AQUA CLARA BOTTLING & DISTRIBUTION INC, S-1/A, 2000-09-19

AQUA CLARA BOTTLING & DISTRIBUTION INC
S-1/A, 2000-09-19
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 2000 REGISTRATION NO. 333-36788
========================================================================================================
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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COLORADO 2080 84-1352529
-------- ---- ----------
(STATE OR JURISDICTION OF PRIMARY STANDARD (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
CODE NUMBER

1315 Cleveland Street John C. Plunkett, CEO
Clearwater, Florida 33755 1315 Cleveland Street
(727) 446-2999 Clearwater, Florida 33755
(Address, including zip code, and telephone number, including area code (727) 446-2999
of Registrant's principal executive offices) (Name, address, including zip code, and telephone
number, including area code, of agent for service)

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COPY TO:
L. VAN STILLMAN
JAMES G. DODRILL II
1177 GEORGE BUSH BOULEVARD, SUITE 307
DELRAY BEACH, FLORIDA 33483
(561) 330-9903
FACSIMILE (561) 330-9116

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.

If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box:[ ]

CALCULATION OF REGISTRATION FEE

Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered Be Registered Per Share(1) Offering Price Registration Fee
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Common Stock issuable upon
conversion of Series B
Convertible Secured 8% Debentures(2). 2,747,253 $0.14 $ 384,615 --
Interest Shares on Debenture(3)........ 100,000 $0.14 $ 14,000 --
Common Stock issuable upon
exercise of options.................. 2,000,000 $0.14 $ 280,000 --

Common Stock already outstanding....... 12,122,046 $0.14 $1,697,086 --

Total.................................. 16,969,299 $2,375,702 $ 627.18
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(1) Estimated solely for purposes of calculating the registration fee. The
registration fee is based upon the closing sales price on September 7,
2000 of $0.14, based on Rule 457(g) except for options exerciseable at
higher prices.
(2) Includes 2,747,253 shares of Common Stock issuable upon the conversion of
$250,000 aggregate principal amount of Secured 8% Series B Debentures.
The Debentures are convertible at 65% of the closing bid price of the
Common Stock averaged over the five trading days prior to the date of
conversion. For purposes of the calculation of the registration fee, the
Registrant has registered the maximum number of shares of Common Stock
which it reasonably believes that will be issued upon conversion of the
Debentures, on the assumption that the conversion price of the Debentures
will not be less than $.0.14 per share of Common Stock. The maximum
offering price per share is based upon the estimated sales price of the
Common Stock assuming they are resold at the time of conversion by the
holders (in accordance with Rule 457(g)). The Registrant makes no
representations as to the price at which Debentures will be converted.

(3) Represents 100,000 shares issuable in lieu of $14,000 interest on the
Debentures, at the conversion price ($0.14) assumed above.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IS THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 2000

PROSPECTUS

AQUA CLARA BOTTLING AND DISTRIBUTION, INC.
16,969,299 SHARES OF COMMON STOCK
(NO PAR VALUE)

The estimated 16,969,299 shares of Common Stock, no par value of Aqua
Clara Bottling and Distribution, Inc., a Colorado corporation are offered by the
selling shareholders, including 2,747,253 shares (assuming conversion at a rate
of $0.14 per share) issuable upon conversion of $250,000 in principal amount of
Secured 8% Series B Convertible Debentures, 100,000 shares issuable in lieu of
interest on the Debentures, 12,122,046 shares already outstanding and 2,000,000
shares issuable upon exercise of options. The eventual number of Shares issuable
upon exercise of the Debentures will depend on market prices on the date of
conversion. Aqua Clara will not receive any proceeds from the sale of Common
Stock by the Selling Shareholders. See "Selling Shareholders" and "Description
of Securities." The expenses of the offering, estimated at $40,000, will be paid
by Aqua Clara.

The Common Stock currently trades on the Electronic Bulletin Board
under the symbol "AQCB" On September 7, 2000, the last sale price of the Common
Stock as reported on the Electronic Bulletin Board was $0.14 per share.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PURCHASE OF THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 7.

The date of this Prospectus is ______, 2000.
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TABLE OF CONTENTS
PAGE

Additional Information...................... 3
Prospectus Summary.......................... 4
Selected Financial Data..................... 6
Risk Factors................................ 7
Use of Proceeds............................. 10
Dividend Policy............................. 10
Market Price of Common Stock................ 11
Management's Discussion and Analysis........ 12
Business and Plan of Operation.............. 14
Management.................................. 18
Principal Shareholders...................... 21
Certain Transactions........................ 22
Changes in and Disagreements with
Accountants................................. 23
Selling Shareholders........................ 24
Plan of Distribution........................ 25
Description of Securities................... 26
Legal Matters............................... 27
Experts..................................... 27
Indemnification............................. 27
Financial Statements........................ F-1

As used in this prospectus, the terms "we," "us," "our," "the Company,"
and "Aqua Clara" mean Aqua Clara Bottling and Distribution, Inc., a Colorado
corporation. The term "Selling Shareholders" means our shareholders who are
offering to sell the shares of Aqua Clara which are being registered through
this prospectus. The term "Common Stock" means our common stock, no par value
and the term "Shares" means the 16,969,299 shares of Common Stock being offered
by the Selling Shareholders. The term "Series A Preferred" means our Series A
Convertible Preferred Stock and the term "Debentures" means our Secured 8%
Series B Convertible Debentures.

You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you with
information that is different. This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any securities covered by this
Prospectus in any state or other jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such state or jurisdiction.
Neither the delivery of this Prospectus nor any sales made hereunder shall,
under any circumstances, create an implication that there has been no change in
the affairs of Aqua Clara since the date hereof.

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ADDITIONAL INFORMATION

We have filed a Registration Statement under the Securities Act with
respect to the securities offered hereby with the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. This Prospectus, which is a part of the
Registration Statement, does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to Aqua Clara and the
securities offered hereby, reference is made to the Registration Statement,
including all exhibits and schedules thereto, which may be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N. W., Room 1024, Washington, D. C. 20549, and at its Regional Offices
located at 7 World Trade Center, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 at
prescribed rates during regular business hours. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in its entirety by such reference. Aqua Clara
will provide, without charge upon oral or written request of any person, a copy
of any information incorporated by reference herein. Such request should be
directed to us at 1315 Cleveland Street, Clearwater, Florida, 33755, telephone
(727) 446-2999.

We file reports and other information with the Commission. All of such
reports and other information may be inspected and copied at the Commission's
public reference facilities described above. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address of
such site is http://www.sec.gov. In addition, we intend to make available to our
shareholders annual reports, including audited financial statements, unaudited
semi-annual reports and such other reports as we may determine.

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PROSPECTUS SUMMARY

The following is only a summary of the information, financial
statements and the notes included in this Prospectus. You should read the entire
Prospectus carefully, including "Risk Factors" and our Financial Statements and
the notes to the Financial Statements before making any investment decision.

AQUA CLARA BOTTLING & DISTRIBUTION, INC.

We are incorporated in Colorado and we produce, bottle and sell
non-sparkling purified drinking water products in PET (an acronym for
polyethylene terephthalate, a premium clear plastic) containers ranging from .5
to 1.5 liters in size.

Historically, our sales have been limited since until recently we had
received no significant purchase orders. Sales for the nine months ended
January 1, 2000 were $207,663. We don't know if we will ever be able to enjoy
significant sales or make a profit. From April 1997 to March 1998 we had a 5
gallon home and office delivery business, but we sold this business in March
1998. During the year ending April 3, 1999, we began producing 20-oz. bottles
of oxygenated water packaged in a PET container. We intend to find a market
niche in oxygen enriched water (with 24 parts per million (ppm) of oxygen
compared to 3 ppm for tap water. Oxygen enriched water tastes light and crisp
and we think its healthier, although there is no scientific data to back this
up.

Initially, we will not flavor our water. After the introduction of our
oxygen enriched bottled water product, we might introduce a new product with
natural flavoring. Likewise, we will consider the infusion of beneficial
herbs. We will also consider the production of super oxygen enriched sports
drinks, providing even higher levels of oxygen, to be marketed at a higher
price. We will utilize a distinctive bottle and label for our water products.

Our objective is to build product markets in Florida and then expand
nationally. To that end, we appointed Crossmark, one of the nation's largest
consumer packaged goods sales and marketing companies to represent our product
throughout Florida. Crossmark offers us the opportunity to build strong
recognition through Crossmark's superior market presentation and support.
Through their category management plans, local event marketing plans and
effective merchandising plans, we expect to achieve stronger retail distribution
that will lead to building our brand and loyalty.

On December 13, 1999 we announced the launch of Aqua Clara/FLA USA
branded bottled water in a first-of-its-kind marketing partnership. We teamed up
with VISIT FLORIDA and Florida Media Inc. to jointly and exclusively market a
new bottled water brand: Aqua Clara - FLAUSA. This brand will be primarily sold
in Florida and will add the hospitality market as a new sales target for the
Company. VISIT FLORIDA, the state of Florida's official tourism marketing
organization, has endorsed the product with its FLA USA logo which is displayed
on the front of every Aqua Clara/FLA USA water bottle. We are already
distributing this product into the Florida market and were the official water
provider of the annual Florida Strawberry Festival, one of the largest festivals
in the South, which was held March 2 - 12, 2000.

Our oxygen enriched small package bottled water product will primarily
be sold through retail outlets, including supermarkets, convenience stores, gas
station markets, grocery stores, health food stores, and health spas. However,
secondary distribution will be effected through vending and private labeling.
Neither vending nor private labeling have the attendant costs of direct
retailing, while they do have the benefit of increasing the production volume
and thereby increasing the production margins.

According to Beverage Marketing, published by Beverage Marketing Corp.,
located at 2670 Commercial Avenue, Mingo Junction, Ohio 43938, the total U.S.
market for bottled water has grown from 1.6 billion gallons sold in 1987 to over
3.1 billion gallons in 1996, and accounted for approximately $3.6 billion in
wholesale sales during 1996. Non-sparkling water comprises over 87% of the U.S.
bottled water market and generated $2.7 billion of wholesale sales in 1996, and
is expected to continue to grow in the future. PET packaged products comprise
approximately 39% of the domestically produced non-sparkling water market and
have grown from approximately 83 million gallons in 1987 to approximately 580
million gallons in 1996, representing a compounded annual growth rate of
approximately 24%. PET-packaged products accounted for approximately $921
million of wholesale sales in 1996. According to Beverage Marketing, PET bottled
water is among the fastest growing beverage categories in the United States.
Contributing to the growth in consumption of non-sparkling water are consumer
trends including health and fitness awareness, municipal tap water quality
concern and maturing soft drink demand, as well as consumer demand for
convenience and innovative packaging.

Our principal executive offices are located at 1315 Cleveland Street,
Clearwater, Florida 33755 and our telephone number is (727) 446-2999.
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Securities Offered:.............................. 16,969,299 shares of Common Stock, no par value per share,
including 2,747,253 shares issuable upon conversion of
$250,000 in principal amount of Secured 8% Series B
Convertible Preferred Stock, at a conversion price per share
of Preferred Stock equal to $1,000 divided by 65% of the
average closing bid price of the

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Common Stock on the five trading days prior to conversion
100,000 shares issuable in lieu of interest on the Debentures,
12,122,046 shares already outstanding and 2,000,000 shares
issuable upon the exercise of options;

Risk Factors..................................... The securities offered hereby involve a high degree of risk
and immediate substantial dilution and should not be
purchased by investors who cannot afford the loss of their
entire investment. See "Risk Factors."

Use of Proceeds.................................. We do not expect to receive any proceeds from the
sale of our common stock in this offering. See "Use
of Proceeds".

Dividend Policy:................................. We do not intend to pay dividends on our Common Stock.
We plan to retain any earnings for use in the operation
of our business and to fund future growth.

Common Stock Outstanding(1) Before Offering:..... 59,232,430 ((1)) shares

Common Stock Outstanding After Offering:......... 76,201,729 ((1)(2)) shares

NASD Electronic Bulletin Board Symbol............ AQCB
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(1) Based on shares outstanding as of April 18, 2000.
(2) Assumes full issuance of all shares registered by this Registration
Statement, including shares to be issued under stock option grants which
have not vested as of this date.

RISK FACTORS

The securities offered hereby are highly speculative and very risky.
Some of these risk factors follow. Before you buy consider the following risk
factors and the rest of this prospectus. Additionally, the risks described below
are not the only ones we face. Additional risks and uncertainties not presently
known to us, that we currently deem immaterial or that are similar to those
faced by other companies in our industry or business in general, may also impair
our business operations. This prospectus also contains forward looking
statements that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward looking statements as a
result of certain factors, including the risks faced by us described below and
elsewhere in this prospectus. Please refer to "Risks Associated with
Forward-looking Statements" on page 9.

Investors should assume that, even if not specifically stated within
this document, if any of the following risks actually materialize, our business,
financial condition or results of future operations could be materially and
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment.

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SELECTED FINANCIAL DATA

Set forth below is selected financial data for the years ended April 1,
2000, April 3, 1999 and April 4, 1998 all of which has been derived from our
audited financial statements. Also set forth below is financial data for the
three month period ended July 1, 2000 and July 3, 1999, which has been derived
from our unaudited financial statements. In our opinion, these unaudited
statements have been prepared on the same basis as our audited financial
statements and reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of our results of operations and
financial condition for these periods.

Three Months Ended Year Ended
July 1, 2000 July 3, 1999 April 1, 2000 April 3, 1999 April 4, 1998
(UNAUDITED) (UNAUDITED)
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Revenue 89,976 103,474 293,980 184,952 135,710
Cost of sales 61,414 62,957 229,839 142,133 277,146
General, administrative, and
sales expenses 350,099 530,288 2,917,367 1,568,388 2,084,099
Stock Options Forfeited (410,020) 0 0 0 0
Operating profit / (loss) 88,483 (489,771) (2,853,226) (1,525,569) (2,225,535)
Net other income (expense) (7,931) (16,725) (622,223) (41,783) 21,821
Cumulative effect of change
in accounting principal 0 0 0 (23,194) 0

Net income (loss) 80,552 (506,496) (3,475,449) (1,590,546) (2,203,714)

Basic loss per common share $ 0.00085 $ (0.03) $ (0.12) $ (0.20) $ (0.62)

Weighted average common
shares outstanding 60,685,328 19,250,055 30,942,463 8,911,295 5,962,307
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Balance Sheet Data (Unaudited): July 1, 2000

Current Assets $600,945
Property, Plant and Equipment, Net $1,806,574
Total Assets $2,409,025
Total Liabilities $974,818
Stockholders equity $1,434,208

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RISK FACTORS

The Common Stock for sale is a speculative investment and very risky.
You should especially consider these risk factors.

WE REQUIRE ADDITIONAL FINANCING

We do not presently have adequate cash from operations or financing
activities to meet either our short-term or long-term needs. Our operations have
been financed to date through a debt offering and through sales of our equity,
most recently through the sale of 1,150 shares of Series B Debentures. At April
18, 2000, we had working capital of approximately $25,000. We require
significant capital for the continuation of our operations. If additional funds
cannot be raised, the Company may be forced to seek protection from its
creditors under the applicable bankruptcy laws. To the extent that additional
funds are obtained by the sale of equity securities, our stockholders may
sustain significant dilution. Even if such additional financing is available on
satisfactory terms, it, nonetheless, could entail significant additional
dilution of the equity ownership of Aqua Clara to existing shareholders and the
book value of their outstanding shares.

PRICES WE PAY FOR RAW MATERIALS MAY RISE

Our ability to raise our product's prices is limited due to the wide
range of beverages available to consumers, including bottled water products. In
the future we may be affected by higher prices for raw materials, including PET
resin and corrugated boxes and we might be unable to pass such higher costs to
our customers. As a result, our results of operations may be adversely affected
by future increases in raw material prices.

WE CARRY LIMITED PRODUCT LIABILITY INSURANCE

The bottling and distribution of bottled water products can lead to
product liability claims, including liability due to the presence of
contaminants in its products. We maintain insurance coverage against the risk of
product liability and product recall. However, the amount of the insurance we
carry is limited, the insurance is subject to certain exclusions and may or may
not be adequate. In addition to direct losses resulting from product liability
and product recall, we may suffer adverse publicity and damage to our reputation
in the event of contamination which could have a material adverse effect on
sales and profitability.

WE DEPEND ON OUR TRADEMARKS

We have obtained a U.S. trademark on the AQUA CLARA trademark, and have
applied for federal registrations for other proposed trademarks. We believe that
our registered and common law trademarks have significant value and goodwill and
that some of these trademarks are instrumental in our ability to create demand
for and to market our products. There can be no assurance that any or all of our
applications for registration will be granted. Additionally, no assurances can
be given that any issued trademark registrations will give us exclusive rights
to use the marks with respect to the goods or services that we may propose to
sell or that the trademarks do not or will not violate the proprietary rights of
others, that they would be upheld if challenged or that we would, in such an
event, not be prevented from using the trademarks, any of which could have a
material adverse effect on us. We do not plan to introduce any product which is
covered by any third party U.S. or foreign trademark or registration rights
known to us.

WE MUST CONTINUE TO ESTABLISH THE AQUA CLARA BRAND

Our business strategy includes using the Aqua Clara brand name.
Successfully implementing this strategy requires that we create recognition of
the Aqua Clara brand, which is fairly new to the water industry, and establish
trademark rights in our various marks. Implementing this strategy requires the
commitment of substantial financial resources. There can be no assurance that we
will be able to implement this strategy.

WE ARE A SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF OUR CURRENT
AND POTENTIAL COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AND
INCREASE MARKET SHARE

The bottled water industry is highly competitive. According to Beverage
Marketing, there are approximately 350 bottled water filling locations in the
United States with sales increasingly concentrated among the larger firms.
According to Beverage Marketing, the ten largest bottled water companies
accounted for approximately 58.4% of wholesale dollars in 1996. Nearly all of
our competitors are more experienced, have greater financial and management
resources and have more established proprietary trademarks and distribution
networks than we do. On a national basis, we compete with bottled water
companies such as The Perrier Group of America, Inc (which includes Arrowhead
Mountain Spring Water, Poland Spring, Ozarka Spring Water, Zephyrhills Natural
Spring Water, Deer Park, Great Bear and Ice Mountain) and Great Brands of Europe
(which includes Evian Natural Spring Water and Dannon Natural Spring Water) We
also compete with numerous regional bottled water companies located in the
United States and Canada. We have chosen to compete by focusing on a higher
quality oxygen enriched purified drinking water, innovative packaging and
customer service. However, no assurance can be given that consumers will accept
our products or that we will be able to successfully compete against these or
any other competitors.

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THE BOTTLED WATER MARKET IS SEASONAL AND WE MAY EXPERIENCE SIGNIFICANT
PERIOD-TO-PERIOD QUARTERLY AND ANNUAL FLUCTUATIONS IN OUR SALES AND OPERATING
RESULTS

The market for bottled water is seasonal, with approximately 70% of
sales taking place in the seven months of April through October. As a result of
seasonality, our staffing and working capital requirements will vary during the
year. Additionally, due to the seasonality of the industry, results from any one
or more quarters are not necessarily indicative of annual results or continuing
trends.

WE ARE INVOLVED IN LITIGATION

Civil litigation in the Circuit Court of the Sixth Judicial Circuit, in
and for Pinellas County, Florida was filed by John S. McAvoy, Plaintiff vs. Aqua
Clara Corporation, Olde Monmouth Stock Transfers, a New Jersey Corporation, John
C. Plunkett, Rand L. Gray and Robert Guthrie, Defendants. The complaint was
multi-part claiming Declaratory Relief; Injunctive Relief; Breach of Fiduciary
and Statutory Duties; Breach of Contract Unpaid Promissory Notes; Breach of
Contract Unpaid Accrued Salary. The Plaintiff sought removal of the restrictive
legends on stock held and $67,973.79 in payment of Notes and Accrued Salary. The
matter went to mediation. An agreement was reached between the parties whereby
we agreed to delegend the Plaintiff's shares, pay Plaintiff $55,000, and agreed
that, should Plaintiff be unable to sell his stock for an average price of $0.37
per share, that we would have one year in which to pay Plaintiff the difference
between the sales price and $0.37 per share. We anticipate that payment of this
amount will begin being made in May, 2000. Plaintiff agreed that the sale of his
stock would take place in an orderly manner so as not to depress our stock
price, to dismiss the case, to release the Defendants, to cancel the notes,
and to release any and all claims including salary claims. We have received
information that Plaintiff's average sales price per share was $0.304 per share.
Plaintiff has demanded that we pay the resulting $118,000 difference, and
proposed a settlement whereby we would issue Plaintiff additional shares in lieu
of a cash payment. The parties are still discussing this proposal. See "Business
- Legal Proceedings."

In April 2000, a former officer and director, Mr. Rand Gray filed a
civil complaint in the Circuit Court of the Sixth Judicial Circuit in and for
Pinellas County, Florida against us, Case No. 002122-CI-021 seeking foreclosure
on his outstanding note and mortgage. Mr. Gray also seeks accrued and unpaid
compensation in the form of our Common Stock as well as salary pursuant to an
employment agreement and severance agreement. We are vigorously resisting these
claims, which are subject to pending mediation.

Water to Go2, Inc., a Florida corporation has filed a civil complaint
in the Circuit Court of the Sixth Judicial Circuit in and for Pinellas County,
Florida against us, Case No. 00279CI-20. Water to Go2 claims that we breached a
contract under which we agreed to sell our oxygenated bottled water to Water to
Go2 and the complaint seeks specific performance of that contract, replevin of
10,000 cases of our oxygenated bottled water and damages for the alleged breach
of contract. We acknowledge that a contract exists and believe we are in
compliance with the terms of such contract. Water to Go2 is owned by Pat L.
Nolen, wife of John C. Plunkett, our President and Chief Operating Officer.

Pat L. Nolen ("Nolen"), wife of John C. Plunkett, our President and
Chief Operating Officer on behalf of Aqua Clara Bottling & Distribution, Inc.
has filed a civil complaint in the Circuit Court of the Sixth Judicial Circuit
in and for Pinellas County, Florida, Case No. 003400CI-021 against Emanuel J.
Mersis, our Chairman of the Board of Directors and Chief Executive Officer, his
wife Anne Mersis, each of our directors other than Mr. Plunkett and against us.
Nolen seeks to require us to comply with the contract referred the to in the
above paragraph and to remove Mr. Mersis from his positions with us. As
disclosed above, believe we are in compliance with the terms of the contract
with Water to Go2. Our Board of Directors has refused to comply with Nolen's
demands regarding Mr. Mersis and views the claims against him as without merit.

Subsequent to May 12, 2000, our C.E.O., Emanuel J. Mersis, and
Directors Michael Potopow, John Thomas and Carl Evans resigned their positions
with the company. In return for their resignations, Water to Go2, Inc., and Pat
L. Nolen withdrew their respective complaints against the company and the named
individuals.

WE ARE SUBJECT TO GOVERNMENT REGULATION

Our operations are subject to numerous federal, state and local laws
and regulations relating to our bottling operations, including the identity,
quality, packaging and labeling of our bottled water. These laws and regulations
and their interpretation and enforcement are subject to change. There can be no
assurance that additional or more stringent requirements will not be imposed on
out operations in the future. Failure to comply with such laws and regulations
could result in fines against us, a temporary shutdown of production, recalls of
the product, loss of certification to market the product or, even in the absence
of governmental action, loss of revenue as a result of adverse market reaction
to negative publicity. Any such event could have a material adverse effect on
our business. See "Business -- Regulation."

OUR GROWTH POTENTIAL IS HEAVILY DEPENDENT ON CONSUMER PREFERENCES

We believe that the most important factor in the growth of natural
water products has been a change in consumer preferences. Consumer preferences
may be influenced, however, by the availability and appeal of alternative
beverages or packaging as well as general economic conditions, among other
things. No assurance can be given that consumer demand for oxygen enriched water
will exist, grow or will not diminish in the future.

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WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS

We have not paid any cash dividends on our capital stock and we
anticipate that our future earnings, if any, will be retained for use in the
business, or for other corporate purposes. It is not anticipated that any cash
dividends on the Common Stock will be paid in the foreseeable future. See
"Dividend Policy" and "Description of Securities."

IF WE ARE UNABLE TO MEET NASDAQ STOCK MARKET LISTING REQUIREMENTS, YOUR ABILITY
TO BUY OR SELL THE COMMON STOCK MAY BE IMPACTED

Our Common Stock does not meet the current NASDAQ listing requirements
for the SmallCap(R) Market. If we are unable to satisfy NASDAQ's requirements
for listing, trading, if any, the Common Stock will continue to be conducted on
the NASD's OTC Bulletin Board, established for securities that do not meet the
NASDAQ SmallCap(R) Market listing requirements. Consequently, the liquidity of
our securities could be impaired, not only in the number of securities which
could be bought and sold, but also through delays in the timing of transactions,
reduction in security analysts' and the news media's coverage of us, and lower
prices for our securities than might otherwise be attained.

OUR BOARD OF DIRECTORS HAS THE POWER TO ISSUE ADDITIONAL SECURITIES WITHOUT THE
CONSENT OF SHAREHOLDERS

Our Board of Directors has the power, without the consent of the
shareholders, to issue additional shares of common stock or preferred stock for
such consideration as may be permitted under the Colorado Business Corporation
Act. Preferred stock may be issued with preferences or rights as to dividends,
voting or liquidation which are superior to those of holders of common stock.
Because of the large number authorized but unissued shares of common stock
(40,767,570 Shares as of the date of this Prospectus) our current shareholders
are subject to significant potential dilution in their ownership interest, see
"Description of Securities."

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements regarding
management's plans and objectives for future operations, including plans and
objectives relating to our planned marketing efforts and future economic
performance. The forward-looking statements and associated risks set forth in
this Prospectus include or relate to: (i) our ability to obtain a meaningful
degree of consumer acceptance for our products and future products, (ii) our
ability to market our products and future products on a national basis at
competitive prices, (iii) our ability to develop brand-name recognition for our
products and future products, (iv) our ability to develop and maintain an
effective sales network, (v) our success in forecasting demand for our products
and future products, (vi) our ability to maintain pricing and thereby maintain
adequate profit margins, (vii) our ability to achieve adequate intellectual
property protection for our products and future products and (viii) our ability
to obtain and retain sufficient capital for future operations.

The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that we will market and provide products on
a timely basis, that we will retain our customers, that there will be no
material adverse competitive or technological change in conditions in our
business, that demand for our products will significantly increase, that our
President will remain employed as such, that our forecasts accurately anticipate
market demand, and that there will be no material adverse change in our
operations or business or in governmental regulations affecting us or our
suppliers. The foregoing assumptions are based on judgments with respect to,
among other things, future economic, competitive and market conditions, and
future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Accordingly, although we
believe that the assumptions underlying the forward-looking statements are
reasonable, any such assumption could prove to be inaccurate and therefore there
can be no assurance that the results contemplated in forward-looking statements
will be realized. In addition, as disclosed elsewhere in the "Risk Factors"
section of this Prospectus, there are a number of other risks inherent in our
business and operations which could cause our operating results to vary markedly
and adversely from prior results or the results contemplated by the
forward-looking statements. Growth in absolute and relative amounts of cost of
goods sold and selling, general and administrative expenses or the occurrence of
extraordinary events could cause actual results to vary materially from the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause us to alter marketing, capital investment and other
expenditures, which may also materially adversely affect our results of
operations. In light of significant uncertainties inherent in the
forward-looking information included in this Prospectus, the inclusion of such
information should not be regarded as a representation by us or any other person
that our objectives or plans will be achieved. See "Management's Discussion and
Analysis" and "Business."

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USE OF PROCEEDS

We will not receive any funds from the sale of the Common Stock by the
Selling Shareholders in this offering.

DIVIDEND POLICY

We have never declared or paid any dividends on our Common Stock and we
do not intend to pay dividends in the foreseeable future. We currently intend to
retain any future earnings to fund the operation and expansion of our business.

In addition, we are obligated to pay holders of Series A Preferred
Stock an 8% annual dividend, equal to $80.00 per share, payable on each July 1
commencing on July 1, 1998. At our option we may pay such dividend in shares of
Common Stock valued at the Conversion Rate in effect on July 1, 1998. We are not
permitted to pay any dividends on the Common Stock unless dividends have been
paid to the holders of Series A Preferred Stock.

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MARKET PRICE OF COMMON STOCK

Our Common Stock has been listed on the NASD OTC Electronic Bulletin
Board sponsored by the National Association of Securities Dealers, Inc. under
the symbol "AQCB" since August 21, 1997. On April 18, 2000, the closing bid
price as reported by the Electronic Bulletin Board was $0.245.

The following table sets forth the high and low bid prices for the
Common Stock as reported on the Electronic Bulletin Board for each quarter since
August 21, 1997, for the periods indicated. Such information reflects inter
dealer prices without retail mark-up, mark down or commissions and may not
represent actual transactions.

Quarter Ended High Low
------- ----- ---- ---
September 30, 1997 4.50 1.8437
December 31, 1997 4.0625 1.3125
March 31, 1998 2.50 1.6875
June 30, 1998 1.8750 1.8125
October 3, 1998 1.8750 .94
January 2, 1998 .91 .15
April 3, 1999 .48 .08
July 3, 1999 .475 .22
October 2, 1999 .43 .12
January 1, 2000 .20 .08
April 1, 2000 .47 .125
July 1, 2000 .34 .135

As of April 18, 2000, there were approximately 354 record holders of
Company common stock.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

The gross profit for the quarterly period ended July 1, 2000 was
$80,552 with general and administrative, and selling expenses totaling $350,099.
The period performance was significantly affected by the reversal of accounting
charges, related to officers' stock options, made in the previous quarter. The
reversal was due to option forfeiture by our former Chief Executive Officer.

The Company intends to increase spending over the next six months in
advertising, marketing and distribution, which amounts are expected to be
expended prior to the receipt of significant revenues. There can be no assurance
as to when, if ever, the Company will realize significant operating revenues or
attain profitability.

Sales for the fiscal year ending April 1, 2000 were $293,980. The lower
than expected sales amount is the result of the Company's inability to find
major distributors or retail chains to purchase large quantities of our product.
The Gross profit for the year ended April 1, 2000 was $64,141 with selling and
general administrative expenses for the fiscal year of $2,917,376.

Our sales comparisons to previous years will not be an indicator of any
future growth patterns because we were still in the development stage of
launching our new product.

We instituted a change in our monthly accounting periods with no
corresponding change in the projected year end date. However, as a result of
this change there were certain impacts in the quarterly financial statements
presented in this registration statement which do not lend themselves to
comparisons with previous periods. A revision of estimated costs of both general
and administrative expenses and operational costs were adopted and may
disproportionately burden the current quarter because of the cumulative effect
of this change. Prospectively, the Company does not expect to incur similar
adjustments.

In 1999 we entered into employment agreements with certain of our
officers. Under the provisions of these agreements, the officers will receive
stock options in addition to salary. The exercise price of each option is $0.01
and vest at a rate of 20% per year over a five year term starting on August 31,
1999 - the execution date of the agreement. The number of shares available at
the exercise price increments based upon targeted ownership percentages in
relation to the number of our outstanding shares. The combined target ownership
is 30%. The price of the option adjusts inversely and proportionally to any
changes in the outstanding shares resulting in a constant and unchanging total
purchase price for all options purchased by the officers.

An amount has been accrued which represents noncash expenses for the
first year vesting ($312,000) plus the pro rata portion of the second year's
liability ($104,000). Based upon the exercise price and other factors used to
determine the fair value of the stock options as provided for under SFAS 123, we
have determined that the intrinsic value of the stock options under APB Opinion
25 closely approximates the fair value under SFAS 123. Accordingly, the pro
forma effects of the application of SFAS 123 are not presented.

The Gross Profit for the fiscal year ended April 3, 1999, was $42,819.
The Selling and General Administrative expenses for the fiscal year were
$1,568,388. Non-recurring expenses included $400,000 for lead generation
corporate/relations contract from the prior year that was completely expensed in
the current year.

We did not begin selling PET bottled water products until July, 1998.
At that time we had no agreements in place with

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distributors for our products. While we entered into a distribution agreement
with a significant distributor in the Northeast United States, there were no
assurances that this distributor would be successful in promoting the product in
its geographic area or that sufficient other distribution can be accomplished to
provide adequate operating revenues from this business.

We intend to increase costs over the next six months in advertising,
marketing and distribution, which amounts are expected to be expended prior to
the receipt of significant revenues. There can be no assurance as to when, if
ever, we will realize significant operating revenues or attain profitability.

Year Ended April 3, 1999.

Our sales commenced in April, 1997, with the introduction of our
5-gallon bottled water service. In the year ended April 4, 1998, we had $135,710
in sales from this business. Revenues were comprised of cooler rentals and water
sales, which terminated in March, 1998. We entered the PET bottled water market
with the proceeds from our offering of Series A Preferred Stock. Our sales for
the fiscal year ending April 3, 1999, were $184,952. The lower than expected
sales amount is the result of our inability to find a major distributor to
purchase large quantities of product.

Year Ended April 4, 1998.

General, administrative and sales expenses in the year ended April 4,
1998 increased to $2,084,099, approximately nine times the level of such
expenses in the year ended March 31, 1997. Such expenses in year ended April 4,
1998 include $1,401,250 for consulting services paid in stock, and $132,000 in
other non-recurring expense. The increased level of these expenses in the year
ended April 4, 1998 reflects the commitment of the delivery of bottled water
business and expenses related to establishing the PET water business.

Sales of PET products commenced in June 1998. We have few agreements in
place with distributors for our PET bottled water products and there can be no
assurance as to future operating revenues from this business. We sold our 5
gallon water business in March 1998 to Clearidge, Inc., a Tennessee corporation
located in Nashville Tennessee and one of our competitors. Neither we nor any of
our officers or directors is affiliated with Clearidge. The purchase price of
approximately $352,394 was paid $186,400 in cash and $148,782 by the assumption
of installment notes payable, and includes accounts receivable, inventory,
equipment and deposits. See notes 1 and 5 of the notes to Consolidated Financial
Statements. If the 5-gallon water business had not been in existence for the
years ended April 4, 1998 and March 31, 1997, we would have had no sales in
either year, and would have had $1,870,524 in general and administrative
expenses and $1,881,903 in net losses in fiscal 1998, compared to $2,084,099 and
$2,203,714 in general and administrative expenses and net loss, respectively,
and our need for cash to supplement cash from operations would have been
accordingly reduced.

Liquidity and Capital Resources

Our primary source of liquidity has historically consisted of sales of
equity securities and debt instruments. In the fiscal year ending April 1, 2000
we raised $1,150,000 through the issuance of a Secured 8% Series B Convertible
Debenture. Certain proceeds of this raise were used to retire the first mortgage
on the plant and real estate in an amount of $264,097 and the payment of a
demand note. The remainder of the funds raised have been used to finance our
continued operation and to pay certain consulting fees related to raising these
funds.

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BUSINESS AND PLAN OF OPERATION

OUR BUSINESS

We produce and sell non-sparkling purified drinking and distilled and
natural water products. We organized on July 29, 1996 as the successor to
Pocotopaug Investment, Inc., a Florida corporation which is now our operating
subsidiary ("Pocotopaug"). Pocotopaug was organized in August 1995 by John S.
McAvoy to investigate the feasibility of producing and marketing non-sparkling
drinking water products.

From April 1997 to March 1998, we generated revenues from our 5 gallon
home and office delivery business, which was sold in March 1998. We now intend
to focus future operations on the sale of oxygen enriched water packaged in PET
(an acronym for polyethylene terephthalate, a premium clear plastic) containers
ranging from .5 to 1.5 liters, and to specialize in oxygen enriched water; with
24 parts per million (ppm) of oxygen, compared to 3 ppm for tap water. Oxygen
richness imparts a light and crisp taste and our management believes that oxygen
enriched water is healthier, although no studies have been made to underlie this
conclusion.

According to Beverage Marketing (published by Beverage Marketing Corp.,
located at 2670 Commercial Avenue, Mingo Junction, Ohio 43938), the total U.S.
market for bottled water has grown from 1.6 billion gallons sold in 1987 to over
3.1 billion gallons in 1996, and accounted for approximately $3.6 billion in
wholesale sales during 1996 and non-sparkling water comprises over 87% of the
U.S. bottled water market and generated $2.7 billion of wholesale sales in 1996,
and is expected to continue to grow in the future (Beverage Marketing has no
affiliation with Aqua Clara or any of its affiliates). PET packaged products
comprise approximately 39% of the domestically produced non-sparkling water
market and have grown from approximately 83 million gallons in 1987 to
approximately 580 million gallons in 1996, representing a compounded annual
growth rate of approximately 24%. PET-packaged products accounted for
approximately $921 million of wholesale sales in 1996. According to Beverage
Marketing, PET bottled water is among the fastest growing beverage categories in
the United States. People are drinking more non-sparkling water because of
health and fitness awareness, municipal tap water quality concern and maturing
soft drink demand, as well as consumer demand for convenience and innovative
packaging.

INDUSTRY OVERVIEW

The U.S. bottled water market is comprised of three segments:
domestically produced non-sparkling water, domestically produced sparkling water
and imported water, which constituted approximately 65%, 21% and 14%,
respectively, of 1996 U.S. bottled water wholesale sales, according to Beverage
Marketing. The domestically produced non-sparkling water category includes
natural spring water obtained from naturally occurring springs, well water,
distilled water and purified water. Unlike other beverages, bottled water serves
both as a tap water substitute and a refreshment beverage.

Oxygen is currently in the public view as an additive to a range of
consumer products. There are currently oxygen bars in Toronto, New York City and
the Los Angeles area. Oxygen in beverages has received widespread media coverage
through television, radio and print media.

Consumer Trends. Contributing to the growth in consumption of
non-sparkling water are consumer trends including health and fitness awareness,
municipal tap water quality concern and maturing soft drink demand, as well as
consumer demand for convenience and innovative packaging. Bottled water,
particularly when packaged in premium PET bottles with sport caps, appeals to
consumers who are sports enthusiasts or whose lifestyles are oriented to health
and fitness. According to Beverage Marketing, consumers' concern over the
quality of municipal water supplies has contributed to an increase in bottled
water consumption. Bottled water has also become an alternative to other
beverages, including soft drinks. According to Information Resources, Inc.
("IRI"), total U.S. gallons sold of soft drinks through food store channels has
increased approximately 10% from 1994 through 1996. (Information Resources Inc.,
is located at 150 Clinton Street, Chicago, Illinois 60661 and has no affiliation
with Aqua Clara or any affiliate thereof.) According to Beverage marketing, over
the same time period, gallons sold of ready-to-drink juices increased
approximately 1% while non-sparkling bottled water gallons sold increased
approximately 21%. Bottled spring water is natural and caffeine and additive
free. These attributes and the increased availability of convenient packaging
for natural spring water have contributed to the increase in bottled water
consumption.

Distribution Channels. Non-sparkling bottled water is generally sold to
end users through four channels. According to Beverage Marketing, the total
share of the bottled water market for each channel is as follows: (i)
off-premise retail, which consists of supermarket, convenience store and drug
store chains and other similar retail outlets (44.9%); (ii) home and office
delivery which primarily consists of 5 gallon containers (39.0%); (iii)
on-premise retail, which includes restaurants, delicatessens and other similar
sites (8.3%); and (iv) vending (7.8%).

Non-sparkling bottled water is generally delivered to customer
locations through direct-store-delivery ("DSD") or warehouse distribution
systems. DSD involves delivery of the product directly to the store's location
where consumers may purchase the product. Warehouse distribution systems involve
the delivery of truckloads of palletized products to the warehouses of regional
customers which, in turn, deliver the product directly to the customer's retail
sales locations.

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Private Label. Private label products have become increasingly popular
among retailers and other customers. For example, supermarket sales of private
label products grew 8.5% in 1996 while branded products grew only 1.4%,
according to IRI. Retailers benefit from having a range of private label and
branded products as well as from the customer affinity developed from the
reinforcement of the retailer's own brand. Other non-retailing customers find it
more efficient to source products from a private label manufacturer than to
produce the products themselves. Both types of customers often choose private
label bottled water producers on the basis of price, consistent product quality,
packaging capability, distribution capability and customer service.

Consolidation. The trend toward consolidation in the bottled water
industry is evidenced by the reduction in the number of bottled water filling
locations and the corresponding increase in volume produced at most locations
over the past ten years. According to Beverage Marketing, in 1996 there were
approximately 350 filling locations in the United States versus approximately
425 in 1986, a decrease of 17.6%. The number of filling locations with sales
over $75 million doubled to eight from 1995 to 1996. Larger companies are
seeking to expand their share within a market, obtain broader distribution and
achieve economies of scale with larger volume production.

PRODUCTS

Oxygen Enriched Bottled Water. Our primary focus will be the
production/distribution of oxygen enriched bottled water in small package, PET,
containers ranging in size from .5 to 1.5 liters. Our oxygen enriched water will
contain approximately 24 parts per million of oxygen. Normal tap water contains
approximately 3 parts per million of oxygen. As such, our oxygen enriched
bottled water will contain approximately 800% more oxygen. The points of
purchase will include grocery stores, convenience stores, gas station markets,
health spas and vitamin/health food stores.

We make our oxygen enriched bottled water by combining purified water
and oxygen. Through water purification processing the source water is reduced to
approximately 5 parts per million of total dissolved solids and then oxygen is
introduced through a unique, proprietary process. As a point of reference, the
Food and Drug Administration's (FDA) definition of distilled water is 5 parts
per million or less of total dissolved solids. As such, the base water is of
distilled quality, although the distillation process will not be used.

Our market research, undertaken by a non-affiliated research firm, has
indicated that no specific medical claims have to be made to consumers with
regard to its product. According to this market research the public will readily
accept the necessity and benefits of both highly purified water and oxygen.
Oxygen is literally the breath of life; oxygen is a natural energizer and body
purifier. Oxygen is odorless and tasteless, as well as non-carbonated. As such,
our water tastes like a fine premium bottled water - light and crisp. Oxygen
does not produce the unhealthy "jolt" associated with caffeine products. Rather,
it is believed to create a feeling of physical well-being and mental clarity.

We do not currently carbonate or flavor our water. After the successful
introduction of our oxygen enriched bottled water product, we will consider
introducing a new product with natural flavoring or carbonation. We will also
consider the infusion of beneficial herbs and the production of super oxygen
enriched sports drinks, which would provide even higher levels of oxygen and be
marketed at a higher price. We use a distinctive bottle and label for our water
products.

There is one significant competitor, Clearly Canadian, producing oxygen
enriched bottled water. The Company also knows of eight other entities that are
attempting to produce and distribute oxygen enriched bottled water. Besides
Clearly Canadian, none of the well-established traditional bottled water
producers has an oxygen enriched bottled water product. There can be no
assurance that the Company's products will achieve consumer acceptance. Consumer
preferences are inherently subjective and subject to change.

STRATEGY

Our objective is to build product markets in Florida and then expand
nationally. To that end, we have appointed Crossmark one of the nations largest
consumer packaged goods sales and marketing companies to represent our product
throughout the state of Florida.

Crossmark currently impacts three billion retail transactions and
generates $12 billion dollars in annual sales. They currently have over 6,300
sales, merchandising and marketing professionals throughout the United States
focused on building the brands they represent. Crossmark will be marketing and
distributing Aqua Clara Oxygen Enriched Purified premium bottled water to some
of the largest retail food stores, wholesale suppliers, and drugstore chains
throughout Florida including Publix, Winn Dixie, Albertson's, Kash N' Karry,
Associated Grocers, Fleming, Eckerd's and Walgreens. A sample of some of the
brand names Crossmark currently represents include Nabisco Foods, Pillsbury
Company, Reynolds Metals, Inc., L'Oreal, Royal Oak Charcoal, and now Aqua Clara.

Crossmark offers us the opportunity to build strong brand recognition
through Crossmark's superior market presentation and support. Through their
category management plans, local event marketing plans and effective
merchandising plans, we expect to achieve stronger retail distribution that will
lead to building their brand and category.

Subsequent to May 12, 2000, Crossmark resigned as a representative of
our products. Their efforts had not resulted in any sales for the company. We
are now in discussions with a national distributor for similar representation.

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On December 13, 1999 we announced the launch of Aqua Clara/FLA USA
branded bottled water in a first-of-its-kind marketing partnership. We have
teamed up with VISIT FLORIDA and Florida Media Inc. to jointly and exclusively
market a new bottled water brand: Aqua Clara - FLAUSA. This brand will be
primarily sold in Florida and will add the hospitality market as a new sales
target for us. VISIT FLORIDA, the state of Florida's official tourism marketing
organization, has endorsed the product with its FLA USA logo, which is displayed
on the front of every Aqua Clara/FLA USA water bottle. We have already begun
distributing it into the Florida market and were the official water provider of
the annual Florida Strawberry Festival, one of the largest festivals in the
South. This year's Strawberry Festival was held March 2-12, 2000.

PRODUCTION

We currently operate out of a facility with approximately 14,000 sq.
ft. under roof with an exposed four-bay loading dock sitting on 2.1 acres in
Clearwater, Florida. Approximately 2,400 sq. ft. is used for office facilities,
with the balance predominantly used for bottling and warehouse operations. We
remodeled the building in fiscal year 1999 for approximately $600,000.

We finished installation and startup of a medium-sized bottling
facility during the fiscal year ended April 3, 1999, at a total cost of
approximately $750,000. The bottling line is rated at 160 bottles/min., or,
practically, 1,080 24-bottle cases of 20-oz. bottled water each shift.

When source water is delivered to our facilities, it is passed through
a number of filtration, ion exchange and reverse osmosis processes by which it
is reduced to a very pure approximately 5 parts per million of total dissolved
solids. Water is oxygenated using the purest oxygen commercially available in a
proprietary process. The water is then treated with ultraviolet light, which
effectively kills bacteria and other micro- organisms before delivery to the
bottling area where the various products are filled and capped. The filling room
is supplied with pressurized air from high-capacity HEPA (High-Efficiency
Particulate Air) filters, resulting in a clean filling and capping environment.

The manufacturing process is designed to be highly automated. Bottles
are mechanically de-palletized, cleaned, filled and capped. The filled bottles
are automatically coded, labeled, tamper banded (if applicable), and packed in
cases. After palletizing and stretch wrapping, the product is either loaded
directly onto a truck for immediate shipment or is stored in a warehouse for
future shipment.

We maintain exacting internal quality control standards. Each shift's
production is tested in our laboratory facilities according to FDA and IBWA
standards, and random samples are submitted regularly to an independent
laboratory for confirmation testing.

WATER SOURCES

Under FDA guidelines, bottled water must contain fewer than 500 parts
per million ("ppm") in total dissolved solids. Varying amounts and types of
dissolved solids provide different tastes to water. Aqua Clara uses FDA and
International Bottled Water Association approved water sources.

COMPETITION

The bottled water industry is highly competitive. According to
"Beverage Marketing", there are approximately 350 bottled water filling
locations in the United States with sales increasingly concentrated among the
larger firms. According to "Beverage Marketing", the ten largest bottled water
companies accounted for approximately 58.4% of wholesale dollar sales in 1996.
Nearly all of our competitors are more experienced, have greater financial and
management resources and have more established proprietary trademarks and
distribution networks than we do. On a national basis, we compete with bottled
water companies such as The Perrier Group of America, Inc. (which includes
Arrowhead Mountain Spring Water, Poland Spring, Ozarka Spring Water, Zephyrhills
Natural Spring Water, Deer Park, Great Bear and Ice Mountain) and Great Brands
of Europe (which includes Evian Natural Spring Water and Dannon Natural Spring
Water). Aqua Clara also competes with numerous regional bottled water companies
located in the United States and Canada. Aqua Clara has chosen to compete by
focusing on a higher quality oxygen enriched purified drinking water, innovative
packaging and customer service.

SEASONALITY

The market for bottled water is seasonal, with approximately 70% of
sales taking place in the seven months of April through October inclusive. As a
result of seasonality, our staffing and working capital requirements will vary
during the year.

TRADEMARKS

We have registrations in the U.S. Patent and Trademark Office for the
Aqua Clara mark as well as certain other marks we use. We believe that our
common law and registered trademarks have significant value and goodwill and
that some of these trademarks are instrumental in our ability to create demand
for and market our products. There can be no assurance that our common law or
registered trademarks do not or will not violate the proprietary rights of
others, that

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they would be upheld if challenged or that we would, in such an event, not be
prevented from using the trademarks, any of which could have an adverse effect
on us.

REGULATION

Our operations are subject to numerous federal, state and local laws
and regulations relating to its bottling operations, including the identity,
quality, packaging and labeling of its bottled water. Our bottled water must
satisfy FDA standards, which may be periodically revised, for chemical and
biological purity. Our bottling operations must meet FDA "good manufacturing
practices," and the labels affixed to our products are subject to FDA
restrictions on health and nutritional claims. In addition, bottled water must
originate from an "approved source" in accordance with federal and state
standards.

State health and environmental agencies, such as the Florida Department
of Agriculture and consumer services, also regulate water quality and the
manufacturing practices of producers.

Our products satisfy Florida and Federal requirements and we are
proceeding with applications to obtain distribution permits in all 50 states.
These laws and regulations are subject to change, however, and there can be no
assurance that additional or more stringent requirements will not be imposed on
our operations in the future. Although we believe that our water supply,
products and bottling facilities are and will be in substantial compliance with
all applicable governmental regulations, failure to comply with such laws and
regulations could have a material adverse effect on us.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings, except as set
forth in this paragraph and the immediately subsequent paragraphs. John S.
McAvoy filed a civil complaint in the Circuit Court of the Sixth Judicial
Circuit, in and for Pinellas County, Florida against us, Olde Monmouth Stock
Transfers, a New jersey Corporation, John C. Plunkett, Rand L. Gray and Robert
Guthrie, Case No. 99-004394-CI-011. The complaint is multi-part, claiming
Declaratory Relief; Injunctive Relief; Breach of Fiduciary and Statutory Duties;
Breach of Contract - Unpaid Promissory Notes; and Breach of Contract - Unpaid
Accrued Salary. The Plaintiff sought removal of the restrictive legends on stock
held and $67,973.79 in payment of Notes and Accrued Salary. The matter went to
mediation. An agreement was reached between the parties whereby we agreed to
delegend the Plaintiff's shares, pay Plaintiff $55,000, and agreed that, should
Plaintiff be unable to sell his stock for an average price of $0.37 per share,
that we would have one year in which to pay Plaintiff the difference between the
sales price and $0.37 per share. Plaintiff agreed that the sale of his stock
would take place in an orderly manner so as not to depress our stock price,
to dismiss the case, to release the Defendants, and to cancel the notes, and to
release any and all claims including salary claims. We have received information
that Plaintiff's average sales price per share was $0.304 per share. Plaintiff
has demanded that we pay the resulting $118,000 difference, and proposed a
settlement whereby we would issue Plaintiff additional shares in lieu of a cash
payment. The parties are still discussing this proposal.

Pat L. Nolen ("Nolen"), wife of John C. Plunkett, our President and
Chief Operating Officer on behalf of Aqua Clara Bottling & Distribution, Inc.
has filed a civil complaint in the Circuit Court of the Sixth Judicial Circuit
in and for Pinellas County, Florida, Case No. 003400CI-021 against Emanuel J.
Mersis, our Chairman of the Board of Directors and Chief Executive Officer, his
wife Anne Mersis, each of our directors other than Mr. Plunkett and against us.
Nolen seeks to require us to comply with the contract referred the to in the
above paragraph and to remove Mr. Mersis from his positions with us. As
disclosed above, we believe we are in compliance with the terms of the contract
with Water to Go2. Our Board of Directors has refused to comply with Nolen's
demands regarding Mr. Mersis and views the claims against him as without merit.

EMPLOYEES

We currently employ approximately eight (8) full-time employees, none
of whom are covered by collective bargaining agreements. During peak production
periods, we supplement our full-time work force with part-time employees. Aqua
Clara believes that its relations with its employees are good.

17
<PAGE>

MANAGEMENT
The following table sets forth certain information with respect to our
executive officers and directors.

Name Position Director Since Age
Robert F. Guthrie Secretary, Director 1997 65
Renato P. Mariani Director 1999 48
John C. Plunkett President, Chief Operations 1997 51
Officer and Director
E. Douglas Cifers Chairman 2000 50

Each director holds such position until our next annual meeting of shareholders
and until his respective successor has been elected and qualifies. All officers
devote full time to us. Any of our officers may be removed with or without cause
at any time by our Board of Directors. There are no agreements with respect to
the election of directors. We have compensated our directors, for service on the
Board of Directors through the end of fiscal year 2000 by the awarding of 50,000
shares of registered common stock to each director. Any non-employee director of
the Company is reimbursed for reasonable expenses incurred for attendance at
meetings of the Board of Directors. The Executive Committee of the Board of
Directors, to the extent permitted under Colorado law, exercises all of the
power and authority of the Board of Directors in the management of the business
and affairs of the Company between meetings of the Board of Directors. Each
executive officer serves at the discretion of the Board of Directors.

The business experience of each of the persons listed above during the past five
years is as follows:

Mr. Cifers is President of Florida Media, Inc., Florida's largest statewide
magazine publishing company. Mr. Cifers entrepreneurial bent and unusual
relationship-based business practices have been the focus of a Wall Street
Journal article.

Mr. Guthrie has served as one of our Directors since May, 1997 and became our
Secretary since December 1998. He is an attorney licensed to practice in Florida
with affairs in Seminole, Florida.

Mr. Mariani has served as one of our Directors since May, 1999. He is the
President of Eagle Diversified, Inc., a wholesale food, candy and tobacco
company.

Mr. Plunkett serves as our President, Chief Operations Officer and a Director.
He has served us since October 1996. Mr. Plunkett has over 20 years experience
in the engineering consulting industry and 10 years experience in real estate
management. He has been associated with us as an officer and director since our
inception and became President in 1998.

We do not have a bonus profit sharing or deferred compensation plan for the
benefit of its employees, officers or directors.

We began compensating our Directors beginning with the fiscal year ending April
1, 2000.

We entered into Employment Agreements as of August 31, 1999 with Emanuel J.
Mersis and John C. Plunkett.

Under the agreement with Mr. Mersis, we agreed to employ him as our Chief
Executive Officer through July 31, 2004, subject to termination under certain
circumstances. Under the agreement with Mr. Mersis, he will receive an annual
salary of seventy-five thousand dollars ($75,000) and, if he fulfills the full
five year term of the agreement, he would hold options to purchase twenty-two
and four tenths percent (22.4%) of our outstanding common shares at a purchase
price of $0.01 per share. These options vest in five equal installments of
twenty percent (20%), with the first installment being exercisable during the
first twelve months of the agreement and with an additional twenty percent (20%)
becoming exercisable on each of the four successive anniversary dates of the
agreement, and are subject to readjustment in the event we issue additional
shares during the term of the agreement.

Subsequent to May 12, 2000, Messrs. Mersis, Evans, Potopow and Thomas resigned
their positions with the company. Mr. Mersis was replaced as Chairman by E.
Douglas Cifers, President of Florida Media, a publishing company headquartered
in Lakeland, Florida, which currently publishes approximately 18 magazines. John
Plunkett assumed the position of Chief Executive Officer. Under the terms of his
resignation, Mr. Mersis gave up the rights to exercise the above stock options.

Under the agreement with Mr. Plunkett, we agreed to employ him as our Chief
Operating Officer through July 31, 2004, subject to termination under certain
circumstances. Under the agreement with Mr. Plunkett, he will receive an annual
salary of seventy-five thousand dollars ($75,000) and, if he fulfills the full
five year term of the agreement, he would hold options to purchase seven and six
tenths percent (7.6%)

18
<PAGE>

of our outstanding common shares at a purchase price of $0.01 per share. These
options vest in five equal installments of twenty percent (20%), with the first
installment being exercisable during the first twelve months of the agreement
and with an additional twenty percent (20%) becoming exercisable on each of the
four successive anniversary dates of the agreement, and are subject to
readjustment in the event we issue additional shares during the term of the
agreement.

19
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the cash and stock compensation of our
executive officers and directors during each of the last three fiscal years. The
remuneration described in the table does not include the cost we incurred in
furnishing benefits to the named executive officers, including premiums for
health insurance and other benefits provided to such individual that are
extended in connection with the conduct of our business. The value of such
benefits cannot be precisely determined, but the executive officers named below
did not receive other compensation in excess of the lesser of $25,000 or 10% of
such officer's cash and stock compensation.

SUMMARY COMPENSATION TABLE

----------------------- --------------------------------------------- ---------------------------------------------------
Annual Compensation Long Term Compensation
----------------------- --------------------------------------------- ---------------------------------------------------
Awards Payouts
----------------------- ------- ---------- --------- ---------------- ------------------------- ---------- --------------
Name and Year Salary Bonus Other Annual Restricted Options/ LTIP All Other
Principal Position Compensation Stock ($) SARs(#) Payouts Compen-
($) sation
----------------------- ------- ---------- --------- ---------------- ------------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Emanuel J. Mersis 2000 $75,000 -0- -0- -0- -0- -0- -0-
Chairman/C.E.O.
----------------------- ------- ---------- --------- ---------------- ------------- ----------- ---------- --------------
John C. Plunkett 2000 $75,000 -0- -0- -0- -0- -0- -0-
President/C.O.O. 1999 $28,000 -0- -0- -0- -0- -0- $255,000(1)
1998 $43,875 -0- -0- -0- -0- -0- -0-

----------------------- ------- ---------- --------- ---------------- ------------- ----------- ---------- --------------
</TABLE>

Mr. Mersis joined us as Chairman and Chief Executive Officer in July 1999.

Mr. Plunkett joined the Company in October 1996 and was named President in
October 1998

(1) This amount is comprised of 750,000 free trading shares of our common stock
which Mr. Plunkett received during the period in which he served as our Chief
Executive Officer. This amount included reimbursement of notes payable and
accrued interest on such notes and deferred salary.

20
<PAGE>

PRINCIPAL SHAREHOLDERS
The following table sets forth information about the beneficial
ownership of our Common Stock as of the date of this Prospectus by (i) each
person who we know is the beneficial owner of more than 5% of the outstanding
shares of Common Stock (ii) each of our directors and executive officers, and
(iii) all of our directors and executive officers as a group. The Percentage
After Offering column assumes the conversion of $250,000 principal amount of
Debentures into 1,666,664 shares of common stock. See "Selling Shareholders".
<TABLE>
<CAPTION>

PERCENTAGE PERCENTAGE
NAME AND ADDRESS(1) COMMON STOCK BEFORE OFFERING AFTER OFFERING
---------------- ------------ --------------- --------------
<S> <C> <C> <C> <C>

John C. Plunkett(2) 1,450,000 2.42% 1.51%
1315 Cleveland Street
Clearwater, Florida 33755

Renato P. Mariani 900,000 1.52% *
1315 Cleveland Street
Clearwater, Florida 33755

Robert Guthrie 125,000 * *
1315 Cleveland Street
Clearwater, Florida 33755

All Directors and Executive 2,475,000 3.94% 1.51%
Officers as a Group (3 persons)

</TABLE>

*less than 1%

(1) Unless otherwise noted below, we believe that all persons named in the
table have sole voting and investment power with respect to all shares
of Common Stock beneficially owned by them. For purposes hereof, a
person is considered to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options or the conversion of convertible
securities. Each beneficial owner's percentage ownership is determined
by assuming that any such warrants, options or convertible securities
that are held by such person (but not those held by any other person)
and which are exercisable within 60 days from the date hereof, have
been exercised.

(2) Includes 650,000 shares issuable upon exercise of options.

Subsequent to May 12, 2000, Mr. Mersis resigned, giving up the rights to
3,800,000 shares of exercisable options.

21
<PAGE>

CERTAIN TRANSACTIONS

On March 29, 1999, Corporate Relations Group ("CRG") exercised 250,000
options at a reduced price of $0.10 per share, offered by us to raise operating
capital. These options were granted originally pursuant to a Lead
Generation/Corporate Relations Agreement which we entered into with CRG in
November 1997

We agreed to issue 100,000 restricted shares to CRG, such shares to be
returned should the Company file and cause to be effective a registration
statement for the shares underlying the options within 120 days of the date of
the agreement (these shares have been issued). CRG was also granted piggyback
rights for these shares, which were subsequently disbursed when the Company
failed to meet the deadline for registration effectiveness. Under its agreement
with the Company, CRG has agreed to perform financial public relations services
for the Company, consisting of disseminating information about the Company to
the investing public, for $400,000 paid in cash in December, 1997. Under the
Core Broker program undertaken by CRG, the Company was required to host a due
diligence trip for up to ten retail brokers who demonstrated an interest in the
Company.

In August, 1998, we entered into two subscription agreements to issue
250,000 shares for $250,000. Under the terms of these agreements, the $250,000
was paid and the stock was issued and was included in the registration which
became effective October, 1998. Mr. John McAvoy has loaned the Company amounts
for working capital. The loans were represented by promissory notes due on
demand and bearing interest of 6%. Mr. McAvoy eventually commenced litigation
against us concerning some of these as well as other items. This lawsuit has now
been settled. See "Business - Legal Proceedings."

Mr. John Plunkett's spouse is a stockholder in a corporation and has a
contract to distribute the Company's products.

Pursuant to the terms of the original Amended Employment Agreements
dated January 20, 1998, on December 15, 1998, the Company reduced the accrued
and unpaid 1997-98 salaries of Messrs. Plunkett ($50,000) and Gray ($39,000) to
promissory notes and secured their interest with the assets of the Company. On
January 21, 1999, the Company reduced the remainder of the accrued and unpaid
1997-98 salaries of Messrs. Plunkett ($8,881) and Gray ($9,948) to promissory
notes subject to the continuing security interests. The promissory notes are
demand instruments at 5% simple interest. A blanket Security Agreement on all of
the Company's assets, a UCC filing on the Company's non-realty assets, and a
mortgage on the Company's realty secures each note. Each note, security
agreement, UCC filing and mortgage includes any future accrued and unpaid
salary.

During October through December, 1998, the Company received emergency
loans from Messrs. Plunkett ($11,839), Gray ($7,436) and Guthrie ($5,000), which
amounts were reduced to promissory notes and secured with the assets of the
Company. During January, 1999, the Company received emergency loans from Messrs.
Plunkett ($533) and Gray ($11,013), which amounts were reduced to promissory
notes on January 21, 1999, subject to the continuing security interests. The
promissory notes are demand instruments at 5% simple interest. A blanket
Security Agreement on all of the Company's assets, a UCC filing on the Company's
non-realty assets, and a mortgage on the Company's realty secures each note.
Each note, security agreement, UCC filing and mortgage includes any future
advancement of additional funds.

Subsequent to April 3, 1999, the Company issued Mr. Guthrie 50,000
shares of common stock in full payment of the secured note described above,
retiring the note, and as compensation. The Company issued Mr. Plunkett 750,000
shares of common stock in full payment of the secured notes for accrued salary
and moneys loaned the Company, described above, retiring the notes, and as
compensation.

The Company on January 21, 1999, reduced the legal fees and costs
($45,480) owed to its litigation counsel, Mr. Michael C. Berry, and its
corporate counsel, Mr. Michael Geo. F. Davis, to a promissory note. The
promissory note is a demand instrument at 5% simple interest. A mortgage on the
Company's realty secures the note. The note, security agreement, and mortgage
include any future fees or costs advancements.

Subsequent to April 3, 1999, the Company paid the amounts owed Messrs.
Berry and Davis, retiring the note described above.

The Company on February 11, 1999, received a loan from a group of the
Company's shareholders, who are neither officers nor directors. Under the loan
terms $250,000 was made available over ninety days. The 10% interest rate was
payable in cash or stock. A blanket Security Agreement on all of the Company's
assets, a UCC filing on the Company's non-realty assets, and a mortgage on the
Company's realty secures the note. The note, security agreement, UCC filing and
mortgage include any future advancements of additional funds. Messrs. Plunkett,
Gray, Guthrie and Berry/Davis subordinated their mortgages, where filed, to the
mortgage of the loaning shareholders.

Subsequent to April 3, 1999, the Company on June 25, 1999, paid off the
loan described above, retiring the note.

22
<PAGE>

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Aqua Clara's former independent accountant BDO Seidman, LLP ("BDO
Seidman") resigned from that capacity on December 29, 1997. The report by BDO
Seidman on the financial statements of Aqua Clara dated November 10, 1997,
including a balance sheet as of March 31, 1997 and the statements of operations,
cash flows and statement of stockholders' equity for the eight months ended
March 31, 1997 and the period inception (August 17, 1995) through March 31, 1997
did not contain an adverse opinion or a disclaimer of opinion, or was qualified
or modified as to uncertainty, audit scope or accounting principles, except as
to the uncertainty as to whether Aqua Clara would continue as a going concern.
However, subsequent to the issuance of BDO Seidman's audit report, Aqua Clara
included the audit report, together with unaudited financial statements of Aqua
Clara as of and for the six months ended October 4, 1997, in a private placement
memorandum relating to the offering of the Series A Preferred Stock. BDO Seidman
did not consent to the use of the audit report in the private placement
memorandum, and did not have the opportunity to review the private placement
memorandum or the unaudited financial statements until after the close of the
offering, at which time BDO Seidman indicated to Aqua Clara's President that
certain prepaid expenses were incorrectly capitalized as of October 4, 1997. The
Board of Directors did not itself discuss this issue of the capitalization of
expenses with BDO Seidman. BDO Seidman resigned as a result of what it
considered to be an unauthorized dissemination of its audit report coupled with
the inaccuracies in the unaudited financial statements. Aqua Clara did not
disagree with BDO Seidman as to the inaccuracies and expensed the prepaid
expenses in question, which were included in the $488,700 expensed for
consulting services in the year ended April 4, 1998. BDO Seidman has been
advised of the restatement. A letter from the former independent accountant for
Aqua Clara is attached as an exhibit to the Registration Statement of which this
Prospectus is a part. There have been no other transactions similar to the above
transaction in disagreement. On December 30, 1997 Aqua Clara engaged Pender
Newkirk & Company as its new independent accountants. Pender Newkirk & Company
had no discussions with BDO Seidman on the classification of expenses.

The Company dismissed Pender Newkirk & Company on April 3, 1999.
Tedder, James Worden and Associates, P.A., Orlando, Florida were appointed as
the new independent accountants on April 3, 1999. During the period covered by
the financial statements through the date of resignation of the former
accountant, there were no disagreements with the former accountant on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.

23
<PAGE>

SELLING SHAREHOLDERS

The shares of our Common Stock offered by the Selling Shareholders (the
"Shares") will be offered at market prices, as reflected on the Electronic
Bulletin Board, or on the NASDAQ Small Cap Market if the Common Stock is then
traded on NASDAQ. The aggregate number of shares offered for resale upon
conversion of the Debentures will be based on the conversion rate in effect at
the time of conversion. It is anticipated that registered broker-dealers will be
allowed the commissions which are usual and customary in open market
transactions. There are no other arrangements or understandings with respect to
the distribution of the Common Stock.

The number of shares of Common Stock issuable upon conversion of each
of the shares of the Series B Debentures, and the consequent number of shares of
Common Stock available for resale under this Prospectus, is based upon a
conversion ratio which is $1,000 divided by 65% of the closing bid price of the
Common Stock on the Electronic Bulletin Board NASDAQ averaged over the five
trading days immediately prior to the date of conversion. Based upon an assumed
conversion price of $0.14 per share, 7,143 shares of Common Stock would be
issuable per each $1,000 in Debentures. The relationship, if any, between Aqua
Clara and any Selling Stockholder is set forth below. The Percentage Before
Offering has been computed in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, by dividing the number of shares held by each Selling
Shareholder by the sum of the number of shares outstanding and the number of
shares, if any, issuable to the Selling Shareholder within 60 days (but assuming
no issuances to any other person).

Stock Percent Stock Percent
owned owned owned owned
prior to prior to after after
Name Offering Offering Offering Offering
<S> <C> <C> <C> <C>
James W. Spratt II 215,465 * 0 0
Roy E. Leinster 633,797 1.07 0 0
Ronnie L. Williams, Sr. 494,950 * 0 0
Frederick Lenz (1) 360,369 * 0 0
Kimberly J. Dowda (2) 727,464 1.04 0 0
Edwards Capital Corp. 562,309 * 0 0
Agricola Coco Bonh, S.A. (3) 1,110,374 1.51 0 0
Bruce R. Knox 1,242,860 2.09 0 0
John T. Mitchell 393,590 * 0 0
Lighthouse Holdings, LLC (4) 569,451 * 0 0
Joe Sloves 185,534 * 0 0
Taurus Enterprises, LLC 185,534 * 0 0
Philip M. Holstein, Jr. 185,534 * 0 0
Bryan King 185,534 * 0 0
Carmen A. Danella (5) 1,138,901 1.18 0 0
Gary Pereira 552,519 * 0 0
Peter Kertes 371,067 * 0 0
John Thomas 371,067 * 0 0
D. Robert Bradshaw 996,063 1.68 0 0
Vinton Packaging 33,333 * 0 0
Stephen P. Rambeaux 20,049 * 0 0
Dennis R. Roehrich 50,000 * 0 0
Patricia A. Livingston 50,000 * 0 0
C. A. Oportunidad 13,433 * 0 0
Barry Seidman 150,914 * 0 0
James Skalko 81,392 * 0 0
Thomas G. Vinton 305,000 * 0 0
Dennis Zweig 240,000 * 0 0
Karen Roche 241,897 * 0 0
Jon C. Botula 241,897 * 0 0
Virginia M. Blanchard 241,897 * 0 0
Linton S. Munroe, Jr. 241,897 * 0 0
Mark Giombetti 241,897 * 0 0
Richard Crane 290,276 * 0 0
James Crane 241,897 * 0 0
William Joseph Mannion 200,000
John C. Plunkett(6) 1,000,000 12.5 0 0
E. Douglas Cifers(7) 1,000,000 12.5 0 0
Clarence J. Socia 1,000,000
Hass & Castillio, P.A. 151,972 * 0 0
Crowe, Chizek and Co. LLP 174,166 * 0 0

TOTAL 16,969,299

</TABLE>

*Less than 1%

(1) Includes 274,725 shares issuable upon conversion of $25,000 principal
amount of Debentures at an assumed conversion price of $0.14 per share and
10,000 shares issued in lieu of interest on such Debentures.
(2) Includes 274,725 shares issuable upon conversion of $25,000 principal
amount of Debentures at an assumed conversion price of $0.14 per share and
10,000 shares issued in lieu of interest on such Debentures.
(3) Includes 549,451 shares issuable upon conversion of $50,000 principal
amount of Debentures at an assumed conversion price of $0.14 per share and
20,000 shares issued in lieu of interest on such Debentures.
(4) Includes 549,451 shares issuable upon conversion of $50,000 principal
amount of Debentures at an assumed conversion price of $0.14 per share and
20,000 shares issued in lieu of interest on such Debentures.
(5) Includes 1,098,901 shares issuable upon conversion of $100,000 principal
amount of Debentures at an assumed
(6) Comprised of 1,000,000 shares issuable upon the exercise of options at an
exercise price of $0.01 per share of which 20% have vested already and the
remaining vest in equal installments on July 31 of each of this year and
the following three years. Mr. Plunkett is our President and CEO.
(7) Comprised of 1,000,000 shares issuable upon the exercise of options at an
exercise price of $0.01 per share of which 20% have vested already and the
remaining vest in equal installments on July 31 of each of this year and
the following three years. Mr. Cifers is Chairman of the Board of
Directors.

24
<PAGE>

conversion price of $0.15 per share and 40,000 shares issued in lieu of
interest on such Debentures.

(6) Comprised of 7,375,000 shares issuable upon the exercise of options at an
exercise price of $0.01 per share of which 20% have vested already and the
remaining vest in equal installments on July 31 of each of this year and
the following three years. Mr. Plunkett is our President and CEO.

(7) Comprised of 7,375,000 shares issuable upon the exercise of options at an
exercise price of $0.01 per share of which 20% have vested already and the
remaining vest in equal installments on July 31 of each of this year and
the following three years. Mr. Cifers is Chairman of the Board of
Directors.

PLAN OF DISTRIBUTION

Each Selling Shareholder is free to offer and sell his or her Shares at
such times, in such manner and at such prices as he or she shall determine. Such
common shares may be offered by selling stockholders in one or more types of
transactions, which may or may not involve brokers, dealers or cash
transactions. The Selling Stockholders may also use Rule 144 under the
Securities Act, to sell such securities, if they meet the criteria and conform
to the requirements of such Rule.

There is no underwriter or coordinating broker acting in connection
with the proposed sale of Common Stock by the Selling Stockholders. The Selling
Stockholders have advised us that sales of Common Stock may be effected from
time to time in by the following events:

- transactions in the Over-the-Counter Bulletin
Board, including block transactions and/or negotiated
transactions

- through the writing of options on the Common Stock

- a combination of such methods of sale at fixed
prices which may be changed, at market prices
prevailing at the time of sale, or at negotiated
prices

The Selling Stockholders may effect such transactions by selling Common
Stock directly to purchasers or to or through broker/dealers which may act as
agents or principals. Such broker/dealers may receive compensation in the form
of discounts, concessions, or commissions from the selling stockholders.

The Selling Stockholders and any broker/dealers that act in connection
with the sale of the Common Stock might be deemed to be "underwriters" within
them meaning of Section 2(11) of the Securities Act, and any commissions
received by them and any profit on the resale of the Class A common stock as
principal might be deemed to be underwriting discounts and commissions under the
Securities Act. The Selling Stockholders may agree to indemnify any agent,
dealer or broker/dealer that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act. Because Selling Stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, they will be subject
to prospectus delivery requirements under the Securities Act.

Furthermore, in the event of a distribution of his or her Common Stock,
any Selling Stockholder, any selling broker/dealer and any affiliated purchasers
may be subject to Regulation M which prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the Class A common stock in connection with the offering.

25
<PAGE>

DESCRIPTION OF SECURITIES

COMMON STOCK

Our Articles of Incorporation authorize the issuance of 100,000,000
shares of Common Stock, no par value per share, of which 59,232,430 shares were
outstanding as of April 18, 2000. See "Certain Transactions." We have no plans
to sell additional shares of common stock at this time, but reserve the right to
do so to meet future operating requirements. Holders of shares of Common Stock
are entitled to one vote for each share on all matters to be voted on by the
stockholders. Holders of Common Stock have no cumulative voting rights. Holders
of shares of Common Stock are entitled to share ratably in dividends, if any, as
may be declared, from time to time by the Board of Directors in its discretion,
from funds legally available therefor. In the event of a liquidation,
dissolution or winding up of Aqua Clara, the holders of shares of Common Stock
are entitled to share pro rata all assets remaining after payment in full of all
liabilities and the liquidation preference to holders of Series A and Series B
Preferred Stock. Holders of Common Stock have no preemptive rights to purchase
our common stock. There are no conversion rights or redemption or sinking fund
provisions with respect to the common stock. All of the outstanding shares of
Common Stock are, and the shares of Common Stock will be, when issued and
delivered, fully paid and non-assessable, including Shares issuable upon
conversion of the Preferred Stock.

PREFERRED STOCK
Our Articles of Incorporation authorize the issuance of 5,000,000
shares of preferred stock, no par value, of which 200 shares of Series A
Preferred Stock were outstanding as of April 18, 2000. The Series A Preferred
Stock is convertible, at the option of the holder, into shares of common stock
at an initial Conversion Rate, subject to adjustments, at a number of shares of
Common Stock equal to $1,000 divided by the lower of (i) Sixty-Five Percent
(65%) of the average Market Price of the Common Stock for the five trading days
immediately prior to the Conversion Date (defined below) or (ii) $1.875,
increased proportionally for any reverse stock split and decreased
proportionally for any forward stock split or stock dividend. Market Price for
any date shall be the closing bid price of the Common Stock on such date, as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), or the closing bid price in the over-the-counter market if
other than NASDAQ. The holders of Series A Preferred have no voting rights, and
have a liquidation preference of $1,300 per share over the Common Stock.
Dividends on the Series A Preferred are payable at the rate of 8% per annum ($80
per share of Series A Preferred Stock) payable on each July 1, in either cash,
or in the option of Aqua Clara, Common Stock valued at the Conversion Rate. The
initial closing for the sale of the Series of Preferred Stock was on November
11, 1997. The holders of the Series A Preferred Stock have the right to receive,
at the time of conversion, additional penalty shares equal to (a) 5% if Aqua
Clara did not file a registration statement to register the underlying common
stock by January 15, 1998, (b) an additional 5% if the registration statement is
not declared effective by April 15, 1998, and (c) an additional 5% if we do not
deliver certificates representing the Common Stock within 5 days of the date of
conversion. Since the registration statement of which this Prospectus is a part
was filed by January 15, 1998 but not declared effective by April 15, 1998, the
holders of Series A Preferred Stock are entitled to 5% additional shares upon
conversion.

Aqua Clara's Board of Directors has authority, without action by the
shareholders, to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other rights
of such series. Aqua Clara considers it desirable to have preferred stock
available to provide increased flexibility in structuring possible future
acquisitions and financings and in meeting corporate needs which may arise. If
opportunities arise that would make desirable the issuance of preferred stock
through either public offering or private placements, the provisions for
preferred stock in Aqua Clara's Articles of Incorporation would avoid the
possible delay and expense of a shareholder's meeting, except as may be required
by law or regulatory authorities. Issuance of the preferred stock could result,
however, in a series of securities outstanding that will have certain
preferences with respect to dividends and liquidation over the Common Stock
which would result in dilution of the income per share and net book value of the
Common Stock. Issuance of additional Common Stock pursuant to any conversion
right which may be attached to the terms of any series of preferred stock may
also result in dilution of the net income per share and the net book value of
the Common Stock. The specific terms of any series of preferred stock will
depend primarily on market conditions, terms of a proposed acquisition or
financing, and other factors existing at the time of issuance. Therefore, it is
not possible at this time to determine in what respect a particular series of
preferred stock will be superior to Aqua Clara's Common Stock or any other
series of preferred stock which Aqua Clara may issue. The Board of Directors may
issue additional preferred stock in future financings, but has no current plans
to do so at this time.

The issuance of Preferred Stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of Aqua Clara.

Aqua Clara intends to furnish holders of its common stock annual
reports containing audited financial statements and to make public quarterly
reports containing unaudited financial information.

TRANSFER AGENT

The transfer agent for the Common Stock is Olde Monmouth Stock Transfer
Company, 77 Memorial Parkway Atlantic Highlands, NJ 07716 and its telephone
number is (732)872-2727.

26
<PAGE>

LEGAL MATTERS

The legality of the Shares offered hereby will be passed upon for Aqua
Clara by The Law Office of L. Van Stillman, P.A., Delray Beach, FL 33483

EXPERTS

The audited financial statements included in this Prospectus as of
April 4, 1998 and for the years ended April 4, 1998 and March 31, 1997 have been
audited by Pender Newkirk & Company, independent certified public accountants,
to the extent and for the periods set forth in their report thereon and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing. The audited financial statements for the
year ended April 3, 1999 have been audited by Tedder, James, Worden &
Associates, P.A., independent certified public accountants, to the extent and
for the period set forth in their report.

INDEMNIFICATION

Aqua Clara has adopted provisions in its articles of incorporation and
bylaws that limit the liability of its directors and provide for indemnification
of its directors and officers to the full extent permitted under the Colorado
General Business Act. Under Aqua Clara's articles of incorporation, and as
permitted under the Colorado General Business Act, directors are not liable to
Aqua Clara or its stockholders for monetary damages arising from a breach of
their fiduciary duty of care as directors. Such provisions do not, however,
relieve liability for breach of a director's duty of loyalty to Aqua Clara or
its stockholders, liability for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, liability for transactions
in which the director derived an improper personal benefit or liability for the
payment of a dividend in violation of Colorado law. Further, the provisions do
not relieve a director's liability for violation of, or otherwise relieve Aqua
Clara or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of equitable remedies such as
injunctive relief or recision.

At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of Aqua Clara where indemnification will be
required or permitted. Aqua Clara is not aware of any threatened litigation or
proceeding that may result in a claim for indemnification by any director or
officer.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of Aqua Clara pursuant to the foregoing provisions, or otherwise, Aqua
Clara has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by Aqua Clara of expenses incurred or paid by a
director, officer or controlling person of Aqua Clara in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Aqua
Clara will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

27
<PAGE>

AQUA CLARA BOTTLING & DISTRIBUTION, INC.

INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

<S> <C>

Report of Tedder, James, Worden & Associates, P.A., Independent Certified Public Accountants.... F-2
Report of Pender Newkirk & Company, Independent Certified Public Accountants.................... F-3
Consolidated Balance Sheets at July 1, 2000 Unaudited, April 1, 2000 and April 3, 1999.......... F-4
Consolidated Statement of Operations for the three months ended July 1, 2000 and July 3, 1999
(unaudited) and the years ended April 1, 2000, April 3, 1999 and April 4, 1998........... F-5
Consolidated Statement of Shareholders Equity for the three months ended July 1, 2000 (unaudited)
and the years ended April 1, 2000, April 3, 1999, April 4, 1998 and March 31, 1997....... F-6
Consolidated Statement of Cash Flows for the three months ended July 1, 2000 and July 3, 1999
(unaudited) and the years ended April 1, 2000, April 3, 1999 and April 4, 1998........... F-7
Notes to Financial Statements for the years ended April 1, 2000, April 3,
1999 and April 4, 1998 and for the Three Months ended July 1, 2000
(unaudited) and July 3, 1999 (unaudited)................................................. F-9

</TABLE>

F-1
<PAGE>

Independent Auditor's Report

Board of Directors
Aqua Clara Bottling & Distribution, Inc. and Subsidiary
Clearwater, Florida

We have audited the accompanying consolidated balance sheet of Aqua Clara
Bottling & Distribution, Inc. and Subsidiary as of April 3, 1999 and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the management of Aqua Clara Bottling & Distribution, Inc. and
Subsidiary. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aqua Clara Bottling
& Distribution, Inc. and Subsidiary as of April 3, 1999 and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has suffered losses from
operations and has negative working capital. Realization of a major portion of
the assets is dependent on the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plan regarding these matters are also described in Note 1 to the
consolidated financial statements. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Tedder, James, Worden & Associates, P.A.

May 28, 1999, except as to Note 1 which is as of June 25, 1999
Orlando, FL

F-2
<PAGE>

Independent Auditors' Report

Board of Directors
Aqua Clara Bottling & Distribution, Inc.
and Subsidiary (A Development Stage Enterprise)
Largo, Florida

We have audited the accompanying consolidated balance sheet of Aqua Clara
Bottling & Distribution, Inc. and Subsidiary (a development stage enterprise) as
of April 4, 1998 and the related consolidated statements of operations, changes
in stockholders' equity, and cash flows for the years ended April 4, 1998 and
March 31, 1997. These consolidated financial statements are the responsibility
of the management of Aqua Clara Bottling & Distribution, Inc. and Subsidiary.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we 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.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aqua Clara Bottling
& Distribution, Inc. and Subsidiary as of April 4, 1998 and the results of its
operations and its cash flows for the years ended April 4, 1998 and March 31,
1997 in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has been in the development stage
since its inception on August 17, 1995. Realization of a major portion of the
assets is dependent on the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans regarding these matters are also described in Note 1 to the
consolidated financial statements. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
May 27, 1998

F-3
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Consolidated Balance Sheets
<TABLE>
<CAPTION>

July 1, 2000 April 1, 2000 April 3, 1999
(UNAUDITED)
<S> <C> <C> <C>
Assets
Current assets:
Cash 15,908 20,980 9,960
Accounts receivable, net of allowance for
doubtful accounts of $10,000 in 1999 22,884 10,793 48,085
Inventories 280,737 290,145 62,729
Prepaid expenses & other current assets 281,416 398,185 26,586

Total Current Assets 600,945 720,103 147,360

Property, plant, and equipment,
net of accumulated depreciation 1,806,574 1,832,669 1,898,287
Other assets 1,506 1,506 1,506

Total Assets 2,409,025 2,554,278 2,047,153
=========== ========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable, trade 167,305 132,057 426,483
Accrued expenses 54,405 237,073 248,348
Current maturities of long term debt 215,602 254,693 18,149
Current obligation under capital lease 3,702 6,042 3,526
Deferred Revenue 3,000 0 0
Due to stockholders 344,049 334,153 370,066
Other current liabilities 11,663 0 26,692

Total current liabilities 799,726 964,018 1,093,264

Long-term debt, less current maturities 158,193 140,607 261,976
Obligation under capital lease, less current portion 16,899 14,559 12,065

Total Liabilities 974,818 1,119,184 1,367,305

Stockholders' equity:
Preferred stock; no par value,5,000,000
shares authorized; 100, 200, and 1,676
shares issued and outstanding as of
July 1, 2000, April 1, 2000 and April 3, 1999
respectively 74,601 149,203 1,250,284
Common stock; no par value, 100,000,000 shares
authorized; 62,505,496, 58,960,851, and
16,160,523 shares issued and outstanding
as of July 1, 2000, April 1, 2000, and
April 3,1999 respectively 8,859,647 8,440,527 3,772,285
Additional paid in capital 2,058,182 2,454,942 1,417,391

Accumulated deficit (9,558,222) (9,609,578) (5,760,112)

Total Stockholders' Equity 1,434,208 1,435,094 679,848

Total Liabilities and Stockholders' Equity 2,409,026 2,554,278 2,047,153
=========== ========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-4

<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Consolidated Statements of Operations
For three months ended July 1, 2000 and July 3, 1999 and the years ended
April 1, 2000, April 3, 1999, and April 4, 1998
<TABLE>
<CAPTION>

July 1, 2000 July 3, 1999 April 1, 2000 April 3, 1999 April 4, 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Sales 89,976 103,474 293,980 184,952 135,710
Cost of sales 61,414 62,957 229,839 142,133 277,146

Gross profit 28,562 40,517 64,141 42,819 (141,436)

General, administrative, and sales expenses 350,099 530,288 2,917,367 1,568,388 2,084,099

Stock Options Forfeited (410,020) 0 0 0 0

Operating profit (loss) 88,483 (489,771) (2,853,226) (1,525,569) (2,225,535)
Other income (expense):
Interest expense (7,931) (14,063) (624,852) (40,601) (38,968)
Interest and other income 0 0 8,420 5,256 27,589
Gain (loss) on sale of assets 0 (10,415) (5,791) (2,467) 33,200
Other 0 7,753 0 (3,971) 0

Net other income (expense) (7,931) (16,725) (622,223) (41,783) 21,821

Net income (loss) before cumulative effect of a
change in accounting principle 80,552 (506,496) (3,475,449) (1,567,352) (2,203,714)
Cumulative effect of a change in
accounting principle 0 0 0 (23,194) 0

Net income (loss) 80,552 (506,496) (3,475,449) (1,590,546) (2,203,714)

Dividends on preferred stock:
Amortization of intrinsic value
of conversion right 0 0 0 0 1,417,391
Unpaid 8.0% cumulative dividends 29,196 0 279,671 176,317 59,178

Net income (loss) applicable to common stock 51,356 (506,496) (3,755,120) (1,766,863) (2,262,892)

Basic income (loss) per common share $ 0.00085 $ (0.03) $ (0.12) $ (0.20) $ (0.62)

Weighted average common shares outstanding 60,685,328 19,250,055 30,942,463 8,911,295 5,962,307

</TABLE>

See accompanying notes to consolidated financial statements.

F-5

<PAGE>

Aqua Clara Bottling & Distribution,Inc. And Subsidiary
Consolidated Statements of Stockholders' Equity
For three months ended July 1, 2000 and the years ended April 1, 2000, April 3,
1999, April 4, 1998 and March 31, 1997
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid In Accumulated Subscription
Shares Amount Shares Amount Capital Deficit Receivable
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, March 31, 1997 0 0 4,884,122 1,032,416 0 (447,046) (50,000)
Collection of subscription
receivable, April 1997 0 0 0 0 0 0 50,000
Issuance of common stock
for services & $100,000 0 0 1,312,500 1,501,250 0 0 0
Stock issued through regulation D
offering, December 1997 2,500 447,597 75,000 247,500 1,417,391 0 0
Amortization of the intrinsic
value of the conversion rights
of the preferred stock 0 1,417,391 0 0 0 (1,417,391) 0
Net loss for the year 0 0 0 0 0 (2,203,714) 0
Balances, April 4, 1998 2,500 1,864,988 6,271,622 2,781,166 1,417,39 (4,068,151) 0

Stock issued through Regulation D
offering August 1998 0 0 250,000 250,000 0 0 0
Conversion of preferred stock (824) (614,704) 8,742,280 614,704 0 0 0
Preferred stock dividends 0 0 646,621 101,415 0 (101,415) 0
Issuance of common stock
exercise of options 0 0 250,000 25,000 0 0 0
Net loss for the year 0 0 0 0 0 (1,590,546) 0
Balances, April 3, 1999 1,676 1,250,284 16,160,523 3,772,285 1,417,39 (5,760,112) 0

Conversion of preferred stock (1,476)(1,101,081) 18,958,035 1,101,081 0 0 0
Preferred stock dividends 0 0 2,946,064 374,017 0 (374,017) 0
Conversion of Debentures 0 0 12,394,597 900,000 0 0 0
Common Stock issuance for services
and $147,009 0 0 8,501,632 2,293,144 0 0 0
Issuance of stock options to employees 0 0 0 0 494,000 0 0
Allocation of beneficial conversion
feature of debentures 0 0 0 0 543,551 0 0
Net loss for the year 0 0 0 0 0 (3,475,449) 0
Balances - April 1, 2000 200 149,203 58,960,851 8,440,527 2,454,94 (9,609,578) 0

Conversion of preferred stock (100) (74,601) 1,245,076 103,798 0 0 0
Preferred stock dividends 0 0 0 0 0 (29,196) 0
Conversion of Debentures 0 0 1,707,682 192,197 0 0 0
Common Stock issuance for services 0 0 591,887 123,125 0 0 0
Issuance of stock options to employees 0 0 0 0 (396,760) 0 0
Net income /(loss) for the 1st quarter 0 0 0 0 0 80,552 0
Balances - July 1, 2000 (unaudited) 100 74,602 62,505,496 8,859,647 2,058,18 (9,558,222) 0
</TABLE>

F-6
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Consolidated Statements of Cash Flows
For three months ended July 1, 2000 and July 3, 1999 and the years ended April
1, 2000, April 3, 1999, and April 4, 1998
<TABLE>
<CAPTION>

July 1, 2000 July 3, 1999 April 1, 2000 April 3, 1999 April 4, 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating activities:
Net income / (loss) 80,552 (506,497) (3,475,449) (1,590,546) (2,203,714)
Adjustments to reconcile net loss to net cash
used in operating activities:
Allowance for doubtful accounts 0 0 (10,000) 10,000 0
Loss (gain) on sales of assets 0 5,578 5,791 2,467 (33,200)
Depreciation 28,342 27,128 113,248 100,444 56,200
Cumulative effect of a change in
accounting principle 0 0 0 23,194 0
Issuance of stock options to employees 0 0 494,000 0 0
Stock Options Forfeited (396,760) 0 0 0
Beneficial conversion feature of debentures 0 0 543,551 0 0
Issuance of common stock for services 140,322 758,045 2,146,135 0 1,326,250
(Increase) decrease in:
Accounts receivable (12,091) 33,288 47,292 (58,085) 0
Employee advances 0 0 0 17,691 0
Inventories 9,408 (18,715) (227,416) (35,781) (26,948)
Prepaid expenses 116,769 (287,325) (371,599) 390,091 (399,709)
Other current assets
Increase (decrease) in:
Accounts payable 35,248 (98,817) (294,426) 217,002 51,436
Accrued expenses (182,668) (236,350) (11,275) 229,946 98,209
Other current liabilities 8,372 (12,459) (26,692) 26,692 0
Stockholder salary accrual 0 (214,758) 0 118,533 0
-------- -------- ---------- -------- ----------
Net cash used in operating activities (172,506) (550,882) (1,066,840) (548,352) (1,131,476)

Investing activities:
Proceeds from sale of assets 0 0 0 4,000 133,925
Proceeds from sale of investments 0 0 0 0 0
Purchase of property, plant and equipment (2,247) 0 (43,690) (578,295) (942,892)
Decrease in other assets 0 0 0 7,930
-------- -------- ---------- -------- ----------
Net cash used in investing activities (2,247) 0 (43,690) (574,295) (801,037)

Financing activities:
Proceeds from borrowings 214,785 1,075,000 1,286,000 0 55,475
Proceeds from due to stockholders 0 0 306,246 155,822 0
Payments on borrowings (45,104) (249,799) (270,825) (21,833) (53,113)
Payment on due to stockholders 0 0 (342,159) 0 0
Payments on capital lease obligations 0 0 (4,721) 0 0
Net proceeds from issuance of stock 0 0 147,009 275,000 2,262,488
-------- -------- ---------- -------- ----------
Net cash provided by financing activities 169,681 825,201 1,121,550 408,989 2,264,850

Net increase (decrease) in cash and cash
Equivalents (5,072) 274,319 11,020 (713,658) 332,337

Cash & cash equivalents beginning of year 20,980 9,960 9,960 723,618 391,218
Cash & cash equivalents end of year 15,908 284,279 20,980 9,960 723,618

Supplemental disclosures of cash flow information
and non-cash investing and financing activities:
Cash paid for interest 7,931 0 30,600 39,100 38,967

</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Consolidated Statement of Cash Flows, Continued
For three months ended July 1, 2000 and the years ended April 1, 2000, April 3,
1999, and April 4, 1998

During the quarter ended July 1, 2000, $175,000 of debentures were converted
into 1,707,682 common shares.

During the quarter ended July 1, 2000, 100 shares of preferred stock were
converted into 1,245,076 common shares.

During the quarter ended July 1, 2000, preferred stock dividends were settled
through the issuance of 123,191 common shares.

During the year ended April 1, 2000, $900,000 of debentures were converted into
12,394,597 common shares.

During the year ended April 1, 2000, 1,476 shares of preferred stock were
converted into 18,958,035 common shares.

During the year ended April 1, 2000, preferred stock dividends were settled
through the issuance of 2,946,064 common shares.

During the year ended April 1, 2000, the Company incurred a capital lease
obligation of $9,731 when it acquired new equipment.

During the year ended April 3, 1999, 824 shares of preferred stock were
converted into 8,742,280 common shares.

During the year ended April 3, 1999, preferred stock dividends were settled
through the issuance of 646,621 common shares.

During the year ended April 3, 1999, the Company incurred a capital lease
obligation of $18,900 when it acquired new equipment.

During the year ended April 4, 1998, $1,326,250 of common stock was issued in
exchange for services to be performed.

During the year ended April 4, 1998, the Company incurred a capital lease
obligation of $49,731 and debt of $107,563 when it acquired new equipment.

During the year ended April 4, 1998, the Company sold its five gallon water
business. As a part of the terms of the sale, debt of $149,782 was assumed by
the purchaser.

F-8
<PAGE>

Aqua Clara Bottling & Distribution, Inc.
And Subsidiary
Notes to Consolidated Financial Statements
Years Ended April 1, 2000, April 3, 1999, and April 4, 1998
and for the Three Months Ended July 1, 2000 (unaudited)
and July 3, 1999 (unaudited)

(1) ORGANIZATION, BACKGROUND, SALE OF ASSETS, AND GOING CONCERN

On August 17, 1995, Pocotopaug Investment, Inc. (hereinafter referred
to as "Pocotopaug") was incorporated under the laws of Florida for the
purpose of raising capital to fund the development of products for
subsequent entry into the bottled water industry.

On July 29, 1996, Aqua Clara Bottling & Distribution, Inc. (hereinafter
referred to as "Aqua Clara" or the "Company") was incorporated under
the laws of Colorado for the purpose of raising capital to fund the
development of products for subsequent entry into the bottled water
industry.

In December 1996, the stockholders of Pocotopaug gained control of Aqua
Clara and Aqua Clara acquired Pocotopaug in a business combination
accounted for as a reorganization of Pocotopaug. Pocotopaug became a
wholly owned subsidiary of Aqua Clara through the exchange of 1,690,122
shares of Aqua Clara's common stock for all 1,000,000 shares of the
outstanding stock of Pocotopaug. The accompanying consolidated
financial statements have been based on the assumption that the
Companies were combined for all periods presented.

In December 1997, the Company issued 2,500 shares of convertible
cumulative preferred stock through a private placement memorandum. The
Company raised $2,500,000 and incurred offering costs of $387,512. The
Company issued 75,000 shares of common stock as compensation to a
promoter of this offering. These shares were valued at their trading
price of other common stock and amounted to $247,500.

During the year ended April 4, 1998 the Company entered into a lead
generation/corporate relations agreement that required the Company to
pay $400,000. This was included in prepaid expenses at April 4, 1998
and was expensed during the year ended April 3, 1999.

During the year ended April 4, 1998, the Company began its five-gallon
water business. In February 1998, the Company sold this portion of the
business. The assets disposed of consist of certain receivables, a
vehicle, and various equipment used in the Company's bottled water
business. The total sales price was approximately $352,394, which
included the assumption of installment notes payable of approximately
$149,782 by the acquiring company. The Company recognized a gain of
approximately $33,000 on this sale.

The following is a pro forma statement of the operations (unaudited) as
if the five-gallon water business was not in existence for the years
ended April 4, 1998 and March 31, 1997:

YEAR ENDED YEAR ENDED
April 4, 1998 March 31, 1997
------------- --------------
<S> <C> <C>
General and administrative expenses $ (1,870,524) $ (315,985)
Interest expense (38,968) (50,542)
Other income 27,589 --
------------- --------------
Net loss $ (1,881,903) $ (366,527)
</TABLE>

During the year ended April 4, 1998 the revenues reflected in the
consolidated financial statements are from initial operations of a
five-gallon water business, which was discontinued in March 1998.
During the year ended April 3, 1999 the Company began producing 20oz
bottles of oxygenated water. The Company will need to generate
additional sales or obtain additional financing to fund its operations.
These factors, combined with the fact that the Company has not
generated any positive cash flows from operations, raise substantial
doubt about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets or amounts and
classifications of liabilities that might be necessary in the event the
Company cannot continue in existence.

F-9
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(1) ORGANIZATION, BACKGROUND, SALE OF ASSETS, AND GOING CONCERN - Continued

In March 1999 the Company entered into an agreement with a major
distributor in the Northeastern United States for distribution of their
20oz. bottles of oxygenated water. The terms and conditions of the
Company's agreement with this distributor have been revised to reflect
new marketing approaches of both companies. Effective January 1, 2000
the distributor will no longer have exclusive sales rights to the
following states: PA, MD, DE, VA, NJ, NY, CT, VT, MA, RI, ME, NH and
the District of Columbia, however the distributor will continue to
purchase from the Company and distribute the Aqua Clara brand
throughout the U.S. as they deem appropriate.

Subsequent to April 3, 1999 the Company raised $1,075,000 through the
issuance of a Class B Preferred Debenture. The proceeds of this
debenture were used to retire the mortgage on the building and the
90-day note to stockholders. The remainder of the proceeds have been
used to fund operations. The Company raised $180,00o through a Rule 506
Offering, the raise will be used to fund continued operation of the
Company.

(2) SIGNIFICANT ACCOUNTING POLICIES

(A) ORGANIZATION

The consolidated financial statements include the accounts of Aqua
Clara Bottling & Distribution, Inc. and its wholly owned subsidiary,
Pocotopaug Investments, Inc. All significant inter-company accounts and
transactions have been eliminated.

The financial statements for previous years reflected the Company as
being in the development stage. The accompanying financial statements
present the Company as no longer being in the development stage.

(B) 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 equivalents consist of all highly liquid debt instruments
purchased with a maturity of three months or less.

(D) INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or
market.

(E) INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the
consolidated financial statements carrying amounts of existing assets
and liabilities and their respective income tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized as income in the period that included the enactment date.

(F) PREFERRED STOCK

The Company charges to retained earnings and credits its additional
paid-in capital for the amortization of the intrinsic value of the
conversion feature of its preferred stock in accordance with the
statements issued by the Securities and Exchange Commission.

(G) COMMON STOCK

Shares of common stock issued for other than cash have been assigned
amounts equivalent to the estimated fair value of the service received
until the time the Company's stock began trading. At that time, the
Company valued the transactions based on quoted prices. The Company
records shares as outstanding at the time the Company becomes
contractually obligated to issue shares.

F-10
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(H) PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment are recorded at cost. Depreciation is
calculated by the straight-line methods over the estimated useful lives
of the assets. Property under capital leases is amortized over the
shorter of the lease terms or the estimated economic life of the
property. The Company has reviewed its long-lived assets for impairment
and has determined that no adjustment to the carrying value of
long-lived assets is required.

(I) FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management. The
respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial instruments
include cash, investment securities, accounts payable, and accrued
expenses. Fair values were assumed to approximate carrying values for
these financial instruments since they are short-term in nature or they
are receivable or payable on demand. The fair value of the Company's
long-term debt is estimated based upon the quoted market prices for the
same or similar issues or on the current rates offered to the Company
for debt of the same remaining maturities.

(2) SIGNIFICANT ACCOUNTING POLICIES CONTINUED

(J) BASIC LOSS PER COMMON SHARE

Basic loss per common share is based on the weighted average number of
common shares outstanding during each period. The Company implemented
SFAS No. 128 "Earnings Per Share" during the year ended April 4, 1998.

The Company applies APB Opinion 25 in accounting for its stock options.
Because the exercise price of these options is below the fair value of
the underlying stock, there is additional compensation cost to the
Company included in these financial statements.

In computing dilutive earnings per share, the following were excluded
because their effects were antidilutive. Year ended April 3, 1999
Preferred shares convertible into common stock and 2,173,382
contingently issuable shares. Year ended April 4, 1998 Preferred shares
convertible into common stock, options on 250,000 shares and 600,000
contingently issuable shares.

(K) ADVERTISING COSTS

Advertising costs are expensed, as incurred and amounted to $ 103,751
for three months ended July 1, 2000; $602,492 and $6,376 for the years
ended April 1, 2000 and April 3, 1999 respectively.

(L) FISCAL YEAR

The Company's fiscal year ends with the first Saturday in April
beginning with the fiscal year ended April 4, 1998.

(M) COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income, effective for the years beginning after December
15, 1997. SFAS No. 130 establishes standards for reporting and display
of comprehensive income and its components in a full set of
general-purpose financial statements. Comprehensive income includes all
changes in equity during a period, except those resulting from
investments by owners and distributions to owners. The Company adopted
SFAS No. 130 in the year ended April 3, 1999; however, there were no
changes in equity during the period exclusive of stock sold for cash
and net loss. As such, comprehensive income for the year ended April 3,
1999 is the amount shown on the statement of operations as net loss.

(N) PREPAID ASSETS

Prepaid assets consist of professional legal and advertising services,
agreements entered into by the Company. The Company will amortize these
costs when services under the contracts are rendered.

F-11
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(3) CHANGES IN ACCOUNTING PRINCIPLE

During 1998 the AICPA issued Statement of Position (SOP) 98-5 that
requires companies to write-off start-up expenses in the year incurred
and any previously capitalized expenditures in the year adopted.

The Company adopted SOP 98-5 during the year ended April 3, 1999 and
recorded a $23,194 cumulative effect of a change in accounting
principle as required by the SOP ($0 per share).

(4) INVENTORIES

Inventories consist of the following:
<TABLE>
<CAPTION>

July 1, 2000 April 1, 2000 April 3, 1999
(unaudited)
<S> <C> <C> <C>
Raw materials $ 68,586 $ 72,755 $ 53,161
Work in progress 298
Finished Goods 211,852 217,390 9,568
--------- --------- ---------
$ 280,737 $ 290,145 $ 62,729
</TABLE>

(5) PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:
<TABLE>
<CAPTION>

July 1, 2000 April 1, 2000 April 3, 1999
(unaudited)
<S> <C> <C> <C>
Land $ 90,000 $ 90,000 $ 90,000
Building 926,520 926,520 932,311
Machinery and Equipment 1,015,091 1,012,844 959,423
Vehicles 22,393 22,393 22,393
-------------- ---------- ------------
Total $ 2,054,004 $ 2,051,757 $ 2,004,127
Less accumulated depreciation (247,430) (219,088) (105,840)
-------------- ---------- ------------
$ 1,806,574 $ 1,832,669 $ 1,898,287
</TABLE>

For the three months ended July 1, 2000 depreciation expense amounted
to $28,342. For the years ended April 1, 2000 and April 3, 1999,
depreciation expense amounted to $ 113,460 and $100,444, respectively.
The Company has reviewed its long-lived assets for impairment and has
determined that no adjustments to the carrying value of long-lived
assets is required.

(6) DUE TO STOCKHOLDERS'

Due to stockholders' consists of the following:
<TABLE>
<CAPTION>

July 1, 2000 April 1, 2000 April 3, 1999
(unaudited)
<S> <C> <C>
Notes payable to stockholders due on demand with
Interest accrued at 5% to 8% $ 344,049 $ 334,153 $ 370,066
</TABLE>

F-12
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(7) LONG-TERM DEBT
<TABLE>
<CAPTION>

Long-term debt consists of:
July 1, 2000 April 1, 2000 April 3, 1999
(unaudited)
<S> <C> <C> <C>
Secured series "B" convertible debentures ("Debentures"),
interest 8%, Maturing at various times during June 2000. The
Debentures are convertible. At any time prior to maturity, at the
option of the holder, into common shares at a conversion price equal
to 65% of the three day average closing bid price prior to the date of
conversion; secured by real estate and personal property.
Series B Convertible Debentures $ 75,000 $ 250,000

Mortgage payable; interest 10% payable monthly; unpaid principal due $ 134,853 $ 134,983
June 1, 2000; collateralized by real property.

Mortgage payable; interest adjustable annually to prime; payable
$2,954 per month including interest; unpaid principal of approximately
$238,000 due February 15, 2001; collateralized by property and plant. $ 265,429

Installment note payable; interest 10.5%; payments $462 per month
includ$ng interest; collateralized by a vehicle. $ 8,932 $ 10,317 $ 14,221

Other Note $ 475

Note payable: interest at 5%, secured by building. $ 155,000
========= ========== ==========
Long Term Debt $ 373,795 $ 395,300 $ 280,125
Less current installments 215,602 254,693 18,149
========= ========== ==========
Long Term Debt, less current installments $ 158,193 $ 140,607 $ 261,976

</TABLE>

The following is a schedule by fiscal year of the principal payments
required on long-term debt:

2001 215,602
2002 158,193
-------
$ 373,795

(8) LEASE COMMITMENTS

At July 1, 2000, the Company is obligated under a long term capital
lease for equipment. The following is a schedule by year of future
minimum lease payment.

2001 $ 7,365
2002 6,791
2003 6,791
2004 2,352
----------
Total lease payments $ 23,299
Less amount representing interest (6.5% - 8%) 2,698
----------
Present value of lease payments $ 20,601
Less current obligation 3,702
----------
Long term capital lease obligation $ 16,889

At July 1, 2000, the Company rented vehicles and equipment under
operating leases. The following is a schedule by year of future minimum
rental under operating leases that have an initial or remaining
non-cancellable lease term in excess of one year as of July 1, 2000.

2001 $ 4,998
2002 400
----------
$ 5,398

F-13
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(9) INCOME TAXES

No provision for income taxes is recorded due to the amount of tax
losses incurred since inception. The Company had unused net operating
loss carryforwards to carry forward against future years' taxable
income of approximately $4,600,000, which will begin to expire in years
after 2011. Temporary differences giving rise to the deferred tax
assets consist primarily of the deferral and amortization of start-up
costs for tax reporting purposes. Management has established a
valuation allowance equal to the amount of the deferred tax assets due
to the uncertainty of the Company's realization of this benefit.

The components of deferred tax assets consist of the following at July
1, 2000:

Deferred tax assets:
Net operating loss carryforwards $ 1,723,000
Other 104,000
------------
Gross deferred tax assets $ 1,827,000
Valuation allowance 1,827,000
------------
Total deferred tax assets $ 0

Since inception, substantial changes of ownership of the Company have
occurred. Under federal tax law, these changes in ownership of the
Company will significantly restrict future utilization of the net
operating loss carryforwards. Other than the net operating losses,
which have been limited because of the change in ownership as described
above, any other net operating losses will expire if not utilized
within beginning in years after 2011.

(10) COMMITMENTS AND CONTINGENCIES

A former officer of the Company filed suit against the Company for
immediate delegending of his 1,796,400 shares of common stock and for
amounts due under promissory notes and deferred salaries. This suit was
settled prior to April 1, 2000. In settlement of this claim, the
Company paid $55,000 and guaranteed a sales price of $.37 per share for
the former officer's outstanding common shares. The Company has been
notified that the former officer is asserting a shortfall from the sale
of his common shares of approximately $118,000. This amount is included
in accrued expenses in the accompanying financial statements.

Another former officer of the Company filed suit against the Company
for approximately $80,000 of accrued wages and loans that took the form
of a mortgage on the property. This claim also seeks 1,350,000 shares
of the Company's common stock. The Company has accrued $80,000,
relating to the accrued wages and loans, in the accompanying financial
statements. However, the Company asserts that all or a majority of the
number of common shares due is a frivolous claim and has not included
any amount related to these shares in the accompanying financial
statements.

(11) STOCK

During the year ended April 4, 1998, the Company issued 2,500 shares of
Series A convertible preferred stock. These shares are nonvoting, and
the holders are entitled to receive an eight-percent annual dividend
and have a liquidation preference of $1,300 per share. These preferred
shares are convertible at any time, at the option of the holder, into
common shares equal to $1,000 divided by the lower of (a) 65 percent of
the average market price of the common stock for the five trading days
prior to the conversion date, or (b) $1.875. The Series A preferred
shares contain a provision that the Company shall increase the
conversion rate by five percent for each of the following occurrences:

1. Failure to file a registration statement under the Securities
Act of 1933 covering the common stock within 30 days of
closing date;
2. Failure of the registration to become effective within 120
days of closing date; and
3. Failure to issue the common shares within the time limits set
forth in the amended articles of incorporation.

As of April 1, 2000, approximately $37,000 of cumulative preferred
dividends were in arrears. As of July 1, 2000, approximately $14,000 of
cumulative preferred dividends are in arrears.

F-14
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(11) STOCK Continued

During the three months ended July 1, 2000 100 shares of preferred
stock were converted into 804,786 common shares. During the years ended
April 1, 2000 and April 3, 1999, 1,476 and 824 shares, respectively, of
the preferred stock were converted into 18,958,035 and 8,742,280 common
shares, respectively. These conversions include the 5% increase as the
Company failed to register the shares within the 120-day time frame and
all unpaid dividends on the preferred stock. The remaining preferred
stock if converted using the aforementioned 65% of the average of the
market price of the common stock, at April 1, 2000, would convert to a
maximum of approximately 1,150,000 common shares which reflects the 5%
additional shares issuable and unpaid dividends on the preferred stock.

The 1999 financial statements previously reflected preferred stock
dividends settled upon conversion of preferred stock to common stock as
a component of the preferred stock conversion. The 1999 financial
statements have been modified to reflect the common stock issued in
settlement of the preferred stock dividends as an increase to common
stock and a corresponding increase in accumulated deficit. There is no
impact to net loss or to total stockholders' equity.

During the three months ended July 1, 2000, $175,000 of debentures were
converted into 1,707,772 common shares. During the year ended April 1,
2000, $900,000 of debentures were converted into 12,394,597 common
shares.

During the year ended April 1, 2000, the Company entered into
employment agreements with two officers of the Company. The employment
agreements include 6,000,000 stock options granted with an exercise
price of $.01. The stock options vest 20% immediately and 20% each year
for the next four years. The number of shares covered by these stock
options and the exercise price shall be proportionally adjusted for any
change in the number of issued shares subsequent to June 3, 1999. As of
April 1, 2000, none of the 6,000,000 options had been surrendered or
exercised; 1,200,000 were exercisable. Mr. Mersis has forfeited his
options at his regignation on June 5, 2000.

The Company applies APB 25 and related interpretations in accounting
for the stock options. Accordingly, the Company recognized $494,000 in
compensation expense during the year ended April 1, 2000 related to the
stock options issued. For companies electing to use APB 25, SFAS 123
requires pro forma disclosures determined through the use of an
option-pricing model as if the provisions of SFAS 123 had been adopted.

The weighted average fair value at the date of grant for options
granted during the year ended April 1, 2000 was $.27 per share. The
fair value of the options granted was estimated on the date of grant
using the Black-Scholes Option Pricing Model with the following
assumptions:

Expected dividend yield 0%
Expected volatility 174.16%
Risk free interest rate 5.3%
Expected term in years 4

If the Company had adopted the provisions of SFAS 123, net loss for the
year ended April 1, 2000 would have increased by $14,000 and basic loss
per share would remain unchanged.

(12) LITIGATION

Civil Litigation in the Circuit Court of the Sixth Judical Circuit in
and for Pinellas County - Rand L. Gray and Kathleen Gray v. Aqua Clara
Bottling & Distribution, Inc. et al., Pinellas County, Case No.
00-2122-C1-021. This case arises out of an alleged breach of an
employment contract. An Amended Complaint was filed by the Plaintiffs
on June 26, 2000. The Amended Complaint alleges 6 counts: Count I -
Foreclosure of Mortgage; Count II - Foreclosure of Security Interest on
Personal Property; Count 3 - Damages on promissory Note; Count IV -
Damages for Breach of employment Agreement; Count V - Damages for
Breach of Severance Agreement; and Count VI-Damages for Breach of
Indemnity Agreement. Our response to Plaintiffs' Amended Complaint is
due July 17, 2000. Settlement negotiations have failed and litigation
previously stayed has become active. A counter-claim seeking damages
will be filed.

The Company does not believe the former officer will prevail and has
not reflected either claim in the consolidated financial statements.

F-15
<PAGE>

Aqua Clara Bottling & Distribution, Inc. And Subsidiary
Notes to Consolidated Financial Statements - Continued

(13) SUBSEQUENT EVENT

Subsequent to April 1, 2000, a distributor of the Company's products
filed a civil claim against the Company for breach of contract. The
claim seeks specific performance under the contract and damages for the
alleged breach. The distributor is owned by the wife of the Company's
president and chief operating officer (COO). Additionally, the wife of
the Company's president and COO filed a civil complaint against the
Company's chief executive officer (CEO), several members of the Board
of Directors (excluding the president) and the Company. This claim also
seeks specific performance on the contract noted above and removal of
the CEO.

In release of the claims against all parties noted above, the CEO and
several members of the Board of Directors resigned subsequent to April
1, 2000. Additionally, the Company agreed to pay approximately $11,000
in attorney's fees and costs incurred by the plaintiff. This amount has
not been reflected in the accompanying financial statements.

(14) LIQUIDITY AND CAPITAL RESOURCES

During the period ending July 1, 2000, the Company raised $55,000
through a Rule 506 Offering. Subsequent to July 1, the Company raised
an additional $125,000 via the same Offering. The proceeds of this
raise are being used to fund continued operation of the Company.

The Company has no plans or arrangements in place with respect to
additional capital sources at this time. The Company has no significant
lines of credit available to it at this time. There are no assurances
that additional capital will be available to the Company when or if
required.

Although the Company expects to experience losses in the 2nd quarter of
fiscal year 2001, management believes that the losses will continue to
decrease and a break-even point could be reached in the near term.
Inflation has not had a significant impact on the Company's results of
operations.

F-16
<PAGE>

No dealer, salesman or other person is authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by Aqua
Clara. This Prospectus does not constitute an offer to sell or a solicitation to
an offer to buy the securities offered hereby to any person in any state or
other jurisdiction in which such offer or solicitation would be unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information contained herein
is correct as of any time subsequent to the date hereof.

TABLE OF CONTENTS
Page

Additional Information...................... 3 AQUA CLARA BOTTLING
Prospectus Summary.......................... 4
Selected Financial Data..................... 6 AND DISTRIBUTION, INC.
Risk Factors................................ 7
Use of Proceeds............................. 10
Dividend Policy............................. 10 16,969,299 SHARES
Market Price of Common Stock................ 11
Management's Discussion and Analysis........ 12
Business and Plan of Operation.............. 14
Management.................................. 18
Principal Shareholders...................... 21
Certain Transactions........................ 22 ----------
Changes in and Disagreements with
Accountants................................. 23 PROSPECTUS
Selling Shareholders........................ 24
Plan of Distribution........................ 25 ----------
Description of Securities................... 26
Legal Matters............................... 27
Experts..................................... 27
Indemnification............................. 27
Financial Statements........................ F-1
, 2000

</TABLE>

<PAGE>

PART II
AQUA CLARA BOTTLING AND DISTRIBUTION, INC.

Item 13. Other Expenses of Issuance and Distribution.
-------------------------------------------
<TABLE>
<CAPTION>

<S> <C>
Filing fee under the Securities Act of 1933
Printing and engraving(1) $ 1,000.00
Legal Fees(1) $ 24,000.00
Auditing Fees(1) $ 12,000.00
Miscellaneous(1) $ 3,000.00
-----------------
TOTAL $ 40,000.00
=================

</TABLE>

------------
(1) Estimates

Item 14. Indemnification of Directors and Officers.
-----------------------------------------

Aqua Clara has adopted provisions in its articles of incorporation
and bylaws that limit the liability of its directors and provide for
indemnification of its directors and officers to the full extent permitted under
the Colorado General Business Act. Under Aqua Clara's articles of incorporation,
and as permitted under the Colorado General Business Act, directors are not
liable to Aqua Clara or its stockholders for monetary damages arising from a
breach of their fiduciary duty of care as directors. Such provisions do not,
however, relieve liability for breach of a director's duty of loyalty to Aqua
Clara or its stockholders, liability for acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, liability for
transactions in which the director derived as improper personal benefit or
liability for the payment of a dividend in violation of Colorado law. Further,
the provisions do not relieve a director's liability for violation of, or
otherwise relieve Aqua Clara or its directors from the necessity of complying
with, federal or state securities laws or affect the availability of equitable
remedies such as injunctive relief or recision.

Item 15. Recent Sales of Unregistered Securities.
----------------------------------------

On March, 1997, the following Pocotopaug bridge investors exchanged
their $323,500 in convertible debt into 796,500 shares of Company common stock
under Rule 504.

NAME SHARES

Foster Hayes 20,000
Genevieve Carriere- 24,000
Diane Bordner 40,000

II-1
<PAGE>

Alex Avramis 12,000
Madeline Goudos 160,000
Pierre & Anna Morin 10,000
Larry Plunkett 50,000
Tom and Adele Richoll 20,000
George Kickliter/
Charles McArthur Dairy 120,000
Don Plunkett 10,000
John C. Plunkett* 80,000
Phil Manquen 10,000
Dwight and Deborah Mason 20,000
Bob & Suzanne Carrol 6,000
Mina Morgan 2,500
John O'Donnell 20,000
Bill Smith 2,000
Robert Adams 10,000
Joan and Bernard Herman 20,000
Michael Wiza 20,000
Millennium Investment, Inc. 140,000
----------
796,500

* Restricted as John C. Plunkett is an officer and director.

In September, 1997, Aqua Clara issued 200,000 shares of restricted
common stock to each of Gulf Atlantic Publishing and Arrow Marketing for
advertising services and creative design of marketing materials respectively,
and issued 25,000 shares to each of Robert Guthrie, a director, and Richard
Trnouski for services. These shares were offered under the exemption provided by
Section 4(2).

Gulf Atlantic Publishing and Arrow Marketing purchased these 400,000
shares of $.25 per share pursuant to an option agreement. These shares were
offered under the exemption provided by Section 4(2).

On November 17, 1997 Aqua Clara entered into a Lead
Generation/Corporate Relations Agreement with Corporate Relations Group ("CRG")
pursuant to which Aqua Clara has paid CRG $400,000 and by which Aqua Clara has
agreed to pay CRG an additional $400,000 upon Aqua Clara raising its next
tranche of $2,500,000. Additionally, Aqua Clara agreed to issue options to CRG
to purchase 250,000 shares of common stock. These shares were offered under the
exemption provided by Section 4(2). This option is exercisable the later of
certain existable dates or when such tranche is raised.

Aqua Clara agreed to issue 100,000 restricted shares to CRG, such
shares to be returned should Aqua Clara file and cause to be effective a
registration statement for the shares underlying the options within 120 days of
the date of the agreement. CRG was also granted piggyback rights for these
shares, which have been escrowed with Aqua Clara's legal counsel.

II-2
<PAGE>

From December 27, 1996 to March 1997, Aqua Clara issued 1,283,000
shares of common stock in an offering under Rule 504 for $.50 per share to 35
persons.

In December, 1997, Aqua Clara issued 20,000 restricted shares of
common stock to Olympus Capital for consulting services rendered prior to
September 30, 1997. In December, 1997, Aqua Clara issued 75,000 restricted
shares of common stock to Olympus Capital for consulting services rendered
pursuant to a one-year consulting contract dated October 30, 1997. These shares
were offered under the exemption provided by Section 4(2).

In December, 1997 Aqua Clara issued 2,500 shares of Series A
Convertible Preferred Stock for $2,500,000 in gross proceeds to twenty-two
purchasers in an offering made under Section 4(2). Each purchaser executed a
subscription agreement and consented to the imprinting of a restrictive legend
on the stock certificate. The identity of the purchasers is set forth in the
prospectus under the caption "Selling Shareholders."

In June 1999 the Company sold $1,075,000 in Series B Debentures to 20
persons.

Except as to offerings under Rule 504 and the June 1998 offering
pursuant to Section 4(6) of the Securities Exchange Act of 1933, as amended, all
of the transactions referred to above are exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Section
4(2) thereof covering transactions not involving any public offering or that
involve no "offer" or "sale." No underwriter was involved. As a condition
precedent to each sale, the respective purchaser was required to execute an
investment letter and consent to the imprinting of a restrictive legend on each
stock certificate received from Aqua Clara.

In July 1998 Aqua Clara sold 500,000 shares at a price of $1.00 per
share to each of Thomas G. Vinton and Dennis J. Zweig, payable with promissory
notes. These individuals represented, and Aqua Clara believes it resonably
relied on the representation, to be "accredited investors" as such term is
defined in Regulation D and a restrictive legend was placed on the share
certificates. The offering was exempt under Section 4(6) of the Securities Act
of 1933. In October 1998 these investors and Aqua Clara mutually agreed to
cancel the 375,000 shares not yet paid for by each of these individuals and to
cancel the remaining $375,000 note obligation of each individual.

Item 16. Exhibits and Financial Schedules
<TABLE>
<CAPTION>
<S> <C>

3. Certificate of Incorporation and Bylaws

3.1. Articles of Incorporation(1)
3.2 Articles of Amendment for Series A Preferred Stock(1)
3.3 Bylaws(1)

5. Opinion of Law Office of L. Van Stillman, P.A. as to legality of securities being registered.

10. Material Contracts
</TABLE>

II-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>

10.1 Amended Employment Agreement with John McAvoy(1)
10.2 Amended Employment Agreement with John C. Plunkett(2)
10.3 Amended Employment Agreement with Rand L. Gray(2)
10.4 Lead Generation/Corporate Relations Agreement dated November 17, 1997 with Corporate
Relations Group, Inc.(1)
10.5 Extract of Board Resolutions dated April 3, 1997 and letter agreement with respect to
Plunkett and Gray consulting agreements(3)
10.6 Installment secured promissary notes(3)
10.7 Modification of Installment secured promissory notes(4)
10.8 Series B Convertible Debentures(6)
10.9 Employment Contract with Emanuel J. Mersis(8)
10.10 Employment Contract with John Plunkett(8)

16.1 Letter from BDO Seidman(3)
16.2 Letter from Pender Newkirk & Company(5)

21. Subsidiaries of the small business issuer-Pocotopaug Investment, a Florida Corporation, is
the only subsidiary. It does business under the same trade name as the Registrant.

23. Consents of Experts and Counsel

23.1 Consent of Pender Newkirk & Company(7)
23.2 Consent of Tedder, James Worden and Associates, P.A.(7)
23.3 Consent of Law Office of L. Van Stillman included in Exhibit 5 hereto

24. Powers of Attorney

24.1 Powers of Attorney are included on signature page

(1) Included in original filing of the Company's Registration Statement on Form SB-2, file No. 33-44315 (the
"SB-2").
(2) Included with Amendment Number 1 to the SB-2.
(3) Included with Amendment Number 2 to the SB-2.
(4) Included with Amendment No. 4 to the SB-2.
(5) Incorporated by reference to the exhibit filed with the Company's Current Report on Form 8-K dated April
8, 1999.
(6) Included in filing of the Company's Registration Statement on Form S-1, file No. 333-85461.
(7) Filed herewith.

All other Exhibits called for by Rule 601 of Regulation S-K are not
applicable to this filing.

(b) Financial Statement Schedules
</TABLE>

II-4
<PAGE>

All schedules are omitted because they are not applicable or because
the required information is included in the financial statements or notes
thereto.

Item 17. Undertakings.
------------

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement, including
(but not limited to) any addition or election of a managing underwriter.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities offered at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(h) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(i) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance

II-5
<PAGE>

upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be a part of this registration statement as of the time it was
declared effective.

(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

II-6
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Clearwater,
State of Florida on September 19, 2000.

AQUA CLARA BOTTLING AND
DISTRIBUTION, INC.

By: /s/ John C. Plunkett
--------------------------------
John C. Plunkett
President and Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 19, 2000.

By: /s/ E. Douglas Cifers Chairman of the Board
---------------------------------------------
E. Douglas Cifers

By: /s/ John C. Plunkett President, and Chief Executive Officer
---------------------------------------------
John C. Plunkett

By: /s/ Robert F. Guthrie Director
---------------------------------------------
Robert F. Guthrie

By: /s/ Renato Mariani Director
---------------------------------------------
Renato Mariani

</TABLE>

II-7
<PAGE>
INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
------ -----------
5 Opinion of Law Office, L.Van Stillman, P.A.

23.1 Consent of Pender Newkirk & Company

23.2 Consent of Tedder, James Worden Associates, P.A.