Micro Cap RESEARCH REPORT
Speculative Buy Recommendation
December 7th, 1998
Aqua Vie Beverage Corp.
| Aqua Vie Beverage Corp. | Shares Outstanding: | 11.2 Million est. | |
| P.O. Box 6759 | Estimated Float: | 6 million shares | |
| 191 Sunvalley Road | Ticker Symbol : | AVBCD | |
| Ketchum, Sun Valley, Id. 83340 | Recent Price: | $0.50/share | |
| (208)-622-7792 or (619)-839-3687 | |||
| www.aquavie.com |
Company Description:
This company is head quartered in Sun Valley, Idaho and produces flavored bottled water products. The company’s products include four lines of functional beverages, including the new, all natural Hydrator™ beverage line, the “E line™” of nutritionally fortified spring waters; Elixir™, Empower™, and Ecstasy™, a line of nutritionally specific spring water nutraceuticals, and three nonalcoholic wine beverages made from spring water.
In the early 1990s the Company successfully pioneered, developed, manufactured, and test marketed an entirely new category of beverages called “functional beverages,” made from spring water and “all natural” ingredients. Today, in the rapidly expanding non-alcoholic beverage market, this product remains unique in its defined market niches.
Take Over Attempt:
In January 1995, a small group, including “insiders” attempted a hostile takeover of the Company. Their motivation was to acquire control of the Company and its outstanding product lines, and to eliminate the Company’s nearly 5,000 shareholder’s equity investment. The weapon of choice was the illegal use of a petition to force Aqua Vie into Involuntary Chapter 11 Bankruptcy before the required 20 day response period that was available to the management of the Company had elapsed.
The group was able to have the court effectively remove management from control of the Company, and turn it over to a Bankruptcy Trustee. This closed down Aqua Vie, just as it was to commence a broad entrance and distribution into the U. S. beverage market and subjected the founder and the Company to almost 3 years of extortion, fraud and bankruptcy crimes.
The “legal siege” ended on October 6th, 1997. During that time, Tom Gillespie, the founder of Aqua Vie Beverage Corporation, was precluded from accomplishing a reorganization of the Company on behalf of legitimate creditors and shareholders, but he was able to keep “the hostile takeover group” from gaining control of the Company and its assets. Tom, through the use of Aqua Vie Advance Corporation, finally rescued the Company and its assets from the court system. This effort was very expensive and time consuming, which will be recognized in the new reorganization of Aqua Vie Beverage Corporation. Most importantly, by managing the reacquisition of the control and assets of the Company, Tom has been able to re-initiate the bottling operations and end the long information vacuum that had effectively kept the Company’s 5,000 shareholders totally uninformed about the events that have transpired.
In an ironic twist of the legal process, the Court sold all of Aqua Vie Beverage Corporation’s assets including the following;
1. Aqua Vie Beverage Corporation’s physical and intellectual assets
2. The founder of Aqua Vie, and Aqua Vie Beverage Corporation have legal claims, the value of each of their
claims are believed to exceed $10 million
3. The Company’s approximate $14 million tax loss carry forward
4. The Corporate shell
ALL, FREE AND CLEAR OF DEBT.
Recent Events:
As a result of the recent emergence from bankruptcy court the company has restructured extensively. The company has signed numerous new distribution agreements to allow for the international distribution of its product, and has retained representation for US distribution.
Aqua Vie recently signed a three year production agreement to have Lyon Magnus provide bottling production to Aqua Vie for its products. The agreement also calls for a feasibility study to be performed to on the potential distribution of Aqua Vie’s through Lyon Magnus’s world wide distribution system of over 1,100 distribution outlets.
Lyons Magnus is one of California’s largest manufacturers of beverages and fruit products, and operates a state-of-the-art manufacturing facility where it currently bottles for beverage companies and distributors in the U. S. and Asia.
Our Analysis:
While the restructuring following the emergence from bankruptcy has created a situation where the company is once again much smaller in size and has been forced to re establish its production and distribution networks. It has also created an opportunity to invest in a company that is not widely followed by the investing public, and renewed success could easily multiply the value of the company many times over. Our information indicates that there are approximately 11 million shares of stock outstanding on the company, giving it a market capitalization of approximately $5.5 million dollars. A successful establishment of the company’s products followed by sustainable growth should make the business significantly more valuable than it is today.
Our Recommendation:
We are recommending the purchase of shares in Aqua Vie Beverage Corp. (OTC Bulletin Board Symbol ‘AVBCD’) for those clients who are looking for an exceptionally high growth opportunity.
Disclaimers:
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