         3) Filing Party:

            -------------------------------------------------------------------
         4) Date Filed:

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<PAGE>

                          CAPITAL BEVERAGE CORPORATION
                               700 Columbia Street
                            Erie Basin, Building #302
                            Brooklyn, New York 11231
                                 (718) 488-8500

Dear Stockholder:

         We are furnishing this Information Statement to the holders of the
Common Stock of Capital Beverage Corporation, a Delaware corporation (the
"Company"), in connection with the sale of substantially all of the Company's
assets consisting of its exclusive distribution rights and saleable inventory to
Oak Beverages, Inc. ("Oak"), pursuant to an asset purchase agreement dated as of
September 15, 2005. A copy of the asset purchase agreement is included as
Appendix A to the Information Statement.

         The asset purchase agreement and the sale of assets to Oak have been
approved unanimously by our Board of Directors. As permitted by Delaware law and
our Certificate of Incorporation, the Company has received a written consent
from the majority stockholders of the Company approving the asset purchase
agreement and the related asset sale.

         ACCORDINGLY, STOCKHOLDERS ARE NOT BEING ASKED FOR PROXIES TO VOTE THEIR
SHARES WITH RESPECT TO THE ASSET PURCHASE AGREEMENT OR THE ASSET SALE. NO PROXY
CARD HAS BEEN ENCLOSED WITH THIS INFORMATION STATEMENT AND NO MEETING OF
STOCKHOLDERS WILL BE HELD TO CONSIDER THE ASSET PURCHASE AGREEMENT OR THE SALE
OF OUR ASSETS.

         The asset sale described in this Information Statement will not become
effective until at least 20 calendar days following the date of mailing of this
Information Statement to our stockholders.

         WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.

         This Information Statement is being provided to you pursuant to Rule
14c-2 under the Securities Exchange Act of 1934, as amended. It contains a
description of the asset purchase agreement and the asset sale, as well as
summary information regarding the contract of sale and the sale of assets. We
encourage you to read the Information Statement, including Appendix A,
thoroughly. You may also obtain information about us from publicly available
documents filed with the Securities and Exchange Commission. We may provide only
one copy of the Information Statement to stockholders who share an address,
unless we have received instructions otherwise. If you share an address, your
household has received only one copy of this Information Statement and you wish
to receive another copy, please contact our corporate secretary at the address
or telephone number above. If you have received multiple copies and only wish to
receive one copy of our SEC materials, you also may contact us at the address
and phone number above.


                                           Very truly yours,



                                           Carmine N. Stella
                                           President and Chief Executive Officer


Brooklyn, New York
October ___, 2005

<PAGE>

                              INFORMATION STATEMENT

                          CAPITAL BEVERAGE CORPORATION
                               700 Columbia Street
                            Erie Basin, Building #302
                            Brooklyn, New York 11231
                                 (718) 488-8500

Introduction

         This Information Statement is being furnished to the stockholders of
Capital Beverage Corporation, a Delaware corporation (the "Company"), in
connection with the prior approval by our Board of Directors of, and receipt of
approval by written consent of the majority stockholders of the Company for, the
proposed sale of substantially all of our assets (together with related
transactions, the "Asset Sale"), to Oak Beverages, Inc. ("Oak").

         The Asset Sale will be effective pursuant to an asset purchase
agreement, dated as of September 15, 2005, by and between the Company and Oak
(the "Asset Purchase Agreement"), as more fully described in this Information
Statement. A copy of the Asset Purchase Agreement is included as Appendix A to
this Information Statement and is incorporated herein by reference.

         The Board of Directors believes that approval and consummation of the
Asset Purchase Agreement and the Asset Sale are in the best interests of the
Company and its stockholders. Accordingly, on September 14, 2005, the Board
unanimously approved the Asset Purchase Agreement and the Asset Sale and
directed that they be submitted for stockholder approval.

         Under Delaware law and our Certificate of Incorporation, the
affirmative vote of a majority of the votes entitled to be cast by holders of
all shares of the Company's Common Stock, par value $.001 per share ("Common
Stock"), outstanding as of the close of business on September 15, 2005, is
required to approve the Asset Purchase Agreement and the Asset Sale. Under our
Certificate of Incorporation, each share of Common Stock is entitled to one vote
per share. As of September 15, 2005, there were outstanding 3,792,045 shares of
Common Stock, representing a total of 3,792,045 votes. As permitted by the
Delaware General Corporation Law, on September 15, 2005, the Company received a
written consent in lieu of a meeting of stockholders from holders of 1,900,000
shares of Common Stock representing 50.1% of the total issued and outstanding
shares of voting stock of the Company approving the Asset Purchase Agreement and
the Asset Sale.

         WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. NO PROXY CARD HAS BEEN ENCLOSED AND NO MEETING OF STOCKHOLDERS WILL BE
HELD TO CONSIDER THE ASSET PURCHASE AGREEMENT OR THE SALE OF ASSETS.

                                       1

<PAGE>

         The Asset Sale will not become effective until at least 20 calendar
days following the date of mailing of this Information Statement to our
stockholders.

         This Information Statement is furnished for the purposes of informing
stockholders, in the manner required under the Securities Exchange Act of 1934,
as amended, of the Asset Sale before it is consummated. This Information
Statement is first being mailed on or about October , 2005 to holders of record
of Common Stock as of the close of business on October ___, 2005.

         THE INFORMATION IN THIS INFORMATION STATEMENT REGARDING  OAK HAS BEEN
SUPPLIED BY OAK.




























                                       2

<PAGE>

                               Summary Term Sheet

         This Information Statement is being furnished to the stockholders of
Capital Beverage Corporation, a Delaware corporation, in connection with the
prior approval by our Board of Directors, and receipt by the Board of approval
by written consent of our majority stockholders, for the Asset Sale, which is
the sale of substantially all of assets to Oak Beverages Inc., or "Oak",
pursuant to the Asset Purchase Agreement. The terms "we," "our," and the
"Company" in this Information Statement refer to Capital Beverage Corporation.
References to "you" are to the stockholders of Capital Beverage Corporation.

         The summary that follows highlights selected information contained
elsewhere in this Information Statement. It may not contain all of the
information that is important to you. To fully understand the sale of
substantially all of our assets to Oak, and for a more complete description of
the Asset Sale and related matters, you should carefully read this Information
Statement (including the Asset Purchase Agreement included as Appendix A) in its
entirety.

The Parties

         Capital Beverage Corporation (the "Company") is a publicly owned
Delaware corporation currently operating a beer and malt beverage distribution
business. The Company's principal office is located at 700 Columbia Street, Erie
Basin, Building #302, Brooklyn , NY 11231 where its telephone number is (718)
488-8500. See "Information about the Company" at page 2.

         Oak Beverages, Inc. ("Oak") is a privately owned New York corporation
currently operating a beer and malt beverage distribution business. Oak's
principal office is located at One Flower Lane, Blauvelt, NY 10913. See
"Information about Oak" at page 2.

The Asset Sale

On September 14, 2005, our Board of Directors, acting by written consent,
approved an asset purchase agreement, dated as of September 15, 2005, between
Oak and the Company, a copy of which is included as Appendix A to this
Information Statement (the "Asset Purchase Agreement"), pursuant to which the
Company intends to sell, and Oak intends to purchase, substantially all of the
Company's assets (the "Asset Sale"). The Asset Sale will consist of our
distribution rights for the Pabst, Pittsburgh and Ballantine brands of beer and
malt beverages in New York City. As consideration for these assets, Oak has
agreed to pay the Company $9.3 million (subject to certain adjustments based
upon sales made by Oak under the Sub-Distribution Agreement), of which at least
$1.5 million will be deposited with an escrow agent for 18 months (or longer if
claims remain unresolved) for post closing indemnification claims which may be
asserted by Oak. See "The Sale of Assets to Oak."

<PAGE>

If the proposed Asset Sale is consummated:

         -    The Company will continue to be a public company;

         -    The  Company's  common  stock will  continue  to trade in the
              over-the-counter  market or be quoted on the OTC  Bulletin
              Board(R);

         -    The Company will use the proceeds from the Asset Sale for working
              capital purposes, including the payment of indebtedness, trade
              payables and other outstanding obligations. Following the payment
              of its creditors, the Company may elect to acquire another entity,
              issue dividend(s) to its stockholders or invest the net proceeds
              in the discretion of the Board of Directors and management of the
              Company.

Reasons For The Asset Sale

The Board of Directors and management of the Company have concluded that based
on the Company's relatively small size, the illiquidity of the trading market
for the Company's common stock, the Company's lack of growth, thin profit
margins in the beer and malt beverage distribution industry, and the fact that
the beverage distribution industry favors relatively large distributors because
of economies of scale; it would be in the stockholders' interests to sell
substantially all of the Company's assets at a fair price. In addition, for the
years ended December 31, 2004 and 2002, the Company recorded net losses of
approximately $4.3 million and $1.8, respectively, and a net profit of $24,000
for the year ended December 31, 2003. For the years ended December 31, 2004 and
2003, the Company's accumulated deficit totaled approximately $9.5 million and
$5.2 million, respectively. The Company has also received a "going concern"
opinion from its independent auditors for the last three fiscal years. As a
result, the Board of Directors and management decided that it is in the best
interest of the Company to pursue a sale transaction to Oak, a well capitalized
and substantial competitor. See "Special Factors Regarding the Asset Sale" at
page .

Approval Of The Board Of Directors and Stockholders

         The Board of Directors of the Company, after careful consideration, has
approved the Asset Purchase Agreement and the Asset Sale and has recommended
that the Company's stockholders vote for its adoption. Immediately following the
execution of the Asset Purchase Agreement by Oak and the Company on September
15, 2005, stockholders holding 50.1% of the Company's shares of common stock
outstanding executed a written consent in lieu of a stockholders meeting
approving the Asset Purchase Agreement and the Asset Sale.
See "Voting Securities and Principal Holders Thereof" at page ______.

<PAGE>

Use of Proceeds

         The Asset Purchase Agreement provides that, the Company will receive
and Oak shall pay $9.3 million (subject to certain adjustments based upon sales
made by Oak under the Sub-Distribution Agreement) payable as follows: (1) $7.8
million to be paid at the closing of the transaction in immediately available
funds and (ii) $1.5 million to be paid at the closing of the transaction in
immediately available funds to an escrow agent. In addition, within ten (10)
days following the closing of the transaction, Oak will purchase from Company
its saleable inventory at an amount equal to the price paid by the Company for
the inventory. Assuming the ultimate release to the Company of the entire
escrowed amount, and after deduction of transaction costs in connection with the
Asset Sale, the Company anticipates that net proceeds will be approximately $8.8
million. Of this amount, the Company anticipates that approximately $7.7 million
will be applied to repay outstanding indebtedness.

         After the repayment of outstanding indebtedness, the Board of Directors
anticipates that it will undertake one or more transactions designed to maximize
stockholder value. Management currently anticipates that additional transactions
may take the form of a dissolution of the corporation, the liquidation of its
remaining assets, and the ultimate distribution to stockholders of any assets
remaining after satisfaction of our liabilities, including personnel termination
and related costs, sale transaction expenses and final liquidation costs. In
event of such dissolution, the residual proceeds of the Asset Sale would become
part of a pool of assets governed by the plan of dissolution. Alternatively,
management may elect to invest the net proceeds from the Asset Sale in assets or
operations acquired by the Company. In such an event, no assets will be
distributed to the stockholders. See "Consideration; Use of Proceeds; Structure
of the Company After the Asset Sale" at page .

Structure of the Company After the Asset Sale

         After completion of the Asset Sale and application of the net proceeds
in the manner contemplated, and assuming ultimate release to us of the entire
escrowed amount, and after deduction of transaction costs in connection with the
Asset Sale, the Company will hold:

     o    residual inventory and equipment not part of the Asset Sale; and

     o    accounts receivable in the approximate amount of $250,000.

         The Company will not have any ongoing operations subsequent to the
Asset Sale, except for the collection of accounts receivable and the payment of
its liabilities. See "Consideration; Use of Proceeds; Structure of the Company
After the Asset Sale."

<PAGE>

The Sub-Distribution Agreement with Oak

         The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak
has become a sub-distributor of the Company of certain Pabst beers and malt
beverages. A copy of the Sub-Distribution Agreement is included as Appendix B to
this Information Statement and is incorporated herein by reference. The
Sub-Distribution Agreement became effective when the Company filed this
Information Statement with the Securities and Exchange Commission and shall
terminate on the earlier of (i) the closing of the transactions contemplated by
the Asset Purchase Agreement, (ii) the termination of the Asset Purchase
Agreement, (iii) 90 days following September 15, 2005, or (iv) the earlier
termination of the Sub-Distribution Agreement in accordance with its terms.
Under the terms of the Sub-Distribution Agreement, Oak has the right to
distribute the Pabst products to customers located in the five boroughs of New
York City, and in exchange for such rights, Oak will pay Pabst directly for its
product purchases and, during the first 45 days following the effective date of
the Sub-Distribution Agreement, Oak will pay to the Company the following
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the
Company in connection with the closing of the transactions contemplated by the
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i)
$.25 for each case of products purchased by Oak and sold by Oak to customers in
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each
barrel of products purchased by Oak but not sold to such customers, all
determined during such 45-day period. If the Sub-Distribution Agreement is
terminated by either party for any reason, the Company will be required to
promptly pay to Oak the credits described above.

Dissenters' Rights

         Company stockholders are not entitled to seek dissenters' or appraisal
rights under  Delaware law in connection  with the Asset Sale.  See "Dissenters'
Rights" at page ____.


Certain Federal Income Tax Consequences

         The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. It is anticipated that any
gain resulting from the Asset Sale will be offset against the Company's net
operating loss carryforwards. However, utilization of these carryforwards
generates an alternative minimum tax for both government bureaus. We do not
expect the combination of both alternative tax liabilities for the two bureaus
to exceed $100,000. See " Certain Federal Income Tax Consequences" at page .

Accounting Treatment

         Upon completion of the Asset Sale, the Company will remove from its
consolidated balance sheet the assets sold to Oak and will reflect therein the
effect of the receipt and the use of the proceeds of the Asset Sale. The Company
will record a gain on the sale of assets to Oak equal to the difference between
the purchase price received and the book value of the assets sold in its
consolidated statement of operations. See "Accounting Treatment" at page ____.

<PAGE>

Interests Of The Continuing Stockholders

         Assuming closing of the Asset Sale, the current stockholders of the
Company will continue to own 100% of the outstanding common stock of the
Company.

                     A NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This Information Statement contains certain forward-looking statements,
including statements regarding our "expectations," "beliefs," "goals," "hopes,"
"strategies," and the like. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of invoking those safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that are subject to change at any time and from time to
time and that could cause our actual results, performance or achievements to
differ materially from our expectations of future results, performance or
achievements expressed or implied by such forward-looking statements. Factors
that could cause actual results or developments to differ materially from those
described in or contemplated or implied by such forward-looking statements
include, without limitation, the risk that the assumptions upon which the
forward-looking statements are based ultimately may prove to be incorrect or
incomplete, that the transactions contemplated by the Asset Purchase Agreement
will not be consummated in a timely manner or at all and that Oak will make
claims against the portion of the purchase price placed in escrow or otherwise,
as well as other risks and uncertainties that are described in the Company's
filings with the Securities and Exchange Commission. Although we believe that
the expectations reflected in our forward-looking statements are reasonable, we
cannot guarantee future events or results. Except as may be required under
federal law, we undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur.

                Summary Information In Question And Answer Format

         The following information in question and answer format, summarizes
many of the material terms of the Company's proposed Asset Sale to Oak. For a
complete description of the terms and conditions of the Asset Sale, you are
advised to carefully read this entire Information Statement and the other
documents referred to herein. The actual terms and conditions of the Asset Sale
are contained in the Asset Purchase Agreement and the exhibits thereto. The
Asset Purchase Agreement is included as Appendix A to this Information
Statement.

<PAGE>

What Vote Is Required To Approve The Asset Sale?

         Approval of the Asset Sale requires the affirmative vote of the holders
of not less than a majority of the Company's outstanding common stock.

What Constitutes A Majority Of The Company's Outstanding Common Stock?

         On September 15, 2005, the Company had 3,792,045 shares of Common Stock
issued and outstanding and 1,896,226 constitutes a majority of the shares of
Common Stock issued and outstanding.

Who Voted In Favor Of The Asset Sale?

         Carmine Stella, the Company's President, Chief Executive Officer and
Chairman of the Board, Anthony Stella, the Company's Vice President of Sales and
Marketing (and the brother of Carmine Stella), Michael Mastrisciani, a director
of the Company, Daniel Mastrisciani, the Company's Vice President of Operations
and a director of the Company, Alex Mastrisciani and Monty Mastrisciani, (each
of whom are the brothers of Michael and Daniel Mastrisciani), voted an aggregate
of 1,900,000 shares in favor of the Asset Sale and the approval of the Asset
Purchase Agreement. Such shares represent 50.1% of the shares of common stock
outstanding. Such individuals shall be referred to as the" Majority
Stockholders". See "Voting Securities and Principal Holders Thereof" at page __.

Will The Stockholders That Voted In Favor Of The Asset Sale Have Any
Relationship With Oak Following The Closing Of The Asset Sale?

         No. None of the stockholders that voted in favor of the Asset Sale
anticipate working for or with Oak, or otherwise have any direct or indirect
financial relationship with Oak. In addition, none of the stockholders that
voted in favor of the Asset Sale anticipate owning any securities of Oak or have
any other right to payment from Oak. However, it should be noted that certain
members of management have not received their salaries since May 1, 2005.
Accordingly, the following individuals are entitled to be paid accrued and
unpaid salaries from the proceeds from the Asset Sale received by the Company in
the amounts set forth adjacent to their names (such amounts calculated as of
October 31, 2005): Carmine Stella ($105,000); Anthony Stella ($67,000); Michael
Mastrisciani ($67,000); Daniel Mastrisciani ($67,000); Monty Mastrisciani
($67,000); and Alex Mastrisciani ($73,000). The Company will also reimburse
such employees for out-of-pocket expenses incurred by them in connection with
the performance of their duties which, as of October 31, 2005, is expected to be
a total of approximately $60,000.

         In addition, under the terms of employment agreements between the
Company and such members of management, such employees are, upon the termination
of their employment with the Company, entitled to severance payments equal to
four (4) weeks of a base salary for each year of service provided to the
Company. The proceeds from the Asset Sale will also be used to pay severance to
following employees each of whom will be terminated as of the closing date of
the Asset Sale in the amounts set forth adjacent to their names: Anthony Stella
($102,000); Michael Mastrisciani ($47,000); Daniel Mastrisciani ($47,000); Monty
Mastrisciani ($47,000); and Alex Mastrisciani ($41,000). Carmine Stella will not
be terminated as of the closing date, and therefore, he will not be entitled to
any severance payment. He will, however, continue to serve as the Company's
Chief Executive Officer, and will be paid $210,000 per annum. See "Payment of
Accrued and Unpaid Salaries and Severance" at page ___.

<PAGE>

Why Isn't The Company Holding A Stockholders Meeting To Vote On The Proposed
Asset Sale?

         In order to lawfully close on the proposed Asset Sale, Delaware law
requires that a majority of shares of Common Stock vote in favor of the proposed
Asset Sale. The stockholders voting in favor of the proposed Asset Sale
represent 50.1% of the shares outstanding, or a majority of the outstanding
shares. Therefore, management concluded that because approving a transaction by
the written consent of stockholders can be faster than distributing a notice of
meeting and proxy statement, and conducting a stockholders meeting, and in light
of the fact that Company management and Oak wanted to expedite the closing of
the proposed Asset Sale, management and the Board of Directors decided not to
conduct a meeting of stockholders. Instead, promptly following the execution of
the Asset Purchase Agreement, stockholders owning approximately 50.1% of the
shares signed a written consent approving the Asset Purchase Agreement and the
transactions contemplated thereby.

What Are The Terms Of The Asset Purchase Agreement?

     On September 14, 2005, our Board of Directors, acting by written consent,
approved an asset purchase agreement, dated as of September 15, 2005, between
Oak and the Company, a copy of which is included as Appendix A to this
Information Statement (the "Asset Purchase Agreement"), pursuant to which the
Company intends to sell, and Oak intends to purchase, the Company's distribution
rights for the Pabst, Pittsburgh and Ballantine brands of beer and malt
beverages in New York City. As consideration for these assets, Oak has agreed to
pay the Company $9.3 million (subject to certain adjustments based upon sales
made by Oak under the Sub-Distribution Agreement), of which at least $1.5
million will be deposited with an escrow agent for 18 months for post closing
indemnification claims which may be asserted by Oak.

Why Is The Company Selling its Assets?

         The Board of Directors and Management of the Company have concluded
that based on the Company's relatively small size, the illiquidity of the
trading market for the Common Stock, the Company's lack of growth, thin gross
profit margins in the beer and malt beverage distribution industry, and the fact
that the beverage distribution industry favors relatively large distributors
because of economies of scale; it would be in the stockholders' interests to
sell substantially all of the Company's assets at a fair price. In addition, for
the years ended December 31, 2004 and 2002, the Company recorded net losses of
approximately $4.3 million and $1.8, respectively, and a net profit of $24,000
for the year ended December 31, 2003. For the years ended December 31, 2004 and
2003, the Company's accumulated deficit totaled approximately $9.5 million and
$5.2 million, respectively. The Company has also received a "going concern"
opinion from its independent auditors for the last three fiscal years. As a
result, the Board of Directors and management decided that it is in the best
interest of the Company to pursue a sale transaction to Oak, a well capitalized
and substantial competitor.

<PAGE>

What Will Happen To The Company After The Asset Sale?

         Following the Asset Sale, the Company is expected to repay its
outstanding indebtedness. Surplus funds will either be distributed to Company
stockholders as a dividend, or retained to pay for ongoing expenses associated
with identifying assets or operations to be acquired. All employees will be
terminated, except for Carmine Stella who will continue to serve as the
Company's Chief Executive Officer and will earn an annual salary of $210,000.

What Steps Has The Board Of Directors Taken To Assure That The Price To Be Paid
By Oak Is Fair To The Public Stockholders?

         Company management has been in the beer and malt beverage industry for
a very long time. The Company has acquired several brands and is well acquainted
with the market for beverage distribution assets. Since the first quarter of
2004, the Company has been in discussions with several potential buyers
interested in purchasing the Company's assets or entering into strategic
transactions. After discussions with these parties, Company management and the
Board of Directors determined that the purchase price to be paid by Oak pursuant
to the Asset Purchase Agreement was the highest and best price.

What Factors Were Considered By Management And The Board Of Directors In
Deciding To Sell Substantially All Of The Company's Assets?

         Management and the Board of Directors considered a number of factors
before deciding to execute the Asset Purchase Agreement, including but not
limited to, the following:

     o    the nature of the beer and malt beverage  distribution business in the
          Company's distribution territory;

     o    the  Company's   deteriorating   financial   condition  and  declining
          operating results;

     o    the relative  lack of growth in the  Company's  revenues over the past
          four years;

     o    the  Company's  limited  ability  to expand its  current  distribution
          business due to a lack of available funding;

<PAGE>

     o    the required future capital investment in order to purchase additional
          beer or malt beverage brands;

     o    Oak's agreement to enter into a Sub-Distribution Agreement;

     o    the  relatively  low  market  prices  for  the  Common  Stock  in  the
          over-the-counter market over the past three years and the inability to
          use that  security  as  consideration  to acquire  other  distribution
          businesses;

     o    the terms and conditions of the proposed Asset Sale; and

     o    the belief  that the  offered  purchase  price by Oak,  is the highest
          price that the Company will obtain for its assets.

How Is The Purchase Price For The Asset Sale Being Financed By Oak?

         Oak has advised the Company that the total amount of funds required to
deliver the Purchase Price to the Company at closing will be funded from Oak's
cash reserves. See "Information About Oak."

Why Did The Company Enter Into A Sub-Distribution Agreement With Oak?

         The Company entered into a Sub-Distribution Agreement with Oak because
the Company has been generating net losses and a reduction in its operating
expenses is necessary to preserve the value of its assets. Under the
Sub-Distribution Agreement, Oak will distribute the Company's beer and malt
beverage brands to the Company's customers and, at the same time, the Company
will reduce its operating expenses because the costs of such distribution will
be incurred by Oak. See "Sub-Distribution Agreement with Oak."

What Are the Terms of the Sub-Distribution Agreement

         The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak
has become a sub-distributor of the Company of certain Pabst beers and malt
beverages. The Sub-Distribution Agreement became effective when the Company
filed this Information Statement with the Securities and Exchange Commission and
shall terminate on the earlier of (i) the closing of the transactions
contemplated by the Asset Purchase Agreement, (ii) the termination of the Asset
Purchase Agreement, (iii) 90 days following September 15, 2005, or (iv) the
earlier termination of the Sub-Distribution Agreement in accordance with its
terms. Under the terms of the Sub-Distribution Agreement, Oak has right to
distribute the Pabst products to customers located in the five boroughs of New
York City, and in exchange for such rights, Oak will pay Pabst directly for its
product purchases and, during the first 45 days following the effective date of

<PAGE>

the Sub-Distribution Agreement, Oak will pay to the Company the following
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the
Company in connection with the closing of the transactions contemplated by the
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i)
$.25 for each case of products purchased by Oak and sold by Oak to customers in
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each
barrel of products purchased by Oak but not sold to such customers, all
determined during such 45-day period. If the Sub-Distribution Agreement is
terminated by either party for any reason, the Company will be required to
promptly pay to Oak the credits described above.

What Rights Do Stockholders Have To Dissent From The Asset Sale?

         Company Stockholders do not have the right to seek the appraisal of
their shares under Delaware law. Furthermore, no provision has been made to
grant any public stockholder access to the corporate files of the Company or to
the files of any Continuing Stockholder or to obtain counsel for or appraisal
services for any public stockholder at the expense of the Company or any
Continuing Stockholder.

What Are The Conditions Of The Asset Sale?

     The following list includes what the Board of Directors and Management
believe are the material conditions to the Asset Sale, all of which must be
satisfied at the time of the closing. In view of the fact that interpretations
of "materiality" can be subjective, the list is qualified by reference to the
Asset Purchase Agreement which is attached as Appendix A to this Information
Statement. You are urged to carefully read this entire document including the
Asset Purchase Agreement.

     o    stockholders  owning at least a majority of the outstanding  shares of
          Common Stock must approve and adopt the Asset  Purchase  Agreement and
          the Asset Sale;

     o    there are no legal restraints rendering the Asset Purchase unlawful or
          preventing  the   consummation   of  the   transactions   contemplated
          thereunder  and no  pending  litigation  that  could  have a  material
          adverse effect on the Company;

     o    the Brewers (Pabst,  Pittsburgh and Best Brands) must approve Oak as a
          distributor of their brands in the Company's territories;

     o    all authorizations, consents and waivers required for the consummation
          of the Asset Purchase shall have been obtained.

     o    the  respective  representations  and  warranties  made  in the  Asset
          Purchase  Agreement  by  each of the  parties  to the  Asset  Purchase
          Agreement shall be true and correct.

<PAGE>

What Are The Income Tax Consequences Of The Asset Sale?

         The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. It is anticipated that any
gain resulting from the Asset Sale will be offset against the Company's net
operating loss carryforwards. However, utilization of these carryforwards
generates an alternative minimum tax for both government bureaus to exceed
$100,000. See "Certain Federal Income Tax Consequences" at page ____.




































<PAGE>



                             CAPITAL BEVERAGES, INC.
                              INFORMATION STATEMENT

                                TABLE OF CONTENTS



Prior Stockholder Approval....................................................1
The Sale Of Assets To Oak.....................................................1
Parties To The Asset Sale; Relationship Of The Company To Oak.................2
   Information About the Company..............................................2
   Relationship Of The Company And Oak........................................3
Background Of And Reasons For The Asset Sale..................................5
Special Factors Regarding The Asset Sale......................................6
Assets Subject To Sale........................................................6
Consideration; Use Of Proceeds; Structure Of The Company After The
Asset Sale....................................................................7
Payment of Accrued Unpaid Salaries and Severance..............................8
Terms Of The Asset Purchase Agreement.........................................8
Purchase Price................................................................9
Escrow........................................................................9
Representations And Warranties................................................9
Covenants And Agreements Of The Company And Oak..............................11
Conditions To Closing; Closing Date..........................................12
Termination..................................................................13
Indemnification..............................................................14
Dissenters' Rights...........................................................16
Certain Federal Income Tax Consequences......................................16
Accounting Treatment.........................................................16
Government Approvals.........................................................16
Voting Securities And Principal Holders Thereof..............................16
Where You Can Find Additional Information....................................18




Appendix

A. Asset Purchase Agreement dated as of September 15, 2005 between the Company
   and Oak Beverages Inc.

B. Sub-Distribution Agreement dated as of September 15, 2005 between the Company
   and Oak Beverages Inc.

<PAGE>

Prior Stockholder Approval

         Our ability to sell our assets without a meeting of our stockholders is
authorized by Section 228 of the Delaware General Corporation Law. That section
generally provides that a Delaware corporation may substitute for action on a
matter by its stockholders at a meeting the written consent of the holders of
outstanding shares of capital stock holding at least the minimum number of votes
which would be necessary to authorize or take the action at a meeting at which
all shares entitled to vote on the matter are present and voted. In accordance
with this provision, we obtained the written consent of the Majority
Stockholders, approving the sale of substantially all of the Company's assets to
Oak pursuant to the Asset Purchase Agreement. As a result of the action of the
Majority Stockholders, we are not soliciting proxies, and there will be no
further stockholder action on the Asset Purchase Agreement or Asset Sale.

         Holders of record of the Company's Common Stock, are entitled to notice
of the action taken by written consent approving the Asset Sale and the Asset
Purchase Agreement.

         Under Delaware law and our Certificate of Incorporation, the
affirmative vote of a majority of the votes entitled to be cast by holders of
all shares of our Common Stock outstanding as of the close of business on the
Record Date, was required to approve the Asset Purchase Agreement and the Asset
Sale. Each holder of Common Stock was entitled to one vote on each of the
foregoing matters, for each share of Common Stock held by such stockholder. As
of September 15, 2005, there were outstanding 3,792,045 shares of Common Stock.
As of that date, the Majority Stockholders held 1,900,000 shares of Common Stock
and were entitled to cast a total of 1,900,000 votes, or 50.1% of the total
votes entitled to be cast by all holders of our Common Stock.

         The action by written consent approving the Asset Sale and the Asset
Purchase Agreement was effective on September 15, 2005.

The Sale Of Assets To Oak

         The terms and conditions of the Asset Sale, which is the sale of
substantially all of our assets to Oak, are set forth in the Asset Purchase
Agreement, dated as of September 15, 2005. A copy of the Asset Purchase
Agreement, excluding the exhibits or schedules thereto, is included as Appendix
A to this Information Statement. The description in this Information Statement
of the terms and conditions of the Asset Sale and of the Asset Purchase
Agreement is a summary only and may not contain all of the information that is
important to you. To fully understand the Asset Sale and the terms of the Asset
Purchase Agreement, you should carefully read in its entirety the copy of the
Asset Purchase Agreement included as Appendix A.

                                       1

<PAGE>

Parties To The Asset Sale; Relationship Of The Company To Oak

Information About the Company

         The Company is in the business of marketing, selling and distributing
at wholesale certain alcoholic beverage products. The Company was incorporated
under the laws of the State of Delaware on December 5, 1995. In January 1996,
the Company acquired from Consolidated Beverage Corporation, the right to become
the exclusive distributor for certain beer and malt liquor products manufactured
by Pabst Brewing Company. The consideration paid by the Company for the pabst
distribution rights was $1.6 million, payable $800,000 in cash and the balance
by delivery of a series of 120 promissory notes, each in the amount of $10,000.

         On July 18, 1998 and July 30, 1998, the Company signed two distributor
agreements with Pittsburgh Brewing Company ("Pittsburgh") to distribute on an
exclusive basis in the entire state of New York, several brands of beer and malt
beverage products.

         On June 29, 2001, the Company purchased all of the assets of the
business of Prospect Beverage, Inc. which related to Prospect's business of
distributing beverages, including among other things, beer distribution rights,
properties, rights, leases, interests, goods and customer lists of Prospect. The
purchase price of the assets consisted of the assumption by the Company of
certain liabilities of Prospect and the issuance of an aggregate of five hundred
thousand (500,000) shares of the common stock of the Company to the shareholders
of Prospect. Inclusive with the acquisition came the following national brands:
Colt 45, Old Milwaukee, Schaefer, Schlitz, Champale, Schmidts, Stroh, Piels,
McSorleys and also an extensive list of various imports.

Information About Oak

         Oak is a privately owned corporation, currently engaged in business and
duly licensed as a multi-brand distributor of beer and other alcoholic malt
beverages as well as non-alcoholic beverages. Oak's exclusive sales territory
differs according to its brands, however, its primary sales territory includes
the five boroughs of New York City, Westchester, Rockland, Putnam, Orange,
Sullivan, Dutchess and Ulster counties, all within the State of New York. Oak
was incorporated under the laws of the State of New York on January 25, 1980.
Oak was formed as an independent, but related, company, to its affiliate Boening
Bros., Inc. (which has been engaged in business as a multi-brand distributor of
alcoholic and non-alcoholic beverages since 1901). Debra Boening is the
President of Oak. Oak's principal office is located at One Flower Lane,
Blauvelt, NY 10913.

         The funds required by Oak to pay the purchase price to the Company as
set forth in the Asset Purchase Agreement will be funded from Oak's cash
reserves.

                                       2

<PAGE>

Relationship Of The Company And Oak

General.

         Prior Acquisition Overtures.

         Current Negotiations. On January 31, 2005, at the suggestion of Pabst
Brewing Company, Debora Boening, President of Oak, met with Carmine Stella,
President, Chief Executive Officer and Chairman of the Company and Michael
Matrisciani, a director of the Company, to discuss Oak's interest in the
potential acquisition of the Company's distribution business.

         On February 17, 2005, management of Oak and the Company discussed the
possibility of a sale by the Company to Oak of the Pabst distribution rights and
Pabst's related approval of the proposed transaction. In addition, on February
17, 2005, Oak's management team began its review of the Company's finance and
sale information and the Company and Oak entered into a confidentiality
agreement. Subsequently, Oak and its legal and financial advisors continued to
conduct business, legal and financial due diligence.

         On February 15, 2005, Mr. Stella discussed with the Board of Directors
of the Company at a regularly scheduled meeting the progress of his discussions
to date with Ms. Boening and the possibility of a transaction between the
Company and Oak.

         On March 16, 2005, Messrs. Stella and Matrisciani and Ms. Boening and
Mr. Scapperotti, General Manager of Oak, met to discuss and conduct business and
financial due diligence.

         On March 29, 2005, senior management and outside legal counsel of each
of Oak and the Company met to negotiate a purchase price, discuss the terms of
the letter of intent and otherwise conduct negotiations. Following that meeting,
Oak's legal counsel, Ettelman & Hochheiser, P.C., distributed a draft of the
proposed letter of intent to the Company and its outside legal counsel, Brown
Rudnick Berlack Israels LLP and Dealy & Silberstein, LLP.

         On April 7, 2005, representatives of Oak and the Company met to discuss
sales and employee matters.

         Following that meeting, on April 15, 2005, Oak and the Company signed
the letter of intent.

         On April 11, 2005 , the Board of Directors of Company met and heard a
presentation from its officers regarding the then-current status of negotiations
and a summary of contemplated deal terms, including a proposed price. Following
that presentation, the Board of Directors of the Company authorized proceeding
with negotiations consistent with the terms presented and ultimate consummation
of a transaction consistent with such terms. Following those presentations,
those Boards likewise authorized further negotiations consistent with the
summary terms presented.

                                       3

<PAGE>

         On April 18, 2005, the Company sent a letter to Pabst seeking approval
of the proposed transaction with Oak.

         On April 19, 2005, senior management of each of the Company and Oak
identified and reviewed various developments concerning the transaction.

         On April 20, 2005, the Company received a voluntary surrender letter
from Pabst providing its approval of the proposed transaction with Oak.

         On April 26, 2005, Messrs.  Stella and Matrisciani, Ms. Boening and Mr.
Scapperotti  reviewed pricing,  sales and projections data.

         On April 28, 2005,  Mr.  Stella and Ms.  Boening met to continue  their
prior  discussions.  They  reviewed and  discussed due diligence matters and
developed a projected timetable of the transaction.  After this meeting,  Mr.
Stella and Ms. Boening communicated on several occasions regarding various
issues related to the transaction.

         Following that meeting on May 4, 2005, Oak provided the Company and its
outside legal counsel with the initial draft of a proposed asset purchase
agreement. Shortly thereafter, the Company's management and its legal advisors
discussed the issues raised by Oak's draft asset purchase agreement.

         On May 10, 2005 Mr. Stella and Ms. Boening met to discuss various due
diligence issues and Oak's concern about sub-distribution matters.

         On May 17, 2005, legal counsel for the Company, Brown Rudnick Berlack
Israels LLP, and legal counsel for Oak, Ettelman & Hochheiser, P.C., held a
conference call to discuss the terms of the proposed asset purchase agreement.

         On May 31, 2005, Mr. Stella and the Company's legal advisors and Ms.
Boening and Oak's legal advisors continued to discuss, telephonically, the terms
of the asset purchase agreement and issues relating to distribution.

         On June 15, 2005, senior management and outside legal counsel of each
of Oak and the Company continued to hold discussions about the terms of the
asset purchase agreement and Oak's concern about sub-distribution matters.

         On June 21, 2005, representatives of the Company and Oak continued its
discussions and review of financial due diligence.

         On July 7, 2005, legal advisors of each the Company and Oak held a
conference call to review the terms of the asset purchase agreement and legal
issues.

                                       4

<PAGE>

         On July 13, 2005, senior management and legal counsel of each the
Company and Oak met to review and discuss the revisions to the asset purchase
agreement and otherwise conduct negotiations. The Company subsequently consulted
with its outside counsel and continued negotiations with Oak toward a final form
of asset purchase agreement.

         On July 20, 2005, senior management and legal counsel of each the
Company and Oak continued their discussions by teleconference.

         On July 26, 2005, Mr. Stella and Ms. Boening met to discuss the status
of the agreements and the progress to date of the transaction.

         During August and September, several telephone conversations took place
between Mr. Stella and Ms. Boening regarding various business issues.

         On September 14, 2005, the Board of Directors of the Company were
presented a final form of Asset Purchase Agreement for consideration and
approval. Upon review and discussion with outside counsel, the Company's Board
authorized the execution of the final Asset Purchase Agreement and recommended
that it be submitted to the stockholders of the Company.

Background Of And Reasons For The Asset Sale

The Board of Directors and Management of the Company have concluded that based
on the Company's relatively small size, the illiquidity of the trading market
for the Common Stock, the Company's lack of growth, thin profit margins in the
beer and malt beverage distribution industry, and the fact that the beverage
distribution industry favors relatively large distributors because of economies
of scale; it would be in the stockholders' interests to sell substantially all
of the Company's assets at a fair price. In addition, for the years ended
December 31, 2004 and 2002, the Company recorded net losses of approximately
$4.3 million and $1.8, respectively, and a net profit of $24,000 for the year
ended December 31, 2003. For the years ended December 31, 2004 and 2003, the
Company's accumulated deficit totaled approximately $9.5 million and $5.2
million, respectively. The Company has also received a "going concern" opinion
from its independent auditors for the last three fiscal years. As a result, the
Board of Directors and management decided that it is in the best interest of the
Company to pursue a sale transaction to Oak, a well capitalized and substantial
competitor. See "Special Factors - Events Leading to the Proposal for and
Acceptance of the Offer" at page ___.

         The foregoing factors, among, all were considered by our Board of
Directors during the course of its deliberations prior to authorizing execution
of the Asset Purchase Agreement, in light of the Board's knowledge of our
business and each director's business judgment. In its deliberations, the Board
of Directors did not quantify or otherwise attempt to assign relative weights to
the specific factors considered in determining to approve (and to recommend that
the stockholders approve) the Asset Sale and the Asset Purchase Agreement.
Rather, the Board made its determination based on the total mix of information
available to it, and the judgments of the individual directors may have been
influenced to different degrees by various factors. In light of the foregoing,
the Board of Directors unanimously approved and adopted the Asset Purchase
Agreement, and unanimously recommended that the Company's stockholders approve
it and the Asset Sale.

                                       5

<PAGE>

Special Factors Regarding The Asset Sale

         There are many factors that our stockholders should consider in
reviewing the information contained in this Information Statement. Such factors
include, but are not limited to, those set forth below and elsewhere in this
Information Statement.

         We will continue to incur claims, liabilities and expenses, which will
reduce the realizable value of our remaining assets and the amount potentially
available for distribution to stockholders.

         Claims, liabilities and expenses from operations (such as salaries,
directors' and officers' insurance, payroll and taxes, legal, accounting and
consulting fees and miscellaneous office expenses) will continue to be incurred
subsequent to the Asset Sale. These expenses will have to be satisfied from our
remaining assets and, therefore, will reduce the net realizable value of those
assets.

         We will continue to incur the expenses of complying with public company
reporting requirements.

         We have an obligation to continue to comply with the applicable
reporting requirements of the Securities Exchange Act of 1934, as amended, even
though compliance with such reporting requirements is economically burdensome.

Assets Subject To Sale

         The assets to be sold by the Company to Oak consist of substantially
all of the Company's assets, and include the following:

         (a) Exclusive distribution rights with respect to the Pabst, Pittsburgh
and Ballantine brands of beer and malt beverage products;

         (b) the Company's customer lists;

         (c) all point-of sale materials; and

         (d) saleable inventory of products.

                                       6

<PAGE>

Consideration; Use Of Proceeds; Structure Of The Company After The Asset Sale

         The Asset Purchase Agreement provides that, the Company will receive
from Oak, in consideration of the sale of the assets $9.3 million payable as
follows: (1) $7.8 million to be paid at the closing of the transaction in
immediately available funds and (ii) $1.5 million (subject to certain
adjustments based upon sales made by Oak under the Sub-Distribution Agreement)
to be paid at the closing of the transaction in immediately available funds to
an escrow agent. The escrowed funds shall be held and disbursed pursuant to the
terms of an escrow agreement between the Company, Oak and the escrow agent. In
addition, within ten (10) days following the closing of the transaction, Oak
will purchase from Company its saleable inventory at an amount equal to the
price paid by the Company for the inventory. At Oak's option, the Company shall
assign to Oak all of its outstanding purchase orders for products not yet
delivered by the respective brewer. Oak will pay such assigned invoices when
due. Assuming ultimate release to the Company of the entire escrowed amount, and
after deduction of transaction costs in connection with the Asset Sale, the
Company anticipates that net proceeds will be approximately $8.8 million. Of
this amount, the Company anticipates that approximately $7.7 million will be
applied to repay outstanding indebtedness.

         After completion of the Asset Sale, the Board of Directors anticipates
that, after consideration in due course, it will undertake one or more
transactions designed to maximize stockholder value. Management currently
anticipates that additional transactions may take the form of a dissolution of
the corporation, the liquidation of its remaining assets, and the ultimate
distribution to stockholders of any assets remaining after satisfaction of
liabilities, including personnel termination and related costs, sale transaction
expenses and final liquidation costs. In the event of such a dissolution, the
residual proceeds of the Asset Sale would become part of a pool of assets
governed by the plan of dissolution. Alternatively, management may elect to
invest the net proceeds from the Asset Sale in assets or operations acquired by
the Company. In such event, no assets will be distributed to the stockholders.

         After completion of the Asset Sale and application of the net proceeds
in the manner contemplated, and assuming ultimate release of the entire escrowed
amount, and after deduction of transaction costs in connection with the Asset
Sale, the Company will hold:

     o    residual inventory and equipment not part of the Asset Sale; and

     o    accounts receivable in the approximate amount of $250,000.

The Company will not have any ongoing operations subsequent to the Asset Sale.

                                       7

<PAGE>

Payment of Accrued Unpaid Salaries and Severance

         Certain members of management have not received their salaries since
May 1, 2005. Accordingly, the following individuals are entitled to be paid
accrued and unpaid salaries from the proceeds from the Asset Sale received by
the Company in the amounts set forth adjacent to their names (such amounts
calculated as of October 31, 2005): Carmine Stella ($105,000); Anthony Stella
($67,000); Michael Mastrisciani ($67,000); Daniel Mastrisciani ($67,000); Monty
Mastrisciani ($67,000); and Alex Mastrisciani ($73,000). The Company will also
reimburse such employees for out-of-pocket expenses incurred by them in
connection with the performance of their duties which, as of October 31, 2005,
is expected to be a total of approximately $60,000.

         In addition, under the terms of employment agreements between the
Company and such members of management, such employees are, upon the termination
of their employment with the Company, entitled to severance payments equal to
four (4) weeks of a base salary for each year of service provided to the
Company. The proceeds from the Asset Sale will also be used to pay severance to
following employees each of whom will be terminated as of the closing date of
the Asset Sale in the amounts set forth adjacent to their names: Anthony Stella
($102,000); Michael Mastrisciani ($47,000); Daniel Mastrisciani ($47,000); Monty
Mastrisciani ($47,000); and Alex Mastrisciani ($41,000). Carmine Stella will not
be terminated as of the closing date, and therefore, he will not be entitled to
any severance payment. He will, however, continue to serve as the Company's
Chief Executive Officer, and will be paid $210,000 per annum. See "Payment of
Accrued and Unpaid Salaries and Severance" at page ___.

Termination of Personal Guaranties and Release of Pledged Collateral

         In connection with a loan in the aggregate principal amount of $2.5
million provided to the Company by Seaway Capital, each of Alex Mastrisciani,
Daniel Mastrisciani, Michael Mastrisciani and Monty Mastrisciani pledged real
property owned by them located in Brooklyn, New York as collateral for such
loan. The security interest held by Seaway Capital in such collateral will be
released on the closing date upon the repayment of the loan by the Company.

         In connection with a revolving line of credit provided by Entrepreneur
Capital to the Company, the Company pledged all of its assets as collateral for
such loan. In addition, Carmine Stella, the Company's President, and Chief
Executive Officer personally guaranteed the Company's obligations to
Entrepreneur Capital. The guaranty provided by Mr. Stella will terminate on the
closing date upon repayment of the line of credit by the Company.

Terms Of The Asset Purchase Agreement

         The following is a summary of the significant provisions of the Asset
Purchase Agreement. To fully understand the Asset Sale and the terms of the
Asset Purchase Agreement, you should carefully read in its entirety the copy of
the Asset Purchase Agreement that is included as Appendix A to this Information
Statement and is incorporated herein by reference.

                                       8

<PAGE>

Purchase Price

         The Asset Purchase Agreement provides that, the Company will receive
$9.3 million (subject to certain adjustments based upon sales made by Oak under
the Sub-Distribution Agreement) payable as follows: $7.8 million to be paid at
the closing of the transaction in immediately available funds and (ii) $1.5
million to be paid at the closing of the transaction in immediately available
funds to the escrow agent. The Escrow Amount shall be held and disbursed
pursuant to the terms of an escrow agreement between the Company, Oak and the
Escrow Agent. In addition, within ten (10) days following the closing of the
transaction, Oak will purchase from the Company its saleable inventory at an
amount equal to the price paid by the Company for the inventory. At Oak's
option, the Company shall assign to Oak all of its outstanding purchase orders
for products not yet delivered by the respective brewer. Oak will pay such
assigned invoices when due.

Escrow

         On the closing date of the Asset Sale, the Company, Oak and Dealy and
Silberstein LLP, as escrow agent, will enter into an Escrow Agreement. Pursuant
to the terms of the Escrow Agreement, at the closing, Oak will deposit $1.5
million of the purchase price in an escrow account with the escrow agent. This
amount will be held to satisfy potential purchase price adjustments and any
claims for indemnification that Oak may have for breaches of the Company's
representations, warranties, covenants or other obligations in the Asset
Purchase Agreement. Upon each of the 6 month, 12 month and 18 month
anniversaries of the closing date, one third of this amount (less any
outstanding claims for indemnification) shall be delivered by the escrow agent
to Capital. The final distribution of these funds shall be delivered by the
escrow agent to Capital upon the later of the 18 month anniversary of the
closing date, or the date upon which all pending claims are resolved.

         In addition, from the $7.8 million cash purchase price to be delivered
by Oak at closing, certain sums will be retained by the escrow agent
specifically to repay outstanding creditors of Capital. It is currently
anticipated that approximately $750,000 will be deposited with the escrow agent
for this purpose.

Representations And Warranties

         The Asset Purchase Agreement contains various representations and
warranties made by us for the benefit of Oak relating to, among other things:

         (a) Our organization, good standing, corporate power and authority;

                                       9

<PAGE>

         (b) Our corporate authorization in relation to the Asset Purchase
         Agreement, the related transactions and related transaction documents
         to which we are a party;

         (c) The absence of conflict with our organization documents, material
         contracts, or applicable law as a result of the execution and delivery
         of, and performance under, the Asset Purchase Agreement;

         (d) the absence of third party approvals required for consummation of
         the transactions contemplated by the Asset Purchase Agreement, except
         as disclosed in the Asset Purchase Agreement;

         (e) the capitalization of the Company;

         (f) the title to and condition of the Assets and lack of encumbrances
         upon such Assets;

         (h) except as otherwise disclosed, compliance in all material respects
         with applicable federal, state and local laws, rules, regulations and
         ordinances in connection with the Distribution Business and ownership
         of the Assets being sold,

         (i) Employee and labor matters;

         (j) Absence of governmental investigations relating to the Distribution
         Business;

         (k) Absence of claims for brokers' fees; and

         (m) legal proceedings relating to our exclusive distribution rights.

         The Asset Purchase Agreement also contains various representations and
warranties made by Oak for our benefit relating to, among other things:

         (a) Its organization and good standing;

         (b) Its corporate authorization in relation to the Asset Purchase
         Agreement and the related transactions and related transaction
         documents to which it is a party;

         (c) The absence of conflict with Oak's organizational documents,
         contracts, or applicable law as a result of its execution and delivery
         of, and performance under, the Asset Purchase Agreement;

         (d) Absence of claims for brokers' fees; and

         (e) Its sufficient liquid assets to fund the purchase price at the
         closing of the transaction.

                                       10

<PAGE>

Covenants And Agreements Of The Company And Oak

         The Company and Oak have set forth various covenants and agreements in
the Asset Purchase Agreement, including the following:

         Maintenance of Physical Assets. We have agreed to maintain and service
the tangible Assets used in the conduct of the Distribution Business in the
manner set forth in the business plan mutually agreed to by the Company and Oak
(the "Business Plan").

         Compliance with Laws. We will comply with all laws applicable to the
Distribution Business, the noncompliance of which would reasonably be expected
to materially and adversely effect the Distribution Business or the related
Assets.

         Proprietary Rights. We have agreed to not transfer, license, dispose of
or permit to lapse any intellectual property right related to the Distribution
Business or to disclose such intellectual property right to any person.

         Conduct of Business Pending Closing. We have generally agreed to
conduct our business in accordance with the Business Plan. In furtherance of the
foregoing, we have agreed, among other things: (i) to preserve existing shelf
space and location for products on the premises of our customers; (ii) use
reasonable best efforts to preserve existing draught lines on the premises of
our customers; (iii) use reasonable best efforts to promote and distribute
products to customers within a specified territory in accordance with the
Business Plan; (iv) not sell products to certain customers in excess of volumes
customarily purchased by such customers for like time intervals; and (v) use
best efforts to preserve the goodwill of our customers, suppliers, and
employees.

         No Solicitation of Similar Transactions. Subject to the fiduciary
duties of our Board of Directors set forth in the Asset Purchase Agreement, we
have agreed on our behalf and on behalf of our stockholders, directors,
officers, employees, representatives, and agents not to directly or indirectly
solicit or encourage any inquiry or offer, or initiate negotiations or
discussions with, any other third party with respect to the purchase or sale of
any of the Assets of the Company being sold to Oak in the Asset Sale, other than
the consumption of inventory in the ordinary course. We have also agreed not to
enter into any agreement with a third party with respect to the purchase or sale
of any of the Assets of the Company being sold to Oak in the Asset Sale, other
than the consumption of inventory in the ordinary course or afford access to our
books, records or properties to any third party.

         Lists. We have agreed to deliver to Oak, on the closing date, (i) our
current 2005 price list for products, (ii) our currently active on-premise and
off-premise customers for products in the territory and (iii) a list of our
creditors and the amounts due in respect thereof. We have agreed to pay and
satisfy in full certain creditors to the reasonable satisfaction of Oak at or
prior to the closing of the transaction and pay and satisfy in full all of our
remaining creditors within ninety (90) days following the closing of the
transaction.

                                       11

<PAGE>

         Brewer Approvals. We have agreed to use our best efforts to assist Oak
in obtaining the written consent from certain brewers (as set forth in the Asset
Purchase Agreement) of Oak as a distributor of brewer's products in a specified
territory.

         Landlord Acknowledgement. We agreed to obtain a release issued by our
landlord in favor of the Company of any liabilities arising under, resulting
from or in connection with, the lease between Erie Basin Marine Associates, as
landlord, and Prospect Beverages Inc., as tenant, for the lease of the property
known as 700 Columbia Street, Erie Basin, Buildings #300 and 302, Brooklyn, New
York (the "Lease"), and deliver a copy of such release to Oak at the closing of
the transaction.

         Post-Closing Actions by the Company. We have agreed that, after closing
of the Asset Sale, that we will execute and deliver to Oak such other
instruments of conveyance and take such other actions as Oak may reasonably
request in order to put Oak more fully in possession of any of the Assets or to
better enable Oak to fully obtain the practical realization of the benefits,
utilization and value of the Assets. The Company and each of the Majority
Stockholders agreed to refrain from (i) acting as an authorized distributor of
the products in the territory and (ii) engaging in wholesale transactions in the
products resold in the territory.

         Confidentiality. After the closing, all information relating to our
business and the acquired Assets will be deemed to be the confidential
information of Oak. We have agreed to hold such confidential information in the
strictest confidence, and not to disclose such confidential information without
the prior written consent of Oak, except as required by law.

Conditions To Closing; Closing Date

         The closing of the transactions contemplated by the Asset Purchase
Agreement is scheduled to take place five business days after at least 20
calendar days have elapsed following the date on which we send this Information
Statement to our stockholders. Our obligation to complete the Asset Sale is
subject to the satisfaction or waiver of, among others, the following
conditions:

         (a) Oak's representations and warranties in the Asset Purchase
Agreement that are qualified by materiality must be true and correct, and Oak's
representations and warranties not so qualified must be true and correct in all
material respects;

         (b) Oak must have complied in all material respects with the terms,
covenants and conditions set forth in the Asset Purchase Agreement; and

         (c) Oak must have paid the purchase price and executed the Escrow
Agreement.

         Oak's obligations to complete the Asset Sale are subject to the
satisfaction or waiver of, among others, the following conditions:

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<PAGE>

         (a) Oak shall receive written approval of the Asset Purchase Agreement
and Asset Sale by certain brewers named therein and a letter from such brewers
appointing Oak as the distributor on an exclusive basis for certain products in
a specified territory and the trade accounts located therein;.

         (b) Our representations and warranties in the Asset Purchase Agreement
must be true and correct in all material respects;

         (c) We must have complied in all material respects with the terms,
covenants and conditions set forth in the Asset Purchase Agreement;

         (d) The Majority Stockholders of the Company have approved the
transaction;

         (e) Nothing shall have occurred resulting in a material adverse effect
on the Distribution Business and the Assets;

         The condition set out in clause (d) has been satisfied by the delivery,
by the Majority Stockholders, of a written consent dated September 15, 2005
approving the Asset Sale and the Asset Purchase Agreement.

         The parties are working toward completing the Asset Sale as quickly as
possible. This Information Statement is being sent to you on or about October ,
2005. We currently expect that the Asset Sale will close on or after __________,
2005, which is the fifth business day after 20 calendar days have elapsed
following the mailing date of this Information Statement.

Termination

         The Asset Purchase Agreement and the transactions contemplated thereby
may be terminated at any time prior to the closing of the Asset Sale:

     o    The mutual written agreement of the Company and Oak;

     o    by Oak,  at its  option,  if there has been a  material  violation  or
          breach  of  any  of  the  covenants,  representations,  warranties  or
          agreements made by us in the Asset Purchase Agreement;

     o    by the Company,  at its option, if there has been a material violation
          or  breach of any of the  covenants,  representations,  warranties  or
          agreements made by Oak in the Asset Purchase Agreement

     o    by Company (1) if, during the time period beginning on the date of the
          execution of the Asset  Purchase  Agreement  and ending on the initial
          filing  of the  Information  Statement  (the  "Initial  Period"),  the
          Company has discussions or negotiations with a third party the Company
          determines  that it is  necessary  to  terminate  the  Asset  Purchase
          Agreement and pursue such  discussions  and  negotiations  in order to
          discharge their fiduciary duties, or (2) if, after the Initial Period,
          our board of directors duly  exercises its fiduciary out,  receives an
          opinion  letter of counsel and  accepts a superior  offer from a third
          party.

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<PAGE>

     o    by Oak, at its option, if any of the closing  conditions  precedent to
          its  obligations  have not been  satisfied  as of the  closing  of the
          transaction  or if  satisfaction  of such a  condition  is or  becomes
          impossible  (other than  through the failure of Oak to comply with its
          obligations)  and Oak has not waived such  condition  on or before the
          closing of the transaction;

     o    by the  Company,  at its  option,  if  any of the  closing  conditions
          precedent to its obligations have not been satisfied as of the Closing
          Date or if satisfaction  of such a condition is or becomes  impossible
          (other  than  through  the  failure of the  Company to comply with its
          obligations)  and the  Company  has not waived  such  condition  on or
          before the closing of the transaction;

     o    by either Oak or the  Company if the closing of the  transaction  does
          not occur  within 90 days  after  the date of  execution  of the Asset
          Purchase Agreement;

     o    by Oak,  (1) at any time  following  the  receipt of a  competing  bid
          notice  plus  seven  (7) days so long as the  Company  has not  ceased
          discussions  with the party that gave rise to such  termination  right
          within such seven (7) day period,  or (2) if the Company exercises its
          fiduciary out,  irrespective of whether the Company accepts a superior
          offer;

     o    by Oak, if, in  connection  with this  Information  Statement,  Oak is
          required to provide (A) any financial information regarding Oak or any
          of its  shareholders,  or (B) any  information  in which Oak,  in good
          faith, believes could put Oak at a competitive disadvantage; and

     o    by the Company,  if Oak refuses to provide the  financial  information
          and  the  SEC  is  unable  to  provide  its   approval   without  such
          information.

Indemnification

         Oak has agreed to indemnify, defend and hold harmless the Company and
its directors, officers, stockholders, employees, representatives and agents
from and against any and all damages or losses suffered or incurred arising
from; (i) its breach or non-fulfillment of any agreement or covenant, or (ii)
its breach or misrepresentation of any representations and warranties.

         We have agreed to indemnify, defend and hold harmless Oak and its
directors, officers, stockholders, employees, representatives and agents from
and against any and all damages or losses suffered or incurred arising from; (i)
any of our liabilities or obligations, (ii) our breach or non-fulfillment of any
agreement or covenant, (iii) our breach or misrepresentation of any
representations and warranties and (iv) certain damages to Oak caused by our
stockholders. To the extent that Oak's indemnification claims exceed the amounts
placed in escrow, Oak will have a right of action against us for the excess. Our
aggregate liability for such indemnification claims is limited to the purchase
price under the Asset Purchase Agreement.

                                       14

<PAGE>

         The parties have agreed that the representations, warranties and
covenants shall survive for 18 months from the closing date, except for claims
for indemnity made by either the Company or Oak due to a breach of any of the
representations, warranties and covenants occurring during such eighteen (18)
month period, which will survive. The Company is not obligated to indemnify Oak
unless the aggregate of all claims exceeds $20,000.

Terms of the Sub-Distribution Agreement

         The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak
has become a sub-distributor of the Company of certain Pabst beers and malt
beverages. A copy of the Sub-Distribution Agreement is included as Appendix B to
this Information Statement and is incorporated herein by reference. The
Sub-Distribution Agreement became effective when the Company filed this
Information Statement with the Securities and Exchange Commission and shall
terminate on the earlier of (i) the closing of the transactions contemplated by
the Asset Purchase Agreement, (ii) the termination of the Asset Purchase
Agreement, (iii) 90 days following September 15, 2005, or (iv) the earlier
termination of the Sub-Distribution Agreement in accordance with its terms.
Under the terms of the Sub-Distribution Agreement, Oak has the right to
distribute the Pabst products to customers located in the five boroughs of New
York City, and in exchange for such rights, Oak will pay Pabst directly for its
product purchases and, during the first 45 days following the effective date of
the Sub-Distribution Agreement, Oak will pay to the Company the following
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the
Company in connection with the closing of the transactions contemplated by the
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i)
$.25 for each case of products purchased by Oak and sold by Oak to customers in
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each
barrel of products purchased by Oak but not sold to such customers, all
determined during such 45-day period. If the Sub-Distribution Agreement is
terminated by either party for any reason, the Company will be required to
promptly pay to Oak the credits described above.

         As a result of entering into the Sub-Distribution Agreement, Oak will
service approximately 80% of existing customers and operating expenses for the
Company will also be reduced by approximately 70%.

                                       15

<PAGE>

Dissenters' Rights

         In accordance with the Delaware General Corporation Law, our
stockholders do not have dissenters' or appraisal rights in connection with the
Asset Sale.

Certain Federal Income Tax Consequences

         The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. Any gain resulting from the
sale will be offset against the Company's net operating loss carryforwards.
However, utilization of these carryforwards generates an alternative minimum tax
for both government bureaus. We do not expect the combination of both
alternative tax liabilities for the two bureaus to exceed $100,000.

Accounting Treatment

         Upon completion of the Asset Sale, the Company will remove from its
consolidated balance sheet the assets sold to Oak and will reflect the effect of
the receipt and the use of the proceeds of the sale therein. The Company will
record a gain on the sale of assets to Oak equal to the difference between the
purchase price received and the book value of the assets sold in its
consolidated statement of operations.

Government Approvals

         Except for compliance with the applicable regulations of the Securities
and Exchange Commission in connection with this Information Statement and of the
Delaware General Corporation Law in connection with the Asset Sale, we are not
required to comply with any federal or state regulatory requirements, and no
federal or state regulatory approvals are required in connection with Asset Sale
(although we are required to obtain approvals for the assignment of certain
contracts with governmental entities and for permits proposed to be transferred
to Oak).

Voting Securities And Principal Holders Thereof

         As of the Record Date, there were outstanding 3,792,045 shares of
Common Stock, $0.001 par value.

         The following table sets forth as of September 15, 2005, certain
information with respect to the beneficial ownership of Common Stock by each
person or entity known by the Company to be the beneficial owner of 5% or more
of such shares, each officer and director of the Company, and all officers and
directors of the Company as a group:

                                       16

<PAGE>

Name and Address of          Shares of Common                 Percentage (%) of
Beneficial Owner             Stock Owned (3)                  Common Stock (3)
-------------------          ----------------                 ------------------

Carmine Stella                      712,500                         18.8%

Anthony Stella                      237,500                          6.3%



Alex Matrisciani(2)                 237,500                          6.3%

Michael Matrisciani(2)              237,500                          6.3%

Daniel Matrisciani(2)               237,500                          6.3%

Monty Matrisciani(2)                237,500                          6.3%

Casimir Capital L.P.              1,000,000(4)                      20.9%
100 Broadway, 11th Floor
New York, NY 10005

All officers and  directors       1,900,000                         50.1%
as a group (nine (9) persons)

(1)      The address of each Stockholder shown above except as otherwise
         indicated is c/o Capital Beverage  Corporation,  700 Columbia Street,
         Erie Basin, Building # 302, Brooklyn, New York 11231.
(2)      Alex Matrisciani, Michael Matrisciani, Daniel Matrisciani and Monty
         Matrisciani are brothers. Daniel Matrisciani and Michael Mastrisciani
         are each a director of the Company.
(3)      Beneficial ownership as reported in the table above has been determined
         in accordance with Item 403 of Regulation S-K of the Securities Act of
         1933 and Rule 13(d)-3 of the Securities Exchange Act, and based upon
         3,792,045 shares of Common Stock outstanding.
(4)      Includes warrants to purchase an aggregate of 1,000,000 shares of
         Common Stock, exercisable at $1.00 per share. Casimir Capital L.P. is
         delinquent in its filing of Schedule 13D and Form 3 with the Securities
         and Exchange Commission.

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Where You Can Find Additional Information

         We file annual, quarterly and current reports, proxy and information
statements and other information with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended. You may read and copy
this information at the Public Reference Section at the Securities and Exchange
Commission at 450 Fifth Street, NW, Judiciary Plaza, Washington, DC 20549. You
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-732-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information about issuers
that file electronically with the SEC. The address of that site is
http://www.sec.gov. Our public filings are also available to the public from
commercial document retrieval services.





























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                                   Appendix A



                            ASSET PURCHASE AGREEMENT




































<PAGE>


                                   Appendix B



                           SUB-DISTRIBUITON AGREEMENT





















