6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2007

Commission File Number: 0-15276

CLEARLY CANADIAN BEVERAGE CORPORATION
(Translation of registrant's name into English)

2267 West 10th Avenue, Vancouver, British Columbia, V6K 2J1
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ x ] Form 20-F   [] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): []

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): []

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes [] No [ x ]

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________

SUBMITTED HEREWITH

Exhibits

99.1	Consolidated Financial Statements for the Three and Six Months Ended June 30, 2007
99.2	Management Discussion and Analysis for the Six Months Ended June 30, 2007
99.3	Form 52-109F2 - Certification of Interim Filings - CEO
99.4	Form 52-109F2 - Certification of Interim Filings - CFO

SIGNATURES

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

	Clearly Canadian Beverage Corporation
	(Registrant)
Date: August 30, 2007	By:	/s/ Brent Lokash
		Brent Lokash
	Title:	President

EX-99.1

Consolidated Financial Statements
(Expressed in thousands of United States dollars, except where indicated)

CLEARLY CANADIAN BEVERAGE CORPORATION

Second Quarter Report for the three and six months ended June 30, 2007

The accompanying Financial Statements for the six months ended June 30, 2007 have not been reviewed or audited by the Company’s Auditor

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Balance Sheets

(Expressed in thousands of United States dollars, except for share and per share amounts)

		June 30, 2007			December 31, 2006
		(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents	$	6,150		$	5,267
Accounts receivable (note 6)		1,544			634
Inventories (note 7)		1,991			427
Prepaid expenses and other current assets		1,262			533
		10,947			6,861
Property, plant and equipment (note 8)		1,614			1,153
Prepaid contracts (note 15(a))		1,257			1,079
Goodwill		6,550			-
	$	20,368		$	9,093
Liabilities and Shareholders’ Equity
Bank indebtedness (note 5)	$	235		$	-
Accounts payable and accrued liabilities (note 9)		3,101			1,608
Capital lease obligation, current portion (note 11)		57			8
Short-term debt (note 10)		1,161			-
		4,554			1,616
Capital lease obligation, net of current portion (note 11)		168			13
Long-term debt (note 12)		4,031			-
		8,753			1,629
Shareholders’ equity:
Capital stock (notes 13 and 14):
Authorized:
Unlimited common share without par value
Unlimited variable multiple voting shares without par value
2,000,000 class A preferred shares
2,000,000 class B preferred shares
Outstanding –600,000 (2006 – 1,600,000) class B preferred shares		600			1,600
Issued – 20,597,702 (2006 – 13,917,153) common shares without par
value
Outstanding – 20,560,402 (2005 – 13,879,853) common shares
without par value		82,272			75,730
Variable multiple voting shares – 1,120,000 (2006 – 320,000)
Contributed surplus		11,156			8,290
Accumulated other comprehensive loss		(337	)		(1,101	)
Deficit		(82,076	)		(77,055	)
		11,615			7,464
	$	20,368		$	9,093

Going concern (note 3(a))
Commitments and contingencies (note 15)
Subsequent events (note 18)
See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

Director

Director

The accompanying Financial Statements for the six months ended June 30, 2007 have not been reviewed or audited by the Company’s Auditor

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Earnings

(Unaudited)

(Expressed in thousands of United States dollars, except for share and per share amounts)

	Unaudited				Undaudited
	For the 3 months ended				For the 6 months ended
	June 30		June 30		June 30		June 30
	2007		2006		2007		2006
	$		$		$		$
Sales	2,996		2,673		4,463		4,375
Cost of sales	2,422		1,910		3,533		3,252
Gross profit	574		763		930		1,123
Selling, general and administration expenses	2,656		3,172		5,251		5,683
Amortization of property, plant and equipment	6		28		12		60
Royalty revenue	-		(66	)	-		(125	)
Interest income	(84	)	-		(147	)	-
Other (income) expense	(6	)	(13	)	(13	)	(45	)
Financing costs	-		-		-		-
Interest on short-term debt	6		34		10		125
Interest on long-term debt	1		14		3		24
Interest on acquisition debt	92		-		125		-
Gain on sale of investments	-		-		-		(201	)
Foreign exchange loss	649		-		649		-
(Gain) loss on settlement of debt	-		93		-		158
Restructuring	-		125		-		112
	3,320		3,387		5,890		5,791
Net (Loss) earnings and comprehensive
(Loss) income for the period	(2,746	)	(2,624	)	(4,960	)	(4,668	)
Loss per share, basic and diluted	(0.14	)	(0.27	)	(0.26	)	(0.58	)
Weighted average number of shares
outstanding	19,784,680		9,086,385		18,811,963		8,086,057

 See accompanying notes to consolidated financial statement

The accompanying Financial Statements for the six months ended June 30, 2007 have not been reviewed or audited by the

Company’s Auditor

1

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

					Class A				Class B
	Common shares				preferred shares				preferred shares
				Share
				subscription								Cumulative				Shareholders’
	Number			receivable	Number				Number		Contributed	translation				equity
	of shares	Amount		(payable)	of shares		Amount		of shares	Amount	surplus	account		Deficit		(deficiency)
		$		$			$			$	$	$		$		$
Balance, December 31, 2004	996,568	59,035		-	-		-		-	-	1,037	(1,253	)	(62,334	)	(3,515	)
Private placement issued January
14, 2005 at CA$2.50 per unit prior
to consolidation	46,500	97		-	-		-		-	-	-	-		-		97
Class A preferred shares issued on
conversion of loan May 5, 2005	-	-		-	1,000,000		1,000		-	-	-	-		-		1,000
Private placement of class A
preferred shares issued May 5,
2005 at US$1.00 per share	-	-		-	1,000,000		1,000		-	-	-	-		-		1,000
Private placement issued May 16,
2005 at US$1.00 per share	2,260,000	2,260		-	-		-		-	-	-	-		-		2,260
Private placement issued May 24,
2005 at US$1.00 per share	815,000	815		-	-		-		-	-	-	-		-		815
Finders fees – private placement –
May 16, 2005 and May 24, 2005
issued at US$1.42 per share	450,000	639		-	-		-		-	-	-	-		-		639
Share issue cost – private placement		(1,003	)	-	-		-		-	-	-	-		-		(1,003	)
Stock dividend on class A preferred
shares issued May 24, 2005 issued
at market US$1.50 per share	7,506	11		-	-		-		-	-	-	-		(11	)	-
Class A preferred shares converted
to class B preferred shares	-	-		-	(2,000,000	)	(2,000	)	2,000,000	2,000	-	-		-		-
Stock dividend on class B preferred
shares issued May 24, 2005
issued at market US$1.50 per
share	200,000	300		-	-		-		-	-	-	-		(300	)	-
Private placement issued May 27,
2005 at US$1.00 per share	635,953	634		-	-		-		-	-	-	-		-		634
Carryforward	5,411,527	62,788		-	-		-		2,000,000	2,000	1,037	(1,253	)	(62,645	)	1,927

8

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

						Class A		Class B
	Common shares					preferred shares		preferred shares
				Share
				subscription							Cumulative				Shareholders’
	Number			receivable		Number		Number		Contributed	translation				equity
	of shares	Amount		(payable)		of shares	Amount	of shares	Amount	surplus	account		Deficit		(deficiency)
		$		$			$		$	$	$		$		$
Broughtforward	5,411,527	62,788		-		-	-	2,000,000	2,000	1,037	(1,253	)	(62,645	)	1,927
Shares issued on September 30,
2005 at market US$1.17 per
share	225,000	263		-		-	-	-	-	-	-		-		263
Share issued on October 17, 2005 at
market US$1.38 per share	25,000	34		-		-	-	-	-	-	-		-		34
Option exercised at US$1.00 per
share	105,000	105		-		-	-	-	-	-	-		-		105
Shares issued on November 30,
2005 at US$2.00 per share	222,825	446		-		-	-	-	-	-	-		-		446
Shares issued on November 30,
2005 at US$2.00 per share	75,000	150		-		-	-	-	-	-	-		-		150
Private placement issued December
28, 2005 at US$1.25 per share	800,000	1,000		-		-	-	-	-	35	-		-		1,035
Share issue cost – private placement
December 28, 2005	-	(30	)	-		-	-	-	-	-	-		-		(30	)
Share subscription receivable	-	-		(198	)	-	-	-	-	-	-		-		(198	)
Fair value of stock options issued	-	-		-		-	-	-	-	1,612	-		-		1,612
Fair value of warrants issued for
consulting services	-	-		-		-	-	-	-	1,904	-		-		1,904
Restructuring cost	-	-		-		-	-	-	-	221	-		-		221
Loss for the year	-	-		-		-	-	-	-	-	-		(6,069	)	(6,069	)
Exchange difference	-	-		-		-	-	-	-	-	324		-		324
Balance, December 31, 2005	6,864,352	64,756		(198	)	-	-	2,000,000	2,000	4,809	(929	)	(68,714	)	1,724
Share subscription received in															198
January, 2006	-	-		198		-	-	-	-	-	-		-
Shares issued for settlement of debt
on February 27, 2006 at US$2.00
per share	100,000	238		-		-	-	-	-	-	-		-		238
Option exercised at US$1.00 per
share	1,122,500	1,122		-		-	-	-	-	-	-		-		1,122
Shares issued for settlement of
services on March 1, 2006 at
CA$2.30 per share	28,260	58		-		-	-	-	-	-	-		-		58
Shares issued for settlement of debt
on March 28, 2006 at US$2.62 per
share	40,000	102		-		-	-	-	-	-	-		-		102
Shares issued for settlement of
services on March 31, 2006 at
US$2.39 per share	2,089	5		-		-	-	-	-	-	-		-		5
Carryforward	8,157,201	66,281		-		-	-	2,000,000	2,000	4,809	(929	)	(68,714	)	3,447

9

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

					Class A		Class B
	Common shares				preferred shares		preferred shares
				Share
				subscription						Cumulative				Shareholders’
	Number			receivable	Number		Number		Contributed	translation				equity
	of shares	Amount		(payable)	of shares	Amount	of shares	Amount	surplus	account		Deficit		(deficiency)
		$		$		$		$	$	$		$		$
Broughtforward	8,157,201	66,281		-	-	-	2,000,000	2,000	4,809	(929	)	(68,714	)	3,447
Shares issued for settlement of
services on March 31, 2006 at
US$2.30 per share	2,175	5		-	-	-	-	-	-	-		-		5
Shares issued for settlement of
services on April 12, 2006 at
US$2.56 per share	1,954	5		-	-	-	-	-	-	-		-		5
Shares issued for settlement of
services on April 12, 2006 at
US$2.56 per share	29,308	75		-	-	-	-	-	-	-		-		75
Shares issued for settlement of
services on April 17, 2006 at
US$2.45 per share	20,442	50		-	-	-	-	-	-	-		-		50
Shares issued for settlement of
services on April 19, 2006 at
US$2.35 per share	18,915	44		-	-	-	-	-	-	-		-		44
Shares issued for settlement of debt
on May 2, 2006 at US$2.62 per
share	88,885	233		-	-	-	-	-	-	-		-		233
Option exercised at US$1.00 per
share	45,000	45		-	-	-	-	-	-	-		-		45
Shares issued for settlement of
services on May 4, 2006 at
US$2.41 per share	8,300	20		-	-	-	-	-	-	-		-		20
Private placement issued May 10,
2006 at US$2.00 per share	1,032,500	2,065		-	-	-	-	-	-	-		-		2,065
Private placement issued May 12,
2006 at US$2.00 per share	275,000	550		-	-	-	-	-	-	-		-		550
Private placement issued May 15,
2006 at US$2.00 per share	5,000	10		-	-	-	-	-	-	-		-		10
Share issue cost – private placement
May 10, 2006 to May 15, 2006		(314	)	-	-	-	-	-	-	-		-		(314	)
Share issue cost – warrant private
placement May 10, 2006 to May 15,
2006	-	(186	)	-	-	-	-	-	186	-		-		-
Shares issued for settlement of
services on June 7, 2006 at
US$2.05 per share	19,630	40		-	-	-	-	-	-	-		-		40
Shares issued for settlement of
services on June 9, 2006 at
US$2.80 per share	4,075	11		-	-	-	-	-	-	-		-		11
Carryforward	9,708,385	68,934		-	-	-	2,000,000	2,000	4,995	(929	)	(68,714	)	6,286

10

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

					Class A		Class B
	Common shares				preferred shares		preferred shares
				Share
				subscription						Cumulative				Shareholders’
	Number			receivable	Number		Number		Contributed	translation				equity
	of shares	Amount		(payable)	of shares	Amount	of shares	Amount	surplus	account		Deficit		(deficiency)
		$		$		$		$	$	$		$		$
Broughtforward	9,708,385	68,934		-	-	-	2,000,000	2,000	4,995	(929	)	(68,714	)	6,286
Shares issued for settlement of
services on June 13, 2006 at
US$2.80 per share	10,715	30		-	-	-	-	-	-	-		-		30
Option exercised at US$1.19 per
share	16,106	19		-	-	-	-	-	-	-		-		19
Warrant exercised at US$1.25 per
share	30,000	37		-	-	-	-	-	-	-		-		37
Shares issued for services on July
25, 2006 at US$3.29 per share	9,312	31		-	-	-	-	-	-	-		-		31
Shares issued for settlement of
lawsuits on July 13, 2006 at
US$3.69 per share	24,314	89		-	-	-	-	-	-	-		-		89
Shares issued for settlement of
lawsuits on July 13, 2006 at
US$2.40 per share	600,000	1,440		-	-	-	-	-	-	-		-		1,440
Private placement issued on July 6,
2006 to July 13, 2006 at US$2.75
per share	1,205,000	3,314		-	-	-	-	-	-	-		-		3,314
Share issue cost – private placement
July 6, 2006 to July 13, 2006	-	(397	)	-	-	-	-	-	-	-		-		(397	)
Share issue cost – warrant private
placement July 6, 2006 to July 13,
2006	-	(162	)	-	-	-	-	-	162	-		-		-
Shares issued for services on July
10, 2006 at US$3.92 per share	4,197	16		-	-	-	-	-	-	-		-		16
Option exercised at US$2.00 per														150
share	75,000	150		-	-	-	-	-	-	-		-
Option exercised at US$1.00 per
share	30,000	30		-	-	-	-	-	-	-		-		30
Option exercised at US$1.19 per
share	16,102	19		-	-	-	-	-	-	-		-		19
Shares issued for services on August
16, 2006 at US$3.28 per share	4,121	13		-	-	-	-	-	-	-		-		13
Shares issued for services on August
1, 2006 at US$2.30 per share	140,000	322		-	-	-	-	-	-	-		-		322
Private placement completed August
31, 2006 at US$3.00 per share	333,334	1,000		-	-	-	-	-	-	-		-		1,000
Share issue cost – private placement
August 31, 2006	-	(120	)	-	-	-	-	-	-	-		-		(120	)
Share issue cost – private placement
August 31, 2006	-	(825	)	-	-	-	-	-	825	-		-		-
Carryforward	12,206,586	73,940		-	-	-	2,000,000	2,000	5,982	(929	)	(68,714	)	12,279

11

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

					Class A		Class B
	Common shares				preferred shares		preferred shares
				Share
				subscription									Cumulative				Shareholders’
	Number			receivable	Number		Number				Contributed		translation				equity
	of shares	Amount		(payable)	of shares	Amount	of shares		Amount		surplus		account		Deficit		(deficiency)
		$		$		$			$		$		$		$		$
Broughtforward	12,206,586	73,940		-	-	-	2,000,000		2,000		5,982		(929	)	(68,714	)	12,279
Share issued for settlement of
services on August 1, 2006 at
US$2.30 per share	4,395	14		-	-	-	-		-		-		-		-		14
Cash dividend on class B preferred
paid on October 10, 2006	-	-		-	-	-	-		-		-		-		(94	)	(94	)
Conversion of $150,000 preferred
shares to common shares on
November 21, 2006	615,000	150		-	-	-	(150,000	)	(150	)	-		-		-		-
Conversion of $250,000 preferred
shares to common shares on
November 29, 2006	1,025,000	250		-	-	-	(250,000	)	(250	)	-		-		-		-
Shares issued for settlement of
lawsuits on December 11, 2006 at
US$3.28 per share	13,477	44		-	-	-	-		-		-		-		-		44
Shares issued for services on
December 8, 2006 at US$2.38 per
share	4,235	10		-	-	-	-		-		-		-		-		10
Shares issued for services on
December 8, 2006 at US2.66 per
share	4,498	12		-	-	-	-		-		-		-		-		12
Shares issued for services on
December 8, 2006 at US$2.76 per
share	4,162	12		-	-	-	-		-		-		-		-		12
Option exercised at US$1.00 per
share	2,500	3		-	-	-	-		-		-		-		-		3
Paid-in capital – exercise of stock
options	-	1,304		-	-	-	-		-		(1,304	)	-		-		-
Fair value of stock options issued for
the 12 months ended December 31,
2006	-	-		-	-	-	-		-		3,310		-		-		3,310
Fair value of warrants issued for the
12 months ended December 31,
2006	-	-		-	-	-	-		-		302		-		-		302
Loss for the 12 months ended
December 31, 2006	-	-		-	-	-	-		-		-		-		(8,247	)	(8,247	)
Exchange difference	-	(9	)	-	-	-	-		-		-		(172	)	-		(181	)
Balance, December 31, 2006	13,879,853	75,730		-	-	-	1,600,000		1,600		8,290		(1,101	)	(77,055	)	7,464

12

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

				Class A		Class B
	Common shares			preferred shares		preferred shares
			Share
			subscription								Cumulative				Shareholders’
	Number		receivable	Number		Number				Contributed	translation				equity
	of shares	Amount	(payable)	of shares	Amount	of shares		Amount		surplus	account		Deficit		(deficiency)
		$	$		$			$		$	$		$		$
Broughtforward	13,879,853	75,730	-	-	-	1,600,000		1,600		8,290	(1,101	)	(77,055	)	7,464
Option exercised at US$2.00 per
share on January 11, 2007	36,000	72	-	-	-	-		-		-	-		-		72
Option exercised at US$2.10 per
share on January 23, 2007	10,000	21	-	-	-	-		-		-	-		-		21
Shares issued for services on Jan
22, 2007 at US2.38 per share	3,874	9	-	-	-	-		-		-	-		-		9
Conversion of $500,000 preferred
shares to common shares on
January 7, 2007	2,050,000	500	-	-	-	(500,000	)	(500	)	-	-		-		-
Conversion of $500,000 preferred
shares to common shares on
January 12, 2007	2,050,000	500	-	-	-	(500,000	)	(500	)	-	-		-		-
Warrant exercised at US$1.25 per
share on February 23, 2007	60,000	75
			-	-	-	-		-		-	-		-		75
Option exercised at US$2.00 per
share on February 25, 2007	37,500	75
			-	-	-	-		-		-	-		-		75
Shares issued for services on
February 25, 2007 at US2.91 per
share	4,074	12	-	-	-	-		-		-	-		-		12
Option exercised at US$2.00 per
share on March 2, 2007
	37,500	75	-	-	-	-		-		-	-		-		75
Private placement issued on March
14, 2007 to March 23, 2007 at
US$3.00 per share	833,000	2,499	-	-	-	-		-		-	-		-		2,499
Shares issued for services on May
8, 2007 at US2.83 per share
	8,444	26	-	-	-	-		-		-	-		-		26
Private placement issued on March
30, 2007 at US$3.00 per share
	333,333	1,000	-	-	-	-		-		-	-		-		1,000
Shares issued for services on April 3,
2007 at US2.83 per share
	9,078	26	-	-	-	-		-		-	-		-		26
Shares issued for services on May
8, 2007 at US2.83 per share
	3,662	10	-	-	-	-		-		-	-		-		10
Shares issued for services on May 8,
2007 at US2.70 per share
	9,465	26	-	-	-	-		-		-	-		-		26
Shares issued for services on May 8,
2007 at US3.00 per share
	1,705	5	-	-	-	-		-		-	-		-		5
Carryforward	19,367,488	80,661	-	-	-	600,000		600		8,290	(1,101	)	(77,055	)	11,395

13

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

				Class A		Class B
	Common shares			preferred shares		preferred shares
			Share
			subscription						Cumulative				Shareholders’
	Number		receivable	Number		Number		Contributed	translation				equity
	of shares	Amount	(payable)	of shares	Amount	of shares	Amount	surplus	account		Deficit		(deficiency)
		$	$		$		$	$	$		$		$
Broughtforward	19,367,488	80,661	-	-	-	600,00	600	8,290	(1,101	)	(77,055	)	11,395
Brokers warrant exercised at
US$2.25 per share on May 14,
2007	79,025	178	-		-	-	-	-	-		-		178
Restricted shares issued for
purchase of My Organic Baby at
$2.76 per share on May 25, 2007	200,000	553	-	-	-	-	-	-	-		-		553
Non Lock Up restricted shares
issued for purchase of My Organic
Baby at $2.48 per share on May 25,
2007	215,000	533	-	-	-	-	-	-	-		-		533
Option exercised at US$1.00 per
share on May 25, 2007	100,000	100	-	-	-	-	-	-	-		-		100
Option exercised at US$1.18 per
share on June 1, 2007	9,872	12	-	-	-	-	-	-	-		-		12
Option exercised at US$1.00 per
share on June 7, 2007	50,,000	50	-	-	-	-	-	-	-		-		50
Shares issued for services on June
7, 2007 at US2.64 per share	10,135	27	-	-	-	-	-	-	-		-		27
Option exercised at US$1.00 per
share on June 7, 2007	50,000	50	-	-	-	-	-	-	-		-		50
Finders fee issued – private
placement March 14 to 30, 2007 at
US$2.42 per share on June 7, 2007	90,000	218	-	-	-	-	-	-	-		-		218
Shares issued for consideration on
employment contract on June 8,
2007 at US2.48 per share	215,000	533	-	-	-	-		-	-		-		533
Option exercised at US$1.18 per
share on June18, 2007	7,922	9	-	-	-	-	-	-	-		-		9
Option exercised at US$1.00 per
share on June 20, 2007	10,,000	10	-	-	-	-	-	-	-		-		10
Option exercised at US$1.00 per
share on June 20, 2007	25,,000	50	-	-	-	-	-	-	-		-		50
Carryforward	20,429,442	82,984	-	-	-	600,000	600	8,290	(1,101	)	(77,055	)	13,718

14

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity, Continued

(Expressed in thousands of United States dollars, except where indicated)

As of June 30, 2007 and December 31, 2006, 2005

					Class A		Class B
	Common shares				preferred shares		preferred shares
				Share
				subscription							Cumulative				Shareholders’
	Number			receivable	Number		Number		Contributed		translation				equity
	of shares	Amount		(payable)	of shares	Amount	of shares	Amount	surplus		account		Deficit		(deficiency)
		$		$		$		$	$		$		$		$
Broughtforward	20,429,442	82,984		-	-	-	600,000	600	8,290		(1,101	)	(77,055	)	13,718
Option exercised at US$1.75 per
share on June 20, 2007	117,500	206		-	-	-	-	-	-		-		-		206
Option exercised at US$1.00 per
share on June 20, 2007	10,000	10		-	-	-	-	-	-		-		-		10
Cash dividend on class B preferred
paid on June 20, 2007	-	-		-	-	-	-	-	-		-		(61	)	(61	)
Option exercised at US$2.12 per
share on June 21, 2007	3,460	7		-	-	-	-	-	-		-		-		7
Share issue cost – private placement
March 14 to 30, 2007	-	(70	)	-	-	-	-	-	-		-		-		(70	)
Share issue cost - Finders fees–
private placement March 14 to 30,
2007	-	(218	)	-	-	-	-	-					-		(218	)
Paid-in capital – exercise of stock
options for the 6 months ended
June 30, 2007	-	1,020		-	-	-	-	-	(1,020	)	-		-		-
Fair value of stock options issued for
the 6 months ended June 30, 2007	-	-		-	-	-	-	-	2,235		-		-		2,235
Fair value of warrants issued for 6
months ended June 30, 2007	-	(1,651	)	-	-	-	-	-	1,651		-		-		-
Loss for the 6 months ended June
30, 2007	-	-		-	-	-	-	-	-		-		(4,960	)	(4,960	)
Exchange difference	-	(16	)	-	-	-	-	-	-		764		-		748
Balance, June 30, 2007	20,560,402	82,272		-	-	-	600,000	600	11,156		(337	)	(82,076	)	11,615

The accompanying Financial Statements for the six months ended June 30 2007 have not been reviewed or audited by the Company’s Auditor

15

CLEARLY CANADIAN BEVERAGE CORPORATION

Consolidated Statement of Cash Flows

(Unaudited)

(Expressed in thousands of United States dollars, except where indicated)

For the six months ended June 30, 2007 and 2006

	Unaudited				Unaudited
	For the 3 months ended				For the 6 months ended
	June 30		June 30		June 30		June 30
	2007		2006		2007		2006
	$		$		$		$
Cash flows from operating activities
Loss for the period	(2,746	)	(2,624	)	(4,960	)	(4,668	)
Items not involving cash (note 16(a))	1,098		1,881		2,512		2,736
Changes in non-cash working capital balances
related to operations (note 16(b))	(640	)	(571	)	(1,008	)	(17	)
	(2,288	)	(1,314	)	(3,456	)	(1,949	)
Cash flows from financing activities
Subscription payable (receivable)	-		825		-		825
Proceeds from issuance of capital stock and
warrants	1,612		2,348		4,429		3,724
Increase (decrease) in bank indebtedness	40		(221	)	66		(311	)
Dividend paid on class B preferred shares	(61	)	-		(61	)	-
Repayment of long-term debt	(14	)	-		(20	)	-
	1,577		2,952		4,414		4,238
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment	-		358		-		358
Proceeds from sale of long-term investment	-		-		-		230
Cash used in acquisition of DMR Food
Corporation	-				(342	)	-
Cash used in acquisition of My Organic Baby
Inc.	(348	)			(348	)
Purchase of property, plant and equipment	(27	)	(24	)	(27	)	(24	)
	(375	)	334		(717	)	564
Effect of exchange rates on cash and cash
equivalents	559		182		642		194
Increase (decrease) in cash and cash
equivalents	(527	)	2,154		883		3,047
Cash and cash equivalents - Beginning of
period	6,677		1,413		5,267		520
Cash and cash equivalents - End of period	6,150		3,567		6,150		3,567
Interest paid	7		48		13		149
Income taxes paid	-		-		-		36

Supplementary cash flow information (note 16(c))
See accompanying notes to consolidated financial statements.

The accompanying Financial Statements for the six months ended June 30, 2007 have not been reviewed or audited by the Company’s Auditor

8

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

1.	Nature of operations:
	The Company produces, distributes and markets beverage products, flavoured beverages, organic baby food and snack food products. The Company’s products are sold principally in the United States and Canada.
2.	Financial statement presentation
	These unaudited interim financial statements have been prepared in accordance with the accounting principles generally accepted in Canada for interim financial information and follow the same accounting policies and methods of their application as the Company’s most recent annual financial statements. These interim financial statements do not include all of the disclosure included in the annual financial statements, and accordingly, they should be read in conjunction with the annual financial statements for the year ended December 31, 2006. In the opinion of management, all adjustments considered necessary for fair presentation have been included in these financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.
	These interim financial statements have been prepared in accordance with accounting principles generally accepted in Canada. These principles differ in certain respects from those accounting principles and practices that the Company would have followed had its consolidated financial statements been prepared in accordance with accounting principles and practices generally accepted in the United States.
	The accompanying Financial Statements for the six months ended June 30, 2007 have not been reviewed or audited by the Company’s Auditors.
3.	Significant accounting policies:
	(a)	Going concern:
		The accompanying consolidated financial statements have been prepared using Canadian generally accepted accounting principles applicable to a going concern.
		While these accompanying financial statements have been prepared on the assumption that the Company is a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business, certain events and conditions cast substantial doubt on this assumption. The Company had a loss of $4,960,000 for the six months ended June 30, 2007. At June 30, 2007 it has working capital of $6,393,000. Operations for the six months ended June 30, 2007 have been funded primarily from cash reserves raised by the issuance of capital stock. Management is in the opinion that cash and cash equivalents of $6.1 million at June 30, 2007 will provide sufficient working capital to meet the Company’s cash requirements until Q1 of 2008.
		Management has continued to take steps to try to improve the Company’s financial results and cash flows. These steps include liquidation of non-core investments and pursuing equity financing to fund working capital requirements. The Company’s ability to continue operations is contingent on its ability to obtain financing. Management believes that it will be able to secure the necessary financing; however, there is no assurance that management will be successful in achieving these objectives

9

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

3. Significant accounting policies (continued):

	These financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.
(b)	Principles of accounting:
	These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP). These principles differ in certain respects from those accounting principles and practices that the Company would have followed had its consolidated financial statements been prepared in accordance with accounting principles generally accepted in the United States (US GAAP).
(c)	Basis of presentation:
	These consolidated financial statements include the accounts of Clearly Canadian Beverage Corporation and its wholly owned subsidiaries, Clearly Canadian Beverage (International) Corporation, CC Beverage (US) Corporation, Blue Mountain Springs Ltd., DMR Food Corporation (o/a Sweet Selections) effective February 7, 2007 and My Organic Baby Inc effective May 24, 2007.
	In view of the consolidated nature of these financial statements, the term “Company”, as used herein, is sometimes used to refer to all of the consolidated companies collectively and, where the context or specific transactions require, is sometimes used to refer to certain of the consolidated companies individually.
(d)	Foreign currency translation
	The Company uses the United States dollar as its reporting currency while the Company’s functional or “measurement” currency is the Canadian dollar. The assets and liabilities of the Canadian operations are translated into United States dollars at the rates of exchange at the balance sheet dates, and revenue and expenses are translated at the average rates of exchange for the periods of operation. Unrealized gains and losses arising on translation are recorded as a separate component of shareholders’ equity.
	Realized gains and losses on foreign currency transactions are included in the determination of loss for the period.
(e)	Revenue recognition:
	Revenue is recognized at the time that shipment of product to the customer is confirmed by the shipper, which is the point at which the customer takes ownership of the product, provided that collectibility is reasonably assured. Distributors are contractually obligated to the Company for complete payment of products sold to them regardless of their ability to sell to retailers. A provision for returns is recorded in the period management becomes aware that it is probable that the product may be returned. For bill and hold transactions, the Company recognizes revenue at the time production is complete and the sale is invoiced to the customer.

10

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

3. Significant accounting policies (continued):

	Royalty revenue is recognized as the Company is notified of the sale of the licensed product and when collectibility is reasonably assured.
	Funds received in advance of revenues being recognized are recorded as customer deposits.
	Effective January 1, 2006 the Company adopted EIC-156 of the Canadian Institute of Chartered Accountants concerning Accounting By A Vendor for Consideration Given to a Customer (Including a Reseller of the Vendors Products). All sales incentives to direct or indirect customers of the Company, including slotting fees, contractual marketing payments, coupons, rebates, free product and similar sales incentives are accounted for as a reduction of revenue when recognized by the Company in its Statement of Operations. Sales and selling expenses for all comparative periods presented have been reclassified to reflect such expenses in accordance with EIC-156.
(f)	Inventories:
	Inventories consist of raw materials and finished goods. Raw materials are valued at the lower of cost and market. Finished goods are valued at the lower of cost and net realizable value. Cost is determined on a first-in first-out basis.
(g)	Property, plant and equipment:
	Property, plant and equipment are recorded at cost less accumulated amortization. Amortization is provided on a straight-line basis over the following periods which represent estimated useful life:

Asset	Rate
Buildings	30 years
Equipment	4 – 15 years
Packaging equipment under capital
lease	Over the term of the lease
Vehicle	30% declining balance
Leasehold improvements	Term of the lease

(h)

Impairment of long-lived assets:

Long-lived assets, such as property, plant and equipment subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

11

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

3. Significant accounting policies (continued):

(i)	Goodwill
	Goodwill is the excess of the cost of an acquired business (DMR Food Corporation and My Organic Baby Inc.) over the net of the amount assigned to assets acquired less liabilities assumed. Goodwill is not subject to amortization. The carrying value is tested for impairment at least annually, and any excess over fair value will be charged to operation as impairment loss in the period.
(j)	Stock-based compensation plan:
	The Company has stock-compensation plans, which are described in note 15. The Company accounts for all stock-based payments granted to employees and non-employees on or after January 1, 2002, using the fair value based method as per CICA Handbook Section 3870, Stock-Based Compensation and Other Stock-Based Payments which requires entities to account for employee stock options using the fair value based method. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the award’s vesting period. Consideration paid by employees on the exercise of stock options is recorded as capital stock. Stock-based payments to non- employees are measured at the fair value of the consideration received and are recognized as the options are earned.
	Consideration paid for stock on exercise of stock options is credited to capital stock.
(k)	Cash and cash equivalents:
	Cash and cash equivalents consist of cash on hand and short-term investments with original maturities of 90 days or less at the time of purchase.
(l)	Use of estimates:
	The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant areas requiring the use of management estimates relate to the assessment of the fair market value of stock options and the carrying value of land and water sources. Actual results could differ materially from those estimates.
(m)	Financial instruments:
	(i)	Fair value of financial instruments:
		The fair value of cash and cash equivalents, accounts receivable, bank indebtedness, and accounts payable and accrued liabilities corresponds to their carrying value due to their short-term nature.
		The carrying value of long-term debt and capital lease obligation approximates their fair value based upon the discount rates applied.

12

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

3. Significant accounting policies (continued):

	(ii)	Concentration of credit risk:
		The Company grants credit to its customers in the normal course of business. Credit valuations are performed on a regular basis and the financial statements take into account an allowance for bad debts. At June 30, 2007, three customers represented 37% (June 30, 2006 – three customers represented 38.6%) of total accounts receivable.
	(iii)	Interest rate risk:
		The US short-term bank credit facility bears interest at US prime rate plus 4% and the CA$ short term bank credit facility bears interest at CA$ prime rate plus 1.25%.
		The Company does not use derivative instruments to manage its exposure to interest rate risk.
	(iv)	Foreign exchange rate risk:
		The majority of the Company’s revenues and selling costs, together with a material portion of its production costs are incurred in United States dollars. General and administration costs are incurred in Canadian dollars and the Company is therefore subject to risk due to fluctuations in exchange rates. The Company does not use derivative instruments to manage its exposure to foreign exchange rate risk.
(n)	Income taxes:
	Income taxes are calculated using the liability method of accounting. Temporary differences arising from the difference between tax basis of an asset or a liability and its carrying value on the balance sheet are used to calculate future income tax liabilities or assets. Future income tax liabilities or assets are calculated using income tax rates that are expected to apply to taxable income in the periods that the temporary differences are expected to reverse. A valuation allowance is recorded against any future tax asset if it is more likely than not the asset will not be realized.
(o)	Advertising and marketing costs:
	The Company expenses all advertising and marketing costs as incurred. For the six months ended June 30, 2007, the Company incurred marketing costs of $655,772 (2006 - $283,030). These costs are included in selling expenses.
(p)	Loss per share:
	Loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding. Diluted loss per share is computed using the treasury method by including other potential common stock from exercise of stock options and warrants in the weighted average number of common shares outstanding for a period, if dilutive. Diluted loss per share is the same as basic loss per share since the exercise of stock options and warrants would be anti-dilutive

13

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

3. Significant accounting policies (continued):

(q)	Other significant accounting policies:
	Effective January 1, 2007, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1530, Comprehensive Income; Section 3251, Equity; Section 3855, Financial Instruments – Recognition and Measurement; Section 3861 Financial Instruments – Disclosure and Presentation, and, Section 3865, Hedges, retroactively without restatement. These new Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide requirements for the recognition and measurement of financial instruments and on the use of hedge accounting. Section 1530 establishes standards for reporting and presenting comprehensive income, which is defined as the change in equity from transactions and other events from non owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with generally accepted accounting principles. Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated except to redefine amounts previously presented in shareholders’ equity as cumulative translation account to be accumulated other comprehensive loss. The adoption of these Handbook Sections had no impact on opening retained earnings.
	Under Section 3855, financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are measured in the balance sheet at fair value except for loans and receivables, held-to- maturity investments and other financial liabilities which are measured at amortized cost. Subsequent measurement and recognition of changes in fair value will depend on their initial classification, as follows: held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net income; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net income.
	Upon adoption of these new standards, the Company designated its cash, cash equivalents, and short-term investments as held-for-trading, which are measured at fair value. Accounts receivable and income taxes receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities are classified as other financial liabilities. The Company had neither available-for-sale, nor held-to-maturity instruments during the six months ended June 30, 2007. The Company has not designated any financial liabilities as held-for-trading.

14

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

4. Acquisitions :

On February 7, 2007, the Company completed the acquisition 100% of the shares of DMR Food Corporation operating under the name of Sweet Selection (“DMR”), a leading seller of organic and natural snack foods in Eastern Canada. The Company acquired the shares of DMR for an initial payment of CA$450,000 (US$380,000) in cash and warrants to purchase 3,000,000 of the Company’s common shares at a purchase price of US$4.00 per share within 3 years. If a gain of CA$2,550,000 is not realized by the holder from the sale of the warrant shares by February 7, 2008, the Company may be required to pay any shortfall up to a maximum of CA$ 2,550,000 (US$2,167,000). The amount of this corporate guarantee has been recorded as a current and long term liability, as applicable, by the Company. Should the Company ultimately not be required to pay any shortfall, the amount of recovery on the reduction of these liabilities will be recorded at that time. The debt is guaranteed by the Company, and discounted on the face value of the acquisition debt ($223,000) and will be accredited on a straight –line basis over 12 months from February 7, 2007. As of 6 months ended June 30, 2007 $90,000 was accredited. The results of operations of DMR Food Corporation have been consolidated from February 7, 2007 forward.

The following table summarizes the purchase consideration paid or payable and the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The allocation of the purchase price is preliminary and is subject to refinement. The Company may engage a third party for review of the value of goodwill acquired. The result of such review could materially alter the allocation of the purchase price of goodwill.

Purchase consideration
Cash Paid			$	381
Purchase price guarantee
Current portion	$	1,050
Long term portion		893		1,943
Business combination expenses				31
Allocation of purchase consideration				2,355
Assets	$
Cash		49
Accounts receivable		642
Inventory		378
Plant and equipment		284
Other current assets		33		1,386
Liabilties
Accounts payable		726
Bank Loan		169
Capital lease obligation		202		(1,097	)
Net identifiable assets				289
Excess of purchase consideration over net identifiable
assets-Goodwill				2,066
	$			2,355

15

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

4. Acquisitions (continued) :

On May 24 2007, the Company completed the acquisition 100% of the shares of My Organic Baby Inc. (“MOB”), a leading seller of organic baby food in Canada. The Company acquired the shares of MOB for an initial payment of CA$400,000 (US$369,000) in cash, 200,000 restricted common shares, 215,000 non lock up restricted common shares of the company, and warrants to purchase 3,750,000 of the Company’s common shares at a purchase price of US$4.00 per share within 3 years. If a gain of CA$600,000 is not realized from the sale of restricted shares within two year, the Company will pay any shortfall, and if CA$3,750,000 is not realized by the holder from the sale of the warrant shares by November 24, 2008, the Company may be required to pay any shortfall up to a maximum of CA$ 3,750,000 (US$3,459,000). The amount of this corporate guarantee has been recorded as a long term liability, as applicable, by the Company. Should the Company ultimately not be required to pay any shortfall, the amount of recovery on the reduction of these liabilities will be recorded at that time. The debt is guaranteed by the Company, and discounted on the face value of the acquisition debt ($357,000) and will be accredited on a straight –line basis over 12 months from May 24, 2007. As of 6 months ended June 30, 2007 $36,000 was accredited.

The results of operations of My Organic Baby Inc. have been consolidated from May 24, 2007 forward.

The following table summarizes the purchase consideration paid or payable and the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The allocation of the purchase price is preliminary and is subject to refinement. The Company may engage a third party for review of the value of goodwill acquired. The result of such review could materially alter the allocation of the purchase price of goodwill.

Purchase consideration
Cash Paid			$	369
Restricted shares – 200,000 common shares				553
Non lock up shares – 215,000 common shares				533
Purchase price guarantee
Current portion	$	-
Long term portion		3,102		3,102
Allocation of purchase consideration				4,557
Assets	$
Cash		21
Accounts receivable		445
Inventory		142
Plant and equipment		21
Other current assets		131		760
Liabilties
Accounts payable		686		(686	)
Net identifiable assets				74
Excess of purchase consideration over net identifiable
assets-Goodwill				4,483
			$	4,557

16

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended March 31, 2007

5.	Bank indebtedness:
	The Company’s subsidiary, CC Beverage (US) Corporation (“CC Beverage”), has an operating line of credit with an unspecified term available with a United States bank, which bears interest at US prime rate plus 4%. The borrowing facility is collateralized by a first lien on all accounts receivable and inventories of CC Beverage. CC Beverage can borrow up to the lesser of $1,000,000 and 80% of trade accounts receivable outstanding less than 60 days (as at June 30, 2007 - $387,700, June 30, 2006 - $385,000). The weighted average interest rate for the period ended June 30, 2007 was 12.25% (March 31, 2006 – 11.66%); As at June 30, 2007 nil (June 30, 2006 - $50,000) has been drawn on this line of credit. This operating line of credit is also secured by a corporate guarantee from the Company.
	The Company’s subsidiary, DMR Food Corporation (“o/a Sweet Selection”), has a demand operating loan facility of $250,000 CA$, bearing interest at Royal Bank of Canada prime lending rate plus 1.25% per annum. The facility is secured by a general security agreement covering all assets of Sweet Selection as well as guarantee and postponement of claims in the amount of $455,000 CA$ by Clearly Canadian Beverage Corp. The weighted average interest rate from February 7, 2007 to June 30, 2007 was 7.25%. As of June 30, 2007 $235,000 US$ has been drawn on this line of credit.
6.	Accounts receivable:

		June 30,		December 31
		2007		2006
Trade accounts receivable, net of allowance of $43,000	$	1,331	$	597
(2006 - $53,000)
Other receivables		213		37
	$	1,544	$	634

7. Inventories:

		June 30,		December 31
		2007		2006
Finished goods	$	1,358	$	280
Raw Materials		633		147
	$	1,991	$	427

17

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

8. Property, plant and equipment and assets:

				Accumulated				June 30,
								2007
		2007		amortization		Write-down		Net
Land and water sources	$	1,135	$	-	$	-	$	1,135
Buildings		1,147		1,091		-		56
Equipment		1,671		1,254		-		417
Leasehold improvements		79		79		-		-
Vehicle		23		17		-		6
		4,055		2,441		-		1,614

				Accumulated				December 31
								2006
		2006		amortization		Write-down		Net
Land and water sources	$	1,035	$	-	$	-	$	1,035
Buildings		1,047		996		51		-
Equipment		1,157		953		86		118
Leasehold improvements		67		67		-		-
		3,306		2,016		137		1,153

Included in the table above are changes arising from the fluctuation in the exchange rate between the Canadian and US dollar.
Included in equipment are assets under capital lease having a net book value of $225,800 at June 30, 2007

9. Accounts payable and accrued liabilities

		June 30,		December 31
		2007		2006
Trade accounts payable	$	2,209	$	1,062
Marketing fees		346		304
Other accrued liabilities		546		242
	$	3,101	$	1,608

18

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

10. Short-term debt:

		June 30,		December 31
		2007		2006
Advance payable to 1068199 Ontario Ltd., bearing
interest at 4.25% per annum and are repayable in
monthly blended payments of $2,341 CA$		21		-
Acquisition debt on the purchase of DMR Food
Corporation (Note 4)		1,050
Acquisition debt on the purchase of DMR Food
Corporation - interest accretion		90		-
	$	1,161	$	-

11. Capital lease obligation:

The Company has entered into lease arrangements to acquire computer equipment. The liability under the capital leases represents the minimum lease payments payable net of imputed interest at an average rate of 18% per annum and is secured by the computer equipment.

The Company’s subsidiary has entered into lease arrangements to acquire packaging equipment. The liability under the capital leases represent the minimum lease payments payable net of imputed interest at an average rate of 6.70% to 6.75% per annum and is secured by the packaging equipment.

The obligation’s under capital leases consists of:

		June 30,			December 31
		2007			2006
Minimum lease payments payable	$	258		$	26
Portion representing interest to be recorded over the
remaining term of the lease		(33	)		(5	)
		225			21
Current portion		(57	)		(8	)
	$	168		$	13

19

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

11. Capital lease obligation (continued):

Future minimum annual lease payments as at June 30, 2007 under the capital lease are as follows:

2007	$	33
2008		68
2009		56
2010		54
2011		47
	$	258

12. Long-term debt:

		June 30,	December 31
		2007	2006
Acquisition debt – DMR Food Corporation (note 4)		893
Acquistion debt – My Organic Baby Inc. (Note 4)		3,102
Acquisition debt – My Organic Baby Inc. - interest
accretion		36
	$	4,031	-

13. Capital stock:

Authorized:

Common shares-limited voting shares, unlimited number, without par value Preferred Shares:

(a)	2,000,000 class A Preferred Shares with special rights and restrictions:
	The class A Preferred Shares include the right to dividends in the amount of 10% per annum payable quarterly in advance (payable by the issuance of common shares of the Company calculated at a share price equal to the ten day average closing price of the Company’s common shares on the OTC Bulletin Board market preceding the date of issuance of such dividend shares), the right to one vote for each class A Preferred Share on any vote of the common shares of the Company, and the right of conversion into common shares of the Company at a conversion price equal to the ten day average trading price of the Company’s common shares on the OTC Bulletin Board market preceding the date of conversion.
(b)	2,000,000 Class B Preferred Shares with special rights and restrictions:

20

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

13. Capital stock (continued):

(b) (continued):

The Class B Preferred Shares include the right to dividends in the amount of 10% per annum payable, in the first year, in advance, by the issuance of common shares of the Company at a price of US$1.00 per share, and thereafter in advance in monthly cash installments. Each class B Preferred Share had the right to five votes on any vote of the common shareholders. The class B Preferred Shares were convertible, in whole but not in part, into such number of common shares of the Company as would equal 50% of the number of fully diluted common shares of the Company immediately prior to the conversion of the class B Preferred Shares.

With the agreement of the class B shareholder, BG Capital Group Ltd., and the approval of the shareholders on March 16, 2006, the conversion ratio was fixed at 4.1 common shares and 0.8 Variable Multiple Voting Shares for each one class B preferred shares.

Variable Multiple Voting Shares

On March 16, 2006, a special general meeting of shareholders was held, and the shareholders approved (a) the re-designation of the common shares as “Limited Voting Shares” and (b) the creation of a class of “Variable Multiple Voting Shares.” Holders of Variable Multiple Voting Shares are entitled to multiple votes at all meetings of common shareholders, and the number of votes attached to each Variable Multiple Voting Share is equal to the greater of (i) ten and (ii) ten times a fraction the numerator of which is the number of issued common shares and the denominator of which is the number of issued common shares on March 16, 2006. At March 31, 2007, the 1,120,000 issued and outstanding Variable Multiple Voting Shares entitles the holder to 20,614,980 votes of meeting of Shareholders.

On February 27, 2006, March 28, 2006 and May 2, 2006, Global (GMPC) Holdings Inc. converted $200,000 (CA$222,570), $80,000 (CA$89,250) and $177,770 (CA$188,000) of principal amount of loans into common shares at conversion prices ranging from US$2.00 to US$2.62 per share. The Company issued 100,000, 40,000 and 88,885 shares respectively.

On May 12, 2006, the Company entered into an agreement to surrender all of the Series A, B, C and D warrants issued in connection with the December 28, 2005 private placement agreement.

In consideration therefore certain of the investors were granted Series A warrants for the purchase of a total of 4,120,000 shares at a price of US$1.25, exercisable within two years following the effective date on which the warrants are registered pursuant to a registration statement filed with the US Securities and Exchange Commission.

21

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

13. Capital stock (continued):

In May 2006, the Company completed a brokered private placement of 1,312,500 common shares issued at US$2.00 per share raising a total of $2,625,000. The Company paid broker’s fees of $183,050 and granted broker warrants to purchase 91,525 common shares at US$2.25 per share, vesting upon issuance and expiring in May, 2007. The Company paid an additional finders fee of $130,750 to BG Capital, a controlling shareholder of the Company, BG Capital has the right until May 2007 to convert any or all of the finder’ fee into shares at a price of US$2.00 per share (maximum of 65,375 shares).

In July 2006, the Company completed a brokered private placement of 1,205,000 common shares issued at US$2.75 per share raising a total of $3,314,000. The Company paid broker’s fees of $259,462 and granted broker warrants to purchase 84,350 common shares at US$3.00 per share, vesting upon issuance and expiring in July, 2007. The Company paid an additional finders fee of $138,187 to BG Capital, a controlling shareholder of the Company, BG Capital has the right until July, 2007 to convert any or all of the finder’s fee into shares at a price of US$2.75 per share (maximum of 50,250 shares).

In August 2006, the Company settled litigation with respect to its Blue Mountain Springs subsidiary. The terms of the settlement included the issuance of 624,314 shares with a fair value of $1,529,000.

In August 2006, the Company issued 140,000 common shares at US$2.30 per share to BG Capital, a controlling shareholder of the Company, under the terms of a management services contract now expired.

In August 2006, the Company completed a brokered private placement of 333,334 common shares issued at $3.00 per share, together with a warrant to purchase 333,334 common shares at $3.25 per share, vesting upon issuance and expiring in September, 2008, raising a total of $1,000,000. The Company paid broker’s fees of $70,000 and granted broker warrants to purchase 23,333 common shares at US$3.25 per share, vesting upon issuance and expiring in August, 2007. The Company paid an additional finders fee of $50,000 to BG Capital, a controlling shareholder of the Company, BG Capital has the right until August, 2007 to convert any or all of the finder’s fee into shares at a price of US$3.00 per share (maximum of 16,666 shares).

In October 2006, the Company paid $94,246 to BG Capital in respect of dividends payable on class B Preferred Shares from May 12, 2006 to October 31, 2006.

In November 2006, BG Capital converted 400,000 Class B preferred shares for 1,640,000 common shares and 320,000 Multiple voting shares. In January, 2007, BG Capital converted 1,000,000 Class B preferred shares for 4,100,000 common shares and 800,000 multiple voting shares.

22

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

13. Capital stock (continued):

In March, 2007, the Company completed a brokered private placement of 1,166,333 common shares issued at $3.00 per share, together with a warrant to purchase 1,166,333 common shares at $3.25 per share, vesting on July, 2007 and expiring in March, 2009, raising a total of $3,499,000. The Company paid broker’s fees of $69,930 and granted broker warrants to purchase 23,333 common shares at US$3.25 per share, vesting on July, 2007 and expiring in March, 2009. The Company also paid a finders fees by issuing 90,000 common shares at $2.42 per share.

In May, 2007, the completed the acquisition 100% of the shares of My Organic Baby Inc., the Company issued 200,000 restricted common shares and 215,000 non lock up restricted common shares (see note 4), and the Company also issued 215,000 common shares as consideration of employment agreement with the former officers and shareholders of My Organic Baby Inc. (see note 15(a).

In June, 2007, the Company paid $61,150 to BG Capital in respect of dividends payable on class B Preferred Shares from November 1, 2006 to June 30, 2007.

14. Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares:

(a)	Stock options:
	Under the April 29, 2005 stock plan, the Company may grant options to purchase up to 1,750,000 common shares of the Company, and under the 2006 equity incentive plan, the Company may grant options to purchase up to 10,000,000 common shares of the Company. Options may be issued under the stock option plan as determined at the sole discretion of the Company’s board of directors. Options may be issued for a term of up to 10 years at an exercise price to be determined by the Company’s board of directors, provided that the exercise price is not less than the average closing price of the Company’s shares for the 10 trading days proceeding the date on which the options are granted. All options vest immediately on issuance, or at the discretion of the Board of Directors.
	A summary of stock options granted by the Company is as follows:

				Weighted
				average exercise
	Number of options			price
	(000’s)			US$
Options outstanding at December 31, 2005	1,617			1.77
Granted	2,216			1.79
Expired	(18	)		3.77
Exercised	(1,307	)		1.82
Surrendered	-			-
Options outstanding at December 31, 2006	2,508			1.96
Granted	956			2.30
Expired	-			-
Exercised	(505	)		1.48
Surrendered	(10	)		2.77
Options outstanding at June 30, 2007	2,949			2.18
Options exercisable at June 30, 2007	1,723		$	2.25

23

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

14. Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):

(a)	Stock options (continued):
	The number of options and their weighted average exercise price has been adjusted to reflect the ten for one consolidation of the common shares on May 2, 2005.
	For the 6 months ended June 30, 2007, the Company granted 955,658 options (June 30, 2006 – 2,122,000) under its stock option plans, of which options to acquire 609,166 shares (June 30, 2006 – 1,950,000) were granted to members of its Advisory Board, Directors and management. The fair value of the options granted for the 6 months ended June 30, 2007 is approximately $2.30 per share (June 30, 2006 $1.79). Stock based compensation expense of $1,221,000 has been recorded for the period (June 30, 2006 - $2,256,000). Stock based compensation of an additional $917,000. attributed to these grants has been allocated to services to be provided in the future. This amount will be recorded to contributed surplus and charged to operations over a one year period based on the estimated service life inherent in the grants.
	The Company has estimated the fair value of each option on the date of grant using the Black-Scholes Options Pricing model using the following assumptions:

		June 30, 2007		June 30, 2006
Risk-free interest rate		4.84% to 5.12%		4.38% to 4.82%
Expected life of options		1 to 5 years		1 to 5 years
Expected volatility in the market price of
the shares		91% to 205%		107% to 185%
Expected dividend yield		0.0%		0.0%
Weighted average grant date fair value	$	1.86	$	2.30

(b)	Warrants:
	The following table summarizes information about common share purchase warrants granted in equity financings and acquisitions to date which remain outstanding at June 30, 2007. Each warrant entitles the holder to purchase one common shares at the exercise price indicated.

Exercise	Balance,							Balance,
price	December 31,							June 30,	Expiry
per share	2006	Cancelled	Granted	Expired		Exercised		2007	date
US$2.25 (CA$2.39)	91,525	-	-	(12,500	)	(79,025	)	-	May 2007
US$3.00 (CA$3.19)	84,350	-	-	-		-		84,350	July 2007
US$3.25 (CA$3.45)	356,667	-	-	-		-		356,667	September 2008
US$1.25 (CA$1.32)	4,090,000	-	-	-		(60,000	)	4,030,000	December 2007
US$3.25 (CA$3.45)	-	-	856,333	-		-		856,333	July, 2009
US$3.25 (CA$3.45)	-	-	333,333	-		-		333,333	April, 2009
US$4.00 (CA$4.26)	-	-	3,000,000	-		-		3,000,000	February 2010
US$4.00 (CA$4.26)	-	-	3,750,000	-		-		3,750,000	May, 2010
US$2.00 (CA$2.13)	1,000,000	-	-	-		-		1,000,000	October 2010
US$2.00 (CA$2.13)	100,000	-	-	-		-		100,000	July 2011
	5,722,542	-	7,939,666	(12,500	)	(139,025	)	13,510,683

24

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

14. Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):

	In the six months ended June 30 2007, the Company granted warrants to acquire 1,189,666 shares in a private placement described in note 13. These warrants had a fair value of $1,651,000, which amount has been charged as a cost of the share capital raised. The Company also granted warrants to acquire 3,000,000 shares and 3,750,000 at a price of $4.00 per share, having a fair value of nil due to the Company guarantee of the acquisition price, in connection with its acquisitions of DMR Food Corporation and My Organic Baby Inc..
(c)	Shareholders’ rights plan:
	The Company has a Shareholders’ Rights Plan which is contained within a Rights Agreement dated October 1, 1990, and a Supermajority Amendment, which forms part of the Company’s articles. The Rights Plan expires on December 31, 2009.
	In general terms, the rights issuable under the Rights Plan permit shareholders to purchase the Company’s shares at 50% of the market price at the time of the occurrence of certain Triggering Events. Generally, a Triggering Event is where a party (Acquiring Person) endeavours to merge, amalgamate, acquire assets or acquire greater than 20% of the voting shares of the Company without the approval of the Company’s directors. An Acquiring Person who causes the Triggering Event to occur is specifically excluded from acquiring shares under the adjustment formula provided for in the Rights Agreement. The rights adjustment does not occur where an offer to acquire shares is determined to be a Qualified Offer. A Qualified Offer is an offer for all outstanding shares on terms determined by a majority of the Company’s directors as being in the best interest of the Company and its shareholders.

15. Commitments and contingencies:

(a)

Consulting contracts:

On November 1, 2005, the Company entered into a consulting agreement with a term of five years. The Company issued a warrant to purchase 1,000,000 common shares of the Company at $2.00 per share as consideration. The fair value of the warrant as determined using the Black-Scholes method was $1,904,000. The Company is recognizing the expense related to the agreement over the five year term of the agreement. During the 6 months ended June 30, 2007, the Company expensed $190,400 (June 30, 2006 - $190,400) with respect to this warrant. At June 30, 2007 it has recorded $380,400 as a current prepaid asset and $920,700 as a long-term prepaid asset with respect to this warrant.

25

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

15. Commitments and contingencies (continued):

	On June 5, 2006, the Company entered into marketing and consulting agreement with a term of three years. The Company issued options to purchase 1,075,000 common shares of the Company at $1.75 per share as consideration. The fair value of the option as determined using the Black-Scholes method was $2,999,000. The Company is recognizing the expense related to the agreement over the three year term of the agreement. During the 6 months ended June 30, 2007, the Company expensed $1,011,400 with respect to these options.
	On May 24, 2007, the Company entered into a employment agreements with former officers and shareholders of My Organic Baby Inc. for a term of three years. The Company issued 215,000 common shares at $2.48 per share as consideration. The Company is recognizing the expense related to the agreement over the three year term of the agreement. During the 6 months ended June 30, 2007, the Company expensed $18,500 (June 30, 2006 - $Nil). At June 30, 2007 it has recorded $177,700 as a current prepaid asset and $337,000 as a long- term prepaid asset.
(b)	Dispute with D. Bruce Horton and Continental Consulting Ltd.:
	In August 1999, a claim was filed against the Company in the Supreme Court of British Columbia by D. Bruce Horton and his company, Continental Consulting Ltd. (Continental). Mr. Horton is claiming compensation from the Company for allegedly constructively dismissing him as an officer of the Company. Continental is claiming compensation from the Company alleging that the Company terminated its management agreement without cause. Mr. Horton and Continental are claiming an aggregate of $2,060,000 (CA$2,400,000) plus interest and costs. The Company does not accept Mr. Horton’s and Continental’s allegations, and has filed statements of defence and has further filed counterclaims against Mr. Horton and Continental for monies owed and damages. The Company has recorded an accrual based on its expected costs.
(c)	Ordinary course business proceedings:
	The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. Management is of the opinion that such claims will not have a material adverse effect on the Company’s future operations or financial position.
(d)	With respect to the long-term indebtedness assumed by the purchaser of the private label co-pack bottling business during the year ended December 31, 2001, the Company’s subsidiary, CC Beverage, still remains as the primary borrower; however, the purchaser is under an obligation to obtain a release of such indebtedness. The purchaser holds a letter of credit with a United States bank to secure the long-term indebtedness. The Company has assessed its liability under this guarantee and determined the fair value to be nil.

26

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

		Unaudited				Unaudited
		For the 3 months ended				For the 6 months ended
		June 30,		June 30,		June 30,		June 30,
		2007		2006		2007		2006
		$		$		$		$
a)	Items not involving cash
	Amortization of property, plant and
	equipment	8		28		12		60
	Stock-based compensation	904		1,387		2,235		2,256
	Gain on sale of investment	-		-		-		(201	)
	Services paid in stock	94		343		140		343
	Loss on settlement of debt	-		93		-		158
	Interest accretion	92		30		125		120
		1,098		1,881		2,512		2,736
b)	Changes in non-cash working capital
	balances related to operations
	Accounts receivable	(379	)	(393	)	176		(647	)
	Inventories	(479	)	(206	)	(1,044	)	(88	)
	Prepaid expenses, deposits and other
	assets	(288	)	(84	)	(419	)	(54	)
	Prepaid contracts	114		77		209		190
	Accounts payable and accrued liabilities	392		35		70		582
		(640	)	(571	)	(1,008	)	(17	)
c)	Non-cash investing and financing
	activities
	Conversion of class B preferred shares to
	common shares	-		-		1,000		-
	Warrant granted in connection with private
	placement financing	1,358		-		1,651		-
	Liabilities recorded in connection with
	DMR Food Corporation acquisition	-				1,944		-
	Liabilities recorded in connection with My
	Organic Baby Inc acquisition	3,102				3,102		-
	Common shares issued for settlement of
	debt	-		233		573		573

27

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

17. Segmented information:

The presentation of the segmented information is based on the way that management organizes the business for making operating decisions and assessing performance. The Company operates solely as a beverage, snack food and organic baby food business , selling flavoured water, carbonated beverages, natural and organic snack foods and organic baby foods products. Management uses geographic areas to monitor the business. The “other” segment represents sales outside North America. Management evaluates the performance of each segment based on the earnings (loss) from operations before the write-down of property, plant and equipment.

The transactions between segments are measured at the exchange value, which is the amount of consideration established and agreed to by each segment.

	Unaudited				Unaudited
	For the 3 months ended				For the 6 months ended
	June 30, 2007		June 30, 2006		June 30, 2007		June 30, 2006
	$		$		$		$
Sales
Canada
Total sales	1,671		539		2,452		755
United States
Total sales	1,325		2,134		2,011		3,620
Less: Sales to other segments	(49	)	(37	)	(62	)	(83	)
Sales to external customers	1,276		2,097		1,949		3,537
Other
Sales to external customers	49		37		62		83
Total sales to external customers	2,996		2,673		4,463		4,375
Sales to external customers by product line
Beverage	1785		2673		2704		4,375
Snack Products	1,002				1,550		-
Organic baby product	209				209		-
	2,996		2,673		4,463		4,375
Interest expense on short-term and long-
term debt
Canada	6		37		10		128
United States	1		11		3		21
	7		48		13		149
Amortization
Canada	6		28		12		60
United States	-		-		-		-
	6		28		12		60

28

CLEARLY CANADIAN BEVERAGE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

(Tabular amounts expressed in thousands of United States dollars, except where indicated)

Six months ended June 30, 2007

	Unaudited				Unaudited
	For the 3 months ended				For the 6 months ended
Loss before income taxes, amortization of
intangible assets and write-down of	June 30, 2007		June 30, 2006		June 30, 2007		June 30, 2006
property, plant and equipment	$		$		$		$
Canada	(2,728	)	(2,385	)	(4,750	)	(4,202	)
United States	(18	)	(239	)	(210	)	(466	)
Other	-		-		-		-
	(2,746	)	(2,624	)	(4,960	)	(4,668	)
Loss for the period before income taxes	(2,746	)	(2,624	)	(4,960	)	(4,668	)

	June 30, 2007	June 30, 2006
	$	$
Assets
Canada	18,017	8,766
United States	2,323	666
Other	28	28
	20,368	9,460
Assets held for sale
Canada	-	-
United States	-	-
	-	-
Total assets	9,460	9,460
Property, plant and equipment additions
Canada	27	24
United States	-	-
	27	24

With respect to third parties, the Company has two customer (June 30, 2006 - two customers) that represent more than 10% of sales as noted below. Sales are on an unsecured open account basis under specific credit terms. The agreements allow the Company to make alternative distribution arrangements within the relevant territories under certain conditions, including a business failure of a distributor.

	June 30,	June 30, 2006
	2007
Customer A	14%	34%
Customer B	-	17%
Customer C	26%	-

29

EX-99.2

2nd quarter report for the 6 months

ended June 30, 2007

MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

(ALL FIGURES BELOW AND IN THE ATTACHED SCHEDULES ARE STATED IN U.S. DOLLARS, unless otherwise stated)

The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of the Company’s unaudited interim consolidated financial statements as at and for the six months ended June 30, 2007.

The following Management Discussion and Analysis dated August 13, 2007 should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2006 as well as the reference to forward-looking statements within this report. All results in this report are presented in US dollars, unless otherwise indicated.

All Basic and diluted earnings (loss) per share figures have been adjusted in the following financial results to reflect a 10:1 share consolidation which was completed May 5, 2005.

Overview

Based in Vancouver, B.C., Clearly Canadian Beverage Corporation markets premium alternative beverages, including Clearly Canadian® sparkling flavoured waters and Clearly Canadian dailyEnergy, dailyVitamin and dailyHydration Natural Enhanced Waters which are distributed primarily in the United States and Canada. Since its inception, the Clearly Canadian brand has sold over 2 billion bottles worldwide. Clearly Canadian’s recent acquisition of DMR Food Corporation and My Organic Baby Inc. marks the Company’s debut into organic and natural products and organic baby food, with a wide range of dried fruit and nut snacks offerings from SunRridge Farms, Naturalife, Sweet Selections, Simply by Nature, Glengrove Organics brands, and wide range of organic baby products for toddlers under the name My Organic Toddler and My Organic Baby. We believe that the health focussed nature of our beverage, baby products and snack product lines complement each other and will provide opportunities for synergy in marketing and distribution in the future.

Our beverage products are considered “alternative” beverages, a category which became identifiable in the mid-1980s. Alternative beverages are distinguishable from traditional soft drinks in that they generally contain natural ingredients, less sugar and calories, and less or no carbonation. Alternative beverages are traditionally seen as healthful, premium-priced and distinctively packaged.

We are focused on creating new alternative beverage brands, developing product extensions and reformulations for existing brands and strengthening the distribution network for our products. In so doing, we have attempted to expand the availability of our existing products and to diversify our alternative beverage product line offerings.

During the year ended December 31, 2006 we repackaged and reformulated our sparkling flavoured water product lines and developed and introduced a new line of non-carbonated, functional beverages under the name Clearly Canadian Natural Enhanced Waters. We continue to develop beverage product extensions in an attempt to reverse the decline in our beverage sales and market share. To improve brand awareness of our products we have also obtained the right to utilize the name and likeness of both Steve Nash, a two-time National Basketball Association MVP and Justin Morneau, a Major League Baseball MVP.

In addition to the rollout of our repackaged and reformulated sparkling, flavoured waters and our new Natural Enhanced Waters, we have, since the beginning of 2007, been transitioning our beverage distribution system from reliance on one large distribution network to a network consisting of a multitude of distributors who are independent of any major soft drink company. We are continuing to evaluate the potential to improve the exposure of our product at the retail level by investing in shelf placement fees with selected national retailers. While we believe all of these initiatives will result in renewed growth in our beverage business, it is still too early to make any trend assessment with respect to sales.

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Effective February 7, 2007, the Company acquired DMR Food Corporation, operating under the name Sweet Selection. DMR is a leading seller of organic and natural snack foods in Eastern Canada. The acquisition accelerates the Company’s efforts to further establish itself as a provider of healthy, good-for-you products. The Company paid CDN $450,000 and issued warrants to purchase 3,000,000 of the Company’s common shares at a price of $4.00 per share to the vendors of DMR. If the vendors do not realize a gain of CDN $2,550,000 from the exercise and sale of our common shares issuable under the warrants by February 7, 2008, they have the right to require the Company to pay any shortfall in cash. For its latest completed fiscal year ended September 30, 2006, DMR had sales of approximately CDN $3,828,000 and net income before tax of approximately CDN $251,000. Our consolidated financial statements for the second quarter include the results of operations of DMR beginning on February 7, 2007, the date of acquisition.

Effective May 24, 2007, the Company acquired all of the outstanding shares of My Organic Baby Inc., an Ontario corporation which markets Canada’s first full nation wide line of organic baby food. The purchase price paid or payable comprises CDN $400,000 and 215,000 common shares of Clearly Canadian on closing, and additional consideration comprising common shares having a market value of CDN $600,000, and warrants to acquire 3,750,000 common shares at a purchase price of $4.00 per share for a three year period. The company may be required to pay up to CDN $4,350,000 to the vendor for any shortfall realized by the vendor on the sale of the common shares issued as additional consideration and to the extent that the vendor has not realized a gain on the sale of shares acquired on exercise of the warrants. The amount of the guarantee would be a maximum of CDN $4,050,000 within 13 months, and a further CDN $300,000 within 25 months. In addition, the Company has entered into a 3 year agreement to retain the services of the founders of My Organic Baby, David Reingold and Orlee Muroff. Mr Reingold was also the majority owner of DMR Food Corporation prior to its acquisition by the Company in February, 2007.

My Organic Baby, Inc. completed its first fiscal year on January 31, 2007 and recorded sales of approximately CDN $1,300,000 and net income before tax of approximately CDN $30,000. Its total assets at January 31, 2007 were approximately CDN $250,000 and its liabilities were approximately CDN $200,000. Substantially all of the purchase consideration is to be allocated to goodwill. Our consolidated financial statements for the second quarter include the results of operations of My Organic Baby Inc. beginning on May 24, 2007, the date of acquisition.

With the completion of our private placements of equity stock in 2006 and 2007 to date and our acquisitions for the six months ended June 30, 2007, we have cash on hand of approximately $6,150,000 (compared to $3,567,000 at the end of Q2-2006). We anticipate that it is likely we will continue to have a negative cash flow on operations for the balance of 2007 on a consolidated basis. Any major marketing initiatives will increase our cash requirements. Accordingly, management may be required to seek additional financing from the sale of stock if our current marketing and distribution plans do not indicate an imminent self-sustaining level of operations.

Operating Results

Three months ended June 30, 2007 (“Q2-2007”) compared with three months ended June 30, 2006 (“Q2-2006”)

Sales were $2,996,000 for the three months ended June 30, 2007 compared with $2,673,000 for the three months ended June 30, 2006, an increase of 12.1% or $323,000. The overall increase in sales was a result of the addition of $1,002,000 in sales from our healthy snack division (acquired in February, 2007 through the purchase of DMR Food Corporation) and $209,000 in sales from our organic baby product division (acquired late May, 2007 through the purchase of My Organic Baby, Inc.). Sales from our beverage division were $1,785,000 in Q2-2007 compared with $2,673,000 in Q2-2006, a decrease of $888,000 which we attribute to the decline in sales of our 14 oz glass sparkling flavoured water due to the changeover of our distribution network in Q1-2007 from the Dr. Pepper/Seven-Up Bottling Group to our new network of strong independent distribution partners. However, included in our beverage sales numbers of $425,000 in sales from our new beverage products, including our 1 Litre sparkling flavoured water format and our new Natural Enhanced Waters, which we expect to continue to grow.

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Cost of sales expenses were $2,422,000 for Q2-2007 compared with $1,910,000 for Q2-2006, an increase of $512,000. The net of sales less cost of sales, being the gross profit margin percentage, decreased to 19.1% for Q2-2007 from 28.5% for Q2-2006, a decrease of 9.4% . This decrease is a result of the integration of our new healthy snack and organic baby product business units with our beverage units. The healthy snack unit has lower gross profit margin percentages than the other businesses, however, it also has lower selling and marketing expenses associated with its business. Due to this recent integration, the roll out of many new organic baby products in Q2-2007, and the seasonality of sales associated with the healthy snack business, we expect to be able to provide trend analysis of the Company’s gross profit margin as the Company moves forward.

Selling, general and administrative expenses were $2,656,000 for Q2-2007 compared with $3,172,000 for Q2-2006, a decrease of $516,000 (Note: certain stock-based compensation previously recorded as a separate line item is now being recorded, and compared to the previous year, as a remuneration and payroll expense). An analysis of the major components of these expenses is as follows:

	Three months ended June 30, 2007	Three months ended June 30, 2006	Increase (Decrease)
Remuneration and payroll cost	$1,659,456	$1,989,781	$ (330,325)
Marketing programs and retail support	351,700	521,389	(169,689)
Professional fees	80,817	132,579	(51,762)
Corporate development and financing	-	190,000	(190,000)
Investor relations and shareholder information	211,902	109,224	102,678
Insurance	51,414	24,160	27,254
Product Development	116,000	68,654	47,346
Other general and administrative	184,711	136,213	48,498
Total Selling, General & Administrative expenses	$2,656,000	$3,172,000	$ (516,000)
SG&A expenses excluding stock-based compensation	1,658,000	1,442,000	216,000
Portion of total stock-based           compensation paid in shares	94,000	343,000	(249,000)
Portion of total stock-based           compensation paid in options	904,000	1,387,000	(483,000)

Remuneration and payroll costs decreased in Q2-2007 compared to Q2-2006 by $330,325 as result of further restructuring of the Company management and administration roles. The decreases were off-set by an increase in management and administrative remuneration with the addition of the healthy snack and organic baby divisions, however, the Company, as part of this restructuring, has been able to achieve efficiencies in management and administrative roles for all three of its divisions.

Marketing programs and retail support expenses related to our beverage division decreased in Q2-2007 compared to Q2-2006 as a result of decreased beverage sales. Also, a significant portion of the Company’s beverage sales expenses in the United States have, for 2007, been transitioned to a variable expense model to assist the Company’s working capital requirements. As the Company completes the integration of the sales and marketing functions of our beverage, healthy snack and organic baby product business units, we will be able to provide a trend analysis of selling expenses for the Company.

The decrease in professional fees is due to higher legal fees in Q1-2006 relating to financings. Excluding extraordinary professional fees relating to financings or acquisitions, we expect our professional fees going forward to be approximately $40,000 per quarter.

The decrease in corporate development and financing expenses related to the inclusion in Q2-2006 of a one time corporate development expense in the amount of $190,000.

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The increase in investor relations costs relates to an increase in shareholder awareness initiatives which the Company did not have in Q1-2006.

The increase in insurance costs relates to the correction of certain insurance expenses which were recorded to other general and administrative expenses in Q1-2007 and the additions of DMR Food Corporation and My Organic Baby Inc. into consolidation for Q2-2007 and effective May 24, 2007 to June 30, 2007 respectively, adding approximately $7,000 in insurance expenses.

Other general and administrative expense increased approximately $72,000 due to the addition of DMR Food Corporation and My Organic Baby Inc. into consolidation for Q2-2007, however, this increase was offset, in comparison to Q2-2006, due to the allocation of insurance expenses in Q2-2006 to other general and administrative expenses.

The loss for the three months ended June 30, 2007 was $2,746,000 ($0.14 per share) compared with $2,624,000 for the three months ended June 30, 2006 ($0.27 per share). The increase in the loss for the comparative fiscal quarters of $122,000 is primarily due to the reasons set out in this discussion. An analysis of the loss taking into account additional items is as follows:

	Three months ended June 30, 2007	Three months ended June 30, 2006	Increase (Decrease)
Earnings (Loss)	($2,746,000)	($2,624,000)	($122,000)
Interest income	84,000	-	(84,000)
Earnings (Loss) excluding non-cash items	(1,007,000)	(864,000)	(143,000)
Stock-based compensation	998,000	1,730,000	(732,000)
Foreign exchange loss	649,000	-	649,000
Interest on acquisition debt	92,000	30	91,970

Interest income represents interest the Company earns on its surplus cash reserves invested in short term bank interest earning deposits.

Foreign exchange loss represents the realized exchange loss on cash from converting from Canadian dollar to US dollars.

Interest on acquisition debt represents the accretion on a straight line basis relating to the discount on face value of the short term acquisition liability from the Company’s acquisition of 100% of the shares of DMR Food Corporation and My Organic Baby Inc.

Six months ended June 30, 2007 (“YTD-2007”) compared with six months ended June 30, 2006 (“YTD-2006”)

Sales were $4,463,000 for the six months ended June 30, 2007 compared with $4,375,000 for the six months ended June 30, 2006, an increase of 2.0% or $88,000. The overall increase in sales was a result of the addition of $1,550,000 in sales from our healthy snack division (acquired in February, 2007 through the purchase of DMR Food Corporation) and $209,000 in sales from our organic baby product division (acquired late May, 2007 through the purchase of My Organic Baby, Inc.). Sales for the six months ended June 30, 2007 from our beverage division were $2,704,000 compared with $4,375,000 for the same period last year, a decrease of $1,671,000 which we attribute to the decline in sales of our 14 oz glass sparkling flavoured water due to the changeover of our distribution network in Q1-2007 from the Dr. Pepper/Seven-Up Bottling Group to our new network of strong independent distribution partners. However, included in our beverage sales numbers is $540,000 in sales from our new beverage products, including our 1 Litre sparkling flavoured water format and our new Natural Enhanced Waters, which we expect to continue to grow.

Cost of sales expenses were $3,533,000 for the six months ended June 30, 2007 compared with $3,252,000 for the same period last year, an increase of $281,000. The net of sales less cost of sales, being the gross profit margin percentage, decreased to 20.8% for the six months ended June 30, 2007 from 25.6% for the six months ended June

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30, 2006, a decrease of 4.8% . This decrease is a result of the integration of our new healthy snack and organic baby product business units with our beverage units. The healthy snack unit has lower gross profit margin percentages than the other businesses, however, it also has lower selling and marketing expenses associated with its business. Due to this recent integration, we expect to be able to provide trend analysis of the Company’s gross profit margin as the Company moves forward.

Selling, general and administrative expenses were $5,251,000 for the six months ended June 30, 2007 compared with $5,683,000 for the same period in 2006, a decrease of $432,000 (Note: certain stock-based compensation previously recorded as a separate line item is now being recorded, and compared to the previous year, as a remuneration and payroll expense). An analysis of the major components of these expenses is as follows:

	Six months ended June 30, 2007	Six months ended June 30, 2006	Increase (Decrease)
Remuneration and payroll cost	$3,650,300	$3,688,294	$ (37,944)
Marketing programs and retail support	655,700	794,389	(138,689)
Professional fees	146,800	275,475	(128,675)
Corporate development and financing	-	190,000	(190,000)
Management fees	-	276,000	(276,000)
Investor relations and shareholder information	322,800	122,300	200,500
Product development	116,000	68,654	47,346
Insurance	95,700	95,495	205
Other general and administrative	263,700	172,393	91,307
Total Selling, General & Administrative expenses	$5,251,000	$5,683,000	$ (432,000)
SG&A expenses excluding stock-based compensation	2,876,000	3,084,000	(208,000)
Portion of total stock-based           compensation paid in shares	140,000	343,000	(203,000)
Portion of total stock-based           compensation paid in options	2,235,000	2,256,000	(21,000)

Remuneration and payroll costs decreased in YTD-2007 compared to YTD-2006 by $37,944 as result of further restructuring of the Company management and administration roles. The decreases were off-set by an increase in management and administrative remuneration with the addition of the healthy snack and organic baby divisions, however, the Company, as part of this restructuring, has been able to achieve efficiencies in management and administrative roles for all three of its divisions.

Marketing programs and retail support expenses related to our beverage division decreased YTD-2007 compared to YTD-2006 as a result of decreased beverage sales. Also, a significant portion of the Company’s beverage sales expenses in the United States have, for 2007, been transitioned to a variable expense model to assist the Company’s working capital requirements. As the Company completes the integration of the sales and marketing functions of our beverage, healthy snack and organic baby product business units, we will be able to provide a trend analysis of selling expenses for the Company.

Professional fees decrease by $128,675 because in YTD-2006 the Company had to incur legal fees relating to equity financing and professional fees for a re-audit of the December 31, 2003 financial statements. This decrease was offset by the addition of the DMR Food Corporation and My Organic Baby Inc. into the consolidated expenses, adding approximately $21,950.

The decrease in corporate development and financing expenses related to the inclusion in Q2-2006 of a one time corporate development expense in the amount of $190,000.

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Management fees decreased by $276,000 because of the termination of the Company’s contract with BG Capital Management Corp. after the end of March 31, 2006.

The increase in investor relations costs relates to an increase in shareholder awareness initiatives which the Company did not have in YTD-2006.

The increase in insurance costs relates to the decrease of our Directors and Officers Liability insurance coverage offset by the addition of the addition of DMR Food Corporation and My Organic Baby Inc. into the consolidated expenses adding approximately $9,782.

Other general and administrative expense increased due to the addition of DMR Food Corporation and My Organic Baby Inc. into the consolidated expenses adding approximately $91.307.

The loss for the six months ended June 30, 2007 was $4,960,000 ($0.26 per share) compared with a loss of $4,668,000 for the six months ended June 30, 2006 ($0.58 per share). The increase in the loss for the comparative six months of $292,000 is primarily due to the reasons set out in this discussion. An analysis of the loss taking into account additional items is as follows:

	Six months ended June 30, 2007	Six months ended June 30, 2006	Increase (Decrease)
Earnings (Loss)	($4,960,000)	($4,668,000)	($292,000)
Interest income	147,000	-	147,000
Restructuring	-	125,000	(125,000)
Earnings (Loss) excluding non-cash items	(1,811,000)	(1,911,000)	100,000
Stock-based compensation	2,375,000	2,599,000	(224,000)
Foreign exchange loss	649,000	-	649,000
Interest on acquisition debt	125,000	158,000	(33,000)

Interest income represents interest the Company earns on its surplus cash reserves invested in short term bank interest earning deposits.

Foreign exchange loss represents the realized exchange loss on cash from converting from Canadian dollar to US dollars.

Interest on acquisition debt represents the accretion on a straight line basis relating to the discount on face value of the short term acquisition liability from the Company’s acquisition of 100% of the shares of DMR Food Corporation and My Organic Baby Inc.

Selected Annual Information
($ in thousands, except per share data)
		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,
		2006		2005		2004(Restated)
Total revenue	$	7,462	$	8,712	$	11,064
Net loss		8,247		6,069		5,531
Basic and diluted loss per share		0.82		1.06		7.14
Total assets		9,093		6,259		4,181
Long term debt		-		1,501		1,957
Cash dividends paid (Preferred Shares)		94		0		0

Total revenue has been reclassified in the above presentation for all comparative periods to give effect to the presentation adopted with EIC-156, whereby vendor and reseller sales incentives are deducted from gross sales.

The following is a summary of quarterly results of the Company for the eight most recently completed financial quarters ended June 30, 2007.

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Amounts in Accordance with Canadian	2007		2007		2006		2006		2006		2006		2005		2005
GAAP (unaudited)	31-Jun		31-Mar		30-Dec		30-Sep		30-Jun		31-Mar		31-Dec		30-Sep
($ in thousands, except per share data)
Sales	2,996		1,467		1,065		2,022		2,673		1,702		1,878		2,797
Cost of sales	2,422		1,111		1,023		1,402		1,910		1,342		1,373		2,008
Gross profit	574		356		42		620		763		360		505		789
Selling, general and administrative
expenses	2,149		1,881		1,727		1,597		1,785		1,642		1,379		1,341
Amortization of property, plant and
equipment	6		6		(62	)	18		28		32		32		30
Royalty	-		-		-		-		(66	)	(59	)	(46	)	-
Interest Income	(84	)	(63	)	4		1		68		101		58		42
Other, interest, gains, losses and
writedowns	1,249		746		(256	)	1,167		1,572		688		1,129		818
Net loss	(2,746	)	(2,214	)	(1,371	)	(2,208	)	(2,624	)	(2,044	)	(2,048	)	(1,462	)
Net loss per share	(0.14	)	(0.12	)	(0.11	)	(0.19	)	(0.27	)	(0.29	)	(0.39	)	(0.27	)
Weighted average shares outstanding	19,784,680		18,836,629		12,896,845		1,754,491		9,086,385		7,072,681		5,728,924		5,413,973

Total revenue has been reclassified in the above presentation for all comparative periods to give effect to the presentation adopted with EIC-156, whereby vendor and reseller sales incentives are deducted from gross sales.

Liquidity and Capital Resources

The Company improved its working capital position during the six months ended June 30, 2007 by issuing a total of 1,860,549 shares of common stock as follows:

i)	Three private placement equity sales totalling 1,166,333 shares were completed to raise $3,499,000,
ii)	$999,617 cash was raised on the issue of 643,779 shares on the exercise of stock options and warrants,
iii)	Services totalling $140,000 otherwise payable in cash were paid by the issuance of 50,437 shares.

An additional 4,100,000 common shares were issued on the conversion of 1,000,000 Class B preferred shares on January, 2007.

During the six month period ended June 30, 2007 the Company increased its cash position by $883,000 from $5,267,000 at December 31, 2006 to $6,150,000 at June 30, 2007.

Total cash raised by the issuance of shares in the six months ended June 30, 2007 totalled $4,429,000.

Operating losses, conversion to inventory and acquisition expenditures for the three months ended June 30, 2007 used cash of $3,456,000. We continue to operate at a loss and are currently utilizing approximately $325,000 of our cash reserves per month to sustain operations. We are continuing to evaluate various marketing initiatives and the potential of acquiring shelf space at national retailers. Should we decide to make investments of this nature we will be required to draw down our cash reserves accordingly unless additional equity can be raised. We have no significant other potential sources of financing such as term debt facilities available to us at this time.

The acquisition of DMR Food Corporation and My Organic Baby Inc. required a cash outlay of $342,000 and $348,000 respectively, being the difference between the initial cash payment and cash acquired with the businesses.

At June 30, 2007, our liabilities relating to operations consisted primarily of operating bank loan indebtedness of, $235,000, accounts payable to suppliers and service providers of $3,101,000, and capital lease obligations of $225,000.

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Effective February 7, 2007 the Company issued warrants to purchase 3,000,000 of the Company’s common shares at a price of US$4.00 per share to the vendors of DMR Food Corporation. If the vendors do not realize a gain of $2,550,000 CDN from the exercise and sale of our common shares issuable under the warrants by February 7, 2008, they have the right to require the Company to pay any shortfall in cash. The shortfall would be payable in defined payments on February 7, 2008 and February 7, 2009. The Company has recorded a provision for payment of $1,050,000 and $893,000 as a current liability and long term liability respectively under this arrangement. Should the Company ultimately not be required to satisfy all or any amount of shortfall, the amount of the gain on the reduction of these liabilities will be recorded at that time. The debt is guaranteed by the Company, and discounted on the face value of the acquisition debt ($223,000) and will be accredited on a straight line basis over 12 months from February 7, 2007. As of six months ended June 30, 2007, $90,000 was accredited.

Effective May 24, 2007 the Company issued warrants to purchase 3,750,000 of the Company’s common shares at a purchase price of US$4.00 per share to the vendors of My Organic Baby Inc. If the vendors do not realize a gain of CDN $3,750,000 from the exercise and sale of our common shares issuable under the warrants by November 24, 2008, the Company may be required to pay any shortfall up to a maximum of CA$ 3,750,000. The amount of this corporate guarantee has been recorded as a long term liability. Should the Company ultimately not be required to pay any shortfall, the amount of recovery on the reduction of these liabilities will be recorded at that time. The debt is guaranteed by the Company, and discounted on the face value of the acquisition debt ($357,000) and will be accredited on a straight line basis over 12 months from May 24, 2007. As of six months ended June 30, 2007, $36,000 was accredited.

The Company's total contractual obligations at June 30, 2007 were $4,943,000 and were comprised of various types of debt instruments, including consulting contracts, and operating leases.

	Payments Due by period (12 months ending) June 30
Contractual Obligations
($ in thousands, except per share	Total	2008	2009	2010	2011	2011	2012 and
data)							thereafter
Acquisition debt-DMR Food
Corporation	2,054	1,161	893
Acquisition debt-My Organic
Baby Inc.	3,138	-	3,138
Operating leases (office equipment
and premises)	236	67	62	33	74	-	-
Consulting contracts	2,353	1,133	682	381	159	-	-
Total Contractual obligations	7,781	2,360	4,774	413	233	-	-

We have no material interest bearing debt at June 30, 2007.

Total acquisition debt due has been increased to $5,192,000. The obligations are structured such that the holders may realize an equal or greater amount by exercising warrants to acquire our common shares at a price of $4.00 per share and then selling these shares on the market. To the extent the holders are able to do so at a profit, our liability will be reduced.

In the event that the Company is required to settle all of its acquisition debt in cash, it will not have the ability to do so without new financing. Our existing cash reserves are required to cover projected operating losses and marketing initiatives over the next 12 months.

At August 13, 2007, our issued share capital was comprised of the following:

• 20,661,218 common shares;
• 1,120,000 Variable Multiple Voting Shares.
• 600,000 Class B Preferred Shares., each one Class B share is convertible into 4.1 common shares and .80 Variable Multiple Voting Shares.

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In addition, at August 13, 2007, there are 2,914,974 common shares issuable upon exercise of outstanding stock options at exercise prices ranging from $1.00 to $12.69 and 13,510,683 common shares issuable upon exercise of outstanding share purchase warrants at exercise prices ranging from $1.25 to $4.00 per share.

The Variable Multiple Voting Shares rank equally with the common shares with respect to dividends and rights on liquidation. With regard to voting, each Variable Multiple Voting Share entitles the holder thereof to 10 votes for each share held or such greater number of votes for each Variable Multiple Voting Share as may be determined in accordance with the following formula:

V	=	LVS	x	10
		CS

Where:

V	=	the number of votes attaching to each issued Variable Multiple Voting Share
LVS	=	the number of issued common shares, redesignated as Limited Voting Shares, other than common shares issued form time to time on conversion of the Company’s Class B Preferred shares.
CS	=	the number of issued common shares as at March 16, 2006, which number shall be increased upon any subdivision and decreased upon any consolidation of the Limited Voting Shares after March 16, 2006 on the same basis as that subdivision or consolidation. The number of issued common shares at March 16, 2006 was 7,229,912

The total number of Variable Multiple Voting Shares issued is 1,120,000, and an additional 480,000 Variable Multiple Voting Shares are issuable on the conversion of the remaining Class B shares. The 1,120,000 Variable Multiple Voting Shares currently outstanding entitle BG Capital Group Ltd. to 23,114,755 votes at meetings of shareholders based on the above formula at May 15, 2007.

Critical Accounting Estimates

Going concern

The accompanying financial statements have been prepared using Canadian generally accepted accounting principles applicable to a going concern.

While these accompanying financial statements have been prepared on the assumption that the Company is a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business, certain events and conditions cast substantial doubt on this assumption We recorded a loss of $4,960,000 for the six months ended June 30, 2007. Operations have been funded primarily from the issuance of capital stock, and we will likely continue to draw down our cash reserves for the foreseeable future until a self-sustaining level of sales is attained.

Management has continued to take steps to try to improve the Company’s financial results and cash flows. These steps include the liquidation of non-core investments and pursuing equity financing to fund working capital requirements. The Company’s ability to continue operations is contingent on its ability to obtain financing. Management believes that it may be able to secure the necessary financing, however, there is no assurance that management will be successful in achieving this objective.

These financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.

Financial instruments

a) Fair value of financial instruments

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The fair value of cash and cash equivalents, accounts receivable, bank indebtedness, and accounts payable and accrued liabilities corresponds to their carrying value due to their short-term nature. The carrying value of long-term debt approximates its fair value based upon the discount rates applied.

b) Concentration of credit risk

The Company grants credit to its customers in the normal course of business. Credit evaluations are performed on a regular basis and the financial statements take into account an allowance for bad debts. At June 30, 2007, three customers represented 37% (June 30, 2006 - three customers represented 38.6%) of total accounts receivable.

c) Interest rate risk

The Company’s short term bank credit facilities bear interest at U.S. prime plus 4% and CDN prime plus 1.25% . The company has no long term interest bearing debt. The Company does not use derivative instruments to manage its exposure to interest rate risk.

d) Foreign exchange rate risk

The majority of the Company’s revenues and selling costs, together with a material portion of its production costs are incurred in the United States and payable in US dollars. General and administration costs, together with a material amount of production costs are incurred in Canada and the Company is therefore subject to risk due to fluctuations in exchange rates. The Company does not use derivative instruments to manage its exposure to foreign exchange rate risk.

Stock based compensation

The Company has stock-compensation plans, which are described in note 15 to the annual financial statements. The Company accounts for all stock-based payments granted to employees and non-employees on or after January 1, 2002, using the fair value based method as per CICA Handbook Section 3870, Stock-Based Compensation and Other Stock-Based Payments which requires entities to account for employee stock options using the fair value based method. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the award’s vesting period. Consideration paid by employees on the exercise of stock options is recorded as capital stock. Stock-based payments to non-employees are measured at the fair value of the consideration received and are recognized as the options are earned. Consideration paid for stock on exercise of stock options is credited to capital stock.

Use of estimates

The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant areas requiring the use of management estimates relate to the assessment of the fair market value of stock options and the carrying value of and land and water sources. Actual results could differ materially from those estimates.

Changes in Accounting Policies including Initial Adoption

Effective January 1, 2006 the Company adopted EIC-156 of the Canadian Institute of Chartered Accountants concerning Accounting by A Vendor for Consideration Given to a Customer (Including a Reseller of the Vendors Products). All sales incentives to direct or indirect customers of the Company, including slotting fees, contractual marketing payments, coupons, rebates, free product and similar sales incentives are accounted for as a reduction of revenue when recognized by the Company in its Statement of Operations. Sales and selling expenses for all comparative periods presented have been reclassified to reflect such expenses in accordance with EIC-156.

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Recent Canadian Accounting Developments

The CICA issued four new accounting standards: Handbook Section 1530, Comprehensive Income ("Section 1530"), Handbook Section 3855, Financial Instruments - Recognition and Measurement ("Section 3855"), Handbook Section 3865, Hedges ("Section 3865") and Handbook Section 3861, Financial Instruments - Disclosures which become effective for the Company for periods beginning on or after January 1, 2007.

Comprehensive income: Section 1530 introduces Comprehensive income which is comprised of Net income and Other comprehensive income and represents changes in Shareholders' equity during a period arising from transactions and other events with non-owner sources. Other Comprehensive Income ("OCI") includes unrealized gains and losses on financial assets classified as available-for-sale, unrealized foreign currency translation amounts, net of hedging, arising from self-sustaining foreign operations, and changes in the fair value of the effective portion of cash flow hedging instruments. Clearly Canadian’s Consolidated Financial Statements will include a Consolidated Statement of Comprehensive Income and the cumulative amount, Accumulated Other Comprehensive Income ("AOCI"), will be presented as a new category of Shareholders' equity in the Consolidated Balance Sheet.

Financial instruments - recognition and measurement: Section 3855 establishes standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. It requires that financial assets and financial liabilities including derivatives be recognized on the balance sheet when the Company becomes a party to the contractual provisions of the financial instrument or a non-financial derivative contract. All financial instruments should be measured at fair value on initial recognition except for certain related party transactions. Measurement in subsequent periods depends on whether the financial instrument has been classified as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or other liabilities.

Financial assets and financial liabilities held-for-trading will be measured at fair value with gains and losses recognized in Net income. Financial assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, will be measured at amortized cost using the effective interest method of amortization. Available-for-sale financial assets will be measured at fair value with unrealized gains and losses including changes in foreign exchange rates being recognized in OCI. Investments in equity instruments classified as available-for-sale that do not have a quoted market price in an active market will be measured at cost. Derivative instruments must be recorded on the balance sheet at fair value including those derivatives that are embedded in financial instruments or other contracts but are not closely related to the host financial instrument or contract, respectively.

Changes in the fair values of derivative instruments will be recognized in Net income, except for derivatives that are designated as a cash flow hedge, the fair value change for which will be recognized in OCI. Section 3855 permits an entity to designate any financial instrument as held-for-trading on initial recognition or adoption of the standard, even if that instrument would not otherwise satisfy the definition of held-for-trading set out in Section 3855. Other significant accounting implications arising on adoption of Section 3855 include the initial recognition of certain financial guarantees at fair value on the balance sheet and the use of the effective interest method of amortization for any transaction costs or fees, premiums or discounts earned or incurred for financial instruments measured at amortized cost.

Hedges: Section 3865 specifies the criteria under which hedge accounting can be applied and how hedge accounting should be executed for each of the permitted hedging strategies: fair value hedges, cash flow hedges and hedges of a foreign currency exposure of a net investment in a self-sustaining foreign operation. In a fair value hedging relationship, the carrying value of the hedged item will be adjusted by gains or losses attributable to the hedged risk and recognized in net income. The change in the fair value of the hedged item, to the extent that the hedging relationship is effective, will be offset by changes in the fair value of the hedging derivative. In a cash flow hedging relationship, the effective portion of the change in the fair value of the hedging derivative will be recognized in OCI. The ineffective portion will be recognized in net income. The amounts recognized in AOCI will be reclassified to net income in the periods in which net income is affected by the variability in the cash flows of the hedged item. In hedging a foreign currency exposure of a net investment in a self-sustaining foreign operation, the effective portion of foreign exchange gains and losses on the hedging instruments will be recognized in OCI and the ineffective portion is recognized in net income.

Impact of adopting sections 1530, 3855 and 3865

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The transition adjustment will be recognized in the opening balance of AOCI as at January 1, 2007, as a result of adjustments, if any, arising due to re-measuring financial assets classified as available-for-sale.

Impact of adopting sections 1530, 3855, 3861 and 3865

Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated except to redefine amounts previously presented in shareholders’ equity as cumulative translation account to be accumulated other comprehensive loss. The adoption of these Handbook Sections had no impact on opening retained earnings.

Upon adoption of these new standards, on January 1, 2007, the Company designated its cash, cash equivalents, and short-term investments as held-for-trading, which are measured at fair value. Accounts receivable and income taxes receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities are classified as other financial liabilities. The Company had neither available-for-sale, nor held-to-maturity instruments during the six months ended June 30, 2007. The Company has not designated any financial liabilities as held-for-trading.

Financial Instruments and Other Instruments

The Company’s use of financial instruments and other instruments is limited to highly liquid short term investments whose fair values approximate their carrying value, lease receivables resulting from the sale of certain systems using sales-type lease; and trade accounts receivable and payable.

Risks associated with financial instruments are minimal as they are fixed rate and short term.

Legal Proceedings

Dispute with D. Bruce Horton and Continental Consulting Ltd.

In August 1999, a claim was filed against the Company in the Supreme Court of British Columbia by D. Bruce Horton and his company, Continental Consulting Ltd. (Continental). Mr. Horton is claiming compensation from the Company for allegedly constructively dismissing him as an officer of the Company. Continental is claiming compensation from the Company alleging that the Company terminated its management agreement without cause. Mr. Horton and Continental are claiming an aggregate of CA$2.4 million plus interest and costs. The Company does not accept Mr. Horton’s and Continental’s allegations, and has filed statements of defence and has further filed counterclaims against Mr. Horton and Continental for monies owed and damages. The Company has made an accrual based on its expected costs.

Ordinary course business proceedings

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. Management is of the opinion that such claims are not likely to have a material adverse effect on the Company’s future operations or financial position.

Stock Exchange

The shares of the Company trade in the United States on the OTC Bulletin Board under the trading symbol “CCBEF”.

Corporate Governance

Clearly Canadian believes that quality corporate governance is essential to ensuring effective management of our Company. Clearly Canadian’s corporate governance policy is substantially aligned with the guidelines set out in the report of The Toronto Stock Exchange Committee on Corporate Governance in Canada.

Disclosure Controls and Procedures and Internal Controls

Disclosure Control Risks

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Disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure. The Company’s management has concluded, based on their evaluation of the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2007, that disclosure controls and procedures provide reasonable assurance that material information is made known to them by others within the Company subject to the reportable weakness identified below regarding segregation of duties. However, a control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Internal Control Risks

Management is responsible for certifying the design of the Company’s internal control over financial reporting (“ICFR”) as required by Multilateral Instrument 52-109 – “Certification of Disclosure in Issuers Annual and Interim Filings”. Our ICFR is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accepted accounting principals (GAAP). ICFR includes those policies and procedures that establish the following:

- maintenance of records in reasonable detail, that accurately and fairly reflect the transactions and dispositions of our assets;

- reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP;

- receipts and expenditures only being made in accordance with authorizations of management and the Board of Directors; and

- reasonable assurance regarding prevention or timely detection of unauthorized collection, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, ICFR may not prevent or detect misstatements. Also, the effectiveness of ICFR is subject to the risk that controls may become inadequate because of changes in condition, or that the degree of compliance with the policies or procedures may deteriorate. Management carried out the design of the Company’s internal controls over financial reporting and concluded, subject to the inherent limitations noted above, the Company has sufficient controls to meet the requirements as stated above and that one reportable weakness existed, at March 31, 2007, as detailed below.

Segregation of Duties

Segregation of duties is a basic, key internal control and one of the most difficult to achieve in a small company. It is used to ensure that errors or irregularities are prevented or detected on a timely basis by employees in the normal course of business. Due to limited resources, a complete segregation of duties within the Company’s operating and accounting groups can not be fully achieved. The result is that the Company is highly reliant on the qualifications, experience and integrity of its staff and on the performance of mitigating procedures during its financial close processes in order to ensure the financial statements are presented fairly in all material respects. Any changes in the current control process will be dependant upon the growth of the Company’s operations and the number of its staff to allow further segregation of duties. Management will continue to review existing mitigating controls and, if appropriate, implement changes to its internal control processes whereby more effective mitigating controls will be adopted.

Note Regarding Forward-Looking Statements

Statements herein that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as “expects”, “intends”, “may”, “could”, “should”, “anticipates”, “likely”, “believes” and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management, including, but not limited to, the Company’s ability to raise additional debt and/or equity financing to fund operations and working capital requirements, the Company’s analysis of its current and future sales and sales trends, its product distribution systems, and changes thereto, and the Company’s expectations regarding the effects of its restructuring efforts, and its production distribution, promotional and marketing activities and the potential benefits of such changes, efforts and activities on its results of operations in future periods. Actual results may differ materially from those currently anticipated due to a number of factors including,

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but not limited to, general economic conditions, changing beverage consumption trends of consumers, the Company’s ability to generate sufficient cash flows to support general operating activities and capital expansion plans, competition, pricing and availability of raw materials, the Company’s ability to maintain the current and future retail listings for its beverage products and to maintain favourable supply, production and distribution arrangements, laws and regulations and changes thereto that may affect the way the Company’s products are manufactured, distributed and sold and other factors beyond the reasonable control of the Company. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission and with the British Columbia and Ontario Securities Commissions.

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EX-99.3

Form 52-109F2 Certification of Interim Filings

I, Brent Lokash, President of Clearly Canadian Beverage Corporation certify that:

1.	I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52- 109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Clearly Canadian Beverage Corporation (the issuer) for the interim period ending June 30, 2007;
2.	Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3.	Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;
4.	The issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:

(a)	designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared;
(b)	designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and

5. I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.

August 30, 2007

“Brent Lokash”

Brent Lokash

Director & CEO

EX-99.4

Form 52-109F2 Certification of Interim Filings

I, Edwin Fok, CFO of Clearly Canadian Beverage Corporation certify that:

1.	I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52- 109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Clearly Canadian Beverage Corporation (the issuer) for the interim period ending June 30, 2007;
2.	Based on my knowledge, the Interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3.	Based on my knowledge, the Interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;
4.	The issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:

(a)	designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared;
(b)	designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and

5. I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.

August 30, 2007

“Edwin Fok”

Edwin Fok

CFO