UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedSeptemberJune 30, 20142021

or

[  ] ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________to________________

Commission file number333-168895

QUEST WATER GLOBAL, INC.

(Exact name of registrant as specified in its charter)

Delaware27-1994359

(State or other jurisdiction
of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1590 Bellevue Avenue, Suite 203209 – 828 Harbourside Drive

WestNorth Vancouver, British Columbia, Canada

V7V 1A7V7P 3R9
(Address of principal executive offices)(Zip Code)

(604) 281-2446888) 897-5536

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
NoneNoneN/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [  ]☐ No [X] ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]☐Accelerated filer [  ]☐
Non-accelerated filer [  ] ☐Smaller reporting company☒[X]
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ]☐No [X]☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [  ]☐ No [  ]☐

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of November 14, 2014,March 11, 2022, the registrant’s outstanding common stock consisted of 92,163,194 85,164,569 shares.

 

 

 

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
 
Item 1.Financial Statements3
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations5
Item 3.Quantitative and Qualitative Disclosures about Market Risk10
Item 4.Controls and Procedures1110
PART II – OTHER INFORMATION
 
Item 1.Legal Proceedings1211
Item 1A.Risk Factors1211
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds1211
Item 3.Defaults Upon Senior Securities1211
Item 4.Mine Safety Disclosures1211
Item 5.Other Information1211
Item 6.Exhibits1311

2

 2

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

QUEST WATER GLOBAL, INC.

Condensed Consolidated Financial Statements
September

Six Months Ended June 30, 20142021

(Expressed in US dollars)

(unaudited)(unaudited – prepared by management)

Index

Condensed Consolidated Balance SheetsF-1F–1
Condensed Consolidated Statements of Operations and Comprehensive LossF-2F–2
Condensed Consolidated Statements of Stockholders’ DeficitF–3
Condensed Consolidated Statements of Cash FlowsF-3F–4
Notes to the Condensed Consolidated Financial StatementsF-4F–5

3

 3

 

QUEST WATER GLOBAL, INC.

Condensed Consolidated Balance Sheets

(Expressed in US dollars)

  September 30, 2014  December 31, 2013 
  $  $ 
  (unaudited)    
         
ASSETS        
         
Current assets        
         
Cash  184   1,605 
Amounts receivable  –   1,293 
Prepaid expenses and deposits  1,913   7,835 
Total current assets  2,097   10,733 
Equipment (Note 3)  8,144   11,269 
Total assets  10,241   22,002 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
         
Current liabilities        
         
Accounts payable  385,908   360,766 
Accrued liabilities  –   3,344 
Convertible notes payable, net of unamortized discount of $nil (2013 - $22,292) (Note 4)  175,000   152,708 
Due to related parties (Note 5)  670,846   980,248 
Total liabilities  1,231,754   1,497,066 
         
Nature of operations and continuance of business (Note 1)        
Commitments (Note 9)        
         
Stockholders’ deficit        
         
Preferred stock, 5,000,000 shares authorized, $0.000001 par value, 2 shares issued and outstanding  1   1 
Common stock, 95,000,000 shares authorized, $0.000001 par value, 92,163,194 and 85,749,860 shares issued and outstanding, respectively  5,147   5,140 
Additional paid-in capital  6,127,686   4,749,609 
Common stock issuable (Note 6)  40,025   23,000 
Deferred compensation (Note 6)  (31,945)  – 
Deficit  (7,362,427)  (6,252,814)
Total stockholders’ deficit  (1,221,513)  (1,475,064)
Total liabilities and stockholders’ deficit  10,241   22,002 

(unaudited – prepared by management)

  June 30 2021  December 31 2020 
  $  $ 
       
ASSETS        
         
Current assets        
         
Cash  4,601   4,715 
Unbilled costs  –   112,724 
Total current assets 4,601   117,439 
         
Investment in related company (Note 3)  7,220   7,220 
         
Total assets  11,821   124,659 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
         
Current liabilities        
         
Accounts payable and accrued liabilities  70,034   69,221 
Convertible notes payable (Note 4)  175,000   175,000 
Due to related company (Note3)  33,964   183,964 
Due to related parties (Note 5)  3,341,061   3,104,805 
         
Total liabilities  3,620,059   3,532,990 
         
Nature of operations and continuance of business (Note 1)  -     
         
Stockholders’ deficit        
         
Preferred stock, 5,000,000 shares authorized, $0.000001 par value, 2 shares issued and outstanding  1   1 
         
Common stock, 95,000,000 shares authorized, $0.000001 par value, 85,164,569 issued and outstanding  85   85 
         
Additional paid-in capital  6,332,748   6,332,748 
         
Common stock issuable  40,025   40,025 
         
Deficit  (9,981,097)  (9,781,190)
         
Total stockholders’ deficit  (3,608,238)  (3,408,331)
         
Total liabilities and stockholders’ deficit  11,821   124,659 

(The accompanying notes are an integral part of these condensed consolidated financial statements)

F-1

 

QUEST WATER GLOBAL, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Expressed in US dollars)

(unaudited)(unaudited – prepared by management)

  Three months
ended
September 30, 2014		  Three months
ended
September 30, 2013		  Nine months
ended
September 30, 2014		  Nine months
ended
September 30, 2013		 
  $  $  $  $ 
             
Expenses                
                 
Advertising and promotion  664   261   43,315   28,216 
Amortization  1,053   14,641   3,125   43,925 
Automotive  6,419   5,008   17,469   14,774 
Consulting fees (Notes 6 and 8)  47,251   3,121   354,932   21,338 
Foreign exchange loss (gain)  (12,119)  5,246   (11,348)  (2,783)
Management fees (Notes 5 and 8)  75,000   75,000   557,731   225,000 
Office and miscellaneous  4,875   10,257   17,291   21,411 
Professional fees  15,271   12,649   71,622   84,035 
Rent  5,815   3,333   16,717   18,313 
Telephone  3,619   4,116   9,379   12,028 
Transfer agent and filing fees  3,273   1,595   9,949   2,414 
Travel  226   9,673   483   29,501 
Total expenses  151,347   144,900   1,090,665   498,172 
Loss before other income (expense)  (151,347)  (144,900)  (1,090,665)  (498,172)
Other income (expense)                
                 
Accretion of discounts on convertible notes payable  (1,042)  (15,937)  (22,292)  (47,815)
Gain on settlement of debt  –   –   3,344   – 
Interest expense  –   (1,260)  –   (3,428)
Total other income (expense)  (1,042)  (17,197)  (18,948)  (51,243)
Net loss  (152,389)  (162,097)  (1,109,613)  (549,415)
Net loss per share, basic and diluted  –   –   (0.01)  (0.01)
Weighted average number of shares outstanding, basic and diluted  91,234,570   85,182,360   87,951,154   85,151,598 
  

Three months ended

June 30, 2021

  

Three months ended

June 30, 2020

  

Six months ended

June 30, 2021

  

Six months ended

June 30, 2020

 
  $  $  $  $ 
             
Revenue (Note 3)  –   –   150,000   – 
                 
Cost of goods sold  –   –   112,724   – 
                 
Gross margin  –   –   37,276   – 
                 
Expenses                
                 
Advertising and promotion  –   –   –   336 
Automotive  1,743   3,004   4,804   4,423 
Management fees (Notes 4)  107,500   102,500   215,000   205,000 
Office and miscellaneous  1,397   1,047   4,222   2,141 
Professional fees  387   –   387   2,528 
Rent (Note 4)  5,250   5,250   10,500   10,500 
Telephone  833   324   1,638   701 
Transfer agent and filing fees  244   146   632   1,849 
Travel  –   –   –   3,006 
                 
Total expenses  117,354   112,271   237,183   230,484 
                 
Net loss and comprehensive loss  (117,354)  (112,271)  (199,907)  (230,484)
                 
Net loss per share, basic and diluted  –   –   –   – 
                 
Weighted average number of shares outstanding, basic and diluted  85,164,569   85,164,569   85,164,569   85,164,569 

(The accompanying notes are an integral part of these condensed consolidated financial statements)

F-2

 

QUEST WATER GLOBAL, INC.

Condensed Consolidated Statements of Cash FlowsStockholders’ Deficit

(Expressed in US dollars)

(unaudited)(unaudited – prepared by management)

  Nine months
ended
September 30, 2014		  Nine months
ended
September 30, 2013		 
  $  $ 
       
Operating Activities:        
         
Net loss for the period  (1,109,613)  (549,415)
         
Adjustments to reconcile net loss to net cash used in operating activities:        
Accretion of discounts on convertible notes payable  22,292   47,815 
Amortization  3,125   43,925 
Gain on settlement of debt  (3,344)  – 
Stock-based compensation  703,164   2,700 
         
Changes in operating assets and liabilities:        
Amounts receivable  1,293   – 
Prepaid expenses and deposits  5,922   – 
Accounts payable  25,142   68,888 
Accrued liabilities  –   (5,490)
Due to related parties  303,971   360,055 
Net cash used in operating activities  (48,048)  (31,522)
Financing Activities:        
Advances from related parties  46,627   – 
Proceeds from issuance of common stock  –   30,000 
Net cash provided by financing activities  46,627   30,000 
Decrease in cash  (1,421)  (1,522)
Cash, beginning of period  1,605   1,732 
Cash, end of period  184   210 
Non-cash investing and financing activities:        
Common stock issued to settle amounts due to related parties  660,000   – 
Supplemental disclosures:        
Interest paid  –   – 
Income tax paid  –   – 

                                 
  Preferred stock  Common stock  Additional
paid-in		  Common stock       
  Number  Amount
$		  Number  Amount
$		  capital
$		  issuable
$		  Deficit
$		  Total
$		 
                                 
Balance, December 31, 2020  2   1   85,164,569   85   6,332,748   40,025   (9,781,190)  (3,408,331)
                                 
Net loss for the period  –   –   –   –   –   –   (82,553)  (82,553)
                                 
Balance, March 31, 2021  2   1   85,164,569   85   6,332,748   40,025   (9,863,743)  (3,490,884)
                                 
Net loss for the period  –   –   –   –   –   –   (117,354)  (117,354)
                                 
Balance, June 30, 2021  2   1   85,164,569   85   6,332,748   40,025   (9,981,097)  (3,608,238)
                                 
Balance, December 31, 2019  2   1   85,164,569   85   6,332,748   40,025   (9,321,920   (2,949,061)
                                 
Net loss for the period  –   –   –   –   –   –   (118,213)  (118,213)
                                 
Balance, March 31, 2020  2   1   85,164,569   85   6,332,748   40,025   (9,440,133)  (3,067,274)
                                 
Net loss for the period  –   –   –   –   –   –   (112,271)  (112,271)
                                 
Balance, June 30, 2020  2   1   85,164,569   85   6,332,748   40,025   (9,552,404)  (3,179,545)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

F-3

 

QUEST WATER GLOBAL, INC.

Notes to theCondensed Consolidated Financial Statements of Cash Flows

September 30, 2014

(Expressed in US dollars)

(unaudited)(unaudited – prepared by management)

  

Six months ended

June 30,

2021

  

Six months ended

June 30,

2020

 
  $  $ 
       
Operating Activities:        
         
Net loss for the period  (199,907)  (230,484)
         
Changes in operating assets and liabilities:        
         
Unbilled costs  112,724   (78,929)
Accounts payable and accrued liabilities  813   2,526 
Due to related company  (150,000)  9,913 
Due to related parties  236,256   252,126 
         
Net cash used in operating activities  (114)  (44,848)
         
Change in cash  (114)  (44,848)
         
Cash, beginning of period  4,715   54,932 
         
Cash, end of period  4,601   10,084 
         
Supplemental disclosures:        
Interest paid  –   – 
Income tax paid  –   – 

(The accompanying notes are an integral part of these condensed consolidated financial statements)

F-4

QUEST WATER GLOBAL, INC.

Notes to the Condensed Consolidated Financial Statements

Six Months Ended June 30, 2021

(Expressed in US dollars)

(unaudited – prepared by management))

1.BasisNature of PresentationOperations and Continuance of Business

The accompanying consolidated interim financial statements of Quest Water Global, Inc. (the “Company”) should be read in conjunction withwas incorporated on February 25, 2010, under the consolidated financial statementslaws of the State of Delaware. The Company is an innovative water technology company that provides solutions to water scarce regions. The Company’s operations to date have been limited primarily to capital formation, organization, and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the resultsdevelopment of its operationsbusiness plan.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and its cash flows forany related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the periods shown.Company has not been significant, but management continues to monitor the situation.

The preparation of the consolidated interim financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at SeptemberJune 30, 2014,2021, the Company has a working capital deficiency of $1,229,657$3,615,458 of which $670,846$3,341,061 is owed to the two principal shareholders (Note 5)4), and an accumulated deficit of $7,362,427.$9,981,097. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue to develop its business and ultimately on the attainment of profitable operations. The Company is in the process of arranging additional capital financing that may assist in addressing these issues; however, these factors continue to raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.Summary of Significant Accounting Policies

(a)Basis of Presentation and Principles of Consolidation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States (“US GAAP”), and are expressed in US dollars. These consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary Quest; Quest’s wholly ownedQuest Water Solutions, Inc. (“Quest Nevada”), a company incorporated under the laws of the State of Nevada, Quest Nevada’s wholly-owned subsidiary, Quest Water Solutions Inc., a company incorporated under the laws of the Province of British Columbia, Canada;Canada, and its 88% owned inactive subsidiaries Agua Cuilo Lda.wholly-owned subsidiary, Heliosource, Inc., Cuilo Embalnages, Lda., and Cuilo Comercial, Lda.a company incorporated under the laws of the State of Nevada. All inter-company balances and transactions have been eliminated on consolidation.

(b)Interim Financial Statements

The accompanying condensed consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2020. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

(c)Foreign Currency Translation

The Company’s functional currency is US dollars. Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into US dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.

F-5

QUEST WATER GLOBAL, INC.

Notes to the Condensed Consolidated Financial Statements

Six Months Ended June 30, 2021

(Expressed in US dollars)

(unaudited – prepared by management))

2.Summary of Significant Accounting Policies (continued)

(c)Foreign Currency Translation (continued)

The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into US dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting exchange gains or losses are recognized in income.

(d)Recent Accounting Pronouncements

The Company has limited operations and is considered to be in the development stage. In the period ended September 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10,Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any materialeffect and that may impact on the consolidatedits financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-43.Investment in and Due to Related Company

QUEST WATER GLOBAL, INC.The Company invested $7,600 in AQUAtap Oasis Partnership S.A.R. L., (“AQUAtap”) a limited liability company domiciled in the Democratic Republic of the Congo and by doing so obtained 38% of the issued and outstanding shares in AQUAtap. The Company accounts for this investment using the equity method. In the year ended December 31, 2019, AQUAtap had a loss of $1,000 and the Company recorded a charge to its operation of $380. There have been no charges to operation in the six-month period ended June 30, 2021 or the year ended December 31, 2020.

Notes

As at December 31, 2020, AQUAtap had issued a sales order and advanced $183,964 (2019 - $174,051) to the Consolidated Financial StatementsCompany in order to assist in the financing of the construction and delivery of certain of the Company’s products. The advances are non-interest bearing and due on demand. During the period ended June 30, 2021, the Company completed its first product sale and $150,000 was recorded that was charged to the liability, leaving a balance owing of $33,964.

September 30, 2014

(Expressed in US dollars)

(unaudited)

34.Equipment

  Cost  Accumulated
Amortization		  Net Carrying
Value
September 30, 2014		  Net Carrying
Value
December 31, 2013		 
  $  $  $  $ 
             
Computer equipment  25,971   20,866   5,105   7,696 
Furniture and equipment  7,426   4,387   3,039   3,573 
   33,397   25,253   8,144   11,269 

4.Convertible Notes Payable

(a)On May 9, 2012, the Company received proceeds of $150,000$150,000 and issued a convertible note which is non-interest bearing, unsecured, and was due on May 9, 2014.2014. The unpaid amount can be converted at any time at the holder’s option at $0.50$0.50 per share of common stock, which must not be less than $25,000$25,000 of unpaid principal. In accordance with ASC 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”), the Company recognized the intrinsic value of the embedded beneficial conversion feature of $90,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $150,000. For the nine months ended September 30, 2014, $15,000 (2013 - $33,750) had been accreted, increasing the carrying value to $150,000 (December 31, 2013 - $135,000).

 (b)
(b)On July 30, 2012, the Company received proceeds of $25,000$25,000 and issued a convertible note which is non-interest bearing, unsecured, and was due on July 30, 2014.2014. The unpaid amount can be converted at any time at the holder’s option at $0.50 $0.50 per share of common stock. In accordance with ASC 470-20, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $25,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $25,000. For the nine months ended September 30, 2014, $7,292 (2013 - $9,375) had been accreted, increasing the carrying value to $25,000 (December 31, 2013 - $17,708).

5.Related Party Transactions

(a)As at SeptemberJune 30, 2014,2021, a total of $207,642 (December$1,533,713 (December 31, 20132020 - $404,193)$1,420,762) is owed to the President of the Company, which is non-interest bearing, unsecured, and due on demand. Refer to Note 6(d).
   
(b)As at SeptemberJune 30, 2014,2021, a total of $463,204$1,807,348 (December 31, 20132020 - $576,055)$1,684,043) is owed to the Vice President of the Company, which is non-interest bearing, unsecured, and due on demand. Refer to Note 6(d).
   
(c)For the ninesix months ended SeptemberJune 30, 2014,2021, the Company incurred a total of $225,000 (2013$215,000 (2020 - $225,000)$205,000) in management fees to the President and the Vice President of the Company. The Company also incurred stock-based compensation of $332,731 (2013 - $nil) for stock options granted to the President and the Vice President of the Company during the nine months ended September 30, 2014, which is included in management fees.

6.Common Stock

(a)On February 18, 2014, the Company issued 30,000 shares of common stock with a fair value of $6,900 pursuant to a consulting agreement.
(b)On February 18, 2014, the Company issued 500,000 shares of common stock with a fair value of $110,000 pursuant to a consulting agreement, of which $78,055 (2013 - $nil) was expensed as consulting fees which reflects the pro-rata portion of the services provided to September 30, 2014. As of September 30, 2014, the remaining amount of $31,945 was recorded as deferred compensation and will be expensed as consulting fees pro-rata over the term of the agreement which ends on January 14, 2015. The fair value of the shares was determined based on the closing price of the Company’s common stock at $0.22 per share on February 18, 2014.
(c)On February 18, 2014, the Company issued 200,000 shares of common stock with a fair value of $38,280 pursuant to a consulting agreement, of which 100,000 shares of common stock with a fair value of $18,000 was included in common stock issuable as at December 31, 2013.

F-5

QUEST WATER GLOBAL, INC.

Notes to the Consolidated Financial Statements

September 30, 2014

(Expressed in US dollars)

(unaudited)

6.Common Stock (continued)

(d)On July 14, 2014, the Company issued 5,500,000 shares of common stock with a fair value of $0.12 per share to settle accrued management fees of $660,000 owing to the President and the Vice President of the Company.
(e)On August 5, 2014, the Company issued 100,000 shares of common stock with a fair value of $7,000 pursuant to a consulting agreement. Refer to Note 9(f).
(f)On August 27, 2014, the Company issued 83,334 units at a price of $0.06 per share for proceeds of $5,000, which was included in common stock issuable as at December 31, 2013. Each unit consisted of one share of common stock and one non-transferable share purchase warrant to purchase an additional share of common stock at a price of $0.20 per share until July 2, 2016.
(g)As at September 30, 2014, the Company had 250,000 shares of common stock issuable with a fair value of $27,500 pursuant to a marketing agreement. Refer to Note 9(e).
(h)As at September 30, 2014, the Company had 250,000 shares of common stock issuable with a fair value of $12,525 pursuant to a consulting agreement. Refer to Note 9(g).

7.Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

  Number of
warrants		  Weighted average
exercise price
$		 
Balance, December 31, 2013  3,056,500   0.53 
Granted  83,334   0.20 
Balance, September 30, 2014  3,139,834   0.52 

As at September 30, 2014, the following share purchase warrants were outstanding:

Number of
warrants
outstanding		  Exercise
price
$		  Expiry date
2,398,000   0.50  January 6, 2015
310,000   0.50  February 10, 2015
286,000   0.75  July 15, 2015
62,500   0.65  October 15, 2015
83,334   0.20  July 2, 2016
3,139,834       

8.Stock Options

  Number
of options		  Weighted average
exercise price
$		 
Outstanding, December 31, 2013  5,050,000   0.90 
Granted  3,750,000   0.19 
Forfeited  (3,500,000)  0.90 
Outstanding, September 30, 2014  5,300,000   0.19 

F-6

QUEST WATER GLOBAL, INC.

Notes to the Consolidated Financial Statements

September 30, 2014

(Expressed in US dollars)

(unaudited)

8.Stock Options (continued)

Additional information regarding stock options outstanding as at September 30, 2014 is as follows:

   Outstanding and exercisable 
Range of
exercise prices
$		  Number of
shares		  Weighted average
remaining
contractual life
(years)		  Weighted average
exercise price
$		 
 0.19   5,300,000   0.7   0.19 

On February 25, 2014, the Company amended the exercise price of 1,550,000 stock options granted on May 30, 2012 from $0.90 to $0.19 per share. Modifications to the terms of an award are treated as an exchange of the original award for a new award. Incremental compensation cost is measured as the excess, if any, of the fair value of the original award immediately before its terms are modified, measured on the share price and other pertinent factors at that date. The Company recognized an incremental compensation cost of $97,240 for these modified stock options, which is included in consulting fees.

The fair values for stock options granted have been estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:

  Nine months
ended
September 30, 2014		  Nine months
ended
September 30, 2013		 
       
Risk-free Interest rate  0.11%  – 
Expected life (in years)  1.3   – 
Expected volatility  162%  – 

During the nine months ended September 30, 2014, the Company recorded stock-based compensation of $453,664 (2013 - $nil) for stock options granted, of which $332,731 was included in management fees and $120,933 was included in consulting fees.

The weighted average fair value of the stock options granted during the nine months ended September 30, 2014 was $0.12 (2013 - $nil) per option.

As at September 30, 2014, the aggregate intrinsic value of stock options outstanding is $nil.

9.Commitments

(a)On November 1, 2011, the Company entered into a management agreement with the President of the Company whereby it is obligated to pay $12,500 per month starting on October 3, 2011 to November 1, 2016.

The agreement may be terminated by written notice. Upon termination, the President shall receive a termination fee equal to the sum of:

(i)Buy-out of any outstanding stock options for a price equal to the fair market value of the Company’s common stock multiplied by the number of shares under options and less the exercise price; plus
(ii)The greater of:

●The aggregate remaining fees for the unexpired remainder of the term; or
●One annual fee plus one month fee for each year served after November 1, 2011.

F-7

QUEST WATER GLOBAL, INC.

Notes to the Consolidated Financial Statements

September 30, 2014

(Expressed in US dollars)

(unaudited)

9.Commitments (continued)

(b)On November 1, 2011, the Company entered into a management agreement with the Vice-President of the Company whereby it is obligated to pay $12,500 per month starting on October 3, 2011 to November 1, 2016.

The agreement may be terminated by written notice. Upon termination, the Vice-President shall receive a termination fee equal to the sum of:

(i)Buy-out of any outstanding stock options for a price equal to the fair market value of the Company’s common stock multiplied by the number of shares under options and less the exercise price; plus
(ii)The greater of:

●The aggregate remaining fees for the unexpired remainder of the term; or
●One annual fee plus one month fee for each year served after November 1, 2011.

(c)On November 19, 2013, the Company entered into a one year agreement for consulting services whereby the Company agreed to pay an annual fee of $45,000 in shares of common stock based on a 40% monthly workload. In connection with this fee, the Company issued 225,000 shares of common stock with a fair value of $49,500. This fee will be reviewed on a monthly basis and will be increased proportionately if the consultant’s workload increases on behalf of the Company. The Company also agreed to pay the consultant a finder’s fee at the following rates:

(i)Based on equity investment:

●10% on funds received from finder investors up to $1,000,000;
●7.5% on funds received from finder investors between $1,000,001 to $2,000,000;
●5% on funds received from finder investors over $2,000,000.

(ii)Based on debt investment:

●5% on funds received from finder investors up to $1,000,000;
●3.75% on funds received from finder investors between $1,000,001 to $2,000,000;
●2.5% on funds received from finder investors over $2,000,000.

The finder’s fee shall be paid in cash, or as elected by the finder, a combination of cash and common stock of the Company at the same price per share as the Company’s current financing round.

(d)On February 11, 2014, the Company signed a lease for office premises and agreed to pay annual basic rent of Cdn$16,248 plus operating costs up to February 11, 2017. Minimum lease payments over the remaining term of the lease is as follows:

Year  Cdn$ 
2014   4,062 
2015   16,248 
2016   16,248 
2017   2,031 
    38,589 

(e)On May 22, 2014, the Company entered into a joint venture (“JV”) marketing agreement with a consultant for marketing services whereby the Company agreed to issue 250,000 restricted shares of common stock to the consultant as a signing bonus. Refer to Note 6(g). The Company also agreed to issue 5,000,000 restricted shares of common stock on an earnout basis based on the JV achieving $20,000,000 in gross sales revenue over the initial three-year period, to be assessed and paid semi-annually. Pursuant to the agreement, ownership of the JV is divided into 55% equity ownership by the Company and 45% equity ownership by the consultant. The Company is committed to contributing $250,000 in a combination of cash and value of demonstration units to the JV. The demonstration units will remain the ownership of the Company until such time that the consultant contributes its $250,000, after which the ownership of the demonstration units become that of the JV. The initial term of the agreement is for three years plus a day from the date the first demonstration unit is installed and properly functioning. The term will renew for three subsequent one year periods unless terminated by either party.

F-8

QUEST WATER GLOBAL, INC.

Notes to the Consolidated Financial Statements

September 30, 2014

(Expressed in US dollars)

(unaudited)

9.Commitments (continued)
(f)On July 29, 2014, the Company entered into a six month agreement for consulting services whereby the Company agreed to pay a fee of $8,000 in shares of common stock in consideration for investor relations services. In connection with this fee, the Company issued 100,000 shares of common stock with a fair value of $7,000. Refer to Note 6(e).
   
(g)(d)On September 10, 2014,For the six months ended June 30, 2021, the Company entered into a nine month agreement for consulting services whereby the Company agreed to issue 1,000,000 restricted shares of common stockincurred $10,500 (2020 - $10,500) in rent to the consultant as consideration of which 25% are deemed earned upon receipt. Refer to Note 6(h). The remaining restricted shares of common stock are deemed earned on a monthly basis with periods ending the 1st day of each month until the endVice President of the contract.Company.

 

6.Subsequent Events

On November 15, 2021, the Company entered into a memorandum of understanding (“MOU”) with Pathogen Detection Systems, Inc. (“PDSI”), an Ontario corporation and the owner of TECTA solution, a United States Environmental Protection Agency approved microbiological water quality monitoring system. Under the terms of the MOU, the two companies will work together with the goal of having PDSI become the exclusive microbiological monitoring provider for all AQUAtap installations world-wide. At the same time, the Company agreed to purchase from PDSI, five TectraTM microbiological test instruments for $9,500. One additional instrument was subsequently purchased for $1.

On December 31, 2021, the creditors owning the convertible notes described in Note 4 agreed to cancel the outstanding debt owing to them and fully and irrevocably discharged the Company from any and all obligations associated with these debts.

F-9F-6

 

PRESENTATION OF INFORMATION

As used in this quarterly report, the terms “we”, “us”, “our” and the “Company” mean Quest Water Global, Inc. and its consolidated subsidiaries, unless otherwise indicated.

This quarterly report includes our interim unaudited consolidated financial statements as at and for the period ended SeptemberJune 30, 2014.2021. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). All financial information in this quarterly report is presented in U.S. dollars, unless otherwise indicated, and should be read in conjunction with the financial statements and the notes thereto included in this quarterly report.

As disclosed in our current report on Form 8-K dated January 10, 2012, on January 6, 2012, we completed a share exchange with Quest Water Solutions, Inc. (“Quest”Quest NV”), a Nevada corporation that is now our wholly owned subsidiary and operating business (the “Share Exchange”). The Share Exchange was treated as a recapitalization effected through a share exchange, with Quest NV as the accounting acquirer and the Company as the accounting acquiree. Our consolidated financial statements are therefore, in substance, those of Quest.Quest NV.

FORWARD-LOOKING STATEMENTS

This quarterly report, any supplement to this quarterly report, and any documents incorporated by reference in this quarterly report, include “forward-looking statements”. To the extent that the information presented in this quarterly report discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

The forward-looking statements made in this quarterly report relate only to events or information as of the date on which the statements are made. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this quarterly report and the documents that we reference in this quarterly report and have filed as exhibits with the understanding that our actual future results may be materially different from what we expect. You should not rely upon forward-looking statements as predictions of future events.

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 4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition has been derived from and should be read in conjunction with our interim unaudited consolidated financial statements and the related notes thereto that appear elsewhere in this quarterly report, as well as the “Presentation of Information” section that appears at the beginning of this quarterly report.

Overview

We are an innovative water technology company that provides sustainable and environmentally sound solutions to water-scarce regions. We use proven technologies to create economically viable products that address the critical shortage of clean drinking water in both domestic and foreign emerging markets.

Our goal is to address the vital issue of water quality and water supply by providing an alternative, sustainable source of pure water at the smallest possible environmental cost to global areas in need, while becoming a leading company in providing decentralized, turn-key solutions using alternative energy for the purification, desalination and distribution of clean drinking water.

To date, we have focused our activities on the formation of safe water partnerships and the sale and installation of our products, with emphasis on our AQUAtapTM Community Water Purification & Distribution systems throughout North America, Latin America, the Caribbean and Africa, with specific attention to the Democratic Republic of the Congo (the “DRC”) and Angola.

Corporate History and Background

We were incorporated under the laws of Delaware on February 25, 2010. From our inception until the closing of the Share Exchange, we sought to provide dental and other medical professionals with turn-key marketing solutions to generate referrals from existing clients and new business from the general public through our wholly owned subsidiary RPM Dental Systems, LLC (“RPM Kentucky”). RPM Kentucky was formed on September 15, 2009, under the laws of the Commonwealth of Kentucky, and we acquired RPM Kentucky on March 23, 2010.

Prior to the Share Exchange, we had minimal revenue and our operations were limited to capital formation, organization and development of our business plan. As a result of the Share Exchange, we ceased our prior operations and, through Quest NV, we now operate as an innovative water technology company that provides sustainable and environmentally sound solutions to water-scarce regions.

Quest NV was incorporated under the laws of Nevada on October 20, 2008 and commenced operations on February 20, 2009. Its operations to date have consisted of business formation, strategic development, marketing, technologies development, negotiations with technologies companies and capital raising activities. Prior to 2021, Quest hasNV had not generated any revenues since its inception.

5

 

Acquisition of Quest NV

On January 6, 2012, we completed the Share Exchange whereby we acquired all of the issued and outstanding capital stock of Quest NV in exchange for 2,568,493 shares of our common stock (on a pre-forward split basis), or approximately 62.74% of our issued and outstanding common stock as of the consummation of the Share Exchange. Subsequent to the Share Exchange, we completed a 20 for 1 forward split of our common stock (the “Forward Split”) that became effective on March 1, 2012. Pursuant to the Forward Split, the 2,568,493 shares described above increased to 51,369,860 shares.

As a result of the Share Exchange, Quest NV became ourwhollyour wholly owned subsidiary and John Balanko and Peter Miele became our principal stockholders. The Share Exchange was treated as a recapitalization effected through a share exchange, with Quest NV as the accounting acquirer and the Company as the accounting acquiree.

In connection with and effective upon the closing of the Share Exchange, Josh Morita, our former President, Chief Executive Officer, director and principal stockholder, and Dr. Laura Sloan, our former director, resigned as members of our Board of Directors and Mr. Morita resigned as our sole officer. Also effective upon the closing of the Share Exchange, John Balanko and Peter Miele were appointed to fill the vacancies on our Board of Directors created by the resignations of Mr. Morita and Ms. Sloan. In addition, our Board of Directors appointed Mr. Balanko as our President and Chief Executive Officer and Mr. Miele as our Vice President and Secretary, all effective upon the closing of the Share Exchange. On April 13, 2012, we also appointed Mr. Miele as our Chief Financial Officer.

5

As a result of our acquisition of Quest NV, Quest NV became our wholly owned subsidiary and we assumed the business and operations of Quest.Quest NV. We then changed our name from RPM Dental, Inc. to Quest Water Global, Inc. to more accurately reflect our new business operations.

AQUAtap Entities

In July 2021, we incorporated a new operating subsidiary, AQUAtap Global, Inc., a Wyoming corporation, that subsequently established a wholly owned subsidiary, AQUAtap Global Investments Inc., a British Columbia, Canada corporation, in November 2021. Through these entities, we expect to coordinate, facilitate and manage our current, planned and future safe water partnerships throughout Africa, Latin America and the Caribbean that provide clean water initiatives for underserved communities. The AQUAtap entities, together with their strategic global partners, plan to establish subordinate partnerships in various countries and engage experienced local individuals and organizations for operational expertise. We anticipate that this will enable the subordinate partnerships to enter into public-private partnerships (commonly known as PPPs) with NGOs, strategic investors and various levels of government.

Quest Water Solutions Inc., a British Columbia, Canada corporation and wholly owned subsidiary of Quest NV (“Quest BC”), will remain as the technology provider to our safe water initiatives. Quest BC is responsible for designing, engineering and manufacturing our range of products, and it also sells these water technology products directly to end users through our corporate sales & marketing divisions and through global distributors and agents.

Business Overview

We provide sustainable and environmentally sound solutions to water scarce regions. Our goal is to address the vital issue of water quality and water supply by providing an alternative, sustainable source of pure water at the smallest possible environmental cost to global areas in need, while becoming a leading company in providing turn-key solutions using alternative energy for the purification, desalination and distribution of clean drinking water.

6

 

We have developed a proprietary community drinking water stationAQUAtap™ Community Water Purification and Distribution System consisting of a self-contained water purification system using either a reverse osmosis membrane or ultrafiltration membrane, powered by photovoltaic solar panels and hosted in modified shipping containers. Each AQUAtapTM unit is energy self-sufficient with minimal operational and maintenance costs. We believe that this product represents the first truly environmentally sound solution to drinking water shortages as it is autonomous, decentralized and sustainable, and because each unit is capable of converting brackish, sea or contaminated surface water into 20,000 litres of high quality drinking water each day, suitable for 1,000 people.at a rate of up to 100,000 litres per day.

In addition to the solar-powered water purification systems, we have also developed a technology known as WEPSTM (water extraction and purification system)WEPSTM that produces potable water from humidity in the atmosphere. WEPSTMWEPSTM technology works by converting humidity into water, otherwise known as atmospheric water extraction.

To date, we have focused our activities on the fifteen countries of the Southern African Development Community (“SADC”), with specific attention to Angola. There is a vast and increasing demand for a sustainable, cost-effective and decentralized continuous supply of clean drinking water in most areas of the SADC. We provide clean drinking water to end-users utilizing various formats of our water purification and distribution systems that include inexpensive bulk drinking water and government-subsidized community level drinking water. Applications of our systems include rural and urban community water supply, water supply for household needs, remote work site camps and water supply for disaster relief.

We are in the process of negotiating a formal agreement with the Ministry of Industry and Ministry of Energy & Water regarding becoming an official registered supplier for the government of Angola’s $650 million “Water for All” program and for the construction of a facility to assemble the AQUAtap™ stations in that country. In June 2012, our management met with the African Development (“AfDB”) to discuss financing the proposed AQUAtap™ assembly plant(s) to be built in Angola and the level of funding required to carry out such an undertaking. These discussions established that we would require between $5.5-6 million per facility, including construction, inventory and working capital. As a result of the meetings, we received a non-binding letter of intent from the AfDB regarding the funding of the proposed project and the Angolan government indicated that once an agreement had been consummated, they would in turn submit a request for funding to the AfDB on our behalf.

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Our operations to date have consisted of business formation, strategic development, marketing, technologies development, negotiations with technology companies and capital raising activities.

Results of Operations

For the Three Months Ended SeptemberJune 30, 20142021

Revenue

We havedid not generatedgenerate any revenues since our inception.revenue during the three months ended June 30, 2021 or 2020. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.

Expenses

During the three months ended SeptemberJune 30, 2014,2021, we incurred $151,347$117,354 in total expenses, including $75,000$107,500 in management fees, $47,251$5,250 in consulting fees, $15,271 in professional fees, $6,419rent, $1,743 in automotive expenses, $5,815 in rent, $4,875$1,397 in office and miscellaneous expenses, $3,619$833 in telephone expenses $3,273and $244 in transfer agent and filing fees, $1,053 in amortization, $664 in advertising and promotion expenses and $226 in travel expenses, as offset by a foreign exchange gain of $12,119.fees. During the same period in the prior year, we incurred $144,900$112,271 in total expenses, including $75,000$102,500 in management fees, $3,121$5,250 in consulting fees, $12,649 in professional fees, $5,008rent, $3,004 in automotive expenses, $3,333 in rent, $10,257$1,047 in office and miscellaneous expenses, $4,116$324 in telephone expenses $1,595 in transfer agent and filing fees, $14,641 in amortization, $261$146 in advertising and promotion expenses. Our expenses $9,673 in travel expenses and $5,246 in foreign exchange loss. The 4% increase in our total expenses duringwere therefore relatively consistent between the most recent period resulted primarily from a significant increase in our consulting fees. However, during the three months ended September 30, 2014 our amortization and travel expenses both decreased substantially on a period-to-period basis.two periods.

Net Loss

During the three months ended SeptemberJune 30, 2014,2021, we incurred a loss before other expense of $151,347 and a net loss of $152,389,$117,354, whereas we incurred a loss before other expense of $144,900 and a net loss of $162,097$112,271 during the same period in the prior year. The majority ofIn each case, our other expensenet loss was equal to our total expenses during each of those periods was related to the accretion of discounts on our convertible notes payable.period. We did not experience any net loss per share during the three months ended SeptemberJune 30, 20142021 or 2013.2020.

7

For the Six Months Ended June 30, 2021

Revenue

We generated $150,000 in revenue during the six months ended June 30, 2021, whereas we did not generate any revenue during the same period in the prior year. All of the revenue was attributable to a sales order and advance payment from AQUAtap Oasis Partnership S.A.R.L., and was offset by $112,724 in cost of goods sold, for a gross margin of $37,276. Notwithstanding the foregoing, we anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.

 7

 

For the Nine Months Ended September 30, 2014

Expenses

During the ninesix months ended SeptemberJune 30, 2014,2021, we incurred $1,090,665$237,183 in total expenses, including $557,731$215,000 in management fees, $354,932$10,500 in consulting fees, $71,622 in professional fees, $43,315 in advertising and promotion expenses, $17,469rent, $4,804 in automotive expenses, $17,291$4,222 in office and miscellaneous expenses, $16,717$1,638 in rent, $9,949telephone expenses, $632 in transfer agent and filing fees $9,379and $387 in telephone expenses, $3,125 in amortization and $483 in travel expenses, as offset by a foreign exchange gain of $11,348.professional fees. During the same period in the prior year, we incurred $498,172$230,484 in total expenses, including $225,000$205,000 in management fees, $21,338$10,500 in consulting fees, $84,035rent, $4,423 in automotive expenses, $3,006 in travel expenses, $2,528 in professional fees, $28,216 in advertising and promotion expenses, $14,774 in automotive expenses, $21,411$2,141 in office and miscellaneous expenses, $18,313 in rent, $2,414$1,849 in transfer agent and filing fees, $12,028$701 in telephone expenses $43,925and $336 in amortizationadvertising and $29,501 in travelpromotion expenses. Our expenses as offset by a foreign exchange gain of $2,783. The 119% increase in our total expenses duringwere therefore relatively consistent between the most recent period resulted primarily from significant increases in two major expense categories, management fees and consulting fees. However, duringperiods.

Net Loss

During the ninesix months ended SeptemberJune 30, 2014 our amortization and travel expenses also both decreased substantially on a period-to-period basis.

Net Loss

During the nine months ended September 30, 2014,2021, we incurred a loss before other expense of $1,090,665 and a net loss of $1,109,613,$199,907, whereas we incurred a loss before other expense of $498,172 and a net loss of $549,415$230,484 during the same period in the prior year. During the nine months ended September 30, 2014 and 2013 we experienced aWe did not experience any net loss per share of $0.01.during the six months ended June 30, 2021 or 2020.

Liquidity and Capital Resources

As of SeptemberJune 30, 2014,2021, we had $184$4,601 in cash, $10,241$11,821 in total assets, $1,231,754$3,620,059 in total liabilities and a working capital deficiency of $1,229,657.$3,615,458. As of September 30, 2014that date, we also had an accumulated deficit of $7,362,427.$9,981,097.

To date, we have experienced negative cash flows from operations and we have been dependent on sales of our common stock and capital contributions to fund our operations. We expect this situation to continue for the foreseeable future, and we anticipate that we will experience negative cash flows during the year ended December 31, 2014.2022.

During the ninesix months ended SeptemberJune 30, 2014,2021, we spent $48,048$114 in net cash on operating activities, compared to $31,522$44,848 in net cash spending on operating activities during the same period in the prior year. The 52% increasesignificant decrease in our net cash spending on operating activities during the ninesix months ended SeptemberJune 30, 20142021 was primarily attributable to the increasedecrease in our net loss as described above as well as certain changes in our operating assets and liabilities and a significant stock-based compensation adjustment.above.

We did not spend or receive any cash onin respect of investing activities during the nine months ended September 30, 2014 or 2013.

We received $46,627 in cash from financing activities during the ninesix months ended SeptemberJune 30, 2014, all of which was in the form of advances from related parties. 2021 or 2020.

During the ninesix months ended SeptemberJune 30, 2013, we received $30,000 in cash from financing activities, all of which was in the form of proceeds from the issuance of our common stock.

During the nine months ended September 30, 2014,2021, our cash decreased by $1,421$114 as a result of our operating investing and financing activities, from $1,605$4,715 to $184.$4,601. As of SeptemberJune 30, 2014,2021, we did not have sufficient cash resources to meet our operating expenses for the next month based on our currentthen-current burn rate.

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 8

 

Plan of Operations

Our plan of operations over the next 12 months is to continue to address water quality and supply issues in Angolathe DRC through the installation of our AQUAtapTM community drinking water stationsAQUAtapTM Community Water Purification & Distribution systems as well as the employment of our WEPSTMWEPSTM technology, and we anticipate that we will require a minimum of $745,000$946,000 to pursue those plans. However, as

As described above, we are currently in the process of negotiating a formal agreement with the Angolan Ministry of Industry and Ministry of Energy & Water regarding becoming an official registered supplier for the “Water for All” program and for the construction of a facility to assemble our AQUAtap™ stations. Our cash requirements will change substantially if we are able to successfully enter into such an agreement, but we expect that the AfDB will fund a large portion of the construction, inventory and working capital costs of the proposed project in those circumstances.

We intend to meet the balance of our cash requirements for the next 12 months through advances from related parties as well as a combination of debt financing and equity financing through private placements. Currently weplacements as circumstances allow. We are active innot presently contacting broker/dealers in Canada and elsewhere regarding possible financing arrangements. However,arrangements, but we do not currently have any arrangementsintend to initiate such contact once the current cease trade order in place to complete any further private placement financings andeffect against us in the Province of British Columbia, Canada has been revoked. Regardless, there is no assurance that we will be successful in completing any suchprivate placement or other financings. If we are unsuccessful in obtaining sufficient funds through our capital raising efforts, we may review other financing options.

During the next 12 months, we estimate that our planned expenditures will include the following:

Description 

Amount

($)

 
Equipment purchases  10,000
Rent30,000250,000 
Management fees  300,000430,000 
Consulting fees  150,000120,000 
Professional fees  130,00050,000
Rent21,000 
Advertising and promotion expenses  15,000 
Travel and automotive expenses  60,00030,000 
GeneralOther general and administrative expenses  50,00030,000 
Total  745,000946,000 

Going Concern

Our financial statements have been prepared on a going concern basis, which implies we will continue to realize our assets and discharge our liabilities in the normal course of business. As at SeptemberJune 30, 2014,2021, we had a working capital deficiency of $1,229,657$3,615,458 and an accumulated deficit of $7,362,427.$9,981,097. Our continuation as a going concern is dependent upon the continued financial support from our shareholders,creditors, our ability to obtain necessary equity financing to continue operations, and ultimately on the attainment of profitable operations. These factors raise substantial doubt regarding our ability to continue as a going concern. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

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 9

 

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

We have identified certain accounting policies, described below, that are important to the portrayal of our current financial condition and results of operations.

Basis of Presentation and Consolidation

OurThe Company’s consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. Our consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Quest; Quest’sQuest Water Solutions, Inc. (“Quest Nevada”), a company incorporated under the laws of the State of Nevada, Quest Nevada’s wholly owned subsidiary, Quest Water Solutions Inc., a company incorporated under the laws of the province of British Columbia, Canada; and its 88% owned inactive subsidiaries Agua Cuilo Lda.wholly-owned subsidiary, Heliosource, Inc., Cuilo Embalnages, Lda., and Cuilo Comercial, Lda.a company incorporated under the laws of the State of Nevada. All inter-company balances and transactions have been eliminated on consolidation. Our fiscal year-end is December 31.

Foreign Currency Translation

OurThe Company’s functional currency is US dollars. Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into US dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.

OurThe Company’s integrated foreign subsidiaries are financially or operationally dependent on us. We usethe Company. The Company uses the temporal method to translate the accounts of ourits integrated operations into US dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting exchange gains or losses are recognized in income.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

As of the end of the period covered by this report, management, with the participation of our Chief Executive and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, management concluded that our disclosure controls and procedures were not effective due to certain deficiencies in our internal control over financial reporting.

Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the period ended SeptemberJune 30, 20142021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting us, our common stock, any of our subsidiaries or our officers or directors of those of our subsidiaries’ in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The following documents are filed as a part of this quarterly report.

Exhibit

Number

 

Description of Exhibit

2.131.1 Share Exchange Agreement dated January 6, 2012 with Josh Morita, Quest Water Solutions, Inc. and the shareholders of Quest Water Solutions, Inc. (1)
3.1Articles of Incorporation (2)
3.2Bylaws (2)
3.3Certificate of Designation for Series A Voting Preferred Stock (1)
3.4Certificate of Amendment filed with the Delaware Secretary of State on February 21, 2012 (3)
10.1Agreement of Sale with Josh Morita dated January 6, 2012 (1)
10.2Subscription Agreement dated January 6, 2012 (1)
10.3Form of Warrant dated January 6, 2012 (1)
10.4Registration Rights Agreement dated January 6, 2012 (1)
10.5Form of Lock-Up Agreement dated January 6, 2012 (1)
10.6(a)Lock-Up/Leak Out Agreement with John Balanko dated January 6, 2012 (1)
10.6(b)Lock-Up/Leak Out Agreement with Peter Miele dated January 6, 2012 (1)
10.7Management Agreement with John Balanko dated November 1, 2011 (1)
10.8Management Agreement with Peter Miele dated November 1, 2011 (1)
10.9Global Cooperation Partner Agreement between Quest Water Solutions, Inc. and Trunz Water Systems AG, dated June 29, 2011 (1)
31.1Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1101.INS Audit Committee Charter (4)Inline XBRL Instance Document
101.SCH 
101.INSXBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
101.PRE Inline XBRL Taxonomy Presentation Linkbase
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)Incorporated by reference from our Current Report on Form 8-K filed with the SEC on January 10, 2012.
(2)Incorporated by reference from our Registration Statement on Form S-1 filed with the SEC on August 17, 2010.
(3)Incorporated by reference from our Current Report on Form 8-K filed with the SEC on March 7, 2012.
(4)Incorporated by reference from our Annual Report on Form 10-K filed with the SEC on April 16, 2012.

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SIGNATURES

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.

Date: November 14, 2014March 11, 2022QUEST WATER GLOBAL, INC.
By:/s/ John Balanko
John Balanko
Chairman, President, Chief Executive Officer, Director

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