SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549



                                   FORM 8-K/A

                                 CURRENT REPORT



                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934



      Date of report (Date of earliest event reported): September 20, 2000



                           HANSEN NATURAL CORPORATION
               (Exact name of registrant as specified in charter)





      DELAWARE                           0-18761                39-1679918
(State or other jurisdiction of       (Commission              (IRS employer
    incorporation)                    file number)           identification no.)


1010 Railroad Street                                                92882
Corona, California                                               (Zip Code)
(Address of principal executive offices)

(909) 739-6200
(Registrant's telephone number, including area code)





<PAGE>




         ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS

                           On October 4, 2000, Hansen Natural  Corporation ( the
                  "Company" or "Registrant")  filed a Current Report on Form 8-K
                  to report that on  September  20,  2000 the Company  acquired,
                  through its indirect subsidiary Blue Sky Natural Beverage Co.,
                  a Delaware corporation  ("BSNBC"),  certain assets of Blue Sky
                  Natural  Beverage Co., a New Mexico  corporation  ("BSNB-NM"),
                  including its natural  carbonated sodas and seltzer  business,
                  for a  purchase  price of $6.5  million  (the  "Acquisition").
                  Pursuant to Item 7 of Form 8-K, the Company  indicated that it
                  would file  certain  financial  information  no later than the
                  date  required by Item 7 of Form 8-K. This Form 8-K/A is being
                  filed to provide the required financial information.



         ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

                  (a)      Financial Statements of Business Acquired

                           The financial statements of BSNB-NM required by Item
                  7 of Form 8-K are included herein as exhibits 99.1 and 99.2.

                  (b)      Pro Forma Financial Information   

                           The  pro  forma  financial  statements   required  by
                  paragraphs (b)(2) and  (a)(4)  of  Item  7  of  Form  8-K  are
                  included herein.

                           Unaudited pro forma combined  statement of income for
                           the year ended December 31, 1999; 

                           Unaudited pro forma combined statement of  income for
                           the  nine-months ended   September  30,  2000;

                           Unaudited  pro forma combined condensed balance sheet
                           data as of September 30, 2000;

                           and Note to unaudited  pro forma  combined statements
                           of income and combined condensed  balance sheet data.

                           The following  unaudited pro forma combined financial
                  statements  are  presented  for  information  purposes only in
                  response  to  Securities  and  Exchange   Commission   ("SEC")
                  requirements  and  are  not  necessarily   indicative  of  the
                  combined  financial  position  or  results of  operations  for
                  future  periods  or  the  financial  position  or  results  of
                  operations  that would  actually  have been  realized  had the
                  Company  and  BSNB-NM  been  a  combined  company  during  the
                  specified periods.  The unaudited pro forma combined financial
                  statements, including the related note, are qualified in their
                  entirety by  reference  to, and should be read in  conjunction
                  with, the  historical  consolidated  financial  statements and
                  related  notes  thereto of the  Company,  included in its Form
                  10-K and Form 10-Q,  filed with the SEC on March 30,  2000 and
                  November  9,  2000,   respectively;   and  BSNB-NM's   audited
                  financial  statements  and related  notes thereto for 1999 and
                  its unaudited  balance  sheet and statement of operations  for
                  the nine-month period ending September 30, 2000, each of which
                  are included in this Form 8-K/A.


                                        2

<PAGE>



                            The following unaudited pro forma combined financial
                  statements give effect to the  Acquisition  using the purchase
                  method  of  accounting.   The  pro  forma  combined  financial
                  statements are based on the respective  historical audited and
                  unaudited  consolidated financial statements and related notes
                  of the  Company  and  BSNB-NM,  respectively.  The  pro  forma
                  adjustments  are  preliminary  and are  based on  management's
                  estimates of the value of the tangible and  intangible  assets
                  acquired.

                            The pro forma  combined  statement of income for the
                  year ended December 31, 1999 assumes that the Acquisition took
                  place as of January 1, 1999 and combines the Company's audited
                  consolidated  statement of income for the year ended  December
                  31, 1999 with  BSNB-NM's  audited  statement of operations for
                  the year  ended  December  31,  1999.  The pro forma  combined
                  statement  of income for the nine months ended  September  30,
                  2000 assumes that the Acquisition  took place as of January 1,
                  2000  and  combines  the  Company's   unaudited   consolidated
                  statement  of income for the nine months ended  September  30,
                  2000 with BSNB-NM's  unaudited statement of operations for the
                  nine months ended September 30, 2000. The operating results of
                  the acquired  business since the date of the  Acquisition  are
                  included in the Company's unaudited  consolidated statement of
                  income for the nine-months ended September 30, 2000.

                           The pro forma historical condensed balance sheet data
                  of the Company and  BSNB-NM as of September 30, 2000 have been
                  adjusted to eliminate the effects of the Acquisition.  The pro
                  forma  adjustments  to the historical condensed balance  sheet
                  data of the Company and BSNB-NM as of September 30, 2000 gives
                  effect  to the  Acquisition.   The combined condensed  balance
                  sheet  data  reports  the  actual  balances  of the Company as
                  reported  in  the  Company's  Form  10-Q  for the period ended
                  September 30, 2000.

                                        3

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED:
--------------------------------------------------------------------------------

<TABLE>
<S>                                                   <C>              <C>               <C>                 <C>


                                                                         December 31, 1999
                                                      ----------------------------------------------------------------------
                                                                 Historical                          Pro forma
                                                      --------------------------------   -----------------------------------
                                                          Company          BSNB-NM         Adjustments           Combined
                                                      --------------   ---------------   ---------------     ---------------

NET SALES                                             $  72,303,186    $    6,417,295    $                   $   78,720,481

COST OF SALES                                            38,776,532         4,570,070                            43,346,602
                                                      --------------   ---------------   ---------------     ---------------

GROSS PROFIT                                             33,526,654         1,847,225                            35,373,879

OPERATING EXPENSES:
Selling, general and administrative                      25,337,374         1,661,929                            26,999,303
Amortization of trademark license and trademarks            307,823                             162,500 (1)         470,323
Other expenses                                              380,378                                                 380,378
                                                      --------------   ---------------   ---------------     ---------------

        Total operating expenses                         26,025,575         1,661,929           162,500          27,850,004
                                                      --------------   ---------------   ---------------     ---------------

OPERATING INCOME                                          7,501,079           185,296          (162,500)          7,523,875

NONOPERATING EXPENSE (INCOME)
Interest and financing expense                              170,506           148,971           588,110 (2)         907,587
Interest income                                            (118,413)           (6,749)                             (125,162)
Gain on sale
                                                      --------------   ---------------   ---------------     ---------------
        Net nonoperating expense (income)                    52,093           142,222           588,110             782,425

INCOME BEFORE PROVISION
        FOR INCOME TAXES                                  7,448,986            43,074          (750,610)          6,741,450

PROVISION FOR INCOME TAXES                                2,971,118                            (300,244)(4)       2,670,874
                                                                         
                                                      --------------   ---------------   ---------------     ---------------


NET INCOME                                            $   4,477,868    $       43,074    $     (450,366)     $    4,070,576
                                                      ==============   ===============   ===============     ===============


NET INCOME PER COMMON SHARE:
        Basic                                         $        0.45                                          $         0.41
                                                      ==============                                         ===============
        Diluted                                       $        0.43                                          $         0.39
                                                      ==============                                         ===============


NUMBER OF COMMON SHARES USED
      IN PER SHARE COMPUTATIONS:
        Basic                                             9,964,778                                               9,964,778
                                                      ==============                                         ===============
        Diluted                                          10,510,604                                              10,510,604
                                                      ==============                                         ===============

See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
</TABLE>


                                        4

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE NINE-MONTHS ENDED:
--------------------------------------------------------------------------------

<TABLE>
<S>                                                   <C>              <C>               <C>                 <C>

                                                                         September 30, 2000
                                                      ----------------------------------------------------------------------
                                                                Historical                           Pro forma
                                                      --------------------------------   -----------------------------------
                                                          Company          BSNB-NM         Adjustments           Combined
                                                      --------------   ---------------   ---------------     ---------------

NET SALES                                             $  61,346,401    $    5,156,185    $                   $   66,502,586

COST OF SALES                                            32,472,187         3,643,876                            36,116,063
                                                      --------------   ---------------   ---------------     ---------------

GROSS PROFIT                                             28,874,214         1,512,309                            30,386,523

OPERATING EXPENSES:
Selling, general and administrative                      22,322,793         1,603,561                            23,926,354
Amortization of trademark license and trademarks            247,935                             121,875 (1)         369,810
Other expenses
                                                      --------------   ---------------   ---------------     ---------------

        Total operating expenses                         22,570,728         1,603,561           121,875          24,296,164
                                                      --------------   ---------------   ---------------     ---------------

OPERATING INCOME                                          6,303,486           (91,252)         (121,875)          6,090,359

NONOPERATING EXPENSE (INCOME)
Interest and financing expense                              169,059           101,646           447,222 (2)         717,927
Interest income and other                                   (11,467)         (314,335)                             (325,802)
Gain on sale of assets                                                     (6,402,838)        6,402,838 (3)            -
                                                      --------------   ---------------   ---------------     ---------------
        Net nonoperating expense (income)                   157,592        (6,615,527)        6,850,060             392,125

INCOME BEFORE PROVISION
        FOR INCOME TAXES                                  6,145,894         6,524,275        (6,971,935)          5,698,234

PROVISION FOR INCOME TAXES                                2,440,516                            (227,639)(4)       2,212,877
                                                      --------------   ---------------   ---------------     ---------------


NET INCOME                                            $   3,705,378    $    6,524,275    $   (6,744,296)     $    3,485,357
                                                      ==============   ===============   ===============     ===============


NET INCOME PER COMMON SHARE:
        Basic                                         $        0.37                                          $         0.35
                                                      ==============                                         ===============
        Diluted                                       $        0.35                                          $         0.33
                                                      ==============                                         ===============


NUMBER OF COMMON SHARES USED
      IN PER SHARE COMPUTATIONS:
        Basic                                             9,959,592                                               9,959,592
                                                      ==============                                         ===============
        Diluted                                          10,440,377                                              10,440,377
                                                      ==============                                         ===============
See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
</TABLE>


                                        5

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DATA

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

<TABLE>
<S>                                                   <C>             <C>              <C>                 <C>


                                                                             September 30, 2000
                                                      --------------------------------------------------------------------
                                                                          Pro forma
                                                      ------------------------------------------------
                                                        Company (7)      BSNB-NM (7)      Adjustments          Combined
                                                      --------------  ---------------  ---------------     ---------------


Working Capital                                       $  12,654,561   $     (595,300)  $      648,300 (5)  $   12,707,561
Net trade accounts receivable                             7,361,309          221,678         (221,678)(6)       7,361,309
Inventories                                              10,737,659           40,000                           10,777,659
Total assets                                             32,669,002          484,598        6,058,451 (5)      39,212,051
Long-term debt                                            2,303,671        1,612,790        4,887,210 (5)       8,803,671
Deferred income tax liability                             1,225,271                                             1,225,271
Shareholders' equity (deficit)                           21,857,395       (1,784,872)       1,784,872 (6)      21,857,395


See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
</TABLE>


                                        6


<PAGE>



                  HANSEN NATURAL CORPORATION AND SUBSIDIARIES
                  NOTE TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
                  AND COMBINED CONDENSED BALANCE SHEET DATA


                           On September 20, 2000, the Company acquired , through
                  its  indirect  subsidiary  Blue Sky  Natural  Beverage  Co., a
                  Delaware  corporation  ("BSNBC"),  certain  assets of Blue Sky
                  Natural  Beverage Co., a New Mexico  corporation  ("BSNB-NM"),
                  including the Blue Sky trademarks and certain other assets for
                  a purchase price of $6.5 million (the "Acquisition"). The Blue
                  Sky(R)  products  include  a range of  all-natural  carbonated
                  sodas and  seltzers  that are marketed  throughout  the United
                  States and in certain  international  markets,  principally to
                  the health food trade.  The Acquisition has been accounted for
                  as a purchase in accordance with Accounting  Principles  Board
                  Opinion  No. 16,  "Business  Combinations."  Accordingly,  the
                  purchase price  inclusive of certain  acquisition  costs,  was
                  allocated to the tangible and intangible assets acquired based
                  on  their   respective   fair   values  at  the  date  of  the
                  Acquisition.   The  purchase   price,   inclusive  of  certain
                  acquisition costs, was financed through the Company's modified
                  line of credit.

                           The purchase price was allocated as follows:

<TABLE>
                           <S>                                                             <C>


                           Cash paid to BSNB-NM                                            $6,500,000
                           Additional costs                                                    43,049
                                                                                           ----------
                                            Total purchase price                           $6,543,049
                                                                                           ==========

                           Trademarks                                                      $6,478,049
                           Inventories                                                         40,000
                           Prepaid expenses                                                    13,000
                           Fixed assets                                                        12,000
                                                                                           ----------
                                            Net assets acquired                            $6,543,049
                                                                                           ==========   
</TABLE>

 

                           Trademarks   acquired   will   be   amortized   on  a
                  straight-line basis over forty years. The operating results of
                  BSNBC since the date of the  Acquisition  are  included in the
                  Company's results of operations.

                           The unaudited pro forma combined statements of income
                  give effect to the  Acquisition  as if it had  occurred at the
                  beginning of the period presented.

                            The following adjustments have been reflected in the
                  unaudited  pro   forma   combined   statements  of income  and
                  unaudited pro forma condensed balance sheet data:

                 (1)     To  record  additional amortization  of  trademarks and
                         trademark  license  of  $162,500  and  $121,875 for the
                         twelve-months  and nine-months presented, respectively.
                 (2)     To  record   additional  interest  expense  of $588,110
                         and  $447,222  for  the  twelve-months  and nine-months
                         presented, respectively,  in respect of the increase in
                         total debt incurred in connection with the Acquisition.
                 (3)     To  record  elimination  of gain realized by BSNB-NM in
                         connection  with the Acquisition.
                 (4)     To record tax effect of pro forma  adjustments.  
                 (5)     To record acquisition of BSNB-NM's business and certain
                         assets and related  increase in long-term debt.

                                        7

<PAGE>

                  HANSEN NATURAL CORPORATION AND SUBSIDIARIES
                  NOTE TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
                  AND COMBINED CONDENSED BALANCE SHEET DATA

                 (6)     To   record   the   elimination   of   certain  assets,
                         liabilities and  shareholders' equity not acquired from
                         BSNB-NM.  
                 (7)     The  historical condensed  balance sheet data presented
                         are  based  of  the  balance sheets  of the Company and
                         BSNB-NM at September 30, 2000 adjusted to eliminate the
                         effects of the Acquisition.


                           In  1997,  the  Company's  wholly-owned   subsidiary,
                  Hansen  Beverage  Company,  obtained  a credit  facility  from
                  Comerica-Bank   California   ("Comerica"),   consisting  of  a
                  revolving  line of credit of up to $3 million in the aggregate
                  at any time  outstanding  and a term loan of $4  million  (the
                  "Credit  Facility").  The  Credit  Facility  was  subsequently
                  modified  from  time  to  time.  In the  third  quarter  ended
                  September 30, 2000,  the Company  entered into a  modification
                  agreement  with Comerica to further amend the Credit  Facility
                  in order to finance the Acquisition, payoff the term loan, and
                  provide   additional   working   capital  (the   "Modification
                  Agreement").  Pursuant  to  the  Modification  Agreement,  the
                  revolving  line of  credit  was  increased  to $12.0  million,
                  reducing to $6.0 million by September 2004. The revolving line
                  of credit remains in full force and effect  through  September
                  2005. Further,  the rate of interest payable by the Company on
                  advances under the line of credit are based on the bank's base
                  (prime) rate,  plus an  additional  amount of up to .5% or the
                  bank's LIBOR rate,  plus an  additional  amount of up to 2.5%,
                  depending  upon certain  financial  ratios of the Company from
                  time to time.

                           The initial use of  proceeds  under the  Modification
                  Agreement  was to pay $6.5  million to  BSNB-NM in  connection
                  with the Acquisition, to payoff the remaining $807,000 balance
                  due under the term loan and to finance  working  capital.  The
                  Company's  borrowings  on the line of credit at September  30,
                  2000 were $8,286,000.

                           The   Modification   Agreement   contains   financial
                  covenants  that  require  the  Company  to  maintain   certain
                  financial  ratios and achieve certain levels of annual income.
                  The Modification Agreement also contains certain non-financial
                  covenants.   At  September  30,  2000,   the  Company  was  in
                  compliance with all covenants.

                                        8

<PAGE>




                  (c)      Exhibits

                  Exhibit Number            Description
                  --------------            -----------
                  99.1                      Audited Financial Statements of Blue
                                            Sky Natural Beverage,  a  New Mexico
                                            corporation ("BSNB-NM") for 1999 and
                                            1998.



                  99.2                      Unaudited Balance Sheet at September
                                            30, 2000 for BSNB-NM and   Unaudited
                                            Statement   of  Operations   for the
                                            nine-months then ended.

                                        9


<PAGE>


                                                     SIGNATURES



                  Pursuant to the  requirements  of the  Securities and Exchange
         Act of 1934, the registrant has duly caused this report to be signed on
         its behalf by the undersigned hereunto duly authorized.


         Date:  December 4, 2000

                                           HANSEN NATURAL CORPORATION



                                           By:      /s/ Rodney C. Sacks 
                                                     Rodney C. Sacks
                                                     Chairman of the Board
                                                     and Chief Executive Officer

                                        10






  BLUE SKY NATURAL BEVERAGE CO.

  Financial Statements
  As of December 31, 1999 and 1998
  Together with Report of Independent Public Accountants



<PAGE>


TABLE OF CONTENTS
-----------------

                                                                       Page
                                                                       ----


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                 1

FINANCIAL STATEMENTS:       
         Balance Sheets                                                  2

         Statements of Operations                                        3

         Statements of Stockholders' Deficit                             4

         Statements of Cash Flows                                        5

         Notes to Financial Statements                                6  - 10


SUPPLEMENTAL SCHEDULES:

         Cost of Sales                                                  11

         Selling Expenses                                               12

         General and Administrative Expenses                            13



<PAGE>




REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Blue Sky Natural Beverage Co.:

We have audited the  accompanying  balance  sheets of BLUE SKY NATURAL  BEVERAGE
CO., as of December 31, 1999 and 1998 and the related  statements of operations,
stockholders'  deficit and cash flows for the years then ended.  These financial
statements and the accompanying supplemental schedules are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements and the accompanying  supplemental  schedules based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United  States.  Those  standards  require  that
 we plan and  perform the
audits 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 audits provide a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Blue Sky Natural Beverage Co.,
as of December 31, 1999 and 1998 and the results of its  operations and its cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  schedules are presented
for purposes of  additional  analysis  and are not a required  part of the basic
financial  statements.  This  information  has been  subjected  to the  auditing
procedures  applied in our audits of the basic financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.


/s/  Arthur Andersen LLP

Albuquerque, New Mexico
May 24, 2000




1

<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Balance Sheets - December 31, 1999 and 1998


<TABLE>
<S>                                                                                   <C>                    <C>

                                                                                              1999                   1998
                                                                                              ----                   ----
                                       Assets
                                       ------
                                                  

Current Assets:
    Cash                                                                              $            5,049     $           37,066
    Trade accounts receivable, net of allowance for doubtful
      accounts of $65,886 and $82,417 for 1999 and 1998                                          458,163                221,234
    Inventories                                                                                   22,070                 16,176
    Note receivable from stockholder, current portion                                              5,213                  4,190
    Prepaid expenses and other                                                                     7,935                  4,321
                                                                                      ------------------     ------------------
      Total current assets                                                                       498,430                282,987
                                                                                  

Note receivable from stockholder, net of current portion                                           6,932                  6,932

Furniture, fixtures and equipment, net                                                            40,594                 52,419



Intangible assets net of amortization                                                             61,577                 22,500
                                                                                      ------------------     ------------------
                    Total assets                                                      $          607,533     $          364,838
                                                                                      ===================    ===================

                        Liabilities and Stockholders' Deficit
                        -------------------------------------

Current Liabilities
    Accounts payable                                                                  $          712,658     $          449,102
    Accrued expenses                                                                              58,175                 52,024
    Current portion of long-term debt                                                            419,070                264,630
                                                                                      ------------------     ------------------
      Total current liabilities                                                                1,189,903                765,756

Long-term debt, net of current portion                                                         1,109,015              1,333,541
                                                                                      ------------------     ------------------

                    Total liabilities                                                          2,298,918              2,099,297
                                                                                      ------------------     ------------------

Stockholders' Deficit
    Common stock - $.0001 par value; 3,000,000 shares
      authorized; 600,000 issued and outstanding                                                     600                    600
    Accumulated deficit                                                                       (1,691,985)            (1,735,059)
                                                                                      ------------------     ------------------
      Total stockholders' deficit                                                             (1,691,385)            (1,734,459)
                                                                                      ------------------     ------------------
                    Total liabilities and stockholders' deficit                       $          607,533     $          364,838
                                                                                      ==================     ==================



The  accompanying  notes to financial  statements  are an integral part of these
balance sheets.
</TABLE>



 2

<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Statements of Operations
For the Years Ended December 31, 1999 and 1998


<TABLE>
<S>                                                                                <C>                         <C>

                                                                                              1999                        1998
                                                                                              ----                        ----

Net Sales                                                                                  $ 6,417,295                 $ 6,691,294

Cost of Sales                                                                                4,570,070                   5,202,577
                                                                                   --------------------        --------------------

     Gross profit                                                                            1,847,225                   1,488,717

Selling Expenses                                                                               966,337                   1,136,152

General and Administrative Expenses                                                            695,592                     956,068
                                                                                   --------------------        --------------------



     Operating income (loss)                                                                   185,296                    (603,503)

Interest and other Non-Operating Income                                                          6,749                      17,875

Interest Expense                                                                              (148,971)                   (146,644)
                                                                                   --------------------        --------------------

     Income (loss) before income taxes                                                          43,074                    (732,272)

Income Taxes:
     Effect of change to Subchapter S Corporation                                                    -                      22,704
                                                                                   --------------------        --------------------

                       Net income (loss)                                                      $ 43,074                  $ (754,976)
                                                                                   ====================        ====================


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

</TABLE>


3

<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Statements of Stockholders' Deficit
For the Years Ended December 31,1999 and 1998


<TABLE>
<S>                                                   <C>                <C>                <C>                      <C>

                                                              Common Stock 
                                                      --------------------------------      Accumulated
                                                      Shares             Amount               Deficit                Total
                                                      ------             ------             ------------             -----

Balance at December 31, 1997                              600,000               $ 600            $ (980,083)           $ (979,483)

     Net loss                                                   -                   -              (754,976)             (754,976)
                                                      --------------     --------------     ----------------         --------------

Balance at December 31, 1998                              600,000                 600            (1,735,059)           (1,734,459)

     Net income                                                 -                   -                43,074                43,074

Balance at December 31, 1999                              600,000               $ 600          $ (1,691,985)         $ (1,691,385)
                                                      ==============     ==============     ================         ==============




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

</TABLE>


4


<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Statements of Cash Flow
For the Years Ended December 31,1999 and 1998


<TABLE>
<S>                                                                            <C>                       <C>

                                                                                        1999                      1998
                                                                                        ----                      ----
Cash Flows from Operating Activities:
   Net income (loss)                                                           $        43,074           $      (754,976)
   Adjustments to reconcile net income (loss) to net cash provided by
     (used for) operating activities:
     Depreciation and amortization                                                      42,334                    23,347
     Bad debt expense                                                                   21,579                    92,563
   Changes in operating assets and liabilities:
     Trade accounts receivable                                                        (258,508)                   (3,555)
     Inventories                                                                        (5,894)                   68,672
     Notes receivable from stockholder                                                  (1,023)                    2,533

     Income taxes receivable                                                                                      47,091
     Deferred income taxes                                                                                        22,704
     Prepaid expenses and other                                                         (3,614)                    9,550
     Accounts payable                                                                  263,556                   229,811
     Accrued expenses                                                                    6,151                  (103,830)
                                                                               ----------------          ----------------        
       Net cash provided by (used for) operating activities                            107,655                  (366,090)
                                                                               ----------------          ----------------

Cash Flows from Investing Activities:
   Purchase of intangible assets                                                       (60,066)
   Purchase of furniture, fixtures and equipment                                        (9,520)                  (13,775)
                                                                               ----------------          ----------------
       Net cash used in investing activities                                           (69,586)                  (13,775)
                                                                               ----------------          ----------------

Cash Flows from Financing Activities:
   Principal payments on long-term debt                                               (446,589)                 (183,723)
   Borrowings on long-term debt                                                        376,503                   406,256
                                                                               ----------------          ----------------
       Net cash (used for) provided by financing activities                            (70,086)                  222,533
                                                                               ----------------          ----------------

Net Decrease in cash                                                                   (32,017)                 (157,332)
Cash, beginning of year                                                                 37,066                   194,398
                                                                               ----------------          ----------------
Cash, end of year                                                              $         5,049           $        37,066
                                                                               ================          ================

Supplemental Cash Flow Information:

                                                                 
 Cash paid during the year for interest                                        $       102,781           $       146,644
                                                                               ================          ================



The  accompanying  notes to financial  statements  are an integral part of these
statements.
</TABLE>


5

<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Notes to Financial Statements
December 31, 1998 and 1999
-------------------------------------------------------------------------

1.       Nature of Operations and Organization

           Blue Sky Natural Beverage Co. (the "Company") was formed in 1980. Its
           principal  business  activities consist of marketing, development and
           distribution  of  natural  beverages.    The Company  is  located  in
           Santa Fe,  New Mexico,  and distributes flavored beverages throughout
           the U.S. and in  select international  markets.   The Company creates
           flavors  to  its  specifications, and contracts for the manufacturing
           and distribution of its beverages.

           As reflected in the accompanying financial statements at December 31,
           1999 and 1998, the Company has a significant  accumulated  deficit in
           stockholders'  equity and current  liabilities exceed current assets,
           which  raises  concern  about the  Company's  ability to satisfy  its
           obligations.  The  losses in 1998 were  primarily  from a  production
           process  failure for one new product and the related  product  recall
           and  discontinuation.  The  Company  absorbed  all the  costs of this
           product  recall  and  discontinuation  during  1998.  The  Company is
           continuing to pursue legal action  against the  outsourced  providers
           they  believe  to be at fault.  At this  time,  the  outcome of these
           proceedings is undeterminable.

           The  accompanying  financial  statements have been prepared  assuming
           that the Company will continue as a going concern. Management's plans
           in regard to these matters include the sale of  substantially  all of
           the Company's assets, as discussed below.

           On May 23, 2000 the Company  received a Letter of Intent from a party
           summarizing a proposed purchase  transaction in which the party would
           purchase  substantially  all  of the  assets  of  the  Company  for a
           purchase price of $7.6 million. The target date of the closing of the
           transaction  is August 15,  2000.  The  financial  statements  do not
           include any  adjustments  that might  result from the outcome of this
           proposed transaction.


2.       Significant Accounting Policies

           a. Basis of Accounting

           The  accounting  and reporting  policies of the Company  conform with
           generally  accepted   accounting   principles.   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.

           b. Inventories

           Inventories  are  carried  at the lower of cost or market  value on a
           first-in, first-out basis.



6



<PAGE>



           c. Property, Plant and Equipment

           Property,  plant and  equipment  are  recorded  at cost.  The Company
           depreciates  these  assets  over their  estimated  useful  lives on a
           straight-line basis as follows:

                   Furniture, fixtures and equipment               5 to 7 Years
                   Automobiles                                          5 Years

           Expenditures for maintenance and repairs are charged to operations as
           incurred.


           d. Intangible Assets

           Intangible assets,  which are recorded at cost, include the Company's
           trademark and other product development costs. The trademark is being
           amortized  over 5 years and the other product  development  costs are
           being amortized over one year.


           e. Revenue Recognition

           The Company recognizes revenue net of sales and volume discounts when
           products are shipped. Returned products and discounts are recorded as
           a reduction of sales in the accompanying statements of operations.


           f. Advertising and Promotion Costs

           Advertising  and promotion  costs are expensed as incurred as part of
           selling expenses.


           g. Income Taxes

           Effective  January 1, 1998,  the Company  changed its taxable  status
           under the  Internal  Revenue  Code  (IRC) from a C  corporation  to a
           Subchapter  S  corporation.  As a result all income  taxes are passed
           through to the stockholders.  Any deferred tax assets existing at the
           election date not expected to be realized  within certain time limits
           specified   by  the  IRC  were   removed  from  the  books  in  1998.
           Accordingly, subsequent to December 31, 1997, the only current income
           tax  expense  recorded  is  attributable  to the  removal  of certain
           deferred tax assets.  The Company recognized a net expense of $22,704
           as an effect of change to Subchapter S Corporation in 1998.


           h. Stock Split

           On August 12, 1999 the Board of Directors  of the Company  approved a
           common stock split in the amount of 1,000  common  shares to 1 common
           share.  The effects of the stock split have been shown  retroactively
           for comparative purposes.


7

<PAGE>

3.       Inventories

         Inventories consist of the following at December 31:

<TABLE>
         <S>                                                                   <C>                        <C>

                                                                                        1999                       1998
                                                                               -----------------------    -----------------------

         Sodas (12 oz., 12 pack, 1 liter and 2 liter)                                    $   13,547                 $    4,010
         Concentrate flavoring                                                               10,440                     10,371
         Bag in box                                                                           2,777                      2,651
         20 oz. Water                                                                                                    2,730
                                                                               -----------------------    -----------------------
                                                                                             26,764                     19,762
         Less: Allowance for spoilage                                                         4,694                      3,586
                                                                               -----------------------    -----------------------
                                                                                         $   22,070                 $   16,176
                                                                               =======================    =======================
</TABLE>



4.       Note Receivable from Stockholder

           The note  receivable from  stockholder  bears interest at the rate of
           5.88% with principal being amortized through November 2000.


5.       Furniture, Fixtures and Equipment

           Furniture,  fixtures  and  equipment  consist  of  the  following  at
           December 31:

<TABLE>
         <S>                                                                   <C>                        <C>

                                                                                        1999                       1998
                                                                               -----------------------    -----------------------

          Furniture, fixtures and equipment                                              $  204,073                 $  194,553
          Automobile                                                                         16,033                     16,033
                                                                               -----------------------    -----------------------
                                                                                            220,106                    210,586
          Less:   Accumulated depreciation                                                  179,512                    158,617
                                                                               -----------------------    -----------------------
                                                                                         $   40,594                 $   52,419
                                                                               =======================    =======================
</TABLE>



6.       Defined Benefit Pension Plan

           The Company had a defined  benefit  pension plan (the  "Plan")  which
           covered  all  employees  meeting  minimum  age and  length of service
           requirements. The Plan provided retirement benefits, which were based
           on a fixed  percentage of the average three highest  annual  salaries
           earned during eligible years of employment.  The Company was required
           to  fund   contributions  in  a  range  established   actuarially  in
           compliance with statutory Employee  Retirement Income Security Act of
           1974 ("ERISA") requirements. Miring 1998, the Plan was terminated and
           Plan  assets  were  distributed  to  participants  prior to  December
           31,1998.


8


<PAGE>

7.         Debt

           Debt consists of the following at December 31:

<TABLE>
<S>                                                                              <C>                        <C>

                                                                                          1999                       1998
                                                                                 -----------------------    -----------------------
          Note payable to a bank, prime plus 1%, (9.5% and 8.75% at December 31.
          1999 and  1998,  respectively)  self  amortizing  through  June  2003,
          collateralized  by  all  furniture,  fixtures,  equipment,  inventory,
          accounts  receivable,   tangibles  and  intangibles,  and  outstanding
          Company stock
                                                                                           $  865,785                $ 1,071,915
          Revolving  $200,000 credit line note payable to a bank, prime plus 1%,
          (9.5% and 8.75% at December 31, 1999 and 1998, respectively), due June
          2000,  collateralized by the same assets as those  collateralized  for
          the note payable above
                                                                                              200,000                     56,256
          Revolving $600,000 credit line note payable to a stockholder,
          10% fixed, due February 2001, unsecured                                             462,300                    470,000
                                                                                 -----------------------    -----------------------

                                                                                            1,528,085                  1,598,171
          Less:  current maturities                                                           419,070                    264,630
                                                                                 -----------------------    -----------------------
                                                                                           $1,109,015                $ 1,333,541
                                                                                 =======================    =======================

</TABLE>


           At December 31, 1999 the long-term debt matures as follows:

                            2000                     $           419,070
                            2001                                 703,748
                            2002                                 266,070
                            2003                                 139,197
                                                         ----------------
                                                      $        1,528,085
                                                         ================


           The note payable and revolving  line-of-credit to a bank requires the
           Company to comply with  certain  debt  covenants  including,  but not
           limited to restrictions on certain indebtedness,  and restrictions on
           the Company's  ability to dispose of all or substantially  all assets
           or assign  certain  assets.  The agreements  also contain  subjective
           acceleration  provisions  that  permit the bank to  declare  the debt
           immediately due and payable if the Company's legal status,  financial
           condition or actions are such that the bank  believes  the  Company's
           ongoing  existence  is  questionable.  Management  believes  that the
           Company is in compliance  with all debt  requirements at December 31,
           1999.  Management  also  believes  that the  Company  will be able to
           comply with all covenants in future periods.


8.         Incentive Stock Option Plan

           On August 12, 1999 the Board of Directors of the Company  approved an
           Incentive  Stock  Option  Plan under which  options to  purchase  the
           Company's common stock may be granted to employees through August 12,
           2009.   Stock  options  vest  ratably  based  on  gross  sales  goals
           determined by the Board of Directors.  Unexercised options expire ten
           years  from  the  date of  grant.  All  options  are  granted  at the
           estimated  fair  value of the stock at the date of grant.  A total of
           200,000 shares of common stock were  initially  reserved for options.
           Terminated  option  shares are  available  for future grant under the
           Plan.  As of  December  31,  1999 the Company had granted all 200,000
           options at an exercise price of $ 2.96 per share, and no options have
           been  vested or  exercised.  The  effect  on income of these  options
           calculated  in  accordance   with  SFAS  No.  123,   "Accounting  for
           Stock-Based Compensation", was immaterial in fiscal year 1999.

9


<PAGE>
9.         Commitments

           The  Company  has  non-cancelable  operating  leases  relating to two
           equipment  leases.  The future minimum  monthly  payments under these
           operating leases at December 31, 1999 are as follows:

                            2000                                  $ 4,324
                            2001                                    4,324
                            2002                                    4,324
                            2003                                    4,343
                                                           ---------------
                                                                 $ 15,315
                                                           ===============


10.        Significant Customers

           For the  years  ended  December  31,  1999  and  1998,  sales  to two
           customers  approximated  27%  of  total  net  sales.  Trade  accounts
           receivable due from these two customers totaled approximately $54,992
           and $29,700, at December 31, 1999 and 1998, respectively.


10


<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Supplemental Schedule of Cost of Sales
For the Years Ended December 31,1999 and 1998


<TABLE>
<S>                                                             <C>                                <C>

                                                                           1999                               1998
                                                                ----------------------------       ----------------------------
Direct Materials                                                                $ 4,042,347                        $ 4,588,538
Freight                                                                             411,259                            450,254
Storage and access                                                                    6,366                             54,545
Production costs                                                                          -                                894
Other direct costs                                                                  110,098                            108,346
                                                                ----------------------------       ----------------------------
                                                                                $ 4,570,070                        $ 5,202,577
                                                                ============================       ============================


</TABLE>



11


<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Supplemerital Schedule of Selling Expenses
For the Years Ended December 31, 1999 and 1998


<TABLE>
<S>                                                             <C>                                <C>

                                                                           1999                               1998
                                                                ----------------------------       ----------------------------
Advertising and promotion                                                         $ 221,247                          $ 345,889
Sales salaries                                                                      327,134                            306,766
Sales commissions                                                                   267,134                            225,538
Travel                                                                               98,287                            126,016
Bad debt                                                                             21,579                             92,563
Shipping                                                                             16,467                             22,083
Other                                                                                14,489                             17,297
                                                                ----------------------------       ----------------------------
                                                                                  $ 966,337                        $ 1,136,152
                                                                ============================       ============================

</TABLE>


12


<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

Supplemental Schedule of General
        and Administrative Expenses
For the Years Ended December 31, 1999 and 1998


<TABLE>
<S>                                                             <C>                                <C>

                                                                           1999                               1998
                                                                ----------------------------       ----------------------------
Salaries:
        General office employees                                                  $ 190,020                          $ 172,352
        Officers and executives                                                     165,906                            298,444
Contributions                                                                        28,293                             95,773
Professional fees                                                                    60,728                             63,749
Travel, entertainment and meals                                                      46,149                             52,368
Rent                                                                                 37,239                             38,578
Telephone                                                                            40,726                             36,452
Product development                                                                       -                             26,197
Insurance                                                                            13,933                             25,463
Depreciation and amortization                                                        42,334                             23,347
Repairs and maintenance                                                              24,010                             18,703
Other                                                                                46,254                            104,642
                                                                ----------------------------       ----------------------------
                                                                                  $ 695,592                          $ 956,068
                                                                ============================       ============================

</TABLE>


13





BLUE SKY NATURAL BEVERAGE CO.

BALANCE SHEET
SEPTEMBER 30, 2000 (Unaudited)
--------------------------------------------------------------------------------


<TABLE>
<S>                                                                                            <C>


                                                                                                  September 30,
                                                                                                      2000
                                                                                                  -------------
                                            ASSETS

CURRENT ASSETS:
Cash                                                                                           $       5,024,998
Trade accounts receivable, net of allowance for doubtful
    accounts of $41,108                                                                                  221,678
Note receivable from stockholder, current portion                                                          5,638
                                                                                               ------------------
                                                                                                       5,252,314

NOTE RECEIVABLE FROM STOCKHOLDER, NET OF
    CURRENT PORTION                                                                                        6,932

FURNITURE, FIXTURES AND EQUIPMENT, NET                                                                    15,400

                                                                                               ------------------
                                                                                               $       5,274,646
                                                                                               ==================

                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                                                                               $         576,900
Accrued expenses                                                                                          79,780
Current portion of long-term debt
                                                                                               ------------------
                                                                                                         656,680

STOCKHOLDERS' EQUITY
Common stock - $.0001 par value; 3,000,000 shares
    authorized; 600,000 issued and outstanding                                                               600
Retained earnings                                                                                      4,617,366
                                                                                               ------------------
    Total stockholders' equity                                                                         4,617,966
                                                                                               ------------------
      Total liabilities and stockholders' equity                                               $       5,274,646
                                                                                               ==================
</TABLE>


<PAGE>

BLUE SKY NATURAL BEVERAGE CO.

STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (Unaudited)
--------------------------------------------------------------------------------


<TABLE>
<S>                                                                                               <C>

                                                                                                         2000
                                                                                                         ----


NET SALES                                                                                                $ 5,156,185

COST OF SALES                                                                                              3,643,876
                                                                                                  -------------------

GROSS PROFIT                                                                                               1,512,309


SELLING EXPENSES                                                                                             598,968

GENERAL AND ADMINISTRATIVE EXPENSES                                                                        1,004,593
                                                                                                  -------------------

OPERATING LOSS                                                                                               (91,252)


INTEREST INCOME AND OTHER                                                                                    314,335

GAIN ON SALE OF ASSETS                                                                                     6,402,838

INTEREST EXPENSE                                                                                            (101,646)
                                                                                                  -------------------

NET INCOME                                                                                               $ 6,524,275
                                                                                                  ===================


</TABLE>