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, 2008

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	Interim Financial Statements for the Period Ended June 30, 2008
99.2	Management Discussion and Analysis for the Period Ended June 30, 2008
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 27, 2008	By:	/s/ David Reingold
		David Reingold
	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, 2008

CLEARLY CANADIAN BEVERAGE CORPORATION
Consolidated Balance Sheets
(Expressed in thousands of United States dollars, except for share and per share amounts)

		June 30, 2008			December 31, 2007
		(Unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	2,664		$	8,786
Accounts receivable (note 4)		2,188			1,038
Inventories (note 5)		1,723			1,436
Prepaid expenses and other current assets		372			723
		6,947			11,983
Property, plant and equipment (note 6)		1,594			1,640
Derivative (note 10)		1,436			1,436
Intangible assets (note 7)		4,791			5,426
Goodwill (note 7)		1,682			1,693
	$	16,450		$	22,178
Liabilities and Shareholders’ Equity
Current liabilities:
Bank indebtedness (note 3)	$	74		$	49
Accounts payable and accrued liabilities (note 8)		2,919			4,273
Capital lease obligation, current portion (note 9)		35			36
		3,028			4,358
Convertible note payable (note 10)		5,996			5,442
Capital lease obligation, net of current portion (note 9)		123			155
		9,147			9,955
Shareholders’ equity:
Capital stock (notes 11 and 12):
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
Issued – 23,716,877 (2007 – 20,597,702) common shares without par
value		-			-
Outstanding – 23,697,577 (2007 – 20,560,402) common shares without par
value		84,196			84,047
Variable multiple voting shares – NIL (2007 – 600,000)
Contributed surplus		19,453			18,033
Accumulated other comprehensive income (loss)		22			56
Deficit		(96,368	)		(89,913	)
		7,303			12,223
	$	16,450		$	22,178
Going concern (note 2(a))
Commitments and contingencies (note 13)
Subsequent events (note 16)

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

GEORGE REZNIK	Director
BOBBY GENOVESE	Director

1

CLEARLY CANADIAN BEVERAGE CORPORATION
Consolidated Statement of Operation and Comprehensive loss
(Unaudited)
(Expressed in thousands of United States dollars, except for share and per share amounts)

	Unaudited				Unaudited
	For the 3 months ended				For the 6 months ended
	June 30		June 30		June 30		June 30
	2008		2007		2008		2007
	$		$		$		$
Sales	2,534		2,996		4,941		4,463
Cost of sales	2,242		2,422		4,382		3,533
Cost of Product Recall	323		-		234		-
Gross profit	(31	)	574		325		930
Expenses
Selling, general and administration expenses	1,105		5,590		4,721		8,185
Amortization of Capital and Intangible Assets	351		6		647		12
Interest income	(43	)	(84	)	(132	)	(147	)
Other (income) expense	-		(6	)	-		(13	)
Interest on short-term debt	6		6		10		10
Interest on long-term debt	-		1		-		3
Interest on acquisition debt			92		-		125
Foreign exchange loss	114		649		114		649
Interest on Convertible Debt	513		-		1,420		-
	2,046		6,254		6,780		8,824
Loss for Period	(2,077	)	(5,680	)	(6,455	)	(7,894	)
Cumulative Translation Adjustment	357		764		(34	)	659
Comprehensive Loss for the period	(1,720	)	(4,916	)	(6,489	)	(7,235	)
Loss per share, basic and diluted	(0.07	)	(0.25	)	(0.27	)	(0.38	)
Weighted average number of shares outstanding	23,693,955		19,784,680		23,640,578		18,811,963

See accompanying notes to consolidated financial statement

2

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, 2008 and December 31, 2007, 2006

					Class A		Class B
	Common shares				preferred shares		preferred shares			Accumulated
			Share							other
			Subscription							comprehensive				Shareholders’
	Number		Receivable		Number		Number		Contributed	income				equity
	of shares	Amount	(payable)		of shares	Amount	of shares	Amount	surplus	(loss)		Deficit		(deficiency)
		$	$			$		$	$	$		$		$
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

3

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, 2008 and December 31, 2007, 2006

					Class A		Class B
	Common shares				preferred shares		preferred shares			Accumulated
				Share						other
				Subscription						comprehensive				Shareholders’
	Number			Receivable	Number		Number		Contributed	income				equity
	of shares	Amount		(payable)	of shares	Amount	of shares	Amount	surplus	(loss)		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

4

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, 2008 and December 31, 2007, 2006

					Class A		Class B
	Common shares				preferred shares		preferred shares			Accumulated
				Share						other
				Subscription						comprehensive				Shareholders’
	Number			Receivable	Number		Number		Contributed	income				equity
	of shares	Amount		(payable)	of shares	Amount	of shares	Amount	surplus	(loss)		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

5

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, 2008 and December 31, 2007, 2006

					Class A		Class B
	Common shares				preferred shares		preferred shares						Accumulated
				Share									other
				Subscription									comprehensive				Shareholders’
	Number			Receivable	Number		Number				Contributed		income				equity
	of shares	Amount		(payable)	of shares	Amount	of shares		Amount		surplus		(loss)		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,
Carryforward	13,879,853	75,730		-	-	-	1,600,000		1,600		8,290		(1,101	)	(77,055	)	7,464

6

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, 2008 and December 31, 2007, 2006

				Class A		Class B
	Common shares			preferred shares		preferred shares					Accumulated
			Share								other
			Subscription								comprehensive				Shareholders’
	Number		Receivable	Number		Number				Contributed	income				equity
	of shares	Amount	(payable)	of shares	Amount	of shares		Amount		surplus	(loss)		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

7

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, 2008 and December 31, 2007, 2006

				Class A		Class B
	Common shares			preferred shares		preferred shares			Accumulated
			Share						other
			Subscription						comprehensive				Shareholders’
	Number		Receivable	Number		Number		Contributed	income				equity
	of shares	Amount	(payable)	of shares	Amount	of shares	Amount	surplus	(loss)		Deficit		(deficiency)
		$	$		$		$	$	$$				$
Broughtforward	19,367,488	80,661	-	-	-	600,000	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
Option exercised at US$1.75 per
share on June 20, 2007	117,500	206	-	-	-	-	-	-	-		-		206
Carryforward	20,546,942	83,190	-	-	-	600,000	600	8,290	(1,101	)	(77,055	)	13,924

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, 2008 and December 31, 2007, 2006

						Class A		Class B
	Common shares					preferred shares		preferred shares				Accumulated
					Share							other
					Subscription							comprehensive				Shareholders’
	Number				Receivable	Number		Number		Contributed		income				equity
	of shares		Amount		(payable)	of shares	Amount	of shares	Amount	surplus		(loss)		Deficit		(deficiency)
			$		$		$		$	$		$		$		$
Broughtforward	20,546,942		83,190		-	-	-	600,000	600	8,290		(1,101	)	(77,055	)	13,924
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	-		-		-	-	-	-	-	-		-		(62	)	(62	)
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	)
Shares issued for services on July 4
and 5, 2007 at US2.85 per share	21,113		61		-	-	-	-	-	-		-		-		61
Option exercised at US$1.75 per
share on July 16, 2007	32,768		58		-	-	-	-	-	-		-		-		58
Shares issued for services on August
1, 2007 at US2.78 per share	9,635		28		-	-	-	-	-	-		-		-		28
Option exercised at US$1.75 per
share on August 16, 2007	116,399		204		-	-	-	-	-	-		-		-		204
Shares issued for settlement of
acquisition liability – DMR Food
Corporation at US$2.90 on August
13, 2007	155,279		428		-	-	-	-	-	-		-		-		428
Restricted shares cancelled for
purchase of My Organic Baby at
$2.76 per share on September,
2007	(200,000	)	(553	)	-	-	-	-	-	-		-		-		(553	)
Paid-in capital – exercise of stock
options for the 12 months ended
September 30, 2007	-		1,449		-	-	-	-	-	(1,449	)	-		-		-
Fair value of stock options issued for
the 12 months ended December
31, 2007	-		-		-	-	-	-	-	1,991		-		-		1,991
Fair value of warrants issued for 12
months ended December 31, 2007	-		(1,651	)	-	-	-	-	-	1,651		-		-		-
Fair value of warrant for consulting
agreement cancelled except for the
warrant	-		-		-	-	-	-	-	1,449		-		-		1,449
Fair value of warrant for convertible
note payable	-		-		-	-	-	-	-	2,576		-		-		2,574
Fair value of conversion option in
convertible note payable	-		-		-	-	-	-	-	2,419		-		-		2,419
Fair value of subordinated
convertible note payable	-		-		-	-	-	-	-	1,346		-		-		1,346
Carryforward	20,695,596		82,943		-	-	-	600,000	600	18,033		(1,101	)	(77,117	)	23,358

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, 2008 and December 31, 2007, 2006

						Class A		Class B
	Common shares					preferred shares		preferred shares					Accumulated
					Share								other
					Subscription								comprehensive				Shareholders’
	Number				Receivable	Number		Number				Contributed	income				equity
	of shares		Amount		(payable)	of shares	Amount	of shares		Amount		surplus	(loss)		Deficit		(deficiency)
			$		$		$			$		$	$		$		$
Broughtforward	20,695,596		82,943		-	-	-	600,000		600		18,033	(1,101	)	(77,117	)	23,358
Shares issued for services on
September 10, 2007 at US$2.47
per share	10,862		27		-	-	-	-		-		-	-		-		27
Shares issued for consulting services
on September 27, 2007 at US$2.11
per share	228,310		482		-	-	-	-		-		-	-		-		482
Shares issued for consulting services
on October 31, 2007 at $2.11 per
share	8,657		18		-	-	-	-		-		-	-		-		18
Conversion of $600,000 preferred
shares to common shares on
October 15, 2007	2.460,000		600		-	-	-	(600,000	)	(600	)	-	-		-		-
Shares cancelled for consulting
services on November 15, 2007 at
USD$2.99 per share	(17,250	)	(52	)	-	-	-	-		-		-	-		-		(52	)
Shares issued for consulting services
on November 15, 2007 at $1.64 per
share	14,612		24		-	-	-	-		-		-	-		-		24
Shares issued for consulting services
on December 6, 2007 at $0.83 per
share	30,000		25		-		-	-		-		-	-		-		25
Loss for the 12 months ended
December 31, 2007	-		-		-	-	-	-		-		-	-		(12,796	)	(12,796	)
Cumulative translation adjustment	-		(20	)	-	-	-	-		-		-	1,157		-		1,137
Balance, December 31, 2007	23,430,787		84,047		-	-	-	-		-		18,033	56		(89,913	)	12,223
Shares issued for convertible
subordinated note payable interest
payment on January 28, 2008 at
$0.46 per share	156,124		73		-	-	-	-		-		-	-		-		73
Shares issued for convertible
subordinated note payable interest
payment on March 10, 2008 at
$0.47 per share	10,435		4		-	-	-	-		-		-	-		-		4
Shares issued for convertible
subordinated note payable interest
payment on March 10, 2008 at
$0.73 per share	24,768		18		-	-	-	-		-		-	-		-		18
Shares issued for convertible
subordinated note payable interest
payment on March 31, 2008 at
$0.97 per share	18,885		18		-	-	-	-		-		-	-		-		18
Loss for the 3 months ended March
31, 2008	-		-		-	-	-	-		-		-	-		(4,378	)	(4,378	)
Fair value of stock options issued for
the 3 months ended March 31,
2008	-		-		-	-	-	-		-		1,527	-		-		1,527

10

Cumulative translation adjustment	-		-	-	-	-	-	-		(391	)	-		(391	)
Shares issued for convertible
subordinated note payable interest
payment on May 13,2008 at
$0.94 per share	19,178	18												18
Shares issued for convertible
subordinated note payable interest
payment on June 6,2008 at
$0.95 per share	19,400	18												18
Loss for the 3 months ended
June 30,2008												(2,077	)	(2,077	)
Fair value of stock options issued for
the 3 months ended June 30,2008								(107	)					(107	)
Cumulative Translation adjustment										357				357
Balance, June 30,2008	23,679,577	84,196	-	-	-	-	-	19,453		22		(96,368	)	7,303

See accompanying notes to consolidated financial statements.

11

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, 2008 and 2007

	Unaudited				Unaudited
	For the 3 months ended				For the 6 months ended
	June 30		June 30		June 30		June 30
	2008		2007		2008		2007
	$		$		$		$
Cash flows from operating activities
Loss for the period	(2,077	)	(5,680	)	(6,455	)	(7,894	)
Items not involving cash (note 14(a))	593		2,229		2,793		3,643
Changes in non-cash working capital balances
related to operations (note 14(b))	(1,351	)	1,163		(2,439	)	795
	(2,835	)	(2,288	)	(6,101	)	(3,456	)
Cash flows from financing activities
Proceeds from issuance of capital stock and
warrants	-		1,612		-		4,429
Increase (decrease) in bank indebtedness	(125	)	40		25		66
Dividend paid on class B preferred shares	-		(61	)	-		(61	)
Repayment of long-term debt	(15	)	(14	)	(30	)	(20	)
	(140	)	1,577		(5	)	4,414
Cash flows from investing activities
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	)	-		(27	)
	-		(375	)	-		(717	)
Effect of exchange rates on cash and cash
equivalents	193		559		(16	)	642
Increase (decrease) in cash and cash
equivalents	(2,782	)	(527	)	(6,122	)	883
Cash and cash equivalents - Beginning of
period	5,446		6,677		8,786		5,267
Cash and cash equivalents - End of period	2,664		6,150		2,664		6,150
Interest paid	249		7		891		13
Income taxes paid			-				-

Supplementary cash flow information (note 14(c))
See accompanying notes to consolidated financial statements.

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, 2008

1.	Nature of operations:
	The Company produces, distributes and markets alternative beverage products, healthy snack food products and organic baby food products. The Company’s products are sold principally in the United States and Canada.
2.	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 $6,455,000 for the six months ended June 30, 2008 (June 30, 2007 - $7,894,000). At June 30, 2008 it has working capital of $2,664,000 (June 30, 2007 - $6,150,000). Operations for the six months ended June 30, 2008 have been funded primarily from cash reserves raised by the issuance of capital stock and convertible notes. Management is of the opinion that its cash and cash equivalents of $2.664 million at June 30, 2008 will provide sufficient working capital to meet the Company’s cash requirements until the fourth quarter of 2008.
		Management has continued to take steps to try to improve the Company’s financial results and cash flow which includes 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.
		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).

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, 2008

2.	Significant accounting policies (continued):
	(c)	Basis of presentation:
		These consolidated financial statements include the accounts of Clearly Canadian Beverage Corporation (o/a Clearly Canadian Brands) 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) and My Organic Baby Inc.
		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. Bill and hold revenue recognized must also meet the following criteria:

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, 2008

2. Significant accounting policies (continued):

(e) Revenue recognition (continued):

(1)	The risk of ownership has passed to the customer
(2)	The customer has made a fixed commitment to purchase the goods in writing
(3)	The customer requests that the transaction be on a bill and hold basis
(4)	The customer has a fixed schedule for the delivery of product
(5)	The customer has retained specific performance obligations
(6)	The products have been segregated from the Company’s inventory and are not subject to being used to fill other orders
(7)	The products have been completed and ready for shipment
(8)	The company expects the customer to pay under its normal billing and credit terms
(9)	The Company does not expect risk of loss due to a decline in the market value of goods
(10)	The customer’s custodial risk is insurable and insured
(11)	There are no exceptions to the customer’s commitment to accept and pay for the products sold

	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.
	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.
(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.

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, 2008

2.	Significant accounting policies (continued):
	(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.
(i)	Goodwill:
	Goodwill is the excess of the cost of an acquired business over the net of the amounts 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 operations as impairment loss in the period.
(j)	Intangible assets:
	Intangible assets acquired are initially recognized and measured at cost. Intangible assets with finite useful lives are amortized over their estimated useful lives. The amortization methods and estimated useful lives of intangible assets are reviewed annually. Intangible Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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 June 30, 2008

2.	Significant accounting policies (continued):
	(k)	Stock-based compensation plan:
		The Company has stock-compensation plans, which are described in note 12. 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.
	(l)	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.
	(m)	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 warrants, the allocation of proceeds to components of convertible debentures, valuation of derivatives and impairment testing of goodwill and intangible assets. Actual results could differ materially from those estimates.
	(n)	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.

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, 2008

2.	Significant accounting policies (continued):
	(n)	Financial instruments (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, 2008, two customers represented 49% (June 30, 2007 – three customers represented 37%) of total accounts receivable.
		(iii)	Interest rate risk:
			The Canadian dollar short term bank credit facility bears interest at Canadian 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:
			A significant amount of the Company’s 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.
	(o)	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 that the asset will not be realized.
	(p)	Advertising and marketing costs:
		The Company expenses all advertising and marketing costs as incurred. For the six months ended June 30, 2008, the Company incurred marketing costs of $577,000 (June 30, 2007 - $656,000). These costs are included in selling expenses.

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, 2008

2.	Significant accounting policies (continued):
	(q)	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
	(r)	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.

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, 2008

2.	Significant accounting policies (continued):
	(r)	Other significant accounting policies (continued):
		Under Section 3855, financial instruments must be classified into one of 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 does not have either available-for-sale, or held-to-maturity instruments during the six months ended June 30, 2008. The Company has not designated any financial liabilities as held-for-trading.

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, 2008

3.	Bank indebtedness:
	The Company’s subsidiary, DMR, has a demand operating loan facility of CA$250,000, 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 DMR as well as guarantee and postponement of claims in the amount of CA$455,000 by the Company. The average interest rate from January 1, 2008 to June 30, 2008 was 6.42%. As of June 30, 2008 $75,000 (June 30, 2007 – $235,000) had been drawn on this line of credit.
4.	Accounts receivable:

		June 30,		December 31,
		2008		2007
Trade accounts receivable, net of allowance of $221,000
(2007 - $210,000)	$	2,079	$	863
Other receivables		109		175
	$	2,188	$	1,038

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, 2008

5. Inventories:

		June 30,		December 31,
		2008		2007
Finished goods	$	1,014	$	1,226
Raw materials		709		210
	$	1,723	$	1,436

6. Property, plant and equipment and assets:

				Accumulated				June 30, 2008
		2008		amortization		Write-down		Net
Land and water sources	$	1,184	$	-	$	-	$	1,184
Buildings		1,198		1,139		-		59
Equipment		1,726		1,380		-		346
Leasehold improvements		79		79		-		-
Vehicle		5		-		-		5
	$	4,192	$	2,598	$	-	$	1,594

								December 31,
				Accumulated				2007
		2007		amortization		Write-down		Net
Land and water sources	$	1,192	$	-	$	-	$	1,192
Buildings		1,206		1,147		-		59
Equipment		1,632		1,250		-		382
Leasehold improvements		79		77		-		2
Vehicles		5						5
	$	4,114	$	2,474	$	-	$	1,640

Included in equipment are assets under capital lease having a value of $221,200 and accumulated amortization of $56,295 with a net book value of $164,905 at June 30, 2008 (2007 - $208,000).

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, 2008

7. Goodwill and other intangible assets:

(a) Intangible assets as at June 30, 2008 are as follows:

		DMR Food		My Organic
		Corp.		Baby Inc.		Accumulated		June 30, 2008
		June 30, 2008		June 30, 2008		amortization		Net
Distributor relationships	$	485	$	645	$	112	$	1,018
Trademarks, copyright
and brands		425		751		115		1,061
Other intangible assets		1,072		2,048		408		2,712
	$	1,982	$	3,444	$	635	$	4791

		DMR Food		My Organic
		Corp.		Baby Inc.		Accumulated		December 31,
								2007
		December 31,		December 31,		Amortization		Net
		2007		2007
Distributor relationships	$	559	$	715	$	144	$	1,130
Trademarks, copyright		489		834		147		1,176
and brands
Other intangible assets		1,291		2,341		512		3,120
	$	2,339	$	3,890	$	803	$	5,426

	Propriety trade secrets, distribution relationship, supplier agreements, trademarks, copyright and brands are amortized over a period of 6 years based on third party valuation. The amortization expense for the period ended June 30, 2008 was $635,000 (June 30, 2007 – nil).
(b)	Goodwill as at June 30, 2008 is as follows:

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, 2008

		DMR Food		My Organic
		Corp.		Baby Inc.
		June 30, 2008		June 30, 2008		Total
Goodwill	$	362	$	1,320	$	1,682

		DMR Food		My Organic
		Corp.		Baby Inc.
		December 31,		December 31,		Total
		2007		2007
Goodwill	$	364	$	1,329	$	1,693

The company performs annual impairment test for goodwill. As of June 30, 2008, the company did not complete its impairment tests.

8. Accounts payable and accrued liabilities:

		June 30,		December 31,
		2008		2007
Trade accounts payable	$	2,060	$	2,896
Marketing fees		89		350
Other accrued liabilities		770		1,027
	$	2,919	$	4,273

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, 2008

9.	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 represents 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 Company’s obligations under the capital leases consist of:

		June 30,			December 31,
		2008			2007
Minimum lease payments payable	$	194		$	228
Portion representing interest to be recorded over the
remaining term of the lease		(36	)		(37	)
		158			191
Current portion		(35	)		(36	)
	$	123		$	155

Future minimum annual lease payments as at June 30, 2008 under the capital lease are as follows:

2008	$	30
2009		57
2010		57
2011		50
	$	194

10. Convertible note payable:

		June 30,			December 31,
		2008			2007
Senior convertible notes payable	$	9,360		$	9,360
Subordinated convertible note payable		2,405			2,421
Discount on senior and subordinated convertible note		(5,769	)		(6,339	)
payable
	$	5,996		$	5,442

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, 2008

10.	Convertible note payable (continued):
	On September 26, 2007, the Company entered into a securities purchase agreement with institutional investors to sell senior convertible notes (the “Senior Convertible Notes”) for $9.36 million maturing on September 26, 2027 and to issue five year share purchase warrants to purchase 4,017,162 common shares of the Company (The “Series E Warrants” and the “Series F Warrants”). The 2,008,581 Series E Warrants are exercisable at an initial exercise price of $2.33 per shares (subject to future adjustment) and the 2,008,581 Series F Warrants are exercisable at an initial exercise price of $2.56 per share (subject to future adjustment). The Company paid an approximate 4% financing fee to the placement agent in the financing. The company received net proceeds from the financing of approximately $9 million after the payment of the financing fee. The Company also issued to the placement agent 500,000 share purchase warrants exercisable at an initial price of $2.33 per share on the same terms as the Series E Warrants.
	The primary features of the Senior Convertible Notes are: (i) interest at 9% per annum for year 1 to 3 and at 18% per annum for year 4 to maturity, payable monthly in cash, or, subject to volume and ownership limitations and in the Company’s discretion, common shares based on a 10% discount to the then market price, (ii) convertible at any time by the holders at the conversion price (initially $2.33 per share, subject to future adjustment), (iii) during year 1 to 2, provided the market price of the company’s common share is double the conversion price, the Company can, subject to volume and ownership limitations, call the Senior Convertible Notes, (iv) in year 3 and beyond, the Company can, subject to volume and ownership limitation, force conversion of the Senior Convertible Note at the lower of the initial conversion price or at a 15% discount of the then market price and so long as the Company is converting the Senior Convertible Notes, the interest rate remains at 9%; and (v) in year 4 and to maturity the Senior Convertible Notes can be called by the note holders.
	The Company used the relative fair value approach to value the Senior Convertible Notes based on their value (i) without the conversion feature (ii) with the conversion option and (iii) with the warrants. Based on this volatility assumption (52%) and credit spread assumption (12%), the Company calculated the fair value of the convertible notes, the straight note value, conversion option value and call option value.
	The fair value of the Senior Convertible Notes based on the above approach was $4,365,000 ($9,360,000 less discount on Senior Convertible Notes of $4,995,000). The fair value of the call option (embedded derivative) was $2,000 and $1,436,000 at September 26 and December 31, 2007, respectively. The company amortized the discount over 3 year, and as of December 31, 2007 the company accreted $214,000.

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, 2008

10.	Convertible note payable (continued):
	The Company is required to pay liquidated damages in cash to the Senior Convertible Note holders if (i) a registration statement registering the common shares underlying the Senior Convertible Notes is not declared effective by the Securities and Exchange Commission on or before January 23, 2008 (an “Effectiveness Failure”) or (ii) after a registration statement has been declared effective by the Securities and Exchange Commission, sales of “registrable securities” cannot be made by a note holder (a “Maintenance Failure”).
	The amount of liquidated damages is calculated as follows: (A) 2% of the aggregate purchase price paid for the Senior Convertible Notes, the Series E Warrants and the Series F Warrants on each of the following dates: (i) the day of an Effectiveness Failure; (ii) the initial day of a Maintenance Failure; (iii) on the 30th day after the day of an Effectiveness Failure (pro rated for periods totaling less than 30 days); and (vi) on the 30th day after the initial day of a Maintenance Failure (pro rated for periods totaling less than 30 days) and (B) 1% of the aggregate purchase price paid for the Senior Convertible Notes, the Series E Warrants and the Series F Warrants on each of the following dates: (i) on every 30th day following the 31st first day following such Effectiveness Failure (pro rated for periods totaling less than 30 days) until such Effectiveness Failure is cured; and (ii) on every 30th day following the 31st day following such Maintenance Failure (pro rated for periods totaling less than 30 days) until such Maintenance Failure is cured. In the event we fail to timely make these liquidated damages payments, these amounts will bear interest at the rate of 1.0% per month (prorated for partial months) until paid in full.
	Up to February 1, 2008, the Company had paid the holders of the Senior Convertible Notes $187,200 on account of these penalties.  As of June 30, 2008, the registration statement relating to the Senior Convertible Notes was still not declared effective by the Securities and Exchange Commission and the Company is required to pay liquidated damages.  The actual amount of liquidated damages payments will depend on the actual effective date of the registration statement and may be more or less than our estimated amount.
	On September 26, 2007, Company also completed a CDN $2,450,000 vendor take back debt financing from the vendors of DMR Food Corporation and My Organic Baby, Inc. through the sale of subordinated convertible notes (the “Vendor Notes”). The primary features of the Vendor Notes are the same as the Senior Convertible Notes with the exception that the interest is at 9% from year 1 to maturity, there are no restrictions on the Company’s ability to pay, with respect to interest or conversation or call of the Vendor Notes, in common shares and there are no provisions for liquidated damages in the event the shares issuable under the Vendor Notes are not registered.
	The Company valued the Vendor Notes based on using the Black-Scholes method, volatility assumption of 52%, and credit spread of 12% over 20 years. Based on these factors the fair value is $1,077,000 ($2,421,000 less discount on the Vendor Notes of $1,344,000)..

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, 2008

11.	Capital stock:
	Authorized:
	Common Shares – unlimited number authorized, 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:
		The Class B Preferred Shares includes 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 has the right to five votes on any vote of the common shareholders. The Class B Preferred Shares are 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 Share.

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 June 30, 2008, the 1,600,000 issued and outstanding Variable Multiple Voting Shares entitles the holder to 39,783,340 votes at a meeting of shareholders.

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, 2008

11.	Capital stock (continued):
	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 thereof, 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. In September 2007, the expiration date of the Series A warrants was extended to December 2010.
	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.
	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.
	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.

29

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, 2008

11.	Capital stock (continued):
	In October 2006, the Company paid $94,246 to BG Capital in respect of dividends payable on the 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 Variable 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 Variable Multiple Voting Shares.
	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 Company completed the acquisition of 100% of the shares of My Organic Baby Inc. and in connection therewith, the Company issued 415,000 common shares of which 200,000 were surrendered when the Company entered into a securities purchase agreement with the former shareholders of My Organic Baby Inc. The Company also issued 215,000 common shares in connection with employment agreements with the former officers and shareholders of My Organic Baby Inc.
	In June, 2007, the Company paid $61,150 to BG Capital in respect of dividends payable on the Class B Preferred Shares from November 1, 2006 to June 30, 2007.
12.	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 Company’s board of directors.

30

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, 2008

12.	Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):
	(a)	Stock options (continued):
		A summary of stock options granted by the Company is as follows:

				Weighted
	Number of			average
	options			exercise 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
Options outstanding at December 31, 2006	2,508			1.96
Granted	1,869			2.51
Expired	(10	)		2.35
Exercised	(653	)		1.54
Surrendered	(10	)		2.75
Options outstanding at December 31, 2007	3,704		$	2.34
Expired	(7	)		6.42
Options Outstanding at March 31,2008	3,697		$	2.33
Expired	(3	)		6.50
Options Outstanding at June 30,2008	3,694			2.28
Options exercisable at June 30,2008	2,475		$	2.20

31

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, 2008

12.	Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):
	(a)	Stock options (continued):
		For the period ended June 30, 2008, the Company granted nil options (June 30, 2007 – 955,658) under its stock option plans, of which options to acquire nil shares (June 30, 2007 – 609,166) were granted to members of its Advisory Board, board of directors and management. Stock based compensation expense of $1,368,000 has been recorded for the period ended June 30, 2008. (June 30, 2007 – 1,897,000).
		The Company has estimated the fair value of each option on the date of grant using the Black- Scholes Options Pricing model and based on the following assumptions:

	June 30,2008		June 30,2007
Risk-free interest rate	-		4.84% to 5.12%
Expected life of options	-		1 to 5 years
Expected volatility in the market
price of the shares	-		91% to 205%
Expected dividend yield	-		0.0%
Weighted average grant date fair
value	-	$	1.86

(b) Stock based compensation:

		June 30,		June 30,
		2008		2007
Stock based compensation
(note 12 (a))	$	1,368	$	1,897
Stock based compensation – option
(note 13 (a))		52		2,035
	$	1,420	$	3,932

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, 2008

12.	Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):
	(c)	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, 2008. Each warrant entitles the holder to purchase one common share at the exercise price indicated.

Exercise	Balance,					Balance,
Price	December 31,					Mach 31,	Expiry
per share	2007	Granted	Cancelled	Expired	Exercised	2008	Date
US$3.25 (CA$3.26)	356,667	-	-	-	-	356,667	September 2008
US$3.25 (CA$3.26)	856,333	-	-	-	-	856,333	July, 2009
US$3.25 (CA$3.26)	333,333	-	-	-	-	333,333	April, 2009
US$2.00 (CA$2.00)	1,000,000	-	-	-	-	1,000,000	October 2010
US$1.25 (CA$1.25)	4,030,000	-	-	-	-	4,030,000	December 2010
US$2.00 (CA$2.00)	100,000	-	-	-	-	100,000	July 2011
US$2.33 (CA$2.33)	2,508,581	-	-	-	-	2,508,581	September 2012
US$2.56 (CA$2.57)	2,008,581	-	-	-	-	2,008,581	September 2012
	11,193,495	-	-	-	-	11,193,495

Warrants activity during the period ended June 30, 2008 and December 31, 2007, 2006 is as follows:

	Number of
	warrants
Balance, December 31, 2005	21,025,000
Granted	4,752,542
Expired	(25,000	)
Cancelled	(20,000,000	)
Exercised	(30,000	)
Balance, December 31, 2006	5,722,542
Granted	12,456,828
Expired	(96,850	)
Cancelled	(6,750,000	)
Exercised	(139,025	)
Balance, December 31, 2007	11,193,495
Balance, March 31, 2008	11,193,495
Balance June 30,2008	11,193,495

33

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, 2008

12.	Stock options, warrants, shareholders’ rights plan, and other commitments to issue shares (continued):
	(c)	Warrants (continued):
		In the year ended December 31, 2007, the Company granted warrants to acquire 1,189,666 shares in a private placement described in note 12. 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 $5,625,000 due to the Company’s guarantee of the acquisition price, in connection with its acquisitions of DMR Food Corporation and My Organic Baby Inc. These warrants were all surrendered in September, 2007 when the Company entered into a share purchase agreement with the former shareholders of DMR Food Corporation and My Organic Baby Inc. The Company granted warrants to institutional investors to acquire 4,017,162 shares and to the placement agent in the financing to acquire 500,000 shares at a price as described in note 10. In September, 2007, the Company also extended the warrant to acquire 4,030,000 at a price of $1.25 from December, 2007 to December, 2010.
	(d)	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.

34

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, 2008

13.	Commitments and contingencies:
	(a)	Consulting contracts:
		On November 1, 2005, the Company entered into a consulting agreement with a five-year term and recognized the expense related to the consulting agreement over the five-year term. As partial consideration under the consulting agreement, we issued warrants to purchase 1,000,000 of our common shares at an exercise price of $2.00 per share. The fair value of these warrants was $1,904,000, as determined using the Black-Scholes valuation method.
		On May 24, 2007, both parties terminated the consulting agreement and as result of the termination of agreement, the Company expensed $1,459,800. However, the cancellation of the consulting agreement did not cancel the warrants issued in connection with the consulting agreement. These warrants remain outstanding until October 31, 2010. We determined that the fair value of the outstanding warrants was $1,449,000, as determined using the Black- Scholes valuation method. We expensed the fair value of the warrants, and recorded the corresponding amount in equity.
		On June 5, 2006, the Company entered into marketing and consulting agreement with a term of three years. As partial consideration under this agreement, the Company issued options to purchase 1,075,000 common shares at $1.75 per share. The Company has recognized the expense related to this agreement over the three year term of the agreement. During the six months ended June 30, 2008, the Company revalued the options and expensed $52,000 (June 30, 2007 – expensed $1,011,400) with respect to these options.
		On May 24, 2007, the Company entered into employment agreements with former officers and shareholders of My Organic Baby Inc. for a term of three years. As partial consideration under these agreements, the Company issued 215,000 common shares at $2.48 per share as consideration. The Company expensed $533,200 relating to these agreements.
	(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.

35

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, 2008

13.	Commitments and contingencies (continued):
	(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.

36

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, 2008

		Unaudited				Unaudited
		For the 3 months ended				For the 6 months ended
		June 30,		June 30,		June 30,		June 30,
		2008		2007		2008		2007
		$		$		$		$
14.	Supplementary Cash Flow Information
a)	Items not involving cash
	Amortization of property, plant and
	equipment and Intangibles	360		8		656		12
	Stock-based compensation	(107	)	2,035		1420		3,366
	Gain on sale of investment	-		-		-		-
	Services paid in stock	-		94		-		140
	Settlement of Interest paid in Stock	36				149
	Interest accretion on convertible debenture
	and short-term debt	304		92		568		125
		593		2,229		2,793		3,643
b)	Changes in non-cash working capital
	balances related to operations
	Accounts receivable	(839	)	(379	)	(1,149	)	176
	Inventories	(24	)	(479	)	(287	)	(1,044	)
	Prepaid expenses, deposits and other
	assets	(119	)	(288	)	351		(419	)
	Prepaid contracts	-		1,917		-		2,012
	Accounts payable and accrued liabilities	(369	)	392		(1,354	)	70
		(1,351	)	1,163		(2,439	)	795
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	-		-		-		573
		-		4,460		-		8,270

37

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, 2008

15.	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, 2008		June 30, 2007		June 30, 2008		June 30, 2007
	$		$		$		$
Sales
Canada
Total sales	2,127		1,671		4,189		2,452
United States
Total sales	407		1,325		752		2,011
Less: Sales to other segments	(18	)	(49	)	(37	)	(62	)
Sales to external customers	389		1,276		715		1,949
Other
Sales to external customers	18		49		37		62
Total sales to external customers	2,534		2,996		4,941		4,463
Sales to external customers by product line
Beverage	634		1,785		1,224		2,704
Snack Products	1,113		1,002		2,183		1,550
Organic baby product	787		209		1,534		209
	2,534		2,996		4,941		4,463
Interest expense on short-term and long-
term debt
Canada	249		6		891		10
United States			1				3
	249		7		891		13

Amortization/Depreciation
Canada	351	6	647	12
United States	-	-	-	-
	351	6	647	12
Other Items
Interest Income
Other (Income) Expense
Interest on Short Term

38

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, 2008

	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, 2008		June 30, 2007		June 30, 2008		June 30, 2007
property, plant and equipment	$		$		$		$
Canada	(1,871	)	(5,662	)	(6,130	)	(7,684	)
United States	(206	)	(18	)	(325	)	(210	)
Other			-				-
	(2,077	)	(5,680	)	(6,455	)	(7,894	)
Loss for the period before income taxes	(2,077	)	(5,680	)	(6,455	)	(7,894	)

		June 30,2008		June 30,2007
Assets:
Canada	$	15,852	$	16,213
United States		570		2.323
Other		28		28
Total assets	$	16,450	$	18,564
Property, plant and equipment additions:
Canada	$	-	$	27
Goodwill:
Canada	$	1,682	$	-

With respect to third parties, the Company has three customers (June 30, 2007 - 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, 2008	June 30, 2007
Customer A		14%
Customer B	10%
Customer C		26%
Customer D	30%
Customer E	14%

39

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, 2008

16.	Subsequent events:
	(a)	In September 2007, the Company issued Senior Convertible Notes and related warrants (see note 10). Each note and warrant carries a full ratchet anti-dilution provision. If the Company issues any convertible or equity securities at any time in the future (subject to certain exceptions including stock option grants and issuances in connection with certain acquisition transactions) at a price less than the applicable conversion price or exercise price, then the conversion price and exercise price will be automatically adjusted down to that lesser price. Any such adjustment will further dilute our shareholders.
		The Company and the holders of the Senior Convertible Notes were involved in a dispute (see previous filings) as to whether the full-ratchet anti-dilution provision had been triggered and whether the Company was obligated to adjust the conversion price of the Notes and the exercise price of the warrants to $0.46 per share.
		Effective August 1, 2008, the Company settled this dispute by entering into a Consent, Waiver and Amendment agreement with the holders of the Senior Convertible Notes. This primary features of this agreement are (i) the conversion price of the Senior Convertible Notes has been reduced to $1.75 per share, (ii) in the event the trading price of the Company’s common shares is lower than $1.75 as of July 31, 2009, the conversion price with respect to 33% of the unconverted principal amount of the Senior Convertible Notes as of July 31, 2009 (less any amounts called by a third-party option holder in the previous 12 months) will be further reduced to the then current trading price of our common shares, (iii), in the event the trading price of the Company’s common shares is lower than $1.75 as of July 31, 2010 the conversion price with respect to 33% of 67% of the Senior Convertible Notes as of July 31, 2010 (less any amounts called by a third-party option holder in the previous 12 months) will be further reduced to the then current trading price of our Common shares, (iv) the exercise price of the Series E, Series F and Placement Warrants has been changed to $1.75 (resulting in a pro rata increase in the number of common shares issuable under the Warrants to 5,612,549 common shares from 4,017,162 common shares, (v) the maturity date of the Senior Convertible Notes was changed to September 26, 2011 from September 26, 2027, which may be extended in certain circumstances by the holders of the notes, (vi) the anti-dilution provisions of the Senior Convertible Notes are no longer triggered if the Company pays interest in common shares to the holders of the CDN $2,450,000 convertible notes issued in 2007 to the vendors of DMR Food Corporation and My Organic Baby, Inc. (the “Vendor Notes”), (vii) the Company’s obligation to register the common shares underlying the Senior Convertible Notes and the Series E, Series F and Placement Warrants has been suspended, provided that the holders of the notes are permitted to sell their securities pursuant to SEC Rule 144 (viii) all accrued and unpaid penalties (described in previous Company filings) related to the said registration of the common shares have been waived, (ix) the Company is permitted to amend the Vendor Notes to incorporate the changes made in this agreement.
	(b)	In April 2008, the Company signed a Letter of Intent to acquire Sarasam Food Corp., a rapidly expanding brand of kosher hot dogs, sausages and other meat products operating under the name Baldwin Street Kosher. The Company expects to complete this acquisition in the 3rd quarter of 2008 without requiring any further financing or dilution of the Company’s common shares.

(c) In August 2008, the Company signed a Letter of Intent to acquire Crofters Food Ltd., one of North America's largest organic jam companies. The acquisition of this rapidly growing manufacturer, producer and marketer of organic jams and spreads will significantly increase the revenues of Clearly Canadian Brands. The letter contemplates completion of this acquisition in the first quarter of 2009. Upon closing of this acquisition, Clearly Canadian Brands will require additional financing and there may be a dilutive effect on the Company’s common shares.

40

EX-99.2

2^nd quarter report for the 6 months
ended June 30, 2008

 
2nd quarter report 2008

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, 2008.

The following Management Discussion and Analysis dated August 22, 2008 should be read in conjunction with the Company’s consolidated financial statements for the six months ended June 30, 2008, as well as reference to previously filed Management Discussions and Analysis, previously file annual reports and forward-looking statements contained within this report.

Overview

Based in Vaughan, Ontario, Clearly Canadian Beverage Corporation, operating under the name Clearly Canadian Brands, 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 2007 acquisitions of DMR Food Corporation and My Organic Baby Inc. marked the Company’s debut into organic and natural snack 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 Baby and My Organic Toddler. We believe that the health focussed nature of our beverage, healthy snack and organic baby product lines complement each other and will provide opportunities for synergy in marketing and distribution in the future.

Over the past many years, our beverage business has been in decline due to the highly competitive nature of the beverage industry. In 2008, the Company’s beverage products division has been undergoing significant redevelopment in order to compete in the highly competitive beverage industry. Specifically, the Company is seeking to transform its reliance on selling its well known brand of Clearly Canadian sparkling flavoured waters in single serve glass format to selling it in various PET packages using strategically located beverage production partners, such as the Cott Corporation. The changes, which are expected to roll out in the 3^rd quarter of 2008, are intended to increase the Company’s use of the production, sales and marketing infrastructures of larger beverage companies, decrease shipping expenses and offer retailers a product which is more marketable to the mass consumer market. While we believe this initiative will result in renewed growth in our beverage business, it is too early to make any trend predictions with respect to sales.

Convertible Notes

In September 2007, we completed a $9.36 million senior debt financing (the “Financing”) from institutional investors through the sale of senior convertible notes (the “Senior Convertible Notes”) and the issuance of five-year share purchase warrants to purchase 4,017,162 common shares (the “Series E Warrants” and the “Series F Warrants”). The 2,008,581 Series E Warrants were exercisable at an initial exercise price of $2.33 per share (subject to future adjustment) and the 2,008,581 Series F warrants were exercisable at an initial exercise price of $2.56 per share (subject to future adjustment). In addition, the Company issued 500,000 share purchase warrants to a placement agent on the same terms as the Series E Warrants (the “Placement Warrants”).

The primary features of the Senior Convertible Notes are (i) interest at 9% per annum for years 1-3 and at 18% per annum for years 4 and after, payable monthly in cash or, subject to volume and ownership limitations and in our discretion, common shares based on a 10% discount to the then-market price, (ii) convertible at any time by the holders at the conversion price (initially $2.33 per share, subject to future adjustment), (iii) during years 1-2, provided the market price of our common shares is double the conversion price, we can, subject to volume and ownership limitations, call the Senior Convertible Notes (iv) in year 3 and beyond, we can, subject to volume and ownership limitations, force conversion of the Senior Convertible Notes at the lower of the initial conversion price or at a 15% discount to the then-market price and so long as we are converting the Senior Convertible Notes, the interest rate remains at 9% and (v) in year 4 and beyond the Senior Convertible Notes can be called by the note holders.

2

 
2nd quarter report 2008

In September 2007, the Company also completed a CDN $2,450,000 vendor take back debt financing from the vendors of DMR Food Corporation and My Organic Baby, Inc. through the sale of subordinated convertible notes (the “Vendor Notes”). The primary features of the Vendor Notes are the same as the Senior Convertible Notes with the exception that the interest is at 9% from year 1 to maturity, there are no restrictions on the Company’s ability to pay, with respect to interest or conversation or call of the Vendor Notes, in common shares and there are no provisions for liquidated damages in the event the shares issuable under the Vendor Notes are not registered.

Each of the Senior Convertible and Vendor Notes and associated warrants carry a full ratchet anti-dilution provision. If we issue any convertible or equity securities at any time in the future (subject to certain exceptions including stock option grants and issuances in connection with certain acquisition transactions) at a price less than the applicable conversion price or exercise price, then the conversion price and exercise price will be automatically adjusted down to that lesser price. Any such adjustment will further dilute our shareholders.

The Company and the holders of the Senior Convertible Notes were involved in a dispute (see previous filings) as to whether the full-ratchet anti-dilution provision had been triggered and whether the Company was obligated to adjust the conversion price of the Senior Convertible Notes and the exercise price of the Series E and Series F Warrants to $0.46 per share.

Effective August 1, 2008, the Company settled this dispute by entering into a Consent, Waiver and Amendment agreement with the holders of the Senior Convertible Notes. This primary features of this agreement are (i) the conversion price of the Senior Convertible Notes has been reduced to $1.75 per share, (ii) in the event the trading price of the Company’s common shares is lower than $1.75 as of July 31, 2009, the conversion price with respect to 33% of the unconverted principal amount of the Senior Convertible Notes as of July 31, 2009 (less any amounts called by a third-party option holder in the previous 12 months) will be further reduced to the then current trading price of our common shares, (iii), in the event the trading price of the Company’s common shares is lower than $1.75 as of July 31, 2010 the conversion price with respect to 33% of 67% of the Senior Convertible Notes as of July 31, 2010 (less any amounts called by a third-party option holder in the previous 12 months) will be further reduced to the then current trading price of our Common shares, (iv) the exercise price of the Series E, Series F and Placement Warrants has been changed to $1.75 (resulting in a pro rata increase in the number of common shares issuable under the Warrants to 5,612,549 common shares from 4,017,162 common shares, (v) the maturity date of the Senior Convertible Notes was changed to September 26, 2011 from September 26, 2027, which may be extended in certain circumstances by the holders of the Senior Convertible Notes, (vi) the anti-dilution provisions of the Senior Convertible Notes are no longer triggered if the Company pays interest in common shares to the holders of the Vendor Notes, (vii) the Company’s obligation to register the common shares underlying the Senior Convertible Notes and the Series E, Series F and Placement Warrants has been suspended, provided that the holders of the Senior Convertible Notes are permitted to sell their securities pursuant to SEC Rule 144 (viii) all accrued and unpaid penalties (described in previous Company filings) related to the said registration of the common shares have been waived, (ix) the Company is permitted to amend the Vendor Notes to incorporate the changes made in this agreement.

Recently Executed Letters of Intent

In April 2008, the Company signed a Letter of Intent to acquire Sarasam Food Corp., a rapidly expanding brand of kosher hot dogs, sausages and other meat products operating under the name Baldwin Street Kosher. The Company expects to complete this acquisition in the 3^rd quarter of 2008 without requiring any further financing or dilution of the Company’s common shares.

In August 2008, the Company signed a Letter of Intent to acquire Crofters Food Ltd., one of North America's largest organic jam companies. The acquisition of this rapidly growing manufacturer, producer and marketer of organic jams and spreads will significantly increase the revenues of Clearly Canadian Brands. The letter contemplates completion of this acquisition in the first quarter of 2009. Upon closing of this acquisition, Clearly Canadian Brands will require additional financing and there may be a dilutive effect on the Company’s common shares.

3

 
2nd quarter report 2008

Working Capital

For the six months ended June 30, 2008, we have cash on hand of approximately $2,664,000 (compared to $6,150,000 at the end of Q2-2007 which was a result of financings completed in 2007). We anticipate that it is likely we will continue to have a negative cash flow from operations for the balance of 2008. In addition, the referenced acquisition activity, and any major marketing initiatives we may undertake, will also increase our cash requirements. Accordingly, management may be required to seek additional financing from the sale of common shares which could result in dilution to existing shareholders.

Operating Results

Three months ended June 30, 2008 (“Q2-2008”) compared with three months ended June 30, 2007 (“Q2-2007”)

Sales were $2,534,000 for the three months ended June 30, 2008 compared with $2,996,000 for the three months ended June 30, 2007, a decrease of 15% or $462,000. Compared to Q2-2007, sales from our healthy snack division increased by $111,000 and sales from our organic baby food division increased by $578,000. However, sales from our beverage division saw a comparative quarterly decrease of $1,151,000. While the Company has noticed steady demand for its beverage products, particularly its sparkling flavoured waters, the Company, during the 2^nd quarter of 2008, was actively transitioning its beverage sales model, including reducing its reliance on the sale of glass products and reducing its sales force. The new model is intended to introduce our sparkling flavoured waters in various PET formats and to utilize the infrastructure of larger beverage companies, such as Cott Corporation. As a result, the Company’s beverage sales decreased as its inventory of glass products decreased. The Company expects to launch the new beverage model in the 3^rd quarter of 2008.

Cost of sales expenses were $2,242,000 for Q2-2008 compared with $2,422,000 for Q2-2007, a decrease of $180,000. The net of sales less cost of sales, being the gross profit margin percentage, decreased to 11.5% for Q2-2008 from 19.1% for Q2-2007, a decrease of 7.7% . The decrease in gross profit margin is a result of several factors. First, all business units are experiencing higher costs of commodities and raw materials as well as significant increases in fuel surcharges resulting in increases in costs of good sold. In respect of the Company’s beverage division, these issues are being addressed through the new beverage model which will significantly increase gross profit margins for our beverage products. Over the next several fiscal quarters, the Company will also be actively seeking means to increase its gross profit margins on its healthy snack and organic baby food divisions. In addition, our organic baby food division took an adjustment in the 2^nd quarter 2008 in the amount of $323,000 relating to a product recall from February 2008. It is reflected in this fiscal quarter as the value of product held by our distributor’s resellers was unknown in Q1-2008. Had these additional recalls not occurred, our margins in the organic baby food division would have been in line with expectations.

Selling, general and administrative expenses were $1,105,000 for Q2-2008 compared with $5,590,000 for Q2-2007, a decrease of $4,485,000

	Three months ended June 30, 2008	Three months ended June 30,2007	Increase (Decrease)
Remuneration and payroll cost	342,000	$4,593,000	(4,251,000)
Marketing programs and retail support	391,000	352,000	39,000
Professional fees	118,000	81,000	37,000
Investor relations	10,000	212,000	(202,000)
Insurance	41,000	51,000	(10,000)
Product Development	27,000	116,000	(89,000)
Other general and administrative	176,000	185,000	(9,000)
Total Selling, General & Administrative expenses	1,105,000	$5,590,000	(4,485,000)
SG&A expenses excluding stock-based	1,212,000	$1,658,000	(446,000)

4

 
2nd quarter report 2008

compensation
Portion of total stock-based                 compensation paid in shares	-	1,897,000	(1,897,000)
Portion of total stock-based                 compensation paid in                 options/warrants	(107,000)	2,035,000	(2,142,000)

Remuneration costs decreased substantially in Q2-2008 compared to Q1-2007 as a result of stock based compensation paid in Q2 -2007 which was not paid in Q2-2008. In addition, stock based compensation from Q1-2008, which is required to be re-valued quarterly, resulted in a recovery of costs in Q2-2008. Overall, the Company continues to reduce these expenses and to achieve efficiencies in management and administrative roles for all three divisions.

The increase in marketing programs and retail support expenses in Q2-2008 compared to Q2-2007 was a result of promotions in the healthy snack food and organic baby products business units, both of which saw an increase in sales in Q2-2008.

The increase in professional fees in Q2-2008 compared to Q2-2007 was a result of negotiations with the holders of the Senior Convertible Notes. Going forward, we expect our professional fees, particularly our legal fees, to decrease significantly.

The decrease in investor relations costs in Q2-2008 compared to Q2-2007 relates to a decrease in shareholder awareness initiatives.

The decrease in insurance costs in Q2-2008 compared to Q2-2007 relates to the decline in insurance and U.S. workers compensation costs of our beverage division.

Product development costs in Q2-2008 compared to Q2-2007 decreased as the majority of the expenses involved in developing our new beverage model were incurred in the latter part of 2007.

Other general and administrative expense decreased by $9,000 in Q2-2008 compared to Q2-2007 and were generally in line with such expenses in Q1-2008.

The loss for the three months ended June 30, 2008 was $2,077,000 ($0.09 per share) compared with $5,680,000 for the three months ended June 30, 2007 ($0.29 per share). The decrease in the loss for the comparative fiscal quarters of $3,603,000 is primarily due to the reasons set out in this discussion. On a cash basis, and after taking into account non-cash items, non-recurring expenses and interest and penalties on all of our convertible notes, the loss for Q2-2008 was $1,066,000 compared to a loss in Q2-2007 of $1,091,000. An analysis taking into account these additional items is as follows:

	Three months ended June 30, 2008	Three Months ended June 30, 2007	Increase (Decrease)
Earnings (Loss)	($2,077,000)	($5,680,000)	$3,603,000
Add Non Cash Items
Stock Based Compensation (stock options)	(107,000)	3,932,000	(4,039,000)
Intangibles and Depreciation	360,000	-	360,000
Interest Accretion/Interest paid in Stock on	108,000	92,000	16,000
Convertible Notes
Foreign Exchange Loss	114,000	649,000	(535,000)
Earnings (Loss) after Non-Cash Items	(1,602,000)	(1,007,000)	595,000
Add Non Recurring Items
Professional Fees	43,000	-	43,000
Organic Baby Food Division Recall	325,000		325,000
Add Interest & Penalties Paid in Cash on Convertible Notes	211,000	-	211,000

5

 
2nd quarter report 2008

Deduct Interest Income	(43,000)	($84,000)	41,000
Earnings (Loss) after non-cash, non-recurring items, interest and penalty expenses and interest income	(1,066,000)	($1,091,000)	25,000

Interest income represents interest the Company earns on its surplus cash reserves invested in short term bank interest earning deposits. Interest Income of $43,000 in Q2-2008 represents a decrease of $41,000 over Q2-2007.

Operating Results

Six months ended June 30, 2008 (“Q2-2008”) compared with six months ended June 30, 2007 (“Q2-2007”)

Sales were $4,941,000 for the six months ended June 30, 2008 compared with $4,463,000 for the six months ended June 30, 2007, an increase of 9.7% or $478,000. The overall increase in sales was a result an increases in sales of $633,000 from our healthy snacks division (acquired February 2007 through the purchase of DMR Food Corporation) and an increase in sales of $1,325,000 from our organic baby food division (acquired May, 2007 through the purchase of My Organic Baby, Inc.). Sales for the six months ended June 30, 2008 from our beverage division were $1,224,000 compared with $2,704,000 in same period last year, a decrease of $1,480,000. The decrease in beverage sales is attributable in part to increased competition and product alternatives in the marketplace and in part to the planned strategy of transforming our beverage product offerings and production strategy as discussed above.

Cost of sales expenses were $4,382,000 for the six months ended June 30, 2008 compared with $3,533,000 for the same period last year, an increase of $849,000 The net of sales less cost of sales, being the gross profit margin percentage, decreased to 11.3% for the six months ended June 30, 2008 from 20.8% for the same period last year, a decrease of 9.5% . The decrease in gross profit margin is a result of a number of factors. First, lower margins can be attributed to the continued integration of our new healthy snack and organic baby product business units with our beverage units. These units have lower gross profit margin percentages than our beverage division traditionally experienced, however, they also have lower selling and marketing expenses associated with their businesses. Second, all business units are experiencing higher costs of commodities and raw materials as well as significant increases in fuel surcharges resulting in increases in costs of good sold. Third, margins have been affected by a product recall in our organic baby food division. The Company is taking active steps to increase gross profit margins as discussed above with the Q2-2008 costs of good sold analysis.

Selling, general and administrative expenses were $4,721,000 for the six months ended June 30, 2008 compared with $8,185,000 for the six months ended June 30, 2007, a decrease of $3,464,000

	Six months ended June 30, 2008	Six months ended June 30,2007	Increase (Decrease)
Remuneration and payroll cost	$3,180,000	$6,584,000	($3,404,000)
Marketing programs and retail support	578,000	655,000	(77,000)
Professional fees	387,000	147,000	240,000
Investor relations and shareholder information	46,000	323,000	(277,000)
Insurance	97,000	96,000	1,000
Product Development	65,000	116,000	(51,000)
Other general and administrative	368,000	264,000	104,000
Total Selling, General & Administrative expenses	$4,721,000	$8,185,000	($3,464,000)
SG&A expenses excluding stock-based compensation	$3,301,000	$2,876,000	$425,000
Portion of total stock-based                 compensation paid in shares	-	673,000	(673,000)

6

 
2nd quarter report 2008

               Portion of total stock-based 
               compensation paid in options/warrants
$1,420,000
$4,636,000
$(3,216,000)

Remuneration and payroll costs decreased by $3,404,000 for the six months ended June 30, 2008 largely as a result of stock based compensation paid and valued in Q2-2007 which was not paid and valued in Q2-2008. Further, after taking into account certain non-recurring items in the first six months of 2008, the Company’s cash remuneration and payroll costs in the first six months of 2008 compared to the same period in 2007 is relatively the same. The Company believes this indicates it is achieving efficiencies in management and administrative costs since for the entire period in 2008 the Company was operating with three divisions where in the same period in 2007 it was transitioning from one to three divisions. The Company will continue to work on reducing these costs as a percentage of its revenues.

Marketing programs and retail support expenses related to our beverage division decreased in the first six months of 2008 compared to the same period last year as a result of the planned transformation of our beverage model, which necessitated a decrease in marketing support, offset by increased spending to promote our healthy snack food and organic baby products business units which have experienced sales increases.

The increase in professional fees in the first six months of 2008 compared to the same period in 2007 was a result of negotiations with the holders of the Senior Convertible Notes and the filing of registration statement with the SEC relating to the Senior Convertible Notes. Both of these matters have now been settled and going forward, we expect our professional fees to decrease significantly.

The decrease in investor relations costs in the first six months of 2008 compared to the same period in 2007 relates to a decrease in shareholder awareness initiatives.

The slight increase in insurance costs in the first six months of 2008 compared to the same period in 2007 relates to coverage for our additional healthy snack food and organic baby food business units offset by the decline in insurance and U.S. workers compensation costs of our beverage division.

Product development costs in in the first six months of 2008 compared to the same period in 2007 decreased as the majority of the expenses involved in developing our new beverage model were incurred in the latter part of 2007.

Other general and administrative expense increased by approximately $104,000 in the first six months of 2008 compared to the same period in 2007 due mainly to the addition of the healthy snack and organic baby food divisions, which the Company did not acquire until February 2007 and May 2007 respectively.

The loss for the six months ended June 30, 2008 was 6,455,000 ($0.27 per share) compared with $7,894,000 for the six months ended June 30, 2007 ($0.42 per share). On a cash basis, and after taking into account non-cash items, non-recurring expenses and interest and penalties on our convertible notes, the loss for the six months ended June 30, 2008 was $2,627,000 compared to a loss in the comparative period last year of $1,958,000. An analysis taking into account these additional items is as follows:

	Six months ended June 30,2008	Six Months ended June 30.2007	Increase (Decrease)
Earnings (Loss)	$(6,455,000)	($7,894,000)	1,439,000
Add Non Cash Items
Stock Based Compensation (stock options)	1,420,000	5,309,000	(3,889,000)
Intangibles and Depreciation	656,000	-	656,000
Interest Accretion/Interest Paid in Stock on Convertible Notes	276,000	125,000	151,000
Foreign Exchange Loss	114,000	649,000	(535,000)
Earnings (Loss) after Non-Cash Items	(3,989,000)	(1,811,000)	(2,178,000)
Add Non Recurring Items
Remuneration and Payroll Costs	415,000	-	415,000

7

 
2nd quarter report 2008

Professional Fees	237,000	-	237,000
Organic Baby Food Division Recall	234,000		234,000
Add Interest & Penalties Paid in Cash on Convertible Notes	608,000	-	608,000
Deduct Interest Income	(132,000)	(147,000)	15,000
Earnings (Loss) after non-cash, non-recurring items, interest and penalty expenses and interest income	$(2,627,000)	($1,958,000)	(669,000)

Interest income represents interest the Company earns on its surplus cash reserves invested in short term bank interest earning deposits. Interest Income of $132,000 in the six months ended June 30, 2008 represents an increase of 15,000 over the same period last year.

Selected Annual Information
($ in thousands, except per share data)

		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,
		2007		2006		2005
Total revenue	$	10,623	$	7,462	$	8,712
Net loss		12,796		8,247		6,069
Basic and diluted loss per share		0.63		0.82		1.06
Total assets		22,178		9,093		6,259
Long term debt		9,955		-		1,501
Cash dividends paid (Preferred Shares)		-		94		-

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, 2008.

Amounts in Accordance with Canadian	2008		2008		2007		2007		2007		2007		2006		2006
GAAP (unaudited)	30- Jun		31-Mar		31-Dec		30-Sept		30-Jun		31-Mar		30-Dec		30-Sep
($ in thousands, except per share data)
Sales	2,534		2,407		2,848		3,312		2,996		1,467		1,065		2,022
Cost of sales	2,242		2,140		2,901		2,778		2,422		1,111		1,023		1,402
Cost of Product Recall	323		(89	)
Gross profit	(31	)	356		(53	)	534		574		356		42		620
Selling, general and administrative
expenses	1,105		3,322		2,839		2,444		5,590		1,881		1,727		1,597
Amortization of property, plant and
equipment	351		296		22		38		6		6		(62	)	18
Royalty			-		-		-		-		-		-		-
Interest Income	(43	)	(89	)	(108	)	(64	)	(84	)	(63	)	4		1
Other, interest, gains, losses and write-
downs	633		562		(312	)	294		650		746		(256	)	1,167
Net Loss	(2,077	)	(4,419	)	(2,494	)	(2,178	)	(5,588	)	(2,214	)	(1,371	)	(2,208	)
Net loss per share	(.08	)	(0.19	)	(0.11	)	(0.10	)	(0.29	)	(0.12	)	(0.11	)	(0.19	)
Weighted average shares outstanding	23,693,955		23,586,606		20,392,029		20,809,731		19,784,680		18,836,629		2,896,845		11,754,491

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.

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2nd quarter report 2008

Liquidity and Capital Resources

The Company improved its working capital position during the six months ended June 30, 2008 by issuing a total of 248,791 common shares to pay $131,000 in interest payments due to subordinated note holders.

During the six month period ended June 30, 2008 the Company decreased its cash position by $6,122,000, from $8,786,000 at December 31, 2007 to $2,664,000 at June 30, 2008.

We continue to experience operating losses and will be required to draw down our cash reserves accordingly. It is likely that additional equity or other forms of financing will need to be raised to support operations into 2009 and to pay interest on our Senior Convertible Notes. We have limited significant sources of financing, such as term debt facilities, available to us at this time.

At June 30, 2008, our liabilities relating to operations consisted primarily of operating bank loan indebtedness of, $74,000, accounts payable to suppliers and service providers of $2,919,000 and capital lease obligations of $158,000

The Company's total contractual obligations at June 30, 2008 were $46,852,000 (this amount is significantly larger than the Company’s legal obligations due to accounting methods utilized to value its convertible notes) and were comprised of various types of debt instruments, including consulting contracts, and operating leases. See section above entitled “Convertible Notes” for further information.

	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
Senior convertible note payable	39,892	842	842	1053	1684	1684	33,787
Subordinate convertible note
payable	6,766	221	221	221	221	221	5,661
Operating leases (office equipment
and premises)	194	30	57	57	50	-	-
Total Contractual obligations	46,852	1,093	1,120	1,331	1,955	1,905	39,448

At August 22, 2008, our issued share capital was comprised of the following:

• 23,750,772 common shares;
• 1,600,000 Variable Multiple Voting Shares.
• Nil Class A Preferred Shares.
• Nil Class B Preferred Shares

In addition, at August 22, 2008 there are 3,701,487 common shares issuable upon exercise of outstanding stock options at exercise prices ranging from $1.00 to $13.25 and 11,193,495 common shares issuable upon exercise of outstanding share purchase warrants at exercise prices ranging from $1.25 to $3.25 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, re-designated as Limited Voting Shares, other than

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2nd quarter report 2008

		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 1,600,000. The 1,600,000 Variable Multiple Voting Shares currently outstanding entitle BG Capital Group Ltd. to 39,783,340 votes at meetings of shareholders based on the above formula at August 22, 2008.

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 $6,455,000 for the six months ended June 30, 2008. 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 and debt 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.

Finished Goods and Inventory

We value our finished goods at standard costs and our work in progress inventories at moving average costs. We assess the need for inventory write-downs based on its assessment of net realizable value using assumptions about future demand and market conditions. When the results of these assumptions differ from our projections, an additional inventory write-down may be required.

Intangibles, Long-lived Assets and Goodwill

We assess the impairment of goodwill on an annual basis and identifiable intangibles and long lived-assets whenever event or changes in circumstance indicate that the carrying value may not be recoverable. Factors which could trigger an impairment review include significant underperformance relative to plan, a change in our business strategy, or significant negative industry or economic trends. When we believe that the carrying value of intangibles, long lived assets or goodwill may not be recovered based on the existence of one or more of the above indicators of potential impairment, we determine what impairment exists based on the fair value of the long lived asset as goodwill. At June 30, 2008 no impairment write-down was required.

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2nd quarter report 2008

Financial instruments

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 approximates its fair value based upon the discount rates applied.

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, 2008, two customers represented 49% (June 30, 2007 – three customers represented 37%) of total accounts receivable.

Interest rate risk

The Company’s short term bank credit facilities bear interest at CDN prime plus 1.25% . The company has long term interest bearing debt. The Company does not use derivative instruments to manage its exposure to interest rate risk.

Foreign exchange rate risk

A significant portion of the company’s 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 13 to the annual financial statements. (Note 12 to the Second Quarter Report). 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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2nd quarter report 2008

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, 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

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2nd quarter report 2008

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 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, 2008. 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 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 Control over Financial Reporting

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Chief Executive Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer

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2nd quarter report 2008

concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2008 due to a material weakness discussed below related to a formal Disclosure Committee. However, the material weakness will be remediated in the future.

Management, including our Chief Executive Officer, does not expect that our disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Internal Control over Financial Reporting

Management is responsible for certifying the design of our internal control over financial reporting as required by Multilateral Instrument 52-109 – “Certification of Disclosure in Issuers Annual and Interim Filings”. Our internal control over financial reporting 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). Our internal control over financial reporting 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.

Management, under the supervision and with the participation of our Chief Executive Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2007. In conducting this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.

Our Independent Registered Public Accountants have not issued an attestation report on our internal control over financial reporting pursuant to the temporary rules of the U.S. Securities and Exchange Commission that permit us to provide only management's report for the year ended December 31, 2007.

A material weakness in internal control over financial reporting is defined by the Public Company Accounting Oversight Board’s Audit Standard No.5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also, the effectiveness of our internal control over financial reporting is subject to the risk that

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2nd quarter report 2008

controls may become inadequate because of changes in condition, or that the degree of compliance with the policies or procedures may deteriorate.

Our management identified a material weakness in that we do not have a formal Disclosure Committee. The purpose of the Disclosure Committee is to assist the senior officers in fulfilling their responsibility to oversee the accuracy, completeness and timeliness of the disclosures made by the Company. Due to a corporate reorganization which included changes within the Board of Directors, the relocation of the Vancouver office and subsequent changes in management, the Disclosure Committee was delayed until 2008. Although a formal process of a Disclosure Committee was not set up in 2007 (e.g. Minutes to meetings etc.) the Board of Directors and CEO do approve company disclosures. The Company intends to establish a formal Disclosure Committee in the future.

With the exception of the identification of the deficiency as discussed above, during the fiscal quarter ended June 30, 2008, there has been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act) that have materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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, 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.

15

EX-99.3

Form 52-109F2 Certification of Interim Filings

I, Bobby Genovese, Chief Executive Officer 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, 2008;
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 22, 2008

“Bobby Genovese”

Bobby Genovese

Chief Executive Officer

EX-99.4

Form 52-109F2 Certification of Interim Filings

I, Bobby Genovese, acting 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 30,2008;
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 22, 2008

“ Bobby Genovese”

Bobby Genovese

Acting CFO