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, 2001

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


                         Commission File Number 0-24801

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

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

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

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

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the last 12 months (or for such shorter  period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

YES [ ]         NO [X]            As of the quarter ending January  31, 2001 the
                                  Registrant  has  been  subject  to the  filing
                                  requirements of the Securities Act of 1934 for
                                  less than 90 days.

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

Class                                        Outstanding at April 30, 2001

Common Stock, Par value $0.001                       47,159,285


                                       1
<PAGE>

Item 1. Financial Statements:


Aqua Vie Beverage Corporation
BALANCE SHEET
<TABLE>
<CAPTION>

                                                                    Apr. 30, 2001 Jul. 31, 2000
                                                                    (unaudited)
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                           $      --      $    11,127
Accounts receivable  (net of $0 allowance for doubtful accounts)         80,792         25,238
Inventories                                                             213,691        249,790
Prepaid expenses and deposits                                           185,155         93,476
                                                                    -----------    -----------

Total current assets                                                    479,638        379,631

Equipment (net of $69,463 and $24,847 accumulated depreciation)         132,145        127,489

Intangibles (net of $26,812 and $19,500 accumulated amortization)        70,688         77,998
                                                                    -----------    -----------

Total assets                                                        $   682,471    $   585,118
                                                                    ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable                                                    $   431,271    $   154,621
Overdraft payable                                                        40,325           --
Shareholder loans payable                                               383,975           --
Notes payable                                                           215,000        792,000
Accrued expenses                                                         68,258        467,564
Loans from related parties                                              157,137        353,600
                                                                    -----------    -----------

Total current liabilities                                             1,295,965      1,767,785
                                                                    -----------    -----------

Long-term debt                                                             --           18,362
                                                                    -----------    -----------

Total liabilities                                                     1,295,965      1,786,147

Commitments and Contingencies                                              --             --

STOCKHOLDERS' DEFICIT
Preferred stock: $0.001 par value 1,000,000 shares authorized,
     Issued and outstanding:
  Series A (200,000), outstanding: 1,973 and 2,557                            2              3
  Series B (200,000), outstanding: 991 and 4,653                              1              4
  Series C (10,000), outstanding: 0 and 200                                --             --
  Series D (20,000) outstanding: 12,000 and 0                                12           --
Common stock:
    $0.001 par value, 120,000,000 shares authorized
     Issued and outstanding: 47,159,285 and 30,811,408                   47,159         30,811
Additional paid-in capital                                            4,480,801      2,422,234
   Subscriptions Receivable                                            (309,702)          --
Accumulated Deficit                                                  (4,831,768)    (3,654,081)
                                                                    -----------    -----------
Total stockholders' deficit                                            (613,495)    (1,201,029)
                                                                    -----------    -----------

Total liabilities and stockholders' deficit                         $   682,471    $   585,118
                                                                    ===========    ===========
</TABLE>


                                       2
<PAGE>

Aqua Vie Beverage Corporation
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                        Three Months Ended            Nine Months Ended
                                                Apr. 30, 2001    Apr. 30, 2000   Apr. 30, 2001   Apr. 30, 2000
                                                 (unaudited)      (unaudited)     (unaudited)     (unaudited)
                                                 ------------    ------------    ------------    ------------
<S>                                              <C>             <C>             <C>             <C>
REVENUES                                         $     40,411    $     34,462    $    765,772    $     64,712

Cost of Sales                                          28,308            --           584,694            --
                                                 ------------    ------------    ------------    ------------

GROSS PROFIT                                           12,103          34,462         181,078          64,712

OPERATING EXPENSES
Promotion and Advertising                              46,779         277,891         372,234         408,676
General and Administrative                            215,066         393,954       1,469,694         938,391
Depreciation and Amortization                          18,590           9,773          57,016          27,072
                                                 ------------    ------------    ------------    ------------
TOTAL OPERATING EXPENSES                              280,435         681,618       1,898,944       1,374,139
                                                 ------------    ------------    ------------    ------------

Loss from Operations                                 (268,331)       (647,156)     (1,717,865)     (1,309,427)

Interest Expense                                      (63,714)         15,921          56,064          65,103
                                                 ------------    ------------    ------------    ------------

Net Loss Before Extraordinary Item                   (204,618)       (663,077)     (1,773,930)     (1,374,530)

Extraordinary Item:
     Forgiveness of Accrued Payroll,
        Net of Income Tax                                --              --           499,968            --
                                                 ------------    ------------    ------------    ------------

Net Loss                                         $   (204,618)   $   (663,077)   $ (1,273,962)   $ (1,374,530)
                                                 ============    ============    ============    ============

Weighted average number of shares outstanding:     43,656,396      26,488,858      36,827,085      24,771,289
                                                 ============    ============    ============    ============

Basic and diluted loss per share before
  extraordinary item                             $     (0.005)   $     (0.025)   $     (0.048)   $     (0.055)
                                                 ============    ============    ============    ============
Basic and diluted income per share from
  extraordinary item                             $       --      $       --      $      0.014    $       --
                                                 ============    ============    ============    ============
Basic and diluted loss per share after
  extraordinary item                             $     (0.005)   $     (0.025)   $     (0.035)   $     (0.055)
                                                 ============    ============    ============    ============
</TABLE>

                                       3
<PAGE>

Aqua Vie Beverage Corporation
STATEMENTS OF CASH FLOWS

                                                       Nine Months Ended
                                                            April 30
                                                       2001          2000
                                                   (unaudited)    (unaudited)
                                                   -----------    -----------
OPERATING ACTIVITIES
  Net loss                                         $(1,273,962)   $(1,374,530)
Adjustments to reconcile net loss
to net cash used by operating activity:
  Depreciation and amortization                         57,016         27,072
  Accrued compensation                                    --          180,000
  Forgiveness of compensation                          499,998           --
  Prior-year expense in retained earnings               52,488           --
Changes in operating assets and liabilities:
  Issuance of shares for services                      364,588           --
  Advances to shareholder                                 --          506,350
  Accounts receivable                                  (55,554)        (7,665)
  Note receivable                                         --             --
  Accounts payable                                     276,650        101,437
  Shareholder loans payable                            383,975           --
  Overdraft payable                                     40,325           --
  Accrued expenses                                    (399,306)        13,815
  Loans from related parties                          (196,463)          --
  Inventories                                           36,099       (189,093)
  Prepaid expenses                                     (91,679)       103,794
                                                   -----------    -----------
Net cash used by operating activities                 (305,827)      (638,820)
INVESTING ACTIVITIES
  Purchase of intangibles                                 --             --
  Purchases of equipment                               (49,272)       (79,959)
                                                   -----------    -----------
Net cash used by investing activities                  (49,272)       (79,959)
FINANCING ACTIVITIES
  Stock sales cash proceeds                            598,484        480,238
  Debt converted to stock                              340,850           --
  Long-term debt                                       (18,362)          --
  Notes payable                                       (577,000)       213,000
Net cash provided by financing activities              343,972        693,238
  Increase (Decrease) in cash                          (11,127)       (25,541)
  Cash - Beginning of period                            11,127         27,298
                                                   -----------    -----------
CASH - END OF PERIOD                               $         0    $     1,757
                                                   ===========    ===========

SUPPLEMENTAL CASHFLOW INFORMATION:
Corporate income taxes paid                        $      --      $      --
Interest paid                                      $   195,725    $      --
NON-CASH TRANSACTIONS:
Debt converted to stock                            $   340,850    $      --
Notes payable and accrued interest forgiven        $   499,998
Note payable converted to long-term debt           $      --      $   340,000
820,000 common shares were issued for services -
August & October 2000                              $   344,578    $      --
Notes payable and accrued interest converted to
    common stock                                          --      $128,960.00


                                       4
<PAGE>

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)


NOTE 1 - STATEMENT OF ACCOUNTING

The interim  financial  statements  of Aqua Vie  Beverage  Corporation  included
herein, have been prepared without audit,  pursuant to the rules and regulations
of the Securities and Exchange Commission. Although certain information normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles has been condensed or omitted,  the Company believes that
the disclosures  are adequate to make the information  presented not misleading.
The accompanying interim financial statements should be read in conjunction with
the audited  financial  statements  and notes thereto  included in the Company's
annual report on Form 10-K for the fiscal year ended July 31, 2000.

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

NOTE 2 - EXTRAORDINARY ITEM

Subsequent  to the ending of this  reporting  quarter,  the  Company  discovered
certain  revenue  figures that had been booked in error for the quarters  ending
October 31, 2000 and January 31,  2001.  It has  re-filed  the Form  10QSB's for
those two quarters with the corrected financial  information.  The correction of
these errors did not affect the final  income,  per share loss or the  financial
statements as previously reported for those periods.

NOTE 3 - STOCK SUBSCRIPTION AGREEMENT

The stock  subscription  agreement executed on November 21, 2000 and reported in
the previous  quarter for the sale of 12,000  shares of $.001 par value Series D
Preferred stock for the aggregate  purchase price of $1,200,000,  the equivalent
of $100 per preferred  share,  has been funded to the extent of $891,000  during
this reporting  quarter and the first month of the subsequent  quarter reporting
period.

NOTE 4 - SUBSEQUENT EVENT

During March,  2001, the Company entered into a Shipping and Security  Agreement
with a central  California  contract  manufacturer.  The Agreements  provide 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.

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 Southern  California.  Subsequently,  the Company increased it
sales and  marketing  efforts.  Due to  production  difficulties,  the  contract
manufacturer  halted  production  under the  agreement.  To date,  the Company's
marketing efforts have resulted in authorizations  for placement of its products
in stores of approximately a dozen additional grocery store chains.


                                       5
<PAGE>

The Company has informed the contract manufacturer of the Company's intention to
seek  redress  in the  amount  of  $385,700  to  compensate  the  Company  for a
production  shortfall and quality assurance problems.  The Company has submitted
portions of this claim to the contract manufacturer and has reserved these claim
amounts,  which have not been  entered  into the books of the Company and do not
affect the financial statements as submitted in this report. To date, this claim
and the  issues on which it is based,  remains  unresolved,  and the  Company is
considering alternative  settlements.  Management believes that these issues can
be resolved to the parties' mutual satisfaction.

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

Aqua Vie Beverage Corporation, a Delaware corporation,  was incorporated on July
30,  1998  and  was  formed  as a  successor  to  another  Delaware  corporation
liquidated in bankruptcy in 1997. Throughout most of its fiscal year ending July
31, 2000,  Aqua Vie was a  traditional  development  stage  company  whose early
efforts  encompassed the development of a new category of beverages called water
beverages,  and the  sales  and  marketing  of the  first  all-natural,  lightly
flavored bottled spring waters, call Hydrators. In the quarter ended October 31,
2000,  the Company had appeared to have emerged from the  development  stage and
actively commenced the sale of its products. In the quarter ended April30, 2001,
the  Company's  selling  efforts,  including a major sales  commitment  from its
contract   bottler,   pushed   year-to-date   sales  to  just   over  the  three
quarter-million-dollar threshold.

At April 30,  2001,  the  Company's  total assets of $682,000  exceeded  that of
$585,000 at its July 31, 2000 year-end.  Although the  composition of the assets
changed during this interim period as most of the year-end inventories were sold
and converted to accounts receivable.  Similarly,  total current assets at April
30,  2001 of  $460,000  were higher  than  year-end  current  assets of $380,000
because of the  increase in the balance of prepaid  expenses and  deposits.  The
Company's current liabilities decreased from $1,768,000 at July 31 to $1,296,000
at April 30 while the composition of this debt shifted from short-term  loans to
increased accounts payable and shareholder loans payable.

During its first two years of existence (from  inception to July 31, 2000),  the
Company accumulated a deficit of $3,654,000. In the subsequent nine months ended
April 30, 2001,  the  Company's  accumulated  deficit grew to  $4,832,000 as the
Company's  marketing  and  executive  expenses  burgeoned,  creating a quarterly
operating loss of $205,000 and a semi-annual operating loss of $1,274,000.

During March,  2001, the Company entered into a Shipping and Security  Agreement
with a central  California  contract  manufacturer.  The Agreements  provide 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.

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 Southern  California.  Subsequently,  the Company increased it
sales and  marketing  efforts.  Due to  production  difficulties,  the  contract
manufacturer  halted  production  under the  agreement.  To date,  the Company's
marketing efforts have resulted in authorizations  for placement of its products
in stores of approximately a dozen additional grocery store chains.


                                       6
<PAGE>

The Company has informed the contract manufacturer of the Company's intention to
seek  redress  in the  amount  of  $385,700  to  compensate  the  Company  for a
production  shortfall and quality assurance problems.  The Company has submitted
portions of this claim to the contract manufacturer and has reserved these claim
amounts,  which have not been  entered  into the books of the Company and do not
affect the financial statements as submitted in this report. To date, this claim
and the  issues on which it is based,  remains  unresolved,  and the  Company is
considering alternative  settlements.  Management believes that these issues can
be resolved to the parties' mutual satisfaction.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The  Company's  revenues of $40,000 for the quarter  ended April 30, 2001 were a
modest increase from the $35,000 of revenues in the corresponding  third quarter
of the prior fiscal year.  Year-to-date  revenues of $766,000 for the first nine
months ended April 30, 2001 also reflect  successful sales efforts in comparison
with the incipient sales of $64,000 for the prior year nine-month period but are
much  less  than  what  had  been  anticipated  due to the  processor's  quality
assurance problem and the resultant lack of inventory.

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,  2001,  the Company  had  negative
working capital of $816,327,  although this amount  represents an improvement in
liquidity and capital  resources from its negative  working capital  position of
$1,388,000 at July 31, 2000.  The  improvement is  principally  attributable  to
sales  of  common  stock  the  proceeds  realized  from the  Series D  Preferred
transaction.

In the nine months  ended April 30,  2001,  the Company  funded a portion of its
operations from the sale of its common stock,  which raised $740,000 in cash. In
addition,  Aqua Vie financed its operations by a combination of increasing trade
payables, issuing shares for services valued at $345,000, converting $341,000 of
short-term  debt into stock,  and negotiating the forgiveness of almost $500,000
in accrued  liabilities  from a related  party.  This recent mix of  diversified
funding sources contrasts with the  corresponding  nine months of the prior year
when the primary  source of funds was $480,000,  originating  with the Company's
sale of its stock.

In the prior quarter,  the Company paid off its only long-term  debt,  which was
$18,000 at July 31,  2000,  and now stands free of  long-term  debt at April 30,
2001.

The  Company  anticipates  that  its use of cash  will  be  substantial  for the
foreseeable future. In particular, management of the Company expects substantial
expenditures in connection with production of 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 Company  does not expect to incur  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 equity
and/or debt securities, as needed.

                                       7
<PAGE>

The  availability  of  sufficient  future  funds  for Aqua Vie will  depend to a
significant  extent on the market  acceptance of the Company's  primary  product
line by  retail  chains.  Accordingly,  the  Company  may be  required  to issue
securities  to  finance  such  working  capital  requirements.  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.  While  the  Company's  nine-month
revenues of $766,000 were over twenty times as large as the nine-month  revenues
of the prior fiscal year,  sales to date have not been  sufficient  to cover the
costs of operations.  The Company's ability to develop  increasing  revenues and
profitable  net income is  dependent  upon the  effectiveness  of its  marketing
efforts in generating sales of its line of flavored spring water products.

For the nine months ended April 30, 2001,  the Company's  sales  produced  gross
profit of $181,078,  which  compares  favorably with the smaller gross profit of
$65,000 for the nine months of the prior fiscal year.  Operating  expenses  were
$1,899,000 for the nine months ended April 30, 2001 and were only $1,309,000 for
the same period of the prior year. The year-to-year change principally  reflects
an increase in marketing  expenses  which  directly  correlates  with  increased
revenues.  During this same  year-to-year  time frame, the increase in operating
expenses also reflects  heightened  expenditures for general and  administrative
expenses which were  substantially  offset by reduced  expenses for professional
fees.

In the quarter ending  January 31, 2001,  the Company's  statement of operations
reflects  an  extraordinary  item,  $500,000  (or $0.01 per  share) of gain from
forgiveness of accrued  compensation  by a related party.  There were no similar
extraordinary items in the corresponding or previous periods presented.

The  Company's  net loss of $205,000  for the three  months ended April 30, 2001
resulted in a net loss per share of $0.005 for the quarter.  This contrasts with
a net loss of $663,000 for the three  months  ended April 30,  2000,  which also
posted a per  share  loss of  $0.025.  The  Company's  year-to-date  net loss of
$1,274,000 is after the extraordinary  gain of $500,000 reported in the previous
quarter and equates to a year-to-date  per share net loss of $0.035,  comparable
to the prior year nine-month per share net loss of $0.055.

                                       8
<PAGE>

                          PART II - - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

ITEM 2.  CHANGES IN SECURITIES

Recent Sales of unregistered securities.

Pursuant to a stock  purchase  agreement  dated  November 21, 2001,  the Company
agreed to sell  12,000  Series D  Preferred  Shares  for  $1,200,000  cash to an
accredited  investor under  Regulation D. All but $309,000 has been paid on said
subscription  Proceeds  are to be used for general  working  capital,  including
slotting fees and marketing  expenses.  The Series D Preferred  Shares are to be
designated  and filed with the State of  Delaware by April 15,  2001,  which has
been  delayed  and said  designation  should be  examined  for the  exact  terms
thereof, of which the following is only a summary. The Series D Preferred Shares
are  convertible  to Common  Shares  under terms  generally  similar to Series B
Preferred  Shares (the terms of which are incorporated by reference from the 10k
S-B filing of the Company on November  15,  2000,  and which are also  available
also from the State of Delaware) with the following principal  differences:  (1)
The preferences  were set at $100 per share; (2) voting rights were 9,167 common
share equivalent for each preferred share, compared to 6,000 shares (adjustable)
under Series B; (3)  Conversion  to common was at 1,666.7  common share for each
preferred  share;  (4) the right to  convert  to common  without  consent of the
Company  commences  June 30, 2002; (5) the adjustment for Market success in Sec.
5(k) of the B  Designation  was  changed to provide  for a 5%  increase in stock
under the conversion for each $.05 that the common shares traded at $.25 or more
to a  maximum  of  trading  at $2.50 per  common  share;  (5) the  anti-dilution
adjustment  in  5(h) of the B  Designation  was  eliminated  for  the  Series  D
Preferred  Shares.  As with the Series B Shares, an irrevocable proxy for voting
was given to Mr. Gillespie for so long as the original holder held the Preferred
Shares or as converted  common shares.  A condition of the subscription was that
remaining  Series A Preferred  Shares  would waive future  anti-dilution  rights
there under,  and that the  conversion to common for those shares would be fixed
at 2,500 shares for those preferred shares remaining outstanding.  Subsequently,
the  Series A  Preferred  Share  anti-dilution  requirement  was waived and that
series will convert at the same conversion ratio as for the Series B Preferred.

                                       9
<PAGE>

ITEM 3.  DEFAULTS ON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.  OTHER INFORMATION

Not applicable.

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

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


                                    AQUA VIE BEVERAGE CORPORATION
                                                     (Registrant)


Date  June 20, 2001                 By: /s/ Thomas J. Gillespie
                                    ---------------------------
                                            Thomas J. Gillespie
                                            Chief Executive Officer &
                                            President

                                       10
<PAGE>