<PAGE>   1

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

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

For the fiscal year ended July 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

For the Transition period from____________________ to _____________________
Commission file number 0-24801

                          AQUA VIE BEVERAGE CORPORATION
                 (Name of small business issuer in its charter)

           Delaware                                             82-056425
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

P.O. Box 6759 333 South Main Street Ketchum, Idaho                 83340
--------------------------------------------------                 -----
    (Address of principal executive offices)                     (Zip Code)
   Issuer's telephone number (208) 622-7792

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class             Name of each exchange on which registered

----------------------------         -------------------------------------------

----------------------------         -------------------------------------------
Securities registered pursuant to Section 12(g) of the act:


--------------------------------------------------------------------------------
                                (Title of class)

--------------------------------------------------------------------------------
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

Check if disclosure of delinquent filers in response to Item 405 of regulation
S-B is not contained in this form, and incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB ( ) State issuer's
revenues for Its most recent fiscal year $151,933

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. On October 31, 2000 the aggregate market
value was $10,398,935.

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliated on the basis of reasonable
assumptions, if the assumptions are stated.

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 5(d) of the Exchange Act after the distribution of
securities under a plan confirm by a court. Yes_______No______

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of issuer's classes of common
equity, as of the latest practicable date. 30,247,049 outstanding on October 31,
2000.

<PAGE>   2

DOCUMENTS INCORPORATED BY REFERENCE:

IF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE, BRIEFLY DESCRIBE THEM
AND IDENTIFY THE PART OF THE FORM 10-KSB (e.g., Part I, Part II, etc.) into
which the documents incorporated: (1) any annual report to security holders; (2)
any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification Transitional Small
Business Disclosure Format (Check one):

Yes [ ]  No [X]


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Aqua Vie Beverage Corporation, a Delaware Corporation, ("Aqua Vie") was
incorporated on July 29, 1998 and was initially a wholly owned subsidiary of
BEVA ("BEVA") Corporation, which had been incorporated in Delaware in 1990. A
merger procedure under Section 251(g) of the Delaware Corporate Code in October
1998 resulted in Aqua Vie becoming the parent, and BEVA becoming the wholly
owned subsidiary, with the former shareholders of BEVA becoming by action of
law the shareholders of Aqua Vie. BEVA retained certain assets it had prior to
this procedure, but is now inactive. BEVA had been originally acquired in a
Chapter 11 Bankruptcy proceeding.

BARHILL EXCHANGE: Pursuant to an agreement and plan of merger dated August 31,
1999 between Barhill Acquisition Corporation (Barhill), a Delaware corporation,
and Aqua Vie Beverage Corporation, all outstanding shares of common stock of
Barhill were exchanged for 250,000 shares of common stock of Aqua Vie in a
transaction in which Aqua Vie was the surviving company. Barhill had no assets,
liabilities, or history of operations. This transaction is more fully described
in Form 8-K/A dated October 28, 1999.

BUSINESS OF ISSUER:

PRODUCTS: Aqua Vie Beverage Corporation develops, manufactures, and markets
new all-natural beverages. The Company has developed a new category of
beverages called "water beverages", that includes Hydrators(TM), a line of
spring water beverages that encourages personal hydration, "Eau Vin"(TM) a line
of non-alcoholic wines and champagne made from spring water, and PurePlay(TM) a
line of spring water beverages for children.

Aqua Vie has in development and/or test markets Aqua Vie Smoothies, the "E"
line of naturally fortified spring water beverages, and Aquaceuticals(TM) a
line of nutraceutical made from spring water.



<PAGE>   3
PROCESS: Aqua Vie presently enters into long term contracts with specialized
beverage co-packing companies, to produce all of its product lines, utilizing a
bottling filler technology that provides for all-natural beverage ingredients to
be bottled in Polyethylene Terephthlate (PET) plastic bottles, a universally
accepted container/vehicle for bottled water. This state-of-the-art aseptic
filling technology protects the desired attributes of the all-natural
ingredients, resulting in the exclusive, all-natural product lines that have
been developed by Aqua Vie.

Spring water is cold filtered with micron filtration so fine that it can
remove bacteria from water, and is then combined with crystalline fructose, and
all-natural flavors and fragrances that undergo the same filtration process. No
artificial ingredients or preservatives are used, and the entire process is
reviewed for Kosher certification. The products are then aseptically bottled
into distinctive shrink wrapped PET plastic bottles. They are sealed for
freshness, capped with a sports cap and then sealed with a tamper-proof outer
seal.

Although a more expensive process than non-aseptic bottling, aseptic PET
bottling provides for the complete sterilization of a PET bottle and its
contents. Pasteurization, hot-fill, and processes that utilize preservatives,
destroy a substantial amount of the natural attributes of fruits and beverages
during the bottling process such as color, taste, and aroma, as well as many of
the nutritional elements of these beverages including vitamins, minerals, and
herbs. Aqua Vie's PET aseptic process retains nutrition thereby enhancing
natural nutrients as well as herbal additives.

When Aqua Vie's aseptic research began, there was one aseptic/PET beta test site
in the United States capable of processing Aqua Vie's new "water beverages",
which Aqua Vie employed as its first domestic co-packer. This year numerous
PET/aseptic production facilities are starting up in the US and Europe with
equipment manufactured primarily by two different manufacturing companies.

Aqua Vie has designed all facets of the retail packaging systems for its product
lines to accommodate high-speed production in bottling facilities in the U. S.
as well as Europe, for both a co-packer and company owned equipment. Aqua Vie
was the first company to introduce the use of a poly-shrink, full-body label on
a PET plastic bottle, and in doing so created a system that can be applied by
readily available commercial labelers onto a consumer-acceptable, generic PET
bottle.


<PAGE>   4

Aqua Vie has developed a comprehensive quality assurance system and manual for
use by the bottlers. The bottlers are required to adhere to the quality
assurance manual as part of their bottling contract. The strict adherence to the
manual helps assure product quality.

Aqua Vie has a total of 16 employees, consultants and sales agents. Seven are on
staff at corporate headquarters and nine are working in sales throughout the
United States. The Company also utilizes an extensive consulting network of 11
persons, in a variety of beverage disciplines.

DISTRIBUTION OF THE PRODUCT: The Company is negotiating with distributors
focusing primarily on retail and food services distribution across the southern
half of the U. S., and several population centers in the Northeast. As a result
Aqua Vie is now represented in several top US markets including New York City,
Philadelphia, Miami/Fort Lauderdale, Houston, Dallas-Fort Worth, Oklahoma City,
Sacramento, Los Angeles, San Diego, and San Francisco. The Company has also
carried out consumer tests in Saudi Arabia, Europe, and China as a part of
initiating a co-packing arrangement in France. Aqua Vie offers information about
its products and a product purchasing and subscription service on its Internet
site.

AQUA VIE'S PLACE IN THE MARKET: Aqua Vie Hydrators bridge two primary market
categories in the beverage industry: soft drinks and bottled water. Standard
& Poor's Foods & Nonalcoholic Beverages Industry Survey, May 2000, reports,
"U.S. retail sales of the five major nonalcoholic refreshment beverage
categories totaled approximately $81.7 billion in 1998 (latest available), up
2.8% from 1997's level, according to Beverage World magazine. These categories
are soft drinks ($54.3 billion), fruit beverages ($17.5 billion), bottled water
($5.2 billion), ready-to-drink tea ($2.5 billion), and sports drinks ($2.3
billion)." Aqua Vie intends to enter the market with its unique packaging and
product to establish a new market segment for flavored water that does not use
preservatives or artificial sweeteners.

GOVERNMENT APPROVAL: Other than normal corporate registration and licensing the
Company does not need any additional and/or unique government license or permit.
The food and beverage industries are highly regulated and subject to many
federal and state government rules, regulations and oversight but compliance is
part of the service furnished by the bottler under the bottling production
contract. As to any future possible government regulations it is believed that
if any are ever imposed that they will be broad market pervasive and of general
application to all members of the beverage industry.

ITEM 2. DESCRIPTION OF PROPERTY.

Aqua Vie leases approximately 3,800 square feet of office space in Ketchum,
Idaho for it's corporate headquarters. The lease runs to November 15, 2001 with
an option to extend for one three year period. Aqua Vie contracts with
co-packers in California and France to produce its product.

<PAGE>   5

ITEM 3. LEGAL PROCEEDINGS.

None

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

None

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Aqua Vie's common stock is traded in the over-the counter market and prices are
quoted on the NASDAQ Bulletin Board. The quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission, and may not represent actual
transactions.


Year Ended July 31, 1999          High        Low
------------------------------------------------------

          First quarter           1.72       1.02

          Second quarter          1.25       0.13

          Third quarter           1.13       0.14

          Fourth quarter          1.94       0.59



Year Ended July 31, 2000          High        Low
------------------------------------------------------

          First quarter           1.22       0.39

          Second quarter          1.91       0.33

          Third quarter           1.91       0.63

          Fourth quarter          0.88       0.47


There is one class of common stock and approximately 700 shareholders plus an
estimated 10,000 beneficial holders in street name.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Matters discussed herein, contain forward-looking statements that involve risk
and uncertainties. This is particularly true as it relates to comments about
the development and funding of Aqua Vie's future production capability,
expectations about profitability, and new product introduction. Results may
differ significantly from results indicated by forward-looking statements.

Factors that might cause some differences, include, but are not limited to: (1)
Changes in general economic conditions, including but not limited to increases
in interest rates; (2) Government regulations affecting customers and the
packaging process for company products; (3) The potential for product recall;
(4) While Aqua Vie is not aware of products quite like theirs there are many
similar products competing for shelf space and market share in the bottled water
industry; (5) The ability of Aqua Vie to successfully bring new products from
their development stage into full and profitable production and sales; (6) Aqua
Vie's ability to raise sufficient debt and/or equity capital to perfect its
business plans; (7) The occurrences of incidents that could subject Aqua Vie to
liability or fines; (8) The ability of Aqua Vie to attract the needed network of
dealers and distributors, and secure the shelf space in stores necessary to
achieve sales forecasts; (9) Until Aqua Vie is able to build and control its own
production facilities Aqua Vie could face difficulties maintaining a suitable
relationship with co-packers.
<PAGE>   6
PLAN OF OPERATION: During the last year Aqua Vie continued establishing a market
presence for its line of Hydrators, lightly flavored spring water beverages.
Aqua Vie is in the process of introducing products in more states using
distributors and growing revenue. Aqua Vie's bringing product to the market
using aseptic filler technology is believed by management to be one feature that
has set Aqua Vie apart from the rest of the industry. At present a small portion
of Aqua Vie's revenue comes from Internet sales that Aqua Vie believes will have
an important part of future revenue. To date the multi-state distributor network
is producing revenue at an annualized rate of about 2.5 million dollars a year.
Aqua Vie's current capitalization is not sufficient to meet the sudden growth in
orders and apparent market acceptance; Aqua Vie is seeking up to $20 million
refinancing.

Given Aqua Vie's present relationship with co-packers and the present cost
structure, adequate levels of profitability may be achieved in a timely
fashion. Aqua Vie is negotiating lower packing fees with several new aseptic
filler co-packers, which promise more profitable operations, however, meaningful
improvements in operating profits are available by gaining control of production
facilities with new financing. The immediate solution to profitability in this
early growth rests with Aqua Vie obtaining the ability to purchase its own
aseptic fillers resulting in a significant reduction in cost and obtaining
scheduling control of production runs.

In the forthcoming year Aqua Vie expects to improve margins by introducing new
products that management believes will support higher gross margins in today's
competitive market environment. The first to be introduced will be a
non-alcoholic wine made from spring water. It will be a multi flavor line of
beverages designed to satisfy the desire for a wine or champagne taste without
the presence of alcohol or preservatives as a

<PAGE>   7

component of the beverage. That will be followed by a line of Hydrators for
children. The third area of new products will be a new fresh fruit smoothie
drink management believes is superior to anything now on the market.

Aqua Vie's product line contains no patented or patentable features or
components. The emphasis will be on copyrighting, trade marking and the use of
trade secret formulations. Aqua Vie is instituting non-disclosure/non-compete
agreements with employees, suppliers and bottlers. At present the company has
not issued any licenses, franchises, concessions, royalty agreements or labor
contracts though future development may include such actions as part of the
corporate strategy.

As mentioned above, Aqua Vie offers information about its products and a
subscription service on its Internet site. Management intends to expand and
develop marketing of Aqua Vie beverages through the Internet.

LIQUIDITY AND CAPITAL RESOURCES: Aqua Vie seeks up to $20 million in new capital
to finance receivables, introduce new product lines, purchase equipment and
provide working capital in the early stages to implement its expansion program.
The new investment sought will allow the Company to meet demand and grow from
its current projected annual volume of about 700,000 cases to over 50 million
cases by the third year hence. With Aqua Vie undercapitalized for the rapid
growth in sales it is suddenly experiencing, it is dependent on stock sales and
loans to continue delivering product.

In the year ended July 31, 1998 Aqua Vie sold stock for $182,750 and borrowed
$144,000. In the year ended July 31, 1999 Aqua Vie sold stock for $1,025,849,
increased borrowing by $260,000, and received loans from an officer of $42,416.
In the year just ended July 31, 2000 Aqua Vie sold stock for $936,525, increased
borrowing by $345,000, and received loans from an officer of $404,105.


RESULTS OF OPERATIONS: Aqua Vie began building its multi-state distributor
network and began obtaining shelf space in retail stores during the year just
ended and as a result received its first meaningful revenue from sales during
the year of $151,924. While establishing testing standards, and quality
assurance procedures for the Aqua Vie Quality Assurance Production System and
Manual, the company internally utilized approximately 24,000 cases of Hydrators.
During the new product introductory phase, numerous cases were also distributed
in lieu of slotting expenses, which resulted in a negative gross profit of
$80,434. These expenses are currently generating a projected annual sales
revenue of $2.5 million. General and administrative, legal and accounting
expenses increased significantly to accommodate the introduction of Aqua Vie
Hydrators and the development of its rapidly growing distributor network.

<PAGE>   8

ITEM 7. FINANCIAL STATEMENTS

                          INDEPENDENT AUDITOR'S REPORT


The Board of Directors
Aqua Vie Beverage Corporation
Ketchum, ID

        I have audited the accompanying consolidated balance sheets of Aqua Vie
Beverage Corporation as of July 31, 2000, and the consolidated related
statements of operations, stockholders' deficit, and cash flows for the years
ended July 31, 2000 and 1999. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.

        I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Aqua Vie Beverage
Corporation as of July 31, 2000, and the results of its operations and its cash
flows for the years ended July 31, 2000 and 1999, in conformity with generally
accepted accounting principles.

        The accompanying financial statements have been prepared assuming that
Aqua Vie Beverage Corporation will continue as a going concern. The Company's
negative working capital and recurring losses raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

W. Alan Jorgensen
Certified Public Accountant

September 26, 2000
Seattle, Washington

<PAGE>   9

AQUA VIE BEVERAGE CORPORATION.
CONSOLIDATED BALANCE SHEET
JULY 31, 2000


<TABLE>
<S>                                                                               <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                         $     11,127
Accounts receivable                                                                     25,238
Inventory                                                                              249,790
Prepaid and other assets                                                                93,476
                                                                                  ------------
Total current assets                                                                   379,631

Equipment & Property (net of $24,847 accumulated depreciation)                         127,489
Intangibles (net of $19,500 accumulated amortization)                                   78,000
TOTAL ASSETS                                                                      $    585,120
                                                                                  ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable                                                                  $    154,621
Notes payable                                                                          792,000
Accrued expenses                                                                       467,564
Loan from related party                                                                353,600
                                                                                  ------------
Total current liabilities                                                            1,767,785

Long Term Debt                                                                          18,362
                                                                                  ------------

TOTAL LIABILITIES                                                                    1,786,147

Commitments and Contingencies

STOCKHOLDERS' DEFICIT
Preferred stock: $0.001 par value (authorized), issued and outstanding:
  Series A (200,000), outstanding: 2,557 shares                                              3
  Series B (200,000), outstanding: 4,653 shares                                              4
  Series C (10,000), outstanding: 200 shares                                                 2
Common stock: 120,000,000 shares, $0.001 par, authorized
   Issued and outstanding: 30,811,408                                                   30,811
Additional paid in capital                                                           2,422,234
Deficit accumulated                                                                (3,654,081)
</TABLE>

<PAGE>   10

<TABLE>
<S>                                                                               <C>
                                                                                   ----------
TOTAL STOCKHOLDERS DEFICIT                                                         (1,201,027)
                                                                                   ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                        $  585,120
                                                                                   ==========
</TABLE>

The accompanying notes are an integral part of these financial statements



AQUA VIE BEVERAGE CORPORATION.
CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                JULY 31,               JULY 31,
                                                                  2000                   1999
                                                              ------------          ------------
<S>                                                           <C>                   <C>
REVENUES                                                      $    151,924          $     16,433

Cost of Goods Sold                                                 232,358                    --
                                                              ------------          ------------

Gross profit (loss)                                                (80,434)               16,433
                                                              ------------          ------------

EXPENSES
Promotion and Advertising                                          578,359               755,583
General and administrative                                         715,770               594,723
Legal and accounting                                               360,923               193,594
Depreciation and Amortization                                       34,597                 9,750
                                                              ------------          ------------
TOTAL EXPENSES                                                   1,689,649             1,553,650

Loss from operations                                            (1,770,083)           (1,537,217)
                                                              ------------          ------------

Oter Income (Expense)
  Interest Expense                                                 (77,139)              (34,560)
                                                              ------------          ------------

Net loss                                                      $ (1,847,222)         $ (1,571,777)
                                                              ============          ============

Basic and primary loss per common share                       $      (0.07)         $      (0.11)

Weighted average number of common shares outstanding:           25,649,677            14,044,036
</TABLE>

The accompanying notes are an integral part of these financial statements

<PAGE>   11

AQUA VIE BEVERAGE CORPORATION.
CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                 YEAR ENDED           YEAR ENDED
                                                                               JULY 31, 2000        JULY 31, 1999
                                                                               -------------        -------------
<S>                                                                            <C>                  <C>
OPERATING ACTIVITIES
Net loss                                                                        $(1,847,222)         $(1,571,777)
Adjustments to reconcile net loss to cash used by operating activities:
  Compensatory stock grants                                                          81,475
  Depreciation and amortization                                                      34,597                9,750
  Notes payable for compensation                                                    115,000
Changes in operating assets and liabilities:
  Accrued compensation                                                              240,000              180,000
  Accounts receivable                                                               (25,238)
  Inventory                                                                        (249,790)
  Accounts payable                                                                 (114,382)             242,055
  Accrued expenses                                                                  183,262               44,302
  Prepaid expenses                                                                  (62,707)            (136,183)
                                                                                -----------          -----------
Net cash used by operating activities                                            (1,645,005)          (1,231,853)
INVESTING ACTIVITIES
  Purchases of equipment                                                            (56,796)             (74,541)
                                                                                -----------          -----------
Net cash used by investing activities                                               (56,796)             (74,541)
FINANCING ACTIVITIES
  Proceeds from sale of common stock                                                836,525            1,025,849
  Proceeds from sale of preferred stock                                             100,000
  Proceeds from notes payable                                                       345,000              260,000
  Advances from shareholder                                                         404,105               42,416
                                                                                -----------          -----------
Net cash provided by financing activities                                         1,685,630            1,328,265
                                                                                -----------          -----------
  (Decrease) Increase in cash                                                       (16,171)              21,871
  Beginning of period                                                                27,298                5,427
                                                                                -----------          -----------
CASH AND CASH EQUIVALENTS END OF YEAR                                           $    11,127          $    27,298
                                                                                ===========          ===========

Corporate income taxes paid                                                     $        --          $        --
Interest paid                                                                   $        --          $        --

SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS
Common shares issued for notes                                                  $   128,638
Common shares issued for services                                               $    81,475          $         9
Preferred shares issued for assets                                                                   $    97,500
Notes payable for current payables for compensation                             $   115,000
Shares issued for retainer                                                      $    20,000
Equipment purchased for long term debt                                          $    21,000
</TABLE>

The accompanying notes are an integral part of these financial statements

<PAGE>   12

AQUA VIE BEVERAGE CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT


<TABLE>
<CAPTION>
                                    SERIES A PREFERRED         SERIES B PREFERRED       SERIES C PREFERRED
                                  ---------------------       -------------------     ----------------------
                                   Share          Amt          Share         Amt      Share             Amt
                                  -------       -------       -------       -----     -----            -----
<S>                               <C>           <C>           <C>           <C>       <C>             <C>
BALANCES AT JULY 31, 1998              --       $    --            --       $  --        --           $   --
Issued for cash
Issued for assets                                               1,496           2
Issued to founders                  4,343             4         3,491           3
Conversion preferred to common       (446)           --
Net Loss for year ended
 July 31, 1999
                                  -------       -------       -------       -----       ---           ------
Balances at July 31, 1999           3,897             4         4,987           5        --               --
                                  -------       -------       -------       -----       ---           ------
Shares issued for cash
Preferred for cash                                                                      200               --
Shares issued for services
Shares issued for notes payable
Converted to common                (1,340)           (1)
Converted to common                                              (334)         (1)
Net Loss for year ended
 July 31, 2000
                                  -------       -------       -------       -----       ---           ------
Balances at July 31, 2000           2,557       $     3         4,653       $   4       200               --
                                  =======       =======       =======       =====       ===           ======
</TABLE>



<TABLE>
<CAPTION>
                                        COMMON STOCK            PAID-IN CAPITAL      NOTE REC.      ACCUM. DEFICIT         TOTALS
                                 ---------------------------    ---------------     -----------     --------------      -----------
                                    Share             Amt             Amt
                                 -----------      ----------    ---------------
<S>                              <C>              <C>           <C>                 <C>             <C>                 <C>
BALANCES AT JULY 31, 1998          2,458,007      $    2,458      $   190,292       $   (10,000)      $  (235,082)      $   (52,332)
Issued for cash                   18,699,509          18,699        1,007,142                                             1,025,841
Issued for assets                                                      97,498                                                97,500
Issued to founders                                                                                                                7
Conversion preferred to common       807,141             807             (807)
Net Loss for year ended                                                                                (1,571,777)       (1,571,777)
 July 31, 1999
                                 -----------      ----------      -----------       -----------       -----------       -----------
Balances at July 31, 1999         21,964,657          21,964        1,294,125           (10,000)       (1,806,859)         (500,760)
                                 -----------      ----------      -----------       -----------       -----------       -----------
Shares issued for cash             2,596,000           2,596          833,928                                               836,524
Preferred for cash                                                    100,000                                               100,000
Shares issued for services         2,703,500           2,704           68,772            10,000                              81,475
Shares issued for notes payable      322,400             322          128,638                                               128,960
Converted to common                2,580,851           2,581           (2,582)                                                   (1)
Converted to common                  644,000             644             (645)                                                   (2)
Net Loss for year ended                                                                                (1,847,222)       (1,847,222)
 July 31, 2000                   -----------      ----------      -----------       -----------       -----------       -----------
Balances at July 31, 2000         30,811,408      $   30,811      $ 2,422,235       $        --       $(3,654,081)      $(1,201,027)
                                 ===========      ==========      ===========       ===========       ===========       ===========
</TABLE>

The accompanying notes are an integral part of these financial statements

<PAGE>   13


AQUA VIE BEVERAGE CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2000

NOTE 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION  Aqua Vie Beverage Corporation was incorporated on July 31, 1998
in the state of Delaware. The Company's principal assets, acquired through a
bankruptcy court ordered liquidation of the predecessor, included, among other
things, the trade name, beverage formulae and the public company status. These
assets were acquired by the issuance of Series B preferred stock. The Company's
business activities have been financed primarily through the issuance of equity
securities, outside loans, and loans from officers and shareholders.

The Company's principal products include low calorie, all natural,
non-preservative, lightly flavored bottled water. Management plans and believes
its products will be marketed nationally and internationally.

GOING CONCERN  The Company's ability to continue and become a going concern is
dependent upon its success in improving gross profits and improving operational
efficiencies, continuing to establish distributors and markets for its primary
developed and market tested product line, and acquiring adequate financing.
Management's plans include expenditures for advertising, inventory production
and establishing a distribution network. Management expects to finance its
initial operations through borrowings, and private and public offerings of the
Company's equity securities.

USE OF ESTIMATES  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS  The Company considers, and the financial statements
reflect, all highly liquid short-term investments with original maturity of
three months or less as cash.

DEPRECIATION AND AMORTIZATION  Equipment is depreciated over the estimated
useful life of three years using the straight-line method. A full year of
depreciation is taken for equipment acquired in the first half of the year and
no depreciation is taken for equipment acquired in the second half of the year.
Depreciation expense for the fiscal years ended July 31, 2000 and 1999, was
$24,847, and $0, respectively. Intangible assets are amortized over 10 years.
Amortization expense was $9,750 for each fiscal year ended July 31, 2000 and
1999.

SLOTTING FEES  The Company pays slotting or shelving fees to retailers. These
cost are deferred and amortized over the expected retail life of the product,
currently 10 years. Slotting fees paid during fiscal 2000 were $42,500 and
covered two months. Amortization of slotting fees for the fiscal year ended July
31, 2000 was $700.

COST OF ISSUING COMMON STOCK  The Company accounts for the cost incurred in
connection with offering securities as a reduction in paid-in capital.

INCOME TAXES  Deferred income tax assets and liabilities are computed for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances have
been established to reduce tax assets to the amount expected to be realized.
Income tax expense is the tax payable or refundable for the period plus or minus
the change during the period in net deferred tax assets and liabilities.

<PAGE>   14

AQUA VIE BEVERAGE CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2000

NET LOSS PER COMMON SHARE  Net loss per common share is computed based on the
weighted average number of common shares and common share equivalents
outstanding. When dilutive, stock options and other potentially dilutive
securities are included as common share equivalents using the treasury stock
method.

There was no difference between basic and fully diluted earnings per share for
all periods presented.

CONSOLIDATION  The Company's accounting policy in consolidating its sole
subsidiary is to eliminate all intercompany transactions.

NOTE 2 INVENTORY

Inventory is valued on a FIFO basis at the lower of cost or market. There was no
beginning inventory. Ending inventory consisted only of finished goods amounting
to $249,790. Inventory purchased during fiscal 2000 was $482,148.

NOTE 3 EQUIPMENT AND PROPERTY

Equipment and property at July 31, 2000 consisted of the following:


<TABLE>
<CAPTION>
                                                Accumulated        Net Equip
                 Equipment       Property       Depreciation      and Property
                 ---------       --------       ------------      ------------
<S>              <C>             <C>            <C>               <C>
Beginning         $74,541         $    --         $(24,847)         $ 49,694

Additions          24,818          52,978                             77,796
                  -------         -------         --------          --------
Ending            $99,359         $52,978         $(24,847)         $127,490
                  =======         =======         ========          ========
</TABLE>


The Company is in the process of acquiring a trade booth to be used in the
promotion of it products. At July 31, 2000, the trade booth was about 50%
complete. This asset has not been put into use and no depreciation has been
recorded.

NOTE 4 NET OPERATING LOSS CARRYFORWARD

The Company acquired, as part of the assets purchased in the bankruptcy
liquidation sale, the predecessor company's net operating loss carryforward
(NOL) in the approximate amount of $15 million. A valuation allowance has been
established so that no value is reflected at the balance sheet dates for any
deferred tax benefit. The value, if any, of the NOL will depend upon a number of
unknowns, including, among others, attaining profitable operations and other tax
law issues related to the acquisition of the NOL from the Company's predecessor.
The aggregate net operating loss carryforwards for federal income tax purposes,
which are available to offset future taxable income, expire beginning in 2001.

NOTE 5 STOCK BASED COMPENSATION

Financial Accounting Standards No. 123 (SFAS 123) addresses the accounting for
stock-based compensation arrangements. SFAS 123 permits a company to choose
either a new fair-value-based method or the APB Opinion 25 intrinsic-value-based
method of accounting for stock-option-based compensation arrangements.
Management will continue to record stock-based compensation using APB Opinion 25
intrinsic-value-based method. The pro forma effect on the income statement if
the Company had adopted the SFAS 123 fair-value-based method to account for
stock-based compensation arrangements would have been to increase net loss by an
estimated $250,000, and a nominal amount, for fiscal years ended July 31, 2000
and 1999, respectively.

During fiscal 2000 and 1999 there were no options issued to purchase shares of
restricted rule 144 stock.

<PAGE>   15
                         AQUA VIE BEVERAGE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2000

NOTE 6 RELATED PARTY TRANSACTIONS

A legal dispute with former bankruptcy legal counsel who was engaged in the
attempt to reorganize the predecessor corporation concerning their legal fees
has been settled. The $80,000 costs of settling the suit have been included in
general and administrative expenses.

NOTES RECEIVABLE FROM STOCKHOLDERS  The Company has issued common shares in
return for a note receivable from a stockholder. This note receivable had been
accounted for as a reduction of stockholders' equity. The obligor has satisfied
receivable providing services valued by the Company at $10,000, the amount of
the note.

ADVANCES TO OFFICER  From time to time the Company borrows money from its CEO,
Mr. Thomas Gillespie, and at other times lends money to the CEO. At July 31,
2000, $353,600 was owed to the CEO under this arrangement. At July 31, 1999,
$50,505 was due from the CEO. These amounts are payable (due) on demand and
carry no interest rate.

NOTE 7 COMMON STOCK

WARRANTS TO PURCHASE COMMONS SHARES  At July 31, 2000 there were warrants
outstanding to purchase the 422,800 shares of the Company's common stock at
prices and expirations dates indicated below. There were no warrants exercised
during the year.

<TABLE>
<CAPTION>
                                                           Number     Common     Common
                          Date    Expiration    Price        of     Shares per   shares
                         Issued      Date     per share   Warrants    Warrant   Issuable
                        --------  ----------  ---------   --------  ----------  --------
<S>                     <C>       <C>         <C>        <C>       <C>         <C>
Beginning of year       10/14/98   10/14/99     $1.50        36       4,800      172,800

                        10/14/98   10/14/00     $2.50        36       4,800      172,800
                                                                                 -------
Totals July 31, 2000                                                             345,600

During fiscal 2000

Warrants issued          8/31/00    8/31/04     $1.00         1     250,000      250,000

Warrants expired        10/14/98   10/14/99     $1.50       (36)     (4,800)    (172,800)
                                                                                --------
End of year (7/31/00)   10/14/98   10/14/99     $2.50        36       4,800      172,800

                         8/31/00    8/31/04     $1.00         1     250,000      250,000
                                                                                 -------
Total warrants outstanding at July 31, 2000                                      422,800
                                                                                 =======
</TABLE>

Subsequent to July 31, 2000, 850,000 additional shares of common stock have been
issued in a private transaction in exchange for a convertible note payable in
the amount of $340,000.

<PAGE>   16
                         AQUA VIE BEVERAGE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2000


MERGER -- RECAPITALIZATION  On August 31, 1999, the Company acquired by merger
the Barhill Acquisition Corporation ("Barhill") and elected to adopt their
successor SEC reporting status. The Company paid the transaction costs of
acquisition and initial filing in the amount of $100,000, and issued 250,000
common shares and warrants to purchase 250,000 shares (with an aggregate value
of $25,000) to the shareholders of Barhill. Barhill had only nominal assets and
liabilities and no operations. The only effect of this merger was that the
authorized common stock of the Company was increased from 50,000,000 to
120,000,000 common shares, and the fiscal year end of the Company was changed to
July 31. The Company has recorded $125,000 of general and administrative
expenses to reflect this transaction.

NOTE 8 PREFERRED STOCK

The Board of Directors has the authority, without further stockholder action, to
determine the preferences, limitations, and relative rights of the preferred
stock, subject to the requirements on the Delaware Business Corporation Act. The
Company has authorized issued and outstanding Series A, B and C Preferred
shares.

PREFERRED SERIES A, B AND C STOCK TERMS SUMMARY

GENERAL TERMS: All Preferred Series A, B and C 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.

        1. Right to preferential dividends before common;

        2. Liquidation rights of each preferred share before common; and

        3. Merger, consolidation right of each preferred share before common.

For these preferences over common stock, the Series A is limited to $300 per
share, Series B is limited to $6 per share, and Series C is limited to $0.25 per
share.

VOTING RIGHTS  All Series A and C Preferred shares have the right to vote based
on their conversion rights to common shares.

CONVERSION FEATURES  All Series A, B and C Preferred shares outstanding have the
right to convert per their conversion provisions subject to authorized common
stock being available. The Company can elect to convert all preferred under
certain stated limited events occurring. Holders of Preferred Series A and B
shares have the right to:

        1. Convert 5% of their shares to common stock after holding 12 months,
           which was October 14, 1999 (and which conversion has been affected).

        2. Convert an additional 10% of their shares to common stock after
           holding 24 months, which is as of October 14, 2000.

        3. Convert all of their shares to common stock held after holding 36
           months, which is as of October 14, 2001

        The Series Preferred C has the right to convert after 180 days from the
date of issue.

CONVERSION TO COMMON SHARES
Conversion to shares of common stock and common stock equivalent voting rights
as of July 31, 2000 are as follows. The Series B Preferred is entitled to a vote
on all shareholder matters equal to 6,000 Common Shares or the adjusted
conversion amount if greater.

<PAGE>   17
                         AQUA VIE BEVERAGE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31,2000

<TABLE>
<CAPTION>
                              Preferred                   Common Shares    Voting Right     Preferred
                               Shares      Conversion      Issuable on      Ratio of        Equivalent
                             Outstanding      Ratio         Conversion      Preferred     Voting Rights
                             -----------   ----------     -------------    ------------   -------------
<S>                          <C>           <C>            <C>              <C>            <C>
Series A Preferred              2,557         2,166          5,538,462        2,166          5,538,462

Series B Preferred              4,653         2,166         10,078,398        6,000         27,918,000

Series C Preferred                200         1,000            200,000        1,000            200,000
                                                            ----------                      ----------
                                                            15,816,860                      33,656,462
                                                            ==========                      ==========
</TABLE>


The Series B Preferred provides that each share is entitled to an additional
conversion share to common 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.

All Preferred Series A, B and C have a basic conversion rate of 1,000 shares of
common stock for every share of preferred. The conversion ratio to common for
Series A & B is adjusted upward depending on any future issue of common shares
at below $1.65 per share. The conversion rates were 1:2,166 and 1:1,925,
preferred to common as of July 31, 2000, and July 31, 1999, respectively.

NOTE 9 NOTES PAYABLE

Notes payable at July 31, 2000 consisted of the following:

<TABLE>
<CAPTION>
                   Principal         Interest              Due
                    Amount             Rate                Date
                   ---------         --------           ---------
         <S>       <C>               <C>                <C>
                   $340,000             8%              7/27/2002
                    155,000             8%               9/1/2001
                     60,000            24%              9/25/1998
                    237,000             8%              3/15/2000
                   --------
         Total     $792,000
</TABLE>

Two convertible debentures totaling $155,000, carrying 8% per annum interest,
and convertible into one share of common stock for $0.80 of debt (193,750 shares
of common stock). Also, subsequent to year-end, the note for $340,000 was
exchanged for 850,000 shares of common stock ($0.40).

NOTE 10 INCOME TAXES

Deferred tax assets primarily consist of net operating loss carry forwards as
the Company has not generated taxable income since inception. There are no
significant deferred tax liabilities. A valuation allowance has been established
to reduce the deferred tax assets to zero as a result of the Company and its
recurring losses. Differences between the cumulative net loss for financial
reporting purposes and that available for income tax purposes arise primarily as
a result of nondeductible expenditures paid by the issuance of securities and
capitalized start up costs.

NOTE 11 FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include cash, receivables, accounts payable,
notes payable and receivables from stockholders and related parties. Except for
notes receivable from stockholders and loans from stockholders, the Company
believes that the fair value of these financial instruments approximates their
carrying amounts based on current market indicators, such as prevailing market
rates. It is not practicable to estimate the fair value of notes receivable from
stockholders and loans from stockholders, due primarily to the uncertainty
surrounding the timing of cash flows.

NOTE 12 COMMITMENTS AND CONTINGENCIES

OFFICER'S SALARY The Company has agreed to pay its CEO a salary of $20,000 per
month. As of July 31, 2000, $420,000 has been accrued for this commitment.

<PAGE>   18
                         AQUA VIE BEVERAGE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31,2000

OFFICE LEASE The Company maintains its administrative offices in Ketchum, Idaho
under an annual lease of $7,833 per month for approximately 3,776 square feet.
The term of the lease expires November 2001 with an option to renew for three
years. The CEO has personally guaranteed this lease. Minimum lease payments for
fiscal 2000 total $93,996, and will total $86,163 through November 1, 2001.

EQUIPMENT LEASES The Company leases two autos and is making payments for debt
incurred to buy a third automobile. The leases on the automobiles are for five
years. The minimum lease payments remaining for the automobiles are:

Minimum Payments Due

<TABLE>
<CAPTION>
    Year
   Ended          Auto          Long-Term
  July 31,       Leases           Date         Totals
  --------       -------        ---------     -------
<S>              <C>            <C>           <C>
    2001         $13,554         $5,424       $18,978

    2002         $13,554         $5,424       $18,978

    2003         $13,554         $5,425       $18,978

    2004         $11,295         $5,424       $16,819

    2005         $11,295         $5,424       $16,819
</TABLE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

<TABLE>
<CAPTION>
Name                       Age                       Position
----                       ---                       --------
<S>                        <C>                       <C>
Thomas Gillespie           53                        President, Director
</TABLE>

Thomas Gillespie is the founder of Aqua Vie Beverage Corporation and has served
as president and director since its original formation in 1991. From 1986 to
1991, Mr. Gillespie was the principal of Kauai Water Company, Kauai, Hawaii.
Prior to 1986, Mr. Gillespie founded and served as president of Marketing
Design, a retail package design and product development company.

Since 1996, Mr. Gillespie has owned Aqua Vie Advance Corporation. From 1991 to
1997, Mr. Gillespie served in various positions with Aqua Vie Beverage
Corporation, the predecessor corporation to the Aqua Vie subsidiary BEVA
Corporation.

Thomas Gillespie was president and founder of Aqua Vie Beverage Corporation
(BEVA) when it was subjected to an involuntary Chapter 11 Bankruptcy petition
in January 1995 as part of a hostile takeover attempt of the company by an
outsider. All of the assets associated therewith were transferred by court
order in December 1997, which provided for a continuing corporate existence.
Series B Preferred shares were issued as a consequence of this transfer.

ITEM 10. EXECUTIVE COMPENSATION

Thomas Gillespie has accrued pay of $240,000. No compensation was paid out to
him.

Mr. Gillespie was granted 700,000 restricted shares pursuant to rule 701, as a
benefit for minimal consideration, in August 1999. Subsequent to the end of the
fiscal year, Mr. Gillespie was granted 600,000 registered common shares as a
benefit for minimal consideration pursuant to Form S-8.
<PAGE>   19

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

<TABLE>
<CAPTION>
                                                                                           Amount and
   Title of class                    Name and address of beneficial owner                   nature of      Percent of
                                                                                         beneficial owner     class
<S>                  <C>                                                                <C>                <C>
Common Stock         Thomas J. Gillespie, 333 S Maine St #201, Ketchum, ID 83340            586,644.00        1.94%

Series A preferred   Bruce Butcher, 1001 4th Ave Plaza Bldg #3827, Seattle, WA 98154            910.90       35.63%
Common Stock

Series A preferred   Valerie Gillespie, P.O. Box 4815, Ketchum, Idaho 83340                     380.00       14.86%
Common Stock

Series A preferred   Roy Schneiderman, 20 Woodbridge Ave, Buffalo, NY 14225                     141.00        5.51%
Common Stock

Series A preferred   Joseph J. Wozniak, 15404 20th SW, Burien, WA 98166                       1,124.82       43.99%
Common Stock

Series C Preferred   Eddwin M. Hamlin Sr., 1591 Gold Hills Dr., Redding, CA 96003               200.00      100.00%

Series B Preferred   Brace Foundation Trust, C/O Bruce Butcher                                4,652.85      100.00%

Common Stock         CEDE, P.O. Box 20, Bowling Green Station, NY, NY 10274              16,046,623.00       53.05%

Common Stock         Directors and executive officers as a group                            586,644.00        1.94%
</TABLE>

Thomas Gillespie, President, his wife, Marie, and his four children are the
named beneficiaries of the Brace Trust, without designated remainder interest,
and T. Gillespie, father of Thomas Gillespie is a designated remainder holder of
30% of the Trust. All voting rights of Trust shares, which constitute a majority
of all voting shares (see Exhibits), have been granted to Thomas Gillespie by
irrevocable proxy (see Exhibits).

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None other than as noted in Note 6 of the Notes to the Consolidated Financial
Statements.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

No reports on Form 8-K were filed since the third quarter.

Aqua Vie Beverage Corporation
FORM 10KSB Exhibit List

<TABLE>
<S>     <C>                                             <C>
 2.1    Certificate of Merger "-S" into BEVA            Oct 15, 1998
 2.2    Barhill Agreement                               Aug 31, 1999
 2.3    Certificate of Merger-Barhill                   Aug 31, 1999
 2.4    251 G Merger Agreement "-S"/BEVA                Oct 14, 1998
 3.1    Certificate of Incorporation "-H"               July 29, 1998
 3.2    Certificate of Amend 1:5 Reverse                Nov 10, 1998
 3.3    Certificate of Amend B Pfd Ratchet              Aug 31, 1999
 3.4    Certificate of Amend Conversion Ratio           Nov 4, 1998
 3.5    Bylaws
 4.1    Designation Series A "-H"                       Oct 8, 1998
 4.2    Designation Series B "-H"                       Oct 8, 1998
 4.3    Designation Series C "-H"                       Oct 8, 1998
 9.1    Irrevocable Voting Proxy                        Oct 14, 1998
10.1    Convertible Note $80K/Wozniak                   Mar 1, 2000
10.2    Convertible Note $75k/Butcher                   Mar 1, 2000
10.3    TPG Capital Agreement                           Aug 31, 1999
10.4    Manufacturing Agreement
</TABLE>


<PAGE>   20

SIGNATURES

In accordance with Section13 or 15(d) of the Exchange Act, the registrant causes
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Aqua Vie Beverage Corp.
(Registrant)

Date 11-13-00   By /s/ Thomas J. Gillespie
     --------      --------------------------
                   Thomas J. Gillespie, CEO and President

Signature                           Title                            Date
/s/ Thomas J. Gillespie                                              11-13-00
-----------------------             ------------------------         --------
Thomas J. Gillespie                 CEO, President, Director