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, 2003

[ ]    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, 2003
------------------------------               -------------------------------
Common Stock, Par value $0.001                          14,902,923


                                       1
<PAGE>


                         AQUA VIE BEVERAGE CORPORATION
                                 BALANCE SHEETS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                       April 30
                                                                         2003        July 31,
                                                                     (Unaudited)       2002
                                                                     ------------   ------------

ASSETS
<S>                                                                 <C>            <C>
    CURRENT ASSETS
     Cash                                                           $   365,676    $     2,179
     Accounts receivable                                                 19,688          6,471
     Inventory                                                          244,457        120,006
     Prepaid and other assets                                            20,022          6,737
                                                                    -----------    -----------
        Total Current Assets                                            649,843       135,393
                                                                    -----------    -----------

    PROPERTY AND EQUIPMENT
     Equipment                                                          207,782        201,608
     Less accumulated depreciation                                     (190,316)      (150,222)
                                                                    -----------    -----------
        Total Property and Equipment                                     17,466         51,386
                                                                    -----------    -----------

    OTHER ASSETS
     Intangibles                                                        281,164        281,164
     Less accumulated amortization                                     (165,881)      (105,433)
                                                                    -----------    -----------
        Total Other Assets                                              115,283        175,731
                                                                    -----------    -----------

    TOTAL ASSETS                                                    $   782,592    $   362,510
                                                                    ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

    CURRENT LIABILITIES
     Accounts payable                                               $   148,512    $   320,030
     Accounts payable - related party                                    91,553         54,292
     Bank overdraft                                                        --           16,388
     Settlements payable                                                 36,000         36,000
     Notes payable - current                                            163,851        218,422
     Accrued expenses                                                    67,276         87,367
     Accrued compensation, related party                                184,225        180,000
     Loan from related party                                             91,423        156,325
                                                                    -----------    -----------
        Total Current Liabilities                                       782,840      1,068,824
                                                                    -----------    -----------

    LONG-TERM DEBT
     Notes payable - net of current portion                               9,123         10,928
                                                                    -----------    -----------

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


    STOCKHOLDERS' DEFICIT
     Preferred  stock,  Series  A, B, C,  D, E, F, G, H, I, J and K  $0.001  par
        value; 5,000,000 shares authorized, 12,214 and 12,941
    shares issued and outstanding, respectively                             12              13
 Common stock, $0.001 par value; 120,000,000 shares
    authorized, 14,902,923 and 5,337,551 shares
    issued and outstanding, respectively                                14,903           5,337
 Additional paid-in capital                                         10,329,355       7,008,584
 Subscriptions receivable                                             (388,309)           --
 Accumulated deficit                                                (9,965,332)     (7,731,176)
                                                                  ------------    ------------
    Total Stockholders' Deficit                                         (9,371)       (717,242)
                                                                  ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                       $    782,592    $    362,510
                                                                  ============    ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       2
<PAGE>


<TABLE>
<CAPTION>


                                                        Three Months Ended             Nine Months Ended
                                                             April 30,                     April 30,
                                                  ----------------------------    ----------------------------
                                                       2003            2002            2003           2002
                                                  ------------    ------------    ------------    ------------

<S>                                               <C>             <C>             <C>             <C>
NET REVENUES                                      $     30,421    $      6,643    $     72,817    $    129,565

COST OF GOODS SOLD                                      11,077          11,301          51,742         183,943
                                                  ------------    ------------    ------------    ------------

GROSS PROFIT (LOSS)                                     19,344          (4,658)         21,075         (54,378)
                                                  ------------    ------------    ------------    ------------

GENERAL AND ADMINISTRATIVE EXPENSES
      Promotion and advertising                        912,699           9,444       1,492,367          86,732
      Legal and accounting                              70,582          25,145         175,239          84,642
      Depreciation and amortization                     30,091          38,156         100,541         112,377
      Officer's compensation                            60,000          60,000         180,000         180,000
      Consulting                                        51,824            --            75,806           8,800
      Other general and administrative expenses        144,188          57,906         317,212         186,402
                                                  ------------    ------------    ------------    ------------
           Total Expenses                            1,269,384         190,651       2,341,165         658,953
                                                  ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                                (1,250,040)       (195,309)     (2,320,090)       (713,331)

OTHER INCOME (EXPENSES)
      Forgivements of related party payable            168,974            --           168,974            --
      Interest expense                                  (4,640)         (8,193)        (83,040)        (28,730)
                                                  ------------    ------------    ------------    ------------
                                                                                       164,334          85,934

LOSS BEFORE TAXES                                   (1,085,706)       (203,502)     (2,234,156)       (742,061)

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

NET LOSS                                          $ (1,085,706)   $   (203,502)   $ (2,234,156)   $   (742,061)
                                                  ============    ============    ============    ============

NET LOSS PER COMMON SHARE
      BASIC AND DILUTED                           $      (0.09)   $      (0.05)   $      (0.25)   $      (0.22)
                                                  ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING, BASIC AND DILUTED         12,341,579       3,801,553       8,825,428       3,421,437
                                                  ============    ============    ============    ============
</TABLE>
                   See notes to interim financial statements.

                                       3
<PAGE>


<TABLE>
<CAPTION>

                         AQUA VIE BEVERAGE CORPORATION
                       STATEMENT OF STOCKHOLDERS' DEFICIT


                                   Preferred Series A - K       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, 2001              15,074  $       15    2,912,749  $   2,912  $  5,617,502  $ (176,977) $ (5,901,501) $  (458,049)

Issuance of common stock
    for cash at $0.81 per share          -           -      312,500        312       253,583           -            -       253,895

Issuance of common stock for
    services at an average of
    $0.68 per share                      -           -      769,667        770       521,613           -            -       522,383

Issuance of common stock
    for debt at $1.04 per share          -           -      265,000        265       275,762           -            -       276,027

Issuance of common stock for
    settlement at $0.10 per share        -           -       12,000         12         1,188           -            -         1,200

Conversion of preferred Series A
    to common stock                   (376)          -       80,080         80           (80)          -            -              -

Conversion of preferred Series B
    to common stock                    (45)          -        9,562         10           (10)          -            -              -

Conversion of preferred Series D
    to common stock                (11,112)        (11)     925,993        926          (915)          -            -              -

Conversion of preferred Series E
    to common stock                   (600)         (1)      50,000         50           (49)          -            -              -

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

Issuance of preferred Series G for
    waiver from officer             10,000          10            -          -       279,990           -            -       280,000

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

Net loss for the year ended
    July 31, 2002                        -           -            -          -             -           -    (1,829,675)  (1,829,675)
                                  --------- ----------- ------------ ---------- ------------- ----------- ------------  ------------
Balance, July 31, 2002              12,941          13    5,337,551      5,337     7,008,584           -    (7,731,176)    (717,242)

Conversion of preferred Series D
    to common stock                   (366)          -       30,500         31           (31)          -            -              -

Issuance of common stock at $0.05
    per share for debt conversion        -           -    2,267,124      2,268      216,040           -            -       218,308

Issuance of common stock at $0.30
    per share for settlement             -           -       54,700         55        25,523           -            -        25,578

Issuance of common stock for
    for fractional shares                -           -           14          -             -           -            -              -

Issuance of common stock for services
    at $0.30 to $0.71 per share          -           -      164,000        164        76,693                                 78,857

Issuance of common stock for services
    and receivable at $0.67 per share    -           -      543,500        543       362,052     (326,175)          -        36,420

Issuance of Series H preferred stock
    at $480.00 per share
    for loan settleme                  125           -            -          -        60,000           -            -        60,000

Confersion of Series A preferred stock
    to Series I preferred stock
    at l:1.5                           407           -            -          -             -           -            -              -

Conversion of Series F preferred
    stock  to Series I preferred
    at 10:1.5                       (1,116)         (1)           -          -             1           -            -              -

Conversion of Series I preferred stock
    to common stock at 10:1           (398)          -    3,972,876      3,972        (3,972)          -            -              -

Issuance of Series J preferred stock
    for accounts payable - related
    party and receivables              524           -            -          -     2,586,998      (62,134)          -     2,524,864

Conversion of Series I preferred stock
    to Series K preferred stock
    at 1:2                             350           -            -          -             -           -            -              -

Conversion of Series K preferred stock
    to common stock at 10:1           (253)          -    2,532,658      2,533        (2,533)          -            -              -

Net loss for the nine months ended
    April 30, 2003 (unaudited)           -           -            -          -             -           -   (2,234,156)   (2,234,156)
                                  --------- ----------- ------------ ---------- ------------- ----------- ------------  ------------
Balance, April 30, 2003
    (unaudited)                     12,214  $       12   14,902,923  $  14,903  $ 10,329,355  $ (388,309) $(9,965,332) $     (9,371)
                                  ========= =========== ============ ========== ============= =========== ============  ============

</TABLE>


                   See notes to interim financial statements.

                                       4
<PAGE>


<TABLE>
<CAPTION>
                         AQUA VIE BEVERAGE CORPORATION
                             STATEMENT OF CASH FLOWS

                                                                             Nine Months Ended
                                                                                  April 30,
                                                                         --------------------------
                                                                             2003           2002
                                                                         -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                      <C>            <C>
      Net loss                                                           $(2,234,156)   $  (742,061)
      Adjustments to reconcile net loss to net cash
           used by operating activities:
               Depreciation and amortization                                 100,541        112,377
               Stock issued for services                                     113,277         64,610
               Stock issued for settlement                                    25,578           --
               Stock issued for loan incentive                                60,000           --
               Stock issued for interest on debt                              32,002         39,027
               Services charged to additional paid-in capital                   --           60,000
      Changes in assets and liabilities:
               Accounts receivable                                           (13,217)       (46,578)
               Receivable from related party                                (175,775)          --
               Inventory                                                    (124,451)        36,240
               Prepaid expenses                                              (13,285)         1,697
               Accounts payable                                             (171,518)       (25,912)
               Accounts payable - related party                            1,436,110           --
               Accrued expenses                                              (20,091)       108,197
               Loans from related parties                                    (64,902)        (8,434)
               Accrued compensation                                            4,225           --
                                                                         -----------    -----------
           Net cash used by operating activities                            (869,887)      (400,837)
                                                                         -----------    -----------

CASH USED BY INVESTING ACTIVITIES:
      Purchase of equipment                                                   (6,174)          --
      Purchase of intangibles                                                   --          (33,213)
                                                                         -----------    -----------
           Net cash used by investing activities                              (6,174)       (33,213)
                                                                         -----------    -----------

CASH PROVIDED BY FINANCING ACTIVITIES:
      Sale of common stock                                                      --          253,895
      Proceeds from notes payable                                          1,256,865           --
      Receipts from stock subscriptions                                         --          176,977
      Net payments of bank overdraft                                         (16,388)          --
      Net proceeds from bank overdraft                                          --            2,251
      Net payments on long-term debt                                            (919)        (2,309)
                                                                         -----------    -----------
           Net cash provided by financing activities                       1,239,558        430,814
                                                                         -----------    -----------

INCREASE (DECREASE) IN CASH                                                  363,497         (3,236)

BEGINNING BALANCE                                                              2,179          3,608
                                                                         -----------    -----------

ENDING BALANCE                                                           $   365,676    $       372
                                                                         ===========    ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
      Income taxes paid                                                  $      --      $      --
      Interest paid                                                      $     4,435    $     1,968

NON-CASH INVESTING AND FINANCING ACTIVITIES:
      Common stock issued for services                                   $   113,277    $    64,610
      Forgiveness of debt and accrued payroll                            $      --      $    60,000
      Issuance of common stock for debt and interest                     $   218,308    $   276,027
      Issuance of common stock for settlements                           $    25,578    $      --
      Issuance of preferred stock for loan incentive                     $    60,000    $      --
      Issuance of preferred stock for accounts payable - related party
           and receivable                                                $ 2,524,864    $      --
</TABLE>
                   See notes to interim financial statements.

                                       5
<PAGE>


                          AQUA VIE BEVERAGE CORPORATION
                 CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
                                 April 30, 2003


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 year ended July 31, 2002. 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 nine months ended April 30, 2003 are not  necessarily
indicative of the results that may be expected for the year ending July 31,2003.

Going Concern

As  shown  in the  financial  statements,  the  Company  incurred  a net loss of
$2,234,156 for the nine month period ended April 30, 2003 and has an accumulated
deficit of $9,965,332. The Company has negative equity, negative working capital
and limited sales volume.  These factors indicate that the Company may be unable
to  continue  in  existence.   The  financial  statements  do  not  include  any
adjustments related to the recoverability and classification of recorded assets,
or the amounts and  classification of liabilities that might be necessary in the
event the Company cannot continue existence.


NOTE 2 - COMMON STOCK

Reverse Stock Split

On September 3, 2002, the Company's board of directors authorized a 1:20 reverse
stock  split of its  $0.001  par  value  common  stock.  All  references  in the
accompanying financial statements to the number of common shares outstanding and
per share amounts have been restated to reflect the reverse stock split.

Common Stock Issuances

Disputed liabilities were settled during the nine months ended April 30, 2003 by
the Company's  issuance of 54,700 shares of common stock to the related vendors.
The stock was valued at $25,578,  which represented the fair market value of the
stock  on the  dates  of  issuance.  No gain or loss was  recognized  from  this
transaction.

                                       6
<PAGE>


During the nine months  ended April 30,  2003,  the Company  converted  debt and
accrued  interest to 2,267,124  shares of common  stock valued at $218,308.  The
stock was valued at its fair market value on the dates of  issuance.  No gain or
loss was recognized on this transaction.

During the nine months  ended April 30, 2003,  the Company  also issued  164,000
shares of common stock for services  valued at $76,824;  30,500 shares of common
stock for the  conversion  of 366  shares of the  Company's  preferred  Series D
stock;  and 3,972,876 shares of common stock for the conversion of 398 shares of
the Company's preferred Series I stock; 2,532,658 shares of common stock for the
conversion of 253 shares of the Company's preferred  Series K stock; and 543,500
shares of common  stock for stock  subscription  receivable  valued at  $362,595
prior to a reduction for services received of $36,420.

NOTE 3 - PREFERRED STOCK

During the nine months ended April 30, 2003, the Company converted 366 shares of
its Series D preferred  stock into 30,500 shares of common stock,  398 shares of
its Series I  preferred  stock  into  3,972,876  shares of common  stock and 253
shares of its Series K preferred stock into 2,532,658 shares of common stock.

In addition,  the Company issued 125 shares of Series H preferred  stock and 524
shares of Series J preferred  stock. The Series H preferred stock was issued for
loan  incentive  value at $60,000.  The Series J stock was issued for payment of
accounts payable - related party in the amount of $2,586,999 and a receivable in
the  amount of  $62,134.  (See Note 5.)  Shareholders  of 813 shares of Series A
preferred  stock  converted  to 1,220  shares  of Series I  preferred  stock and
shareholders of 1,860 shares of Series F preferred stock converted to 186 shares
of Series I preferred  stock.  Shareholders  of 350 shares of Series I preferred
stock  converted to 700 shares of Series K preferred  stock.  Other  information
regarding preferred Series H preferred stock, Series I preferred stock, Series J
preferred stock and Series K preferred stock as follows:

The Company is  authorized  to issue a total of  5,000,000  shares of  preferred
stock, par value at $0.001.  At January 31, 2003, the Company had six classes of
preferred stock outstanding with an aggregate of 466,000 shares authorized.  The
Company has been authorized to issue 200,000 shares of $0.001 par value Series A
preferred  stock,  200,000 shares of $0.001 par value Series B preferred  stock,
10,000  shares of $0.001 par value Series C preferred  stock,  20,000  shares of
$0.001 par value  Series D  preferred  stock,  5,000  shares of $0.001 par value
Series E preferred  stock,  5,000  shares of $0.001 par value Series F preferred
stock,  25,000 shares of $0.001 par value Series G preferred stock, 1,000 shares
of $0.001 par value Series H preferred  stock,  5,000 shares of $0.001 par value
Series I preferred  stock,  1,000  shares of $0.001 par value Series J preferred
stock and 1,000 shares of $0.001 par value Series K preferred  stock.  The board
of directors of the Company has the authority to issue shares of preferred stock
from time to time in one or more  classes or series,  which may have such voting
power,  full or  limited  as  fixed  by the  board of  directors.  The  board of
directors may also  determine  the terms of any such series or class,  including
dividend rights, dividend rates, conversion,  exchange,  voting rights and terms
of redemption, the redemption price and the liquidation preference of such class
or series.

                                       7
<PAGE>


The number of shares outstanding of preferred stock, Series A, B, C, D, E, F, G,
H, I, J and K and amounts were as follows:

                                                    July 31, 2002
                                       -----------------------------------------
                                       Number of Shares            Amount
                                       ----------------      -------------------
                      Series A                 813                $    1
                      Series B                --                    --
                      Series C                --                    --
                      Series D                 888                     1
                      Series E                --                    --
                      Series F               1,860                     1
                      Series G              10,000                    10
                                            ------                ------
                        Total               12,941                $   13
                                            ======                ======

                                                   April 30, 2003
                                       -----------------------------------------
                                       Number of Shares            Amount
                                       ----------------      -------------------
                      Series A                --                  $ --
                      Series B                --                    --
                      Series C                --                    --
                      Series D                 522                     1
                      Series E                --                    --
                      Series F                --                    --
                      Series G              10,000                    10
                      Series H                 125                  --
                      Series I                 596                     1
                      Series J                 524                     1
                      Series K                 447                  --
                                            ------                ------
                        Total               12,214                $   13
                                            ======                ======



General Terms

All Series A, B, C, D, E, F, G, H, I, J, and K preferred  stock  shares  contain
standard  terms  relative  to  adjustment  for stock  splits  and  combinations,
reorganizations, mergers, and consolidations or sales of assets, registration of
stock  issued  upon   conversion,   and  registration   rights.   For  dividend,
liquidation,  mergers and  consolidations,  the respective rights of each series
are  different.  Series A  preferred  stock  is  limited  to $300  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  A
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  B  preferred  stock  is  limited  to  $6  per  share  in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  B
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series C  preferred  stock is  limited  to  $0.25  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  C
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  D  preferred  stock  is  limited  to $100  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  D
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  E  preferred  stock  is  limited  to $100  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  E
preferred share has liquidation rights and merger or consolidation rights before


                                       8
<PAGE>


common  stock.  Series  F  preferred  stock  is  limited  to $100  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  F
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  G  preferred  stock  is  limited  to $80  per  share  in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  G
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series H  preferred  stock is  limited  to  $1.00  per  share in
non-cumulative   preferential  dividends  before  common  stock  Each  Series  H
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  I  preferred  stock  is  limited  to $80  per  share  in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  I
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  J  preferred  stock  is  limited  to $80  per  share  in
non-cumulative  preferential  dividends  before  common  stock.  Each  series  J
preferred share has liquidation rights and merger or consolidation rights before
common  stock.  Series  K  preferred  stock  is  limited  to $100  per  share in
non-cumulative  preferential  dividends  before  common  stock.  Each  Series  K
preferred share has liquidation rights and merger or consolidation rights before
common stock.

As of the date of these  financial  statements,  no dividends have been declared
due to the Company's accumulated deficit.

Voting Rights

All Series A, B, C, E, F, G, H, I and J preferred  shares have the right to vote
based on their  conversion  rights to common shares.  Series D preferred  shares
have the right to vote based on five and a half times their conversion rights to
common  shares.  Series G preferred  shares have the right to vote based on four
times their conversion rights to common shares.  Series K preferred shares shall
have no voting rights unless required under Delaware law.

Conversion to Common Shares

The  Series  A and B  preferred  provide  that  each  share  is  entitled  to an
additional  conversion  share to common stock based on a formula  that  reflects
increased  market value of the common stock when the common shares have a market
price in excess of $2 but not greater than $12 per share.

Preferred  Series A, B, and C stock have a basic conversion rate of 50 shares of
common stock for every share of preferred  stock. The conversion ratio to common
for Series A and B preferred stock is adjusted  upwards  depending on any future
issue of common shares at below $1.65 per share. The conversion rates for Series
A and B  preferred  stock was  1:213  preferred  to common as of July 31,  2002.
Preferred  Series D and E have a basic  conversion  rate of 83  shares of common
stock for every share of preferred stock.

Preferred  Series F have a basic  conversion  rate of 100 shares of common stock
for every share of preferred  stock.  Preferred Series G have a basic conversion
rate of 400 shares of common stock for every share of preferred stock. Preferred
Series H have a basic  conversion rate of 5,000 shares of common stock for every
share of preferred  stock.  Preferred Series I , J and K have a basic conversion
rates of 10,000  shares of common  stock  for every  share of  preferred  stock.
Preferred  Series I has a  conversion  cap until  December  31, 2003 whereby the
person  converting the stock cannot hold more then 4.95% of the Company's common
stock at any time.  Preferred  Series J has a conversion  cap until December 31,
2003 whereby the person  converting the stock cannot hold more then 4.99% of the
Company's  common stock at any time.  Preferred  Series K has a  conversion  cap
until  September  30, 2004 whereby the person  converting  the stock cannot hold
more then 4.99% of the Company's common stock at any time.

                                       9
<PAGE>


NOTE 4 - NOTES PAYABLE

Current  notes  payable at April 30,  2003 and July 31,  2002  consisted  of the
Following:


                                                       April 30,        July 31,
       Creditor and Conditions                           2003            2002
--------------------------------------------------------------------------------

Note  payable to GMAC,  interest at 13.99%,  secured
by 2000 Plymouth  Voyager, payable in monthly
installments of $452.07 through April 28, 2006.       $  12,974      $  14,350

Bruce  Butcher,  unsecured,  interest at 8%,
convertible to one share of common stock
per $0.80 of debt, due on demand.                          --           75,000

Joe Wozniak, unsecured, interest at 8%, convertible
to one share of common stock per $0.80 of debt,
due on demand.
                                                           --           80,000

Keely Smith, secured by product inventory of
subsidiary, interest at 24%, due on September
25, 1998. Delinquent.                                    60,000         60,000
                                                     ----------      -----------
                                                     $   72,974      $ 229,350


Edwin Hamlin,  Sr., secured by product inventory,
 Interest at 12%, due on February 24, 2003.             100,000            --
                                                     ----------      -----------

Total                                                $  172,974      $  229,350

Less current portion                                    163,851         218,422
                                                     ----------      -----------

Net long-term debt                                   $    9,123      $   10,928
                                                     ==========      ===========


NOTE 5 - RELATED PARTY

The Company has a shareholder  who acts as a Company  representative  in certain
transactions.  During the nine months  ended April 30,  2003,  this  shareholder
incurred $1,368,000 in promotional and other  administrative  expenses on behalf
of the Company.  This amount was recorded as accounts  payable - related  party.
The  accounts  payable - related  party was then paid  through  the  issuance of
Series J preferred  stock.  Accounts payable - related party to this shareholder
is  stated  at  $91,553  and $54,  292 at  April  30,  2003  and July 31,  2002,
respectively. See Note 3.

NOTE 5 - RELATED PARTY TRANSACTION (Continued)

Effective April 30, 2003, a shareholder  offered to forgive $168,974 owed to his
firm for legal  services  performed  for Aqua Vie.  This  amount is  recorded as
forgiveness of related party payable in other income.

NOTE 6 - RECLASSIFICATION

Certain  amounts  from prior  periods have been  reclassified  to conform to the
current period presentation. This reclassification has resulted in no changes to
the Company's  accumulated  deficit or net losses presented.  A portion of notes
payable, $5,220, was reclassified as a related loan.

                                       10
<PAGE>


NOTE 7 - CONCENTRATION OF CREDIT RISK

The Company  maintains its cash in one commercial  account at a major  financial
institution.  Although the financial institution is considered  creditworthy and
has not experienced any losses on its deposits,  at April 30, 2003 the Company's
cash balance exceeded  Federal Deposit  Insurance  Corporation  (FDIC) limits by
$265,676.

NOTE 8-COMMITMENTS AND CONTINGENCIES

On February 27, 2003,  the Company  entered into a consulting  agreement  with a
related  party  whereby  the  Company  will  issue  common  stock in  payment of
consulting fees and for payment of subcontracting fees or other fees paid by the
consultant  to others.  During the  quarter  ended April 30,  2003,  the Company
issued  543,500  shares of its common stock  valued at $362,595.  Because only a
small  portion of the  consulting  services were  performed  during the quarter,
$326,175 has been recorded as  subscription  receivable at April 30, 2003.  This
receivable will be reduced as services are performed for the Company.

Subsequent  to the quarter  ended April 30, 2003,  the  consultant  has paid for
approximately $275,000 of expenses for the benefit of the Company.

NOTE 9-LEGAL PROCEEDINGS

The Securities and Exchange Commission ("SEC") temporarily  suspended trading in
the  securities  of Aqua Vie from May 2, 2003  through May 15,  2003  because of
questions raised  regarding the accuracy and  completeness of information  about
Aqua  Vie in fax  broadcasts  and on the  Internet.  Subsequent  to the  trading
suspension,   the  SEC  commenced  a  formal  investigatory  proceeding  of  the
aforementioned.

                                       11
<PAGE>

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

INTRODUCTION

Beginning  calendar  2002  and to the end of the  current  period,  the  company
continued to develop and refine a new marketing strategy  incorporating  greater
brand  and  corporate  awareness  within  acquired  distribution  channels,  and
directed  toward  broadening  its portfolio of  water-beverages  and new product
introductions within the all-natural retail, and all-other retail food markets.

The  company's  primary  operating  focus  has been the  development  of its new
Hydrator product line and product labels, for planned  introduction this summer,
additional production capacity, and the company's new corporate website.

Aqua Vie products are currently  distributed  through two major  distributors in
the natural foods  market--Tree of  Life/Gourmet  Award Foods and United Natural
Foods.  The products are being  featured in  all-natural  "store within a store"
concepts,  through various grocery chains including Safeway,  Vons,  Dominick's,
Pavilions, Randall's, Tom Thumb, Carr's Genuardi's, Shaw's Supermarkets and Wild
Harvest.  The greatest  concentration  of retail  availability is in the Pacific
Northwest,  Southwest,  and Northeast  regions of the United States.  During the
most recent  quarter,  the company  began  marketing  and product  demonstration
programs within these regions,  aimed at increasing retail demand and geographic
distribution of its all-natural  product line. The company continues to make its
products available directly to consumers through its website (www.aquavie.com).

Sales  increased  for the quarter  ended April 30, 2003 compared to the previous
quarter and the year ended April 30, 2002 as shipping of initial  products for a
nationwide store demonstration program commenced.  Current assets were higher at
the end of the most recent  period,  and our current  liabilities  decreased  by
about $285,984 from April, 2002.

During the  quarter,  the  Company  continued  a program to settle or reduce our
payables and other current  liabilities aimed at strengthening our balance sheet
and improving our credit in anticipation of a need for factoring  capital and/or
lines of credit to  support  increased  production.  In  conjunction  with these
efforts,  we also reduced  accounts  payable at April 30, 2003 to $148,512  from
320,030 at the beginning of the fiscal year.

In addition to its all-natural Hydrators, Aqua Vie has finalized the development
of a low  calorie  line  of  Hydrators  for  chain  retail  markets  that do not
specialize in all-natural  products (the all-other  markets),  for  introduction
this summer.  The company  anticipates  introducing the first of its new product
lines through new, as well as existing distribution channels.

Liquidity and Capital Resources

Despite the difficult  capital markets,  which severely  hindered our operations
throughout  2000 and 2001,  we were able to secure  approximately  $3,321,000 in
additional  equity  capital  during the period July 31,  2002 - April 30,  2003.
Additional  capital we have received has enabled us to fund current  operations,
pay for additional  production  runs, and engage in an aggressive  marketing and
development  program.  Our preliminary  goal is to achieve  sustainable  current
sales sufficient to support  overhead,  and as a function of the sales achieved,
to seek additional  capital thereafter as needed, to support growth. We have not
yet secured this capital, but management has been reviewing various alternatives
to affect these capital objectives.  The capital markets remain difficult due to
global  uncertainties  and weak  short-term  economic  outlook.  Our  success in
achieving  sustainable  production  and  sales  and  the  development  of  these
compelling new products,  together with  improvement in our current position and
the  overall  market  situation,  will  determine  the extent we will be able to
continue  acquiring  additional  capital,  and the  dilution  this  may  entail.
Assuming  increased  revenues,  driven by higher demand and  additional  product
available  for sale,  we expect,  as a result of our efforts to  strengthen  our
current position,  and to be able to present a better balance sheet when seeking
support financing.

                                       12
<PAGE>


Results of Operations

Our assets  increased in the current period,  primarily due to production of new
inventory and equity infusion. Relative to July 31, 2002, total assets increased
approximately $420,082 of which approximately $363,000 was in cash, $125,000 was
in  inventory,  and $13,217 was in accounts  receivable.  These  increases  were
offset by  approximately  $100,000 of additional  accumulated  depreciation  and
amortization.

Our current liabilities decreased by approximately $285,900 during the period.

We had increased but low sales during the period ended April 30, 2003;  however,
as a result of the capital infusions,  we anticipate  additional production runs
to support increasing sales.  Expenses have continued  however,  and our deficit
increased  approximately $1.1 million during the period. Our accumulated deficit
as of April 30, 2003 was  $(9,965,332),  compared to $(7,731,176) as of July 31,
2002 and  $(6,643,561)  as of April 30,  2002.  Although  we  maintained  modest
payroll costs, we incurred a substantial increase for promotional expenses,  our
most significant cost item during the quarter.  Given the nature of the beverage
industry and our place in that industry,  we expect  advertising and promotional
new  product  introduction  costs to be a  significant  factor in the  company's
growth, through the remainder of this year and throughout fiscal 2004.


ITEM 3. CONTROLS AND PROCEDURES

In accordance with Item 307 of Regulation S-B  promulgated  under the Securities
Act of 1933, as amended, and within 90 days of the date of this Quarterly Report
on Form 10-QSB,  the Chief Executive  Officer and Chief Financial Officer of the
Company (the "Certifying Officers") have conduct ed evaluations of the Company's
disclosure  controls  and  procedures.  As defined  under  Rules  13a-14(c)  and
15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the term  "disclosure  controls and procedures"  means controls
and other  procedures of an issuer that are designed to ensure that  information
required to be  disclosed  by the issuer in the reports that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported, within
the time  periods  specified  in the  Commission's  rules and forms.  Disclosure
controls and procedures  include,  without  limitation,  controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports  that it files or submits  under the  Exchange  Act is  accumulated  and
communicated  to the issuer's  management,  including  its  principal  executive
officer or officers and  principal  financial  officer or  officers,  or persons
performing similar functions, as appropriate to allow timely decisions regarding
required  disclosure.  The  Certifying  Officers  have  reviewed  the  Company's
disclosure  controls and procedures  and have  concluded  that those  disclosure
controls and  procedures  are effective in causing  information  to be recorded,
processed,  summarized,  and reported  within the time periods  specified in the
Commission's  rules and forms and  communicated  to management of the Company to
allow timely decisions regarding the Company's public disclosures. In compliance
with Section 302 of the Sarbanes-Oxley Act of 2002, (18 U.S.C 1350), each of the
Certifying  Officers  executed  an  Officer's  Certification  included  in  this
Quarterly Report on Form 10-QSB.

As of the date of this Quarterly Report on Form 10-QSB,  there have not been any
significant  changes in the Company's internal controls or in other factors that
could significantly affect these internal controls subsequent to the date of the
Certifying Officers' evaluation.


PART II - OTHER INFORMATION


                                       13
<PAGE>


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 has had, and  anticipates in the future that it will have,  conflicts as
regards  certain  Accounts  Payable for  services  invoiced  but not  adequately
performed.


ITEM 2. CHANGE IN SECURITIES

There were several  exchanges of securities  during the period for  pre-existing
debt  that  did not  entail  any new  consideration.  Please  see the  financial
statements for details.  During the period, a new class of shares, "J" Preferred
Shares (See item 5) was subscribed to for a consideration of $500,000 for 125 of
said shares.  The securities  were issued in reliance to the exemption  provided
under Regulation D, Rule 506 for accredited investors.

(b)  There  were  several   exchanges  of  securities   during  the  period  for
pre-existing  debt that did not  entail  any new  consideration.  Please see the
financial  statements  for  details.  There  was also a new  class of  preferred
shares, "Series K" designated,  which does not have voting rights and eliminated
the $.30  anti-dilution  provision.  Please see the financial  statements  for a
complete  description  of terms and for a description of exchanges for a portion
of the Series I shares.  Exchanges were without additional consideration and the
Company relied upon the Regulation D exemption as to accredited investors.


ITEM 3  DEFAULTS ON SENIOR SECURITIES

A subsidiary of Aqua Vie, Keely Smith,  delinquent,  has a credit of 60,000 with
an interest rate of 24%. It was due on September 25, 1998.


ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

NA

ITEM 5  OTHER INFORMATION

5.1.

The  company's  co-packer,  Lyons  Magnus,  has  determined  that it  wished  to
concentrate on a few larger  accounts,  and accordingly has notified the Company
that it wished to forthwith  terminate the co-packing  relationship.  A bottling
run is currently scheduled for August,  2003, and thereafter the Company expects
to utilize  other  co-packers.  Discussions  are  underway  with other  packers;
however, no definite arrangements have been made.

As  discussed  in the last 10-Q,  Item 5, a new series K  Preferred  shares were
designated and offered in exchange for a portion of the Series I shares.  Please
see the Financial Statements and Notes for details.

As previously  noted in our Report filed for the Quarter ended October 31, 2002,
after the end of said period,  the Company affected the filing of a new Series I
Preferred Stock. The new Series I was offered in exchange for all Series A and F
Shares at a rate of 1.5 Series I share for each Series A Share, and 1.5 Series I
Shares  for  each 10  Series  F  Shares.  The  Series  I  Shares  eliminate  the
anti-dilution  provisions  of  Series A Shares  (Series  A shares  anti-dilution
provisions caused their conversion rate to increase from 1000/1 to 10,000/1 from
inception in 1998 based on the  pre-combination  conversion  rate),  and further


                                       14
<PAGE>


reduce the preference to $80/Share from  $300/Share for Series A, and $100/Share
in Series F. The  conversion  rate is set at 10,000 to one to common;  however a
conversion cap of 4.95% is established  until December 2003 or in the event of a
sale or similar  corporate  event  (extendable  by  agreement),  total  holdings
including  beneficial holdings at any one time; and the voting rights of the new
Series is only to the extent they may be converted at any time. A provision  for
a  conversion  adjustment  is  provided  in the event  that the  market  for the
Company's common stock drops below $.30/share for a period  immediately prior to
a conversion  request,  with the  adjustment  eliminated  if a later  request is
received after the $.30 thresh hold is reached.  The upward share  adjustment is
made proportionally to the decrease below $.30/share. In our last report, it had
been proposed to offer in exchange for no additional consideration approximately
350 I Shares for  approximately  700 shares of a new class of preferred  shares,
tentatively "K" preferred, which would eliminate the $.30/adjustment,  eliminate
all voting rights and lower the preference.  This has been effected,  please see
the Financial  Statements  for details.

Series G Preferred (issued in May, 2002) has varying  conversion rates depending
upon market  performance and other factors,  and voting rights vary accordingly.
In  addition,  in the event  that the  Company  issues  either  common  stock or
instruments  convertible  into  common  stock in a  transaction  valued  at over
$200,000 where the effective price of common stock for the  consideration  given
is less than  $.40/share,  the conversion rate of Series G preferred is adjusted
upward accordingly ($.40/share post-combination was the approximate market price
of common  underlying  the Series G when issued).  The recent Series I, J, and K
share issuance would trigger this adjustment;  however, a valuation has not been
placed  on  these  transactions  for  these  purposes  as yet by  the  Board  of
Directors.  No Series G shares  have  been  converted,  and  there  have been no
shareholder  actions since the consent actions in June, 2002 (Please see the two
Information  Statements sent to shareholders and filed with the SEC in June 2002
for more  information).

Series J shares were authorized during the period, but the Designation of Rights
and issuance  thereof had not occurred by Quarter-end.  Please see Note 3 to the
financials for a discussion of the terms thereof.


ITEM 6. EXHIBITS AND REPORTS

99. Exhibit:  (a) Title 18 Certification  (b) Designation of Rights of Preferred
Series K (c) Designation of Rights of Preferred Series J
              (d)  Employee Benefit Agreement for Valerie Gillespie


                                       15
<PAGE>


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 has  undertaken 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
HYDRATOR(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 risks 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,  the need to  transition  to a new  bottlerdependence  on key
suppliers,  future  capital  needs  and  uncertainty  of  additional  financing,
availability  of loan funds or other sources of capital,  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.


                           SIGNATURES
                           ----------

                           AQUA VIE BEVERAGE CORPORATION
                                   (Registrant)


                               By:  /s/ Thomas Gillespie
                                    ---------------------------------------
                                        Thomas Gillespie
                                        Chief Executive Officer & President

Date: June 26, 2003

                                       16
<PAGE>


                     CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                   PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002-

I, Thomas Gillespie certify that:

1. I have  reviewed  this  quarterly  report on Form 10-QSB of Aqua Vie Beverage
Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the Statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this quarterly report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
Information included in this report, fairly present in all material respects the
financial  condition,  results of operations and Cash flows of the registrant as
of, and for, the periods presented in this report;

4. I am responsible for  establishing  and maintaining  disclosure  controls and
procedures  (as  Defined  in  Exchange  Act Rules  13a-14  and  15d-14)  for the
registrant and I have:

         a)   Designed such  disclosure  controls and  procedures to ensure That
              material  information  relating to the  registrant,  Including its
              consolidated  subsidiaries,  is made known to us By others  within
              those  entities,  particularly  during  the  Period in which  this
              quarterly report is being prepared;

         b)   Evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls and  procedures  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   Presented in this report our conclusions  about the  effectiveness
              of the disclosure  controls and procedures based on our evaluation
              as of the Evaluation Date;

5. I have disclosed,  based on our most recent  evaluation,  to the registrant's
auditors and the audit committee of registrant's  board of directors (or persons
performing the equivalent function):

         a)   All  significant  deficiencies  in  the  design  or  operation  of
              Internal  controls which could adversely  affect the  registrant's
              Ability to record,  process,  summarize and report  financial data
              And have  identified  for the  registrant's  auditors any material
              Weaknesses in internal controls; and

         b)   Any fraud,  whether or not material,  that involves  management or
              Other  employees who have a significant  role in the  registrant's
              Internal controls; and

6. I have indicated in this report whether or not there were significant changes
in  internal  controls  or in other  factors  that  could  significantly  affect
internal  controls  subsequent  to the  date  of  our  most  recent  evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

                                    Signature
                                    ---------

/s/ Thomas Gillespie                   Title                       Date
---------------------        ------------------------        ----------------
    Thomas Gillespie         CEO, President, Director         June 27, 2003



                                       17