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
                                April 30, 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                                  (IRS Employer
     of incorporation)                                     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  [X]    NO  [ ]


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 April 30, 2002
------------------------------                    -----------------------------
Common Stock, Par value $0.001                             76,031,061


                                        1
<PAGE>

Item 1. Financial Statements:

                         AQUA VIE BEVERAGE CORPORATION
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                            April 30,       July 31,
                                                                              2002            2001
                                                                           (Unaudited)
                                                                           -----------    -----------

ASSETS
------
<S>                                                                       <C>            <C>

    CURRENT ASSETS
      Cash                                                                $       372    $     3,608
      Accounts receivable                                                     129,354         82,776
      Inventory                                                               119,132        155,372
      Deposits and other assets                                                22,737         24,434
                                                                          -----------    -----------
        Total Current Assets                                                  271,595        266,190
                                                                          -----------    -----------

    PROPERTY AND EQUIPMENT
      Equipment                                                               201,608        201,608
      Less accumulated depreciation                                          (134,071)       (85,615)
                                                                          -----------    -----------
        Total Property and Equipment                                           67,537        115,993
                                                                          -----------    -----------

    OTHER ASSETS
      Intangibles                                                             338,253        305,040
      Less accumulated amortization                                          (122,081)       (58,159)
                                                                          -----------    -----------
        Total Other Assets                                                    216,172        246,881
                                                                          -----------    -----------

    TOTAL ASSETS                                                          $   555,304    $   629,064
                                                                          ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

    CURRENT LIABILITIES
      Accounts payable                                                    $   336,400    $   362,312
      Bank overdraft                                                           54,663         52,412
      Settlements payable                                                      10,000         10,000
      Notes payable - current                                                 218,480        455,135
      Accrued expenses                                                        172,298         64,101
      Loan from related party                                                 120,086        128,520
                                                                          -----------    -----------
        Total Current Liabilities                                             911,927      1,072,480
                                                                          -----------    -----------

    LONG-TERM DEBT
      Notes payable - net of current portion                                   11,977         14,632
                                                                          -----------    -----------

    COMMITMENTS AND CONTINGENCIES                                                --             --
                                                                          -----------    -----------

    STOCKHOLDERS' DEFICIT
      Preferred stock,  Series A, B, C, D, E and F, $0.001 par value;  1,000,000
        shares authorized, 6,985 and 15,074
        shares issued and outstanding, respectively                                 7             15
      Common stock, $0.001 par value; 120,000,000 shares
        authorized, 83,496,173 and 58,253,173 shares
        issued and outstanding, respectively                                   83,496         58,253
      Additional paid-in capital                                            6,191,459      5,562,162
      Subscriptions receivable                                                   --         (176,977)
      Accumulated deficit                                                  (6,643,562)    (5,901,501)
                                                                          -----------    -----------
        Total Stockholders' Deficit                                          (368,600)      (458,048)
                                                                          -----------    -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                           $   555,304    $   629,064
                                                                          ===========    ===========
</TABLE>
                   See notes to interim financial statements.


                                       2
<PAGE>




                         AQUA VIE BEVERAGE CORPORATION
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>


                                                     Three Months Ended                  Nine Months Ended
                                                         April 30,                           April 30,
                                                  ----------------------------    ----------------------------
                                                      2002            2001            2002            2001
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
NET REVENUES                                      $      6,643    $     40,411    $    129,565    $    765,772

COST OF GOODS SOLD                                      11,301          28,308         183,943         584,694
                                                  ------------    ------------    ------------    ------------

GROSS PROFIT (LOSS)                                     (4,658)         12,103         (54,378)        181,078
                                                  ------------    ------------    ------------    ------------

GENERAL AND ADMINISTRATIVE EXPENSES
      Promotion and advertising                          9,444          46,779          86,732         372,234
      Depreciation and amortization                     38,156          18,590         112,377          57,016
      Legal and professional                            25,145          15,100          84,642          45,430
      Officer's compensation                            60,000          60,000         180,000         180,000
      Other general and administrative expenses         57,906         139,966         195,202       1,244,264
                                                  ------------    ------------    ------------    ------------
           Total expenses                              190,651         280,435         658,953       1,898,944
                                                  ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                                  (195,309)       (268,332)       (713,331)     (1,717,866)

OTHER EXPENSES
      Interest (expense) income                         (8,193)         63,714         (28,730)        (56,064)
                                                  ------------    ------------    ------------    ------------

LOSS BEFORE TAXES                                     (203,502)       (204,618)       (742,061)     (1,773,930)

INCOME TAXES                                              --              --              --              --
                                                  ------------    ------------    ------------    ------------

NET LOSS                                          $   (203,502)   $   (204,618)   $   (742,061)   $ (1,773,930)
                                                  ============    ============    ============    ------------

NET LOSS PER COMMON SHARE, BASIC AND
      DILUTED                                                $             Nil    $      (0.01)   $      (0.04)
                                                  ============    ============    ============    ------------

WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING, BASIC AND DILUTED         76,031,061      43,656,396      68,428,748      36,827,085
                                                  ============    ============    ============    ============
</TABLE>


                   See notes to interim financial statements.

                                       3
<PAGE>


                         AQUA VIE BEVERAGE CORPORATION
                       STATEMENT OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                          Preferred, Series A, B,
                               C, D, E and F                Common Stock
                         ---------------------------  ----------------------- Additional
                            Number                       Number                 Paid-in    Subscriptions Accumulated
                          of Shares      Amount        of Shares    Amount      Capital    Receivable      Deficit        Total
                         ------------ --------------  ------------ ---------- ------------ ------------ ------------- ------------

<S>                           <C>    <C>              <C>         <C>        <C>          <C>          <C>           <C>
Balance, July 31, 2000         7,410  $           7    30,811,408  $  30,811  $ 2,422,236  $        --  $ (3,654,081) $ (1,201,027)

Issuance of common stock
    for services at prices
    ranging from $0.02
     to $0.42                     --             --     5,335,000      5,335      640,783           --            --      646,118

Issuance of common stock
    for debt conversion at
    $0.40 per share               --             --       850,000        850      340,000           --            --      340,850

Conversion of preferred
    Series A to common
    stock                     (1,368)            (2)    4,489,123      4,489       (4,487)          --            --           --

Conversion of preferred
    Series B to common
    stock                     (4,608)            (4)   16,567,642     16,568      (16,564)          --            --           --

Conversion of preferred
    Series C to common
    stock                       (200)            --       200,000        200         (200)          --            --           --

Issuance of preferred Series
    D for cash and receivable
    at $100 per share         12,000             12            --         --    1,199,988     (176,952)           --    1,023,048

Issuance of preferred Series
    E for cash at $100
    per share                    600              1            --         --       59,999          (25)           --       59,975

Issuance of preferred Series
    F for cash at $100
    per share                  1,240              1            --         --      123,999           --            --      124,000

Forgiveness of debt and
    accrued payroll by
    officer                       --             --            --         --      796,408           --            --      796,408

Net loss for the year ended
    July 31, 2001                 --             --            --         --           --           --    (2,247,420)   (2,247,420)
                         ------------ --------------  ------------ ---------- ------------ ------------ ------------- ------------

Balance, July 31, 2001        15,074             15    58,253,173     58,253    5,562,162     (176,977)   (5,901,501)    (458,048)

Issuance of common stock          --             --     6,250,000      6,250      247,645           --            --      253,895
    for cash at $0.04 per share

Stock issued for services
    at $0.08 per share            --             --       810,000        810       63,800           --            --       64,610

Issuance of common stock
    for debt at $0.05 per share   --             --     5,300,000      5,300      270,727           --            --     276,027

Conversion of preferred
    Series A to common
    stock                       (234)            --     1,000,000      1,000       (1,000)          --            --           --

Conversion of preferred
    Series D to common
    stock                     (7,255)            (7)   11,383,000     11,383      (11,376)          --            --           --

Conversion of preferred
    Series E to common
    stock                       (600)            (1)      500,000        500         (499)          --            --           --

Forgiveness of payroll by
    officer                       --             --            --         --       60,000           --            --       60,000

Payment of stock subscriptions
    receivable                    --             --            --         --           --      176,977            --      176,977

Net loss for the nine months
    ended April 30, 2002          --             --            --         --           --           --      (742,061)    (742,061)
                         ------------ --------------  ------------ ---------- ------------ ------------ ------------- ------------

Balance, April 30, 2002
    (Unaudited)                6,985  $           7    83,496,173  $  83,496  $ 6,191,459  $        --  $ (6,643,562) $  (368,600)
                         ============ ==============  ============ ========== ============ ============ ============= ============

</TABLE>

                   See notes to interim financial statements.



                                       4
<PAGE>


                         AQUA VIE BEVERAGE CORPORATION
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                                 April 30,
                                                                                     -------------------------------
                                                                                          2002                2001
                                                                                     -----------         -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                  <C>                 <C>
      Net loss                                                                       $  (742,061)        $(1,773,930)
      Adjustments  to  reconcile                                                                           net  loss
           to  net  cash  used  by  operating activities:
                Depreciation and amortization                                            112,377              57,016
                Stock issued for services                                                 64,610             364,588
                Stock issued for accrued interest                                         39,027                --
                Forgiveness of accrued payroll by officer                                 60,000                --
      Changes in assets and liabilities:
                Accounts receivable                                                      (46,578)            (55,554)
                Inventory                                                                 36,240              36,097
                Prepaid expenses                                                           1,697             (91,679)
                Accounts payable                                                         (25,912)            276,650
                Shareholder loans payable                                                   --               383,975
                Accrued expenses                                                         108,197            (226,676)
                Loans from related parties                                                (8,434)           (196,463)
                                                                                     -----------         -----------
           Net cash used by operating activities                                        (400,837)         (1,225,976)
                                                                                     -----------         -----------

CASH USED BY INVESTING ACTIVITIES:
      Purchase of intangibles                                                            (33,213)               --
      Purchase of equipment                                                                 --               (49,272)
                                                                                     -----------         -----------
           Net cash used by investing activities                                         (33,213)            (49,272)
                                                                                     -----------         -----------

CASH PROVIDED BY FINANCING ACTIVITIES
      Sale of common stock                                                               253,895                --
      Sale of preferred stock                                                               --               978,310
      Debt converted to stock                                                               --               340,850
      Receipts from stock subscriptions                                                  176,977                --
      Bank overdraft                                                                       2,251              40,325
      Payments on long-term debt                                                          (2,309)            (18,362)
      Payments to notes payable                                                             --               (77,002)
                                                                                     -----------         -----------
           Net cash provided by financing activities                                     430,814           1,264,121
                                                                                     -----------         -----------

INCREASE (DECREASE) IN CASH                                                               (3,236)            (11,127)

BEGINNING BALANCE                                                                          3,608              11,127
                                                                                     -----------         -----------

ENDING BALANCE                                                                       $       372                --
                                                                                     ===========         ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
      Income taxes paid                                                              $      --                  --
      Interest paid                                                                  $     1,968             195,725

NON-CASH INVESTING AND FINANCING ACTIVITIES:
      Debt and accrued interest converted to stock                                   $   276,027         $   340,850
      Common stock issued for services                                               $    64,610         $   364,588
      Forgiveness of debt and accrued payroll by officer                             $    60,000         $   499,998

</TABLE>

                   See notes to interim financial statements.



                                       5
<PAGE>




,                          AQUA VIE BEVERAGE CORPORATION
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                 April 30, 2002



NOTE 1 - BASIS OF PRESENTATION

The  foregoing  unaudited  interim  financial  statements  have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim  financial  information  and with the  instructions  to Form
10-QSB  and  Regulation  S-B as  promulgated  by  the  Securities  and  Exchange
Commission.  Accordingly,  these financial  statements do not include all of the
disclosures  required by accounting  principles generally accepted in the United
States of America for complete  financial  statements.  These unaudited  interim
financial  statements  should be read in conjunction with the audited  financial
statements for the period ended July 31, 2001. In the opinion of management, the
unaudited interim financial statements furnished herein include all adjustments,
all of which are of a normal recurring nature, necessary for a fair statement of
the results for the interim period presented.

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires the use of estimates
and  assumptions  that affect the  reported  amounts of assets and  liabilities,
disclosure of contingent  assets and  liabilities  known to exist as of the date
the financial statements are published, and the reported amounts of revenues and
expenses  during  the  reporting  period.  Uncertainties  with  respect  to such
estimates  and  assumptions  are inherent in the  preparation  of the  Company's
financial statements;  accordingly, it is possible that the actual results could
differ from these estimates and assumptions that could have a material effect on
the  reported  amounts  of the  Company's  financial  position  and  results  of
operations.

Operating  results for the  three-month  and nine-month  periods ended April 30,
2002 are not necessarily  indicative of the results that may be expected for the
year ending July 31, 2002.


NOTE 2 - RESTATEMENT AND CORRECTION OF ERRORS

The Company's  financial  statements  for the year ended July 31, 2001 have been
restated to reflect the correction of errors as follows.

1.       Settlements payable have been accrued to reflect an expected settlement
         on a breach of contract claim for $10,000.

2.       Forgiveness  of advances and payroll by the Company's  chief  executive
         officer is shown as a capital  contribution which increased  additional
         paid-in  capital by $796,408 and expenses by $120,000 for unpaid salary
         not previously  recorded in the last six months of the Company's fiscal
         year.

                                       6
<PAGE>


                          AQUA VIE BEVERAGE CORPORATION
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                 April 30, 2002

NOTE 2 - RESTATEMENT AND CORRECTION OF ERRORS (Continued)

The effect of these  corrections  in the restated  financial  statements  was an
increased  net loss for the year ended July 31, 2001 of $806,408  and  increased
liabilities of $10,000.


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.

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  aforementioned  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 by the  Company  for an  accounting  resulting  in a refusal  by the
packer of any further production or shipment of inventory already produced until
the  Company  executed an  indemnity  in the  packer's  favor.  Management  held
steadfast in its belief that its product quality and purity are critical and not
subject to  compromise.  This  dispute  had a negative  impact on the Company by
creating  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 already been  undertaken.  In an effort to resolve the dispute,  the
Company entered into a new production agreement,  which provided for payments to
be made directly to the Company in settlement of the claims.

Subject to  third-party  quality  assurance  testing,  shipping  and  production
resumed in July  under the new  agreement.  Management  is  confident  that with
certain  modifications  having  been  made  to  the  manufacturing  process  and
production  line,  and with  strict  adherence  to the  quality  assurance,  the
aforementioned   issues  have  been  resolved  and  the  packer  is  capable  of
maintaining production levels and consistent quality.


                                       7
<PAGE>


                          AQUA VIE BEVERAGE CORPORATION
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                 April 30, 2002

NOTE 3 - ADDITIONAL COMMENTS (Continued)

Notwithstanding  the impact on the Company's sales and marketing  efforts by 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  period  from June to August  2001 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 retail
grocery chains, and to obtain additional approvals.

Management believes that these placements and approvals provide a major foothold
and a foundation  for  regional  expansion  into 2002 as the Company  expects to
begin a rapid expansion of its inventory  production and its sales and marketing
programs during the current fiscal year.


                                       8
<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 $5,901,501. In the subsequent nine months ended
April 30, 2002,  the  Company's  accumulated  deficit grew to  $6,643,562 as the
Company's marketing and administrative expenses increased,  creating a quarterly
operating loss of $203,502.

At April 30, 2002,  the  Company's  total assets of $555,304 were lower than the
$629,064 reported at its July 31, 2001 year-end.  The decrease was due primarily
to  a  decrease  in  inventory  to  approximately  $119,000  from  approximately
$155,000,  decreases  in  accounts  receivable,  and  increases  in  accumulated
depreciation and amortization.  The Company's current liabilities decreased from
$1,072,480 at July 31, 2001 to $911,927 at April 30, 2002.

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. To date,  arrangements have not been finalized.
The  aforementioned  delay in  capitalization  of  financing  resulted  in lower
production  and inventory  levels,  and a postponement  of regional  advertising
campaigns.

As  uncertain  conditions  within  the  financial  markets,  and  other  factors
continued to seriously affect the company's already  discounted stock price, the
company  chose to  initiate a  registration  statement  intended to be used in a
registered offering directed towards  institutional  investment within the U. S.
and offshore this fall. The company also took steps to restructure its sales and
distribution  strategy  within the  all-natural  segments  of  national  grocery
retailers,  including  new  sales  units  and  marketing  programs  designed  to
exclusively  accommodate the "store-within-a store" and "all natural" formats of
key  retailers in the U.S.,  from  shipping  points in New York,  Illinois,  and
California.  As a result  of its  affiliation  with key  national  and  regional
natural food  distributors,  the Company expects to greatly reduce  distribution
overhead and  administrative  expenses  associated  with opening new markets and
launching new products.

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.
                                       9
<PAGE>

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. .

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
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 $6,643 for the  quarter  ended April 30, 2002 were a
decrease from the $40,411 of revenues in the corresponding  third 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 April 30,  2002,  the Company  had  negative
working  capital of  $640,322,  although  this amount  represents  a decrease in
liquidity and capital  resources from its negative  working capital  position of
$806,290  at July 31,  2001.  The  decrease  is  principally  attributable  to a
decrease in current Assets.

In the three months ended April 30, 2002,  the Company funded a portion of its
operations from the payment of stock subscriptions in the amount of $176.977. In
addition,  Aqua Vie  financed  its  operations  by  issuing  shares for debt and
accrued  interest  valued at $276,027.  This recent mix of  diversified  funding
sources contrasts with the corresponding three months of the prior year when the
primary source of funds was $740,000 from the Company's sale of stock.
                                       10
]<PAGE>

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 $6,643 were less than three-month revenues of the prior fiscal year,
sales to date have not been sufficient to cover the costs of operations.  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 April 30, 2002,  the Company's  sales  produced gross
profit of  ($4,658),  which  compares  with the gross  profit of $12,103 for the
comparable  three  months of the prior  fiscal  year.  Operating  expenses  were
$190,651  for the three  months  ended April 30, 2002 and were  $280,435 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 April 30, 2002 also  reflects  reduction in general and
administrative expenses.


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 April 30, 2002,  the Company's net loss of ($203,502) for
the three  months  ended  April  30,  2002  resulted  in a net loss per share of
($0.003) for the quarter.  This  contrasts with a net loss of ($204,618) for the
three  months  ended  April 30,  2001,  which  also  posted a per share  loss of
($0.005).
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<PAGE>
                                   SIGNATURE

                          AQUA VIE BEVERAGE CORPORATION
                                  (Registrant)


Date  June 25, 2002               By: /s/ Thomas J. Gillespie
                                    ---------------------------
                                          Thomas J. Gillespie
                                          Chief Executive Officer
                                          & President

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