SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10 QSB
                                   -----------

(Mark One)

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

                         For the quarterly period ended
                                January 31, 2002

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                           For the transition period from
                                    to


                         Commission File Number 0-24801

               Delaware                                   82-0506425
(State or other Jurisdiction of incorporation) (IRS Employer Identification No.)

AQUA VIE BEVERAGE CORPORATION
(Exact Name of Registrant as Specified in its Charter)

P.O. Box 6759  333 South Main Street Ketchum, Idaho 83340
(Address of principal executive offices)

208/622-7792
(Registrant's telephone number)

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the last 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 [ ]         NO [X]            As of the quarter ending October 31, 2001 the
                                  Registrant  has  been  subject  to the  filing
                                  requirements of the Securities Act of 1934 for
                                  less than 90 days.

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

Class                                        Outstanding at January 31, 2002

Common Stock, Par value $0.001                       68,113,173


                                       1
<PAGE>

Item 1. Financial Statements:


                         AQUA VIE BEVERAGE CORPORATION
                                 Balance Sheet
                             As of January 31, 2002


                                                               Jan 31, 2002
                                                             ---------------
ASSETS
      Current Assets
          Checking/Savings
              1000  AVAC - General                                   -9.64
              1010  AVAC - Operating                                 65.86
              1020  AVBC - Operating                             15,796.85
              1030  AVBC - Primary                                  201.39
              1040  Petty Cash                                      103.00
                                                             ---------------
          Total Checking/Savings                                 16,157.46
          Accounts Receivable
              1100   Accounts Receivable                        128,346.20
                                                             ---------------
          Total Accounts Receivable                             128,346.20
          Other Current Assets
              1200  Inventory                                    89,634.41
              1240  Prepaid Insurance                                49.22
              1250  Prepayments                                  29,791.00
                                                             ---------------
          Total Other Current Assets                            119,474.63
                                                             ---------------
      Total Current Assets                                      263,978.29

      Fixed Assets
          1300  Leasehold Improvements                            1,000.00
          1400  Equipment
              1401  Accumulated Depreciation                   -134,071.00
              1400  Equipment - Other                           200,608.39
                                                             ---------------
          Total 1400   Equipment                                 66,537.39
          1500o  Intangible Assets
              1501  Accumulated Amortization                    -79,159.00
              1500  Intangible Assets - Other                   313,336.00
                                                             ---------------
          Total 1500   Intangible Assets                        234,177.00
                                                             ---------------
      Total Fixed Assets                                        301,714.39

      Other Assets
          1800   Deposits                                        22,737.18
                                                             ---------------
      Total Other Assets                                         22,737.18
                                                             ---------------
TOTAL ASSETS                                                    588,429.86
                                                             ===============

                             See accompanying notes.


<PAGE>

                         AQUA VIE BEVERAGE CORPORATION
                            Balance Sheet (continued)
                             As of January 31, 2002

LIABILITIES & EQUITY
      Liabilities
          Current Liabilities
              Accounts Payable
                  2000   Accounts Payable                       298,720.97
                                                             ---------------
              Total Accounts Payable                            298,720.97
              Other Current Liabilities
                  2300  Loan Payable - RS                       237,000.00
                  2310  Loan Payable - GMAC                      16,512.44
                  2400  Notes Payable
                      2403  Notes Payable - 8% conv-JW           80,000.00
                      2400  Notes Payable - Other               135,000.00
                                                             ---------------
                  Total 2400   Notes Payable                    215,000.00
                  2410  Accrued Interest-Notes Payable           83,542.67
                  2500  Affiliate Loan
                      2501  Brace Trust Affiliate Loan           14,398.00
                      2500  Affiliate Loan - Other              153,808.17
                                                             ---------------
                  Total 2500   Affiliate Loan                   168,206.17
                                                             ---------------
              Total Other Current Liabilities                   720,261.28
                                                             ---------------
          Total Current Liabilities                           1,018,982.25
                                                             ---------------
      Total Liabilities                                       1,018,982.25
      Equity
          3000  Opening Bal Equity                                   58.95
          3900  Retained Earnings                            -5,204,837.58
          3950  Additional Paid-In Capital                    5,190,940.59
          Net Income                                           -416,714.35
                                                             ---------------
      Total Equity                                             -430,552.39
                                                             ---------------
TOTAL LIABILITIES & EQUITY                                      588,429.86
                                                             ===============

                             See accompanying notes.


<PAGE>

                         AQUA VIE BEVERAGE CORPORATION
                             Statement of Operations
                      November 2001 through January 2002

                                                               January 31,2002
                                                             ------------------
      Ordinary Income/Expense
              Income
                  4100  Distributor Sales                           72,514.00
                  4200  Internet Sales                               3,549.67
                                                             ------------------
              Total Income                                          76,063.67
              Cost of Goods Sold
                  5200   Cost of Goods Sold                         27,950.00
                                                             ------------------
              Total COGS                                            27,950.00
                                                             ------------------
          Gross Profit                                              48,113.67
              Expense
                  Post dated from 11/23                                  0.00
                  6100  Payroll                                     31,983.00
                  6999  Uncategorized Expenses                           0.00
                  7020  Computer Allowance                             498.90
                  7050  Bank Charge                                  3,258.82
                  7120  Broker Commission                            7,000.00
                  7145  Depreciation and Amortization               37,179.00
                  7210  Equipment Leasing                            4,210.94
                  7335  Insurance                                    5,429.80
                  7350  Investor Relations                           6,586.27
                  7450  Office Expenses                              1,593.13
                  7480  Maintenance                                    225.00
                  7490  Miscellaneous                                2,001.30
                  7540  Postal                                       5,840.08
                  7550  Professional Fees
                      7555  Legal Fees                                 600.00
                      7550  Professional Fees - Other                7,500.00
                                                             ------------------
                  Total 7550   Professional Fees                     8,100.00

                  7590  Promotional Expense - Product                8,572.38
                  7670  Research & Development                         987.99
                  7710  Shipping                                     3,035.80
                  7715  Slotting Fees                                  550.00
                  7770  Trademark                                      750.00
                  7780  Telephone                                    5,741.36
                  7785  Travel                                         819.50
                  7800  Utilities
                      7810  Cable TV                                   422.60
                      7820  Gas & Electric                             482.87
                                                             ------------------
                  Total 7800   Utilities                               905.47
                                                             ------------------
              Total Expense                                        135,268.74
                                                             ------------------
      Net Ordinary Income                                          -87,155.07

      Other Income/Expense
          Other Expense
              9010   Interest Expense                                 -350.42
                                                             ------------------
          Total Other Expense                                         -350.42
                                                             ------------------
      Net Other Income                                                 350.42
                                                             ------------------
      Net Income                                                   -86,804.65
                                                             ==================


                             See accompanying notes.

<PAGE>

                         AQUA VIE BEVERAGE CORPORATION
                                   Cash Flows
                      November 2001 through January 20002

                                                             Nov 2001 - Jan 2002
                                                                 ----------
OPERATING ACTIVITIES
    Net Income                                                   -86,804.65
    Adjustments to reconcile Net Income
    to net cash provided by operations:
        1100 Accounts Receivable                                 128,346.20
        1400 Equipment:1401 Accumulated Depreciation            -134,071.00
        1500 Intangible Assets:1501 Accumulated Amortization     234,177.00
        2000 Accounts Payable                                    298,720.97
        2500 Affiliate Loan                                      153,808.17
        2310 Loan Payable - GMAC                                  16,512.44
                                                                 ----------
Net cash provided by Operating Activities                        610,689.13
FINANCING ACTIVITIES
    3000 Opening Bal Equity                                           58.95
                                                                 ----------
Net cash provided by Financing Activities                             58.95
                                                                 ----------
Net cash increase for period                                     610,748.08
Cash at beginning of period                                      -44,931.80
                                                                 ----------
Cash at end of period                                             16,157.06
                                                                 ==========

                             See accompanying notes.

                  Comparisons will be provided in an amendment

<PAGE>


CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -  STATEMENT OF ACCOUNTING

The interim  financial  statements  of Aqua Vie  Beverage  Corporation  included
herein, have been prepared without audit.  Although certain information normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles has been condensed or omitted,  the Company believes that
the disclosures  are adequate to make the information  presented not misleading.
The accompanying interim financial statements should be read in conjunction with
the audited  financial  statements  and notes thereto  included in the Company's
annual report on Form 10-K for the fiscal year ended July 31, 2001.

The  financial   statements   included  herein  reflect  all  normal   recurring
adjustments  that,  in the  opinion  of  management,  are  necessary  for a fair
presentation of the results for interim periods. The results for interim periods
are not necessarily indicative of trends or of results to be expected for a full
year.

NOTE 2 -  STOCK SUBSCRIPTION AGREEMENT

The stock  subscription  agreement executed on November 21, 2000 and reported in
the previous  quarter for the sale of 12,000  shares of $.001 par value Series D
Preferred stock for the aggregate  purchase price of $1,200,000,  the equivalent
of $100 per preferred share, has been funded to the extent of $1,023,048  during
this reporting  quarter and the first month of the subsequent  quarter reporting
period.

NOTE 3 -  ADDITIONAL COMMENTS

During March,  2001, the Company entered into a Shipping and Security  Agreement
with a central California  contract  manufacturer.  The agreements  provided the
Company  with  production  financing  and  inventory  expansion  of its beverage
products,  interest-free  and  without a factoring  fee.  Under the terms of the
agreement,  the Company granted to the contract manufacturer a security interest
in the Company's inventory and receivables. Based on that Agreement, the Company
began  an  aggressive   campaign  to  place  its  products  in  California-based
supermarket chains by paying and/or incurring slotting fees, supporting sampling
programs, and other marketing activities.

<PAGE>

In April 2001, the contract manufacturer commenced production under the terms of
the Shipping and Security  Agreement and began shipping product to major grocery
chain accounts in California,  Arizona,  and Nevada.  Subsequently,  the Company
increased its sales and marketing efforts, and slotting fee commitments intended
to support an expanded sales program. The Packer, which was experiencing quality
assurance  problems,  failed to sustain  production  levels adequate to meet the
sales levels  projected by the Company  notwithstanding  the marketing  expenses
incurred by the Company, and the Packer continued in its failure to resolve past
account issues arising over defective products.  This led to a demand being made
on the Packer by the Company for an accounting. The Packer responded by refusing
any further  production  or shipment of  inventory  already  produced  until the
Company would execute an indemnity in favor of the Packer.  Notwithstanding then
a deadlock in  negotiations,  management  held  steadfast in its belief that its
product  quality  and purity are  critical  and,  therefore,  are not subject to
compromise.  The dispute,  which was of  considerable  duration,  had a negative
impact on the  Company,  as it created  uncertainty  relative  to the  Company's
ability to deliver product to fill pending and projected  orders,  for which the
slotting  payments and marketing  efforts had been  undertaken.  In an effort to
progress toward a resolution, the Company and Packer subsequently entered into a
new production agreement,  which provided for payments to be made to the Company
in settlement  of the claims  against the Packer and also effected a termination
of the factoring agreement.

Subject  to  stringent  third-party  quality  assurance  testing,  shipping  and
production  resumed in July under the new  agreement.  Management  is  confident
that,  now  with  certain   modifications  having  been  made  to  the  Packer's
manufacturing  process  and  production  line,  and  with  the  Packer's  strict
adherence to the Company's stated quality assurance,  the aforementioned  issued
have been  resolved to the Company's  satisfaction  and the Packer is capable of
maintaining consistent quality at commercial production levels.

Notwithstanding  the  impact on the  Company's  increased  sales  and  marketing
efforts  resultant  of the  Packer's  failure  to  perform  as  agreed,  and the
consequent loss of saleable  inventory under the Shipping and Security Agreement
to satisfy orders and proposed orders during the June-August  2001 period of the
dispute, through additional slotting fee commitments and other arrangements made
by the  Company,  the Company  was able to place its  products on the shelves of
over  1,200  retail  grocery  chains,  and to  obtain  additional  approvals  in
approximately  650 chains.  These placements and approvals are providing a major
foothold and a foundation for regional expansion throughout 2002.

<PAGE>

Item 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

During its first three years of existence (from inception to July 31, 2001), the
Company  accumulated a deficit of  $5,095,000.  In the  subsequent  three months
ended October 31, 2001, the Company's  accumulated deficit grew to $5,858,000 as
the Company's marketing and executive expenses  increased,  creating a quarterly
operating loss of $86,805.

At January 31, 2002, the Company's  total assets of $263,978 were lower than the
$629,000   reported  at  its  July  31,  2001  year-end  The  Company's  current
liabilities  decreased slightly from $1,062480 at July 31, 2001 to $1,018,982 at
January 31, 2002.

The Company entered into an aggressive marketing campaign in the Spring of 2001,
which substantially  increased its General and Administrative expenses for sales
personnel  and  marketing  expenses for slotting fees and related items based on
the  production  financing  agreement  made  with its  contract  packer  in late
February 2001 (see Note 3 to the  Financials).  These  expenses were incurred in
the  anticipation  of a rapid  increase  in sales and  revenues  to support  the
expenditures. The dispute which arose with the packer, although resolved in late
July, 2001, did not provide  compensation for the loss of revenues  projected by
management  for  that  period,  and  also  reduced  the  sales  activity  due to
uncertainties over supply.  Management had proposed to address these problems in
early  September 2001 but was unable to adequately  redress the issue due to the
September 11th event and its impact on retail sales.

Aqua Vie continues to offer  information  about its products and a  subscription
service on its Internet  site.  Aqua Vie's revenue from Internet  sales, a small
portion of current  revenue,  is  projected  to be an  important  part of future
revenue.  Management  intends  to  expand  and  develop  marketing  of Aqua  Vie
beverages through the Internet,  and redesign of the Company's  Internet site to
support the Company's marketing plan is currently underway.

Given  Aqua Vie's  market  distribution  presence  and order  interest  by major
customers,   the  funded  slotting  fee  arrangements  with  major  grocery  and
convenience store chains, its present  relationship with its co-packer,  and the
present  production  and  overhead  cost  structure,  profitability  is believed
achievable in 2002, given adequate bridge financing.  The immediate  solution to
profitability in this early growth scenario rests with the Company's  ability to
obtain bridge financing  adequate to meet the increased product demand available
within the account base with which the Company has already  secured shelf space.

At the same time,  the company will  continue to build brand  awareness  through
immediate  execution  of consumer  marketing  programs  postponed  during  2001,
including radio and newspaper  advertising in select markets,  which is expected
to commence during the first half of the calendar year.

<PAGE>

The Company  began a program to seek  production  financing  shortly  before the
September  11th event but was unable to  finalize  commitments  with  interested
investors  at that time due to the market  uncertainties  which  arose.  In late
January, the company entered into an agreement in principle with a venture group
to provide  $1.2  million in bridge  capital for the  company's  operations  and
inventory  requirements for 2002; however,  to date,  arrangements have not been
finalized.  The  aforementioned  delay in finalization of financing  resulted in
lower  production and inventory  levels,  and a  postponement  of additional new
product  shipments  until early March  2002.

In the future  Aqua Vie  expects to
improve margins through  economies of scale and by introducing new products that
management   believes  will  support   higher  gross  margins  even  in  today's
competitive  market  environment.  The first to be introduced  will be a line of
Hydrators especially designed for children.  Subsequently,  the Company plans to
follow with a multi-flavor  line of  nonalcoholic  wines made from spring water.
These  nonalcoholic  wines  have been  designed  to provide  all of the  sensual
qualities  of fine wines and  champagnes,  without  the  presence  of alcohol or
preservatives.

Aqua Vie's product line contains no directly patented or patentable  features or
components.  Copyrighting,  trade marking and the use of trade secret techniques
and     formulations    are    employed     extensively.     Aqua    Vie    uses
non-disclosure/non-compete  agreements with  employees,  suppliers and co-packer

<PAGE>

bottlers.  At present  the  Company  has not issued  any  licenses,  franchises,
concessions,  royalty  agreements or labor contracts,  though future development
may include such actions being incorporated into the corporate strategy.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company's revenues of $76,000 for the quarter ended January 31, 2002 were an
decrease from the $563,133 of revenues in the  corresponding  second  quarter of
the prior fiscal year, due to the time lost in the resolution of the processor's
quality assurance problem,  the resultant  temporary lack of inventory available
for sale, the  consequent  delay of advertising  and marketing  programs,  and a
postponement of final arrangements for additional funding in September,  delayed
because of events of September 11th. Discussions are ongoing with the same third
parties concerning this additional funding.

Because it has sustained  recurring losses from  operations,  the Company cannot
assure  that it will be able to fully  carry out its plans as  budgeted  without
additional  operating  capital.  At January 31,  2002,  the Company had negative
working  capital of  $872,004,  although  this amount  represents  a decrease in
liquidity and capital  resources from its negative  working capital  position of
$796,290  at July 31,  2000.  The  decrease  is  principally  attributable  to a
decrease in current Assets.

<PAGE>

In the three months ended January 31, 2002,  the Company funded a portion of its
operations from the issuance of common stock, valued at $29,000. .

The Company anticipates a substantial use of cash for the foreseeable future. In
particular,  management  of the  Company  intends  substantial  expenditures  in
connection with production of additional  inventory for the planned  increase in
sales,  expansion of the Company's marketing  organization,  payment of slotting
fees to obtain  shelf  space  with new  retailers,  and  quality  assurance  and
distribution  management.  The availability of sufficient  future funds for Aqua
Vie will depend to a  significant  extent on the growth in market  acceptance of
the Company's primary product line by retail chains. The Company does not expect
to incur any major capital  expenditures in the next year. Aqua Vie's management
expects that  additional  funding for operating  expenditures  will be available
from the issuance of debt and/or equity securities,  as needed.  There can be no
assurance whether or not such financing will be available on satisfactory terms.

RESULTS OF OPERATIONS

Aqua Vie commenced  operations in 1998 and has a limited  history of operations,
which to date have not been profitable.  Its operations are subject to the risks
and  competition  inherent in the  establishment  of a  relatively  new business
enterprise. Aqua Vie is currently operating at a loss. The Company's three month
revenues  of $76,000  were less than the  comparable  three-month  period of the
prior fiscal year.  Though sales to date have not been  sufficient  to cover the
costs of operations,  profitability is believed  achievable  assuming  inventory
levels are adequate to meet demand within the Company's existing customer base.

For the three months ended January 31, 2002, the Company's  sales produced gross
profit of $48,113  which  compares  with the gross  profit of  $144,147  for the
comparable  three  months of the prior  fiscal  year.  Operating  expenses  were
$135,269  for the  three  months  January  31,  2002 and were  $798,029  for the
comparable  period  of the  prior  year.  The  year-to-year  change  principally
reflects  a decrease  in  marketing  expenses  during  the most  recent  quarter
resulting from the Company's decision to postpone its advertising, marketing and
promotional  activities  pending the  development  of higher  inventory  levels.
During this same  year-to-year  time frame,  the decrease in operating  expenses
during the quarter ended January 31, 2002 also reflects reduction in general and
administrative expenses.

<PAGE>

While Aqua Vie  continued  to operate at a loss during the most recent  quarter,
given  inventories  adequate to support its  marketing  efforts,  the  Company's
ability to generate  higher  revenue  and  realize a net profit from  operations
remains  primarily  dependent upon the effectiveness of its marketing efforts in
generating sales of its line of flavored spring water products.

In the quarter  ending January 31, 2002, the Company's net loss of ($86,805) for
the three  months  ended  January 31,  2002  resulted in a net loss per share of
($0.001) for the quarter.  This  contrasts with a net loss of ($171,347) for the
three months ended January 31, 2001, which posted a per share loss of ($0.004).

PART II - - OTHER INFORMATION

ITEM  1.  LEGAL PROCEEDINGS

There are no substantial legal  proceedings  against the Company and the Company
is unaware  of any such  meaningful  proceedings  contemplated  against  it. The
Company anticipates that in the future it will have conflicts as regards certain
Accounts Payable for services invoiced but not adequately  performed and for the
use of selected names for products and product lines in selected market places.

ITEM 2.   CHANGES IN SECURITIES

Recent Sales of unregistered securities.

Sales  of   unregistered   securities   were  pursuant  to  the  exemption  from
registration  under the  Securities  Act of 1933  contained  in Section 4(2) and
Regulations  promulgated  thereunder.  During the three months ended January 31,
2001, the Company  issued 824,000 shares of common stock for services  valued at
$29,000.

ITEM 3.   DEFAULTS ON SENIOR SECURITIES

Not applicable.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

<PAGE>

ITEM 5.   OTHER INFORMATION

Not applicable.

CAUTIONARY  STATEMENT FOR PURPOSES OF THE SAFE HARBOR  PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

Statements in this discussion  which are not historical  facts may be considered
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. The words "believe",  "expect",  "anticipate",
"estimate" and similar  expressions  identify  forward looking  statements.  Any
forward  looking  statements  involve risks and  uncertainties  that could cause
actual  events or  results  to differ,  perhaps  materially,  from the events or
results  described in forward looking  statements.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates.  The Company  undertakes no obligation to publicly update or revise
any forward looking statements,  whether as a result of new information,  future
events  or  otherwise.  Risks  associated  with the  Company's  forward  looking
statements include,  but are not limited to, risks associated with the Company's
history of losses and uncertain profitability, need for market acceptance of the
HYDRATROR(TM)  product  line,  the  Company's  reliance at this time on a single
product line,  reliance on the market  distribution  and retail system and risks
associated with the Company's international  operations,  currency fluctuations,
the risk of new and different  legal and regulatory  requirements,  governmental
approvals,  tariffs and trade barriers,  risks  associated with  competition and
technological and product  innovation by competitors,  dependence on proprietary
formulas,  general economic  conditions and conditions in the beverage industry,
reliance  on key  management,  limited  manufacturing  production  history  with
respect to the aseptic  bottling  system,  maintenance of quality control by the
contract  bottler,  dependence  on  key  suppliers,  future  capital  needs  and
uncertainty of additional  financing,  potential recalls and product  liability,
dilution,  effects of outstanding  convertible  debentures and preferred  stock,
limited public market,  liquidity,  possible volatility of stock price, recently
adopted new listing standards for NASDAQ securities and environmental matters.

<PAGE>


                                    AQUA VIE BEVERAGE CORPORATION
                                              (Registrant)


Date  March 27, 2002               By: /s/ Thomas J. Gillespie
                                    ---------------------------
                                            Thomas J. Gillespie
                                            Chief Executive Officer
                                            & President