UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                For the quarterly period ended September 29, 2002

                         BEVSYSTEMS INTERNATIONAL, INC.




                FLORIDA                                 EIN 84-1352529



                 501 Brickell Key Drive Suite 407 Miami, Florida
                                      33131

                                 (786) 425-2201
                                 www.lifeO2.com

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

As of November 27, 2002, the registrant had 92,628,468 shares of common stock
outstanding at .001 par value.

<PAGE>

                  BEVSYSTEMS INTERNATIONAL, INC. & SUBSIDIARIES


                         TABLE OF CONTENTS


PART I

Item 1.    Condensed Consolidated Financial Statements

           Condensed Consolidated Balance Sheet as of September 29,
           2002 (unaudited)

           Condensed Consolidated Statement of Operations (unaudited) for the
           three and six months ended September 29, 2002 and 2001

           Condensed Consolidated Statement of Cash Flows (unaudited) for the
           six months ended September 29, 2002 and 2001

           Notes to Condensed Consolidated Financial Statements
           (unaudited)

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations


PART II - Other Information

Item 1-5.  Not Applicable

Item 6.    Exhibits and Reports on Form 8-K

Signatures

                                       2
<PAGE>

                                     Part I
                              Financial Information
                                     Item 1
                              Financial Statements
                              --------------------

                                   BEVsystems International, Inc. & Subsidiaries
                                            CONDENSED CONSOLIDATED BALANCE SHEET
                                               At September 29, 2002 (Unaudited)
<TABLE>
<CAPTION>




                                      ASSETS

Current assets
<S>                                                                                  <C>
  Cash                                                                               $        847
  Accounts receivable                                                                     157,914
  Inventory                                                                               114,823
  Prepaid expenses and other current assets                                               325,111
-------------------------------------------------------------------------------------------------

     Total current assets                                                                 598,695

Property, plant and equipment, net                                                      1,858,816

Intangible assets                                                                       6,167,000
-------------------------------------------------------------------------------------------------

     Total assets                                                                    $  8,624,511
=================================================================================================

                       LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                                   $  1,317,930
  Accrued expenses                                                                        864,500
  Deposits and deferred fees                                                              485,500
  Convertible debentures                                                                1,600,584
  Notes payable and shareholder advances                                                  366,819
-------------------------------------------------------------------------------------------------

     Total current liabilities                                                          4,635,333

  Long-term debt, net of current portion                                                  488,636
-------------------------------------------------------------------------------------------------

     Total liabilities                                                                  5,123,969
-------------------------------------------------------------------------------------------------

Shareholders' equity
  Preferred stock; no par value; 5,000,000 shares authorized; 100 shares issued
    and outstanding; nonvoting and convertible into 174,825 shares of common stock         74,601
  Common stock; no par value; 100,000,000 shares authorized; 61,131,623 shares
    issued and outstanding and additional paid-in capital                              26,468,322
  Prepaid costs - convertible debentures                                                 (303,193)
  Unearned Services                                                                      (873,999)
  Accumulated deficit                                                                 (21,865,189)
-------------------------------------------------------------------------------------------------

      Total shareholders' equity                                                        3,500,542
-------------------------------------------------------------------------------------------------

      Total liabilities and shareholders' equity                                     $  8,624,511
=================================================================================================
</TABLE>



See accompanying notes.


                                       3
<PAGE>
                                   BEVsystems International, Inc. & Subsidiaries
                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>

                                                     Three Months Ended September 29, Six Months Ended September 29,
                                                            2002            2001            2002            2001
--------------------------------------------------------------------------------------------------------------------

<S>                                                    <C>             <C>             <C>             <C>
Net revenues                                           $    230,298    $    485,877    $    443,620    $    485,877
-------------------------------------------------------------------------------------------------------------------

Costs and expenses
  Cost of revenues                                          133,066         528,219         298,766         536,064
  Selling and marketing                                     596,082         547,254       1,193,588         579,658
  General and administrative                              1,690,418         328,564       3,875,961         932,895
  Asset impairment charges                               11,946,032            --        11,946,032            --
  Interest expense, net                                     225,838            --           409,254            --
-------------------------------------------------------------------------------------------------------------------

     Total costs and expenses                            14,591,436       1,404,037      17,723,601       2,048,617
-------------------------------------------------------------------------------------------------------------------

Net loss                                               $(14,361,138)   $   (918,160)   $(17,279,981)   $ (1,562,740)
===================================================================================================================

Basic and diluted net loss per common share            $      (0.28)   $      (0.04)   $      (0.37)   $      (0.09)
                                                       ------------    ------------    ------------    ------------

Weighted average number of common shares outstanding     50,906,353      25,415,084      46,838,770      16,700,751
                                                       ------------    ------------    ------------    ------------

</TABLE>

See accompanying notes.

                                       4
<PAGE>
                                   BEVsystems International, Inc. & Subsidiaries
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>

                                                                                 Six Months Ended September 29,
                                                                                      2002           2001
---------------------------------------------------------------------------------------------------------------


Operating activities
<S>                                                                              <C>             <C>
  Net loss                                                                       $(17,279,981)   $ (1,562,740)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Depreciation                                                                     98,124           5,938
      Amortization                                                                    351,051            --
      Asset impairment charges                                                     11,946,032            --
      Common stock issued for services                                              2,416,025            --
      Issuance of warrants in connection with extension of notes payable              140,153            --
      Changes in assets and liabilities:
        Accounts receivable                                                           (51,771)        (25,484)
        Inventory                                                                     (48,369)        (18,734)
        Prepaid expenses and other assets                                             (90,586)        (19,400)
        Accounts payable and accrued expenses                                         720,091       1,465,361
-------------------------------------------------------------------------------------------------------------

           Net cash used in operating activities                                   (1,799,231)       (155,059)
-------------------------------------------------------------------------------------------------------------

Investing activities
  Acquisition of Life International                                                      --        (1,020,000)
  Purchase of property and equipment                                                  (36,937)       (192,078)
-------------------------------------------------------------------------------------------------------------

           Net cash used in investing activities                                      (36,937)     (1,212,078)
-------------------------------------------------------------------------------------------------------------

Financing activities
  Proceeds from notes payable and shareholder advances                                416,387            --
  Repayments of notes payable                                                        (330,524)           --
  Proceeds from issuance of convertible debentures                                    728,000            --
  Proceeds from issuance of common stock                                               50,000       1,332,059
  Proceeds from exercise of stock options                                               5,500            --
  Net Proceeds from exercise of warrants                                              959,356            --
-------------------------------------------------------------------------------------------------------------

           Net cash provided by financing activities                                1,828,719       1,332,059
-------------------------------------------------------------------------------------------------------------

Net decrease in cash                                                                   (7,449)        (35,078)

Cash, beginning of period                                                               8,296            --
-------------------------------------------------------------------------------------------------------------

Cash (overdraft), end of period                                                  $        847    $    (35,078)
=============================================================================================================

Supplemental disclosures of cash flow information:

  Cash paid for interest                                                         $     45,625    $       --
  Supplemental schedule of non-cash activities:
    Common stock issued in connection with prepaid expenses                      $    173,188    $       --
    Common stock issued in connection with conversion of note payable            $     68,912    $       --
    Common stock issued in connection with conversion of convertible debenture   $     50,000    $       --
    Common stock issued in lieu of accounts payable and accrued expenses         $  1,613,010    $       --
    Common stock and warrants issued in connection with acquistion               $       --      $  4,882,312
    Cashless exercise of warrants in lieu of accounts payable                    $     49,702    $       --
    Cashless exercise of stock options in lieu of accounts payable               $      9,000    $       --
    Issuance of warrants in connection with convertible debentures               $    477,177    $       --
    Issuance of warrants in connection with consulting agreements                $    974,441    $       --

</TABLE>

See accompanying notes.


                                       5
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments), which are, in the
opinion of Management, necessary for a fair presentation of the financial
position and results of operations, and cash flows for the periods presented.
The results of operations for the three and six months ended September 29, 2002
and 2001 are not necessarily indicative of the results of the entire year. The
consolidated financial statements included herein are presented in accordance
with the requirements of Form 10-QSB and consequently do not include all of the
disclosures normally made in the registrant's annual Form 10-KSB filing. These
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Form 10-KSB
for the year ended March 30, 2002.

2. NEW ACCOUNTING PRONOUNCEMENTS

During 2000 and 2001, the Emerging Issues Task Force ("EITF") addressed various
issues related to the income statement classification of certain promotional
payments, including consideration from a vendor to a reseller or another party
that purchases the vendor's products. EITF No. 01-9, Accounting for
Consideration Given by a Vendor to a Customer or Reseller of the Vendor's
Products, was issued in November 2001 and codified earlier pronouncements. The
consensus requires certain sales promotions and customer allowances previously
classified as selling, general and administrative expenses to be classified as a
reduction of net sales or as cost of goods sold. The Company adopted EITF No.
01-9 on March 31, 2002.

On June 29, 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. Statement 141 eliminates the
pooling-of-interests method of accounting for business combinations except for
qualifying business combinations that were initiated prior to July 1, 2001.
Statement 141 changes the criteria to recognize intangible assets apart from
goodwill. The requirements of Statement 141 are effective for any business
combination accounted for by the purchase method that is completed after June
30, 2001.

Under Statement 142, goodwill and indefinite lived intangible assets are no
longer amortized but will be reviewed annually, or more frequently if impairment
indicators arise. Intangible assets that are not deemed to have an indefinite
life will continue to be amortized over their useful lives.

3. GOING CONCERN - UNCERTAINTY

As shown in the accompanying condensed consolidated financial statements, the
Company has incurred operating losses, negative cash flows from operating
activities and has negative working capital. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.

The Company has initiated several actions to generate working capital and
improve operating performances, including equity and debt financing.

There can be no assurance that the Company will be able to successfully
implement its plans, or if such plans are successfully implemented, that the
Company will achieve its goals.

Furthermore, if the Company is unable to raise additional funds, it may be
required to reduce its workforce, reduce compensation levels, reduce dependency
on outside consultants, modify its growth and operating plans, and even be
forced to terminate operations completely.

                                       6
<PAGE>

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern and do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
might result from the outcome of this uncertainty.

4. ASSET IMPAIRMENT CHARGES

Based on Statement 142, as discussed in Note 2, the Company recorded a one-time,
noncash charge of $11,946,032 to write off the carrying value of its goodwill in
the second quarter. In calculating the impairment charge, the fair value was
estimated using quoted market prices. The amount of the impairment primarily
reflects the decline in the Company's stock price since the acquisition of the
goodwill in February of 2002.

Significant estimates underlying the accompanying condensed consolidated balance
sheet include the recoverability of intangible assets. This estimate may be
subject to a change, which could have a material unfavorable impact on the
Company in the near term.

5. LONG-TERM DEBT

In July 2002, the Company re-financed the manufacturing plant located in
Clearwater Florida. The amount of the mortgage note totaled $420,000. The note
is due in monthly installments of principal and interest thru 2032 and bears
interest at 12.99%. The outstanding principal balance as of September 29, 2002
totaled $419,806.

6. CONVERTIBLE DEBENTURES

The company received $815,000 of proceeds from convertible debentures for the
six months ending September 29, 2002. The company also incurred $40,000 in
issuance costs related to the debentures. During the period, the company issued
350,877 shares for the conversion of $50,000 of convertible debentures.
Additionally, the company paid $87,000 as repayment of debentures during the
period. The holders of the convertible debentures received 1,803,333 warrants to
acquire shares of the Company's stock. The exercise price of the warrants range
depending on the current market price. The warrants expire in three years. The
proceeds from the issuance of the debentures with the warrants were allocated
between the warrants and the convertible debentures, based on their relative
fair values at the time of issuance. The aggregate fair value of the warrants on
the grant date was $477,177 calculated using the Black-Scholes Option Pricing
Model and was accounted for as additional paid-in capital and as prepaid costs -
convertible debentures, which is amortized to interest expense over the term of
the notes. $173,984 was charged to interest expense during the six months ending
September 29, 2002.

7. STOCK OPTION PLAN

In April 2001, the Company adopted a Stock Option Plan intended to provide
officers, directors, key employees and consultants of the Company an opportunity
to acquire stock in the Company. As of March 30, 2002, 1,732,383 options to
purchase shares at $0.33 per share had been issued and 900,000 options to
purchase shares at $0.01 per share had been issued. 1,695,055 of the options are
vested at March 30, 2002, with the remainder, of 937,328, options, to be vested
over the next two years. No options have been exercised at March 30, 2002. The
fair value of the options on the grant date was $94,050 calculated using the
Black-Scholes Option Pricing Model.

The company granted to employees 8,925,000 stock options to purchase shares
during the six months ended September 29, 2002. As of September 29, 2002,
10,640,645 options to purchase shares ranging from $0.08 to $0.73 per share were
outstanding, 9,330,728 of the options are vested as of September 29, 2002, with
the remainder, of 1,309,867 options, to be vested over the next two to three
years. 916,738 options were exercised during the period September 29, 2002. The
fair value of the options granted during the six month period on the grant date
was $755,495 calculated using the Black-Scholes Option Pricing Model.

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," in accounting for stock based employee compensation
arrangements whereby no compensation cost related to stock options is deducted
in determining net loss. Had the compensation cost for stock option grants to
the Company's employees been determined by SFAS No. 123, "Accounting for Stock
Based Compensation," the Company's net loss would have increased for the three
and six months ended September 29, 2002, as presented in the table below. Using
the Black-Scholes Option Pricing Model, the Company's pro forma net loss is as
follows:
<TABLE>
<CAPTION>

                                        Three Months Ended September 2Six0Months Ended September 29,2002
                                        ---------------------------------------------------------
<S>                                                  <C>                           <C>
Pro Forma Net Loss                                   $ (14,765,233)                $ (17,901,351)
Pro Forma Net Loss Per Share                                 (0.29)                        (0.38)
Risk Free Interest Rate                                4.50 - 5.71                   4.50 - 5.71
Expected Lives                                         2 - 3 Years                   2 - 3 Years
Expected Volatility                                  None - 110.33                 None - 110.33
</TABLE>


For purposes of these pro forma disclosures, the estimated fair value of the
options granted is amortized to expense over the options' vesting period.

                                       7
<PAGE>

8. COMMON STOCK TRANSACTIONS

The Company issued 8,273,476 shares of common stock for the period ended
September 29, 2002 to employees and non-employees of the company for past
services rendered; 5,337,250 shares for the period ended September 29, 2002 for
the exercise of warrants. The Company, pursuant to the application of SFAS No.
123 in accounting for the issuance of stock to employee and non-employee
consultants, recorded expense based on the fair market value of the shares
issued since the fair value of the shares is more reliably measurable. The
common stock was issued pursuant to the Registration Statement on Form S-8 under
the Securities Act of 1933 and as such no holding period is required. Due to the
issuance of the shares the company recorded $1,782,786 of expense in the
statement of operations for the period ended September 29, 2002.

The Company issued 4,775,928 shares of restricted common stock for the period
ended September 29, 2002 to non-employees for past and future services rendered,
586,475 shares of restricted stock for the period September 29, 2002 for the
conversion of debt, 916,738 shares of restricted stock for the period ended
September 29, 2002, for the exercise of stock options and 1,977,298 shares of
restricted stock for the period ended September 29, 2002 for the exercise of
warrants. Additionally, the company issued 833,333 shares of restricted stock
for $50,000 during the period ended September 29, 2002. The Company, pursuant to
the application of SFAS No. 123 in accounting for the issuance of stock to
employee and non-employee consultants, recorded expense based on the fair market
value of the shares issued since the fair value of the shares is more reliably
measurable. Since restricted common stock cannot be sold until registered under
the SB-2 registration, certain issuances by the Company were discounted by 25%
as of the date of issuance. Due to the issuance of the shares, the Company
recorded $633,239 of expense in the statement of operations for the period ended
September 29, 2002.

During the period ended September 29, 2002 7,314,548 warrants were exercised at
a conversion price ranging from $0.01 to $0.66. The net proceeds of the warrants
totaled $959,356.

9. SUBSEQUENT EVENTS

On October 21, 2002, at a special meeting of the Shareholders, the holders of a
majority of the shares entitled to vote adopted the Board of Directors'
recommendation that the registrant change its domicile from Colorado to Florida.
The registrant subsequently filed a Certificate of Domestication with the state
of Florida, and a withdrawal of its authority in Colorado, resulting in the
registrant becoming a Florida corporation.

As a result of the shareholder's adoption of the recommendations of the Board of
Directors at the October 21, 2002 meeting, the number of authorized common
shares were increased from 100,000,000 to 650,000,000, with a par value of .0001
per share.

Subsequent to September 29, 2002 the Company issued 26,465,831 shares of common
stock to employees and non-employees of the company services rendered. The
shares were issued in connection with the exercise of warrants, accounts payable
in lieu of cash, conversion of notes payable, and consulting agreements. The
common stock was issued pursuant to the Registration Statement on Form S-8 under
the Securities Act of 1933 and as such no holding period is required.
Additionally, the Company issued 5,031,014 shares of restricted common to
non-employees for services rendered. The shares were issued in connection with
the purchase of common stock, accounts payable in lieu of cash, and conversion
of notes payable.


                                       8
<PAGE>

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations:
--------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto as filed in the Annual Report on Form
10-KSB of BEVsystems International, Inc. and Subsidiaries (the "Company") for
the year ended March 30, 2002.

                           Forward-Looking Statements

When used in the Form 10-QSB and in future filings by the Company with the
Securities and Exchange Commission, the words or phrases "will likely result,"
"the Company expects," "will continue," "is anticipated," "estimated,"
"project," "outlook," or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company wishes to caution readers not to
place undue reliance on any such forward-looking statements, each of which
speaks only as of the date made. Such statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Among these
risks are water supply and bottling capacity constraints in the face of
significant growth, dependence on outside distributors, and reliance on
commodity price fluctuations as they influence raw material pricing. The Company
has no obligation to publicly release the result of any revisions, which may be
made to any forward-looking statements to reflect anticipated or unanticipated
events or circumstances occurring after the date of such statements.

Company Overview
----------------

BEVsystems' objectives for its first quarter ending June 30, 2002 encompassed
the expansion of its distribution network and the growth of its target markets
to include Florida, New York, New Jersey and parts of South Carolina. The
implementation of its sales and marketing strategies to support this growth was
also included in its stated goals. During the second quarter ending September
29, 2002, these goals were achieved. Our product is now distributed in health
clubs, spas and fitness centers as well as in health food stores in Florida, New
York and New Jersey. In parts of South Carolina Life O2 is available in retail
chain outlets.

The company has entered into an agreement with Visit Florida, a department
within the State of Florida, to license the brand FLA USA. Our purified bottled
water is now Florida's `Official Water'. We are actively promoting our FLA USA
product to our partners in Visit Florida. These consist primarily of businesses
within the tourism industry including hotels, theme parks, travel and
hospitality.

Our product family now consists of a purified water available under the FLA USA
brand in 16.9 oz., 20 oz., and one liter bottles and our performance water Life
O2 available in the same packages and also with a sports cap.

The international business is continuing to grow with Chile and Canada becoming
two of our strongest international licensees. Japan, after the recall problem
reported in our 10K filing for the fiscal year ended March 30, 2002, is now
ready to begin distributing their Balance Date +O2 beginning in the third
quarter of fiscal year 2003.

In September 2001, the Company did not have any distribution in the United
States, relied entirely upon co-packing contracts to produce our products, and
did not have a sales staff. Now one year later the Company owns our own
manufacturing plant, with a capacity to produce 50,000 cases of single serve
bottled water per month, has distribution through out the entire states of
Florida, New York and New Jersey, has assembled a professional, competent sales
staff, and sold over 50,000 cases in our first year of operations


                                       9
<PAGE>

Results of Operations
---------------------

The company did not begin operations until July 13, 2001, when the acquisition
of the Assets of the Beverage Division of Life International Products, LLP was
completed. Additionally, the Company acquired Aqua Clara Bottling &
Distribution, Inc. and Subsidiaries on February 25, 2002. As such, the financial
statement comparison does not accurately reflect comparative results of
operations.

For the three months ended September 29, 2002 (Second Quarter):
---------------------------------------------------------------

Net Revenues for the second quarter of fiscal year 2003 were $230,298 compared
to $485,877, for the same period of fiscal year 2002. Sales to Nihon Shokken, a
Japanese distributor, accounted for 91% of the revenue in the second quarter of
fiscal year 2002. In January 2002, the Company entered into a master
distribution agreement with StonePoint Group, Ltd. for the territory of Asia. As
such, there were no direct sales to Nihon Shokken for the second quarter of
fiscal year 2003. Instead, the Company received $400,000 as a one-time license
fee, which is carried on the balance sheet as part of deposits and deferred
fees.

Selling and marketing expenses for the second quarter of fiscal year 2003 was
$596,082 compared to $547,254, for the same period of fiscal year 2002, the
slight increase is primarily attributable to higher public relations and
investor relations expense, an increase in sales & marketing personnel, which
was offset by lower general marketing expenses. General and administrative
expenses for the second quarter of fiscal year 2003 was $1,690,418 compared to
$328,564, for the same period of fiscal year 2002, the increase is primarily
attributable to expenses related to consultative services, encompassing mergers
and acquisitions, corporate restructuring, and strategic alliances. Impairment
charges related to goodwill of $11,946,032 in the second quarter of fiscal year
2003 compared to none for the same period of fiscal year 2002, and interest
expense for the second quarter of fiscal year 2003 was $225,838 compared to none
for the same period of fiscal year 2002, the increase is directly attributable
to higher average debt outstanding and the amortization of the debt discount
related to the issuance of warrants (as discussed in note 6). The net loss was
for the second quarter of fiscal year 2003 was $14,361,138 compared to $918,160,
for the same period of fiscal year 2002. As a result of the issuance of both
restricted and S-8 common stock in exchange for services, the company recorded
$814,759 of non-cash expenditures, which is included in the results of
operations for second quarter of fiscal year 2003.

For the six months ended September 29, 2002 (First Half):
---------------------------------------------------------

Net Revenues for the first half of fiscal year 2003 were $443,620 compared to
$485,877, for the same period of fiscal year 2002. Sales to Nihon Shokken, a
Japanese distributor, accounted for 91% of the revenue in the first half of
fiscal year 2002. In January 2002, the Company entered into a master
distribution agreement with StonePoint Group, Ltd. for the territory of Asia. As
such, there were no direct sales to Nihon Shokken for the second quarter of
fiscal year 2003. Instead, the Company received $400,000 as a one-time license
fee, which is carried on the balance sheet as part of deposits and deferred
fees.

                                       10
<PAGE>

Selling and marketing expenses for the first half of fiscal year 2003 was
$1,193,588 compared to $579,658, for the same period of fiscal year 2002, the
increase is primarily attributable to higher public relations and investor
relations expense, an increase in sales & marketing personnel which was offset
by lower general marketing expenses. General and administrative expenses for the
first half of fiscal year 2003 was $3,875,961 compared to $932,895, for the same
period of fiscal year 2002, the increase is primarily attributable to expenses
related to consultative services, encompassing mergers and acquisitions,
corporate restructuring, and strategic alliances. Impairment charges related to
goodwill of $11,946,032 for the first of fiscal year 2003 compared to none for
the same period of fiscal year 2002, and interest expense for the first half of
fiscal year 2003 was $409,254 compared to none for the same period of fiscal
year 2002, the increase is directly attributable to higher average debt
outstanding and the amortization of the debt discount related to the issuance of
warrants (as discussed in note 6). The net loss was for the first half of fiscal
year 2003 was $17,279,981 compared to $1,562,740, for the same period of fiscal
year 2002. As a result of the issuance of both restricted and S-8 common stock
in exchange for services, the company recorded $2,416,025 of non-cash
expenditures, which is included in the results of operations for the first half
of fiscal year 2003.

Liquidity and Capital Resources
-------------------------------

Our primary source of liquidity has historically consisted of sales of equity
securities and debt instruments. The company is currently engaged in discussions
with numerous parties with respect to raising additional capital. As shown in
the accompanying condensed consolidated financial statements, the Company has
incurred operating losses, negative cash flows from operating activities and has
negative working capital. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. The Company has initiated
several actions to generate working capital and improve operating performances,
including equity and debt financing. There can be no assurance that the Company
will be able to successfully implement its plans, or if such plans are
successfully implemented, that the Company will achieve its goals. Furthermore,
if the Company is unable to raise additional funds, it may be required to reduce
its workforce, reduce compensation levels, reduce dependency on outside
consultants, modify its growth and operating plans, and even be forced to
terminate operations completely.

The Company does not intend to manufacture bottled water products without firm
orders in hand for its products. The Company intends to expend costs over the
next twelve months in advertising, marketing and distribution. These costs are
expected to be expended prior to the receipt of significant revenues. There can
be no assurance that the company will generate significant revenues as a result
of its investment in advertising, marketing and distribution and there can be no
assurance that the company will be able to continue to attract the capital
required to fund its business plan.

However, the Company has no definitive plans or arrangements in place with
respect to additional capital sources at this time. The Company has no lines of
credit available to it at this time. There is no assurance that additional
capital will be available to the Company when or if required.


                                       11
<PAGE>

                 BEVsystems International, Inc. And Subsidiaries

                                     Part II
                                Other Information
                                     Item 6
                              Exhibits and Reports
                              --------------------

Exhibits and Reports on Form 8-K

(a) Exhibits

3.1 Articles of Incorporation (1)
3.2 Bylaws (1) 21.1 Subsidiaries

(b) Reports on Form 8-K:

The Company filed a Form 8-K on October 29, 2002 and is incorporated by
reference.

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                                   SIGNATURES

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





Date:  November 27, 2002         BEVsystems International, Inc.




                               By: /s/ G. Robert Tatum
                                  ----------------------------------
                                  G. Robert Tatum
                                  President, Chief Executive Officer





                                       13
<PAGE>


                Written Statement of the Chief Executive Officer
                           Pursuant to 18 U.S.C. "1350

     Solely for the purposes of complying with 18 U.S.C. ss.1350, I, the
undersigned, Chief Executive Officer of BEVsystems International, Inc. (the
"Company"), hereby certify, based on my knowledge, that the Quarterly Report on
Form 10-QSB of the Company for the quarter ended September 29, 2002 (the
"Report") fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934 and that information contained in the Report
fairly presents, in all material respects, the financial condition and results
of operations of the Company.



/s/ G. Robert Tatum, III
------------------------
G. Robert Tatum, III
November 27, 2002

                                       14

<PAGE>


               Written Statement of the Vice President of Finance
                           Pursuant to 18 U.S.C. "1350

     Solely for the purposes of complying with 18 U.S.C. ss.1350, I, the
undersigned, Vice President of Finance of BEVsystems International, Inc. (the
"Company"), hereby certify, based on my knowledge, that the Quarterly Report on
Form 10-QSB of the Company for the quarter ended September 29, 2002 (the
"Report") fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934 and that information contained in the Report
fairly presents, in all material respects, the financial condition and results
of operations of the Company.



/s/ Victor M. Corral
--------------------
Victor M. Corral
November 27, 2002



                                      15
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                                  EXHIBIT INDEX

EXHIBIT

NO. DESCRIPTION

21.1 Subsidiaries